EXHIBIT 10.63
MCKELLAR MALL
THUNDER BAY, ONTARIO
COMMERCIAL LEASE
THIS LEASE, made and entered into this 29 day of December, 2005, among THE
CORPORATION OF THE CITY OF THUNDER BAY, an Ontario, Canada municipal
corporation, referred to in this Lease as the "the Landlord" and STARTEK CANADA
SERVICES, LTD., an operating Subsidiary of StarTek, Inc., referred to in this
Lease as "the Tenant", and STARTEK, INC., referred to in this Lease as the
"Guarantor".
The Landlord, for and in consideration of the covenants and agreements set out
in this Lease, to be kept and performed by the Tenant, demises and leases to the
Tenant, and the Tenant accepts and rents from the Landlord, the Premises for the
Term, at the rental and upon the terms and conditions set out in this Lease.
INTERPRETING THIS LEASE:
DEFINITIONS: Wherever a term set out below appears in the text of this Lease in
capital letters, the term shall have the meaning set out for it in this Section
or in Schedule "B", as applicable. Wherever a term below appears in the text of
this Lease in regular case, it shall be deemed to have the meaning ordinarily
attributed to it in the English language.
(a) ADDITIONAL RENTAL means the amounts set out in Section 4.
(b) BUILDING means the building within which the Premises exist. It is a
multi-tenanted "shopping mall" facility, with common areas and tenants
other than the Tenant. The building known as "McKellar Mall" is contiguous
with another shopping mall known as "Victoriaville Mall", and to many, the
two are one, and the more commonly referred to name is the "Victoriaville
Mall". However, the two buildings and properties are separately operated
and managed, and were separately constructed, with separate heating
systems, etc. Where this lease refers to common space and Common Areas for
the purposes of shared costs, it is referencing space within McKellar Mall
only - and not within Victoriaville Mall.
(c) COMMON AREAS include: the parking areas, ingress, egress and access roads
and drives, sanitary sewers and utility lines, interior and exterior
walkways and sidewalks, landscaped and planted areas of the lands
surrounding the Building, aisleways within the Building, and other
facilities designed for use in common by occupants of the Building and
their agents, employees, customers, invitees and licensees.
(d) COMMON AREA COSTS has the meaning set out in Section 4(d) of this Lease.
(e) DEFAULT occurs in the circumstances outlined in Section 19 of this Lease.
(f) EXTENSION TERM has the meaning set out in Section 2.1 of this Lease.
Page 2
(g) The GUARANTOR means StarTek, Inc., the parent corporation of the Tenant.
(h) HVAC means heating, ventilation and/or air conditioning systems and
equipment.
(i) The LANDLORD means The Corporation of the City of Thunder Bay. Where the
context permits, the term includes its servants, agents and employees.
(j) LEASE means this agreement, as amended from time to time in accordance
with its provisions, and the term includes all recitals and schedules,
which all form integral parts of this Lease. At the time of execution of
this Lease, it had three (3) Schedules, as follows:
SCHEDULE "A": Depiction of the Premises
SCHEDULE "A-1": Depiction of the Parking Areas
SCHEDULE "B": Detail with respect to the Work
(k) LEASEHOLD IMPROVEMENTS means all alterations, improvements and
installations to be constructed or installed by Landlord or Tenant in the
Premises.
(l) PARTY means any one of the Landlord, the Tenant, or the Guarantor, as the
case may be. PARTIES means both the Landlord and the Tenant, or, in
circumstances where the Landlord has evoked the guarantee provisions, both
the Landlord and the Guarantor.
(m) PARKING AREAS means the four hundred (400) parking spaces detailed in
Schedule "A-1", made available by the Landlord for exclusive use by the
Tenant during the Term.
(n) PREMISES has the meaning set out in Section 1.
(o) RENTAL is the amount set out in Section 3, and in applicable
circumstances, Section 14.
(p) RENTAL COMMENCEMENT DATE means April 1, 2006 or as extended under clause 3
of Schedule "B".
(q) The TEMPORARY SPACE means the space described and detailed in Section 2B
of this Lease.
(r) The TENANT means StarTek Canada Services Ltd. Where the context permits,
the term includes its servants, agents and employees.
(s) The TERM means the seven year period referenced in Section 2 of this
Lease.
(t) The WORK means the work required to the Premises and Building to make them
suitable for the Tenant. The Work is divided into the "Landlord's Work"
and the "Tenant's Work". The Landlord's Work is further divided into Work
the Landlord will undertake, and "Work to be performed by the Tenant on
behalf of the Landlord".
Page 3
INTERPRETATION:
(a) The captions, article and section names and numbers appearing in this
Lease are for convenience of reference only and have no effect on its
interpretation.
(b) All provisions of this Lease creating obligations on either Party will be
construed as covenants.
(c) This Lease is to be read with all changes of gender or number required by
the context.
(d) The words "include", "includes" and "including" are not to be read as
limiting the words or phrases which precede them.
(e) All dollar figures within this Lease are expressed in Canadian currency.
(f) The execution of the Lease by each Party constitutes a covenant that each
is fully authorized by law to undertake this Lease and all of its
obligations with respect to this Lease in the Province of Ontario, Canada.
1. DEMISED PREMISES. The Premises demised and leased under this Lease consist
of the building and land described as follows, to wit:
Approximately thirty three thousand (33,000 ft(2)) square feet, exact size
to be confirmed, located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇, and commonly known as "McKellar Mall", owned and operated
by the Landlord. The Premises are comprised of Units 19 through 35,
inclusive, in McKellar Mall. (The Premises are depicted on Schedule A.)
2. TERM OF LEASE. This Lease shall have a term of seven (7) years, commencing
on the Rental Commencement Date. Subject to Section 2A, the Tenant shall
have access to the Premises for the purpose of commencing the Work on
January 3, 2006.
2A RELOCATION OF EXISTING TENANCIES: The Tenant acknowledges that the
Premises, at the time of execution of this Lease, was partially vacant and
partially occupied (in Units 19, 28 and 34) by other tenants. The Landlord
has committed to providing the Tenant with vacant possession of all of the
Units that comprise the Premises on or before January 3, 2006.
2B TEMPORARY SPACE: The Landlord agrees to provide space within McKellar
Mall, outside the Premises, to accommodate training operations of the
Tenant. The Parties have agreed that Units 9 and 10 within McKellar Mall
are suitable as the Temporary Space referenced. The Landlord will not
charge the Tenant any rental or utilities for use of the Temporary Space,
but the Tenant shall insure the premises at its sole cost. The Tenant
acknowledges having examined the Temporary Space and agreed to its
suitability. The Tenant accepts the Temporary Space on an "as is" basis
for its purposes. The Landlord agrees to allow the Tenant to make whatever
cosmetic or nonstructural changes it needs or wishes to make to the
Temporary Space. The Temporary Space is available to the Tenant any time
after January 3, 2006, and can continue to be used and occupied by the
Tenant until July 7, 2006. Prior to occupancy, the Tenant shall provide
the Landlord with satisfactory evidence of insurance covering the
Temporary Space which is in form and content acceptable to the Landlord.
When the Tenant relinquishes the Temporary Space to the Landlord, it will,
at the Landlord's option, restore the Temporary Space to its original
condition when delivered to Tenant, and shall surrender the Temporary
Space to the Landlord in good condition, reasonable wear and tear
excepted. During the time period that the Tenant has possession of the
Temporary Space, the Landlord shall supply the Tenant with power,
lighting, heating or cooling (as necessary) to accommodate the use the
Tenant puts to the Temporary Space. All costs associated with the use of
these utilities shall be borne by the Landlord.
Page 4
2.1 OPTION TO EXTEND: Provided that the Tenant is not then in Default of any
of its obligations under this Lease beyond any applicable period of notice
and/or cure, the Tenant shall have the option to extend the Lease term for
two (2) additional periods of three (3) years (each an "Extension Term").
The Extension Terms shall be upon the same terms and conditions contained
in the Lease for the initial term except the Rental shall be adjusted as
set forth in Section 2.1A, and there shall be no further option to extend
beyond the second Extension Term. The Tenant shall exercise its option to
extend the Term by delivering to the Landlord, no later than three (3)
months prior to the expiration of the initial Term (or the first Extension
Term, as applicable), written notice of the Tenant's desire to extend the
Term. Landlord, as a courtesy to Tenant, will send a reminder notice four
(4) months prior to expiration of initial Term and first Extension Term.
Unless the Landlord otherwise agrees in writing, and so long as Landlord
has issued the reminder notice outlined in this Section, the Tenant's
failure to timely exercise the option shall waive it and any succeeding
option. If the Tenant properly exercises its option to extend, the
Landlord and the Tenant shall execute an amendment to the Lease reflecting
the terms and conditions of the Extension Term.
2.1A RENTAL FOR EXTENSION TERMS: The Rental for the Extension Terms shall be
four dollars and twenty cents ($4.20/ft(2)) per square foot. The Rental
and Additional Rental during Extension Terms shall be paid at the same
time and in the same manner as provided in the Lease.
2.2 EXPANSION SPACE: The Landlord grants to the Tenant a right of first
refusal on any other vacant space available now or in future within
McKellar Mall. The Landlord shall, prior to renting any space to any other
prospective tenant, provide the Tenant with notice of the details of the
prospective lease, and allow the Tenant the option to rent that same space
on the same terms and conditions offered by that prospective tenant.
Should the Tenant wish to accept the additional space, a lease for that
space shall be executed by the Parties within fifteen (15) days of the
date that the Tenant receives the notice required pursuant to this Section
2.2, otherwise it shall be considered to have waived its option to lease
the additional space. Despite this, the Parties can mutually agree to
extend the fifteen (15) day requirement, provided they do so in writing in
a document executed by both Parties.
3. RENTAL: The Tenant shall pay to the Landlord as Rental for the Premises
the sum of five dollars and fifty cents ($5.50/ft(2)) per square foot of
the Premises, per year, payable in equal monthly installments. The Rental,
calculated at a monthly rate, shall be due on the first (1st) day of each
and every month throughout the term of the Lease without demand. The
Rental to be paid under this Lease shall be made payable to The
Corporation of the City of Thunder Bay, Realty Services Division, at the
delivery address noted in Section 17. Electronic payment (debit) services
are available and are the Landlord's preferred payment terms where
possible.
During both the Term and any Extension Terms, the Rental includes the use
of the Parking Areas as set out in Section 5.1 and Schedule "A-1".
Page 5
3.1 INTEREST ON OVERDUE RENTAL: Without waiving any right of action of the
Landlord in the event of Default of any payments of Rental or Additional
Rental due to the Landlord pursuant to this Lease, in the event that the
Tenant is delinquent in payment of any Rental or Additional Rental for
thirty (30) days or more, the Tenant agrees to pay interest on the arrears
at a rate equal to the rate that the Landlord pays to its bank on
indebtedness, plus one and one half (1.5%) per cent per year, retroactive
from the date the amount was due and payable, until it is actually paid.
The Landlord will provide evidence to the Tenant and/or the Guarantor to
substantiate the interest charged by its bank.
3.2 COVENANT TO PAY RENTAL AND ADDITIONAL RENTAL: The Tenant agrees to pay the
Rental and Additional Rental at the times and in the manner prescribed in
this Lease, without any abatement or deduction.
4. ADDITIONAL RENTAL: The Tenant agrees to pay as Additional Rental all of
the expenses outlined in (a) through (f) below.
(a) Repairs: The Tenant shall keep, maintain in good working order, and repair
the Premises at its sole expense. The term "repair" includes "replace",
where necessary. The Tenant shall supply at its own expense all materials
required to meet its commitment in this regard, including replacement
light bulbs for the Premises. Despite this requirement, it is understood
and acknowledged that the following repairs, maintenance and replacements
are the Landlord's responsibility to undertake at its expense:
i) the HVAC system, excepting any Premises-specific HVAC system
elements installed as part of the Tenant's Work;
ii) the Building, including its roof, foundation, and exterior walls,
primary electrical service to the point of entry to the Premises,
primary plumbing services to the point of entry to the Premises; and
iii) the Common Areas.
Additional Rent payable by the Tenant for repairs and maintenance
under this Section 4(a) shall be paid by the Tenant as and when it
falls due. Should the Landlord not fulfill its repair obligations
under this Section the Tenant may, after providing Landlord five (5)
days written notice, "repair" the Premises at its expense and deduct
the amount of those expenses from Rent amounts due to the Landlord.
(b) Pro-Rata Share of Landlord's Insurance: The Landlord shall maintain fire
and extended coverage insurance (or other special broad form coverage)
covering the Building in the same manner as it contracts for insurance for
its other owned and occupied buildings.
During the term of this Lease, as Additional Rental, the Tenant
shall pay its pro rata share of the premiums for the insurance to be
maintained by the Landlord in accordance with this Section 4(b).
That pro rata share will be computed pursuant to the terms of this
Lease. Additional Rental payable by the Tenant for insurance under
this Section 4(b) shall be paid by the Tenant in accordance with
Section 4(d).
Page 6
(c) Tenant's Insurance: The Tenant shall at all times during the Term, at its
expense, maintain fire and extended coverage insurance on its fixtures,
equipment, merchandise and other personal property in or upon the Premises
for its full insurable value on a replacement cost basis, and its own
policy of liability insurance meeting the requirements of this Section.
The Tenant may acquire any business interruption insurance the
Tenant desires. Additional Rental payable by the Tenant for premiums
for insurance required under this Section 4(c) shall be paid by the
Tenant when due in accordance with the Tenant's own insurance
contracts.
Insurance Specifications: The Tenant shall obtain and maintain in
good standing comprehensive general liability insurance acceptable
to the Landlord and subject to limits of not less than five million
($5,000,000.00) dollars inclusive per occurrence for bodily injury,
death and damage to property, including loss of use of property.
This insurance coverage shall not be subject to a deductible limit
in excess of one thousand ($1,000.00) dollars and shall name the
Landlord as additional insured, but only for liability arising out
of the operations of the Tenant on the Premises.
The comprehensive general liability insurance shall include coverage
for:
i) premises and operations liability;
ii) products or completed operations liability;
iii) blanket contractual liability;
iv) cross liability;
v) contingent employers' liability;
vi) personal injury liability arising out of false arrest,
detention or imprisonment or malicious prosecution; libel,
slander or defamation of character; invasion of privacy;
wrongful eviction or wrongful entry; and
vii) liability with respect to non-owned licensed motor vehicles.
All insurance policies shall contain an endorsement to provide all
named insured with a thirty (30) day written notice prior to notice
of changes and cancellations.
The Tenant shall also provide, at its own expense, tenant's legal
liability insurance. The Tenant shall take out and keep in force
during the Term, all risk tenant's legal liability insurance in an
amount of not less than seventy five thousand ($75,000.00) dollars.
Evidence of insurance satisfactory to the Landlord shall be provided
prior to the Rental Commencement Date. If requested by the Landlord,
certified copies of the above-referenced policies must be provided
periodically as requested by the Landlord.
The Tenant covenants that the Tenant will not do or permit to be
done any act or thing which may void or make voidable any insurance
the Landlord may be carrying itself on the Building and any
surrounding areas or adjacent buildings owned by the Landlord, or
any part of them, and will not do or permit to be done any act or
thing which may cause any increased or additional premium to be
payable for that insurance.
Page 7
(d) The Tenant's Pro-Rata Share: As Additional Rental for the Term and any
Extension Term, the Tenant agrees to pay its pro-rata share of Common Area
Costs. Common Area Costs include: all of the Landlord's costs and expenses
of every kind and nature incurred for operating, managing, equipping,
lighting, decorating, repairing, securing, cleaning, providing security,
insuring (as noted in Section 4(b)), and maintaining the Common Areas,
keeping the main entrances to the Building cleaned of snow, ice, and water
and providing liability insurance on them, paying all taxes associated
with them, plus administrative costs equal to fifteen (15%) per cent of
all other Common Area Costs. It is understood that the Landlord may cause
any or all of the Common Area services to be provided by an independent
contractor or contractors. The Common Area Costs shall be estimated for
the year, and calculated on a monthly basis for payment, and shall be paid
by the Tenant monthly in the estimated amount, at the same time as the
Tenant pays the Rental.
(e) Pro-Rata Fraction: The Tenant's pro-rata share shall be a fraction of the
Common Area Costs, the numerator of which shall be the number of square
feet representing the area of the Premises, and the denominator of which
shall be the number of square feet representing the total useable retail
and/or office area in the Building. The numerator shall be agreed upon by
the Landlord and the Tenant after completion of the Work has finally
delineated the size of the Premises, based upon Building Operators and
Managers Association ("BOMA") Standards, certified by an Ontario Land
Surveyor or Architect.
(f) Payment as Estimated Amount: The Tenant's pro-rata share of the Common
Area Costs shall be paid in advance in monthly installments on the first
day of each calendar month commencing on the Rental Commencement Date. The
estimate of the Common Area Costs shall, to the extent possible, be based
upon the actual Common Area Costs for the preceding calendar year,
adjusted to reflect reasonably anticipated increases or decreases in
operating costs and expenses. The Landlord's substantiated written
estimate of the Common Area Costs for each calendar year shall be given to
the Tenant on or before the Rental Commencement Date and, throughout the
term of this Lease (including Extension Terms), on or before the
anniversary date of the Rental Commencement Date.
(g) Adjustments to Payments Made: On or before April 1 of each year during the
Term or any Extension Terms, excepting the first year, the Landlord shall
provide the Tenant with a substantiated statement showing in reasonable
detail the actual Common Area Costs paid or incurred by the Landlord in
the preceding calendar year. This statement will be prepared by the
Landlord in accordance with generally accepted accounting practices and
procedures. Within thirty (30) days of the date that the Tenant receives
the statement, the Tenant shall (where the actual Common Area Costs exceed
the sum paid to the Landlord in the past calendar year for Common Area
Costs), pay the Landlord an amount to cover the difference between the
Common Area Costs paid pursuant to the estimates from the prior year and
the actual Common Area Costs shown on the statement. Within thirty (30)
days of the date that the Tenant receives the statement, the Landlord
shall (where the Common Area Costs paid by the Tenant during the past
calendar year exceed the actual Common Area Costs incurred by the
Landlord), pay the Tenant an amount to cover the difference between the
Common Area Costs paid pursuant to the estimates from the prior year and
the actual Common Area Costs shown on the statement.
Page 8
(h) Taxes: The Tenant is responsible for the payment, as Additional Rental, of
all taxes levied against the Premises by the Municipal Property Assessment
Corporation by virtue of the existence of this Lease. The Tenant is also
responsible for the payment of Canadian federal government goods &
services taxes levied against the Rental. Municipal property taxes shall
be paid when due. Goods and services taxes shall be paid together with
payment of the Rental.
5. USE OF THE PREMISES: The Premises shall be used only for the purpose of
carrying on the business of a technical support center and/or call center.
The Tenant shall operate its business in the Premises under the trade name
"StarTek". The Premises shall not be used for any other purpose.
The Landlord covenants not to allow another technical support center
and/or call center to occupy space in either the Building, or those
portions of Victoriaville Mall owned by the Landlord, during the Term
and/or during any Extension Terms.
5A LAWS & RULES: The Tenant agrees to abide by all applicable Federal,
Provincial, and/or Municipal or local statutes, regulations, and by-laws,
including any rules of the Landlord applicable to the use and occupation
of the Building, however, the Tenant will not be obligated to incur any
capital cost in order to comply unless necessitated solely by the nature
or its use of the Premises.
5.1 PARKING: During the Term and any Extension Terms, the Landlord will
provide four hundred (400) parking spaces referred to as the "Parking
Areas" to the Tenant at no additional cost to the Tenant or its employees.
Schedule "A-1" details the location of the Parking Areas. Two hundred and
ten (210) parking spaces are located in the parking garage structure known
as the "Victoriaville Parkade", and the balance of the parking spaces are
located in outdoor parking lots within reasonable walking distance of the
Premises. The Parking Areas will be provided for the exclusive use of the
Tenant for itself, its employees, agents, invitees and all licensees,
subject to the rights given to the Landlord and the other tenants of
McKellar Mall and Victoriaville Mall for easements, rights of way and
deliveries. The Landlord shall maintain all Parking Areas and keep same
free of snow and readily accessible for use by the Tenant as is necessary
in the circumstances.
Page 9
Exclusive use of the spaces within the Victoriaville Parkade will be
provided through provision to the Tenant of two hundred ten (210) pass
cards for the Parkade structure. The Parkade has three (3) floors of
parking. The Tenant may use any spaces within any of the floors through
use of the pass card process. The use of the pass card system is intended
to ensure that the Tenant's parking users obtain spaces that are most
convenient to them. In Tenant's sole opinion, if the program is not
working to the Tenant's satisfaction, the Landlord will instead have the
third floor of the structure dedicated for the Tenant's sole and exclusive
use.
Spaces within the outdoor Parking Areas will be provided through
assignment of "hang tag" permits for use within vehicles.
The Tenant shall not use the Parking Areas for any other purpose without
the consent of the Landlord, which will not be unreasonably withheld.
The Tenant agrees to abide by, and to request that its employees, agents
and invitees abide by, the by-laws of the Landlord and/or the City of
Thunder Bay Parking Authority with respect to the parking of vehicles.
The Landlord shall have the right to change the size, location, elevation,
access methods, or nature of the Parking Areas depicted on Schedule "A-1",
provided that at all times, unless the Tenant agrees otherwise, four
hundred (400) parking spaces are made available to it exclusively, and
that a minimum of two hundred ten (210) of them are within the
Victoriaville Parkade, and the balance are within reasonable walking
distance, as determined by Tenant, of the Premises. Despite this, the
Landlord will make every reasonable effort not to change the Parking
Areas.
The Landlord shall use reasonable efforts to accommodate the Tenant's
future requests, if any, for additional parking.
5.2 EMPLOYEE PARKING AREA: The Tenant agrees that if, any approved subtenant
or assignee, and their respective officers, employees and agents will park
their automobiles and other vehicles only where and as permitted by the
Landlord. The Tenant and the Tenant's employees are allowed to park in
only the designated parking areas that are shown in Schedule "A-1" without
paying applicable fees for parking. For clarification, all other parking
areas owned by the Landlord and maintained by it or by its parking
authority are available to the Tenant subject to payment of applicable
fees.
6. CONSTRUCTION OF THE WORK: Schedule "B" outlines the Parties' covenants
regarding the Work.
7. "FOR LEASE" SIGNS: If the Tenant has not exercised its option to extend,
the Landlord may place on the Premises notices or signs indicating that
the Premises are "For Rent" or "For Lease" or the like, during the last
six months of the Term. The Tenant shall not interfere in any manner with
these notices or with the Landlord's showing of the Premises to
prospective tenants during those same six (6) months. The Landlord agrees
to provide the Tenant with twenty four (24) hours' prior notice before
showing the Premises to prospective tenants.
Page 10
7A OTHER SIGNS: The Tenant is permitted to erect appropriate exterior and
interior building signage upon approval of design and location by the
Landlord. The Landlord will not unreasonably withhold this approval. The
Tenant acknowledges that exterior signage must comply with applicable
municipal by-laws.
8. TERMINATION OR SUSPENSION DUE TO DAMAGE: If the Premises or the Building
is substantially or totally damaged by fire or other casualty, the
Landlord may terminate this Lease as of the date of the destructive event
by providing written notice to the Tenant within sixty (60) days after
that event. If the Landlord does not elect to terminate this Lease, or if
the extent of damage is not substantial, then the Landlord shall promptly,
and with reasonable diligence, restore the Building and, working with the
Tenant and the Tenant's insurers, the Premises. The Rental and Additional
Rental shall ▇▇▇▇▇ on account of any damage in proportion to the area of
the Premises rendered untenantable until the Premises are restored. In
addition, if Landlord has vacant and available space for Tenant to
temporarily occupy it will provide that space at no cost to Tenant. If the
Premises are not restored in accordance with this Section 8 within one
hundred eighty (180) days after the destructive event, then the Tenant may
terminate this Lease by written notice to the Landlord within two hundred
ten (210) days after the destructive event. In the event of termination
under this clause, the Lease is considered to have been terminated; not to
have been annulled or made void. All payments due the Landlord by the
Tenant to the date of termination shall be paid, and similarly, all
payments due to the Tenant by the Landlord shall be paid, in each case,
pro-rated to the date of termination.
9. TERMINATION OR DIMINUTION DUE TO EXPROPRIATION:
(a) Expropriation: If the whole of the Premises is taken for any public
or quasi-public use under any statute, or by right of eminent
domain, or by private purchase in lieu of those rights, then this
Lease shall terminate as of the date that title is taken by the
expropriating authority. If part of the Premises is taken in that
manner, in a proportion so as to render the remainder of the
Premises unusable for the conduct of the Tenant's business, then the
Landlord or the Tenant may terminate this Lease on thirty (30) days'
notice to the other given within ninety (90) days after the date of
the taking. In the event of termination under this clause, the Lease
is considered to have been terminated; not to have been annulled or
made void. For circumstances outlined in this Paragraph, Landlord
shall use its reasonable best efforts to negotiate with any third
party a ninety (90) day period for the Tenant to find another
location and make arrangements to relocate its operations. All
payments due to the Landlord by the Tenant to the date of
termination shall be paid, and similarly, all payments due to the
Tenant by the Landlord shall be paid, in each case, pro-rated to the
date of termination.
Page 11
(b) Partial Taking Where Lease Not Terminated: If any part of the
Premises is taken as contemplated in 9(a) above, and this Lease is
not terminated, then the Rental shall be prorated to date of loss
and equitably apportioned according to the space removed from the
Premises. The Landlord shall, at its expense, restore the remaining
portion of the Premises to the extent necessary to make the Premises
reasonably suitable for the purposes for which the Premises are
leased, and shall make all repairs to the Building to the extent
necessary to constitute the remaining portion of the Building a
complete architectural unit.
(c) Award: In the event that the circumstances contemplated in Sections
9(a) or (b) occur, then the Tenant shall have no claim against the
Landlord. The Tenant shall have no claim or right to any portion of
the amount awarded as damages or paid as a result of the taking, and
the full amount of any award made by the expropriating authority
shall be paid to and retained by the Landlord, free of any claim by
the Tenant to any portion of it. All rights of the Tenant, if any,
are assigned by the Tenant to the Landlord. The Tenant shall have no
claim against the Landlord for the value of the unexpired term of
this Lease and shall have no right or claim to any part of the
award.
10. ALTERATIONS: The Tenant shall not make any alterations, improvements or
additions to the Premises apart from the Work, unless the Landlord has
given prior written approval of the plans and specifications for the work.
It will be a pre-condition to that approval that the work is insured, to
the Landlord's satisfaction, against any cost or damage incident to it. It
will also be a pre-condition to that approval that the Tenant secures all
necessary building and other permits. All such alterations, modifications,
additions or installations, when made, shall become the property of the
Landlord unless the Parties have otherwise agreed in writing. They shall
remain upon and be surrendered with the Premises as a part of the Premises
at the end of the Term. The Landlord agrees that it will not unreasonably
withhold its consent to any alterations, modifications, additions or
installations. If the Tenant should make any alterations, the Tenant
agrees to indemnify and defend the Landlord from any liability as a result
of them. Upon any expiration or termination of this Lease, the Tenant
shall be entitled to remove any and all furniture and equipment not
belonging to the Landlord.
Despite this Section 10, the Tenant does not require the Landlord's
approval for cosmetic alterations which, per occurrence, amount to less
than twenty thousand ($20,000.00) dollars and do not affect the structure
of the Premises.
11. CLEANLINESS AND WASTE: The Tenant shall keep the Premises and the walks
adjacent to the Premises at all times in a neat, clean and sanitary
condition, and shall promptly remove any waste or debris. The Tenant shall
neither commit nor permit any waste or nuisance in, on or at the Premises.
The Landlord will not clear snow or ice or provide other maintenance to
entrances or loading facilities that are exclusive to the Premises.
11A NO DAMAGE: The Tenant agrees that it shall not do (or allow to be done)
anything which may damage the Premises beyond the damage occasioned by
reasonable use.
Page 12
11B FIRE PREVENTION: The Tenant agrees to take all precautions to prevent fire
from occurring in or about the Premises. The Tenant further agrees to
observe and comply with all reasonable instructions given from time to
time by the Landlord with respect to prevention and extinguishing of
fires.
12. SUBLEASE: The Tenant shall not sublet or assign the Premises except by
written permission and consent of the Landlord which will not be
unreasonably conditioned, delayed or withheld. All references in this
Lease to assignees or subtenants are considered to refer to approved
assignees or subtenants. Any such subleasing or assignment, even with the
approval of the Landlord, shall not relieve the Tenant from liability for
its covenant to pay the Rental and the Additional Rental, or from its
obligation to keep and be bound by the terms, conditions and covenants of
this Lease during the Term and any and all Extension Terms. The acceptance
of Rental or Additional Rental from any person other than the Tenant shall
not be deemed to have waived any of the provisions of this Lease or to be
a consent to the assignment of this Lease or a subletting of the Premises.
The Tenant may assign and/or sublet the Premises to a subsidiary or
successor of the Tenant, upon the submission by the subtenant or assignee
of a financial statement that is acceptable to the Landlord. Upon receipt
of a financial statement that establishes that the subsidiary or successor
subtenant and/or assignee is a creditworthy tenant, the Landlord shall
consent to the assignment or subletting of this Lease and the terms of
this Section apply.
13. TENANT'S GENERAL INDEMNIFICATION: The Tenant shall indemnify, defend and
hold the Landlord harmless from any and all claims and damages, including
reasonable legal fees and costs, arising from the Tenant's use of the
Premises or the conduct of its business or from any activity, work, or
thing done, permitted, or suffered by the Tenant in or about the Premises
and/or the Building, unless caused by the Landlord or the Landlord's
agents or employees.
13A TENANT'S INDEMNIFICATION FOR BREACH: The Tenant shall further indemnify,
defend, and hold the Landlord harmless from any and all claims and
damages, including reasonable legal fees and costs, arising from any
breach or Default in the terms of this Lease, arising from any act,
negligence, default, or omission of the Tenant or the Tenant's agents,
and/or employees, and from and against any and all costs, reasonable legal
fees, expenses, and liabilities incurred in or about such claim or any
action or proceeding brought as a result of such claim.
13B LANDLORD'S GENERAL INDEMNIFICATION: The Landlord shall indemnify, defend,
and hold the Tenant harmless from any and all claims and damages,
including reasonable legal fees and costs arising from the Landlord's
ownership of the Premises or the conduct of its agents or from any
activity, work, or thing done, permitted, or suffered by the Tenant in or
about the Premises or the Building, unless caused by the Tenant or the
Tenant's agents or employees.
Page 13
13C LANDLORD'S INDEMNIFICATION FOR BREACH: The Landlord shall further
indemnify, defend, and hold the Tenant harmless from any and all claims
and damages, including reasonable legal fees and costs, arising from any
breach or Default in the terms of this Lease arising from any act,
knowledge, or default or occasion of the Landlord or the Landlord's
agents, employees, or invitees, and from and against any other costs,
reasonable legal fees, and liabilities incurred in or about such claim or
any action or proceeding brought as a result of such claim.
14. HOLDING OVER: If the Tenant retains possession of the Premises after the
expiration or earlier termination of this Lease, the Tenant shall become a
tenant from month to month at a new Rental which is equal to one hundred
fifty (150%) per cent of the Rental (calculated on a monthly basis) in
effect at the end of the Term, besides remaining responsible for all
Additional Rental, and otherwise upon the terms, covenants and conditions
specified in this Lease, so far as applicable. Acceptance by the Landlord
of Rental after the expiration of the Term or any Extension Term shall not
result in a renewal or extension of this Lease, and the Tenant shall
vacate and surrender the Premises to the Landlord upon the Tenant being
given thirty (30) days' prior written notice from the Landlord to vacate.
15. QUIET POSSESSION: Subject to the provisions of this Lease, the Landlord
agrees that the Tenant shall have quiet possession of the Premises.
16. THE LANDLORD'S RIGHT TO INSPECT: The Landlord and its agents shall have
free access to the Premises during all reasonable hours subject to
twenty-four (24) hours' prior notice from the Landlord, for the purpose of
examining the Premises to ascertain if they are in good repair, to make
reasonable repairs which the Landlord may be required to make under this
Lease, and to exhibit the same to prospective purchasers or tenants.
17. NOTICES: All notices required under this Lease are required to be written,
and are deemed to have been properly delivered if (a) delivered
personally; or (b) sent by registered mail; or (c) sent by facsimile
followed by regular mail; to the Landlord at:
If delivered or sent by facsimile, to:
The Corporation of the City of Thunder Bay
Realty Services Division, Development Services Department
VictoriaVille Mall,
111 Syndicate Avenue South, Second Floor
Thunder Bay, Ontario, Canada, P7E 6S4
Attention: Manager of Realty Services
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Together with a copy to:
The Corporation of the City of Thunder Bay
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ East, Third Floor
Thunder Bay, Ontario, Canada, P7E 5V3
Attention: City Solicitor
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Page 14
Or, if sent by mail, to:
The Corporation of the City of Thunder Bay
Realty Services Division, Development Services Department
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇
Attention: Manager of Realty Services
Together with a copy to the City Solicitor at the address noted above.
Notices to the Tenant shall be deemed to have been properly served if (a)
delivered personally; or (b) sent by registered mail; or (c) sent by
facsimile followed by regular mail; to the Tenant at:
StarTek Canada Services, Ltd.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇
Attention: Vice President of Facilities and Real Estate
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Notices to the Guarantor shall be deemed to have been properly served if
(a) delivered personally; or (b) sent by registered mail; or (c) sent by
facsimile followed by regular mail; to the Guarantor at:
StarTek, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇
Attention: Chief Financial Officer
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
The date of effective service of the notice by delivery shall be the date
upon which it was personally delivered. The date of effective service of
notice by mail shall be the date which is the fifth (5th) business day
after the date which the notice was mailed. The date of effective service
of notice by facsimile shall be the business day next following the date
shown on a confirmation of delivery receipt held by the sender. The
Parties agree that whenever there is a disruption in postal service, or a
threat of disruption in postal service, in either the United States or
Canada, notices will either be delivered or sent by facsimile.
The Parties further agree that no other method of communication, including
electronic mail, will be relied upon for formal notices required under the
terms of this Lease. Notwithstanding Section 27, any Party may provide
unilateral written notice (under this Section) to the others of a change
of address for notice purposes.
18. UTILITIES AND LIENS: The Tenant shall make all necessary arrangements for
utility services, including necessary permits for gas for heating
purposes, if required. The Tenant shall pay promptly all charges for heat,
light, gas, water and power used in or upon the Premises; shall pay
promptly for garbage and sewage removal and waste removal, if any; and
shall pay promptly all bills for materials furnished or labor performed
for the Tenant, or at the Tenant's instance and request, in connection
with any repairs, alterations, improvements, decoration, installation of
fixtures and equipment on the Premises and to keep the Premises free from
all claims for liens for work, labour or materials on account of same. The
Parties' indemnities to each other under this Lease include requirements
that the particular responsible Party promptly remove at its expense any
and all liens against the Premises or Building which are attributable to
the Particular Party's activities or omissions.
Page 15
18A MALL HVAC WORK: The Tenant acknowledges that the Landlord's Work as
delineated in Schedule "B" involves construction and alteration of the
Mall HVAC System which will involve some interruption of HVAC services.
This work will be completed during 2006 as set out in Schedule "B". The
Tenant agrees to fully cooperate and assist the Landlord in facilitating
the Mall HVAC Work and its effects on other tenants of the Building. In
reference to the Mall HVAC Work outlined in this Paragraph and Schedule
"B", the Landlord shall indemnify, protect, defend, and hold the Tenant
harmless from any and all claims and damages, including reasonable legal
fees and costs arising from the Landlord's ownership of the Premises and
its obligations to its other tenants or the conduct of its agents or from
any activity, work, or thing done, permitted, or suffered by the other
tenant in or about the Premises or the Building, unless caused by the
gross negligence of the Tenant or the Tenant's agents or employees.
19. DEFAULT: The following are considered events of Default:
(a) Rental, or any part of it, whether it has been demanded or not,
remains unpaid after it becomes due for a period of sixty (60) days
after the Tenant's receipt of the Landlord's notice of non-payment;
(b) Additional Rental, or any part of it, whether it has been demanded
or not, remains unpaid after it becomes due for a period of sixty
(60) days after the Tenant's receipt of the Landlord's notice of
non-payment;
(c) any term, condition or covenant of the Lease to be kept or performed
by the Tenant is violated or neglected and remains so for a period
of sixty (60) days after written notice to the Tenant by the
Landlord, specifying the nature of the Default and reasonably
requiring it to be cured, or, where the circumstances of the breach
reasonably require more than sixty (60) days to cure, after
expiration of the reasonable time period specified in the notice;
(d) the Tenant has vacated the Premises and left it unoccupied for a
period of time greater than one hundred and twenty (120) consecutive
business days without prior consent of the Landlord, and has not
either re-occupied the Premises or obtained the Landlord's consent
within fourteen (14) consecutive days after notice to do so by the
Landlord;
(e) if a petition in bankruptcy or assignment for the benefit of
creditors is filed by the Tenant, or if the Tenant is finally
adjudicated bankrupt, and the bankruptcy is not discharged within
sixty (60) days after written demand by the Landlord.
19A GUARANTOR: The Guarantor agrees with the Landlord that the Tenant will
make all payments under this Lease as they fall due, and will perform all
covenants in accordance with the terms and conditions of the Lease. In the
event of Default of the Tenant, the Guarantor will, upon demand, pay any
amounts in default, and will perform the agreements, terms and conditions
in this Lease. This guarantee shall continue in place throughout the Term
and any Extension Terms.
Page 16
20. TERMINATION OF THE LEASE:
(a) Surrender: At the expiration or sooner determination of the Term,
apart from termination pursuant to Sections 8 or 9, the Tenant shall
peaceably surrender and yield to the Landlord, the Premises in a
well-maintained, fully operating condition with all related
facilities, structures and improvements (excepting those removed
pursuant to Sections 10 or 20(b)) in a good state of repair
(reasonable wear and tear excepted). At the expiration of the Lease,
the Landlord will have and enjoy absolute title to all of the
Premises without compensation to the Tenant, and free of any claim
or encumbrance. In the event that this Lease is terminated due to a
Default by the Tenant, no goods, materials or chattels of any sort
may be removed by the Tenant without the Landlord's express consent.
(b) Removal of Improvements: Despite Section 20(a), and provided the
Tenant is not in Default, at the expiration of the Term or any
Extension Term, or upon earlier determination of the Term, the
Landlord may allow the Tenant to remove, at its sole cost, any
improvements on the Premises which the Landlord does not require.
Subject to Schedule "B", the choice of which, if any, improvements
the Tenant may remove is the sole and unfettered discretion of the
Landlord. The Tenant agrees to restore the Premises upon which the
removed improvements were located, to a state of repair satisfactory
to the Landlord within thirty (30) days of the date of the
termination of the Lease.
(c) Termination or Other Remedies Upon Default: Upon occurrence of an
event of Default, the Landlord has the exclusive right, at its sole
option, to terminate this Lease at once, and to re-enter and take
possession of the Premises in accordance with law immediately and by
force, if necessary, without any previous notice of intention to
re-enter and remove all persons and their property, and to use such
force and assistance in effecting and perfecting such removal as the
Landlord may deem advisable to recover at once full and exclusive
possession of all of the Premises, whether the Premises be in
possession of the Tenant or of third persons, or whether the
Premises be vacant. The Tenant authorizes and empowers the Landlord
to do so.
The Landlord may, however, at its option, at any time after the
Default, re-enter and take possession of Premises without such
re-entering working a forfeiture of the Rental and Additional Rental
to be paid and the covenants to be kept and performed by the Tenant
for the full Term. In that case, the Landlord may make repairs,
alterations and additions in or to the Premises and redecorate the
same to the extent deemed by the Landlord necessary or desirable at
its own costs, associated with re-letting the Premises.
Page 17
(d) Landlord's Option on Tenant's Default: Nothing in this Lease
prevents the Landlord, in the circumstances of Default by the
Tenant, from entering upon the Premises and performing the Tenant's
obligations. This work shall be completed at the sole cost and
expense of the Tenant It is expressly understood and agreed that the
Landlord is not under any obligation to perform any of the Tenant's
covenants.
(e) Other Remedies: Forfeiture of this Lease by either Party is wholly
without prejudice to the right of the other Party to recover arrears
of Rental or Additional Rental, or damages for any antecedent breach
of covenant on the part of the said Party, as applicable.
Notwithstanding any forfeiture, either Party may subsequently
recover from the other Party damages suffered by reason of the Lease
having been determined prior to the end of the Term as set out in
this Lease. This clause and the rights under it shall survive the
termination of this Lease whether by act of the Parties or by
operation of law.
21. FORCE MAJEURE/TIME: Despite anything in this Lease, neither Party shall be
in Default with respect to the performance of any of the terms of this
Lease if any non-performance is due to any force majeure, strike,
lock-out, labour dispute, civil commotion, war or similar event, invasion,
the exercise of military power, act of God, government regulations or
controls, inability to obtain any material or service, or any cause beyond
the reasonable control of the Party (unless such lack of control results
from a deficiency in financial resources). Otherwise, time shall be of the
essence of this Lease and all the obligations contained in it.
22. COVENANT TO BIND SUCCESSOR: It is agreed that the provisions, covenants
and conditions of this Lease shall bind and enure to the benefit of the
legal representatives, successors and assigns of the respective Parties to
it.
23. LEGAL FEES: In the event of any legal action related to this Lease, the
non-prevailing Party agrees to pay the prevailing Party's reasonable legal
fees incurred to enforce this Lease.
24. WAIVER OF SUBROGATION: The Landlord releases the Tenant, and the Tenant
releases the Landlord from and against any and all claims, demands,
liabilities or obligations whatsoever for damage to the property, or loss
or rents or profits from either the Landlord or the Tenant resulting from
or in any way connected with any fire, accident, or other casualty,
whether or not such fire, accident or other casualty shall have been
caused by the negligence or contributory negligence of either the Landlord
or the Tenant or by any agent, associates or employee of either the
Landlord or the Tenant. In confirmation of this Section 24, the Landlord
and the Tenant shall execute an agreement of waiver of subrogation and
deliver the same to their respective insurance carriers.
25. WAIVER OF JURY TRIAL AND FORUM: All Parties to this Lease waive the right
to any jury trial in any action, proceeding, or counterclaim brought by
any Party against any other Party. The Parties further agree that any
action brought concerning this Lease shall be brought only in the Superior
Court of Ontario located in Thunder Bay, and expressly waive any right to
any other forum or jurisdiction.
Page 18
26. ENTIRE AGREEMENT: This Lease (as defined) constitutes the entire agreement
between the Parties. Any prior understanding or representation of any kind
preceding the date of this Lease shall not be binding on either Party
except to the extent incorporated in this Lease.
27. MODIFICATION: Any modification of this Lease or any additional obligation
assumed by either Party in connection with this Lease shall be binding
only if evidenced in writing signed by each Party or an authorized
representative of each Party. This does not apply to the notice of new
addresses for notice as provided for in Section 17.
28. GOVERNING LAW: This Lease shall be governed by, construed, and enforced in
accordance with the laws of the Province of Ontario.
29. PARTIAL INVALIDITY: If any article, section, subsection, paragraph, clause
or subclause or any of the words contained in this Lease is held wholly or
partially illegal, invalid or unenforceable by any court or tribunal of
competent jurisdiction, the Landlord and the Tenant agree that the
remainder of this Lease shall not be affected by the holding, but shall
remain in full force and effect. The provisions of this Lease shall have
effect, notwithstanding any statute to the contrary.
30. RELATIONSHIP OF PARTIES: Nothing in this Lease shall create any
relationship between the Parties other than that of landlord and tenant.
It is specifically agreed that neither Party is a partner, joint venturer,
agent or trustee of the other.
31. FREEDOM OF INFORMATION: The Parties agree, subject to the provisions of
the Municipal Freedom of Information and Protection of Privacy Act, to
keep the substantive contents of this Lease confidential.
32. INDEPENDENT LEGAL ADVICE: Each Party acknowledges that it has either
received or waived the benefit of its own legal advice with respect to the
execution of this Lease.
TO WITNESS, the Parties have executed this Lease the day and year first
above written.
The Landlord: The Tenant:
The Corporation of the City of Thunder Bay StarTek Canada Services, Ltd.
----------------------------------------- -----------------------------
-------------------- ----------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇, Mayor ▇▇▇▇ ▇▇▇▇▇▇▇, Chief Financial Officer
I have the authority to bind the Corporation
--------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, City Clerk
The Guarantor:
StarTek, Inc.
----------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇, Chief Financial Officer
I have the authority to bind the Corporation
Page 19
SCHEDULE "B" - AGREEMENT WITH RESPECT TO THE WORK
Alterations are required to the Premises to make them usable for the Tenant's
purposes. These alterations comprise the Work. Some of these alterations
represent the Landlord's Work and some represent the Tenant's Work. Most of the
Work will be undertaken and completed by the Tenant, either on its own behalf or
on the Landlord's behalf. The terms and conditions of this Schedule will govern
the Parties' responsibilities in this regard.
1. DEFINITIONS: Wherever a term set out below appears in the text of this
Schedule in capital letters, the term shall have the meaning set out for
it in the Interpretation Section of the Lease or in this Section of this
Schedule, as applicable. Wherever a term below appears in the text of this
Schedule in regular case, it shall be deemed to have the meaning
ordinarily attributed to it in the English language.
(a) BUILDING SHELL means:
i) the provision of waterline for hot and cold water to the
Premises for heating/cooling systems for normal occupancy;
ii) the provision of plumbing facilities to the wall of the
Premises;
iii) the provision of water to the wall of the Premises; and
iv) the provision of a watertight roof without leaks.
(b) CONSULTANTS refers to any and all contractors and other
professionals retained by the Tenant to complete the Work.
(c) ALLOWANCE means the sum of two million four hundred thousand
($2,400,000.00) dollars, being the maximum cost to the Landlord,
including seven hundred fifty thousand ($750,000.00) dollars towards
elements of the Tenant's Work which will remain with the Premises
upon termination of the Lease.
(d) LANDLORD'S REPRESENTATIVE means ▇▇▇▇ Fydirchuk.
(e) LANDLORD'S WORK is comprised of the following:
i) Building Shell;
ii) Mall HVAC Work as outlined in Section 18A of the Lease; and
iii) Work Performed by the Tenant on Behalf of the Landlord as
outlined in Section 12 of this Schedule.
(f) MALL HVAC means the HVAC system designed to provide basic heating
and cooling services to the Premises as well as the other portions
of the Building.
(g) PLANS means all plans and designs required for any part of the Work.
(h) TENANT'S REPRESENTATIVE means ▇▇▇▇▇ ▇▇▇▇▇.
(i) TENANT'S WORK means all of the Work that is not defined as
Landlord's Work.
(j) WORK means improvements to the Premises consisting of either
Landlord's Work or Tenant's Work.
(k) WORK PERFORMED BY THE TENANT ON BEHALF OF THE LANDLORD means all of
the elements of the Work detailed in Section 12 of this Schedule.
Page 20
2. SUBSTANTIAL COMPLETION: It is the intention of the Tenant to have all of
the Work substantially completed on or before the Rental Commencement
Date. A statement from the Architect certifying the date upon which the
Work has been fully completed shall be conclusive evidence of the
completion thereof. The Work shall be deemed to have been complete when
(i) the components of the Work are fully complete and properly operable
(except for customary punch list items) by execution of Certificate of
Completion (AIA Form G704 or equivalent) certified by the Architect, the
general contractor and Tenant, and approved by Landlord, and (ii) Tenant
has obtained a temporary or final certificate of occupancy from the
applicable governmental authority. The Lease Term and Tenant's obligation
to pay rentals due under the Lease shall commence upon the Rental
Commencement Date provided in the Lease irrespective of whether or not the
Work is complete, except as a result of any Landlord delay as expressly
herein provided. The Parties agree that minor construction details which
do not materially interfere with the Tenant's ability to occupy the
Premises for the purposes of its business shall not delay the substantial
completion of the Work.
3. DELAYS BY THE TENANT: Delays to substantial completion caused by the
Tenant shall not affect the Rental Commencement Date. These include:
(a) the Tenant's failure to approve any matter that requires the
Tenant's approval;
(b) any breach by the Tenant of the terms of this Schedule or the
balance of the Lease;
(c) changes by the Tenant in any of the Plans which have already been
approved by the Landlord or are in the process of being approved by
the Landlord that cause material delay in the approval process;
and/or
(d) the Tenant's requirements for materials, components, finishes or
improvements that are not available in a commercially reasonably
time, or which are different from, or not included in the Landlord's
Work.
The Landlord agrees to use all reasonable efforts to counter the effects
of any delays by the Tenant.
DELAYS BY THE LANDLORD: Delays to Substantial Completion caused by the
Landlord shall affect and extend the Rental Commencement Date one day for
every day of Landlord delay. These include:
(a) the Landlord's failure to approve any matter that requires the
Landlord's approval;
(b) any breach by the Landlord of the terms of this Schedule or the
balance of the Lease;
(c) changes by the Landlord in any of the Plans which have already been
approved by the Landlord and/or Tenant or are in the process of
being approved by the Landlord and/or Tenant that cause material
delay in the approval process; and/or
(d) the Landlord's requirements for materials, components, finishes or
improvements that are not available in a commercially reasonably
time, or which are different from, or not included in the Landlord's
Work.
Page 21
The Tenant agrees to use all reasonable efforts to counter the effects of
any delays by the Landlord.
4. REPRESENTATIVES: The Landlord appoints the Landlord's Representative to
act for the Landlord in all matters covered by this Schedule. The Tenant
appoints the Tenant's Representative to act for the Tenant in all matters
covered by this Schedule. All inquiries, requests, instructions,
authorizations and other communications with respect to the matters
covered in this Schedule will be made to or by the Landlord's
Representative or the Tenant's Representative, as the case may be. Neither
Party will contact or seek instructions or authorizations from any other
representative of the opposite Party. Either Party may change the identity
of its representative by providing the other Party with three (3) business
days' written notice.
Each Party expressly and irrevocably delegates authority to its
representative, as set out in Sections 1(d) and (h), to undertake the
approvals and authorizations required pursuant to the terms of this
Schedule. Landlord shall not charge a construction fee for the
administering Landlord's obligations in connection with construction of
the Work. All costs for space planning design, architectural and
engineering services for the Work (including without limitation, the
preliminary Plans and the construction Plans) shall be included in the
costs of the Work and may be disbursed by Landlord from the Allowance.
5. OWNERSHIP INTERESTS: The Parties agree that all alterations, improvements
and additions made to the Premises and the Building according to this
Schedule, whether paid for by the Landlord or the Tenant, will, without
compensation to the Tenant, become the Landlord's property upon
installation and will remain the Landlord's property at the termination of
the Lease. The only items excluded from this requirement are the
following, which are and shall remain the property of the Tenant: the
generator, computer and telephone equipment (including all equipment owned
by the Tenant in the server room), UPS equipment, and furniture.
6. APPROVAL OF CONSULTANTS: It is hereby noted and agreed that IA, Interior
Architects is the proposed "Architect". Tenant will direct IA to contract
with a local architect to obtain the appropriate review and certifications
for the final Plans to be submitted for the permit. Tenant, at is sole
discretion, will procure and contract with a general contractor of its
choice for completion of the Work. No other Consultants shall be retained
by the Tenant in furtherance of any portion of the Work unless and until
both the Landlord's and Tenant's Representatives have approved the use of
that Consultant.
7. APPROVAL OF PLANS: Nothing shall be done by the Tenant in furtherance of
any portion of the Work unless and until the Landlord's Representative has
approved all of the Plans associated with that portion of the Work.
Landlord's Representative will not unreasonably withhold condition or
delay its approval of the preliminary Plans or the construction Plans. If
Landlord's Representative does not approve or respond with comments to any
submission by Tenant of the preliminary Plans or construction Plans or any
revisions thereof within seven (7) business days after receiving the same,
Landlord's Representative will be deemed to have approved such preliminary
Plans or construction Plans as submitted by Tenant. Any disapproval or
conditional approval by Landlord's Representative of any proposed
preliminary Plans or construction Plans will be accompanied by written
reasons for such disapproval or conditional approval.
Page 22
In the event either Party provides written notice of objection to the
preliminary Plans or the construction Plans, then Landlord, Tenant, their
Representatives and the Architect shall cooperate as necessary to reach
agreement regarding any outstanding changes. The Architect shall prepare a
revised draft of the preliminary Plans or the construction Plans, as the
case may be, as soon as reasonably possible and submit a revised draft
thereof to Landlord's Representative and Tenant's Representative for
approval. The same procedures and deadlines for review and approval by
Landlord's Representative and Tenant's Representative shall apply to the
revised draft.
After approval by Landlord's Representative of the construction Plans,
Tenant's Representative shall submit the drawings to the appropriate
governmental authority for plan review and issuance of a building permit
and any other applicable governmental approvals. All permit and processing
fees shall be paid by Tenant, subject to reimbursement from the Tenant
Improvement Allowances. Landlord will provide at Tenant's expense all
assistance reasonably requested by Tenant to obtain proper permits and
approvals.
8. CONDITIONS OF WORK: The Tenant acknowledges and agrees that neither it nor
any of its Consultants shall perform work on the Building or the Premises
unless it has complied with the Landlord's terms, conditions and standards
for conducting work upon property owned by the Landlord. These terms,
conditions and standards include: compliance with applicable codes,
provision of insurance and/or indemnification acceptable to the Landlord
(including Workers' Compensation coverage), provision of labour and
material and/or performance bonds or securities, payment of fair wages,
and other terms.
9. PROMPT AND REASONABLE APPROVALS: The Landlord covenants to undertake all
approvals it is required to make under the terms and conditions of this
Schedule in a prompt and reasonable fashion. The Tenant shall not be
subject to any fees related to the approval of Plans, apart from permit
fees required at law. The Tenant covenants to supply the Landlord with all
of the Plans or other things required for the Landlord to make an informed
decision with respect to any approval.
10. CONSTRUCTION LIENS: The Tenant will take all steps necessary to prevent
liens pursuant to the Construction Lien Act from attaching to the
Building. In the event that any lien is registered, the Tenant shall take
whatever action is required to have the lien removed from the Landlord's
title within sixty (60) days of the date of its registration.
11. PAYMENT COVENANTS AND METHODS:
(a) Landlord's Work: The Landlord covenants to pay the actual cost
associated with the Landlord's Work, in an amount not exceeding the
Allowance. The Landlord will make this payment in progress payments
after the commencement of the Work by the Tenant. The progress
payments will be made not later than fifteen (15) days after receipt
by the Landlord's Representative of copies of the Tenant's invoices
for all expenses associated with the Landlord's Work, together with
a certificate from the Tenant's architectural Consultant indicating
that the work associated with the invoices has been completed. The
payment will be made payable to the Tenant, it being understood that
the Tenant will then pay the invoices directly. The Landlord's
Representative may demand any documentation from the Consultants
working on the Work that is normally demanded by the Landlord for
similar projects it undertakes on its own behalf.
Page 23
(b) Tenant's Covenants: The Tenant covenants to make all payments to all
Consultants, subject to the Construction Lien Act, and subject to
its contractual rights with its Consultants to be satisfied with the
performance of the Consultants and the quality of work, etc. Tenant
shall cause its contractors, subcontractors and suppliers to provide
warranties for a period of not less than one (1) year against
defects and workmanship, materials or supplies. Tenant shall
promptly assign to Landlord, on a non-exclusive basis in common with
Tenant, all manufacturers' or other warranties obtained as a part of
the Work.
12. WORK PERFORMED BY THE TENANT ON BEHALF OF THE LANDLORD: The following
table details elements of the Landlord's Work to be undertaken by the
Tenant. The Landlord will pay the cost of this Work up to the maximum
Allowance. The Tenant is responsible to complete all of this Work whether
the maximum Allowance is met or exceeded.
ITEM
----
STRUCTURE a. Demolition of all existing improvements to
bring premises to a core and shell condition
including removal of theatre mezzanine
level.
b. Clear acoustical ceiling height of not less
than 12'-0". Maximum Height preferred.
c. The building exterior requires no work and
is accepted by the Tenant on an "as is"
basis.
d. Possible relocation of a mall exit and
common areas associated with same.
ELEVATORS a. No Requirement
FIRE PROTECTION SPRINKLER a. Furnish, install or modify complete fire
SYSTEM protection system per NFPA -13 requirements
or international equivalent with grid
distribution with heads for office
occupancy.
PLUMBING a. Furnish and install complete ADA compliant
(or international equivalent) restrooms
consisting of two (2) Ladies rooms and two
(2) Men's room to be fixtured per code at
the locations designated in the Tenant's
Preliminary Plans. Provide waterproofing and
water barrier material at wet areas. Floor
drains, janitorial closet, and water heater
with recirculation pump will be required.
b. Furnish and install electric water cooler(s)
adjacent rest rooms.
c. 3/4 inch pipe to space or sized appropriate
to wash room requirements.
d. Gas delivery - 1 inch minimum pipe to space,
adjusted for size of space and distance to
meter. (if available)
HVAC a. Heat pump so as to provide the Premises with
1 ton per 350 Square Feet with local zone
thermostat control of a minimum of 10 zones.
Furnish and install low pressure duct work,
diffusers and return air grills in suspended
drop ceiling.
b. Furnish and install base building energy
management system.
c. Provide exhaust systems for base building
spaces as required by all codes.
Page 24
ELECTRICAL a. Furnish and install a complete 277/480 volt,
3-phase, 4 wire building power distribution
system to include five (5) 200 AMP 3-phase
electrical panels disbursed as mutually
agreed upon by Landlord and Tenant.
b. Furnish and install step down transformers
and 120/208 volt panels at one (1)
electrical room interior to the Premises,
electrical service is sized to provide 7
▇▇▇▇▇ per square foot for office equipment
loads and convenience power "connected
load".
c. Furnish and install two 277 volt lighting
panel in each central electrical room on
each floor.
d. Indirect lighting at the floor to provide 35
- 40 foot candles and 2' X 4' lights - (1
per 80 Square Feet) at the remainder
e. Furnish and install lighting in base
building service rooms and all common areas.
f. Furnish and install code required exit and
emergency lighting for all public areas.
g. Furnish and install telephone risers' chases
to the telephone rooms.
h. Provide a fully operational fire alarm
system including fire and enunciator panel,
smoke detectors, flow alarm, pulls, audible
and visual alarms as required by code.
i. Exit and emergency lighting as required by
code.
j. Furnish and install exterior site lighting.
DEMISED PREMISES a. Furnish and install glass and aluminum
IMPROVEMENTS entrance doors at Tenant's entry of demised
space.
b. Restrooms, telephone/ electrical room,
janitor closets, service entry and
mechanical rooms are to be provided
complete.
TOILET ROOM FINISHES a. Furnish and install stone vanity top with
apron and lavatories and decorative mirrors.
b. Furnish and install stainless steel toilet
partitions.
c. Furnish and install wall-mount, flush valve
water closets and wall-hung urinals to meet
all code requirements.
d. Fully handicapped compliant restrooms.
Page 25
COMMON AREA HALLWAYS a. Furnish and install metal studs and drywall
on common area side of hallway. Finish being
vinyl wall covering or high density acrylic
paint "Zolotone", acoustical tile ceiling,
with recessed lighting, floor tile and tile
base to match.
INTERIOR PARTITIONS a. Install demising wall per code to achieve
appropriate fire rating per code. Sheetrock
shall be taped/floated/sanded and ready for
paint.
PERIMETER WALLS a. At exterior walls of premises provide an
insulated surface ready to receive gypsum
board.
CEILINGS a. Furnish and install 2' x 4' acoustical
ceiling grid and tiles throughout Tenant's
Premises at a height of at least 12 feet.
Tenant prefers max height not to exceed 15
feet.
DOORS, FRAMES AND HARDWARE a. Furnish, install, and finish solid core
transparent finished flush wood doors in
painted hollow metal frames at public
building areas. Service core doors will be
solid core wood doors in hollow metal
frames. Building entry and service core
doors shall be equipped with locks with
removable cores.
SECURITY a. No requirement. At Tenant's option, Tenant
may connect into Landlord's card access
system.
b. Furnish and install general signage at
toilet rooms and exit stairwells.
FLOORS AND FLOORING MATERIAL a. Floors ready for new tile or carpet
including floor preparation and leveling
compound as needed. Existing sloped theatre
floors shall be brought up to grade level of
the rest of the Premises and shall have a
live load capacity of 75lbs per square foot.
EXTERIOR SIGNAGE a. Furnish and install exterior signage for
building address identification.
WINDOW BLINDS a. Furnish and install horizontal mini-blinds
on all exterior windows. Horizontal blinds
to be 1" by Levalor Riviera Deluxe Series or
equivalent.
INTERIOR SIGNAGE a. Furnish and install a building directory in
the main lobby.