Exhibit 4.16
PENSIONFUND REALTY LIMITED
Landlord
- and -
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METSO AUTOMATION SCADA SOLUTIONS LTD.
Tenant
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LEASE OF OFFICE SPACE
SOUTHLAND PARK
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LEASED PREMISES: Suite(s) 200, 310, 320, 325, 335 and 400
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
INDEX
SECTION PAGE
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TERM SHEET
ARTICLE 1.00 DEFINITIONS
1.01 Definitions................................................................. 1
ARTICLE 2.00 GRANT OF LEASE AND GENERAL COVENANTS
2.01 Grant....................................................................... 1
2.02 Landlord's General Covenants................................................ 1
2.03 Tenant's General Covenants.................................................. 2
ARTICLE 3.00 TERM AND POSSESSION
3.01 Term........................................................................ 2
3.02 Early Occupancy............................................................. 2
3.03 Delayed Possession.......................................................... 2
3.04 Acceptance of Leased Premises............................................... 2
ARTICLE 4.00 RENT
4.01 Rent........................................................................ 2
4.02 Security Deposit............................................................ 3
4.03 Intent...................................................................... 3
4.04 Payment of Rent - General................................................... 3
4.05 Partial Month............................................................... 3
4.06 Payment of Tenant's Occupancy Costs......................................... 3
4.07 Estimates of Indirect Expenses and Resolution of Disputes................... 5
4.08 Area Determination.......................................................... 5
4.09 Vacancy..................................................................... 5
4.10 Method of Payment........................................................... 5
ARTICLE 5.00 USE AND OCCUPATION
5.01 Use of Leased Premises...................................................... 6
5.02 Compliance with Laws........................................................ 6
5.03 Prohibited Uses............................................................. 7
5.04 Common Elements............................................................. 7
5.05 Hazardous Use............................................................... 7
5.06 Tenant's Security Interest.................................................. 7
5.07 Rules and Regulations....................................................... 7
5.08 Permitted Signs............................................................. 7
5.09 Prohibited Signs............................................................ 8
5.10 Window Coverings............................................................ 8
5.11 Parking..................................................................... 8
5.12 Authorization of Enquiries.................................................. 8
5.13 Records..................................................................... 8
5.14 Overloading................................................................. 9
5.15 See Schedule................................................................ 9
ARTICLE 6.00 SERVICES, MAINTENANCE, REPAIR AND ALTERATIONS BY LANDLORD
6.01 Operation of Project........................................................ 9
6.02 Building Services and Facilities............................................ 9
6.03 Maintenance, Repair and Replacement......................................... 10
6.04 Alterations / Renovations by Landlord....................................... 10
6.05 Access by Landlord.......................................................... 11
6.06 Energy Conservation......................................................... 11
6.07 Supervision and Extended Services........................................... 11
6.08 Landlord's Work............................................................. 11
6.09 Control by Landlord......................................................... 11
ARTICLE 7.00 PAYMENT FOR SERVICES AND MAINTENANCE, REPAIR AND
ALTERNATIONS BY TENANT
7.01 Utilities................................................................... 11
7.02 Lights...................................................................... 12
7.03 Heating, Ventilation and Air Conditioning................................... 12
7.04 Alterations by Tenant....................................................... 12
7.05 Tenant's Trade Fixtures and Personal Property............................... 13
7.06 Maintenance and Repair...................................................... 13
7.07 Inspection.................................................................. 14
7.08 Failure to Maintain......................................................... 14
7.09 Liens....................................................................... 14
7.10 Roof........................................................................ 14
ARTICLE 8.00 - TAXES
8.01 Taxes Payable by Landlord................................................... 14
8.02 Taxes Payable by Tenant..................................................... 15
8.03 Tax Increases Attributable to Tenant........................................ 15
8.04 GST......................................................................... 15
8.05 Landlord's Election......................................................... 15
8.06 Right to Contest............................................................ 15
ARTICLE 9.00 - INSURANCE, LIABILITY AND ENVIRONMENTAL
9.01 Landlord's Insurance........................................................ 16
9.02 Tenant's Insurance.......................................................... 17
9.03 Placement of Tenant's Insurance by Landlord................................. 18
9.04 Limitation of Landlord's Liability.......................................... 18
9.05 Environmental Issues........................................................ 18
ARTICLE 10.00 - DAMAGE AND DESTRUCTION
10.01 Limited Damage to Leased Premises, Access or Services....................... 19
10.02 Major Damage to Leased Premises............................................. 19
10.03 Damage to Building.......................................................... 20
10.04 No Abatement................................................................ 20
10.05 Notify Landlord............................................................. 20
10.06 Expropriation............................................................... 21
ARTICLE 11.00 DEFAULT
11.01 Interest.................................................................... 21
11.02 Costs of Enforcement........................................................ 21
11.03 Performance of Tenant's Obligations......................................... 21
11.04 Events of Default........................................................... 21
11.05 Remedies on Default......................................................... 22
11.06 Availability of Remedies.................................................... 23
11.07 Waiver...................................................................... 23
11.08 Waiver of Exemption and Redemption.......................................... 24
11.09 Companies' Creditors Arrangement Act........................................ 24
ARTICLE 12.00 ASSIGNMENT, SUBLETTING AND OTHER TRANSFERS
12.01 Request for Consent......................................................... 24
12.02 Basis for Consent........................................................... 24
12.03 Terms and Conditions Relating to Consents................................... 25
12.04 Subsequent Transfers........................................................ 26
12.05 Profit Rents upon Transfers................................................. 26
12.06 Advertising................................................................. 26
12.07 Grant of Security Interest by Transferee.................................... 26
ARTICLE 13.00 TRANSFERS BY LANDLORD
13.01 Sale, Conveyance and Assignment............................................. 26
13.02 Effect of Transfer.......................................................... 26
13.03 Subordination............................................................... 26
13.04 Attornment.................................................................. 26
13.05 Effect of Attornment........................................................ 27
13.06 Repurchase.................................................................. 27
ARTICLE 14.00 SURRENDER
14.01 Possession and Restoration.................................................. 27
14.01 Tenant's Trade Fixtures and Personal Property............................... 27
14.02 Overholding................................................................. 27
ARTICLE 15.00 GENERAL
15.01 Estoppel Certificates....................................................... 28
15.02 Entire Agreement............................................................ 28
15.03 No Registration of Lease or Notices......................................... 28
15.04 Project Name and Trademarks................................................. 28
15.05 Demolition/Substantial Renovation........................................... 28
15.06 Relocation.................................................................. 28
15.07 For Lease Signs............................................................. 28
15.08 Unavoidable Delays.......................................................... 28
15.09 Limitation of Recourse...................................................... 28
15.10 Notice...................................................................... 29
15.11 Delegation of Authority..................................................... 29
15.12 Relationship of Parties..................................................... 29
15.13 Governing Law............................................................... 29
15.14 Amendment or Modification................................................... 29
15.15 Legal and Administration Costs.............................................. 29
15.16 Construction................................................................ 29
15.17 Captions and Headings....................................................... 29
15.18 Interpretation.............................................................. 30
15.19 Time of the Essence......................................................... 30
15.20 Successors and Assigns...................................................... 30
15.21 Counterparts................................................................ 30
15.22 Further Schedule............................................................ 30
15.23 Independent Legal Advice.................................................... 30
15.24 No Offer.................................................................... 30
15.25 Landlord's Security Interest................................................ 30
15.26 Survival of Covenants and Indemnities....................................... 31
15.27 Exculpatory Provisions...................................................... 31
15.28 Brokerage Commissions....................................................... 31
15.29 Covenants to be Performed at Landlord's Option.............................. 31
15.30 Radiation................................................................... 31
15.31 Merger...................................................................... 31
15.32 Division of Project......................................................... 32
SCHEDULES
Schedule A - Plan Showing Leased Premises*
Schedule A1 - Legal Description of Land*
Schedule B - Definitions
Schedule C - Rules and Regulations*
Schedule D - Landlord's Work*
Schedule E - Additional Covenants, Agreements and Conditions (if any)**
Schedule F - Form of Indemnity Agreement (if applicable)*
Schedule G - Security Interest - Remedies on Default*
Schedule H - Contents of Leased Premises*
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* Omitted from Exhibit 4.16 to the Telvent GIT, S.A. Annual Report on Form 20-F
for the fiscal year 2004.
** In Exhibit 4.16 to the Telvent GIT, S.A. Annual Report on Form 20-F for the
fiscal year 2004, incorporated into the text of the agreement.
PAGE 1 OF TERM SHEET - FORMING PART OF LEASE OF OFFICE SPACE - SOUTHLAND PARK
1. LANDLORD: PENSIONFUND REALTY LIMITED
ADDRESS: TELEPHONE: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇▇▇▇ ▇▇▇ FAX NUMBER: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
Landlord's "Environmental Contact": ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LANDLORD'S HEAD OFFICE: TELEPHONE: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇ - ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ FAX NUMBER: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
Attention: Senior Vice-President,
Property Management
2. TENANT (legal name): TELEPHONE: ▇▇▇-▇▇▇-▇▇▇▇
METSO AUTOMATION SCADA SOLUTIONS
LTD.
ADDRESS: FAX NUMBER: ▇▇▇-▇▇▇-▇▇▇▇
200, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇.▇.
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TENANT'S HEAD OFFICE: TELEPHONE: as above
SAME AS ABOVE FAX NUMBER: as above
ATTENTION: ▇▇▇▇▇ ▇▇▇▇▇
3. PROJECT NAME: MUNICIPAL ADDRESS OF PROJECT:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇.▇., ▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇.▇., ▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇.▇., ▇▇▇▇▇▇▇ AE
4. LEASED PREMISES:
Attached as Schedule A to the Lease is a plan of the Project showing the
Leased Premises by a distinguishing outline. The Leased Premises are
designated as suite(s) 200, 310 (which includes suites previously
designated as 320, 325 & 335) and 400.
5. RENTABLE AREA OF LEASED PREMISES:
132,800 square feet subject to adjustment in accordance with the
definition of Rentable Area and Section 4.08.
6. (a) SECURITY DEPOSIT: n/a (SECTION 4.02)
(b) OTHER DEPOSIT: n/a (SCHEDULE E)
PAGE 2 OF TERM SHEET - FORMING PART OF LEASE OF OFFICE SPACE - SOUTHLAND PARK
7. TERM: 5 years, 0 months, 0 days.
(a) FIRST DAY OF TERM: AUGUST 1, 2003
(b) LAST DAY OF TERM: JULY 31, 2008
8. BASIC RENT:
From: August 1, 2003 To: July 31, 2008 $1,759,600.00 per annum $146,633.33 per
month calculated at a rate of $13.25 per square foot per annum of the Rentable
Area of the Leased Premises
9. USE OF LEASED PREMISES: except any use prohibited by Article 5.00 or
Section 9.05
GENERAL OFFICE FOR THE BUSINESS OF:
A COMPUTER SOFTWARE/HARDWARE AND DEVELOPMENT COMPANY.
10. ENVIRONMENTAL ISSUES:
LEASE SECTION 9.05: Applies X Does not apply
RIDER 1 (SECTION 9.05): Applies Does not apply X
11. INDEMNIFIER: NOT APPLICABLE TELEPHONE:
ADDRESS: FAX NUMBER:
Additional Covenants, Agreements and Conditions (if any) listed here are more
particularly set out in Schedule E.
SECTION I AMENDMENTS TO LEASE DOCUMENT
SECTION II OCCUPANCY COSTS
SECTION III TENANT ALLOWANCE
SECTION IV OPTIONS
SECTION V RIGHT TO TERMINATE - 3rd FLOOR (ONLY)
SECTION VI RIGHT TO EXPAND - SUITE #386
SECTION VII RIGHT TO TERMINATE LEASE
SECTION VIII OPTION TO LEASE ADDITIONAL SPACE
SECTION IX PARKING
SECTION X STORAGE SPACE
SECTION XI THIRD FLOOR COMMON AREAS
SECTION XII POSSESSION AND RESTORATION
LEASE OF OFFICE SPACE
SOUTHLAND PARK
THIS LEASE is made as of the 7th day of August, 2002
BETWEEN:
PENSIONFUND REALTY LIMITED, a company Incorporated under the laws of
the Province of Ontario and registered to carry on business in the
Province of Alberta.
(the "Landlord")
AND:
METSO AUTOMATION SCADA SOLUTIONS LTD., a company incorporated under
the laws of the Province of Alberta and registered to carry on
business in the Province of Alberta
(the "Tenant")
AND: NOT APPLICABLE
(the "Indemnifier")
IN CONSIDERATION of the mutual covenants contained herein, the parties
hereby agree as follows:
ARTICLE 1.00 - DEFINITIONS
1.01 DEFINITIONS - In this Lease the terms defined in Schedule B shall have the
meanings designated therein respectively.
ARTICLE 2.00 - GRANT OF LEASE AND GENERAL COVENANTS
2.01 GRANT - The Landlord hereby leases to the Tenant and the Tenant hereby
leases from the Landlord the Leased Premises, to have and to hold during the
Term, subject to the terms and conditions of this Lease.
2.02 LANDLORD'S GENERAL COVENANTS - The Landlord covenants with the Tenant:
(a) subject to the provisions of this Lease, for quiet enjoyment of the Leased
Premises so long as the Tenant shall observe and perform all of the
covenants and obligations of the Tenant herein; and
(b) to observe and perform all the covenants and obligations of the Landlord
herein.
Page 1
2.03 TENANT'S GENERAL COVENANTS - The Tenant covenants with the Landlord:
(a) to pay Rent without any deduction, abatement or set-off whatsoever; and
(b) to observe and perform all the covenants and obligations of the Tenant
herein.
ARTICLE 3.00 - TERM AND POSSESSION
3.01 TERM - The Term of this Lease shall begin on the Commencement Date and end
on the date set out in Item 7(b) of the Term Sheet unless terminated earlier as
provided in this Lease.
3.02 EARLY OCCUPANCY - The Tenant may, with the Landlord's prior written
consent, use and occupy the Leased Pr3mises or portions thereof before the
Commencement Date. In the event of early occupancy, the Tenant shall pay to the
Landlord on the date of occupancy a rental for the period from the date the
Tenant begins to use or occupy the Leased Premises or portions thereof to the
Commencement Date, which rental shall be that proportion of the Rent for the
first calendar year of the Term which the number of days in such period is of
365, multiplied by that proportion that the part of the Leased Premises used and
occupied from time to time by the Tenant prior to the Commencement Date is of
the total area of the Leased Premises. Except where clearly inapplicable, all
provisions of this Lease shall apply during such period.
3.03 DELAYED POSSESSION - If the Landlord is unable to deliver possession of
all or any portion of the Leased Premises by the Commencement Date, this Lease
shall remain in full force and effect and the Tenant shall take possession of
the Leased Premises on the date when the Landlord delivers possession of all of
the Leased Premises, which date shall be conclusively established by notice in
writing from the Landlord to the Tenant at least 10 days before such date. The
Landlord shall not be liable to the Tenant for any loss, damage or inconvenience
resulting from any delay in delivering possession of the Leased Premises but,
unless the delay is caused by or attributable to the Tenant, its servants,
agents or Independent contractors, no Rent shall be payable by the Tenant for
the period prior to the date on which the Landlord can deliver possession of all
of the Leased Premises, unless the Tenant elects to take possession of a portion
of the Leased Premises, in which case Rent shall be payable in respect thereof
from the date such possession is so taken. Despite anything contained to the
contrary in this Section 3.03, if the Landlord is of the opinion that it is
unable to deliver possession of all or any part of the Leased Premises by the
expiration of 6 months from the Commencement Date, the Landlord shall have the
right to terminate this Lease upon written notice to the Tenant, whereupon
neither party shall have any liability to the other.
3.04 ACCEPTANCE OF LEASED PREMISES - Taking possession of all or any portion of
the Leased Premises by the Tenant shall be conclusive evidence as against the
Tenant that the Leased Premises or such portion thereof and the Common Elements
are in satisfactory condition on the date of taking possession, subject only to
latent defects and to deficiencies (if any) listed in writing in a notice
delivered by the Tenant to the Landlord not more than 10 days after the date of
taking possession.
ARTICLE 4.00 - RENT
4.01 RENT - The Tenant shall pay to the Landlord as Rent for the Leased
Premises the aggregate of:
(a) Basic Rent in respect of each year of the Term, payable in advance and
without notice or demand in monthly installments as set out in Item 8 of
the Term Sheet commencing on the Commencement Date and on the first day of
each calendar month thereafter during the Term;
(b) Tenant's Occupancy Costs, which shall include Tenant's Proportionate Share
of Taxes, during the Term, payable in monthly installments at the times
and in the manner provided in Section 4.06; and
Page 2
(c) all amounts (other than payments under Subsections 4.01 (a) and (b))
payable by the Tenant to the Landlord under this Lease, at the times and
in the manner provided in this Lease or, if not so provided, as reasonably
required by the Landlord.
4.02 SECURITY DEPOSIT - The Landlord acknowledges receipt on or before the
Commencement Date of the amount set out in Item 6(a) of the Term Sheet (the
"Security Deposit") to be held by the Landlord, without any liability whatsoever
on the part of the Landlord for the payment of interest thereon, as a security
deposit for the faithful performance by the Tenant of the terms, covenants and
conditions of this Lease during the Term hereof and not to be applied on account
of Rent except as otherwise provided in this Section 4.02. The Security Deposit
will not be a limitation on the Landlord's damages or other rights and remedies
available under this Lease or at law or equity, nor shall the Security Deposit
be either a payment of liquidated damages or an advance payment of Rent. The
Landlord shall have no fiduciary responsibilities or trust obligations
whatsoever with regard to the Security Deposit and shall not assume the duties
of a trustee for the Security Deposit. The Security Deposit shall not be
mortgaged, assigned or encumbered by the Tenant and the Landlord shall not be
bound by any such mortgage, assignment or encumbrance. It is understood and
agreed between the parties that any portion of the Security Deposit may, at the
Landlord's option, be applied toward the payment of overdue or unpaid Rent and
may also be applied as compensation to the Landlord for any loss or damage
sustained with respect to the breach on the part of the Tenant of any terms,
covenants and conditions of this Lease, provided in all cases, however, that the
Tenant's liability hereunder is not limited to the amount of the Security
Deposit. If during the Term any portion of the Security Deposit is so applied,
then the Tenant shall on written demand deliver to the Landlord a sufficient
amount in cash or by certified cheque to restore the Security Deposit to the
original sum deposited. The Landlord shall refund to the Tenant after the expiry
date of this Lease any portion of the Security Deposit not used by the Landlord
after application by the Landlord to any damage incurred by the Landlord by
reason of the default of the Tenant under the terms of this Lease. It is further
provided that the Landlord will be discharged from all liability to the Tenant
with respect to the Security Deposit to the extent that it is transferred to any
purchaser of the Landlord's interest in the Leased Premises.
4.03 INTENT - It is the stated purpose and intent of the Landlord and the
Tenant that this Lease and the Rent shall be fully net to the Landlord.
4.04 PAYMENT OF RENT - GENERAL - All amounts payable by the Tenant to the
Landlord pursuant to this Lease shall be deemed to be Rent and shall be payable
and recoverable as Rent in the manner herein provided and the Landlord shall
have all rights against the Tenant for default in any such payment as in the
case of arrears of Rent. Rent shall be paid to the Landlord in lawful money of
Canada, without deduction, abatement or set-off, at the local address of the
Landlord set out in Item 1 of the Term Sheet or to such other Person or such
other address as the Landlord may from time to time designate in writing. The
Tenant's obligation to pay Rent shall survive the expiration or earlier
termination of this Lease. Any Rent or other sum received or accepted by the
Landlord and paid by anyone other than the Tenant, on behalf of the Tenant,
shall not release or in any way affect the covenants of the Tenant set out in
this Lease and shall not be deemed to constitute or evidence the Landlord's
consent to a Transfer under Article 12.00. Any Rent or other sum received by the
Landlord from or for the account of the Tenant while the Tenant is in default
under this Lease may be applied at the Landlord's option to the satisfaction in
whole or in part of any of the obligations of the Tenant then due under this
Lease in such manner as the Landlord sees fit regardless of any designation or
instruction of the Tenant to the contrary.
4.05 PARTIAL MONTH - If the Commencement Date is a day other than the first day
of a calendar month, or if the Term ends on any day other than the last day of a
calendar month, Rent for the fractions of a month at the beginning and at the
end of the Term shall be adjusted pro rata on a per diem basis.
4.06 PAYMENT OF TENANT'S OCCUPANCY COSTS
(1) ESTIMATE AND PAYMENT
(a) The Landlord shall deliver to the Tenant a written estimate or a written
revised estimate of: (i) Tenant's Occupancy Costs for each Fiscal Year;
and (ii) Tenant's Proportionate Share of those Taxes that are imposed
against the Project or any part of it including the Common Elements. The
Tenant shall pay to the Landlord the amount so estimated in equal monthly
installments (except as otherwise required in this Section 4.06 with
respect to Property Taxes) in advance over that Fiscal Year simultaneously
with the Tenant's payments on
Page 3
account of Basic Rant. If the Landlord does not deliver to the Tenant such
an estimate, the Tenant shall continue to pay Tenant's Occupancy Costs and
Tenant's Proportionate Share of Taxes based on the last such estimate
delivered by the Landlord until a further estimate is delivered by the
Landlord and the next payment on account of Tenant's Occupancy Costs or
Taxes shall be adjusted to take into account any over or under payment in
the preceding installments paid in the Fiscal Year to which the estimate
or revised estimate relates. Notwithstanding the foregoing, as soon as
bills for all or any portion of amounts included in Operating Costs
(including, without limitation, Taxes) as so estimated are received, the
Landlord may ▇▇▇▇ the Tenant for the Tenant's Proportionate Share thereof
and the Tenant shall pay the Landlord such amounts so billed (less all
amounts previously paid on account by the Tenant on the basis of the
Landlord's estimate as aforesaid) as Rent within 5 days following demand
therefor.
(b) Within a reasonable time after the date in each calendar year when the
final installment of Property Taxes is due in respect of commercial
properties generally in the municipality in which the Project is located
(the "Final Payment Date"), the Landlord shall deliver a statement (the
"Tax Statement") to the Tenant that: (i) specifies the Tenant's
Proportionate Share of Taxes for the Property Tax Year, and (ii) sets out
the total (the "Prepayment Total") of amounts payable under this
Subsection 4.06(1)(b) that have been paid by the Tenant between the Final
Payment Date in the previous Property Tax Year and the Final Payment Date
of the current Property Tax Year. If the Prepayment Total, less any
amounts that were previously credited to the Tenant, and any amounts paid
for arrears in respect of previous Property Tax Years, (the "Net
Prepayment Total") is less than the Tenant's Proportionate Share of Taxes
specified in the Tax Statement, the Tenant shall pay the deficiency with
the next monthly payment of Basic Rent. If the Net Prepayment Total
exceeds the Tenant's Proportionate Share of Taxes specified in the Tax
Statement, the Landlord shall, unless the Tenant is then in default under
this Lease, credit the excess to the Tenant on account of the next
succeeding payments of Tenant's Occupancy Costs. The Landlord may estimate
Property Taxes for the Property Tax Year following the then current
Property Tax Year and the Tenant shall continue after the Final Payment
Date to make monthly payment in advance, in amounts determined by the
Landlord, for periods determined by the Landlord. The monthly payments
paid by the Tenant after the Final Payment Date shall be credited against
the Tenant's Proportionate Share of Taxes for the subsequent Property Tax
Year.
(c) Any portion of the Tenant's Proportionate Share of Taxes accrued with
respect to the Term or any part thereof paid by the Landlord prior to the
Commencement Date shall be reimbursed by the Tenant to the Landlord on the
Commencement Date or on demand thereafter. Subject to Sections 8.03 and
8.05, the Tenant shall pay the Tenant's Proportionate Share of any
Property Taxes or the Landlord's reasonable estimate thereof monthly in
advance in the same manner as for payment of Tenant's Occupancy Costs.
Notwithstanding the foregoing, the Landlord shall always have the right:
(i) to revise the amount of installments on account of Property Taxes
payable by the Tenant to an amount that allows the Landlord to
collect all Property Taxes payable by the Tenant by the final due
date of Property Taxes for the calendar year, and/or
(ii) to schedule and require payment by the Tenant of installments on
account of Property Taxes payable by the Tenant such that by the
final due date of Property Taxes for any calendar year, the Tenant
shall have paid to the Landlord the full amount of Property Taxes
payable by the Tenant for such calendar year, which arrangement may
include payment of installments by the Tenant in a calendar year on
account of Property Taxes payable by the Tenant for the next
calendar year; and/or
(iii) (but not the obligation) to allocate Taxes among categories of
rentable premises in the Project on the basis of such factors as the
Landlord determines to be relevant, such as, by way of example, the
types of business or activity carried on therein, the locations in
the Project, costs of construction, relative benefits derived by
rentable premises, relative assessment values, non-public school
support designations and vacancies. The Landlord shall be entitled
to adjust the Tenant's Proportionate Share of Taxes having regard to
the category in which the Tenant is placed by the Landlord. In
determining the share of Taxes which is payable by the Tenant
pursuant to this Lease, Taxes shall include such additional amounts
as would have formed part of the Taxes had the Project been fully
assessed during the whole of the relevant period as fully completed
and fully occupied by tenants,
Page 4
with no special exemptions or reductions, and without taking into
account any actual or potential reduction of Taxes or change of
assessment category or class for rentable premises within the
Project which are vacant.
(2) ANNUAL STATEMENT AND ADJUSTMENT -The Landlord shall deliver to the Tenant
within 120 days after the end of each Fiscal Year or as soon after that date as
the same shall be prepared by or for the Landlord, a written statement setting
out in reasonable detail the amount of Operating Costs and Tenant's Occupancy
Costs for such Fiscal Year. If the total of monthly installments of Tenant's
Occupancy Costs actually paid by the Tenant to the Landlord during that Fiscal
Year differs from the amount of Tenant's Occupancy Costs payable for that Fiscal
Year under Subsection 4.01(b), the Tenant shall pay to the Landlord or, if the
Tenant is not in default, the Landlord shall credit to the Tenant on account of
the next succeeding payments of Tenant's Occupancy Costs, as the case may be,
the difference, without Interest, within 30 days after the date of delivery of
the statement.
(3) DISPUTES - If the Tenant disputes the Landlord's statement setting out
Operating Costs and Tenant's Occupancy Costs or the Tax Statement for any Fiscal
Year, the Tenant shall provide notice thereof in writing to the Landlord within
60 days of delivery of the statement in respect of that Fiscal Year.
Notwithstanding delivery of such notice, the Tenant shall continue to pay Rent
in accordance with the terms of this Lease. In the event of a dispute, the
determination of Operating Costs and Tenant's Occupancy Costs or Tenant's
Proportionate Share of Taxes as made by the Landlord's auditors shall be
conclusive and binding upon both the Landlord and the Tenant. All costs of
obtaining such determination shall be included in Operating Costs; provided that
if the Landlord's auditors confirm the Landlord's calculations within a variance
of 5%, the Tenant shall be solely responsible for the entire cost of such
determination and shall pay such coats to the Landlord forthwith upon demand. If
the Tenant and any one or more of the other tenants in the Project are
responsible to pay such costs, the Tenant shall be jointly and severally liable
with such other tenant or tenants.
4.07 ESTIMATES OF INDIRECT EXPENSES AND RESOLUTION OF DISPUTES - Any expense
not directly incurred by the Landlord but which is included in Operating Costs
may be estimated by the Landlord on whatever reasonable basis the Landlord may
select if and to the extent that the Landlord cannot ascertain the actual amount
of the expense from the party who incurred it. In the event of any disagreement
as to the amount or propriety of any amount included in Operating Costs, a
certificate of the auditor of the Landlord, acting reasonably, shall be
conclusive as to the amount of Operating Costs for any period to which such
certificate relates.
4.08 AREA DETERMINATION* - The Landlord may from time to time, as it deems
necessary, cause the Rentable Area of the Leased Premises, the Building or any
part thereof to be recalculated or remeasured and the cost thereof shall be
included in Operating Costs (except as otherwise provided in this Section 4.08).
Upon any such recalculation or remeasurement, Rent (including without limitation
Basic Rent) shall be adjusted accordingly. If any calculation or determination
by the Landlord of the Rentable Area of any premises (including the Leased
Premises) is disputed or called in question, is shall be calculated or
determined by the Landlord's architect or surveyor from time to time appointed
for that purpose, whose certificate shall be conclusive and binding upon the
parties hereto. The cost of such calculation or determination shall be included
in Operating Costs; provided that if the Tenant disputes the Landlord's
calculation or determination and the calculation and determination by the
Landlord's architect or surveyor agrees with the Landlord's calculation or
determination within a 2% variance, the Tenant shall pay the full cost of such
calculation or determination forthwith upon demand. If the Tenant and any one or
more of the other tenants in the Project are responsible to pay such costs, the
Tenant shall be jointly and severally liable with such other tenant or tenants.
If any error shall be found in the calculation of the Rentable Area of the
Leased Premises or in the calculation of Tenant's Proportionate Share, Rent
(including without limitation Basic Rent) shall be adjusted for the Fiscal Year
in which that error is discovered and for the Fiscal Year preceding the Fiscal
Year in which the error was discovered, if any, and thereafter but not for any
prior period.
Notwithstanding the above, the Landlord and Tenant agree that the area of the
Leased Premises shall be as stipulated in Item 5 of the Term Sheet, subject to
(i) any construction or redevelopment to the Building which results in an
----------
* Per hand marked revision to the original, the text of Section 7.04(b) is
incorporated from Schedule E to the original (which is here omitted).
Page 5
increase or decrease of the overall Building area; or (ii) change to the Leased
Premises as provided for in Section VI - Right to Expand and Section VIII -
Option to Lease Additional Premises.
4.09 VACANCY - If any part of the Building available for leasing is not
occupied, the Landlord shall have the right, in respect of amounts forming part
of Operating Costs which vary with occupancy, to include in Operating Costs a
larger amount of costs, which larger amount shall be based on a reasonable
estimate of the actual cost which would have been incurred if the unoccupied
parts of the Building available for leasing were occupied, it being intended
hereby that the Landlord shall obtain, to the extent reasonably possible, full
reimbursement of Operating Costs attributable to or in respect of occupied
premises, and not that: (a) the Tenant shall subsidize Operating Costs incurred
by the Landlord attributable to or in respect of vacant premises; or (b) the
Landlord shall recover more than actual Operating Costs.
4.10 METHOD OF PAYMENT
(1) Unless the Landlord advises otherwise in writing, the Tenant shall provide
to the Landlord on or before the Commencement Date and thereafter on or before
the beginning of each Fiscal Year during the Term and within 10 days after
delivery of the Landlord's estimate of any payment constituting Rent, postdated
cheques in the amount of Rent for each month during that Fiscal Year.
(2) At the Landlord's request, the Tenant shall participate in a
pre-authorized payment plan whereby the Landlord will be authorized to debit the
Tenant's bank account each month or from time to time for Rent payable on a
monthly basis, and any amount payable provisionally on an estimated basis. The
Tenant hereby undertakes to execute and deliver such documents as may reasonably
be required to give full force and effect to this Subsection 4.10(2) within 5
days of such request.
ARTICLE 5.00 - USE AND OCCUPATION
5.01 USE OF LEASED PREMISES - The Tenant shall use and occupy only the usable
part of the Leased Premises and only for office purposes to carry on the
business set out in Item 9 of the Term Sheet and shall not use or permit the
Leased Premises or any part thereof to be used or occupied for any other purpose
or business except as otherwise expressly permitted under this Lease or by any
Person other than the Tenant. The Tenant shall be responsible for obtaining at
its expense all necessary approvals, licenses and permits, including but not
limited to zoning, development, building, occupancy and business approvals,
licenses and permits, for its intended use of the Leased Premises and shall
submit all applications for such approvals, licenses and permits to the Landlord
for its consent (which consent, if the application pertains to the zoning
applicable to the Project or may adversely affect the value or use of the
Project or any part thereof, may be arbitrarily withheld by the Landlord) prior
to making application. Notwithstanding the Landlord's consent to an application,
the Tenant shall indemnify and defend the Landlord and save it harmless from and
against any and all Claims incurred or suffered by the Landlord directly or
indirectly arising out of the Tenant's application for such approvals, licenses
or permits or the resulting approvals, licenses and permits with respect to the
use, intended or otherwise, of the Leased Premises whether such Claims are in
respect of the Leased Premises or in respect of the Building or the Project. The
Landlord makes no representation whether or not necessary approvals can be
obtained for the Tenant's use or intended use. The Landlord makes no
representation or warranty, express or implied, that the present or future use
of the Leased Premises, if such use is anything other than office use, is
legally fit for the intended use, or compiles with any law, by-law or regulation
governing the use of the Leased Premises.
5.02 COMPLIANCE WITH LAWS - The Tenant shall promptly and at its own cost
comply with all present and future laws, regulations and orders relating to, and
obtain and maintain in force all approvals, permits, licenses and registrations
required for, any of the following:
(a) the occupation or use of and the conduct of any business in or from the
Leased Premises;
(b) the condition of the Leasehold Improvements, fixtures, furniture and
equipment installed therein;
Page 6
(c) Pollutants and the protection of the environment so far as those laws,
regulations and orders or any of them relate to the Project; and
(d) the making by the Tenant of any repairs, changes or improvements in or to
the Project;
and the Tenant shall immediately give written notice to the Landlord of the
occurrence of any event in the Leased Premises constituting an offence
thereunder or being in breach thereof and if the Tenant shall, either alone or
with others, cause the happening of any such event, the Tenant shall immediately
give the Landlord notice to that effect and thereafter give the Landlord from
time to time written notice of the extent and nature of the Tenant's compliance
with the foregoing provisions of this Section.
The Tenant agrees that if the Landlord determines in its sole discretion that
the Landlord, its property, its reputation or the Leased Premises or any one or
more of the foregoing is placed in any jeopardy, as determined by the Landlord,
by the requirements for any work required to ensure compliance with the
foregoing provisions of this Section 5.02, or the Tenant is unable to fulfill
its obligations under this Section, the Landlord may itself undertake such work
or any part thereof at the cost and expense of the Tenant.
The Tenant shall, at its own expense, remedy any damage to the Leased Premises
caused by such event or work or by the performance of the Tenant's obligations
under this Section.
If alterations or improvements to the Leasehold Improvements onto the Leased
Premises are necessary to comply with any of the foregoing provisions of this
Section or with the requirements of Insurance carriers, the Tenant shall
forthwith complete such work, complying always with the applicable provisions of
this Lease, to the extent that it can be done within the Leased Premises and in
any event shall pay the entire cost of alterations and improvements so required.
In the event that structural repairs or upgrading of the Building, including but
not limited to seismic upgrading, is required to permit the Tenant's use, the
Landlord may, at its sole discretion, terminate the Lease.
5.03 PROHIBITED USES - The Tenant shall not commit, cause or permit any
nuisance in or about or any damage to the Leased Premises or any part thereof,
the Building, the Project or any of the Leasehold Improvements or goods or
fixtures therein, any overloading of the floors of the Leased Premises or any
use or manner of use causing annoyance to other tenants or occupants of the
Project. Without limiting the generality of the foregoing, the Tenant shall not
use or permit the use of any portion of the Leased Premises for any dangerous,
illegal, noxious, odorous or offensive trade, business or occurrence. The Tenant
shall keep the Leased Premises free of debris, Pollutants and anything of a
dangerous, noxious, odorous or offensive nature or which could create a fire
hazard (through undue load on electrical circuits or otherwise) or vibration,
heat or noise detectable outside the Leased Premises in the sole discretion of
the Landlord. The Tenant shall not use equipment in the Leased Premises in a
manner that results in its being seen or heard outside the Leased Premises.
5.04 COMMON ELEMENTS - The Tenant and its employees and invitees shall be
entitled to use, in common with others entitled thereto, for purposes for which
they are intended and only during such hours as the Landlord may designate from
time to time, the Common Elements. The Tenant and its employees and invitees
shall not obstruct the Common Elements or use the Common Elements other than for
their intended purposes and then only in accordance with the rules and
regulations set by the Landlord from time to time.
5.05 HAZARDOUS USE - The Tenant shall not do, omit to do or permit to be done
anything which will cause or may have the effect of causing the cost of the
Landlord's insurance in respect of the Project or any part thereof to be
increased at any time during the Term or any policy of insurance on or relating
to the Project to be subject to cancellation. Without waiving or limiting the
foregoing prohibition, the Landlord may demand and the Tenant shall pay to the
Landlord upon demand, the amount of any increase in the cost of insurance caused
by anything so done or omitted or permitted to be done. The Tenant shall
forthwith upon the Landlord's request comply with the requirements of the
Landlord's insurers, cease any activity complained of and make good any
circumstance which has caused any increase in insurance premiums or the
cancellation or threatened cancellation of any insurance policy. In determining
the amount of increased premiums for which the Tenant is responsible, a schedule
or statement issued by the Person who computes the insurance rates for the
Landlord showing the components of the rate shall be conclusive
Page 7
evidence of the items that make up the rate. If any policy of insurance in
respect of the Project or any part thereof is cancelled or becomes subject to
cancellation by reason of anything so done or omitted or permitted to be done,
the Landlord may without prior notice terminate this Lease and re-enter the
Leased Premises,
5.06 TENANT'S SECURITY INTEREST - The Tenant shall not, without the Landlord's
prior written consent, create a security interest in Leasehold Improvements
installed by the Tenant or the Landlord in the Leased Premises.
5.07 RULES AND REGULATIONS - The Landlord may from time to time make and from
time to time modify by amendment, deletion, addition, rescission or replacement,
rules and regulations for the safety, use, care and cleanliness of the Project,
the comfort and convenience of tenants and other persons in the Project, the
preservation of good order and efficient management and the control of Common
Elements, Delivery Facilities, retail concourse, any Project Components,
construction activities, movement in and out of the Project, delivery and
shipping and other services and functions. The Tenant shall observe and cause
its employees, servants, agents, invitees, customers, subtenants, licensees and
others over whom the Tenant can reasonably be expected to exercise control to
observe the rules and regulations attached as Schedule C hereto and such further
and other reasonable rules and regulations and amendments and additions thereto
as may be made by the Landlord and notified to the Tenant by mailing a copy
thereof to the Tenant or by posting same in a conspicuous place in the Building.
All such rules and regulations now or hereafter in force shall be read as
forming part of this Lease; provided that if there is a conflict between the
rules and regulations and this Lease, the terms of this Lease shall prevail. The
Landlord shall not be responsible to the Tenant for the non-observance of any
rule or regulation or the terms of any lease or agreement to lease by any other
tenant of the Project.
5.08 PERMITTED SIGNS - The Tenant shall use only such identification signs as
are prescribed by the Landlord from time to time and as comply with all
applicable by-laws, regulations and codes as to size, location, arrangement,
type of lettering, colour, appearance and design for uniform use by office
tenants in the Building. Such signs shall contain only the name under which the
Tenant carries on business.
5.09 PROHIBITED SIGNS - Except with the prior written consent of the Landlord,
which consent may be arbitrarily withheld or rescinded in the Landlord's sole
discretion, or as provided in Section 5.08, the Tenant shall not paint, display,
inscribe, place or affix any sign, symbol, notice, advertisement, display or
direction of any kind anywhere outside the Leased Premises or on the interior of
any glass, windows or doors or elsewhere within the Leased Premises so as to be
visible from the outside of the Leased Premises.
5.10 WINDOW COVERINGS - Without the prior written consent of the Landlord, the
Tenant shall not install any blinds, drapes, curtains or any other window
coverings in the Leased Premises and shall not remove, add to or change the
blinds, drapes, curtains, or other window coverings installed by the Landlord
from time to time. The Tenant shall keep all window coverings open or closed at
various times as the Landlord may from time to time direct by the rules and
regulations or otherwise.
5.11 PARKING - Any parking area or facility provided by the Landlord shall at
all times be subject to the exclusive control and management of the Landlord or
those whom the Landlord may designate from time to time. The Landlord shall have
the right from time to time to establish, modify and enforce reasonable rules
and regulations with respect to any parking area or facility and shall have the
right from time to time:
(a) to expand, reduce, or change the area, level, location and arrangement of
the parking area or facility and to construct any parking facility;
(b) to enforce parking charges with appropriate provisions for free parking
ticket validating by tenants of the Building;
(c) to close all or any portion of the parking area or facility to such extent
as may, in the Landlord's Opinion, be legally sufficient to prevent a
dedication thereof or the accrual of rights to any Person or the public;
(d) to temporarily obstruct or close off all or any part of the parking area
or facility for the purpose of maintenance or repair; and
Page 8
(e) to do and perform such other acts in and to the parking area or facility
as in the judgment of the Landlord, shall be advisable with a view to the
improvement of the convenience of and use of the Building by tenants,
their employees and invitees.
The Landlord will operate and maintain the parking area or facility in such
manner as the Landlord in its sole discretion shall determine from time to time.
Without limiting the scope of such discretion, the Landlord shall have the sole
right to employ all personnel and make all rules and regulations pertaining to
and necessary for the proper operation and maintenance of the parking area or
facility. The Tenant shall participate in any free parking or other ticket
validation system established by the Landlord and abide by all rules and
regulations pertaining thereto and the Tenant shall pay to the Landlord monthly,
together with payments on account of Basic Rent, all parking charges
attributable to the Tenant as evidenced by parking tickets validated by the
Tenant in accordance with any system established by the Landlord.
5.12 AUTHORIZATION OF ENQUIRIES - The Tenant hereby authorizes the Landlord to
make enquiries from time to time of any government or municipality or
governmental or municipal agency with respect to the Tenant's compliance with
any and all laws and regulations pertaining to the Tenant or the business
conducted in the Leased Premises including, without limitation, laws and
regulations pertaining to Pollutants and the protection of the environment; and
the Tenant covenants and agrees that the Tenant shall from time to time provide
to the Landlord such written authorization as the Landlord may reasonably
require in order to facilitate the obtaining of such information.
5.13 RECORDS - The Tenant shall keep on the Leased Premises or at the Tenant's
head office complete records of all goods stored on, or processed, manufactured
packaged or used in any process in the Leased Premises by the Tenant and by any
other occupant of the Leased Premises or any part thereof. The Landlord may
examine such records and the Tenant shall provide extracts from or copies
thereof all as required by the Landlord from time to time. This requirement to
maintain such records shall survive the expiry or earlier termination of the
Term.
5.14 OVERLOADING - The Tenant shall not install or permit the installation of
equipment or storage of items that in the opinion of the Landlord's engineer
overloads the capacity of any utility or of any electrical or mechanical
facility in the Project or which may exceed the load-bearing capacity of the
floors of the Project. If damage is caused to the Leased Premises or to the
Project as a result of any installation in contravention of this Section, the
Tenant shall repair the damage or, at the Landlord's option, pay to the Landlord
on demand the cost of repairing the damage incurred by the Landlord.
5.15 TELECOMMUNICATIONS*
(1) The Tenant may utilize a telecommunication service provider of its choice
with the Landlord's prior written consent, which consent shall not be
unreasonably withheld, subject to the provisions of this Lease, including but
not limited to the following:
(a) prior to commencing any work in the Project, the service provider shall
execute and deliver the Landlord's standard form of license agreement,
which shall include a provision for the Landlord to receive compensation
for the use of the space for the service provider's equipment and
materials;
(b) the Landlord shall incur no expense or liability whatsoever with respect
to any respect of the provision of telecommunication services, including
without limitation, the cost of installation, service, materials, repairs,
maintenance, removal, interruption or loss of telecommunication service;
(c) the Landlord must first reasonably determine that there is sufficient
space in the risers of the Building for the installation of the service
provider's wiring and cross connect;
----------
* Per hand marked revision to the original, the text of Section 7.04(b) is
incorporated from Schedule E to the original (which is here omitted).
Page 9
(d) the Tenant shall indemnify and hold harmless the Landlord for all losses,
claims, demands, expenses and judgments against the Landlord caused by or
arising out of, either directly or indirectly, any acts or omissions by
the service provider or the Tenant or those for whom either of them is
responsible at law; and
(e) the Tenant shall incorporate in its agreement with its service provider a
provision granting the Tenant the right to terminate the service provider
agreement if required to do so by the Landlord and the Landlord shall have
the right at any time and from time to time during the Term to require the
Tenant, at its expense, to exercise the termination right and to contract
for telecommunication service with a different service provider. The
Landlord acknowledges that the Tenant currently has agreements in place
that do not include this right to terminate. The Tenant shall use
commercially reasonable effort to insert this provision in any new
telecommunications service agreements.
(2) The Tenant shall be responsible for the costs associated with the supply
and installation of telephone, computer and other communication equipment and
systems and related wiring within the Leased Premises to the boundary of the
Leased Premises for hook up or other integration with telephone and other
communication equipment and systems of a telephone or other communication
service provider, which equipment and systems of the service provider are
located or are to be located in the Building pursuant to the Landlord's standard
form of license agreement and, subject to the provisions of Section 14.01, for
the removal of signs.
(3) The Landlords shall supply space in risers in the Building and space on
floors(s) of the Building in which the Leased Premises are located, the location
of which shall be designated by the Landlord in its discretion, to
telecommunication service providers who have entered into the Landlord's
standard form of license agreement for the purpose, without any cost or expense
to the Landlord therefore, or permitting installation in such risers and on such
floor(s) of telephone and other communication services and systems (including
data cable patch panels) to the Leased Premises at a point designated by the
Landlord.
(4) The Landlord shall have the right to assume control of wiring, cables and
other telecommunication equipment in the Building and may designate them as part
of the Common Elements. The Landlord shall not have the right to assume control
of the Tenant's switching devices or other equipment that would be considered
Tenant trade fixtures within the Leased Premises or serving the Leased Premises.
ARTICLE 6.00 - SERVICES, MAINTENANCE, REPAIR AND ALTERATIONS BY LANDLORD
6.01 OPERATION OF PROJECT - During the Term, and so long as no Event of Default
shall exist, and so long as no event shall occur which, with the passage of time
or the giving of notice or both, would constitute an Event of Default, the
Landlord shall operate and maintain the Project in accordance with applicable
laws and regulations and with standards from time to lime prevailing for similar
projects in the area in which the Project is located and, subject to payment by
the Tenant of Rent, shall provide the Services set out in this Article 6.00;
provided that the Landlord shall not be responsible for providing those Services
or operating, maintaining, repairing or replacing the systems, facilities or
equipment for the provision of such Services to the extent that such Services,
operation, maintenance, repair or replacement are specifically stated in this
Lease to be the responsibility of the Tenant.
The Landlord shall be deemed to have observed and performed the terms and
conditions to be performed by the Landlord under this Lease, including those
relating to the provision of utilities and Services, if in so doing it acts in
accordance with a directive, policy or request of a governmental or
quasi-governmental authority serving the public interest in the fields of
energy, conservation or security.
6.02 BUILDING SERVICES AND FACILITIES - The Landlord shall provide:
(a) washrooms accessible to the Leased Premises for the use of the Tenant, its
employees and invitees in common with other persons entitled thereto;
(b) domestic running water to the building standard washrooms in the Leased
Premises, if any, and to washrooms available for the Tenant's use in
common with others entitled thereto;
Page 10
(c) access to and egress from the Leased Premises for use by the Tenant, its
employees and invitees in common with other persons entitled thereto,
provided that the Landlord may restrict access for security purposes or
require that all persons seeking access produce identification;
(d) heating, ventilation and air conditioning to the Building, including the
Leased Premises, to a level sufficient to maintain therein conditions of
reasonable temperature and comfort provided that, unless otherwise agreed
by the parties, a full standard of interior climate control shall only be
maintained during those hours and on those days established from time to
time by the Landlord as being operating periods for the Building, having
reasonable regard to energy conservation;
(e) lighting and electrical power to the Common Elements as reasonably
required;
(f) electrical power to the Leased Premises for lighting and for standard
office equipment capable of operating from the voltage circuits available
and then standard for the Building;
(g) janitorial services to the Leased Premises and Common Elements to a
standard consistent from time to time with similar buildings in the area
in which the Building is located;
(h) a directory board located in the Common Elements providing identification
of the tenants in the Building in such manner and containing such
information as the Landlord may determine; and
(i) subject to Section 5.15, appropriate ducts for bringing telephone services
to the Leased Premises.
6.03 MAINTENANCE, REPAIR AND REPLACEMENT - Subject to the provisions of Article
10.00 and payment by the Tenant of Rent, the Landlord shall operate, maintain,
repair and replace the systems, facilities and equipment necessary for the
proper operation of the Project and for provision of the Landlord's Services set
out in Section 6.02 (except as may be installed by or be the property of the
Tenant) and shall maintain and repair the foundations, structure and roof of the
Building and repair damage to the Building which the Landlord is obligated to
insure against under Article 9.00, provided that:
(a) if and so long as all or part of the systems, facilities and equipment in
the Project or the supply of utilities to the Project are destroyed,
damaged or interrupted, the Landlord shall have a reasonable time within
which to complete any necessary repair or replacement and, during that
time, shall only be required to maintain such Services as are reasonably
possible in the circumstances;
(b) the Landlord may temporarily discontinue such Services or any of them at
such times as may be reasonably necessary;
(c) the Landlord shall use reasonable diligence in carrying out its
obligations under this Section 6.03, but shall not be liable under any
circumstances for any consequential damages, whether direct or indirect,
to any Person or property for any failure to do so:
(d) no reduction or discontinuance of Services under this Section 6.03 shall
be construed as a breach of the Landlord's covenant for quiet enjoyment or
as an eviction of the Tenant or, except as specifically provided otherwise
in this Lease, release the Tenant from any obligation under this Lease;
(e) the Landlord shall not be liable under any circumstances for any damage
caused by interruption or failure of any satellite, telecommunications
system, utility, wiring, elevator or escalator;
(f) the Landlord shall have no responsibility for any inadequacy of
performance of any systems within the Leased Premises if the Leased
Premises or the use thereof depart from the design criteria for such
systems as established by the Landlord for the Building; and
(g) nothing contained herein shall derogate from the provisions of Article
10.00.
Page 11
6.04 ALTERATIONS/RENOVATIONS BY LANDLORD - During the Term or any renewal or
extension thereof, it is understood and agreed that if the Landlord intends to
make changes, additions or improvements to or renovate the Project or any part
thereof, of which the Leased Premises form a part (the "Renovation Work"),
notwithstanding anything contained in this Lease to the contrary, the Landlord,
its servants, agents, contractors and representatives may proceed with the
Renovation Work without further consent or approval of the Tenant and the Tenant
hereby irrevocably grants to the Landlord its consent to the carrying out of the
Renovation Work; provided that the Renovation Work shall not materially
interfere with or adversely affect the business of the Tenant carried on in the
Leased Premises. It is specifically understood and agreed that there shall be no
compensation paid to the Tenant nor shall there be any abatement of Rent in
connection with the Renovation Work. In exercising its rights pursuant to this
Section 6.04, the Landlord shall be entitled to:
(a) enter the Leased Premises from time to time to make changes or additions
to the structure, systems, facilities and equipment in the Leased Premises
where necessary to serve the Leased Premises or other parts of the
Building;
(b) limit from time to time as may be necessary by reason of the Renovation
Work, ingress to and egress from the Leased Premises and/or the Project;
(c) change, add to, diminish, demolish, dedicate for public purposes part or
parts of, improve or alter any part of the Project not in or forming part
of the Leased Premises; and
(d) change, add to, diminish, improve or alter the location and extent of the
Common Elements.
The Landlord agrees to use commercially reasonable efforts to give to the Tenant
notice of its intention to proceed with the Renovation Work and the Tenant shall
cooperate with the Landlord in order to allow the Renovation Work to be
completed as expeditiously as possible. It is specifically agreed by the
Landlord and the Tenant that the Landlord shall not, by reason of exercising its
rights pursuant to this Section 6.04, be in default or be deemed to be in
default of any covenant or proviso contained in this Lease or at law.
6.05 ACCESS BY LANDLORD - The Tenant shall permit the Landlord to enter the
Leased Premises at any time in case of an emergency, either real or perceived,
and otherwise during normal business hours where such entry will not
unreasonably disturb or interfere with the Tenant's use of the Leased Premises
or operation of its business, to examine, inspect and show the Leased Premises
for purposes of leasing, sale or financing, to provide Services or make repairs,
replacements, changes or alterations as provided for in this Lease and to take
such steps as the Landlord may deem necessary for the safety, improvement or
preservation of the Leased Premises or the Project. The Tenant shall cooperate
with the Landlord in any such showing of the Leased Premises. The Landlord
shall, whenever possible, consult with or give reasonable notice to the Tenant
prior to entry but no such entry shall constitute an eviction or a breach of the
Landlord's covenant for quiet enjoyment or entitle the Tenant to any abatement
of Rent.
6.06 ENERGY CONSERVATION - The Landlord shall be deemed to have observed and
performed its obligations under this Lease, including those relating to the
provision of utilities and Services, if in so doing it acts in accordance with a
directive, policy or request of an authority having jurisdiction in the field of
energy conservation, security or environmental matters.
6.07 SUPERVISION AND EXTENDED SERVICES - The Landlord, if it shall from time to
time so elect, shall have the right to supervise the moving of furniture or
equipment of the Tenant and (in addition to supervising the Tenant's work as
provided for in this Lease) to supervise the making of repairs conducted within
the Leased Premises and the exclusive right to supervise or make deliveries to
the Leased Premises. In addition, and by arrangement with the Tenant, the
Landlord may provide extended cleaning or other Services to the Tenant in
addition to those normally supplied and referred to in this Lease. In each case,
the Landlord's costs and expenses incurred with respect thereto together with a
reasonable administration fee shall be paid to the Landlord by the Tenant from
time to time promptly upon receipt of invoices from the Landlord.
6.08 LANDLORD'S WORK - The Tenant agrees that it has entered into this Lease on
the express understanding that, unless otherwise specifically provided in
Schedule D or Schedule E, the Leased Premises are being leased "as is" and that
the Landlord's work in respect of the Leased Premises is limited to the scope
delineated as Landlord's work in
Page 12
Schedule D. All other improvements to the Leased Premises shall be performed at
the sole expense of the Tenant in accordance with the terms of this Lease,
including but not limited to Section 7.04.
6.09 CONTROL BY LANDLORD - The Tenant agrees that the Landlord shall have
control of the Project and, without limiting the generality of anything
contained elsewhere in this Lease, the Landlord may make such use of the Common
Elements and permit others to make such use of the Common Elements as the
Landlord may from time to time determine subject, in the case of use by others,
to such terms and conditions and for such consideration as the Landlord may in
its discretion determine, provided that such uses do not materially obstruct
access to the Leased Premises and the Landlord may close all or any part or
parts of the Project to such extent as may, in the opinion of the Landlord or
any Consultants engaged by the Landlord in that regard, be legally sufficient to
prevent a dedication thereof or the accrual of rights therein to any Person or
the public.
ARTICLE 7.00 - PAYMENT FOR SERVICES AND MAINTENANCE, REPAIR AND
ALTERATIONS BY TENANT
7.01 UTILITIES - In addition to the payment of Tenant's Occupancy Costs and
notwithstanding Sections 6.01 and 6.02, the Tenant shall be responsible for the
cost of all utilities including electricity supplied to the Leased Premises. The
Tenant shall not, without the prior written approval of the Landlord, which may
be arbitrarily withheld, install or cause to be installed in the Leased Premises
any equipment that will require additional utility usage or any
telecommunications lines and/or conduits in excess of that normally required for
office premises. If with the Landlord's approval such additional equipment is
installed, the Tenant shall be solely responsible for such excess utility usage.
If utilities are supplied to the Tenant through a meter common to other tenants
in the Project (there being no obligation on the Landlord to install separate
meters), the Landlord shall pay the cost of the utilities and apportion the cost
pro rata among the tenants supplied through the common meter, based on all
relevant factors including, but not limited to, the hours of use, number and
types of lights and electrical equipment and the proportion of each tenant's
Rentable Area to the Rentable Area of all tenants to which the common meter
relates. Upon receipt of the Landlord's statement of apportionment, the Tenant
shall promptly reimburse the Landlord for all amounts apportioned to the Tenant
by the Landlord provided that the Landlord may elect by notice to the Tenant to
estimate the amount which will be apportioned to the Tenant and require the
Tenant to pay that amount in monthly installments in advance simultaneously with
the Tenant's payments of Basic Rent. Notwithstanding the foregoing, and whether
the Leased Premises are separately metered or not, the Landlord may purchase in
bulk from the utility supplier the aggregate utility requirements of the Project
at the applicable rates determined by a single meter on the Project and may, in
billing the Tenant for its share of such utility, apply a scale of rates not
greater than the current scale of rates at which the Tenant would from time to
time be purchasing the whole of its utilities required and consumed in respect
of the Leased Premises if the Tenant were purchasing directly from the utility
supplier. The Tenant shall upon the Landlord's request install a separate
utility meter or meters in the Leased Premises at the Tenant's expense.
In addition to the payments to the Landlord required by this Article 7.00, the
Tenant shall pay all rates, charges, costs and expenses as may be assessed or
levied by any supplier of utilities to the Tenant other than those supplied by
the Landlord.
7.02 LIGHTS - In addition to the payment of Tenant's Occupancy Costs and
notwithstanding Sections 6.01 and 6.02, except to the extent the same is
included in Operating Costs, the Tenant shall pay to the Landlord monthly in
advance, with its payments of Basic Rent, a reasonable amount as determined by
the Landlord in respect of replacement of building standard fluorescent tubes,
light bulbs and ballasts in the Leased Premises on a periodic basis or as
required from time to time and the costs of cleaning, maintaining and servicing
of the electrical light fixtures in the Leased Premises.
7.03 HEATING, VENTILATION AND AIR CONDITIONING - In addition to the payment of
Tenant's Occupancy Costs and notwithstanding Sections 6.01 and 6.02, the Tenant
shall be responsible for the cost of all heating, ventilation and air
conditioning required in the Leased Premises or any part thereof in excess of
that required to be provided by the Landlord under Section 6.02(d). If at any
time during the Term the Landlord shall determine that the cost of the heating,
ventilation and air conditioning required in the Leased Premises or any part
thereof is in excess of that normally required in other parts of the Building
which are used for normal office purposes, the Landlord may deliver to the
Tenant a statement in writing setting out the cost of the excess and upon
receipt of the statement from time to
Page 13
time the Tenant shall promptly reimburse the Landlord for the amount shown in
the statement as attributable to the Leased Premises.
7.04 ALTERATIONS BY TENANT* - The Tenant may from time to time at its own
expense make changes, additions and improvements to the Leased Premises to
better adapt the same to its business, provided that any change, addition or
improvement shall:
(a) comply with the requirements of the Landlord's insurers and any
governmental or municipal authority having jurisdiction;
(b) notwithstanding anything set out in this Lease to the contrary, the
Landlord acknowledges and agrees that the Tenant shall not be liable for
any Pollutants, in on, over, under or emanating from the Project prior to
the date which is the earliest of the following: (a) the date on which the
Tenant takes occupancy of the Leased Premises under this Lease; or (b) the
date on which the Tenant took occupancy of the Leased Premises under any
prior lease of the Leased Premises; or (c) the date on which the Tenant
took occupancy of any other premises in the Project under any other lease
of such other premises in the Project; or (d) the Commencement Date of
this Lease, provided the Tenant, its representatives, employees, agents,
visitors or those authorized to be in the Leased Premises or the Project,
invitees, contractors and all other persons for whom the Tenant is in law
responsible in no way contributed to the existence, damage, disturbance or
release in any way of any such Pollutants in, on, over, under or emanating
from the Product.
(c) shall be made only after detailed plans and specifications therefor have
been submitted to the Landlord and received the prior written approval of
the Landlord, all at the expense of the Tenant, and should the Landlord
provide its written approval, such approval shall not be deemed to mean
that the proposed changes, additions or improvements comply with any
existing or future municipal by-laws or any other applicable laws,
by-laws, codes or requirements. All costs incurred with respect to such
approval shall be at the expense of the Tenant. Any changes, additions
and/or improvements affecting the Building's electrical, mechanical and/or
structural components shall only be performed by contractors selected by
the Landlord (the "Landlord's Contractors"). A list of the Landlord's
Contractors is available upon request;
(d) equal or exceed the then current standard for the Building;
(e) be carried out in a good and workmanlike manner and subject to Subsection
7.04(c), only by Persons selected by the Tenant and approved in writing by
the Landlord who shall, if required by the Landlord, deliver to the
Landlord before commencement of the work, performance and payment bonds as
well as proof of workers' compensation and public liability and property
damage insurance coverage, with the Landlord and the Landlord's agent and
nominee (if any) named as additional insureds, in amounts, with companies
and in a form reasonably satisfactory to the Landlord, which shall remain
in effect during the entire period in which the work will be carried out;
and
(f) be made only after the Tenant has provided to the Landlord evidence of all
requisite permits and licenses and any other information reasonably
required by the Landlord.
Upon completion of such change, addition or improvement, the Tenant shall
provide to the Landlord as-built drawings and/or a CAD disk of same in a format
useable by the Landlord, together with evidence satisfactory to the Landlord of
a final inspection of such change, addition or improvement (including inspection
of mechanical and electrical systems where applicable) by the authority which
issued the permit or license for same.
It is understood and agreed that the Landlord shall have no responsibility or
liability whatsoever with respect to any such work or attendant materials left
or installed in the Project and shall be reimbursed for any Outlays and for any
delays caused to the Landlord or its contractor(s) directly or indirectly as a
result thereof. The Tenant shall be solely responsible for the removal of any
and all construction refuse or debris resulting from such work with such removal
to occur only after normal business hours.
--------------
* Per hand marked revision to the original, the text of Section 7.04(b) is
incorporated from Schedule E to the original (which is here omitted).
Page 14
Any increase in Taxes or fire or casualty insurance premiums for the Project
attributable to such change, addition or improvement shall be borne by the
Tenant. The Tenant shall promptly repair at its own expense any damage to the
Leased Premises or the Project, including without limitation the property of
others, resulting from such changes, additions or improvements.
7.05 TENANT'S TRADE FIXTURES AND PERSONAL PROPERTY - The Tenant may install in
the Leased Premises its usual trade fixtures and personal property in a proper
manner; provided that no installation or repair shall interfere with or damage
the mechanical or electrical systems or the structure of the Building. If the
Tenant is not then in default hereunder, the trade fixtures and personal
property installed in the Leased Premises by the Tenant may be removed by the
Tenant from time to time in the ordinary course of the Tenant's business or in
the course of reconstruction, renovation or alteration of the Leased Premises by
the Tenant, subject to the provisions of Article 14.00 of this Lease, and
provided that the Tenant promptly repairs at its own expense any damage to the
Leased Premises and the Building resulting from the installation and removal and
provided further that in the event of removal of trade fixtures the Tenant shall
promptly replace such trade fixtures with trade fixtures of equal or greater
quality and value, subject to the provisions of Section 14.01.
7.06 MAINTENANCE AND REPAIR - Except to the extent that the Landlord is
specifically responsible therefore under this Lease, the Tenant, at its cost,
shall maintain, repair and replace the Leased Premises, all Leasehold
Improvements and all apparatus therein in good order and condition, and in
compliance with the requirements of all authorities having jurisdiction,
including without limitation:
(a) keeping the Leased Premises and the immediate surrounding area in a clean
and tidy condition and free of debris and garbage;
(b) repainting and redecorating the Leased Premises and cleaning and
maintaining drapes and carpets at reasonable intervals as reasonably
required by the Landlord;
(c) making repairs and replacements as needed to the Leased Premises
including, without limitation, to internal and external glass within or on
the exterior of the Leased Premises (with the exception of glass
comprising the curtain wall), doors, hardware, partitions, walls,
fixtures, lighting and plumbing fixtures, wiring, piping, ceilings, floors
and thresholds in the Leased Premises; and
(d) keeping the Leased Premises in such condition as to comply with the
requirements of any authority having jurisdiction.
7.07 INSPECTION. The Landlord and its Consultants may from time to time enter
upon the Leased Premises:
(a) to inspect the Leased Premises and its condition; and
(b) to inspect any work being done by the Tenant both during the course of
such work and following completion thereof.
If the Landlord or its agents shall determine that the work being done by the
Tenant is in breach of this Lease or fails to comply with the requirements of
this Lease in any respect, the Tenant shall forthwith remedy such breach or
failure to comply and shall desist from continuing the same. The Tenant shall,
at its own cost, make good any deficiency in such work and remedy any failure to
comply with the requirements of this Lease.
7.08 FAILURE TO MAINTAIN - If the Tenant fails to perform any obligation under
this Article 7.00, then on not less than 5 days' notice to the Tenant, the
Landlord may enter the Leased Premises and perform the obligation without
liability to the Tenant for any loss or damage thereby incurred. The Tenant
shall promptly after receiving the Landlord's invoice therefor reimburse the
Landlord for all costs incurred by the Landlord in performing the obligation
plus 20% of the costs for overhead and supervision.
7.09 LIENS - The Tenant shall:
Page 15
(a) pay promptly when due all costs for work done or caused to be done or
goods affixed by the Tenant in the Leased Premises which could result in
any lien or encumbrance on the Landlord's interest in the Project or any
part thereof, or the filing or registration of any security interest or
notice thereof;
(b) keep the title to the Project, including every part thereof and the
Leasehold Improvements, free and clear of any lien, encumbrance or
security interest or notice thereof; and
(c) indemnify and hold harmless the Landlord against any Claims arising out of
the supply of goods, materials, services or labour for the work.
The Tenant shall immediately notify the Landlord of any lien, encumbrance, claim
of lien, security interest, or notice thereof or other action of which it has,
or reasonably should have, knowledge and which affects the title to the Project
or any part thereof and, except for those contemplated by Section 15.25, shall
cause the same to be removed within 5 business days (or such additional time as
the Landlord may consent to in writing), failing which the Landlord may take
such action as the Landlord deems necessary to remove same and the entire cost
thereof shall immediately become due and payable by the Tenant to the Landlord.
The Tenant shall not affix or cause to be affixed to the Project any goods
acquired under conditional sale or with respect to which any lien, encumbrance
or security interest exists. The Landlord may from time to time post such
notices in such places on the Leased Premises as the Landlord considers
advisable to prevent or limit the creation of any liens upon the Project or any
part thereof.
7.10 ROOF - The Tenant shall not be entitled to install upon the roof of the
Building any equipment except as consented to in writing by the Landlord, which
consent may be arbitrarily withheld, but if given shall be subject to whatever
conditions the Landlord, in its sole discretion, deems necessary in the
circumstances.
ARTICLE 8.00 - TAXES
8.01 TAXES PAYABLE BY LANDLORD - The Landlord covenants and agrees to pay all
Taxes assessed against the Landlord or the Project on account of its ownership
when due (except for Taxes payable directly to the taxing authority by the
Tenant under Subsection 8.02(c)) and subject to the provisions hereinafter
contained in this Article 8.00. Provided however, that the Landlord may defer
payment of any such Taxes or defer compliance with any statute, law, by-law,
regulation or ordinance in connection with the levy of such Taxes in each case
to the fullest extent permitted by law as long as it shall diligently prosecute
any contest or appeal of such Taxes.
8.02 TAXES PAYABLE BY TENANT - The Tenant shall pay promptly when due to the
taxing authority or the Landlord at the Landlord's direction all Taxes upon or
on account of the following:
(a) Property Taxes in respect of the Leased Premises;
(b) Tenant's Proportionate Share of the amount assessed as Property Taxes for
the Common Elements if separately identified and if not separately
identified then as may be reasonably attributed or allocated by the
Landlord; and
(c) any Taxes imposed or assessed against or in respect of the personal
property end Leasehold Improvements of the Tenant in the Leased Premises
or in respect of any business operations carried on or in respect of the
use or occupancy thereof by the Tenant or by any subtenant or licensee, if
levied or assessed separately from Taxes upon the remainder of the Land
and Building and referred to herein as "Business Taxes".
The Tenant agrees to provide to the Landlord within 3 days of receipt thereof,
an original or duplicate copy of any separate ▇▇▇▇ for Taxes.
In the event that there shall not be a separate assessment and separate tax ▇▇▇▇
for Property Taxes or Business Taxes levied in respect of the Leased Premises,
the Tenant shall pay at the same time as Basic Rent, Tenant's Proportionate
Share of Taxes which may be assessed, levied, rated or imposed against the
Project. The Tenant shall deliver promptly,
Page 16
upon request of the Landlord, receipts for all such payments and will furnish
such other information as the Landlord may require.
8.03 TAX INCREASES ATTRIBUTABLE TO TENANT - If any Taxes in respect of the
Leased Premises or Project are greater than they otherwise would have been by
reason of the constitution or ownership of the Tenant, the use of the Leased
Premises by the Tenant, the school support of the Tenant, or any other reason
peculiar to the Tenant, the portion of such Taxes in each year attributable to
such reason, as determined by the Landlord, shall be paid by the Tenant to the
Landlord at least 15 days prior to the due date for payment thereof by the
Landlord, and in addition to Property Taxes and other Taxes otherwise payable by
the Tenant under this Lease.
8.04 GST - The Tenant shall pay to the Landlord the amount of all GST accruing
due with respect to Rent at the time the Rent is due and payable to the Landlord
under this Lease. The Tenant's obligation to pay GST under this Section shall
not be limited or precluded by any limitation contained in this Lease upon the
Landlord's right to recover or receive payment from the Tenant of taxes upon the
Landlord's income or profits or otherwise.
8.05 LANDLORD'S ELECTION - Notwithstanding that any Taxes (including without
limitation, any of the foregoing payable by the Tenant under Section 8.02) may
be separately imposed, levied, assessed or charged by the appropriate authority
for or in respect of the Leased Premises and other portions of the Project, the
Landlord may elect that such Taxes shall be added to Operating Costs and the
Landlord may in its absolute discretion allocate such amount among tenants of
the Building and the amount allocated to the Tenant shall form part of Tenant's
Occupancy Costs.
If there are not separate assessments of Property Taxes for the Leased Premises
or the Building, the Landlord shall allocate Property Taxes to the Building and
any other of the Project Components covered by or included in an assessment
covering the Land or the Building on an equitable basis having regard, without
limitation, to the various uses and values of the subject Project Components,
any separate assessments that may have been rendered by the taxing authority and
any assessment principles known or prescribed by any lawful taxing authority.
8.06 RIGHT TO CONTEST - Each of the Landlord and the Tenant (provided the Tenant
is legally entitled to do so) shall have the right to contest in good faith the
validity or amount of any Taxes which, in the case of the Landlord, the Landlord
is responsible to pay under this Article 8.00 and which, in the case of the
Tenant, the Tenant is responsible to pay under Section 8.02 and for which it is
separately assessed. Notwithstanding anything to the contrary herein, the Tenant
may, upon prior written notice to the Landlord, defer payment of any amount
payable by it pursuant to Section 8.02 for which it is separately assessed, to
the extent permitted by law; provided that no contest by the Tenant shall
involve the possibility of forfeiture, sale or disturbance of the Landlord's
interest in the Leased Premises or the imposition of any penalty or interest,
charge or lien and that, upon the final determination of any contest by the
Tenant, the Tenant shall immediately pay and satisfy the amount found to be due,
together with any costs, penalties and interest. If, as a result of any contest
by the Tenant, any tax, rate, levy, assessment, fee or other charge is
increased, the Tenant shall be responsible for the full amount of such increase
in respect of the period to which the contest relates and to any subsequent tax
periods which commence during the Term.
The Tenant shall not contest any amount payable by it under Section 8.02 or
appeal any assessment therefor except as follows:
(a) the Tenant shall deliver to the Landlord any notices of appeal or other
like instrument and obtain the Landlord's consent thereto, which consent
shall not be unreasonably withheld, before filing the same;
(b) the Tenant shall deliver whatever security the Landlord reasonably
requires;
(c) the Tenant shall promptly and diligently prosecute the contest or appeal
at its sole expense; and
(d) the Tenant shall keep the Landlord fully informed thereof.
Page 17
ARTICLE 9.00 - INSURANCE, LIABILITY AND ENVIRONMENTAL
9.01 LANDLORD'S INSURANCE - During the Term, the Landlord shall place insurance
coverage on and with respect to the Project excluding the area(s) to be insured
by the Tenant as set out in Section 9.02, which coverage shall include the
following, if available at reasonable cost in the opinion of the Landlord:
(a) all risks insurance for the full reconstruction value of the Project,
excluding Leasehold improvements, as determined by the Landlord:
(b) as an extension to the insurance maintained pursuant to Subsection
9.01(a), insurance on the rental income derived by the Landlord from the
Project on a gross rental income form with a period of indemnity of not
less than the period as estimated by the Landlord from time to time which
would be required to rebuild and, if necessary, to re-tenant the Project
in the event of the complete destruction thereof:
(c) boiler and machinery insurance, including repair or replacement and rental
income coverage, if applicable;
(d) plate glass insurance (not including plate glass fronting or within the
Leased Premises) if deemed appropriate by the Landlord;
(e) comprehensive general liability insurance; and
(f) such other insurance which is or may become customary or reasonable for
owners of projects similar to the Project to carry in respect of loss of,
or damage to, the Project or liability arising therefrom.
The Insurance referred to in this Section shall be carried in amounts determined
reasonably by the Landlord. The insurance shall be written in the name of the
Landlord with loss payable to the Landlord and to any mortgagee (including any
trustee under a deed of trust and mortgage) of the Project from time to time.
The policies of insurance referred to in Subsections 9.01(a), (b), (c), (d) and
(e) shall contain a waiver of the insurer's right of subrogation as against the
Tenant. The Landlord hereby waives its right of recovery against the Tenant, its
employees and those for whom the Tenant is in law responsible with respect to
occurrences required to be insured against by the Landlord hereunder. Upon the
occurrence of any loss which by this Lease the Landlord is required to insure
against, the Tenant shall pay to the Landlord the Tenant's Proportionate Share
of all applicable deductibles under such policies of insurance.
Notwithstanding any contribution by the Tenant to Insurance premiums as provided
for in this Lease, no insurable interest is conferred upon the Tenant under
policies carried by the Landlord. Except as specifically provided in this Lease,
the Landlord shall in no way be accountable to the Tenant regarding the use of
the insurance proceeds arising from any Claims.
The Landlord shall allocate (in circumstances where the insurer or the insurer's
agent falls to do so) the cost of premiums to the Building and any other of the
Project Components (and such other properties as may be appropriate), covered by
the insurance policy on an equitable basis having regard, without limitation, to
the various uses and values of the subject Project Components and any other
properties so included and the recommendation of the Landlord's insurance
broker.
9.02 TENANT'S INSURANCE - At its own expense the Tenant shall take out and
thereafter maintain in force at all times during the Term and at all times when
the Tenant is in possession of the Leased Premises insurance policies as
follows:
(a) all risks insurance on Leasehold improvements and on all other property of
every description, nature and kind owned by the Tenant or for which the
Tenant is legally liable, which is installed, located or situate within
the Leased Premises or elsewhere in the Project, including without
limitation, all inventory or stock-in-trade in an amount not less than the
full replacement cost thereof without deduction for depreciation; such
insurance shall be subject to a replacement cost endorsement and shall
include a stated amount co-insurance clause and a breach of conditions
clause;
Page 18
(b) comprehensive or commercial general bodily injury and property damage
liability insurance to respond to any and all incidents occurring in the
Leased Premises in the minimum amount of $3,000,000 per occurrence
including the following extensions: owners and contractors protective;
limited pollution coverage endorsement; products end completed operations;
personal injury; occurrence basis property damage; blanket contractual and
non-owned automobile liability; such insurance shall include the Landlord
and the Landlord's agent and nominee (if any) as named additional
insureds, and shall protect the Landlord and the Landlord's agent and
nominee (if any) in respect of all Claims, including Claims by the Tenant,
as if the Landlord and the Landlord's agent and nominee (if any) were
separately insured; such insurance shall include cross liability and
severability of interest clauses;
(c) boiler and machinery insurance, if applicable, including repair or
replacement endorsement in an amount satisfactory to the Landlord and
providing coverage with respect to all objects introduced into the Leased
Premises by or on behalf of the Tenant or otherwise constituting Leasehold
improvements;
(d) plate glass insurance on all internal and external glass within or
fronting the Leased Premises; however, notwithstanding the foregoing, the
Tenant may elect to self-insure for the insurance described in this
Subsection 9.02(d);
(e) business interruption insurance on the profit form providing all risks
coverage with a period of indemnity of not less than 12 months and subject
to a stated amount co-insurance clause; and
(f) any other form of Insurance in such amounts and against such risks as the
Landlord may from time to time reasonably require.
The Tenant acknowledges and agrees that it shall be solely responsible for
insuring the Leasehold Improvements, its equipment and stock and any other
property owned or brought into the Leased Premises by the Tenant whether affixed
to the Building or not.
The insurance policies referred to in this Section shall be subject to such
higher limits as the Tenant, or the Landlord acting reasonably, or any mortgagee
of the Landlord's interest in the Project may require from time to time. The
policies of insurance referred to in Subsections 9.02(a), (b), (c), (d), (e) and
(f) shall contain a waiver of the insurer's right of subrogation as against the
Landlord. The Tenant hereby waives its right of recovery against the Landlord,
its employees and those for whom the Landlord is in law responsible with respect
to occurrences required to be insured against by the Tenant hereunder. Any and
all deductibles in the Tenant's insurance policies shall be borne solely by the
Tenant and shall not be recovered or attempted to be recovered from the
Landlord. In addition, all such policies shall be noncontributing with, and will
apply only as primary and not excess to, any insurance proceeds available to the
Landlord.
The Tenant shall provide to the Landlord at the commencement of the Term and at
least 30 days prior to the renewal of all Insurance referred to in this Section
9.02, and promptly at any time upon request, a certificate of insurance
evidencing the insurance coverage maintained by the Tenant in accordance with
this Section 9.02. The delivery to the Landlord of a certificate of Insurance or
any review thereof by or on behalf of the Landlord shall not limit the
obligation of the Tenant to provide and maintain insurance pursuant to this
Section 9.02 or derogate from the Landlord's rights if the Tenant shall fail to
fully insure.
All policies shall provide that the insurance shall not be cancelled or changed
to the prejudice of the Landlord without at least 30 days' prior written notice
given by the Insurer to the Landlord. All policies of insurance shall be placed
with a company licensed to sell commercial insurance in Canada.
The Tenant acknowledges and agrees that, if it fails to obtain and maintain in
force any of the insurances set out in this Section 9.02, then the Tenant shall
indemnify the Landlord in respect of any losses arising therefrom.
9.03 PLACEMENT OF TENANT'S INSURANCE BY LANDLORD - If the Tenant fails to place
or maintain all or any of the insurance coverage referred to in Section 9.02,
the Landlord may, at its option, place all or any part of such insurance in the
name of or on behalf of the Tenant and the Tenant shall pay to the Landlord upon
demand all costs incurred by
Page 19
the Landlord in so doing including, without limitation, the premium or premiums
for such insurance together with the Landlord's administrative fee of 15% of
such premium.
9.04 LIMITATION OF LANDLORD'S LIABILITY - The Landlord, its agents and employees
and any Person for whom it is in law responsible shall not be liable under any
circumstances for any damage caused by anything done or omitted to be done by
any other tenant of the Project or any damage resulting from the exercise of the
Landlord's control over the Projector any part thereof.
9.05 ENVIRONMENTAL ISSUES
(1) LANDLORD'S REQUIREMENTS - The Tenant shall not bring into or allow to be
present in the Leased Premises or the Project any Pollutants except such as are
disclosed in Schedule H hereto. If the Tenant shall bring or create upon the
Project, including the Leased Premises, any Pollutants, then such Pollutants
shall be and remain the sole property of the Tenant and the Tenant shall remove
same at its sole cost at the expiration or sooner termination of the Term or
sooner if so directed by any governmental authority or if required to effect
compliance with any Environmental Laws or if required by the Landlord.
(2) GOVERNMENTAL REQUIREMENTS - If, during the Term or any extension thereof,
any governmental authority shall require the clean-up of any Pollutants:
(a) held in, released from, abandoned in, or placed upon the Leased Premises
or the Project by the Tenant or its employees or those for whom it is in
law responsible; or
(b) released or disposed of by the Tenant or its employees or those for whom
it is in law responsible;
then the Tenant shall, at its own expense, carry out all required work,
including preparing all necessary studies, plans and approvals and providing all
bonds and other security required and shall provide full information with
respect to all such work to the Landlord provided that the Landlord may, at its
option, perform any such work at the Tenant's sole cost and expense, payable on
demand as additional Rent.
(3) ENVIRONMENTAL COVENANTS - In addition to and without restricting any other
obligations or covenants herein, the Tenant covenants that it will:
(a) comply in all respects with all Environmental Laws relating to the Leased
Premises or the use of the Leased Premises;
(b) promptly notify the Landlord in writing of any notice by any governmental
authority alleging a possible violation of or with respect to any other
matter involving any Environmental Laws relating to operations in the
Leased Premises or relating to any Person for whom it is in law
responsible or any notice from any other party concerning any release or
alleged release of any Pollutants; and
(c) permit the Landlord to:
(i) enter and inspect the Leased Premises and the operations conducted
therein; and
(ii) conduct tests and environmental assessments or appraisals; and
(iii) remove samples from the Leased Promises; and
(iv) examine and make copies of any documents or records relating to the
Leased Premises and interview the Tenant's employees as necessary;
and
(d) promptly notify the Landlord of the existence of any Pollutants in the
Project.
Page 20
(4) ENVIRONMENTAL INDEMNIFICATION - The Tenant shall indemnify and hold the
Landlord harmless at all times from and against any and all losses, damages,
penalties, fines, coats, fees and expenses (including legal fees on a solicitor
and client basis and Consultants' fees and expenses) resulting from:
(a) any breach of or non-compliance with the foregoing environmental covenants
of the Tenant; and
(b) any legal or administrative action commenced by, or claim made or notice
from, any third party, including, without limitation, any governmental
authority, to or against the Landlord and pursuant to or under any
Environmental Laws or concerning a release or alleged release of
Pollutants at the Leased Premises into the environment and related to or
as a result of the operations of the Tenant or those acting under its
authority or control at the Leased Premises, and any and all costs
associated with air quality issues, if any.
[IF RIDER 1 (SECTION 9.05) IS ATTACHED TO THIS LEASE THIS SECTION WILL BE
DELETED AND INITIALED AND THE TERMS AND CONDITIONS STATED ON RIDER 1 WILL GOVERN
THE RELATIONSHIP BETWEEN THE LANDLORD AND THE TENANT WITH RESPECT TO
ENVIRONMENTAL ISSUES.]
ARTICLE 10.00 - DAMAGE AND DESTRUCTION
10.01 LIMITED DAMAGE TO LEASED PREMISES, ACCESS OR SERVICES - If during the
Term, the Leased Premises or any part thereof, or other portions of the Building
providing access or Services essential to the Leased Premises, shall be
destroyed or damaged by any hazard against which the Landlord is obligated to
insure pursuant to Section 9.01, the Landlord, if permitted by law so to do,
shall proceed with reasonable diligence to rebuild and restore or repair the
Leased Premises or comparable premises or such access routes or Service systems,
as the case may be, in conformance with current laws to the extent of insurance
proceeds received. The covenants of the Tenant to repair shall not include any
repairs of damage required to be made by the Landlord under this Section 10.01.
Rent payable by the Tenant shall ▇▇▇▇▇ from the date of such damage or
destruction to the date of substantial completion of the Landlord's work as
determined by the Landlord's architect or engineer or restoration of access or
Services, as the case may be. If less than all of the Leased Premises is
destroyed or damaged as contemplated in this Section 10.01, Rent payable by the
Tenant shall ▇▇▇▇▇ from the date of such damage or destruction to the date of
substantial completion of the Landlord's work in the same proportion as the
Rentable Area of the Leased Premises so damaged or destroyed is of the total
Rentable Area of the Leased Premises.
10.02 MAJOR DAMAGE TO LEASED PREMISES - Notwithstanding anything contained in
this Lease to the contrary, if the Leased Premises shall be damaged or destroyed
by any hazard against which the Landlord is obligated to insure under this
Lease; and if in the opinion of the Landlord's architect or engineer, given
within 30 business days of the happening of said damage or destruction, said
damage or destruction is to the extent that the Leased Premises shall be
incapable of being rebuilt or repaired or restored with reasonable diligence
within 6 months after the occurrence of such damage or destruction, then the
Landlord may, at its option, terminate this Lease by notice in writing to the
Tenant given within 15 days after the giving of the opinion by the Landlord's
architect or engineer. If such notice is given by the Landlord under this
Section 10.02, then this Lease shall terminate on the date of such notice and
the Tenant shall immediately surrender the Leased Premises and all interest
therein to the Landlord and Rent shall be apportioned and shall be payable by
the Tenant only to the date of such damage or destruction and the Landlord may
re-enter and repossess the Leased Premises.
The Tenant agrees that in the event of damage or destruction to the Leased
Premises covered by insurance required to be taken out by the Tenant pursuant to
Section 9.02 or otherwise, the Tenant shall use the proceeds of such insurance
for the purpose of repairing or restoring such damage or destruction. In the
event of damage to or destruction of the Project or the Building entitling the
Landlord to terminate the Lease pursuant to this Article 10.00, then, if the
Leased Premises have been damaged or destroyed, the Tenant shall pay to the
Landlord all of its insurance proceeds relating to any Leasehold Improvements in
the Leased Premises which the Tenant was required to insure and, if the Leased
Premises have not been damaged or destroyed, the Tenant shall deliver to the
Landlord, in accordance with the provisions of this Lease, all Leasehold
Improvements and the Leased Premises.
10.03 DAMAGE TO BUILDING - Notwithstanding that the Leased Premises may not be
affected, if in the reasonable opinion or determination of the Landlord or the
Landlord's architect or engineer, rendered within 30 business days of
Page 21
the happening of damage or destruction, the Building shall be damaged or
destroyed to the extent that any one or more of the following conditions exist:
(a) in the reasonable opinion of the Landlord the Building must be totally or
partially demolished, whether or not to be reconstructed in whole or in
part; or
(b) in the reasonable opinion of the Landlord's architect or engineer the
Building shall be incapable of being rebuilt or repaired or restored with
reasonable diligence within 6 months after the occurrence of such damage
or destruction; or
(c) any tenant of the Building which, in the Landlord's absolute discretion,
is a major tenant of the Building becomes entitled to terminate its lease
as a result of such damage or destruction; or
(d) more then 35% of the Rentable Area of the Building is damaged or destroyed
as reasonably determined by the Landlord's architect or engineer; or
(e) any or all of the heating, ventilating, air conditioning, electrical,
mechanical or elevator systems in the Building are damaged or destroyed as
reasonably determined by the Landlord's architect or engineer;
then the Landlord may at its sole option terminate this Lease by notice in
writing to the Tenant given within 15 days after the rendering of such opinion
or determination. If notice is given by the Landlord under this Section 10.03,
then this Lease shall terminate from the date of such notice and the Tenant
shall immediately surrender the Leased Premises and all interest therein to the
Landlord and Rent shall be apportioned and shall be payable by the Tenant only
to the date of such notice and the Landlord may thereafter re-enter and
repossess the Leased Premises. If the Building is damaged to the extent
described in this Section 10.03 and the Landlord does not terminate this Lease,
the Landlord will rebuild or repair the Building to base building standards, but
the rebuilt or repaired Building may be different in configuration and design
from that comprising the Project prior to the damage or destruction.
10.04 NO ABATEMENT - Except as specifically provided in this Article 10.00,
there shall be no abatement of Rent and the Landlord shall have no liability to
the Tenant by reason of any injury to, loss of or interference with the Tenant's
business or property arising directly or indirectly from fire or other casualty,
howsoever caused, or from the making of any repairs resulting therefrom or to
any portion of the Building or the Leased Premises.
10.05 NOTIFY LANDLORD - The Tenant shall immediately notify the Landlord or its
representative in the Project of any accident or detect in the Project, the
Leased Premises or any systems thereof and, as well, of any matter or condition
which may cause injury or damage to the Project or any person or property
located therein.
10.06 EXPROPRIATION - If at any time during the Term the whole or any pert of
the Leased Premises shall be taken by any lawful power or authority by the right
of Expropriation, the Landlord may, at its option, give notice to the Tenant of
termination of this Lease either in its entirety or only insofar as it affects
the part of the Leased Premises taken by the lawful power or authority by right
of Expropriation, on the date when the Tenant or the Landlord is required to
yield up possession thereof to the Expropriating authority. Upon such
termination, or upon termination by operation of law, as the case may be, the
Tenant shall immediately surrender the Leased Premises or the part of the Leased
Premises taken by the Expropriating authority, as the case may be, and all its
interest therein, and Rent shall ▇▇▇▇▇ and be apportioned to the date of
termination and the Tenant shall forthwith pay to the Landlord the apportioned
Rent and all other amounts which may be due to the Landlord up to the date of
termination. The Tenant shall have no claim upon the Landlord for the value of
its property or the unexpired Term, but the parties shall each be entitled
separately to advance their claims for compensation for the loss of their
respective interests in the Leased Premises so taken, and the parties shall each
be entitled to receive and retain such compensation as may be awarded to each
respectively. However, to the extent that a part of the Project other than the
Leased Premises is Expropriated the full proceeds paid or awarded therefor will
belong solely to the Landlord and the Tenant will assign to the Landlord any
rights it might have or acquire in respect of such proceeds or awards and will
execute those documents that the Landlord reasonably requires in order to give
effect to this intention.
Page 22
Where used in this Section 10.06 "Expropriation" means expropriated by a
governmental or municipal authority, or transferred, conveyed or dedicated in
contemplation of a threatened expropriation and "Expropriated" and
"Expropriating" have corresponding meanings.
ARTICLE 11.00 - DEFAULT
11.01 INTEREST - The Tenant shall pay monthly to the Landlord interest at a rate
per annum equal to the lesser of the Prime Rate plus 5% and the maximum rate
permitted by applicable law upon all Rent required to be paid hereunder from the
due date for payment thereof until the same is fully paid and satisfied.
11.02 COSTS OF ENFORCEMENT - The Tenant shall indemnify the Landlord against all
costs and charges (including legal fees one solicitor and client basis)
reasonably incurred either during or after the Term in enforcing payment of Rent
hereunder and in obtaining possession of the Leased Premises after default of
the Tenant or upon expiration or earlier termination of this Lease or in
enforcing any covenant, proviso or agreement of the Tenant herein contained or
in determining the Landlord's rights or the Tenant's obligations under this
Lease or both. All such costs and charges shall be paid by the Tenant to the
Landlord forthwith upon demand.
11.03 PERFORMANCE OF TENANT'S OBLIGATIONS - All covenants and agreements to be
performed by the Tenant under any of the terms of this Lease shall be performed
by the Tenant, at the Tenant's sole cost and expense, and without any abatement
of Rent. If the Tenant fails to perform any act to be performed by it hereunder
then, in the event of an emergency, either real or perceived, or if the failure
continues for 10 days following notice thereof, the Landlord may (but shall not
be obligated to) perform the act without waiving or releasing the Tenant from
any of its obligations relative thereto; but having commenced to do so may cease
to do so without completing performance thereof. All sums paid and costs
incurred by the Landlord in so performing the act, plus 20% of the cost for
overhead and supervision together with interest thereon at the rate set out in
Section 11.01 from the date payment was made or such cost was incurred by the
Landlord, shall be payable by the Tenant to the Landlord on demand.
11.04 EVENTS OF DEFAULT - If and whenever:
(a) all or any part of the Rent hereby reserved is not paid when due; or
(b) the Term or any goods, merchandise, stock in trade, chattels or equipment
of the Tenant or any Indemnifier is or are seized or taken or exigible in
execution or in attachment or if a creditor takes possession thereof or if
a writ of execution is issued against the Tenant or any Indemnifier; or
(c) the Tenant or any Indemnifier or any Person bound to perform the
obligations of the Tenant in this Lease either as guarantor or indemnifier
or as one of the parties constituting the Tenant takes any steps in
furtherance of or suffers any order to be made for its winding-up or other
termination of its corporate existence or becomes insolvent or commits an
act of bankruptcy or becomes bankrupt or takes the benefit of any statute
that may be in force for bankrupt or insolvent debtors or becomes involved
in voluntary or involuntary winding-up proceedings or if a receiver or
receiver/manager shall be appointed for all or any part of the business,
property, affairs or revenues of the Tenant or such indemnifier or Person;
or
(d) the Tenant makes a bulk sale of its goods or moves or commences, attempts
or threatens to move its goods, chattels and equipment, or any of them,
out of the Leased Premises (other than in the normal course of its
business) or ceases to conduct business in the Leased Premises; or
(e) the Tenant fails to move into or take possession of the Leased Premises or
vacates or abandons the Leased Premises in whole or in part or fails to
actively carry on business therein; or
(f) the Tenant or any indemnifier or any Person bound to perform the
obligations of the Tenant pursuant to this Lease either as guarantor or
indemnifier or as one of the parties constituting the Tenant fails to
observe, perform and keep each and every covenant, agreement, provision,
stipulation and condition herein contained to be observed, performed and
kept by the Tenant or the indemnifier (other than payment of Rent) and
Page 23
persists in the failure after 10 days' notice by the Landlord requiring
the Tenant to remedy, correct, desist or comply (or if any breach would
reasonably require more than 10 days to rectify, unless the Tenant
commences rectification within the 10 day notice period and thereafter
promptly, effectively and continuously proceeds with the rectification of
the breach); or
(g) any Transfer occurs except as permitted by and in accordance with Article
12.00; or
(h) any Pollutants are present in the Leased Premises without the prior
written consent of the Landlord or otherwise than in compliance with all
terms and conditions imposed by the Landlord in giving its consent
thereto; or
(i) a report or statement required from the Tenant under this Lease is false
or misleading except if it results from an innocent clerical error as
determined by the Landlord; or
(j) any policy of insurance taken out by either the Landlord or the Tenant
with respect to the Project shall be cancelled by reason of any act or
omission of the Tenant; or
(k) the Tenant fails to observe and perform the rules and regulations; or
(l) the use of the Leased Premises is not in accordance with that set out in
Item 9 of the Term Sheet;
then the Landlord shall be entitled to any or all of those remedies set out in
Section 11.05. Each of the foregoing circumstances constitutes an "Event of
Default" for the purposes of this Lease.
11.05 REMEDIES ON DEFAULT - Upon the happening of an Event of Default the
Landlord may at its option, and in addition to and without prejudice to all
rights and remedies of the Landlord available to it either by any other
provision of this Lease or by statute or the general law exercise any one or
more of the following remedies:
(a) be entitled to the full amount of the current month's and the next ensuing
3 months' installments of Rent which shall immediately become due and
payable and the Landlord may immediately distrain for the same, together
with any arrears then unpaid; or
(b) without notice or any form of legal process, forthwith re-let or sublet
the Leased Premises or any part or parts thereof for whatever term or
terms and at whatever rent and upon whatever other terms, covenants and
conditions the Landlord considers advisable including, without limitation,
the payment or granting of inducements all on behalf of the Tenant: and on
each such re-letting or subletting the rent received by the Landlord
therefrom will be applied first to reimburse the Landlord for any such
inducements and for any expenses, capital or otherwise, incurred by the
Landlord in making the Leased Premises ready for re-letting or subletting;
and secondly to the payment of any costs end expenses of re-letting or
subletting including brokerage fees and legal fees on a solicitor and
client basis; and third to the payment of Rent; and the residue, if any,
will be held by the Landlord and applied to payment of Rent as it becomes
due and payable. If rent received from re-letting or subletting during any
month is less than Rent to be paid during that month hereunder, the Tenant
will pay the deficiency which will be calculated and paid monthly on or
before the first day of every month; and no re-letting or subletting of
the Leased Premises by the Landlord or entry by the Landlord or its agents
upon the Leased Premises for the purpose of re-letting or subletting or
other act of the Landlord relating thereto including, without limitation,
changing or permitting a subtenant to change locks, will be construed as
an election on its part to terminate this Lease unless a written notice of
termination is given to the Tenant; and if the Landlord elects to re-let
or sublet the Leased Premises without terminating, it may afterwards elect
to terminate this Lease at any time by reason of any Event of Default then
existing; or
(c) seize and sell such goods, chattels and equipment of the Tenant as are in
the Leased Premises and the Landlord may, but shall not be obligated to,
apply the proceeds thereof to all Rent to which the Landlord is then
entitled under this Lease. Any such sale may be effected by public
auction, private sale or otherwise, and either in bulk or by individual
item, or partly by one means and partly by another, all as the Landlord in
its sole discretion may decide; or
Page 24
(d) terminate this Lease by leaving upon the Leased Premises notice in writing
of the termination, and such termination shall be without prejudice to the
Landlord's right to damages, it being agreed that the Tenant shall pay to
the Landlord on demand as damages the loss of income of the Landlord to be
derived from this Lease and the Leased Premises for the unexpired portion
of the Term had it not been terminated; or
(e) re-enter into and upon the Leased Premises or any part thereof in the name
of the whole and repossess and enjoy the same as of the Landlord's former
estate, anything herein contained to the contrary notwithstanding;
and the Tenant shall pay to the Landlord forthwith upon demand all expenses of
the Landlord in reentering, terminating, re-letting, collecting sums due or
payable by the Tenant or realizing upon assets seized or otherwise exercising
its rights and remedies under this Section 11.05 including tenant inducements,
leasing commissions, legal fees on a solicitor and client basis and all
disbursements and the expense of keeping the Leased Premises in good order,
repairing the same and preparing the same for re-letting.
In addition, and without limiting the generality of the foregoing provisions of
this Section 11.05, upon the happening of an Event of Default, and whether or
not this Lease is terminated in accordance with such provisions: (i) the
Landlord shall have no further liability to pay to the Tenant or any third party
any amount on account or in respect of a refund of any Security Deposit, prepaid
Rent or prepaid Taxes or any tenant inducement, leasehold improvement allowance,
lease takeover or lease subsidy or any other concession or inducement otherwise
provided to the Tenant under or with respect to this Lease, and any Rent free
period otherwise provided to the Tenant hereunder shall be null and void and of
no further force or effect and Rent shall be payable in full hereunder without
regard to any such Rent free period; and (ii) any cash allowance, inducement
payment, and the value of any other benefit paid to or conferred on the Tenant
by or on behalf of the Landlord in connection with the Leased Premises or this
Lease shall be recoverable in full as additional Rent and shall be payable to
the Landlord on demand.
11.06 AVAILABILITY OF REMEDIES - The Landlord may from time to time resort to
any or all of the rights and remedies available to it upon the occurrence of an
Event of Default either by any provision of this Lease or by statute or the
general law, all of which rights and remedies are intended to be cumulative and
not alternative, and the express provisions herein as to certain rights and
remedies are not to be interpreted as excluding any other or additional rights
or remedies available to the Landlord by statute or the general law.
11.07 WAIVER - If the Landlord shall overlook, excuse, condone or suffer any
default, breach or nonobservance by the Tenant of any obligation hereunder, this
shall not operate as a waiver of the obligation in respect of any continuing or
subsequent default, breach or non-observance and no such waiver shall be implied
but shall only be effective if expressed in writing.
The Landlord's acceptance of Rent after a default is not a waiver of any
preceding default under this Lease even if the Landlord knows of the preceding
default at the time of acceptance of the Rent. No term, covenant or condition of
this Lease shall be considered to have been waived by the Landlord or the Tenant
unless the waiver is in writing. The Tenant waives any statutory or other rights
in respect of abatement, set-off or compensation in its favour that may exist or
come into existence hereafter with respect to Rent.
11.08 WAIVER OF EXEMPTION AND REDEMPTION - Notwithstanding anything contained in
any statute now or hereafter in force limiting the right of distress, none of
the Tenant's goods or chattels in the Leased Premises at any time during the
Term shall be exempt from levy by distress for Rent in arrears and this
agreement of the Tenant in this Section may be pleaded as an estoppel against
the Tenant.
11.09 COMPANIES' CREDITORS ARRANGEMENT ACT - By virtue of its interest in this
Lease, the importance of the Tenant continuing to carry on business in the
Leased Premises in accordance with this Lease, end the Landlord's entitlement to
damages where this Lease is terminated by reason of an Event of Default, the
Landlord does and will (despite any changes in circumstances of the Tenant or
its business) constitute a separate class or category of creditor in any plan of
arrangement or other proposal submitted by or on behalf of the Tenant under the
Companies' Creditors Arrangement Act (Canada) or any similar legislation for
bankrupt or insolvent debtors.
Page 25
ARTICLE 12.00 - ASSIGNMENT, SUBLETTING AND OTHER TRANSFERS
12.01 REQUEST FOR CONSENT - The Tenant shall not effect a Transfer of this Lease
or of all or part of the Leased Premises without the prior consent in writing of
the Landlord, which consent shall not, provided no Event of Default has
occurred, be unreasonably withheld. Provided that the Tenant shall, at the time
the Tenant shall request the consent of the Landlord, deliver to the Landlord
such information in writing (herein called the required information) as the
Landlord may reasonably require respecting the proposed Transferee including,
without limitation, the name, address, nature of business, financial
responsibility and standing of such proposed Transferee. Provided further that
after receiving such request, the Landlord shall have the right, at its option,
to terminate this Lease if the request relates to all of the Leased Premises or,
if the request relates to a portion of the Leased Premises only, to terminate
this Lease with respect to such portion, by giving, within 10 days after
receiving the required information, not less then 30 nor more than 60 days'
written notice of termination to the Tenant. In the event of such termination
the Rent and other payments required to be made by the Tenant hereunder shall be
adjusted to the date of termination and in the case of a partial termination,
Rent shall ▇▇▇▇▇ in the proportion that the area of the portion of the Leased
Premises for which this Lease is terminated bears to the area of the Leased
Premises and this Lease shall be deemed to be amended accordingly.
If the Landlord elects to terminate this Lease as to all or part of the Leased
Premises, the Tenant may by written notice (given within 10 days or such longer
time as the Landlord may consent to in writing after receipt of the Landlord's
notice of termination) notify the Landlord of the Tenant's intention to refrain
from the Transfer which gave rise to the Landlord's notice of termination or of
the Tenant's intention to accept such notice of termination. If the Tenant gives
such written notice to the Landlord within such time period that it intends to
refrain from such Transfer, then the Landlord's election to terminate this Lease
in whole or in part shall become null and void. Otherwise, the Landlord's
termination shall take effect on the date stipulated by the Landlord in its
notice of termination.
12.02 BASIS FOR CONSENT - Notwithstanding any statute or law and without
limiting the grounds upon which a consent may be refused, the Landlord will not
be deemed to be unreasonable in refusing consent when:
(a) the giving of such consent would place the Landlord in breach of any other
tenant's lease in the Project or the proposed use by the Transferee is not
substantially the same as that of the Tenant;
(b) such consent is requested for a mortgage, charge, debenture (secured by
floating charge or otherwise) or other encumbrance of, or in respect of,
this Lease or the Leased Premises or any part of them;
(c) the Transferee, in the opinion of the Landlord; (i) does not have a
history of successful business operation in the business to be conducted
in the Leased Premises, (ii) does not have a good credit rating or a
substantial net worth, or (iii) there is a history of default under other
leases by the Transferee or by companies or partnerships that the
Transferee was a principal shareholder of or a partner in at the time of
the default;
(d) the Transferee is an existing tenant in the Project or in any other
project of the Landlord, or has been within 3 months prior to the proposed
assignment or sublease taking affect;
(e) the Landlord has other premises in the Project available for leasing to
the Transferee;
(f) in the case of a Transfer to a subtenant of less than the entire Leased
Premises, if such would result in a congratulation which: (i) would
require access to be provided through space leased or held for lease to
another tenant or improvements to be made outside of the Leased Premises,
or (ii) would, in the sole opinion of the Landlord, be unreasonable to
attempt to re-lease to a third party;
(g) the required information received from the Tenant or the Transferee is not
sufficient in the Landlord's opinion to enable the Landlord to make a
determination concerning the matters set out above; or
(h) the use of the Leased Premises by the proposed Transferee, in the
Landlord's opinion arrived at in good faith, could result in excessive use
of the systems or Services in the Project, be inconsistent with the image
and
Page 26
standards of the Project or expose the occupants of the Project to risk of
harm, damage or interference with their use and enjoyment thereof, or
reduce the value of the Project.
The Landlord shall not be liable for any claims, actions, damages, liabilities,
losses or expenses of the Tenant or any proposed Transferee arising out of the
Landlord's unreasonably withholding its consent to any Transfer and the Tenant's
only recourse will be to bring an application for a declaration that the
Landlord must grant its consent to the Transfer.
In no event shall any Transfer to which the Landlord may have consented release
or relieve the Tenant or any Indemnifier from its obligations fully to perform
all the terms, covenants and conditions of this Lease, the indemnify Agreement
or any renewals or extensions of this Lease or the Term on its part to be
performed and, in any event, the Tenant shall be liable for the Landlord's costs
incurred in connection with the Tenant's request for consent as set out in
Subsection 12.03(g).
12.03 TERMS AND CONDITIONS RELATING TO CONSENTS - The following terms and
conditions apply in respect of a consent given by the Landlord to a Transfer:
(a) the consent by the Landlord is not a waiver of the requirement for consent
to subsequent Transfers, and no Transfer shall relieve the Tenant of its
obligations under this Lease, unless specifically so provided in writing;
(b) no acceptance by the Landlord of Rent or other payments by a Transferee
is: (i) a waiver of the requirement for the Landlord to consent to the
Transfer, (ii) the acceptance of the Transferee as tenant, or (iii) a
release of the Tenant or Indemnifier from its obligations under this Lease
or any Indemnity Agreement;
(c) the Landlord may apply amounts collected from the Transferee to any unpaid
Rent;
(d) the Transferor, unless the Transferee is a subtenant of the Tenant, will
retain no rights under this Lease in respect of obligations to be
performed by the Landlord or in respect of the use or occupation of the
Leased Premises after the Transfer and will execute an Indemnity Agreement
on the Landlord's standard form in respect of obligations to be performed
after the Transfer by the Transferee;
(e) the Transferee shall, when required by the Landlord, jointly and severally
with the Tenant, enter into an agreement directly with the Landlord
agreeing to be bound by this Lease as if the Transferee had originally
executed this Lease as the Tenant, and the Tenant will not be released nor
relieved from its obligations under this Lease including, without
limitation, the obligation to pay Rent;
(f) in the event that this Lease is disaffirmed, disclaimed or terminated by
any trustee in bankruptcy of a Transferee, the original Tenant named in
this Lease shall be deemed, upon notice by the Landlord given within 30
days of such disaffirmation, disclaimer or termination to have entered
into a lease with the Landlord containing the same terms and conditions as
in this Lease, with the exception of the Term of such Lease which shall
expire on the date on which this Lease would have ended save for such
disaffirmation, disclaimer or termination; and
(g) any documents relating to a Transfer or the Landlord's consent will be
prepared by the Landlord or its solicitors and a reasonable administration
charge of at least $250.00 and the greater of: (i) a reasonable document
preparation fee of at least $450.00, or (ii) those legal fees on a
solicitor end client basis incurred by the Landlord will be paid to the
Landlord by the Tenant on demand.
12.04 SUBSEQUENT TRANSFERS - The Landlord's consent to a Transfer shall not be
deemed to be consent to any subsequent Transfer, whether or not so stated.
12.05 PROFIT RENTS UPON TRANSFERS - In the event of any Transfer by the Tenant
by virtue of which the Tenant receives a rent in the form of cash, goods or
services from the Transferee which is greater than the Rent payable
Page 27
hereunder to the Landlord, the Tenant shall pay any such excess to the Landlord
in addition to all Rent payable under this Lease, and such excess rent shall be
deemed to be further Rent payable hereunder.
12.06 ADVERTISING - The Tenant shall not advertise the Leased Premises or any
part thereof as being available for leasing or this Lease as being available for
transfer in any medium and will not cause or permit any such advertisement,
unless the Landlord has permitted the Tenant to do so in writing and has given
written approval of the wording of such advertisement, which permission and
approval may be arbitrarily withheld.
12.07 GRANT OF SECURITY INTEREST BY TRANSFEREE - The Tenant will cause any
Transferee and any new indemnifier of this Lease to grant a mortgage, charge and
security interest to the Landlord in form corresponding to the Security interest
granted in Section 15.25 by delivery of a written security agreement in form and
substance satisfactory to the Landlord prior to the effective date of the
Transfer.
The Tenant shall pay au costs associated with the granting and perfection of
mortgages, charges and security interests granted pursuant to this Lease upon
any Transfer.
ARTICLE 13.00 - TRANSFERS BY LANDLORD
13.01 SALE, CONVEYANCE AND ASSIGNMENT - Nothing in this Lease shall restrict the
right of the Landlord to sell, convey, assign, pledge or otherwise deal with the
Project, subject (except as provided in Section 13.03) only to the rights of the
Tenant under this Lease.
13.02 EFFECT OF TRANSFER - A sale, conveyance or assignment of the Project by
the Landlord shall operate to release the Landlord from liability from and after
the effective date thereof in respect of all of the covenants, terms and
conditions of this Lease, express or implied, except as they may relate to the
period prior to the effective date, and the Tenant shall thereafter look solely
to the Landlord's successor in interest.
13.03 SUBORDINATION - Subject to Section 13.04, this Lease is and shall be
subject and subordinate in all respects to any and all mortgages (including
deeds of trust and mortgage) now or hereafter registered against title to the
Building or Land and all advances thereunder, past, present and future and to
all renewals, modifications, consolidations, replacements and extensions
thereof. The Tenant agrees to execute promptly and in any event within 10 days
after request therefore by the Landlord or the mortgagee or trustee under any
such mortgage or deed of trust and mortgage an instrument of subordination as
may be requested.
13.04 ATTORNMENT - The Tenant agrees, whenever requested by any mortgagee
(herein called the "Mortgagee") taking title to the Project by reason of
foreclosure or other proceedings for enforcement of any mortgage or deed of
trust, or by delivery of a deed in lieu of such foreclosure or other proceeding,
to attorn to such Mortgagee as a tenant under all of the terms of this Lease.
The Tenant agrees to execute promptly and in any event within 10 days after a
request by any Mortgagee an instrument of attornment as may be required by it.
13.05 EFFECT OF ATTORNMENT - Upon attornment pursuant to Section 13.04, this
Lease shall continue in full force and effect as a direct lease between the
Mortgagee and the Tenant, upon all of the same terms, conditions and covenants
as are set forth in this Lease except that, after attornment, the Mortgagee and
its successors in title shall not be:
(a) liable for any act or omission of the Landlord; or
(b) subject to any offset or defense which the Tenant might have against the
Landlord; or
(c) bound by any prepayment by the Tenant of more than 1 month's installment
of Rent unless the prepayment shall have been approved in writing by the
Mortgagee or by any predecessor of the Mortgagee's former interest as
mortgagee of the Project.
Page 28
13.06 REPURCHASE - The Tenant acknowledges and agrees that should the Landlord
sell, convey, assign, pledge or otherwise deal with the Project, or any interest
therein, or intend to deal with the Project, or any interest therein, in any
manner described herein then the Landlord may, at its option, if the Landlord
has provided the Tenant with Basic Rent free periods. Rent free periods and/or
other inducements during the Term and/or any renewal or extension of the Term of
this Lease, reimburse the Tenant for the then present value of any then
unexpired Basic Rent free periods or Rent free periods and/or other inducements
provided to the Tenant under this Lease, in an amount equal to the discounted
cash value thereof determined by applying the then current yield of 10 year
Canadian Government Bonds plus 4% (hereinafter referred to in this Section 13.06
as the "Discounted Cash Value") to the dollar amount of such outstanding Basic
Rent free periods, Rent free periods and/or other inducements and the Tenant
agrees that any such periods or inducements for which it has received such
Discounted Cash Value from the Landlord will no longer exist or be payable or be
of any force or effect from and after the date on which such Discounted Cash
Value is received by the Tenant from the Landlord. The Tenant agrees to
forthwith execute any agreement prepared by the Landlord, the purpose of which
agreement is to amend this Lease by deleting such Basic Rent free periods, Rent
free periods and/or other inducements from the Lease for which the Tenant has
received the Discounted Cash Value from the Landlord.
ARTICLE 14.00 - SURRENDER
14.01 POSSESSION AND RESTORATION*
(1) Upon the expiration or other termination of the Term, the Tenant shall
immediately quit and surrender possession of the Leased Premises and all
Leasehold Improvements, in substantially the condition in which the Tenant is
required to maintain the Leased Premises, excepting only reasonable wear and
tear and damage covered by the Landlord's insurance under Section 9.01, and the
Tenant shall deliver to the Landlord the keys, mechanical or otherwise, and
combinations, if any, to the locks in the Leased Premises and entries thereto.
Notwithstanding the foregoing, the Landlord shall have the right, at its sole
option upon expiration or other termination of the Term, including any rights to
terminate as provided for in Schedule E, Sections V & VII, to require that the
Tenant remove or cause to be removed at the Tenant's cost all or any part of the
Leasehold Improvements in the Leased Premises installed by or on behalf of the
Tenant during a previous term or the Term of this Lease and to restore the
Leased Premises and other parts of the Project affected by the installation or
removal thereof subject to the specific provisions as provided for in Section
XII - Possession and Restoration herein. Any subsequent changes shall be subject
to the Landlord's written approval, with any requirement for removal to be
stipulated at the time of approval. In addition, the Landlord shall have the
right, at its sole option upon expiration or other termination of the Term, to
require that the Tenant remove or cause to be removed at the Tenant's cost all
or any part of any wiring, cables, risers or similar installations appurtenant
thereto installed by the Tenant or on the Tenant's behalf in the risers of the
Building (the "Wiring") and to restore the risers and other parts of the Project
affected by the installation or removal of the Wiring to their condition
existing prior to the installation of the Wiring (the "Wire Restoration Work").
Notwithstanding the foregoing, the Landlord may, at its sole option, perform the
Wire Restoration Work at the Tenant's sole cost and expense. Upon surrender, all
right, title, and interest of the Tenant in the Leased Premises and all
Leasehold Improvements located therein and in all Wiring shall cease.
(2) 90 days (or as soon after such date as is reasonably possible) prior to the
expiration of the Term the Landlord may inspect the Leased Premises to determine
the extent of the Wire Restoration Work and the work required to restore the
Leased Premises and other parts of the Project affected by any installation or
removal of Leasehold Improvements to the condition required as outlined in
14.01(1) above, and upon receipt of the Landlord's estimate of the costs thereof
(the "restoration cost") the Tenant shall provide to the Landlord, by cash or
certified cheque, the restoration cost.
14.02 TENANT'S TRADE FIXTURES AND PERSONAL PROPERTY - After the expiration or
other termination of the Term or in the event of the abandonment of the Leased
Premises by the Tenant, all of the Leasehold Improvements, and the Tenant's
trade fixtures and personal property remaining in the Leased Premises shall be
deemed conclusively to have been abandoned by the Tenant and may be
appropriated, sold, destroyed or otherwise disposed of by the Landlord
-----------------
* Per hand marked revision to the original, the text of Section 14.01 is
incorporated from Schedule E to the original (which is here omitted).
Page 29
without notice or obligation to compensate the Tenant or to account therefor,
and the Tenant shall pay to the Landlord upon written demand all of the costs
incurred by the Landlord in connection therewith.
14.03 OVERHOLDING - If the Tenant, remains in the Leased Premises or any part
thereof after the expiration or other termination of the Term:
(a) without the consent of the Landlord, no yearly or other periodic tenancy
shall be created but the Tenant shall be bound by the terms and provisions
of this Lease except any options thereby granted to the Tenant and except
the Basic Rent which shall be twice the greater of: (i) the rate provided
for herein for the final year of the Term; and (ii) the market rate as
determined by the Landlord at the time of such overholding for similar
premises, plus the sum of $200 daily and subject to such additional
obligations and conditions as the Landlord may impose by notice to the
Tenant; or
(b) with the consent of the Landlord and agreement as to the Rent payable, the
tenancy shall be month-to-month at the Rent agreed and otherwise on the
terms and conditions of this Lease but without any option to renew.
The Landlord may recover possession of the Leased Premises during any period
with respect to which the Tenant has prepaid the amount payable under Subsection
14.03(a).
The Tenant shall promptly indemnify and hold harmless the Landlord from and
against all Claims against the Landlord as a result of the Tenant remaining in
possession of all or any part of the Leased Premises after the expiry of the
Term without the consent of the Landlord (including, without limitation, any
compensation to any new tenant or tenants which the Landlord may elect to pay
whether to offset the cost of overtime work or otherwise).
ARTICLE 15.00 - GENERAL
15.01 ESTOPPEL CERTIFICATES -The Tenant shall whenever requested by the
Landlord, a prospective purchaser or any mortgagee (including any trustee under
a deed of trust and mortgage) promptly, and in any event within 10 days after
request, execute and deliver to the Landlord or to any party or parties
designated by the Landlord a certificate in writing as to the then status of
this Lease, including as to whether it is in full force and effect, is modified
or unmodified, confirming the Rent payable hereunder and each element hereof and
the then state of the accounts between the Landlord and the Tenant, the
existence or non-existence of defaults and any other matters pertaining to this
Lease in respect of which the Landlord shall request a certificate, and provide
such other information as may reasonably be required, including a copy of the
Tenant's most recent audited financial statements. The party or parties to whom
such certificates are addressed may rely upon them.
15.02 ENTIRE AGREEMENT - There is no promise, warranty, representation,
undertaking, covenant or understanding by or binding upon the Landlord except
such as are expressly set forth in this Lease and this Lease including the Term
Sheet and schedules hereto contains the entire agreement between the parties
hereto.
15.03 NO REGISTRATION OF LEASE OR NOTICES - The Tenant shall not register or
apply to register this Lease or any notice of this Lease or any interest under
this Lease and waives any statutory obligation upon the Landlord to execute and
deliver this Lease in registrable form. The Tenant shall, at its own cost,
promptly on request discharge any registration or filing or notice that
contravenes this Section. Notwithstanding the foregoing, the Landlord may elect
to require this Lease or notice of this Lease be registered.
15.04 PROJECT NAME AND TRADEMARKS - The Tenant shall not refer to the Project or
Building by any name other than that designated from time to time by the
Landlord and the Tenant shall use the name of the Building for the business
address of the Tenant, but for no other purpose. Compliance with this Section
shall be at the sole cost and expense of the Tenant and the Tenant shall have no
claim against the Landlord for any costs or expenses incurred by the Tenant,
whether direct or indirect, in complying with this Section.
Page 30
15.05 DEMOLITION/SUBSTANTIAL RENOVATION - Notwithstanding any other provision of
this Lease, the Landlord may terminate this Lease at any time upon giving to the
Tenant not less than 12 months' notice of such termination if it is the
Landlord's intention to demolish, redevelop or substantially renovate all or
part of the Building.
15.06 RELOCATION* - This clause shall be struck in its entirety.
15.07 "FOR LEASE" SIGNS - The Landlord shall have the right during the last 12
months of the Term to place upon the Leased Premises a notice of reasonable
dimensions stating that the Leased Premises are "for lease" and the Tenant shall
not obscure or remove such notice or permit the same to be obscured or removed.
15.08 UNAVOIDABLE DELAYS - If the Landlord or the Tenant (the "delayed party")
shall be delayed, hindered or prevented in or from the performance of any of its
covenants under this Lease by any cause not within the control of the delayed
party as determined by the Landlord acting reasonably (excluding lack of
finances of the delayed party), the performance of the covenant shall be excused
for the period during which performance is rendered impossible and the time for
performance thereof shall be extended accordingly, but this shall not excuse the
Tenant from the prompt payment of Rent or from the performance of any of its
other obligations under this Lease not related to such cause.
15.09 LIMITATION OF RECOURSE - The Tenant acknowledges that, notwithstanding any
other provision contained in this Lease, the obligations of and rights against
the Landlord under this Lease shall be performed, satisfied and paid only out of
and enforced against, and recourse hereunder shall be had only after judgment
and only against, the right, title and interest of the Landlord from time to
time in, and the Landlord's revenue derived from, the Project. No obligation of
the Landlord hereunder or in respect hereof is personally binding upon, nor
shall any resort or recourse be had, judgment issued or execution or other
process levied against, the Landlord (except to the extent necessary for
enforcement under the first sentence of this Section 15.09 and only for that
purpose), or against any other assets or revenues of the Landlord. The only
remedy against the Landlord shall be an action for damages, except that if the
Tenant is of the opinion that any consent requested pursuant to Article 12.00
hereof has been wrongfully withheld, its remedies are as set out in Section
12.02.
15.10 NOTICE - Any notice required or contemplated by any provision of this
Lease shall be given in writing and shall be sufficiently given if delivered or
if sent by telecopy with confirmation of transmission and if to the Landlord, so
given to an executive officer of the Landlord at the Landlord's head office as
specified in Item 1 of the Term Sheet and to the address set out in Item 1 of
the Term Sheet and if to the Tenant, so given to the Tenant personally (or to a
partner or officer of the Tenant if the Tenant is a firm or corporation) at the
address specified in item 2 of the Term Sheet or left at the Leased Premises
(whether or not the Tenant has departed from, vacated or abandoned the same).
Any notice shall be deemed to have been received on the business day following
the date of delivery or sending. The Landlord or the Tenant may from time to
time by notice in writing to the other designate another address or addresses in
Canada as the address to which notices are to be sent.
Notwithstanding the provision of any statute or law relating thereto, service by
means of electronic mail of any notice(s) required to be given in writing by
either party hereto pursuant to the Lease shall not constitute good and
effective service.
If two or more Persons are named as, or bound to perform the obligations of, the
Tenant hereunder, notice given as herein provided to any one of the Persons
constituting the Tenant or so bound shall be deemed to be notice simultaneously
to all Persons constituting the Tenant and to all Persons so bound. Any notice
given to the Indemnifier or the Tenant shall be deemed to have been given
simultaneously to the other of them and to all Persons bound by their
obligations hereunder.
15.11 DELEGATION OF AUTHORITY - The managing agent of the Landlord may act on
behalf of the Landlord in any manner provided for herein.
15.12 RELATIONSHIP OF PARTIES - Nothing contained in this Lease shall create any
relationship between the parties hereto other than that of landlord and tenant
and, if applicable indemnifier.
---------------
* Per hand marked revision to the original, the text of Section 15.06 is
incorporated from Schedule E to the original (which is here omitted).
Page 31
15.13 GOVERNING LAW - This Lease shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the laws of the
Province of Alberta and the laws of the Dominion of Canada applicable therein.
15.14 AMENDMENT OR MODIFICATION - No amendment, modification or supplement to
this Lease shall be valid or binding unless set out in writing and executed by
the Landlord and the Tenant with the same degree of formality as the execution
of this Lease.
15.15 LEGAL AND ADMINISTRATION COSTS - The Tenant shall indemnify the Landlord
against all legal fees on a solicitor and client basis and disbursements
incurred by the Landlord or by its manager or agents in connection with the
negotiation, preparation and execution of any renewal, amendment, assignment,
cancellation, approval or consent in connection with this Lease or Event of
Default arising from this Lease, including the Landlord's reasonable
administration charges. All such costs and charges shall be paid by the Tenant
to the Landlord forthwith upon demand.
15.16 CONSTRUCTION - All of the provisions of this Lease are to be construed as
covenants and agreements, if any provision of this Lease is illegal or
unenforceable, it shall be considered separate and severable from the remaining
provisions of this Lease which shall remain in force and be binding as though
the provision had never been included.
15.17 CAPTIONS AND HEADINGS - The captions and headings contained in this Lease
are for convenience of reference only and are not intended to limit, enlarge or
otherwise affect the Interpretation of the Articles, Sections or parts hereof to
which they apply.
15.18 INTERPRETATION - In this Lease, "herein", "hereof', "hereunder",
"hereafter" and similar expressions refer to this Lease and not to any
particular Article, Section or other portion thereof unless there is something
in the subject matter or context inconsistent therewith. Wherever necessary or
appropriate in this Lease, the plural shall be interpreted as singular, the
masculine gender as feminine or neuter and vice versa; and when there are two or
more parties bound by the Tenant's covenants herein contained, their obligations
shall be joint and several, if the Tenant is a partnership each Person who is
presently a member of such partnership and each Person who becomes a member of
any successor partnership shall be and continue to be liable jointly and
severally for the performance of the obligations of this Lease, whether or not
such Person ceases to be a member of such partnership or successor partnership.
15.19 TIME OF THE ESSENCE -Time shall be of the essence hereof and no extension
or variation of this Lease shall operate as a waiver of this provision.
15.20 SUCCESSORS AND ASSIGNS - Subject to specific provisions contained in this
Lease to the contrary, this Lease shall enure to the benefit of and be binding
upon the successors and assigns of the Landlord and the heirs, executors and
administrators and the permitted successors and assigns of the Tenant.
15.21 COUNTERPARTS - This Lease may be executed in counterparts and the
counterparts together shall constitute an original.
15.22 FURTHER SCHEDULES - Any additional covenants, agreements and conditions
forming part of this Lease will be attached as Schedule E and the Tenant agrees
with the Landlord to comply with the provisions of Schedule E. If an indemnifier
is a party hereto, the form of Indemnity Agreement to be executed by the
indemnifier and the Landlord ass separate agreement will be attached as Schedule
F.
15.23 INDEPENDENT LEGAL ADVICE - The Tenant and the Indemnifier each acknowledge
that the Landlord hereby advises each of the Tenant and the indemnifier to
obtain advice from independent legal counsel prior to signing this Lease and/or
the Indemnity Agreement. The Tenant and the Indemnifier further acknowledge that
any information provided by the Landlord is not to be construed as legal, tax or
any other expert advice and the Tenant and the Indemnifier are cautioned not to
rely on any such Information without seeking legal, tax or other expert advice.
The Landlord and the Tenant understand, acknowledge, and agree that this Lease
has been freely negotiated by both parties and that, in any dispute or contest
over the meaning, interpretation, validity or enforceability of this Lease or
Page 32
any of its terms or conditions, there shall be no inference, presumption or
conclusion drawn whatsoever against either party by virtue of that party having
drafted this Lease or any portion thereof.
15.24 NO OFFER - The Landlord will not be deemed to have made an offer to the
Tenant by furnishing an unexecuted copy of this Lease with particulars inserted.
Notwithstanding that a Security Deposit or payment of advance Rent is received
by the Landlord when this Lease is received by the Landlord for execution, no
contractual or other right will exist between the Landlord and the Tenant with
respect to the Leased Premises until the Landlord, the Tenant and the
Indemnifier, if any, have executed and delivered this Lease and any required
Indemnity Agreement.
15.25 LANDLORD'S SECURITY INTEREST
(1) As security for the Tenant's performance of its obligations under this
Lease, including but not limited to the payment of Rent and GST, the Tenant
grants to the Landlord by way of security interest, mortgage, pledge, charge,
assignment and hypothec a continuing security interest (the "Security Interest")
in the Tenant's present and future undertaking and all of its present and after
acquired personal property and assets including without limitation the assets
described in Schedule G attached hereto and forming part hereof and all goods
(including inventory), trade fixtures and other personal property of the Tenant
located from time to time on the Leased Premises and any Leasehold Improvements
which the Tenant effects on or in respect of the Leased Premises (collectively
the "Collateral") . The Tenant may, however prior to the occurrence of an Event
of Default, sell or dispose of its inventory to its customers in the ordinary
course of business, in accordance with the terms and conditions of this Lease,
without the consent of the Landlord. The Tenant will promptly execute additional
documents and will provide additional information required by the Landlord from
time to time in connection with the Security Interest. The Tenant authorizes the
Landlord to file a financing statement and any other form of document required
in connection with the Security Interest to perfect, protect or preserve its
Security Interest. The Landlord's Security interest is in addition to and not in
lieu of its right of distress.
(2) The Landlord may enforce its Security Interest upon the occurrence of an
Event of Default in the manner outlined in Schedule G attached hereto and
forming part hereof or in any other manner available at law or in equity.
(3) The grant of the Security interest shall not effect or result in a merger of
any rights or interests of any party hereto.
(4) To the extent permitted by law, the Tenant hereby waives its right to
receive a copy of any financing statement, financing change statement or
verification statement relating to the Security Interest.
(5) The Landlord and the Tenant acknowledge that they have not agreed to
postpone the time for attachment of the Security Interest with respect to
existing Collateral, and that the Security Interest shall attach to after
acquired Collateral as soon as the Debtor has rights in such Collateral.
15.26 SURVIVAL OF COVENANTS AND INDEMNITIES - All obligations of the Tenant
which arise during the Term pursuant to this Lease and which have not been
satisfied at the end of the Term and all indemnities of the Tenant contained in
this Lease shall survive the expiration or other termination of this Lease.
15.27 EXCULPATORY PROVISIONS - In all provisions of this Lease containing a
release, indemnity or other exculpatory language in favour of the Landlord,
reference to the Landlord includes reference also to the Landlord's agents and
nominee (if any) and any Person for whom it is in law responsible and the
directors, officers and employees of the Landlord, its agents and nominee (if
any) and any Person for whom it is in law responsible and its agents while
acting in the ordinary course of their employment (collectively the "Released
Persons"), it being understood and agreed that, for the purposes of this Section
15.26, the Landlord is deemed to be acting as the agent or trustee on behalf of
and for the benefit of the Released Persons solely to the extent necessary for
the Released Persons to take the benefit of this Section 15.26.
15.28 BROKERAGE COMMISSIONS - The Tenant covenants that no act of the Tenant has
given rise nor shall give rise to any Claims against the Landlord for any
brokerage commission, finders fee or similar fee in respect of this Lease.
Page 33
The Tenant hereby Indemnities and agrees to hold the Landlord harmless from any
Claims for such commission or fees with respect to this Lease except any which
were directly contracted for by the Landlord.
15.29 COVENANTS TO BE PERFORMED AT LANDLORD'S OPTION - Where any provision in
this Lease gives the Landlord the option of having the Landlord or the Tenant
perform the covenants set out in such provision, the Tenant shall perform such
covenants unless the Tenant is otherwise directed by way of written notice from
the Landlord.
15.30 RADIATION - Only if the Landlord believes on reasonable grounds that
radiation is or has been used or created by the Tenant or any Person permitted
by the Tenant to be in the Leased Premises shall this Section 15.30 apply to the
Tenant.
The Tenant agrees, if so requested by the Landlord, to conduct at its own
expense a survey by an accredited firm of consultants acceptable to the Landlord
to determine the level of radiation in the Leased Premises, and if such levels
are in excess of those allowable under Environmental Laws and set by the
applicable regulatory authorities governing radiation, the Tenant agrees, at its
own cost and expense and on terms and conditions approved by the Landlord, to
reduce the level of radiation to a level allowable under Environmental Laws and
set by such applicable regulatory authorities.
15.31 MERGER - The voluntary or other surrender of this Lease by the Tenant or
the sublease of space by the Tenant to the Landlord or the cancellation of this
Lease by mutual agreement of the Tenant and the Landlord shall not operate as a
merger but shall, at the Landlord's option, terminate all or any subleases and
subtenancies or operate as an assignment to the Landlord of all or any subleases
or subtenancies. The Landlord's options hereunder shall be exercised by notice
to the Tenant and all known subtenants in the Leased Premises or any part
thereof.
15.32 DIVISION OF PROJECT
(1) The Landlord shall be entitled to sever the Land into separate parcels or to
consolidate the Land with other parcels and, after completion of such severance
or consolidation, the definitions of "Land" and "Project" shall be read to
correspond to such change. The separate parcels of the Land on severance may be
owned by or may be treated as if they were owned by separate entities other than
the Landlord. The Landlord may in its discretion create and grant rights and
easements among separate parcels or Project Components and may register same as
encumbrances.
(2) The Tenant acknowledges and agrees that if the Land is severed into 2 or
more separate parcels or consolidated into fewer parcels, the Tenant will
register any caveat indicating its interest in this Lease and the Leased
Premises against only the parcel(s) of the Land which is or are directly
affected by the Tenant's interest in this Lease and the Leased Premises as
directed by the Landlord and, if the Land is severed subsequent to the
registration of such caveat, the Tenant shall, at the Landlord's request, cause
to be registered a partial discharge of such caveat against the parcels of Land
not so directly affected by the Tenant's interest in this Lease and the Leased
Premises. If the Tenant fails to cause such partial discharge to be registered
within 15 days of a written request from the Landlord, the Landlord may take
such steps as it considers necessary to cause such caveat to be partially
discharged and the Tenant shall pay the Landlord for all Outlays within 10 days
of receipt of an invoice therefor.
(3) (a) From time to time the Landlord may, if, in the opinion of the
Landlord, more efficient or economical operation of the Project or
more equitable distribution of Operating Costs will result,
establish Project Components (of which the Building shall be one)
and divide, apportion and allocate Operating Costs among such
Project Components.
(b) In any such division, apportionment and allocation of Operating
Costs, the Landlord shall charge any item which relates exclusively
to one of the Project Components directly to that Project Component
only, and, in respect of items which do not exclusively relate to
any single Project Component, the Landlord shall divide, apportion
and allocate same to all Project Components affected thereby on an
equitable basis having regard, without limitation, to the various
uses and values of the subject Project Components, to prudent
practices of property management, to the provisions of this Lease
and to generally accepted accounting and engineering principles for
the commercial real estate industry. The aggregate so directly
charged or divided, apportioned and allocated to the Building is
herein called the "Operating Costs for the Building".
Page 34
(c) If such treatment would result in a more equitable and compatible
recognition of the cost of their respective usage, the Landlord may
similarly, mutatis mutandis, charge, divide, apportion and allocate
Operating Costs or Operating Costs for the Building among office,
retail and other differing elements of the Building.
Page 35
IN WITNESS WHEREOF the Landlord and the Tenant have executed this Lease as
of the date first set forth above.
LANDLORD:
PENSIONFUND REALTY LIMITED
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇.▇. ▇▇▇▇▇▇▇▇
Title: AUTHORIZED SIGNATORY c/s
By: /s/ ▇▇▇▇▇ D'Agata
--------------------------------------------
Name: ▇▇▇▇▇ D'AGATA
Title: AUTHORIZED SIGNATORY
I/We have authority to bind the Corporation
WITNESS to signature of Tenant: TENANT:
METSO AUTOMATION SCADA SOLUTIONS LTD.
signature: /s/ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
print name: ▇. ▇▇▇▇▇▇▇▇ Title: VP BUSINESS CONTROLS c/s
address: By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: PRESIDENT
occupation: Facilities Mgr. I/We have authority to bind the Corporation
WITNESS to signature of INDEMNIFIER:
Indemnifier:
NOT APPLICABLE
signature: By:_____________________________________________
Name:
print name: Title: c/s
address: By:_____________________________________________
Name:
Title:
occupation: I/We have authority to bind the Corporation
Page 36
SCHEDULE B
DEFINITIONS
"BASIC RENT" means the amount set out in Item 8 of the Term Sheet payable by the
Tenant to the Landlord in respect of each year of the Term.
"BIO-MEDICAL WASTE" shall mean and include the following:
(a) (i) surgical waste including all materials discarded from surgical
procedures, including but not limited to, disposal gowns, soiled
dressings, sponges, casts, lavage tubes, drainage sets, underpads
and surgical gloves; and
(ii) pathological waste including all human tissues and anatomical parts
which emanate from surgery, obstetrical procedures, autopsy and
laboratory; and
(iii) biological waste including blood and blood products, excretions,
exudates, secretions, suctionings and other body fluids including
solid/liquid waste from renal dialysis; and
(iv) isolation waste including all waste emanating from the care or
treatment of a patient on any type of isolation or precaution except
reverse (protective) isolation; and
(v) cultures and stocks of etiologic agents and associated biologicals
including, without limitation, specimen cultures, cultures and
stocks of etiological agents, wastes from production of biologicals
and serums, and discarded live and attenuated vaccines; and
(vi) laboratory waste which has come in contact with pathogenic
organisms, including but not limited to, culture dishes, devices
used to transfer, inoculate and mix cultures, paper and cloth which
has come in contact with specimens or cultures; and
(vii) animal carcasses exposed to pathogens in research, their bedding and
other waste from such animals; and
(viii)sharps, including any discarded article that may cause punctures or
cuts, including but not limited to, needles, IV tubing with needles
attached, scalpel blades, glassware, and syringes that have been
removed from their original sterile containers; and
(ix) any other wastes Identified as infectious or similar wastes In any
other applicable federal, provincial at municipal laws, regulations
and guidelines; and
(b) "Chemotherapy Waste" (also known as antineoplastic or cytotoxic waste)
means and includes discarded items, including but not limited to, masks,
gloves, gowns, empty IV tubing bags, vials, syringes and other
contaminated materials which have been contaminated by chemotherapeutic
drugs or antineoplastic agents; and
(c) any waste defined as bio-medical waste under any applicable law or
regulation.
"BUILDING" means the buildings, structures and improvements from time to time
during the Term erected in, upon or under the Land municipally identified in
Item 3 of the Term Sheet and all alterations and additions thereto and
replacements thereof, being the Project Component in which the Leased Premises
are situated.
"CAPITAL TAX" means the applicable amount of any tax or taxes including but not
limited to Large Corporations Tax payable based upon or computed by reference to
the paid-up capital or place of business of the Landlord as determined for the
purposes of such tax or taxes; provided that for the purposes hereof, the
"applicable amount" of such tax or taxes shall mean the amount thereof that
would be payable if the Project were the only establishment of the Landlord
Page B-1
in the jurisdiction of the taxing authority or if any other establishment of the
Landlord therein were located outside that Jurisdiction.
"CLAIMS" means claims, losses, actions, suits, proceedings, causes of action,
demands, damages (direct, indirect, consequential or otherwise), judgments,
executions, liabilities, responsibilities, costs, charges, payments and expenses
including, without limitation, any professional, consultant and legal fees on a
solicitor and client basis and any associated disbursements.
"COLLATERAL" has the meaning ascribed in Section 15.25.
"COMMENCEMENT DATE" means the first day of the Term as specified in Item 7(a) of
the Term Sheet.
"COMMON ELEMENT" means the areas, facilities, utilities, improvements, equipment
and installations (collectively, "elements") in the Project that, from time to
time, are not intended to be leased to tenants of the Project (including,
without limitation, elements within rentable premises that are intended for the
benefit of tenants of the Project and their invitees and employees) or are
designated from time to time as Common Elements by the Landlord and includes
access roads, driveways and parking areas and facilities, whether or not the
same are open to the general public and shall, without limiting the generality
of the foregoing, include all improvements, fixtures, chattels, equipment,
systems, decor, signs, facilities, utilities or landscaping contained therein or
maintained or used in connection therewith and also all pedestrian and vehicular
exits and entrances and all malls, courtyards, passageways, hallways, stairways
and public washrooms, and any elevators and escalators and any pedestrian
walkway system, park, bus stop, transportation facility or other public facility
for which the Landlord is subject to obligations from time to time in its
capacity as owner of the Project.
"CONSULTANTS" means any reference in this Lease to the Landlord's accountant,
auditor, architect, surveyor or other consultant shall be deemed to be such duly
qualified consultant appointed by the Landlord in its absolute discretion for
the purposes of this Lease or of any provision hereof; and they will act in
accordance with this Lease and the principles and standards of their
professions. In determining any cost allocation the Landlord may rely on, and
the parties shall be bound by, the Landlords Consultants.
"DELIVERY FACILITIES" means those portions of the Common Elements on or below
street level of the Project as are from time to time designated by the Landlord
as facilities to be used in common by the Landlord, tenants of the Project and
others for the purposes of loading, unloading, delivery, dispatch and holding of
merchandise, goods and materials entering or leaving the Project and giving
vehicular access thereto.
"ENVIRONMENTAL LAWS" shall include any domestic and foreign federal, provincial,
municipal or local laws, statutes, regulations, ordinances, guidelines,
policies, Judge made laws or common laws and any orders of a court or
governmental authority, relating in any way to the natural or human environment
(including land, surface water, groundwater, and real, personal, moveable and
immoveable property), public or occupational health and safety, and the
manufacture, importation, handling, use, reuse, recycling, transportation,
storage, disposal, elimination and treatment of a substance, hazardous or
otherwise.
"EVENT OF DEFAULT" has the meaning ascribed in Section 11.04.
"EXPROPRIATED", "EXPROPRIATING" and "EXPROPRIATION" have the meanings ascribed
in Section 10.06.
"FISCAL YEAR" means a period, from time to time determined by the Landlord all
or part of which falls within the Term, at the end of which the Landlord's
accounts in respect of the Project are balanced for auditing or bookkeeping
purposes. Such period shall be 12 months except when the Landlord designates a
new date upon which the fiscal year shall end.
"GST" means goods end services tax being that tax payable pursuant to Parts VIII
and IX of the Excise Tax Act, as amended and re-enacted from time to time, and
other like taxes levied from time to time and Includes any blended sales tax
which combines GST and provincial sales tax.
"INDEMNIFIER" means the Person, if any, so identified in the Term Sheet and who
has signed the Lease as Indemnifier.
Page B-2
"INDEMNITY AGREEMENT" means the agreement attached as Schedule F.
"LAND" means those lands legally described in Schedule A1 as same may be
expanded or contracted from time to time subject to the provisions of Section
15.32 of this Lease.
"LEASE" means this lease, the Term Sheet, and all Schedules attached hereto
which are referred to in this lease and every properly executed instrument which
by its terms amends, modifies or supplements this lease.
"LEASED PREMISES" means those premises in the Building which are described and
identified in Item 4 of the Term Sheet and which are marked in a distinguishing
manner on the plan attached as Schedule A.
"LEASEHOLD IMPROVEMENTS" means:
(d) all improvements, fixtures, installations, alterations and additions from
time to time made, erected or installed to or in the Leased Premises, in
addition to, beyond or replacing the base building standards, including
all partitions however affixed (including moveable and demountable
partitions), millwork and affixed wall units, internal stairways, doors,
hardware, light fixtures, carpeting and other applied floor finishes, and
heating, ventilating and air conditioning equipment and other building
services not forming part of the Landlord's base building equipment and
services; and
(e) alterations, improvements and equipment made or installed for the
exclusive benefit of the Tenant elsewhere in the Project;
in either case whether or not installed by or on behalf of the Tenant and
whether or not installed during the Term including, without limitation, all
fixtures (except trade fixtures) in the Leased Premises.
"MORTGAGEE" has the meaning ascribed in Section 13.04.
"OPERATING COSTS" means in respect of any Fiscal Year the total of all costs,
expenses and amounts, incurred or accrued in that Fiscal Year for or with
respect to ownership, management, operation, maintenance, repairs, upkeep,
insurance, supervision, decoration, cleaning and upgrading of the Project and
the determination and allocation of such costs, expenses and amounts, whether
incurred or accrued by or on behalf of the Landlord or by or on behalf of any
manager or agent of the Landlord including, without limitation and without
duplication:
A. Inclusions - if provided by the Landlord (subject to certain deductions as
hereinafter set out):
(f) the cost of providing and maintaining security, landscaping, gardening and
snow and refuse removal;
(g) the cost of heating, air conditioning and ventilating the Building and
investigating and remedying air quality issues, if any;
(h) the cost of providing hot and cold or tempered water, electricity
(including lighting) and all other utilities to all parts of the Project
not otherwise paid by tenants;
(i) the cost of supplying heated water to heat the Leased Premises and the
cost of supplying chilled water to air condition the Leased Premises.
In respect of the foregoing:
"the cost of supplying heated water to heat the Leased Premises" means the
sum of $0.6595 per annum for each square foot of Rentable Area of the
Leased Premises, provided that if the unit cost paid by the Landlord for
natural gas increases at any time after the first day of June, 1985, the
aforesaid cost per square foot of heated water shall be increased by the
same percentage that the unit cost of natural gas increases.
Page B-3
"the cost of supplying chilled water to air condition the Leased Premises"
means the sum of $0.421 per annum for each square foot of Rentable Area of
the Leased Premises per lease year, provided that if the unit cost paid by
the Landlord for electricity increases at any time after the first day of
June, 1985, the aforesaid cost per square foot for chilled water shall be
increased by the same percentage that the cost of electricity increases.
(j) the cost of providing janitor, window cleaning and general cleaning
services including supplies to all parts of the Project including all
premises leased to tenants of the Project;
(k) the cost of replacement of building standard fluorescent tubes, light
bulbs and ballasts in the Leased Premises and the costs of cleaning,
maintaining and servicing of the electrical light fixtures in the Leased
Premises if not separately invoiced pursuant to Section 7.02;
(l) the cost of all insurance taken out and maintained by the Landlord under
Article 9.00 and the cost of any deductible amount paid by the Landlord in
connection with a claim under its insurance;
(m) the rental or lease cost of all rented or leased equipment acquired for
the operation or maintenance of the Project;
(n) accounting costs incurred in connection with the Project including
computations required for the determination of charges to tenants and
audit fees incurred for the determination of any costs hereunder;
(o) the cost of all equipment acquired for operation or maintenance of the
Project if expensed fully in the Fiscal Year in which such equipment is
acquired;
(p) if expensed fully in the Fiscal Year in which the expense is incurred, the
cost of any improvement, replacement, repair or alteration whether with
respect to buildings, improvements, equipment, fixtures or otherwise and
whether on-site or off-site which, in the opinion of the Landlord, is
necessary to reduce or limit increases in Operating Costs or is required
by the Landlord's insurance carriers or by any changes in the laws, rules,
regulations or orders of any governmental authority having jurisdiction,
including those necessary to comply with energy conservation, pollution
and environmental control standards and the costs of any procedures
required with respect thereto;
(q) the cost of investigating, testing, monitoring, removing, enclosing,
encapsulating or abating any Pollutants which is in or about the Project
or any part thereof or which has entered the environment from the Project,
if the Landlord is required to do so or if, in the Landlord's opinion, it
is harmful or hazardous to any Person or to the Project or any part
thereof or to the environment.
Notwithstanding the above, subject to the provisions of Section 7.04(b),
the Tenant shall not be responsible for the cost of removing,
encapsulating or abating any Pollutants.
(r) the cost of repairs and replacements to or in respect of the Project
including those resulting from normal wear and tear and otherwise and
including those necessary with respect to the window coverings,
decorations, elevators and escalators (if any), roof or any parking area
or facility;
(s) the cost of repairs, replacements and improvements to systems in the
Project including, without limitation, the heating, ventilating, air
conditioning and energy-saving and security systems and devices;
(t) at the Landlord's election (such election to be evidenced by the method of
calculating Operating Costs for each Fiscal Year), either amortization, in
an amount determined by the Landlord's accountant, of the cost (whether
incurred before or during the Term and whether or not incurred by the
party constituting the Landlord at any time or its predecessor in title or
interest) of any repair, replacement, decoration or improvement of the
Project not expensed within the Fiscal Year in which the expenditure was
incurred and of all equipment required for the operation and maintenance
of the Project not included within Operating Costs
Page B-4
for the Fiscal Year in which the expenditure occurred in accordance with
Subsections (j) and (k) above, or depreciation in an amount determined by
the Landlord's accountant based on the cost (whether incurred before or
during the Term and whether or not incurred by the party constituting the
Landlord at any time or its predecessor in title or interest) of any of
those items which the Landlord in its absolute discretion has elected to
treat as capital in nature together with, in each case, an amount equal to
interest at the Prime Rate plus 1.5% per annum on the undepreciated or
unamortized amount thereof;
(u) the amount of all salaries, wages and fringe benefits paid to or for the
benefit of employees and others engaged either full-time or part-time in
the operation or maintenance of the Project;
(v) amounts paid for service contracts with independent contractors;
(w) the cost of energy audits, conservation studies and other measures taken
to conserve energy or reduce costs or liability;
(x) the cost of renting, operating and maintaining Project signs and providing
directional signage;
(y) all other expenses of every nature incurred in connection with the
maintenance and operation of the Project;
(z) the cost of direct supervision attributable to any of the above;
(aa) all Taxes; provided that if any portion of Taxes are levied for a period
not coinciding with the Fiscal Year, the amount of such Taxes included in
Operating Costs in each Fiscal Year shall be that amount accruing during
that Fiscal Year;
(bb) the fair rental value of space in the Building occupied by the Landlord,
its manager or personnel in connection with the Services; and
(cc) any Capital Tax imposed upon the Landlord provided that if the Capital Tax
payable by the Landlord in this connection is for a period not coinciding
with the Fiscal Year, the amount of the Capital Tax included in Operating
Costs in each Fiscal Year shall be that amount payable by the Landlord
accruing during the Fiscal Year.
plus an administration fee equal to 4% of the gross revenue for the Project in
such Fiscal Year.
B. Exclusions - Operating Costs shall exclude, without duplication and without
limiting the generality of the foregoing, and except to the extent expressly
included above:
(dd) debt service;
(ee) major structural repairs;
(ff) costs determined by the Landlord from time to time to be fairly allocable
to the correction of initial construction faults or initial maladjustments
in operating equipment but only to the extent that such costs are
recovered from the contractor or others responsible;
(gg) any ground rent payable by the Landlord in respect of a lease of the Land
or part thereof; and
(hh) tenant improvement allowances, leasing commissions and leasing costs,
"PROPERTY TAX YEAR" means the 12 month period set by the municipal taxing
authorities as the period for and over which Property Taxes and where applicable
business taxes are assessed, charged and payable by the owner or occupant of the
Project or Leased Premises respectively, whether on a calendar or fiscal year or
any other basis.
Page B-5
"PROPERTY TAXES" means all taxes, rates, levies, duties and assessments
whatsoever whether municipal, school, provincial, parliamentary or otherwise
levied, charged, imposed or assessed against the Project or upon the Landlord in
respect thereof or from time to time levied, charged, imposed or assessed in the
future in lieu thereof or in addition thereto, including, without limitation,
those levied, charged, imposed or assessed for education, school and local
improvements and all business taxes, if any, from time to time payable by the
Landlord or levied against the Landlord on account of its ownership or interest
in or the operation of the Project; and all costs and expenses incurred by the
Landlord in good faith in contesting, resisting or appealing any such taxes,
rates, duties, levies or assessments including, without limitation, legal fees
on a solicitor and client basis and other professional fees and interest and
penalties on deferred payments but excluding income or profits taxes upon the
income of the Landlord. If any portion of the Project is assessed or taxed other
than at the prevailing commercial assessment rates and mill rates due to the
occupancy of any tenants or the nature of any tenant's operation, then the
amount of such taxes, rates, levies, duties or assessments shall be adjusted to
be an amount equal to the amount which would have been incurred had such portion
of the Project been assessed and taxed at the prevailing commercial assessment
rates and mill rates throughout the entire period for which the calculation is
being made. Any tax levied on commercial property or other like tax based on the
area or use of the Project or the Leased Premises or any tax on rent imposed in
lieu of the foregoing taxes are included herein.
"RENT" means the aggregate of all amounts payable by the Tenant to the Landlord
under this Lease. Provided that any and all amounts so payable which are
collectible by the Landlord as agent of a taxing authority and which are Taxes
imposed by that authority on the Tenant are included in Rent so as to determine
the Landlord's rights and remedies in the case of delay or failure to pay the
same notwithstanding that the same do not accrue to the Landlord as rent
hereunder.
"RENTABLE AREA" means the area of the Leased Premises, the Building or any part
thereof as determined by the Landlord and which may be adjusted from time to
time to give effect to any structural or functional change and any change in the
leasing pattern in the Building, and which shall be calculated in accordance
with the BOMA ANSI standards ANSI Z65.1-1980 (Reaffirmed in 1989) (except to the
extent altered by this definition) as follows:
(ii) in the case of premises occupying the whole of one or more floors, the
Rentable Area of such premises shall be determined by measuring to and
from the inside finish of permanent outer Building walls or from the glass
line, whichever extends further, but shall not include stairs and elevator
shafts (except stairs and elevators exclusively serving the Tenant where
the Leased Premises consist of more than one floor), flues, stacks, pipe
shafts and vertical ducts with their enclosing walls. Washrooms, air
conditioning equipment rooms, fanrooms, janitors' closets, electrical
closets and other closets serving that floor or floors shall be included
in the Rentable Area of such premises. No deductions shall be made for
columns and projections necessary to the Building;
(jj) in the case of premises occupying part of a floor, the Rentable Area of
such premises shall be determined by measuring from and to whichever of
the following form the boundaries of such premises: the inside finish of
permanent outer Building walls or from the glass line, whichever extends
further; the centre of partitions which separate such premises from
adjoining premises or public and/or service areas; and the office side of
the corridor walls or other permanent partitions, without in any case,
deduction for columns and projections necessary to the Building, and
includes washrooms, air conditioning equipment rooms, tan rooms, janitors'
closets, electrical closets and other closets within and serving the
Leased Premises exclusively, but does not include stairs and elevator
shafts supplied by the Landlord for use in common with other tenants, and
flues, stacks, pipe shafts or vertical ducts with their enclosing walls
within the Leased Premises; the Rentable Area as so determined shall have
added thereto a portion of the area of the public and/or service areas on
such floor which, without limitation, shall include corridors, elevator
lobbies, washrooms, air conditioning equipment rooms, fan rooms, janitors'
closets, electrical closets and other closets serving that floor. The
portion of such area of the public and/or service areas so added shall be
that portion from time to time which the Rentable Area of such premises
bears to the Rentable Area of all premises leased or set aside from time
to time for leasing by the Landlord on that floor (including such
premises).
"SECURITY DEPOSIT" has the meaning ascribed in Section 4.02.
"SECURITY INTEREST" has the meaning ascribed in Section 15.25.
Page B-6
"SERVICE(S)" means those activities, personnel, facilities, systems and supplies
required for the complete decoration, repair, administration, replacement,
maintenance, improvement and operation of the Project.
C. Deductions - There shall be deducted from Operating Costs:
(kk) the proceeds of insurance recovered by the Landlord applicable to damage,
the cost of repair of which was included in the calculation of Operating
Costs paid by the Tenant; and
(ll) amounts recovered as a result of direct charges to the Tenant and other
tenants to the extent that the cost thereof was included in the
calculation of Operating Costs.
"OUTLAYS" means any and au costs of any nature or kind whatsoever incurred by
the Landlord as a direct or indirect result of failure by the Tenant to perform
its obligations under this Lease or for the account of the Tenant pursuant to
this Lease.
"PARKING FACILITIES" means that part of the Project containing parking
facilities with vehicular access thereto including, without limitation, parking
spaces, ramps, circulation space, vehicular entrances and exits, the structural
elements thereof and services, facilities and systems contained in or servicing
such parking facilities.
"PERSON" means any person, partnership, corporate entity or any combination of
them.
"POLLUTANTS" means any substance which if regulated by or which would be
considered a contaminant, pollutant, waste or deleterious or hazardous substance
under Environmental Laws, or which is or may be hazardous to persons or property
or detrimentally affect property value and includes, without limiting in any way
the generality of the foregoing:
(mm) radioactive materials;
(nn) explosives;
(oo) any substance that, if added to any air, land and/or water, would degrade
or alter or form part of a process of degradation or alteration of the
quality of that air, land and/or water to the extent that it is
detrimental to its use by human beings or by any animal or plant;
(pp) any solid, liquid, gas, microorganism, sound, vibration, ray, heat,
radiation, odour or combinations of any of them that is likely to alter
the quality of the environment (including air, land and water) in any way
or the presence of which in the environment is prohibited by regulation or
is likely to affect the life, health, safety, welfare or comfort of human
beings or animals or to cause damage to or otherwise impair the quality of
the soil, vegetation, wildlife or property;
(qq) toxic substances;
(rr) substances declared to be hazardous or toxic under any law or regulation
now or hereafter enacted or promulgated by any governmental or municipal
authority having Jurisdiction over the Landlord, the Tenant, the Leased
Premises or the Project of which the Leased Premises form a part;
(ss) any substance the use or transportation of which or the release of which
into the environment is prohibited, regulated, controlled or licensed
under Environmental Laws;
(tt) anything contaminated by any Pollutants; and
(uu) Bio-Medical Waste.
Page B-7
"PRIME RATE" means the rate of interest per annum established from time to time
by The Bank of Nova Scotia (or such other bank being one of the 5 largest
Canadian chartered banks as the Landlord may designate from time to time) at its
head office in Toronto, Ontario as the reference rate of interest to determine
interest rates it will charge on Canadian dollar loans to its Canadian customers
and which it refers to as its "prime rate".
"PROJECT" means the Land and all improvements and buildings (including, without
limitation, the Building and any other Project Components) and all equipment and
facilities erected thereon or situated therein from time to time, together with
all such other land, easements, licences, leases or rights (if any) contiguous,
convenient, adjacent or appurtenant to the Land and like improvements,
buildings, equipment and facilities thereon or therein which the Landlord may
from time to time own, develop or operate as an entity integrated with the
Building.
"PROJECT COMPONENT(S)" means the segments of the Project (of which the Building
shall be one and which together comprise the whole Project) which may be
designated by the Landlord from time to time or any one of such segments.
"TAXES" means comprehensively all various classes and types of taxes, rates,
levies, fees, duties, charges anti assessments from whatever source arising and
levied, rated, imposed, assessed, conferred or chargeable against the Project,
the Leased Premises or in respect of the occupancy and activity carried on
therein or on account of the Landlord's ownership of or interest in the Project
or on account of rents payable with respect therefor and includes Property
Taxes, business taxes or any like tax or other amount levied or assessed in lieu
of, in addition to, or in substitution therefor, whether or not similar to or of
the foregoing character and whether or not in existence on the date hereof
together with an administrative charge for allocation of Taxes and all costs and
expenses incurred by the Landlord in good faith in contesting, resisting or
appealing any such taxes, rates, duties, levies or assessments including,
without limitation, legal fees on a solicitor and client basis and other
professional fees and interest and penalties on deferred payments; but excluding
income or profits taxes upon the income of the Landlord.
"TENANT'S OCCUPANCY COSTS" means for each Fiscal Year the Tenant's Proportionate
Share of the Operating Costs for that Fiscal Year.
"TENANT'S PROPORTIONATE SHARE" means a fraction, which has as its numerator the
Rentable Area of the Leased Premises and has as its denominator the total
Rentable Area of the Project, calculated by the Landlord in accordance with the
method of measurement described under the definition of Rentable Area. Provided
that:
(vv) if and whenever pursuant to Section 15.32 of the Lease, the Landlord shall
have established and designated Project Components, in respect of
Operating Costs which pertain only to a Project Component, the denominator
aforesaid shall be the total Rentable Area of such areas as comprise that
Project Component;
(ww) if and whenever the Building shall have been established and designated as
a Project Component, "Operating Costs for the Building" shall have the
meaning ascribed in Section 15.32 and subsection (a) above shall govern
apportionment thereof;
(xx) in calculating Operating Costs for the Building for any Fiscal Year, if
and while less than 95% of the Building is occupied by tenants, then the
amount of Operating Costs shall be deemed for purposes of this Schedule to
be increased to an amount equal to Operating Costs which normally would be
expected to have been incurred had occupancy of the Building been 95%
during period(s) when vacancies existed, to the intent that, after
allowing for a periodic vacancy factor of 5%, the cost of Services
actually provided by the Landlord to the Leased Premises will be recovered
by the Landlord from the Tenant, while the Landlord will absorb the costs
incurred in or attributable to rentable areas which are not occupied,
"TERM" means the period of time set out in Item 7 of the Term Sheet unless
sooner terminated.
"TERM SHEET" means the pages identified as Term Sheet attached to this Lease;
and all information and particulars contained therein shell form part of this
Lease.
"TRANSFER" means:
Page B-8
(yy) an assignment, sublease, licensing or other disposition by the Tenant of
this Lease or any interest therein or any interest in the Leased Premises
(whether or not by operation of law) or in a partnership that is the
Tenant under this Lease, or a mortgage or charge (floating or otherwise)
or other encumbrance of or upon this Lease by the Tenant except a Transfer
that occurs on the death of the Transferor;
(zz) a parting with or sharing of possession of all or part of the Leased
Premises; and
(aaa) a transfer or issue by sale, assignment, bequest, inheritance, operation
of law or other disposition, or by subscription, of all or part of the
corporate shares of the Tenant which results in a change in the effective
voting control of the Tenant (unless the Tenant is a corporation whose
shares are traded on a stock exchange in Canada or the United States or is
a subsidiary of such a corporation).
"TRANSFEROR" and "TRANSFEREE" have meanings corresponding to the definition of
"Transfer". In the case of a Transfer described in item (c) of the definition of
Transfer, the Transferor is the Person that has or would have effective voting
control before the Transfer and the Transferee is the Person that has or would
have effective voting control after the Transfer. The singular and plural forms
of defined words and phrases shall have corresponding meanings.
Page B-9