EXHIBIT 10.10
LEASE
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AMONG
LAURELTON INVESTMENTS LTD. and KBK NO. 197 VENTURES LTD.
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(together, the "Lessor")
AND
SEAGATE SOFTWARE INFORMATION MANAGEMENT GROUP (CANADA), INC.
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(the "Lessee")
AND
SEAGATE SOFTWARE, INC.
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(the "Indemnifier")
INDEX
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Page
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PART 1 - DEFINITIONS....................................................................... 1
1.1 Definitions....................................................................... 1
PART 2 - DEMISE AND TERM................................................................... 6
2.1 Demise and Term................................................................... 6
2.2 Readjustment...................................................................... 7
PART 3 - RENT, TAXES AND OTHER CHARGES..................................................... 7
3.1 Basic Rent........................................................................ 7
3.2 Payment of Rent and Additional Rent............................................... 7
3.3 Net Lease......................................................................... 7
3.4 Rent.............................................................................. 8
3.5 Single Lease...................................................................... 8
3.6 Place of Payment.................................................................. 8
3.7 Lessee's Payment of Taxes/Sales Taxes............................................. 8
3.8 Rental for Irregular Periods...................................................... 8
3.9 Estimate of Additional Rent....................................................... 9
3.10 Reporting and Audit of Additional Rent............................................ 9
PART 4 - ACCEPTANCE AND FIXTURING OF DEMISED PREMISES...................................... 9
4.1 Lessee Loan....................................................................... 9
4.2 Leasehold Improvements............................................................ 10
4.3 HVAC Inducement................................................................... 11
4.4 Early Occupation by Lessee........................................................ 11
4.5 As Is/Lessee's Alterations........................................................ 11
4.6 Restriction on Construction Times................................................. 12
4.7 Lessor's Repairs/Work............................................................. 12
4.8 Cash Inducement in Lieu of Lessor's Repairs/Work.................................. 13
4.9 Allowances for Leasehold Improvements............................................. 14
PART 5 - CONDUCT OF BUSINESS............................................................... 14
5.1 Permitted Use..................................................................... 14
5.2 Waste and Nuisance................................................................ 14
5.3 Tidy Condition/Compliance With Laws............................................... 15
5.4 Environment Warranty - Lessee..................................................... 15
5.5 Signs............................................................................. 15
5.6 Payment of Lessee's Expenses...................................................... 15
PART 6 - REPAIRS........................................................................... 16
6.1 No Obligation to Repair/Replace................................................... 16
6.2 Repairs by Lessee................................................................. 16
6.3 Damage by Lessee.................................................................. 16
6.4 Building Compliance/Ordered Upgrades.............................................. 16
6.5 Alterations....................................................................... 17
6.6 Increase in Insurance............................................................. 17
6.7 Plans and Specifications.......................................................... 17
6.8 Non-Compliance................................................................... 17
6.9 Lessor's Property/Fixtures....................................................... 18
6.10 No Liens......................................................................... 18
6.11 Destruction of Demised Premises.................................................. 18
PART 7 - COMMON AREAS/SERVICES .......................................................... 19
7.1 Control of Common Areas and Facilities........................................... 19
7.2 Building Services................................................................ 19
7.3 Building Alarm................................................................... 19
7.4 Parking.......................................................................... 19
7.5 Storage and Emergency Generator Rooms............................................ 20
7.6 Refuse and Deliveries............................................................ 20
7.7 Directory Board.................................................................. 21
7.8 Satellite and Communications..................................................... 21
7.9 Bicycle Storage.................................................................. 21
7.10 Floor Loading.................................................................... 22
PART 8 - ASSIGNMENT AND SUBLETTING....................................................... 22
8.1 Assignment....................................................................... 22
8.2 Reorganization, Change in Ownership or Use by Affiliate.......................... 22
PART 9 - INSURANCE....................................................................... 23
9.1 Lessee to Insure................................................................. 23
9.2 Lessor to Insure................................................................. 23
PART 10 - EXCLUSION OF LIABILITY AND INDEMNITY........................................... 24
10.1 Lessee's Indemnity............................................................... 24
10.2 Lessor's Indemnity............................................................... 24
10.3 Exclusion of Liability........................................................... 24
PART 11 - LANDLORD'S RIGHTS AND REMEDIES................................................. 25
11.1 Default.......................................................................... 25
11.2 Termination of Lease............................................................. 25
11.3 Payment of Lessor's Expenses.................................................... 26
11.4 Right of Lessor to Perform Lessee's Covenants.................................... 26
11.5 Re-Entry......................................................................... 26
11.6 Right of Lessor to Seize......................................................... 26
11.7 Remedies for Non-Payment......................................................... 27
11.8 Non-Waiver....................................................................... 27
11.9 Remedies Cumulative.............................................................. 27
11.lO Interest......................................................................... 27
PART 12 - MORTGAGES AND ASSIGNMENTS BY LANDLORD.......................................... 27
12.1 Subordination.................................................................... 27
12.2 Status Statement................................................................. 28
12.3 Non-Disturbance Agreement........................................................ 28
12.4 Registration..................................................................... 28
PART 13 - OVERHOLDING BY LESSEE.......................................................... 28
13.1 Month to Month Tenancy........................................................... 28
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PART 14 - LESSOR'S COVENANTS.............................................................. 29
14.1 Lessor's Covenants................................................................. 29
14.2 Environment Warranty - Lessor...................................................... 30
PART 15 - GENERAL CONDITIONS.............................................................. 31
15.1 Rules and Regulations.............................................................. 31
15.2 Notice............................................................................. 31
15.3 Showing of Premises................................................................ 31
15.4 Dispute Resolution................................................................. 32
PART 16 - RIGHT OF FIRST OFFER AND EXPANSION PREMISES..................................... 32
16.1 Right of First Offer............................................................... 32
16.2 Expansion Premises................................................................. 33
PART 17 - OPTION TO RENEW................................................................. 34
17.1 Grant of Option.................................................................... 34
17.2 Exercise of Option................................................................. 34
17.3 Office Premises.................................................................... 34
PART 18 - INDEMNITY....................................................................... 34
18.1 Indemnity.......................................................................... 34
18.2 Enforcement of Indemnity........................................................... 34
18.3 Continuation of Indemnity.......................................................... 35
18.4 No Defence......................................................................... 35
18.5 Modification in Writing............................................................ 35
18.6 Authority.......................................................................... 35
18.7 Enurement.......................................................................... 35
18.8 Assignments, Reorganization, Etc................................................... 35
PART 19 - MISCELLANEOUS................................................................... 36
19.1 Joint and Several Obligations...................................................... 36
19.2 Time of the Essence................................................................ 36
19.3 Headings........................................................................... 36
19.4 Governing Law...................................................................... 36
19.5 Entire Agreement................................................................... 36
19.6 Enurement.......................................................................... 37
SCHEDULE "A" - Plan of Premises
SCHEDULE "B" - Rules and Regulations
SCHEDULE "C" - Stantec Report Summary (Schedule "C" to Offer to Lease)
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LEASE
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THIS LEASE made the 27/th/ day of September, 1999.
BETWEEN:
LAURELTON INVESTMENTS LTD. and KBK NO. 197 VENTURES LTD.,
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having a business office at 3038 - 910 Mainland Street,
Vancouver, British Columbia, V6B lA9
(together, the "Lessor")
AND:
SEAGATE SOFTWARE INFORMATION MANAGEMENT GROUP (CANADA),
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INC., having a business office at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
(the "Lessee")
AND:
SEAGATE SOFTWARE, INC., having a business office at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
----------------------
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
(the "Indemnifier")
In consideration of the premises and the mutual covenants, agreements and
conditions herein contained, it is hereby covenanted and agreed between the
parties as follows:
PART 1 - DEFINITIONS
--------------------
1.1 Definitions
-----------
The terms defined herein shall have, for all purposes of this Lease, the
following meanings unless the context expressly or by implication otherwise
requires:
(a) "Additional Rent" means all sums of money, other than Basic Rent,
which are required to be paid by the Lessee pursuant to any provision
of this Lease whether or not they are designated as "Additional Rent";
(b) "Assignment" has the meaning set out in Section 8.1;
(c) "Basic Rent" has the meaning set out in Section 3.1;
(d) "Building" means the building, improvements, structures and
facilities, including parking facilities, erected on the Lands and
having a civic address of ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇;
(e) "Commencement Date" means, for each of the premises comprising the
Demised Premises, the respective date set out in Column 3 in Section
2.1;
(f) "Consumer Price Index" means the Consumer Price Index for all items
for Vancouver, British Columbia issued from time to time by Statistics
Canada or its successor, or any other measure hereafter employed by
Statistics Canada in lieu of such price index that measures the cost
of living in Vancouver, British Columbia. If Statistics Canada or its
successor no longer publishes the Consumer Price Index or no longer is
operated by the Government of Canada, then any alternate price index
designed to fairly reflect changes in the consumer purchasing power of
the Canadian dollar, as agreed by the parties, failing agreement, the
dispute shall be settled in the manner set out in Section 15.4;
(g) "Demised Premises" means, as and from the respective Commencement
Dates, collectively the Initial Leased Premises, the Option Leased
Premises and all Expansion Space, each of which premises is outlined
in black on the floor plans annexed hereto as Schedule "A";
(h) "Expansion Space" means the First Expansion Leased Premises, the
Second Expansion Leased Premises and the Third Expansion Leased
Premises (but does not include any space leased pursuant to the Right
of First Offer in Section 16.1);
(i) "Expiry Date" means, for each of the premises comprised in the Demised
Premises, the respective date set out in Column 4 in Section 2.1;
(j) "First Expansion Leased Premises" means the premises in the Building
and described in Column 1 in Section 2.1 and identified as such on
Schedule "A" hereto;
(k) "Force Majeure" means any act or occurrence which delays or hinders or
prevents a party from the performance of any term, covenant or act
required under this Lease by reason of strikes, labour troubles,
inability to procure material or services, power failure, restrictive
governmental laws or regulations, riots, insurrection, sabotage,
rebellion, war, acts of God or other reasons beyond the reasonable
control of the applicable party hereto;
(1) "Hazardous Substances" means any pollutants, contaminants, deleterious
substances, underground or above-ground tanks, asbestos materials,
hazardous, corrosive, or toxic substances, special waste or waste of
any kind, halon, radon, PCB's, or other pollutants, contaminants or
hazardous materials or any other substance which is now or hereafter
prohibited, controlled, or regulated under environmental laws;
(m) "Increase in Consumer Price Index" means the fraction which has as its
numerator the Consumer Price Index for the year in question and has as
its denominator the Consumer Price Index as of June 1, 2000;
(n) "Initial Leased Premises" means the premises in the Building and
described in Column 1 in Section 2.1 and identified as such on
Schedule "A" hereto;
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(o) "Lands" means the lands on which the Building is constructed and
legally described as: Firstly: ▇▇▇▇ ▇▇ ▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇
541, Plan 3469 and; Secondly: ▇▇▇ "▇", ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇,
▇▇▇▇ ▇▇▇▇▇;
(▇) "Leasehold Improvements" means the improvements to the Demised
Premises to be carried out by the Lessee and described in Section 4.2;
(q) "Lessor's Repairs/Work" means the work to be performed by the Lessor
and described in Section 4.7;
(r) "Loan" means the loan described in Section 4.1;
(s) "Operating Costs" means (without duplication) the total costs and
expenses incurred, accrued or attributed by the Lessor to operate,
service, maintain, insure, manage, promote, clean, supervise, replace
and repair the Lands, Building and Demised Premises and any common
facilities and common areas of the Building, and the total costs and
expenses incurred, accrued or attributed by the Lessor to discharge
its obligations under this Lease. Without limiting the generality of
the foregoing, such costs and expenses shall specifically include the
supply of all utilities; landscaping; common area interior glazing
repair and replacement, if damaged; minor repairs and partial
replacing of roof membrane; premiums for insurance the Lessor, in its
sole discretion, deems necessary for the operation of the Lands and
Building, acting reasonably; painting; signs; sanitation control; snow
removal; security; rental or replacement of machinery and equipment
which by their nature require periodic replacement or substantial
replacement (including without limitation, maintenance and janitorial
equipment); the reasonable wages and salaries of personnel (including
any benefits paid) and fees to independent contractors required in
connection therewith; and a management fee payable to a third party or
the Lessor for managing the Lands and Building, which management fee
in either case shall be limited to $0.60 per square foot of Rentable
Area during each year of the initial Term of this Lease and subject to
an Increase in the Consumer Price Index during any renewals. Operating
Costs shall exclude, or have deducted from them, as the case may be:
(i) all amounts which otherwise would be included in Operating Costs
which are recovered by the Lessor from tenants (other than under
sections of their leases comparable to Section 3.2 of this
Lease);
(ii) such of the Operating Costs as are recovered from insurance
proceeds, to the extent such recovery represents reimbursements
for costs previously included in Operating Costs;
(iii) interest on debt and capital retirement of debt;
(iv) ground rent payable by the Lessor to the owner of the Lands
under any ground lease of the Lands;
(v) gas and hydro costs, except as permitted pursuant to Section
7.2;
(vi) the amount allocated from time to time by the Lessor to, and
relating to the Lands and Building of, any capital tax payable
by the Lessor or the owners of the Lands and Building under any
legislation, provincial or federal, imposing
-3-
taxes on account of capital, calculated as if the Building were
the only property of the Lessor or the owners of the Lands and
Building;
(vii) costs of maintaining and repairing structural elements of the
Building, costs of all external glazing and costs of correcting
construction defects as they relate to the base Building
finishes;
(viii) costs for which the Lessor is reimbursed;
(ix) any bad debt loss, rent loss, or reserves for bad debts or rent
loss;
(x) costs associated with the operation of the business entity
which constitutes the Lessor as the same are distinguished from
the costs of operation of the Building, including accounting
and legal matters, costs of defending any lawsuits with any
mortgagee, costs of selling, syndicating, financing, mortgaging
or hypothecating any of the Lessor's interest in the Building,
costs of any disputes between the Lessor and its employees (if
any) not engaged in the Building operation, disputes of Lessor
with building management, or fees or costs paid in connection
with disputes with other tenants;
(xi) fines or penalties and interest thereon arising from the acts
or omissions of the Lessor or those for whom it is responsible
for at law;
(xii) subject to Section 9.2, any damage or loss resulting from any
casualty which the Lessor covenanted to insure against (except
to the extent of any deductible);
(xiii) capital costs which do not materially reduce Operating Costs or
which do not improve the operation of the Building in a manner
which is of material benefit to either the Lessee or to the
Lessee's business. The parties further agree that capital costs
are not costs normally incurred for the repair, replacement or
maintenance of existing building equipment or systems, but will
include replacements resulting in material upgrades to such
equipment or systems, and will include the replacement of HVAC
systems and the main electrical transformers. For greater
certainty, the parties agree that, without limitation,
replacement of carpeting and toilets in common areas when
needed and to a standard consistent with a Class B professional
building, and minor repairs and partial replacement of roof
membranes are examples of repair and maintenance rather than
capital cost items, but upgrades made to the Building to enable
the Lessor to better market the Building are examples of
capital cost items not of material benefit to either the Lessee
or its business;
(xiv) subject to Section 14.2, the cost of removing, encapsulating or
otherwise abating any Hazardous Substance in or about the
Building (except if placed or caused by the Lessee or those for
whom the Lessee is responsible at law);
(xv) legal fees pertaining to leasing issues, space planner's fees,
real estate brokers' leasing commissions, lease take-over
costs, advertising and marketing expenses and all other leasing
expenses;
-4-
(xvi) the wages of an employee for the periods of time that such
employee is not devoting his or her time to the Building
(allocations of the time pooled employees are permitted); and
(xvii) all costs associated with repair or maintenance of HVAC
equipment, plumbing, electrical equipment and all other
utilities servicing all Rentable Areas in the Building other
than the Demised Premises;
(t) "Option Leased Premises" means the premises in the Building and
described in Column 1 in Section 2.1 and identified as such on
Schedule "A" hereto and leased pursuant to Section 16.2;
(u) "Possession Date" means, for each of the premises comprising the
Demised Premises, the respective date set out in Column 2 in Section
2.1 for the purpose of planning and constructing the Leasehold
Improvements;
(v) "Proportionate Share" means the proportion, at any given time, that
the aggregate Rentable Area of the premises comprising the Demised
Premises as at that time is of the aggregate of all Rentable Areas in
the Building (aggregating at a minimum 222,739 square feet);
(w) "Rent" has the meaning set out in Section 3.4;
(x) "Rentable Area" means, with respect to the Demised Premises on the
first and second floor of the Building, the Usable Area of such
premises multiplied by 112% and, with respect to the Demised Premises
on the third floor of the Building, the Usable Area of such premises
multiplied by 108.4%), except that in the case of the Lessee leasing a
full floor in the Building, the Rentable Area of such floor shall be
the Usable Area of such floor without a gross up factor;
(y) "Rentable Areas in the Building" means the aggregate of all rentable
areas within the Building, as determined from time to time by the
Landlord, acting reasonably, being the aggregate of the Rentable Area
of the Demised Premises, the rentable areas of all spaces and premises
in the Building serviced by air-conditioning, as defined in the
Landlord's other leases and rental contracts with other tenants from
time to time, and the rentable area of any vacant space serviced by
air-conditioning measured in a comparable manner to such other leases
and rental contracts;
(z) "Sales Taxes" means taxes, value-added taxes, multistage taxes,
business transfer taxes and any other similar taxes imposed in respect
of the rent payable by the Lessee under this Lease or in respect of
the Demised Premises;
(aa) "Second Expansion Leased Premises" means the premises in the Building
and described in Column 1 in Section 2.1 and identified as such on
Schedule "A" hereto;
(bb) "Taxes" means the real property taxes (including local improvement
rates), licence fees, assessments, or other charges levied or imposed
by any provincial, municipal, school or other authority against the
Lands and Buildings or the Demises Premises;
(cc) "Term" means for each of the premises comprising the Demised Premises,
the respective period of time set out in Column 5 in Section 2.1;
-5-
(dd) "Third Expansion Leased Premises" means the premises in the Building
and described in Column 1 in Section 2.1 and identified as such on
Schedule "A" hereto; and
(ee) "Usable Area" means, subject to Section 4.7(f), the usable area of the
Demised Premises calculated in accordance with the methods of
measuring usable areas as described in the Standard Method for
Measuring Floor Area in Office Buildings, ANSI Z65.1-1980 (reaffirmed
in 1989), as promulgated by the Building Owners and Managers'
Association (BOMA) International.
PART 2 - DEMISE AND TERM
------------------------
2.1 Demise and Term
---------------
In consideration of the rents, covenants, conditions and agreements
hereinafter reserved and contained on the part of the Lessee to be paid,
observed and performed, the Lessor hereby demises and leases unto the
Lessee the Demised Premises on the terms and conditions contained herein.
To hold the Demised Premises for and during the Term, unless sooner
terminated pursuant to the terms of this Lease, commencing on the
respective Commencement Date and ending on the Expiry Date, as follows:
--------------------------------------------------------------------------------------------
Column 1 Column 2 Column 3 Column 4 Column 5
-------- -------- -------- -------- --------
Premises/Rentable Area Possession Commencement Expiry Term
(sq. ft.) Date Date Date
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8,572 - 1/st/ floor January 1, June 1, 2000 May 31, 7 years
14,065 - 2/nd/ floor 2000 2007
19,504 - 3/rd/ floor
(the "Initial Leased
Premises")
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11,238 - 3/rd/ floor August 1, December 1, May 31, 6 years,
(the "First Expansion Leased 2000 2000 2007 6 months
Premises")
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12,752 - 3/rd/ floor April 1, 2001 July 1, 2001 May 31, 5 years,
(the "Second Expansion 2007 11 months
Leased Premises")
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29,043 - 3/rd/ floor September 1, January 1, 2002 May 31, 5 years,
(the "Third Expansion Leased 2001 2007 5 months
Premises")
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14,645 - 3/rd/ floor September 1, January 1, 2002 May 31, 5 years,
(the "Option Leased 2001 2007 5 months
Premises")
--------------------------------------------------------------------------------------------
Subject to existing encumbrances and utility rights of way (whether
registered or unregistered), the Lessor also agrees that the Lessee is
entitled to the exclusive use of that exterior area of the
-6-
Lands located adjacent to the first floor of the Building beside the
Initial Leased Premises, approximately as outlined in red on the floor plan
annexed hereto as Schedule "A", provided that if such area is used for the
Lessee's parking, the terms and conditions of Section 7.4 will apply to
such parking.
2.2 Readjustment
------------
If the Rentable Area of the Demised Premises was estimated by or on behalf
of the Lessor for the purposes of this Lease because the Rentable Area
thereof could not be accurately calculated prior to the execution of the
Lease, or if the Rentable Area of the Demised Premises changes at any time
during the Term, then, when the Rentable Area of the Demises Premises can
be accurately calculated and if the estimate previously made was not
correct or has changed, the Rentable Area of the Demised Premises shall
then be calculated as provided herein and the appropriate adjustments made
with respect to Basic Rent payable under this Lease and to the definition
of Proportionate Share. Notwithstanding the foregoing, at all times the
aggregate of all rentable areas in the Building will, for the purposes of
the definition of Proportionate Share, be not less than 222,739 square
feet.
PART 3 - RENT, TAXES AND OTHER CHARGES
--------------------------------------
3.1 Basic Rent
----------
The Lessee covenants and agrees to pay to the Lessor in lawful money of
Canada rent in the amount of $12.50 per square foot of Rentable Area of the
Demised Premises per annum (the "Basic Rent") from and as of the respective
Commencement Dates during the Term.
3.2 Payment of Rent and Additional Rent
-----------------------------------
The Lessee shall pay Basic Rent in advance in equal monthly instalments
without set-off or deduction on the 1st day of each month during each year
of the Term to the Lessor, the first of such payments to be made on the
respective Commencement Dates, together with the following:
(a) goods and services tax attributable to Basic Rent;
(b) the Lessee's Proportionate Share of Operating Costs;
(c) the Loan payments pursuant to Section 4.1;
(d) payment for the parking stalls pursuant to Section 7.4;
(e) the monthly rent for the storage and emergency generator rooms
pursuant to Section 7.5; and
(f) any other Additional Rent.
3.3 Net Lease
---------
It is understood and agreed that this Lease is a completely net lease to
the Lessor except as otherwise stated in this Lease. The Lessor is not
responsible for any costs, charges or expenses
-7-
relating to the Demised Premises, their upkeep, use, occupancy, contents,
equipment, improvements or the business carried on in them and the Lessee
shall be responsible for all such charges, impositions, costs and expenses,
except as stated in this Lease.
3.4 Rent
----
It is further understood and agreed that the term "Rent" as used in this
Lease shall include all Basic Rent, and all other costs, charges or
expenses relating to the Demised Premises or the Lands and Building which
are the responsibility of the Lessee hereunder and such other charges, if
any, shall be designated as Additional Rent.
3.5 Single Lease
------------
For greater certainty the parties agree that, notwithstanding the
respective Commencement Dates for the portions of the Demised Premises,
this is a single lease in respect of the Demised Premises. Without limiting
the generality of the foregoing, a default by the Lessee in payment of
Basic Rent or a breach of any term with respect to a portion of the Demised
Premises is a breach of this Lease in respect of all of the Demised
Premises and the Lessor may exercise its rights and remedies against the
Lessee with respect to all of the Demised Premises.
3.6 Place of Payment
----------------
All payments of Rent shall be paid to the Lessor at the address shown on
page 1 or at such other address as the Lessor shall designate in writing.
3.7 Lessee's Payment of Taxes/Sales Taxes
-------------------------------------
The Lessee covenants to pay to the Lessor upon written notice from the
Lessor, as Additional Rent hereunder, its Proportionate Share of Taxes. The
Lessee with the prior written consent of the Lessor, such consent not to be
unreasonably withheld or delayed, may, at its own expense, contest any
Taxes and appeal any assessments with respect to the Land, Building and the
Demised Premises, provided all penalties, interest and other costs arising
out of such actions are to be paid for by the Lessee (unless the Lessee is
successful and in such event such costs are to be included in Operating
Costs).
The Lessee shall pay Sales Taxes whether they are characterized as a goods
and services tax, sales tax, value-added tax, multi-stage tax, business
transfer tax or otherwise with the intent that the Lessor be fully
indemnified in respect of all Sales Taxes payable or collectible in respect
of the Rent payable in respect of this Lease or the Demised Premises. Sales
Taxes payable by the Lessee will be calculated by the Lessor in accordance
with the applicable legislation.
3.8 Rental for Irregular Periods
----------------------------
If the Term of this Lease expires before the end of any calendar year with
respect to which Additional Rent is payable under this Lease, the Lessee
shall pay its Proportionate Share of such Additional Rent based upon the
number of days of the term of this Lease within such year, and the Lessee
shall pay such Additional Rent upon demand, notwithstanding that the term
of this Lease may have expired at the time of such demand.
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3.9 Estimate of Additional Rent
---------------------------
It is agreed that the Lessor may estimate the amount of Additional Rent for
each year and upon notice from the Lessor, the Lessee shall pay the amount
so estimated in instalments of such amount or amounts and at such time or
times as the Lessor shall determine, including but without limiting the
generality of the foregoing, on the 1st day of each and every month of the
Term. Within thirty (30) days after determination of the actual amount of
the Additional Rent for which the Lessee is responsible, there shall be an
appropriate adjustment between the Lessor and the Lessee so that the total
amount paid by the Lessee pursuant to this Section in advance or by
instalments or otherwise does not exceed the actual amount of Additional
Rent for which the Lessee is responsible in respect of the year for which
the Lessee made advance or instalment payments. Notwithstanding the
foregoing, nothing in this Section 3.9 shall be interpreted to require the
Lessee to prepay estimated Taxes more than thirty (30) days prior to the
date(s) on which such tax payments are payable to the taxing authority,
provided that the Lessee covenants and agrees that a default in paying the
estimated Taxes, upon not less than five (5) days' notice from the Lessor,
at least thirty (30) days prior to such date(s) provides to the Lessor the
same remedies as a default in the payment of Rent. The Lessor shall forward
to the Lessee a copy of each statement of the Taxes issued by the City of
Vancouver within ten (10) days of receipt.
3.10 Reporting and Audit of Additional Rent
--------------------------------------
The Lessor shall deliver to the Lessee within one hundred and twenty (120)
days after the end of each fiscal year a written statement setting out in
reasonable detail the actual amount of Additional Rent for such fiscal year
and the statement shall be audited if requested by the Lessee within one
hundred and twenty (120) days of receipt of such statement at the Lessee's
expense (unless such audit determines that the Lessor has overcharged the
Additional Rent by more than 3%, and in such event, solely at the Lessor's
cost) by a certified chartered accountant of the Province of British
Columbia. The Lessee, at its option and cost, shall be permitted to review
such audited statement with the Lessor's auditor upon providing at least
fourteen (14) days' prior notice to the Lessor.
PART 4 - ACCEPTANCE AND FIXTURING OF DEMISED PREMISES
-----------------------------------------------------
4.1 Lessee Loan
-----------
The Lessor agrees to loan to the Lessee an amount (the "Loan") equal to the
cost of the Leasehold Improvements but in any event, the Loan will not
exceed $25.00 multiplied by the Rentable Area in square feet of each area
comprising the Demised Premises. In the event that the Lessee exercises its
option to lease the Option Leased Premises, the Lessor and the Lessee agree
that the cumulative Loan payable for the third floor portion of the Demised
Premises shall not exceed $25.00 multiplied by the Usable Area in square
feet of the entire third floor. The Loan will be advanced to the Lessee in
instalments, no more than once per month, and will be paid directly to the
Lessee's contractor, subject to the Lessor holding back any applicable
builders lien holdback for the statutory period. The instalments will be
paid up to the monetary limit of the Loan set out above upon receipt by the
Lessor of an invoice from the Lessee accompanied by the Lessee's written
authorization to disburse the funds, and provided this Lease has been
executed by the Lessee and no liens are filed against title to the Lands
pertaining to the Leasehold Improvements. The Lessor agrees that it will
pay any applicable
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goods and services tax ("GST") on any work in respect of which the Loan is
advanced at the time of such advance, and the Lessee acknowledges and
agrees that the Lessor is solely entitled to the applicable input tax
credit in respect of any such GST, and further, that the Lessee covenants
and agrees to deliver such input tax credit refund to the Lessor upon
receipt, but in any event, the Lessee shall pay the amount of the GST to
the Lessor within sixty (60) days of payment by the Lessor. The Loan will
bear simple interest of 8.00% per annum on the amount of the Loan advanced
from time to time, will be amortized over the initial Term of this Lease as
applicable for the part of the Demised Premises for which the Loan is
advanced at any time and will be repaid by the Lessee to the Lessor in
equal monthly instalments due and payable concurrently with the payment of
Basic Rent. The Lessor agrees that the Lessee may prepay the Loan, or any
part thereof, at any time during the Term without notice, penalty or bonus.
Notwithstanding the foregoing, if this Lease is terminated for any reason
whatsoever including, without restricting the generality of the foregoing,
pursuant to Section 6.11, or if any of the events in Section 11.2 shall
occur, the Loan and all accrued interest shall forthwith become due and
shall be paid within sixty (60) days if this Lease is so terminated, or
shall be paid immediately if any of the events in Section 11.2 shall occur,
as the case may be. The obligation of the Lessee to repay the Loan and all
accrued interest shall survive the termination of this Lease.
In consideration of the Lessor entering into this Lease, the Lessee grants
to the Lessor as security for payment of the Loan a continuing and specific
security interest in the Leasehold Improvements. The Lessor may, at its
option, register or file any necessary statements or documents in
accordance with the Personal Property Security legislation of the Province
of British Columbia to preserve and to perfect the security interest
created in favour of the Lessor in this Lease. The Lessee hereby
acknowledges receiving a copy of this Lease and waives all rights to
receive from the Lessor a copy of any financing statement, financing change
statement or verification statement filed at any time or from time to time
in respect of the security interest granted herein.
4.2 Leasehold Improvements
----------------------
The Loan will be advanced to the Lessee for the following items (the
"Leasehold Improvements"):
(a) all Lessee's interior improvements and remodelling, including a new
main reception area, open workstation areas, private hard wall
offices, conference rooms, coffee/kitchenettes with hot and cold
running water with sink, cabinetry, etc., additional hard wall offices
and laboratories, signage, telecom and data cabling costs, certain and
specific demolition and reconstruction, new carpeting, doors and
hardware throughout the Demised Premises, wall coverings, painting,
and patching throughout;
(b) exterior Building and lobby and floor directory signage;
(c) any use/occupancy permit, certificate or other formal permission
documentation necessary from the City of Vancouver for the Lessee's
occupancy; and
(d) design, architectural, engineering, mechanical, electrical and other
miscellaneous working drawings.
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4.3 HVAC Inducement
---------------
As an inducement for the Lessee agreeing to execute this Lease, the Lessor
shall pay to the Lessee $8.00 (plus applicable goods and services tax) per
square foot of the Usable Area leased by the Lessee towards the cost of
installing a new HVAC system for the Demised Premises as designed by the
Lessee's consultants. Such inducement shall be payable on the applicable
Commencement Dates for the Demised Premises. Subject to Section 7.9, the
Lessor shall provide the Lessee during the Term and any renewal thereof
with exclusive use of, and unrestricted access to, the area within the
existing enclosure housing the existing HVAC unit labelled #6, free of
Rent, to provide the Lessee with a roof pad for the housing of the Lessee's
HVAC equipment. Subject to Section 7.9, the Lessee shall also have the use
of, and unrestricted access to, the existing enclosure housing the existing
HVAC unit labelled #l in common with the Lessor (who may install a small
HVAC unit to serve the balance of the area currently being served by Unit
#l not being leased by the Lessee), free of Rent during the Term of this
Lease and any renewals thereof. If, as and when existing HVAC units
currently serving the third floor of the Building are decommissioned by the
Lessor, the Lessor will provide the areas within the enclosures housing
those units to the Lessee free of Rent as required for the purpose of
housing the Lessee's additional HVAC equipment, provided that if the
Lessee, acting reasonably, does not require such enclosure for such
purpose, the Lessor may use such enclosure for other purposes. The Lessor
confirms that the Lessee may, at its cost, construct an enclosure
surrounding the Lessee's HVAC equipment within each of the areas provided
for the Lessee's use pursuant to this Section. The Lessee will have
unrestricted access at all times to its HVAC equipment. The Lessor will be
solely responsible on a non pass-through basis for any required
modifications to existing HVAC units serving, or installing any new HVAC
units required to serve, other tenants in the Building.
4.4 Early Occupation by Lessee
--------------------------
Subject to Force Majeure, the Lessee shall be entitled to have access to
the Demised Premises for the purpose of planning and constructing its
Leasehold Improvements on the applicable Possession Dates. During any
period prior to a Commencement Date (being the fixturing period from the
Possession Date to a Commencement Date) in which the Lessee is permitted to
have occupancy of premises forming part of the Demised Premises, whether
exclusively or in common with the Lessor, its contractors, sub-contractors
or employees, and with respect to such premises, the Lessee shall be bound
by all the provisions of this Lease other than those requiring payment of
Rent. If a Possession Date is delayed as a result of Force Majeure, the
applicable Commencement Date will be extended by a period equivalent to any
period of delay.
4.5 As Is/Lessee's Alterations
--------------------------
The Lessee confirms that it is leasing the Demised Premises on an "as is"
basis with the exception of Lessor's Repairs/Work. Any alterations the
Lessee wishes to carry out to the Demised Premises shall comply with the
terms of this Lease and the Lessee shall obtain any applicable approvals
from the City of Vancouver and of the Lessor's architects, mechanical,
electrical and structural consultants, at the Lessee's cost. The Lessee
agrees to review all building permit applications with the Lessor or
Lessor's consultants prior to submittal of same to the City of Vancouver,
and to amend said permits as reasonably required by the Lessor to ensure
that only expenditures which must be listed are included in the
application, which applications the Lessor agrees to review without delay.
The Lessee will prepare and submit to the Lessor for the Lessor's written
approval, such approval not to be unreasonably withheld or
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delayed, all plans and specifications for the proposed Lessee's work and
fixturing for the Demised Premises. The Lessor acknowledges that the
Lessee's alterations will result in building code upgrades being required
to the Building for which the Lessor will be solely responsible, and agrees
that the extent, type or cost of such upgrades will not be reason for the
Lessor to object to any alterations proposed by the Lessee (i.e. the
Leasehold Improvements are anticipated to be comparable to the Lessee's
improvements at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, and to include one internal stairwell
connecting the first floor, second floor and third floor of the Building
and a data systems centre).
4.6 Restriction on Construction Times
---------------------------------
The Lessee acknowledges that there are approximately thirty (30) days,
inclusive of weekends, throughout the calendar year wherein other Building
tenants conduct intensive selling shows that are crucial to their financial
success. Upon being advised of those dates in writing by the Lessor at the
beginning of each calendar year, the Lessee, acting reasonably, agrees to
schedule such improvement work so as to avoid disruptive construction noise
and disturbance to other Building tenants, it being agreed that
construction noise after 5:00 p.m. on said days shall be acceptable. If
requested by the Lessee, acting reasonably, the Lessor agrees that if the
Lessee is unable to work on its Leasehold Improvements during any part of a
fixturing period as a result of this obligation to accommodate other
Building tenants the Commencement Dates will be extended by a period
equivalent to any period of delay.
4.7 Lessor's Repairs/Work
---------------------
The Lessor shall, at its cost, provide only those repairs and improvements
detailed as follows, unless otherwise provided in this Lease:
(a) Electrical Service. As per Schedule "C" to this Lease except that two
------------------
electrical rooms and a 120/208V distribution centre are to be provided
by the Lessor within the Demised Premises, size and location of the
electrical rooms and distribution centre are to be determined by the
Lessee and approved by the Lessor, such approval not to be
unreasonably withheld or delayed;
(b) Lighting. As per Schedule "C" to this Lease;
--------
(c) Location for Lessee's Emergency Power Equipment. As per Schedule "C"
to this Lease;
(d) Demolition. Demolition including removal of all interior partitions to
----------
underside of structure and the removal of resilient and carpet
flooring. Existing t-bar ceiling and lighting is to remain unless its
removal is requested by the Lessee on or before November 27, 1999
provided that with respect to the 3/rd/ floor the Lessee has first
provided a ceiling plan to the Lessor and the Lessor, acting
reasonably, has approved such plan;
(e) Windows. Twelve (12) linear feet by five (5) feet of exterior window
-------
in each full exterior bay, with the exception of where exterior wall
washrooms are located, the two (2) bays on the second floor fronting
on Mainland Street, and where stairwells or other impediments makes
the installation of exterior windows impractical. All existing windows
will be replaced with new windows measuring twelve (12) linear feet by
five
-12-
(5) feet (the existing windows are twelve (12) feet by approximately
three (3) feet). Building compatible standard window coverings
throughout (which are to be venetian blinds, colour and type to be
selected by the Lessee) are to be provided for all exterior windows;
(f) Demising. Construction of demising walls to the underside of the slab
--------
(reusing and adding to existing insulated walls where possible).
Notwithstanding the foregoing, at the option of the Lessor the Lessor
may elect to construct new walls between the Demised Premises and
other Building leasable areas consisting of steel studs placed
adjacent to existing demising walls finished with taped and sanded
drywall to the underside of the slab on the Demised Premises' side of
the said new wall. The Lessee acknowledges that the said new walls are
of material benefit to the Lessee and agrees that, notwithstanding the
specifications for the Usable Area measurement, the Demised Premises
shall be measured from the middle of the existing walls between the
Demised Premises and other rentable areas in the Building;
(g) The Lessor appreciates that installing new exterior windows and
enlarging existing exterior windows negatively affects the seismic
performance of the Building, and that any exterior stiffness removed
must be replaced. Accordingly, the Lessor has designed a system
whereby the exterior stiffness is replaced on the exterior wall
without the requirement for any interior bracing or sheer walls.
All of the work described above shall be completed by the Lessor to a
building standard consistent with a Class B professional office building and
shall encompass the specific reasonable requirements of the Lessee. Prior to
November 30, 1999 for the Initial Leased Premises and thereafter prior to
the Possession Dates for the First, Second and Third Expansion Leased
Premises, the Lessee and Lessor will each, acting reasonably, prepare,
approve and commit to a schedule of dates by which the Lessor's Repairs/Work
must be completed, subject to Force Majeure. The Lessee acknowledges that
performance of certain elements of the Lessor's Repairs/Work are contingent
upon the Lessee first providing plans or specifications or completing
certain tenant improvements, and that delays in completing the Lessor's
Repairs/Work as a result of the Lessee not providing said plans or
specifications or performing said tenant improvements shall not constitute a
breach of this provision by the Lessor and shall extend each of the said
dates accordingly. The Lessee and the Lessor agree that contractors for each
of the Lessee and the Lessor may undertake work within the Demised Premises
concurrently. Subject to the Lessee not causing delays as set out herein,
the Lessor acknowledges that its failure to complete the Lessor's
Repairs/Work in accordance with the approved schedule of dates for the
Initial Leased Premises may cost the Lessee additional rent at its present
or alternative premises, and accordingly the Lessor agrees to indemnify the
Lessee for any base rent and additional rent which are incurred by the
Lessee as a direct consequence of the Lessor's failure to complete the
Lessor's Repairs/Work as scheduled. The Lessor also agrees that the
Commencement Date for any portion of the Demised Premises not completed as
scheduled will be deferred for a period of time equivalent to the period of
delay.
4.8 Cash Inducement in Lieu of Lessor's Repairs/Work
------------------------------------------------
The Lessor agrees that the Lessee may elect by notice in writing to the
Lessor on or before October 27, 1999 to receive a cash payment in lieu of
the Lessor completing any part of the Lessor's Repairs/Work, such payment
to be in an amount to be mutually agreed upon between the Lessor and the
Lessee, each acting reasonably. Any such payment is to be paid by the
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Lessor to the Lessee's contractor (subject to the Lessor holding back the
appropriate lien holdback amounts) no more than once per month upon
receipt of an invoice from the Lessee accompanied by the Lessee's written
authorization to disburse the funds up to the monetary limits established
with respect to such inducement, and provided the Lessee has executed this
Lease and no liens are filed against title to the Lands pertaining to the
Leasehold Improvements. The Lessor's obligation to complete such part of
the Lessor's Repairs/Work which is attributable to the cash payment will be
satisfied by such payment being received by the Lessee. The Lessee
acknowledges that the Lessor will be solely entitled to the applicable
input tax credit in respect of such payments in the same manner as set out
in Section 4.1.
4.9 Allowances for Leasehold Improvements
-------------------------------------
The Lessor agrees to provide to the Lessee the following allowances which
are to be paid to the Lessee on or before the earlier of June 1, 2000 or
the date the costs have been incurred for the following work (as evidenced
by invoices), provided this Lease has been executed by the Lessee and no
liens are registered against title to the Lands pertaining to the Leasehold
Improvements:
(a) the sum of $32,000.00 (plus GST) to be applied by the Lessee to
upgrade four washrooms located within the Initial Leased Premises; and
(b) the sum of $37,500.00 (plus GST) to be applied by the Lessee to
construct a corporate entrance for the Demised Premises.
The Lessee acknowledges that the Lessor will be solely entitled to the
applicable input tax credit in respect of such payments in the same manner
as set out in Section 4.1.
PART 5 - CONDUCT OF BUSINESS
----------------------------
5.1 Permitted Use
-------------
The Lessee shall not use or permit the Demised Premises or any part thereof
to be used for any purpose other than for general administrative and field
support office use associated with any software and computer engineering or
development company, or any other legally permitted use compatible with
office buildings of comparable quality and approved in writing by the
Lessor, such approval not to be unreasonably withheld or delayed. It is
agreed that it shall not be unreasonable for the Lessor to withhold
approval of a use which in the Lessor's reasonable opinion is not
compatible with a professional office building.
5.2 Waste and Nuisance
------------------
The Lessee shall not commit or suffer to be committed any waste upon the
Demised Premises or any nuisance in or on the Demised Premises. The Lessee
agrees that the Lessor may determine, acting reasonably, if any such state
or condition exists. The Lessor acknowledges and agrees that the Lessee
shall have the right to maintain a kitchen in the Demised Premises. The
Lessee shall take all necessary steps to ensure that no odours escape
from the Demised Premises into any other areas of the Building, including
other tenants' premises.
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5.3 Tidy Condition/Compliance With Laws
-----------------------------------
The Lessee, at the end of each business day, shall leave the Demised
Premises in a clean and tidy condition and shall be responsible for all
janitorial services within the Demised Premises. The Lessee shall comply
with all provisions of law governing the conduct of their business and
their use of the Demised Premises including, without limitation, federal,
provincial and/or municipal regulations which relate to the partitioning,
equipment operation and use of the Demised Premises, and the making of any
repairs, replacements, alterations or changes to the Demised Premises, and
shall comply with all police, fire and sanitary regulations imposed by any
duly constituted authority or regulations made by the Lessor or fire
insurance underwriters, and shall observe and obey all governmental and
municipal regulations and other requirements governing the conduct of any
business conducted in or upon the Demised Premises, provided such
compliance, observation or abeyance is made necessary by an act or omission
of the Lessee or by those for whom the Lessee is responsible at law, or by
the nature of the Lessee's business or by the manner in which the Lessee
conducts its business.
5.4 Environment Warranty - Lessee
-----------------------------
The Lessee represents and warrants that to its knowledge it does not
utilize any Hazardous Substances in its operations and the Lessee
covenants, warrants and agrees with the Lessor that it will not bring
Hazardous Substances onto the Demised Premises. The Lessee further
covenants and agrees to indemnify the Lessor and its directors, officers,
employees, agents, successors, and assigns from any and all liabilities,
actions, damages, claims, remediation cost recovery claims, losses, costs,
orders, fines, penalties, and expenses whatsoever (including all legal and
consultants' fees and expenses and the cost of remediation of the Demised
Premises and any adjacent property) arising from or in connection with:
(a) any breach of or non-compliance with the provisions of this Section by
the Lessee; or
(b) the release of any Hazardous Substances at or from the Demised
Premises related to or as a result of the use and occupation of the
Demised Premises or any act or omission of the Lessee or any person
for whom it is in law responsible.
The obligations of the Lessee under this Section shall not survive the
expiry or earlier termination of this Lease.
5.5 Signs
-----
The Lessee may install exterior Building signage and lobby and floor
directory signage of a kind and size, and affixed or installed in a manner
approved in writing by the Lessor (such approval not to be unreasonably
withheld or delayed) and subject to the prior approval of the City of
Vancouver where required.
5.6 Payment of Lessee's Expenses
----------------------------
The Lessee shall pay promptly all business taxes, license fees, charges,
telephone, garbage and utilities bills, taxes, sales taxes, value added
taxes, duties and assessments now charged or to be charged in respect of
the Lessee, the Basic Rent, Additional Rent, the business carried on by the
Lessee and/or any installation made in or upon or any alteration or
improvements made in or to or any moveable property brought on the Demised
Premises and in particular fixtures, machinery and similar things of a
commercial or industrial undertaking and to reimburse the
-15-
Lessor to the extent and on account of any increase by way of insurance
rate, taxes or rates levied by any municipal, public or governmental
authority payable by the Lessor (other than Taxes which are governed by
Section 3.7) if such increase is the direct or indirect result of anything
done or omitted by the Lessee contrary to the provisions and covenants
contained herein, or that is a result of any installation, alteration or
improvement made in or upon the Demised Premises by the Lessee or any
assignee, sub-lessee, invitee or licensee of the Lessee.
PART 6 - REPAIRS
----------------
6.1 No Obligation to Repair/Replace
-------------------------------
The Lessor shall be under no obligation to repair, maintain or replace the
Lessee's installations, HVAC systems servicing the Demised Premises,
alterations, additions, partitions and fixtures or anything in the nature
of a leasehold improvement made or installed by or on behalf of the Lessee.
6.2 Repairs by Lessee
-----------------
The Lessee shall repair and maintain the Demised Premises, and, without
limitation, the HVAC equipment, plumbing, electrical equipment and all
other utilities and facilities servicing the Demised Premises as would a
careful owner, including glass, locks and doors of the Demised Premises and
shall leave the Demised Premises in good repair, including interior
painting if such painting is required because of damage done by the Lessee
to the Demised Premises, reasonable wear and tear excepted. The Lessee
shall permit the Lessor to enter during normal business hours (except in
the case of emergency, in which case the Lessor may enter at any time
without notice) to view the state of repair and the Lessee shall repair
according to notice in writing; PROVIDED HOWEVER, damage by fire, lightning
and tempest and other casualty against which the Lessor is insured and
structural repairs to the Building, including the roof and outside walls
thereof, are expressly excepted from this covenant of the Lessee to repair.
Except as otherwise provided for in this Lease, it is agreed by and between
the parties hereto that mechanical, electrical, plumbing and other repairs
to the base systems and structure of the Building shall be carried out by
the Lessor and not by the Lessee, save and except for damage done or caused
by the Lessee or its agents, contractors, employees, licensees or invitees
and save and except for damage from improper installation of fixtures
installed by or on behalf of the Lessee.
6.3 Damage by Lessee
----------------
If the Demised Premises or any part of the Building shall be damaged or
destroyed through negligence, carelessness or misuse by the Lessee, its
servants, agents, employees, invitees or anyone permitted by it to be in
the Demised Premises, all costs and expenses of the necessary repairs,
cleaning, replacements or alterations resulting therefrom shall be borne by
the Lessee, and shall be paid by the Lessee to the Lessor forthwith on
demand as Additional Rent.
6.4 Building Compliance/Ordered Upgrades
------------------------------------
The Lessee acknowledges that the condition of the Building is currently
designated as "Legal, Non-Conforming" by the City of Vancouver. Any
upgrades to the Demised Premises and/or Building including building systems
ordered by the City of Vancouver as a result of the Lessor's Repairs/Work
or the Leasehold Improvements that have received prior approval by the
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Lessor, or any other regulatory body having jurisdiction over the Building,
during the Term or any renewal thereof shall be at the sole cost and
expense of the Lessor. The Lessor agrees that in the event the Lessor is
required by the City or other governmental authority to complete upgrades
to the Building and such work materially disrupts the Lessee's operations,
Rent will ▇▇▇▇▇ for such period of time and with respect to such portion of
the Demised Premises as are affected by such disruption.
6.5 Alterations
-----------
The Lessee shall not cause or permit to be caused any waste or damage,
disfiguration or injury to the Demised Premises or the Building or the
fixtures and equipment thereof or cause or permit to be caused any
overloading of electrical or other systems of the Building or the floors
thereof; and not place therein any safe, heavy business machine, or other
heavy thing, without first obtaining the express consent in writing of the
Lessor. The Lessee shall not make or permit to be made any alterations,
additions or improvements to the Demised Premises or the Building systems
or any part thereof without first obtaining the prior express consent in
writing of the Lessor, and without using contractors or other qualified
workmen first designated or approved by the Lessor in writing, such consent
not to be unreasonably withheld or delayed. Notwithstanding the foregoing,
the Lessee shall be entitled to make any non-material alterations,
installations or renovations to the Demised Premises without the consent of
the Lessor provided the Lessee gives written notice to the Lessor that such
work will be performed.
6.6 Increase in Insurance
---------------------
The Lessee shall pay to the Lessor the amount of the increase for any
insurance coverage to the extent that such increase is directly
attributable to any action by the Lessee under this Lease, and the Lessee
covenants that such insurance shall not thereby be made liable to avoidance
or cancellation by the insurer by reason of such alterations, additions or
improvements.
6.7 Plans and Specifications
------------------------
The Lessee when requesting the Lessor's consent to said alterations,
additions or improvements, shall submit to the Lessor five (5) copies of
all plans and specifications for said alterations, additions or
improvements. Such plans and specifications shall include but not be
limited to details of architectural, electrical, mechanical, heating,
ventilating and air conditioning and plumbing work and such other items and
information as the Lessor may reasonably require, all as drawn to scale.
Plans and specifications shall include dimensions, materials and colour and
texture specifications and colour chips where appropriate. All reasonable
costs, expenses and fees of the Lessor incurred in respect to such work
shall be paid as Additional Rent by the Lessee on demand.
6.8 Non-Compliance
--------------
In the event that the Lessor determines that any alterations, additions or
improvements made to the Demised Premises or the Building systems serving
the Demised Premises do not comply with all applicable statutes,
regulations or by-laws of any municipal, provincial or other governmental
authority, and the Lessee, after receipt of notice from the Lessor, does
not rectify such non-compliance with due diligence, then the Lessor's
designated contractors may, at the Lessor's option, rectify or repair said
deficiency which shall be at the Lessee's sole cost and expense, the same
to be paid as Additional Rent by the Lessee to the Lessor upon demand.
-17-
6.9 Lessor's Property/Fixtures
--------------------------
At the expiration of the Term and any renewal, or the earlier determination
of this Lease, all alterations, additions, floor coverings, light fixtures
and improvements made to or installed upon or in the Demised Premises
(including, without limitation, the Leasehold Improvements) and which in
any manner are attached in, to, on or under the floors, walls or ceilings
shall remain upon and be surrendered and automatically transferred to the
Lessor with the Demised Premises as a part thereof, without disturbance,
molestation or injury and shall be and become the absolute property of the
Lessor without any payment or indemnity by the Lessor to the Lessee, except
that the Lessee will have the right, but not the obligation, to remove:
(a) the emergency generator and the uninterrupted power supply backup
system installed by the Lessee, provided the Lessee repairs at its
cost all damage caused by such removal; and
(b) any trade fixtures which were approved by the Lessor and installed
upon or in the Demised Premises, by either the Lessor or the Lessee,
in which event the Lessee covenants and agrees to make good any damage
or injury caused to the Demised Premises resulting from such removal.
6.10 No Liens
--------
The Lessee shall not permit, do, or cause anything to be done to the Lands
and Building or the Demised Premises which would allow any lien, lis
pendens, judgment or certificate of any Court to be imposed or to remain
upon the Demised Premises, its contents, or the Lands and Building. In the
event of the registration of any such lien, the Lessee shall at its own
expense immediately cause the same to be discharged.
6.11 Destruction of Demised Premises
-------------------------------
In the event that the Demised Premises or the Building or any part thereof
shall, at any time during the Term, be destroyed or damaged by fire,
lightning, tempest, explosion, act of God or the Queen's enemies, so as to
render the Demised Premises unfit for the purposes of the Lessee, then the
Rent hereby reserved, or a proportionate part thereof, according to the
nature and extent of the destruction or damage sustained, shall ▇▇▇▇▇, such
suspension in the case of destruction or damage to be until the Demised
Premises have been rebuilt and made fit for the Lessee's repair or
replacement of its fixtures and improvements; provided that either the
Lessor or the Lessee shall have the option, in the event the Building or a
substantial part thereof being substantially destroyed or damaged such that
the Building or any part thereof cannot be repaired within one hundred
eighty (180) days of the commencement of repair and rebuilding as
determined by the Lessor's architect, acting reasonably, such determination
to be made and communicated to each of the Lessor and the Lessee within
sixty (60) days after such destruction or damage occurring to terminate
this Lease on giving to the other party within thirty (30) days after
receipt of such architect's determination notice in writing of its
intention to so terminate this Lease, and thereupon Rent and any other
payments for which the Lessee is liable under this Lease shall be
apportioned to a date being sixty (60) days after such notice is given, and
the Lessee shall on such latter date immediately deliver up vacant
possession of the Demised Premises to the Lessor together with repayment of
the Loan and all accrued interest. If such option is not exercised, the
Lessor shall diligently rebuild the Demised Premises to the extent of its
obligations as described in this Lease (provided that the Lessor shall not
be obligated to
-18-
provide any loans, allowances or inducements to the Lessee) and the Lessee
shall erect and install the Leasehold Improvements.
PART 7 - COMMON AREAS/SERVICES
------------------------------
7.1 Control of Common Areas and Facilities
--------------------------------------
The Lessor shall at all times have the right of control over the common
areas and common facilities of the Lands and Building and sidewalks
adjacent to the Lands. Such control includes control of security,
deliveries, contractors present in the Building, signs, traffic control,
access, the hours of operation and the use made by the Lessee and/or the
public of such common areas and common facilities.
7.2 Building Services
-----------------
Subject to Force Majeure, the Lessor agrees, in addition to other common
area services, to provide the Lessee with access to lighting, electrical,
elevator usage (i.e. elevator closest to Cambie Street) parking and HVAC
seven (7) days a week twenty-four (24) hours per day. As required, the
Lessee may install, at its sole cost, a card access security system for the
doors within the Building servicing solely the Demised Premises. The Lessee
may also install, at its sole cost, security cameras within the common
areas in the Building. Wherever reasonably practical, electrical costs for
the Demised Premises will be metered by the Lessor, at the sole cost of the
Lessor, and the full amount of said costs, including Sales Taxes, charged
directly to the Lessee as Additional Rent based upon the BC Hydro Schedule
1220 for Commercial Accounts (or comparable replacements thereof if said
schedule is discontinued or modified by BC Hydro or a successor provider of
electrical utilities). The Lessee agrees to pay its share of hydro used by
or benefiting the Lessee that is not directly metered, as estimated by the
Lessor acting reasonably, as an Operating Cost. The Lessee shall also
reimburse the Lessor, based upon the rates charged to the Lessor for said
utilities from time to time, for the Lessee's natural gas and excessive
water consumption, it being agreed that installation of an open loop water
based air-conditioning system by the Lessee shall constitute excessive
water consumption and a closed loop water based air-conditioning system
shall not constitute excessive water consumption.
7.3 Building Alarm
--------------
The Lessee acknowledges that the Lessor currently alarms the Building with
perimeter protection and motion detector protection between approximately
11:45 p.m. and 7:00 a.m. daily. The Lessee agrees to use best efforts in
preventing its employees and invitees from entering the Building common
hallways during these alarm activation hours, and agrees to reimburse the
Lessor for the Lessor's direct costs resulting from alarms caused by the
Lessee, the Lessee's employees and the Lessee's invitees. The Lessor and
the Lessee agree to work together to disengage alarms in areas of the
Building which will be frequented by the Lessee to accommodate the Lessee's
reasonable working requirements.
7.4 Parking
-------
Subject to the second paragraph of this Section 7.4, the Lessee shall have
the right to rent random or reserved, as determined by the Lessor, in its
sole discretion, parking stalls in the Building based upon a ratio of one
(1) stall per 1,000 square feet of Rentable Area of the
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Demised Premises throughout the Term and any renewals thereof. The rental
rates for the parking stalls is subject to adjustment to comparable parking
rates in the area and are currently $60.00 per month (plus Sales Taxes) for
random parking stalls and $70.00 per month (plus Sales Taxes) for reserved
parking stalls. Further, the Lessee shall have the exclusive right to the
parking adjacent to the southerly asphalt parking area adjacent to the
second floor of the Building, including the parking on the ramp leading
down to the said parking area, which parking area shall be included in the
foregoing parking ratio. No later than sixty (60) days prior to the
Commencement Date of each area comprising the Demised Premises the Lessor
shall notify the Lessee in writing of the respective number of random and
reserved parking stalls allocated for its use and that the Lessee has
fifteen (15) days from receipt of such notice to respond. The Lessee shall
advise the Lessor, in writing, of the number of stalls it elects to take
within fifteen (15) days of receipt of such notice.
It is agreed that the Lessee shall have the right to cancel any or all of
said parking stalls upon not less that thirty (30) days' written notice.
Should the Lessee wish to reinstate the use of any parking stalls, it shall
provide the Lessor with three (3) months' notice in writing.
It is further agreed that in the event that the Lessor deems it necessary
to carry out maintenance work to the roof area of the Building the Lessor
shall have the right to temporarily suspend the Lessee's parking privileges
for affected parking stalls during the period reasonably required for said
work, it being understood that the parking rates for such affected parking
stalls shall ▇▇▇▇▇ for a corresponding period.
7.5 Storage and Emergency Generator Rooms
-------------------------------------
The Lessor will provide 1,000 to 1,400 square feet of storage premises in
the Building for the Term of this Lease and any renewals thereof if
required by the Lessee. Said storage premises may be relocated by the
Lessor in its sole discretion, acting reasonably, to space of comparable
size and with comparable improvements, at its cost, from time to time
throughout the Term or any renewal thereof upon not less than thirty (30)
days' written notice to the Lessee. In addition to the storage premises,
the Lessor will provide an area of approximately 625 square feet adjacent
to the first floor exterior wall of the Demised Premises for the Lessee's
emergency generator for the Term of this Lease and any renewals thereof.
The Lessee agrees to pay monthly rent for said storage space and emergency
generator space based upon $8.00 gross per square foot per annum during the
Term, and at market rates for storage space in the Building during any
renewals of this Lease. The Lessee will have unrestricted access at all
times to its emergency generator. Any disputes as to the market rate for
such spaces will be resolved in the manner set out in Section 15.4. The
parties agreed that the provisions of Sections 4.1, 4.3, 4.4, 4.7 and 7.4
and Schedule "C", shall not apply to said storage premises or emergency
generator rooms.
7.6 Refuse and Deliveries
---------------------
The Lessee shall not place or leave or permit to be placed or left in or
upon any part of the Lands and Building any debris or refuse except as
allowed by the Lessor at specific times for refuse, deposit and pick-up in
areas indicated by the Lessor. In addition, all deliveries for the Lessee
shall be in such areas designated by the Lessor for that purpose.
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7.7 Directory Board
---------------
The Lessee shall be entitled to have its name shown upon the directory
board of the Building, but the Lessor shall in its sole discretion design
the style of such identification and allocate the space on the directory
board for each tenant of the Building.
7.8 Satellite and Communications
----------------------------
Subject to the Lessee obtaining at its cost all required regulatory and
governmental approvals, the Lessor shall permit the Lessee to place
satellite transmission or receiving or other communication equipment
related to the conduct of its business on the roof of the Building covering
an aggregate area of not greater than 150 square feet at any time during
the Term of this Lease or any renewals thereof, at the Lessee's cost. The
Lessor shall not charge rent of any kind or nature for such use by the
Lessee, provided further that the Lessor shall approve the location of such
equipment prior to installation of same, such approvals not to be
unreasonably withheld or delayed, and the Lessor, acting reasonably may
relocate such equipment from time to time at the Lessor's cost. Any direct
increase in Operating Costs for the Building attributable to maintenance
and use of this equipment will be paid for entirely by the Lessee as
Additional Rent.
Notwithstanding the foregoing, it is agreed that said communication
equipment shall not be placed in any areas which limit or restrict parking
or vehicular movement on the roof of the Building. In the event that the
Lessor elects to perform repair or maintenance work in a roof area covered
or impacted by said communication equipment, the Lessee agrees, upon not
less than fourteen (14) days' written notice, to temporarily relocate said
equipment at its cost.
The Lessee shall have 24 hour access to telecommunications centres within
the Building other than those rented to other parties on an exclusive
basis, it being understood that during periods when the Building is alarmed
the Lessee shall employ, at the Lessee's cost, the Lessor's alarm response
company to access the telecommunication centres. The Lessor will facilitate
the Lessee getting additional telecommunications carriers into the
Building. The Lessee shall be permitted to route communications cabling and
such wiring and ducting as may be required for its emergency generator and
communications equipment throughout the common areas of the Building
between their various spaces or through premises leased by other tenants
(to the extent required, the Lessee acting reasonably, and to the extent
the Lessor can accommodate, acting reasonably), provided that the Lessee
does so with as little disruption to other Building occupants as reasonably
possible and is liable for any damage to the Building or any portion
thereof as a result of said cabling.
7.9 Bicycle Storage
---------------
The Lessor agrees to provide to the Lessee, free of charge, sufficient
parking stalls (anticipated to be two or three) to accommodate up to forty
(40) bicycles during the Term of this Lease and any renewal thereof. At the
Lessor's cost, the Lessor will cover the parking stalls, install bike
racks, secure the stalls with fencing and install a locking device
permitting access to only authorized personnel of the Lessee provided that
the Lessor shall not have any liability for any theft or damage to any
bikes in the bicycle storage area unless such theft or damage results from
the negligence or wrongful act of the Lessor or those for whom, in law, the
Lessor is responsible. It is agreed that the provisions of Sections 4.1,
4.3, 4.4, 4.7 and 7.4 and Schedule "C", hereof shall not apply to said
bicycle storage area. In the event that the existing HVAC
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enclosure housing HVAC unit #l or HVAC unit #6 is not required by either
the Lessee (in the sole opinion of the Lessee, acting reasonably) or the
Lessor for new HVAC equipment, the Lessee's bicycle storage area may
alternatively be located within the said enclosure provided it is first
modified by the Lessor as required herein. Notwithstanding the foregoing,
it is agreed that said bicycle storage area may be relocated by the Lessor,
at its cost, from time to time throughout the Term and any renewal thereof
to an alternative area within or adjacent to the Building.
7.10 Floor Loading
-------------
The Lessor hereby represents and warrants that the floor loading capacity
of the first floor of the Building is at least 100 lbs. per square foot,
live load, and the floor loading capacity of the second floor of the
Building is at least 150 lbs. per square foot, live load, and the floor
loading capacity of the third floor of the Building is at least 50 lbs. per
square foot, live load.
PART 8 - ASSIGNMENT AND SUBLETTING
----------------------------------
8.1 Assignment
----------
The Lessee agrees not to assign this Lease or any interest herein, or
sublet, license, transfer or part with possession of the Demised Premises
or any part thereof (collectively called an "Assignment") without first
obtaining the prior express consent in writing of the Lessor, which consent
shall not be unreasonably withheld or delayed, provided in all cases the
Lessee's covenant remains on this Lease. In requesting the Lessor's
consent, the Lessee shall give the Lessor no less than thirty (30) days'
written notice of the terms of any contemplated Assignment, which notice
shall specify the name and address of the proposed sublessee, assignee or
licensee with such financial statements, credit, character and other
references and information (including the type of business proposed to be
conducted and carried out on the Demised Premises) as the Lessor may
reasonably require. In the event that the Lessor should consent to any such
Assignment, the Lessor shall nevertheless, and does hereby reserve its
right to approve any further Assignment, and may require, as a condition of
the Lessor giving its consent, that the assignee, sublessee, licensee or
person taking possession covenant directly with the Lessor to observe and
perform the Lessee's obligations contained in this Lease. The acceptance of
Rent from or the performance of any obligation hereunder by a person other
than the Lessee shall not be construed, in the absence of the prior express
consent in writing of the Lessor, as an admission by the Lessor that such
person has any right to or interest in the Demised Premises. Except with
the express written consent of the Lessor, no permitted Assignment shall
release the Lessee or the Indemnifier of their obligations hereunder. The
Lessee shall pay to the Lessor as Additional Rent the reasonable costs and
fees of the Lessor associated with any such request for an Assignment.
8.2 Reorganization, Change in Ownership or Use by Affiliate
-------------------------------------------------------
The Lessor agrees that a reorganization, merger, sale, partnership change
or other change in ownership interest of the Lessee shall not be deemed to
be an Assignment within the meaning of Section 8.1, for which the Lessee
must obtain the prior consent in writing of the Lessor. It is further
agreed that the use by, or the subleasing to any subsidiary, affiliate or
successor of the Lessee shall not be deemed an Assignment under Section
8.1.
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PART 9 - INSURANCE
------------------
9.1 Lessee to Insure
----------------
The Lessee will take out and keep in force during the Term of this Lease
all perils replacement cost insurance for the Lessee's HVAC system for the
Demised Premises and the Leasehold Improvements, and public liability and
tenant's legal liability insurance all in amounts and with policies and
forms satisfactory from time to time to the Lessor (but in any event not
less than $3,000,000.00 inclusive limits) each with insurers and upon terms
acceptable to the Lessor. Each such policy shall name the Lessor as an
additional insured as its interest may appear and shall provide that the
insurer shall not have any right of subrogation against the Lessor on
account of any loss or damage covered by such insurance or on account of
payments made to discharge claims against or liabilities of the Lessor, by
such insurance. The cost of premium for each and every such insurance
policy shall be paid by the Lessee. The Lessee shall obtain from the
insurers under such policies undertakings to notify the Lessor in writing
at least ten (10) days prior to any cancellation thereof or any material
change therein. The Lessee agrees at the request of the Lessor to forthwith
provide the Lessor with written evidence of the existence of the insurance
policies described herein. The Lessee shall not do or omit or permit to be
done or omitted upon the Demised Premises anything which shall cause the
rate of insurance upon the Building to be increased and the Lessee shall
comply with any and all requirements pertaining to the Demised Premises of
any insurance organization or company necessary for the maintenance of
reasonable fire and other insurance covering the Demised Premises or the
Building.
9.2 Lessor to Insure
----------------
The Lessor shall throughout the Term carry:
(a) insurance on the Building (excluding the foundations and excavations)
and the machinery, boilers and equipment in or servicing the Building
and owned by the Lessor or the owners of the Building (excluding any
property which the Lessee and other tenants are obliged to insure
under Section 9.1 or similar sections of their respective leases)
against damage by fire and extended perils coverage;
(b) public liability and property damage insurance with respect to the
Lessor's operations in the Building; and
(c) such other form or forms of insurance as the Lessor reasonably
considers advisable. Such insurance shall be in such reasonable
amounts and with such reasonable deductibles as would be carried by a
prudent owner of a reasonably similar building, having regard to size,
age and location. Notwithstanding any other provision of this Lease,
the Lessor's insurance shall contain a waiver of subrogation by the
insurers against the Lessee and its subtenants to the extent such
waiver is commercially available.
The Lessor, acting reasonably, shall have the right to determine that if
insurance premiums for the Building shall increase materially in the sole
opinion of the Lessor, acting reasonably, as a consequence of a claim being
made pursuant to such insurance (provided that this clause shall not apply
to claims pursuant to any public liability insurance), and in the event the
Lessor so
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determines, then the Lessor may forego filing or pursuing an insured claim
and the costs of remedying such claim shall form part of the Operating
Costs.
PART 10 - EXCLUSION OF LIABILITY AND INDEMNITY
----------------------------------------------
10.1 Lessee's Indemnity
------------------
The Lessee shall indemnify and save harmless the Lessor from and against
any and all claims of any kind whatsoever arising out of the Lessee's use
of or presence in the Demised Premises, including without limiting the
generality of the foregoing, all claims for personal injury, sickness or
death or property damage suffered by the Lessor or by any other tenant of
the Lands and Building arising out of the use of or presence in the Demised
Premises or the Building or arising out of the conduct of any work or
through any act or omission of the Lessee or any assignee, subtenant,
agent, contractor, servant, employee, invitee or licensee of the Lessee or
by reason of any breach of a term of this Lease by the Lessee and, against
and from all costs, counsel fees, expenses and liabilities incurred in or
resulting from any claim, action or proceeding brought thereon, unless such
claim is caused by the Lessor or those for whom the Lessor is, at law,
responsible. This indemnity shall survive the expiration of this Lease.
10.2 Lessor's Indemnity
------------------
Notwithstanding any other provision of this Lease, the Lessor shall
indemnify the Lessee and save it harmless from all direct loss (excluding
economic or consequential loss), claims, actions, damages, liability and
expense in connection with loss of life, personal injury, damage to
property or any other loss or injury whatsoever arising out of the
negligence of the Lessor, or any breach of the Lessor's obligations under
this Lease, or occasioned wholly or in part by any negligent act or
omission of the Lessor or any one for whom the Lessor is responsible at
law, except where expressly authorized by any other provision of this
lease. If the Lessee shall, without fault on its part, be made a party to
any litigation commenced by or against the Lessor, then the Lessor shall
protect, indemnify and hold the Lessee harmless in connection with such
litigation.
10.3 Exclusion of Liability
----------------------
The Lessor, its agents, servants and employees, shall not be liable nor
responsible in any way for any damage or injury to any property of the
Lessee which is entrusted to the care and control of the Lessor, its
agents, servants or employees nor for any personal or consequential injury
of any nature whatsoever that may be suffered or sustained by the Lessee or
any employee, agent, customer, invitee or licensee of the Lessee or any
other person who may be upon the Lands and Building or the Demised Premises
or for any loss of or damage or injury to any property belonging to the
Lessee or to its employees or to any other persons while such property is
on the Lands and Building or the Demised Premises and, in particular but
without limiting the generality of the foregoing, the Lessor shall not be
liable for any damage or damages of any nature whatsoever to any such
property caused by the failure by reason of a breakdown or other cause, to
supply adequate drainage, heating, air conditioning, ventilation, snow or
ice removal, or by reason of the interruption of any public utility or
service or in the event of steam, water, rain or snow which may leak into,
issue, or flow from any part of the building or from the water, steam,
sprinkler, or drainage pipes or plumbing works of the same, or from any
other place or quarter or for any damage caused by anything done or omitted
by
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any tenant of the Building, unless such claim is directly caused by the
Lessor or those for whom the Lessor is, at law, responsible. The Lessee
shall not be entitled to any abatement of rent in respect of any such
condition, failure or interruption of service; and the Lessor, its agents,
servants, employees or contractors, shall not be liable for any damage
suffered to the Demised Premises or the contents thereof by reason of the
Lessor, its agents, employees or contractors, entering upon the Demised
Premises to undertake the examination thereof or any work therein in the
case of any emergency.
PART 11 - LANDLORD'S RIGHTS AND REMEDIES
----------------------------------------
11.1 Default
-------
If and whenever the Rent (including Additional Rent) hereby reserved or any
part thereof shall not be paid on the day appointed for the payment thereof
and the Lessee fails to remedy such breach within three (3) business days
of notice thereof by the Lessor, or in case of breach or non-observance or
non-performance by the Lessee of any of the covenants, agreements,
provisos, conditions or rules and regulations on the part of the Lessee to
be kept, observed or performed and the Lessee fails to remedy such breach
within fifteen (15) days of notice thereof by the Lessor (or immediately
in the case of an emergency or such shorter period as required by any
lawful governmental authority) or, if such breach cannot reasonably be
remedied within fifteen (15) days, the Lessee fails to commence to remedy
such breach within such fifteen (15) day period or thereafter fails to
proceed diligently to remedy such breach, or if without the written consent
of the Lessor, the Demised Premises shall be used by any person other than
the Lessee, the Lessee's permitted assigns or permitted sub-lessees, or for
any purpose other than that for which the Demised Premises were leased, or
in case the Term shall be taken in execution or attachment for any cause
whatever, then and in every such case it shall be lawful for the Lessor
thereafter to immediately and without notice enter into and upon the
Demised Premises or any part thereof in the name of the whole and the same
to have again, repossess and enjoy as of its former estate, notwithstanding
anything to the contrary herein.
11.2 Termination of Lease
--------------------
If the Term hereof shall be at any time seized in execution or attachment
by any creditor of the Lessee or if a receiver or receiver-manager is
appointed in respect of any property of the Lessee or the Lessee shall make
any assignment for the benefit of creditors or shall make any bulk sale or
become bankrupt or insolvent or take the benefit of any statute now or
hereafter in force for bankrupt or insolvent debtors, or, if the Lessee is
a corporation and any order shall be made for the winding-up of the Lessee,
or other termination of the corporate existence of the Lessee, then in any
such case this Lease shall, at the option of the Lessor, cease and
determine and the Term shall immediately become forfeited and void and the
then current month's Rent and the next ensuing three (3) months' Rent
(including Additional Rent) shall immediately become due and be paid and
the Lessor may immediately claim the same together with any arrears then
unpaid and any other amounts owing to the Lessor by the Lessee and the
Lessor may without notice or any form of legal process forthwith re-enter
upon and take possession of the Demised Premises and become the owner of
the Lessee's effects (save and except for any software which shall remain
owned by the Lessee in any event) and remove the Lessee's effects
therefrom, any statute or law to the contrary notwithstanding, the whole
without prejudice to, all other rights, remedies and recourses of the
Lessor.
-25-
11.3 Payment of Lessor's Expenses
----------------------------
If at any time an action is brought for recovery of possession of the
Demised Premises, or the recovery of Rent or any part thereof, or because
of a breach by act or omission of any covenant contained herein on the part
of the Lessee, and a breach is established, the Lessee shall pay to the
Lessor all expenses incurred by the Lessor in the enforcement of its rights
and remedies hereunder including reasonable legal expenses on a solicitor
and own client basis.
11.4 Right of Lessor to Perform Lessee's Covenants
---------------------------------------------
If at any time, and so often as the same shall happen, the Lessee shall
make default in the observance or performance of any covenant contained
herein on its part to be observed or performed and has not cured such
default following written notice thereof pursuant to Section 11.1 hereof,
then the Lessor may, but shall not be obligated so to do, without waiving
or releasing the Lessee from its obligations under this Lease, itself
observe and perform the covenant or covenants in respect of which the
Lessee has made default or make payment of the monies the Lessee has failed
to pay; and all costs and expenses incurred by the Lessor in the observance
or performance of such covenant or covenants including without limitation
reasonable legal costs as between solicitor and own client and any moneys
so paid by the Lessor will, with interest thereon from the date of the
incurring of such costs or expenses or payments of monies, at a rate equal
to 3% per annum above the prevailing prime commercial lending rate then
being published by any Canadian chartered bank designated by the Lessor,
shall be a charge on the Demised Premises in favour of the Lessor in
priority to the interest of the Lessee hereunder and of any person claiming
through or under the Lessee, and all such costs, expenses and monies and
interest thereon shall be payable by the Lessee to the Lessor forthwith on
demand as Additional Rent. The Lessor shall have the same rights and
remedies and may take the same steps for recovery thereof as for the
recovery of Rent in arrears.
11.5 Re-Entry
--------
On the Lessor becoming entitled to re-enter upon the Demised Premises under
any of the provisions of this Lease, the Lessor, in addition to all other
rights, shall have the right to immediately determine forthwith this Lease
and the Term by leaving upon the Demised Premises notice in writing of its
intention so to do, and thereupon Rent shall be computed, apportioned and
paid in full to the date of such determination of this Lease and any other
payments for which the Lessee is liable hereunder shall be paid and the
Lessee shall immediately deliver up vacant possession of the Demised
Premises to the Lessor, and the Lessor may re-enter and take possession
thereof.
11.6 Right of Lessor to Seize
------------------------
If the Lessor is entitled to do so at law, the Lessor may seize and sell
all the Lessee's goods and property which at any time have been located
within the Demised Premises whether or not the same are at the time of
seizure located within the Demised Premises or have been removed to another
location, and apply the proceeds of such sale against Rent outstanding and
upon the costs of the seizure and sale as provided for at law. The Lessee
further agrees that if it leaves any Rent unpaid, the Lessor, in addition
to any remedy otherwise provided at law or in equity, may seize and sell
such goods and property of the Lessee at any place to which the Lessee or
any other person may have removed them, in the same manner as if such goods
and property had remained upon the Demised Premises.
-26-
11.7 Remedies for Non-Payment
------------------------
In the event of default by the Lessee in payment of Additional Rent or any
other amount payable by the Lessee hereunder, the Lessor shall have, in
addition to any other right or remedy that the Lessor would otherwise have
at law or in equity, the same rights and remedies that the Lessor would
have in the case of default in payment of Rent.
11.8 Non-Waiver
----------
No condoning, excusing or overlooking by the Lessor of any default, breach
or non-observance by the Lessee at any time or times in respect of any
covenant, proviso or condition contained herein shall operate as a waiver
of or defeat or affect the Lessor's rights hereunder in respect of any
continuing or subsequent default, breach or non-observance. No waiver
shall be implied by anything done or omitted by the Lessor unless the
Lessor gives an express written waiver to that effect.
11.9 Remedies Cumulative
-------------------
All rights and remedies of the Lessor in this Lease contained shall be
cumulative and not alternative.
11.10 Interest
--------
The Lessee shall pay to the Lessor interest at a rate equal to 3% per
annum above the prevailing prime commercial lending rate published from
time to time by any Canadian chartered bank designated by the Lessor, on
all payments of Rent, Additional Rent and all other sums required to be
paid under this Lease which have become overdue so long as such monies
remain unpaid.
PART 12 - MORTGAGES AND ASSIGNMENTS BY LANDLORD
-----------------------------------------------
12.1 Subordination
-------------
This Lease is subject and subordinate to all mortgages including any deed
of trust and mortgage securing bonds, and all indentures supplemental
thereto which may now or hereafter affect such leases and the Lands and
Building, and to all renewals, modifications, consolidations, replacements
and extensions thereof. The Lessee agrees to execute promptly any
certification and confirmation of such subordination as the Lessor may
request. It is agreed by and between the parties hereto that
notwithstanding any subordination of this Lease to mortgages as provided,
the Lessee's obligations under the Lease shall remain in full force and
effect notwithstanding any action at any time taken by a mortgagee to
enforce the security of any mortgage, provided however that any such
postponement or subordination shall reserve to the Lessee the right to
continue in possession of the Demised Premises under the terms of this
Lease so long as the Lessee shall not be in default hereunder.
Notwithstanding the foregoing, the Lessee will not be required to attorn
to a purchaser, mortgagee or trustee unless such third party enters into a
non-disturbance agreement with the Lessee in a form satisfactory to the
Lessee, acting reasonably.
-27-
12.2 Status Statement
----------------
For the purpose of confirming the status of this Lease to any person,
including a purchaser or proposed purchaser or mortgagee or proposed
mortgagee of the Lands and Building, the Lessee shall from time to time and
within seven (7) days of written request, execute and deliver to the Lessor
a statement in writing certifying that this Lease is unmodified or, if
modified, stating the modifications, that it is in full force and effect,
the amount of the annual rent paid hereunder, the dates to which such rent
and other charges hereunder have been paid, and whether there is any
existing default on the part of the Lessor of which the Lessee has notice.
The Lessee agrees that the statement so delivered shall be binding and may
be relied upon by the person to whom it is directed.
12.3 Non-Disturbance Agreement
-------------------------
The Lessor agrees that concurrently with the execution of this Lease, it
will provide the Lessee with non-disturbance agreements acceptable to the
Lessee and the Lessor, both acting reasonably, from any mortgage holders or
lien holders having priority to this Lease.
12.4 Registration
------------
The Lessee may at its option and at the cost and expense of the Lessee,
cause this Lease or a Short Form Lease to be registered in the Vancouver
Land Title Office. All expenses with respect to the said registration,
including all governmental registration fees and if required, the costs of
surveying the Demised Premises, or the Lands and Building and all other
costs incidental to preparing a plan and documents in registrable form,
shall be entirely borne by the Lessee.
PART 13 - OVERHOLDING BY LESSEE
-------------------------------
13.1 Month to Month Tenancy
----------------------
The Lessor shall grant to the Lessee the automatic provision to hold over
the Demised Premises for up to six (6) months at the end of the Term at a
monthly rent of 115% of the monthly Basic Rent payable during the last
month of the Term plus the Lessee's Proportionate Share of Operating Costs
and Additional Rent payable hereunder, provided the Lessee has notified the
Lessor of its intention to waive its Option to Renew in Part 17 and
notifies the Lessor in writing (the "Notice") of the date (the
"Termination Date") the Lessee shall vacate the Demised Premises, it being
understood and agreed that such Notice shall be delivered no later than
nine (9) months prior to expiry of this Lease otherwise this Section 13.1
shall be deemed waived.
The tenancy created thereby shall be a month to month tenancy which will
terminate on the Termination Date (and not earlier, except in the event of
a default pursuant to Section 11.1 of this Lease), and shall not be deemed
to be a tacit renewal of this Lease, and otherwise on the terms and
conditions herein set out, save and except for any rights pursuant to Parts
16 or 17 hereof granted to the Lessee herein.
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PART 14 - LESSOR'S COVENANTS
----------------------------
14.1 Lessor's Covenants
------------------
The Lessor covenants with the Lessee, so long as the Lessee is not in
breach of any of its covenants hereunder, as follows:
(a) Quiet Enjoyment. To permit, subject as herein provided, the Lessee to
---------------
peaceably possess and enjoy the Demised Premises for the Term and any
renewals without any disturbance or interruption by the Lessor or by
its successors and assigns, or by any person claiming by, through or
under the Lessor;
(b) Utilities. To make available to the Demised Premises electricity and
---------
power requirements as per Schedule "C" to this Lease, and, in normal
quantities gas, water, and other public utilities generally made
available to other tenants of the Building by the Lessor, unless
otherwise provided for in the Lease, save and except that the Lessor
shall not be obligated to provide heating and air conditioning of the
Demised Premises, provided that the Lessor shall have no liability for
failure to supply utilities when prevented from doing so by repairs,
or causes beyond the Lessor's reasonable control;
(c) Repair. To repair or maintain and to keep in good repair as would a
------
prudent owner the foundations, outer walls, roof, spouts and gutters
of the Building and all of the common areas therein, parking areas,
and the plumbing, sewage and electrical systems therein except to the
extent that they are located on the Demised Premises or in any other
portions of the Lands and the Building occupied by other tenants;
provided that the Lessor shall use reasonable efforts in exercising
its rights under this clause so as to minimize any interference with
the Lessee's business and use of the Demised Premises, the Lessee
shall not have any right to object to nor any right to any claim of
damages or any reduction or abatement of Rent in respect of the
exercise of the Lessor's rights under this clause. The Lessee shall
permit the Lessor, its servants or agents upon forty-eight (48) hours'
prior written notice (or without notice in the case of an emergency)
to enter the Demised Premises from time to time for the purpose of
inspecting and making repairs, alterations or improvements to the
Building, and the Lessee shall not be entitled to compensation for any
inconvenience, nuisance or discomfort occasioned thereby, provided the
Lessor takes all practical measures to minimize any interference with
the Lessee's business;
(d) Use of Common Areas. To permit the Lessee and its employees and all
-------------------
persons lawfully requiring communication with them to have the use in
common with others of the main entrances and the stairways, corridors
and elevators leading to the Demised Premises, subject to such
reasonable rules and regulations as the Lessor may make in regard
thereto from time to time, provided that the Lessor shall in no way be
responsible or obligated for failure to enforce any rules and
regulations in this regard. In the event that a card access security
system is installed upon the Building by the Lessor the Lessee shall
abide by any rules and regulations regarding the use of said system
made by the Lessor and shall pay upon demand any costs or charges
incurred by the improper use of the said system by the Lessee, its
servants or agents;
-29-
(e) Use of Washrooms. Subject to Section 14.1(d) to permit the Lessee and
----------------
its employees in common with others entitled thereto to use the
washrooms in the Building on the floor on which the Demised Premises
are situate;
(f) Replacement of Light Bulbs. To replace at the expense of the Lessee
--------------------------
all electrical light bulbs, tubes and ballasts on the Demised Premises
whenever replacement shall be necessary, the replacement cost
(including labour with respect to ballast replacement) to be payable
on demand as Additional Rent;
(g) Y2K Compliance. The Lessor acknowledges that it is aware of the Y2K
--------------
issue and covenants and agrees to take all reasonable steps as would a
prudent landlord to prevent or at least minimize, to the extent
reasonably possible, any detrimental impact to the supply of services
to the Building, the Demised Premises (including, without limitation,
HVAC, maintenance, and security) and the Lessee's quiet enjoyment of
the Demised Premises and the operation of the Lessee's business
therein by virtue of the Lessor's computer dependent equipment failing
to operate properly due to date related problems;
(h) Lessor to Act Reasonably. The Lessor shall act reasonably and
------------------------
expeditiously to minimize the extent and duration of any stoppage,
interruption or reduction of the services, systems and utilities
servicing the Demised Premises. The Lessor shall give the Lessee
reasonable advance notice of any planned stoppage, interruption or
reduction, shall advise the Lessee prior to scheduling such work to
enable the Lessee to schedule its business to minimize disruption, and
shall to the extent commercially reasonable consider the Lessee's
reasonable scheduling suggestions.
14.2 Environment Warranty - Lessor
-----------------------------
The Lessor represents and warrants that to its knowledge the Lands and the
Building comply in all material respects with all applicable federal,
provincial or local environmental, health and safety statutes and
regulation, that there are no Hazardous Substances in the Building or in or
about the Lands with the exception of underground oil tanks and of trace
amounts of asbestos which potentially may remain within inaccessible areas,
but to the Lessor's knowledge such areas meet or exceed acceptable levels
for commercial buildings as determined by applicable governmental
authorities (including, without limitation, regulations under the Workers
-------
Compensation Act (British Columbia)). The Lessor further represents and
----------------
warrants that it will be responsible for the cost of removing any asbestos
which is exposed on the third floor of the Building during demolition, and
that neither the Lands nor the Building are subject to any outstanding
orders or directives pursuant to any judicial orders or safety statutes or
regulations. Any future testing of any Hazardous Substances or potentially
Hazardous Substances not caused by the Lessee or those for whom the Lessee
is responsible at law shall be at the sole cost and expense of the Lessor,
and if it is determined by the Lessor, or any regulatory body, that removal
is necessary, the removal and disposal of the said substances shall be at
the sole cost and expense of the Lessor. The Lessor agrees to indemnify the
Lessee and its directors, officers, employees, agents, successors and
assigns from any and all liabilities, actions, damages, claims, remediation
cost recovery claims, losses, costs, orders, fines, penalties and expenses
whatsoever (including all legal and consultants' expenses and the cost of
remediation of the Building and any adjacent property) arising from or in
connection with:
(a) any breach of or non-compliance with the provisions of this Section by
the Lessor; or
-30-
(b) the existence of, or the release into the environment of, any
Hazardous Substances in the Building or in or about the Lands caused
by the underground oil tanks or by the Lessor or those for whom the
Lessor is responsible for at law.
The obligations of the Lessor under this Section shall not survive the
expiry or earlier termination of this Lease.
PART 15 - GENERAL CONDITIONS
----------------------------
15.1 Rules and Regulations
---------------------
The Lessor reserves the right to make such Rules and Regulations as in its
judgment, acting reasonably, may from time to time be necessary and or
desirable for the proper operation, safety, security, parking, environment,
care, access and cleanliness of the Building and for the preservation of
order and the Lessee agrees that it will abide thereby and that its
employees, agents, servants and any others permitted by the Lessee to
occupy or enter the Demised Premises will, at all times, abide by such
rules and regulations of which it has notice, and that a default in the
performance and observation thereof shall have the same effect as a default
under any of the covenants or conditions of this Lease. The Rules and
Regulations attached as Schedule "B" hereto shall be applicable until
amended by the Lessor.
15.2 Notice
------
Any notice, demand, request, consent or objection required or contemplated
to be given or made by any provision of this Lease shall be given or made
in writing and either delivered personally or sent by facsimile (604-687-
6340) or by registered mail, postage prepaid, addressed to the Lessor at
the Building Management Office, Suite 3038, 910 Mainland Street, Vancouver,
British Columbia, V6B lA9, or to the Lessee at the Demised Premises with a
copy to Seagate Software Information Management Group (Canada), Inc., ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇-▇▇▇▇,
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and to ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇.▇.,
▇▇▇ ▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, or to such other address which either
party may from time to time notify the other in writing. The time of giving
or making such notice, demand, request, consent or objection shall be, if
delivered or sent by facsimile, when delivered or transmitted, and if
mailed, then on the 4th business day after the day of mailing thereof. In
the event of a mail strike, mail slowdown or other labour dispute which
might affect delivery of such notice, then all such notices and demands
shall be delivered or transmitted by facsimile. If in this Lease two or
more persons are named as Lessee such notice, demand, request, consent or
objection shall be sufficiently given or made if and when the same shall be
given to any one of such persons.
15.3 Showing of Premises
-------------------
The Lessee shall permit the Lessor or its agents or employees to show the
Demised Premises to prospective investors, purchasers, agents, brokers and
lenders at any time during the Term during normal business hours upon not
less than twenty-four (24) hours' prior written notice to the Lessee, and
to prospective tenants during the last nine (9) months of the Term (if the
Term has not been renewed by the Lessee) during normal business hours upon
twenty-four (24) hours' prior written notice to the Lessee, provided in
each such case the Lessor is accompanied by the representative of the
Lessee, the group consists of no more than three (3) persons and no
-31-
pictures are taken within the Demised Premises and the Lessor shall act
reasonably and shall not unduly disrupt the Lessee's use and quiet
enjoyment of the Demised Premises.
15.4 Dispute Resolution
------------------
In the event the Lessor and the Lessee are unable to agree as to any
matters set out in this Lease which require agreement (save and except the
rent to be determined pursuant to Section 17.l), then either party may
notify the other, by written notice (in this Section, the "Notice"), of a
desire to resolve the dispute by mediation and a meeting will be held
promptly between the parties, attended by individuals with decision-making
authority regarding the dispute, to attempt in good faith to negotiate a
resolution of the dispute. If, within fourteen (14) days after such meeting
or such further period as is agreeable to the parties (the "Negotiation
Period"), the parties have not succeeded in negotiating a resolution of the
dispute, they agree to submit the dispute to mediation. The parties will
jointly appoint a mutually acceptable mediator, seeking assistance from the
British Columbia International Commercial Arbitration Centre if they have
been unable to agree upon such appointment within twenty (20) days
following the conclusion of the Negotiation Period. If the parties are not
successful in resolving the dispute through mediation, or if the mediation
has not commenced within thirty (30) days following the Negotiation Period,
then the parties agree that the dispute will be settled by arbitration
pursuant to the Commercial Arbitration Act of British Columbia, as amended
--------------------------
from time to time, or any like statute in effect from time to time and the
decision of such arbitrator(s) shall be final and binding upon the parties.
PART 16 - RIGHT OF FIRST OFFER AND EXPANSION PREMISES
-----------------------------------------------------
16.1 Right of First Offer
--------------------
Provided that the Lessee is not in breach of this Lease, the Lessor will
grant to the Lessee the right of first offer during the Term and any
renewal thereof to lease any contiguous rentable space which becomes
available for lease (i.e. the term of the existing lease of any such space
has either expired or been terminated and the existing tenant does not have
a contractual right of renewal) on the first, second or third floors of the
Building or any premises within the Building comprising not less than 5,000
square feet on an "as is where is" basis without any loan, inducement,
allowance or Lessor's Repairs/Work, on the terms and conditions provided
herein and otherwise on the terms and conditions of this Lease, mutatis
mutandis (in this Section 16.1 the "Expansion Space"), as follows:
(a) not more than nine (9) months or less than two (2) months before the
date the Lessor expects the Expansion Space, or any part thereof, to
become available, the Lessor shall deliver to the Lessee notice in
writing identifying the available Expansion Space and the date upon
which it will be available;
(b) the Lessee shall have seven (7) business days from the date of receipt
of such notice within which to advise the Lessor, in writing, that it
intends to exercise its option to lease the Expansion Space;
(c) the Basic Rent per square foot of the Expansion Space payable for the
Expansion Space shall be equal to the Basic Rent per square foot of
the Demised Premises payable by the
-32-
Lessee under this Lease at the time the Lessor delivers the notice
described in subparagraph (a) hereof;
(d) subject to subparagraph (e) hereof, the term of the lease of any such
Expansion Space shall commence on the date thirty (30) days following
the date upon which the space becomes vacant (as specified in the
notice) and shall terminate on the expiry of the Term of this Lease or
any renewal thereof;
(e) the Lessee acknowledges that the Lessor may be required to complete
significant building code upgrades to the Building if, during any
twenty-four (24) month period, building permits are issued by the City
of Vancouver for work to the Building valued, in aggregate, equal to
or in excess of the amount (the "Improvement Limit") which is 50% of
twice the Building's property tax assessment excluding the value
attributed to the Lands. The Lessee agrees that if the Lessee
exercises its right to lease any Expansion Space pursuant to this
Section and the Lessee's proposed improvements to such Expansion Space
will cause or, having regard to the value of the anticipated future
Lessee improvements to the Demised Premises could, in the Lessor's
opinion, acting reasonably, cause the aggregate value of the building
permits taken out for the Building over any twenty-four (24) month
period to exceed the Improvement Limit, the Lessee shall, within seven
(7) business days of either party giving notice to the other that the
proposed Lessee improvements will or could result in the Improvement
Limit being exceeded, elect in writing to either delay its Lessee
improvements to the Expansion Space until such time as the Improvement
Limit will not be exceeded or waive the Lessee's right to lease such
Expansion Space. In the event of any disagreement between the Lessor
and the Lessee as to whether any proposed improvements of the Lessee
could cause the Improvement Limit to be exceeded, such disagreement
will be resolved in the manner described in Section 15.4;
(f) if the Lessee fails to exercise its option with respect to any
Expansion Space, this option with respect to such space only shall
become null and void and have no further effect but shall continue to
apply if such space again becomes available to lease and with respect
to any other Expansion Premises;
(g) the Loan and any inducements or allowances provided for in this Lease
shall not apply to or benefit any premises leased under this option;
and
(h) any premises leased under this option shall not lessen, change or
affect the Lessee's right to the Expansion Premises.
16.2 Expansion Premises
------------------
Provided the Lessee is not in breach of this Lease, the Lessee shall have
the option to lease an additional area measuring approximately 14,645
square feet commencing January 1, 2002 (the "Option Leased Premises")
provided the Lessee notifies the Lessor in writing prior to December 1,
2000. The Loan, inducements and allowances as outlined in Sections 4.1,
4.3, 4.7, 4.8, 4.9 and on Schedule "C" shall apply to the Option Leased
Premises and the Lessee shall be granted a fixturing period of four (4)
months commencing September 1, 2001. The Basic Rent per square foot payable
on the Option Leased Premises shall be at the same rate payable on the
Initial Leased Premises. The lease term on the Option Leased Premises shall
terminate on the expiry of the Term of this Lease or any renewal thereof.
-33-
PART 17 - OPTION TO RENEW
-------------------------
17.1 Grant of Option
---------------
Provided the Lessee is not in breach of this Lease, the Lessee shall have
the right to renew this Lease with respect to the Demised Premises and any
additional space leased pursuant to Section 16.1 or Section 16.2 for one
(1) additional term of three (3) years and one (1) additional term of five
(5) years on the same terms and conditions, save only for the Basic Rent,
Lessor's Repairs/Work, the Loan or any Lessee inducements or Lessee
allowances. The Basic Rent during each of the renewal periods shall be the
then fair market rent of comparable "Office Premises" (as defined in
Section 17.3) inclusive of such tenant inducements as free Basic Rent,
tenant improvement allowances and other incentives, if any, offered by
landlords of such Office Premises at the time agreed between the parties,
and failing such agreement within four (4) months of the date of the
exercise of each option, as determined by arbitration pursuant to the
Commercial Arbitration Act of British Columbia.
--------------------------
17.2 Exercise of Option
------------------
To exercise this Option to Renew, the Lessee shall give written notice to
the Lessor no later than nine (9) months prior to the expiry of the Term or
the first renewal term, as the case may be, otherwise this Option to Renew
shall be deemed waived.
17.3 Office Premises
---------------
For the purposes of Section 17.1, "Office Premises" means office premises
with base building systems including, without limitation, HVAC, electrical
systems, lighting and plumbing, all at a standard consistent with the
systems then supplying the Demised Premises, but without Lessee finishings
including, without limitation, all floor coverings, ceiling treatments if
installed at the cost of the Lessee, wall coverings, interior walls and all
built-in improvements including any raised flooring, cupboards, shelving,
lockers, sinks, appliances and showers.
PART 18 - INDEMNITY
-------------------
18.1 Indemnity
---------
In consideration of the Lessor leasing the Demised Premises to the Lessee
and the sum of $1.00 now paid by the Lessor to the Indemnifier and other
good and valuable consideration (the receipt and sufficiency of which is
hereby acknowledged by the Indemnifier), the Indemnifier unconditionally
agrees to and covenants with the Lessor to indemnify the Lessor for the
full and prompt payment of all sums, including but not limited to, Basic
Rent, Additional Rent, the Loan and any and all other sums and charges
payable by the Lessee to the Lessor under this Lease, and the full
performance and observance of all of the covenants, terms, conditions and
agreements therein provided to be performed and observed by the Lessee.
18.2 Enforcement of Indemnity
------------------------
The Lessor shall have the right to enforce this Indemnity regardless of the
acceptance of additional security from the Lessee and regardless of the
release or discharge of the Lessee by the Lessor or by others or by
operation of any law.
-34-
18.3 Continuation of Indemnity
-------------------------
This Indemnity is absolute and unconditional and, without limiting the
generality of the foregoing, the liability of the Indemnifier under this
Indemnity shall not be deemed to have been waived, released, discharged,
impaired, or affected by reason of the release or discharge of the Lessee
in any receivership, bankruptcy, winding-up, or other creditors'
proceedings, or the rejection, surrender, disaffirmation, or disclaimer of
this Lease by any party or in any action or proceeding, and shall continue
with respect to the periods prior thereto and thereafter for and with
respect to the Term and any renewals thereof. The liability of the
Indemnifier shall not be affected by any repossession of the Demised
Premises by the Lessor, provided however that the net payments received by
the Lessor, after deducting all costs and expenses of the repossession and
reletting the same, shall be credited from time to time by the Lessor to
the account of the Indemnifier and the Indemnifier shall pay any balance
owing to the Lessor from time to time immediately upon ascertainment.
18.4 No Defence
----------
No action or proceeding brought or instituted under this Indemnity and no
recovery in pursuance thereof shall be a bar or defence to any further
action or proceeding which may be brought under this Indemnity by reason of
any further default or default hereunder or in the performance and
observance of the covenants, agreements, conditions and provisos of this
Lease.
18.5 Modification in Writing
-----------------------
No modification of this Indemnity shall be effective unless the
modification is in writing and signed by the Indemnifier and the Lessor.
18.6 Authority
---------
The Indemnifier covenants with the Lessor that the Indemnifier has the
necessary power to give this Indemnity and is jointly and severally bound
with the Lessee for the fulfilment of all obligations of the Lessee under
this Lease as though the Indemnifier was the Lessee named in this Lease.
18.7 Enurement
---------
All of the covenants, agreements, conditions and provisos of this Indemnity
shall extend to and be binding upon the Indemnifier, its successors and
assigns and shall enure to the benefit of and may be enforced by the
Lessor, its successors and assigns and the holder of any mortgage to which
this Lease may be subject and subordinate from time to time.
18.8 Assignments, Reorganization, Etc.
---------------------------------
Notwithstanding any other provision of this indemnity, in the event this
Lease is assigned, sublet or otherwise transferred by the Lessee with or
without the consent of the Lessor or there is a reorganization, merger,
sale, partnership change or other change in ownership interest in the
Lessee, the Indemnifier shall remain liable for the performance of its
obligations hereunder, except that the indemnity of the Indemnifier will
not extend to any new obligation of the transferee assumed in a
modification of this Lease.
-35-
PART 19 - MISCELLANEOUS
-----------------------
19.1 Joint and Several Obligations
-----------------------------
If there be more than one Lessee, the covenants and obligations hereunder
on the part of each Lessee, respectively, shall be deemed to be joint as
well as several.
19.2 Time of the Essence
-------------------
Time shall be of the essence of this Lease.
19.3 Headings
--------
The headings appearing in this Lease have been inserted as a matter of
convenience and for reference only and in no way define, limit or enlarge
the scope or meaning of this Lease or any provision hereof.
19.4 Governing Law
-------------
This Lease shall be construed and governed by the laws of the Province of
British Columbia. All of the provisions of this Lease shall be construed as
covenants and agreements as though the words importing such covenants and
agreements were used in each separate paragraph. Should any provision of
this Lease be illegal or not enforceable, it or they shall be considered
separate and several from the Lease and its remaining provisions and
conditions shall remain in force and be binding upon the parties hereto as
though the illegal or unenforceable provision or provisions or conditions
had never been included.
19.5 Entire Agreement
----------------
The Lessee acknowledges that there have been no representations or
warranties made by the Lessor which are not set out in this Lease. This
Lease embodies the entire terms of the lease agreement with respect to the
Building and the Demised Premises between the Lessor and the Lessee, and
supersedes all prior agreements, if any, with respect to the Demised
Premises between the parties hereto.
-36-
19.6 Enurement
---------
This Lease shall enure to the benefit of and be binding upon the parties
hereto, their respective heirs, executors, administrators, successors and
permitted assigns and other legal representatives, as the case may be.
IN WITNESS WHEREOF the parties hereto have duly executed this Lease as of the
date first above written.
LESSOR:
------
LAURELTON INVESTMENTS LTD.
Per:
/s/ ▇▇▇▇ ▇▇▇▇
------------------------------
Authorized Signatory
KBK NO. 197 VENTURES LTD.
Per:
/s/ ▇▇▇ ▇▇▇▇▇
------------------------------
Authorized Signatory
LESSEE:
------
SEAGATE SOFTWARE INFORMATION
MANAGEMENT GROUP (CANADA), INC.
Per:
/s/ ▇▇▇▇▇ ▇ ▇▇▇▇▇
------------------------------
Authorized Signatory
INDEMNIFIER:
-----------
SEAGATE SOFTWARE, INC.
Per:
/s/ ▇▇▇▇▇ ▇ ▇▇▇▇▇
------------------------------
Authorized Signatory
-37-
SCHEDULE "A"
[FIRST FLOOR PLAN]
Page 1 of 3
SCHEDULE "A"
[SECOND FLOOR PLAN]
Page 2 of 3
SCHEDULE "A"
[THIRD FLOOR PLAN]
Page 3 of 3
SCHEDULE "B"
RULES AND REGULATIONS
---------------------
1. The Lessee shall at all times abide by all laws, rules, regulations,
ordinances, provisions and requirements relating to the Building or to the
Demised Premises of which it has notice and shall keep the Demised
Premises, its employees, servants, agents and invitees under its control so
as to prevent the performance of any act, or the carrying on of any
practice which would damage the Building or its reputation or the Demised
Premises or could injure or annoy the other tenants in the Building, their
employees, servants, agents, or invitees or the public.
2. The Lessee shall not keep or display any merchandise on, or otherwise
obstruct the corridors or other areas adjacent to the Demised Premises. The
Lessee agrees to promptly remove any displays or merchandise that the
Lessor feels is objectionable.
3. The Lessee shall not overload any floor of the Demised Premises: in excess
of one hundred (100) pounds per square foot live load on the 1/st/ floor of
the Building; one hundred and fifty (150) pounds per square foot live load
on the 2/nd/ floor of the Building; and fifty (50) pounds per square foot
live load on the 3/rd/ floor of the Building; nor shall it hang or suspend
from any ceiling or any part of the Building any equipment, displays,
fixtures or signs which are not authorized by the Lessor or its architects.
4. The Lessee shall at all times keep the Demised Premises in a clean and
sanitary condition, including the inside and outside of all glass, the
doors and windows of the Demised Premises, together with all exterior store
front surfaces of the Demised Premises, in accordance with the laws and
direction, rules and regulations of any governmental, municipal or other
agency having jurisdiction. In the event that the Lessor, in its sole
discretion, determines that a Lessee's premises is unsightly, the Lessor,
shall have the right to require the Lessee to install, at the Lessee's sole
cost and expense, venetian window blinds of a type satisfactory to the
Lessor within thirty (30) days after having received written notice from
the Lessor. The Lessee shall not place, or permit to be placed, any
obstructions or merchandise, on, in or near any corridors, rear entrances,
service corridors or loading areas. The Lessee agrees to remove all
merchandise from the loading area immediately upon such merchandise being
delivered.
5. The Lessee shall notify the Lessor, in writing, of its intention to add or
modify lighting, electrical wiring or plumbing in the Demised Premises, and
shall obtain the Lessor's written approval prior to carrying out said work.
In any event, all such work shall be carried out by qualified, licensed
tradesmen in accordance with all applicable building codes.
6. The Lessee and Lessee`s employees and agents shall not solicit business
in the parking area or sidewalks surrounding the Building or other common
areas, nor shall a Lessee distribute or post any handbills or other
advertising material in the parking area or other common areas of the
Building.
7. The Lessee shall not use or permit the use of any objectionable advertising
medium such as, without limitation, loudspeakers, phonographs, televisions,
public address systems, sound amplifiers, radio or broadcasting within the
Building which is in any way audible or visible outside of the Demised
Premises. No aerial shall be erected on the roof or exterior walls of the
Demised Premises, or on the ground, without, in each instance, the written
consent of the
Lessor, such consent not to be unreasonably withheld or delayed. Any aerial
installed without such written consent shall be subject to removal without
notice at any time.
8. The plumbing facilities shall not be used for any other purpose than that
for which they were constructed, and no foreign substance of any kind shall
be thrown therein and the expense of any breakage, stoppage or damage
resulting from the violation of this provision shall be borne by the Lessee
whose employees, agents or invitees shall have caused it.
9. For the benefit and welfare of all lessees of the premises of the Building,
as it may exist from time to time, the Lessor shall have the right to issue
further reasonable rules and regulations and such further rules and
regulations shall thereupon be binding upon the Lessees. The Lessee agrees
to comply with all rules and regulations on notice to the Lessee from the
Lessor.
SCHEDULE "C"
STANTEC REPORT SUMMARY
----------------------
(attach from Offer to Lease)
The references herein to the Stantec report are limited to the specific matters
described in this Schedule "C", and any other matter, item or recommendation set
out in the Stantec report and not specifically and directly described and set
out in this Schedule "C" is not binding upon the Lessor.
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SCHEDULE "C"
Electrical
As per the Stantec report dated June 1, 1999 (the "Stantec report"), we agree to
relocate at our sole cost all non-Seagate electrical panels and transformers in
Seagate space that serve other tenants and that are not housed in common
electrical rooms.
Electrical Service
The Stantec report calls for the provision of an 800 amp 600 volt service to
provide power for Seagate's total requirement for HVAC, lighting and general use
power. We propose to dedicate a small room just outside the main first floor
electrical room to house switches and meters for the full 800 amp service. For
the Initial Area we propose to run 400 amps at 600 volts (as suggested by the
Seagate electrical consultant) up to a new third floor electrical room
(exclusively for Seagate's use) to be located within the Seagate Initial Area.
We would initially install a 225 kva transformer to provide 600/120-208 power.
As additional phases are added to Seagate's space we propose to run an
additional 400 amps at 600 volts to the third floor Seagate electrical
room coupled to an additional 250 kva transformer to provide 600/120-208 power.
As per the Stantec report, Seagate would be responsible for any transformer
switch, any second transformer to isolate power, a UPS and all panelboard
feeders, panelboards and items fed from these panelboards.
Lighting
While Stantec has always called for the provision of 550 lux at desk level,
prior to the latest report ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ had indicated that one fixture per 90
square feet would likely result in the desired light levels. The latest Stantec
report calls for one fixture per 64 square feet. We agree to provide these
extra fixtures if required. As per the Stantec report, these fixtures are to be
deep cell parabolic (5") luminaires and are to be installed on a phased basis to
suit Seagate's layout.
We also agree to provide a low voltage control system consisting of ▇▇▇▇▇▇▇ or
GE low voltage lighting relay panel, with one switch to be provided per circuit.
The Stantec report calls for one switch for every fixture, which is
prohibitively expensive (approximately $68,000) and well beyond normal switching
requirements. If Seagate desires this level of switching we would expect that
Seagate would fund this additional expense.
Emergency Power
The Stantec report calls for Seagate to install a very large (250 kva) emergency
power system that requires approximately 442 square feet to house. This
emergency generator will have to be located on the lower level adjacent to an
exterior wall given the weight of the equipment and the requirement for venting.
We currently have a room measuring approximately 625 square feet adjacent to the
first floor exterior wall (within 25' of the main electrical room) that is
occupied by rented storage lockers. We would be prepared to relocate these
storage lockers, and would expect that Seagate will lease this room at storage
rates.
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Other Landlord's Repairs/Work
We are prepared to agree to the following as Landlord's Repairs/Work:
- Demolition -- see Schedule "B"
- Construction of demising walls to the underside of the slab (reusing and
adding to existing insulated walls where possible)
- Twelve linear feet by five feet of exterior window in each full exterior bay,
with the exception of where exterior wall washrooms are located, the two bays on
the second floor fronting on Mainland Street, and where stairwells or other
impediments makes the installation of exterior windows impractical. All existing
windows will be replaced with new windows measuring 12 lineal feet by 5 feet
(the existing windows are 12 feet by approximately 3 feet). Retaining the
existing width of exterior windows will enable us to reuse the existing window
headers and will preserve the aesthetics of the building when viewed from the
exterior.
- Provide an allowance of $32,000 (plus applicable Goods and Services Tax) (not
to be amortized and recovered over the term) towards the upgrade of four
washrooms located within the Initial Area
- Provide an allowance of $37,500 (plus applicable Goods and Services Tax) (not
to be amortized and recovered over the term) to construct a corporate entrance
for the Leased Premises if the Conditional Leased Premises are provided to
Seagate, and otherwise, if the Conditional Leased Premises cannot be provided
and Seagate then constructs a corporate entrance on the second floor with an
access stairwell (as described in Clause 29A), the Landlord will provide a
greater allowance in an amount to be mutually agreed upon between Seagate and
the Landlord, equal to the amount spent by Seagate but to a maximum $75,000
(plus applicable Goods and Services Tax), each hereby acknowledging that both
parties will benefit from a professional and corporate entrance and the cost to
construct the second floor entrance and stairwell will be approximately double
the cost of the first floor entrance.
Given existing lease commitments we will have to deliver the space to Seagate
without landlord's work being completed on the dates indicated in this letter.
Provided demolition work is done immediately upon the space becoming available,
we believe that landlord's work and tenant improvement work can be performed at
the same time without undue conflict.
MISCELLANEOUS
We appreciate that installing new exterior windows and enlarging existing
exterior windows negatively affects the seismic performance of the building, and
that any exterior stiffness removed must be replaced. According we have designed
a system whereby the exterior stiffness is replaced on the exterior wall without
the requirement for any interior bracing or sheer walls.
The references herein to the Stantec report are limited to the specific matters
described in this Schedule "C", and any other matter, item or recommendation set
out in the Stantec report and not specifically and directly described and set
out in this Schedule "C" is not binding upon the Landlord.