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EXHIBIT 10.26
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SOUTHCREEK CORPORATE CENTRE - OFFICE
LEASE
TABLE OF CONTENTS
Page
----
ARTICLE I INTERPRETATION ......................................... 1
1.1 Certain Basic Lease Provisions ............................. 1
1.2 Definitions ................................................ 1
1.3 Effect of Headings, etc..................................... 9
1.4 Governing Law .............................................. 9
1.5 Severability ............................................... 9
1.6 Joint Covenants and Grammatical Changes .................... 9
1.7 Net Lease .................................................. 9
ARTICLE II DEMISE, TERM AND RENT ................................. 10
2.1 Demise ..................................................... 10
2.2 Term ....................................................... 10
2.3 Basic Rent ................................................. 10
2.4 Deposit .................................................... 11
2.5 Recovery of Additional Rent ................................ 11
ARTICLE III TAXES .................................................. 11
3.1 Payment of Tax for the Year ................................ 11
3.2 Contestation of Tax for the Year ........................... 11
3.3 Separate School Supporter .................................. 12
ARTICLE IV OPERATING AND JANITORIAL COSTS ......................... 12
4.1 Payment of Common Expenses ................................. 12
4.2 Adjustment of Tenant's Share of Common Expenses ............ 12
4.3 Payment of Janitorial Costs ................................ 12
4.4 Broken Period .............................................. 12
ARTICLE V TENANT'S COVENANTS ..................................... 13
5.1 Rent ....................................................... 13
5.2 Other Taxes ................................................ 13
5.3 Electric Current ........................................... 13
5.4 Permitted Use .............................................. 13
5.5 Repairs and Maintenance .................................... 14
5.6 Condition of Premises on Termination ....................... 14
5.7 Landlord May Inspect ....................................... 14
5.8 Repairs Where Tenant at Fault .............................. 14
5.9 Assignment and Subletting .................................. 15
5.10 Rules and Regulations ...................................... 16
5.11 Observance of Law .......................................... 16
5.12 Waste and Nuisance ......................................... 16
5.13 Entry by Landlord .......................................... 16
5.14 Exhibiting Premises ........................................ 16
5.15 Liens ...................................................... 16
5.16 Alterations ................................................ 17
5.17 Signs ...................................................... 17
5.18 Glass, Locks and Trimmings ................................. 18
5.19 Rubbish .................................................... 18
5.20 Blinds ..................................................... 18
5.21 Limitation of Landlord's Liability ......................... 18
ARTICLE VI LANDLORD'S COVENANTS ................................... 18
6.1 Quiet Enjoyment ............................................ 18
6.2 Taxes ...................................................... 18
6.3 Repair ..................................................... 18
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6.4 Heating and Air-Conditioning ............................... 19
6.5 Elevator Service ........................................... 19
6.6 Caretaking of Common Areas ................................. 19
6.7 Janitorial Services ........................................ 19
6.8 Washrooms .................................................. 19
6.9 Landlord's Work ............................................ 20
6.10 Access ..................................................... 20
ARTICLE VII INSURANCE .............................................. 20
7.1 Increase in Insurance Rates or Cancellation of Policy ...... 20
7.2 Landlord's Insurance - Mandatory ........................... 20
7.3 Landlord's Insurance - Optional ............................ 20
7.4 Tenant's Insurance ......................................... 20
ARTICLE VIII DAMAGE AND DESTRUCTION ................................. 21
8.1 Injury to Premises and Building ............................ 21
8.2 Reference to Rider ......................................... 22
ARTICLE IX TENANT'S DEFAULT AND LANDLORD'S REMEDIES ............... 22
9.1 Default and Remedies ....................................... 22
9.2 Interest on Overdue Payments and Administrative Fee ........ 23
9.3 Bankruptcy Acts ............................................ 23
9.4 Landlord's Performance of Tenant's Obligations ............. 24
ARTICLE X MISCELLANEOUS .......................................... 24
10.1 Fixtures ................................................... 24
10.2 Impossibility of Performance ............................... 24
10.3 Non-Waiver ................................................. 24
10.4 No Collateral Agreements ................................... 25
10.5 Notice ..................................................... 25
10.6 Certificate ................................................ 25
10.7 Guarantee .................................................. 25
10.8 Subordination .............................................. 25
10.9 Changes and Additions to Building .......................... 26
10.10 Relocation ................................................. 26
10.11 Overholding ................................................ 26
10.12 Time of Essence ............................................ 26
10.13 Registration ............................................... 26
10.14 Successors and Assigns ..................................... 26
10.15 Contra Proferentum ......................................... 26
10.16 Partial Invalidity ......................................... 27
10.17 Special Provisions ......................................... 27
SCHEDULE A -- FLOOR PLAN
SCHEDULE B -- RULES AND REGULATIONS
SCHEDULE C -- LANDLORD'S AND TENANT'S WORK
SCHEDULE D -- RENEWAL OPTION
SCHEDULE E -- LEASE RIDERS
SCHEDULE F -- SOUTHCREEK CORPORATE CENTRE
SCHEDULE G -- STORAGE SPACE
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LEASE
THIS INDENTURE made the date specified in Section 1.1(i) pursuant to
the short form of Leases Act between the Landlord and tenant hereinafter
identified.
ARTICLE I
INTERPRETATION
1.1 Certain Basic Lease Provisions
The following are certain basic lease provisions, which are part of,
and are in certain instances referred to in other provisions, of this lease:
(i) date of this lease: January 28, 1999
(ii) "Landlord": ▇▇▇▇▇▇ Properties Limited a corporation
incorporated under the laws of the Province of Ontario.
(iii) address of Landlord: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇.
(iv) "Tenant": Genesis Microchip Inc.
(v) address of Tenant: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
(vi) location of Demised Premises: The entire 2nd and 3rd floor
and part of the first floor of ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
(vii) Rentable Area of the Demised Premises as defined in
Section 1.2(xviii): Approximately 45,000 square feet
(viii) term of this lease in Section 2.2: Ten (10) years
(ix) Commencement Date in Section 2.2(a): June 1st, 1999 or as
determined in Section 2.2.
(x) termination date of the Term (subject to earlier termination
in accordance with the terms of this lease): May 31st, 2009
or the day proceeding Ten (10) years after the Commencement
Date.
(xi) yearly basic rent in Section 2.3: $697,500.00
(xii) equal monthly instalments of basic rent in Section 2.3;
$58,125.00
(xiii) amount of deposit in Section 2.4: $206,884.50
1.2 Definitions
In this lease, unless otherwise stated, the following terms shall have
the following respective meanings:
Additional Area
(i) "Additional Area" means the total area of the corridors,
elevator
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lobbies, service elevator lobbies, washrooms, mechanical
rooms, janitor's closets, telephone and electrical closets
and any other closets serving the Demised Premises in common
with other premises, if any, on the floor or floors of the
Building on which the Demised Premises are located;
Additional Rent
(ii) "Additional Rent" means any payments contemplated by this
lease to be made by the Tenant in addition to Basic Rent;
Base Common Expenses
(iii) "Base Common Expenses" means the actual Common Expenses,
excluding utilities, incurred during the Year 1999, adjusted
in respect of those Common Expenses which vary with
occupancy, and in no event so as to increase the Common
Expenses otherwise payable by the Tenant, to reflect full
Building occupancy and full occupancy for the entire Year,
computed by the Landlord on an estimated annual basis, acting
reasonably, which computations will be disclosed by the
Landlord to the Tenant;
Basic Rent
(iv) "Basic Rent" means the monthly rental instalments referred to
in Section 2.3;
Building
(v) "Building" means the building situate on the lands;
Certificate of Substantial Completion of Landlord's Work
(vi) "Certificate of Substantial Completion of Landlord's Work"
means that certificate prepared by the Landlord's Architect
which certifies the substantial completion of the Landlord's
Work described in Schedule "C", in paragraph 2, save and
except for the Punch List.
Commencement Date
(vii) "Commencement Date" means the date determined in accordance
with Sections 2.2 and 10.17(vi) for the commencement of the
Term.
Common Areas
(viii) "Common Areas" means all parts of the Lands and the Building
not leased or leasable to tenants and includes pedestrian
sidewalks and ways, corridors, stairways, elevators, comfort
stations, heating, air-conditioning, electrical, plumbing and
sanitary drainage systems and other facilities of the
Building which are from time to time provided, utilized or
available for the tenants, their employees, customers and
others or for general public use and enjoyment;
Common Expenses
(ix) "Common Expenses" means the total amount paid whether by the
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Landlord or others on behalf of the Landlord for the
operation, maintenance and management of the Lands, the
Building and the Common Areas, and for caretaking services
for the public areas of the Building, such as are in keeping
with maintaining the standard of a first-class office
building and calculated without duplication, including,
without limitation, the following:
(A) the cost of insuring the Building for fire and all
risks or extended perils coverage, public liability,
plate glass, tenant's rentals and other risks
against which the Landlord may reasonably insure;
(B) the cost of cleaning, snow removal, landscaping,
window cleaning, garbage disposal;
(C) the cost of janitorial and caretaking services for
Common Areas not otherwise chargeable to tenants;
(D) the cost of electricity, lighting, fuel, gas,
telephone and other utility costs not otherwise
chargeable to tenants calculated as though all
tenants and other occupants of the Building entered
into leases substantially similar to this Lease and
the cost of replacing electrical fixtures, ballasts,
tubes and bulbs not otherwise chargeable to tenants
calculated as though all tenants and other occupants
of the Building entered into leases substantially
similar to this Lease;
(E) the cost of plumbing, sanitary drainage, elevator
and escalator service and maintenance;
(F) the cost of heating, cooling, air-conditioning and
providing hot and cold water not chargeable directly
to tenants calculated as though all tenants and
other occupants of the Building entered into leases
substantially similar to this Lease;
(G) the salaries and remuneration (including
contributions towards fringe benefits, unemployment
insurance and similar contributions) of persons and
staff to the extent they are employed to provide
security, management, maintenance, supervisor and
operating services to the Building;
(H) fees and expenses of the Landlord's chartered
accountants, architects, professional engineers or
quantity surveyors pertaining only to services
performed in the preparation of certificates
contemplated hereunder;
(I) the cost of maintenance, repair, servicing,
operation, supervision and policing of the Lands and
the Building, including all repairs and replacements
and not properly chargeable to capital accounts
under generally acceptable accounting principles;
(J) the cost of any modification and/or addition to the
Building
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and/or the machinery and equipment therein where, in
the reasonable opinion of the Landlord, such
expenditure may reduce Common Expenses, or the cost
of any additional equipment or improvements required
by law or, in the Landlord's reasonable opinion,
made for the benefit or safety of the users of the
Building;
(K) the total annual amortization of capital (on a
straight line basis over the useful life or such
other period as reasonably determined by the
Landlord), and interest on the unauthorized capital
at a rate equivalent to the lending rate actually
charged or chargeable by the Landlord's bankers from
time to time, of the cost of all fixtures and
equipment which, by their nature, require periodic
or substantial replacement (including heating and
air-conditioning equipment but excluding buildings
or structures) which in the Landlord's reasonable
opinion have an estimated useful life longer than
one (1) year and the cost whereof has not previously
been charged to the tenants of the Building;
(L) management of the Building, the annual cost of which
for the purposes of this lease shall be deemed to be
12% of the total Common Expenses inclusive of Taxes
but exclusive of any portion thereof referrable to
management of the Building or utilities if
separately metered, but otherwise as herewtih
defined; and
(M) the reasonable actual carrying costs of inventory
required for the maintenance and operation of the
Building.
Costs shall be allocated to each fiscal period without
duplication in accordance with generally accepted accounting
practices, and insurance premiums for any policy whose term is not
concurrent with a fiscal year may be allocated to a fiscal period in
which the premium therefor is paid;
Notwithstanding anything to the contrary in the Lease
contained, the Tenant shall not be responsible for and rent shall not
include or shall be reduced by, as the case may be, and Landlord shall
perform all obligations with respect to:
(1) costs or expenses in respect of Structural
Repairs which relate to the 'base building'
as commonly referred to; all permitted
expenses in regard to Structural Repairs
are permitted only to the extent that the
same are equally amortized over the
expected use of the part and not caused by
inherent defect or weakness or the
negligence of the Landlord or its officers,
agents, servants or employees;
(2) costs or expenses which are separately
recoverable by the Landlord under another
contract, insurance policy or lease to
which the Tenant is not a party;
(3) costs or expenses incurred with respect to
any matter for which the Landlord has
expressly agreed to indemnify the Tenant;
(4) acquisition, construction and
reconstruction costs or expenses,
construction and reconstruction costs
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being those costs incurred in the
construction of the Building and the
reconstruction of the Building if the
Building is damaged or destroyed;
(5) finance, mortgage and similar charges and
penalties;
(6) amounts expended by the Landlord for
advertising and promotion;
(7) payments by virtue of any ground or head
lease;
(8) the cost of any work in respect of the
Building necessitated by the non-compliance
of the Landlord or those for whom it is in
law responsible or by its contractors or
suppliers with any codes, by-laws,
regulations and ordinances in respect of the
Building;
(9) costs and expenses considered to be capital
in accordance with generally accepted
accounting principles;
(10) interest charges in conjunction with any
costs or expenses;
(11) any input tax credits with respect to or in
connection with Additional Rent available
to the Landlord. Input tax credits shall be
reasonably and equally allocated and
distributed among the Building and Lands.
For the purposes of the Lease, "Input tax
credits" shall mean the amounts of Goods
and Services Tax that are or will be
available to the Landlord as an input tax
credit or other similar credit or refund,
when claimed as such, in determining the
net amount of Goods and Services Tax which
the Landlord is required to pay or remit to
the applicable taxing authority on account
of Goods and Services Tax with respect to
the Demised Premises or any part thereof.
Goods and Services Tax shall be calculated
on a reasonable and equitable basis and in
accordance with the applicable
legislation. It is the intention of the
parties that the inclusion of Goods and
Services Tax payable by the Tenant not
result in a windfall gain to the Landlord.
The Landlord shall promptly pay to the
Tenant any Goods and Services Tax on any
amount which the Tenant has paid to the
Landlord or to any authority on an
estimated basis or otherwise in accordance
with this Lease and which amount is an
overpayment having regard to final bills,
reconciliation or adjustments at or
following the end of a fiscal or calendar
year, as applicable;
(12) any firms, suits, claims, demands, actions,
charges, costs and expenses caused or
contributed to by the negligent or willful
act of omission of the Landlord
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or those for whom it is in law responsible;
(13) capital taxes, large corporation taxes, and any other
taxes personal to the Landlord, and penalties
relating to the late payment of any amounts payable
by the Landlord;
(14) any levy imposed under or pursuant to the Planning
Act or the Development Charges Act of Ontario, or any
successor statute thereto and any other municipal
improvement charges and costs;
(15) any administration, overhead, head office or
management fees in excess of those described in
Section 1.02(ix)(L);
(16) any income or similar taxes, corporation taxes,
profit taxes, excess profit taxes, place of business
taxes, land transfer taxes, business taxes, value
added, sales, multistage sales, excise or any other
similar tax personal to the Landlord, whatsoever
imposed on any rent payable by any occupants of the
Lands or Building;
(17) recoveries which reduce expenses incurred by the
Landlord;
(18) costs due to the Landlord's default under this Lease;
and
(19) costs incurred with respect to environmental matters
as now designated by the appropriate governmental
authorities having jurisdiction, including without
limitation, the removal or remediation of hazardous
substances, which are the Landlord's obligation under
the provisions of this Lease.
Full Floor Rentable
(x) "Full Floor Rentable Area" of a floor shall be measured in
accordance with the Building Owners and Managers Association
International (B.O.M.A.) Standard Method for Measuring Floor
Area in Office Buildings, known as ANSI/BOMA Z65.1-1996;
Janitorial Costs
(xi) "Janitorial Costs" means the cost to the Landlord of providing
janitorial services pursuant to Section 6.7 for the Demised
Premises, as reasonably determined by the Landlord;
Landlord's Architect
(xii) "Landlord's Architect" means the arm's length architect
qualified to practise and practising in the Province of
Ontario from time to time named by the Landlord;
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Lands
(xiii) "Lands" means those lands municipally known as ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇;
Part Floor Usable Area
(xiv) "Part Floor Usable Area" of part of a floor in the event the
Demised Premises consists of or includes part only of a floor
shall be measured in accordance with the Building Owners and
Managers Association International (B.O.M.A.) Standard Method
for Measuring Floor Area in Office Buildings, known as
ANSI/BOMA Z65.1-1996;
Proportionate Share
(xv) "Proportionate Share" means the fraction which has as its
numerator the Rentable Area of the Demised Premises and has as
its denominator the Rentable Area of the Building whether
rented or not. The calculation of the Rentable Area of the
Demised Premises shall be adjusted from time to time to give
effect to any change therein during the Term;
Punch List
(xvi) "Punch List" means the list prepared by the Tenant, the
Landlord and the Tenant's Space Planner, acting reasonably, of
those items of the Landlord's Work as described in Schedule C,
paragraph 2, which are not complete as of the date that the
Landlord advises the Tenant that the Landlord's Work is
substantially complete. The Punch List will be prepared within
2 days of written notice by the Landlord that the Landlord's
Work is substantially complete in accordance with Schedule C,
paragraph 2.
Rentable Area of the Building
(xvii) "Rentable Area of the Building" shall be measured in
accordance with the Building Owners and Managers Association
International (B.O.M.A.) Standard Method for Measuring Floor
Area in Office Buildings, known as ANSI/BOMA Z65.1-1996;
Rentable Area of the Demised Premises
(xviii) "Rentable Area of the Demised Premises"
(1) for both the Full Floor Rentable Area of every single
tenancy floor of the Demised Premises, and
(2) the Part Floor Usable Area of every part of the
Demised Premises on a multiple tenancy floor shall be
measured in accordance with the Building Owners and
Managers Association International (B.O.M.A.)
Standard Method for Measuring Floor Area in Office
Buildings, known as ANSI/BOMA Z65.1-1996.
The Rentable Area of the Demised Premises is specified in
Section 1.1(vii).
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Structural Repairs
(xix) "Structural Repairs" means repairs or replacements to the
footings and foundations, columns, beams, joists, bearing
walls, perimeter walls, floor slab and roof structure of the
Building;
Tax
(xx) "Tax" means all taxes, rates, duties, levies and assessments
whatsoever whether municipal, regional, parliamentary or
otherwise, or grants paid in lieu thereof, charged upon the
Building or the Lands of upon the Landlord on account thereof
including all taxes, rates, duties, levies and assessments
for local improvements and including any payments which the
Landlord is obliged to make in lieu of the foregoing or a
component thereof if the Building or a portion thereof is or
becomes exempt from the foregoing or from a component of the
foregoing as defined, but excluding the amount by which
separate school taxes (if any should be payable) exceed the
amount which would have been payable for school taxes if no
assessment for separate schools had been made and excluding
such taxes as corporate, income, profits or excess profits
taxes assessed upon the income of the Landlord and further
excluding any grants paid in lieu of business taxes and shall
also include any and all taxes which may in future be levied
in lieu of Tax as herein before defined, and subject to the
other terms of this Lease;
Tenant's Floor Share
(xxi) "Tenant's Floor Share" shall be measured in accordance with
the Building Owners and Managers Association International
(B.O.M.A.) Standard Method for Measuring Floor Area in Office
Buildings, known as ANSI/BOMA Z65.1-1996;
Tenant's Improvements
(xxii) "Tenant's Improvements" means all improvements, installations
and/or modifications affixed in or upon the Demised Premises
by the Tenant or by the Landlord at the request of the Tenant
and whether or not such improvements, installations and/or
modifications are paid for by the Landlord or the Tenant;
Tenant's Share of Common Expenses
(xxiii) "Tenant's Share of Common Expenses" means, in any Year or
fiscal period adopted by the Landlord, the Proportionate
Share of Common Expenses during such Year or fiscal period,
or (with the exception of the first year of the Term) at the
option of the Landlord, if the Building is not substantially
leased, the portion of Common Expenses allocated to the
Tenant for that Year or fiscal period by the Landlord, acting
reasonably, on an equitable basis, in every case taking into
account the yearly limitations set out herein, and without
penalizing the Tenant for the fact the Building is not
substantially leased;
Tenant's Share of Tax for the Year
(xxiv) "Tenant's Share of Tax for the Year" means in any Year, at
the option of the Landlord,
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(1) the Proportionate Share of Tax during that Year; or
(2) the portion of Tax allocated to the Tenant for that Year by
the Landlord, acting reasonably, on an equitable basis.
Term
(xxv) "Term" means the period from the Commencement Date to the
date on which this lease terminates, and includes any
renewal or extension thereof and any additional period
during which the Tenant shall overhold and for which the
Landlord shall accept rental as provided in this lease;
Year
(xxvi) "Year" means a calendar year;
Normal Operating Hours
(xxvii) "Normal Operating Hours" means the hours of 7:00 a.m. to
7:00 p.m., Monday to Friday, exclusive of any statutory
holidays;
Permitted Transferee
(xxviii) "Permitted Transferee" is defined in Section 10.17(iv); and
Southcreek Corporate Centre
(xxix) "Southcreek Corporate Centre" means the lands outlined in red
on Schedule "F" attached hereto.
1.3 Effect of Headings, etc.
The division of this lease into Articles and sections and the
insertion of heading and marginal notes are for convenience of reference only
and shall not affect the construction or interpretation of this lease.
1.4 Governing Law
This lease shall be governed by and construed in accordance with the
laws of the Province of Ontario and the laws of Canada applicable therein and
shall be treated in all respects as an Ontario contract.
1.5 Severability
If any provision of the lease, or the application thereof to any
circumstances, shall be held to be invalid or unenforceable, then the remaining
provisions of this lease, or the application thereof to other circumstances,
shall not be affected thereby and shall be held valid and enforceable to the
full extent permitted by law.
1.6 Joint Covenants and Grammatical Changes
All covenants herein contained shall be construed as being joint and
several where there is more than one Tenant, and when the context so requires or
permits, the singular number shall be read as if the plural were expressed, and
the neuter gender as if the masculine or feminine, as the case may be, were
expressed.
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1.7 Net Lease
Subject to the specific provisions of this Lease, it is the intention
of the Landlord and the Tenant and it is hereby agreed by them that, the Tenant
shall pay all rental to be paid hereunder to the Landlord without any deduction,
abatement or set-off whatsoever; and notwithstanding any statutory or other
provisions, all charges, expenses, payments and costs of every nature and kind
whatsoever incurred in respect of the Demised Premises or for any matter or
thing affecting the Demised Premises shall (unless otherwise expressly
stipulated herein to the contrary) be borne by the Tenant so that the rental
herein provided for shall be absolutely net to the Landlord. The Landlord shall
not be responsible for any charge, claim or liability whatsoever in connection
with the Demised Premises except as expressly provided in this Lease.
ARTICLE II
DEMISE, TERM AND RENT
2.1 Demise
In consideration of the rents, covenants and agreements hereinafter
reserved and contained on the part of the Tenant, the Landlord does demise and
lease unto the Tenant all those premises (hereinafter called the "Demised
Premises") comprising the number of square feet of Rentable Area specified in
Section 1.1 (vii) as shown outlined in red on the plan attached hereto as
Schedule A, excepting the exterior faces of the exterior walls of the Building.
The Landlord shall provide an Architect's Certificate of the Rentable Area of
the Demised Premises and the Building on the Commencement Date.
2.2 Term
To Have and To Hold the Demised Premises for and during the term of
years specified in Section 1.1 (viii) to be computed from whichever of the
following days shall last occur:
(a) the date specified in Section 1.1 (ix); or
(b) the date that the Demised Premises are deemed ready for occupancy by
the Tenant as evidenced by delivery of a Certificate of Substantial
Completion of Landlord's Work, provided that:
(i) if the Tenant delivers the final plans to the Landlord after
February 15, 1999, then the Commencement Date shall be the date
that the Demised Premises are deemed ready for occupancy in the
manner set forth herein, less the number of days after February
15, 1999 that the Tenant delivered the plans to the Landlord. By
way of example, if the Tenant delivers the plans on February 20,
1999, (five days after February 15, 1999) and the Demised
Premises are deemed ready for occupancy in the manner set out
herein on June 10, 1999, the Commencement Date would be June 5,
1999 (the date of Substantial Completion less the five day delay
due to the Tenant's lateness in delivering the plans); and
(ii) if the Tenant or its representative(s) issues material or
numerous change orders from the final plans as delivered, then
the Commencement Date shall be the date that the Demised Premises
are deemed ready for occupancy in the manner set forth herein,
less the number of days of delay caused by the issuance of said
material or numerous change orders, but in no event shall the
Commencement Date be earlier than June 1, 1999. The Landlord's
Architect acting reasonably will determine the
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number of days of delay caused by such material or numerous
change orders. By way of example, if the Landlord's Architect
acting reasonably determines the number of days of delay caused
by the issuance by the Tenant of material or numerous change
orders to be five (5) days, and the Demised Premises are deemed
ready for occupancy in the manner set out herein on June 10,
1999, the Commencement Date would be June 5, 1999 (the date of
Substantial Completion less the five day delay determined by the
Landlord's Architect acting reasonably to be due to the Tenant's
issuance of the material or numerous change orders.
2.3 Basic Rent
Yielding and paying therefor yearly and every year during the Term
unto the Landlord the amount specified in Section 1.1 (xi) of lawful money of
Canada, to be payable in advance in equal monthly instalments of the amount
specified in Section 1.1 (xii) each on the first day of each calendar month
during the Term to the Landlord at ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇ or at such other place as the Landlord shall hereafter
designate, the first of such payments to be made on the Commencement Date or on
the first day of the month next following the Commencement Date if the
Commencement Date is not on the first day of the month. Provided that if the
term contains a broken calendar month, Basic Rent for the broken calendar month
shall be payable on the first day (within the Term) of the broken calendar
month as the instalment for the broken calendar month in an amount equal to the
amount of a monthly instalment otherwise payable under this section adjusted
pro-rata.
2.4 Deposit
The Tenant has paid a cheque in the amount of $206,884.50 as a deposit,
payable to Royal LePage Commercial Inc. in trust for the Landlord, is due upon
waiver of all conditions contained herein and is to be credited together with
interest on account of rental payments including GST as they become due.
2.5 Recovery of Additional Rent
Any additional payments by the Tenant contemplated by this lease shall
be recoverable as if rent, and the the Landlord shall have (in addition to any
other right or remedy) the same rights and remedies in the event of default by
the Tenant in payment of any amount payable by the Tenant hereunder as the
Landlord would have in the case of default by the Tenant in payment of rent.
ARTICLE III
TAXES
3.1 Payment of Tax for the Year
The Tenant shall, in each Year of the Term, pay the Tenant's Share of
Tax for the Year in the manner hereinafter provided. The Tenant shall only be
required to pay Tenant's Share of Tax for the Year which relates to a fiscal
period of the taxing authority a part of which is included in a period prior to
the expiration of the Term. The Tenant shall pay the Landlord, at the time that
the payment of Basic Rent reserved hereunder is due and payable, on account of
the obligation of the Tenant to pay the Tenant's Share of Tax for the Year,
one-twelfth (1/12th) of the Landlord's reasonable estimate of the amount of
Tenant's Share of Tax for the Year (reduced proportionately as herein before
provided, where applicable) until the date of mailing of the tax ▇▇▇▇ or the
month in which the Tenant's Share of Tax for the Year can be determined. On the
first day of the month next following the mailing of the tax ▇▇▇▇ or in which
the tax for the Year can be determined, the Tenant shall pay to the Landlord the
Tenant's Share of Tax for the Year after first receiving credit for the monthly
payments of the estimated amount of the Tenant's Share of Tax for the Year
previously paid to the Landlord. The Landlord shall, upon requesting payment of
the balance of the Tenant's Share of Tax for the Year, provide the Tenant with
particulars of
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calculations of the Tenant's Share of Tax for the Year.
3.2 Contestation of Tax for the Year
Either the Landlord or the Tenant, in each case acting reasonably,
and in the case of the Tenant after obtaining the consent of the Landlord,
which consent shall not be unreasonably withheld, shall have at any time the
right to contest any tax, rate (including local improvement rates) assessment or
other charge against the Demised Premises if such contestation will not involve
any forfeiture, foreclosure, escheat, sale or termination of the Landlord's
title to the Demised Premises, the Building or any part thereof, and provided
further that all such proceedings shall be prosecuted with all due diligence and
dispatch. The Landlord shall provide notice to the Tenant of any such
contestation. The Tenant will pay a proportionate share of the cost of any such
contestation and also pay the Landlord, on demand, a proportionate share of all
proper costs, penalties, interest or other charges payable as a result of or
incidental to such contestations. Notwithstanding such contestation by the
Tenant, the Tenant shall continue to pay to the Landlord the Tenant's Share of
Tax for the Year in the manner hereinbefore set out. Should, as a result of such
contestation, the amount of Tax payable by the Landlord be decreased as a result
of such contestation or appeal, the Landlord hereby agrees to reimburse the
Tenant accordingly, including a proportionate share of any interest paid to the
Landlord by the taxing authorities.
3.3 Separate School Supporter
If the Tenant is assessed as a separate school supporter, and by
reason thereof the amount of Tax is increased over the amount payable on an
assessment as a public school supporter, then and in such event the Tenant
covenants and agrees with the Landlord to pay to the Landlord the amount of
such increase upon demand being made therefor in writing by the Landlord. It is
understood and agreed that such increase shall be payable by the Tenant
notwithstanding the fact that at the time such demand is made, the Tenant may
have ceased to be a tenant of the Landlord.
ARTICLE IV
OPERATING AND JANITORIAL COSTS
4.1 Payment of Common Expenses
During the Term, the Tenant shall pay to the Landlord the Tenant's
Share of Common Expenses, subject to the terms of this Lease, as follows:
(i) before the commencement of each Year or fiscal period adopted
by the Landlord, the Landlord shall reasonably estimate the
Tenant's Share of Common Expenses for such period and so
notify the Tenant; and the Tenant shall pay one-twelfth
(1/12) of such estimated Tenant's Share of Common Expenses
with each monthly installment of rental payable throughout
that period (which monthly payments shall be adjusted if the
Landlord, acting reasonably, subsequently re-estimates such
Tenant's Share of Common Expenses for such period or the
remaining portion thereof); and
(ii) the actual amount of Common Expenses for such period and the
Tenant's Share of Common Expenses shall be certified by the
Landlord's certified accountant or other qualified financial
person accompanied by auditor's certificate verifying the
quantum of the Common Expense within one hundred and twenty
(120) days after the expiration of such period. In the event
that any
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difference cannot be resolved by the parties, the matter
shall be resolved through binding arbitration.
4.2 Adjustment of Tenant's Share of Common Expenses
Within fourteen (14) days after the delivery of the certificate by the
Landlord, a payment will be made by the Landlord or the Tenant, as the case may
be, in respect of any overpayment or underpayment by the Tenant of the Tenant's
share of Common Expenses for the period covered by the certificate.
4.3 Payment of Janitorial Costs
During the Term the Tenant shall pay to the Landlord the Tenants
Floor Share of Janitorial Costs. Such payment shall be made at the times and in
the manner, with all changes necessary in the context, provided in Sections 4.1
and 4.2.
4.4 Broken Period
If only part of a period relevant for the calculation of Common
Expenses or of Janitorial Costs is included within the Term, any amounts
payable on account of Tenant's Share of Common Expenses or on account of
Tenant's Floor Share of Janitorial Costs for that period shall be reduced
proportionately.
ARTICLE V
TENANT'S COVENANTS
5.1 Rent
The Tenant covenants with the Landlord to pay Basic Rent and
Additional Rent.
5.2 Other Taxes
The Tenant covenants with the Landlord to pay, as and when the same
become due, all business income and other taxes, charges, rates, duties and
assessments from time to time levied against or payable in respect of the
occupancy of the Demised Premises.
5.3 Electric Current
The Tenant covenants with the Landlord to pay the cost of electric
current supplied to the Demised Premises as reasonably determined by the
Landlord. The Tenant shall pay throughout the Term promptly to the Landlord when
demanded the cost of maintaining and servicing in all respects all electric
lighting fixtures in the Demised Premises including the cost of replacement on a
group basis or otherwise of electric light bulbs, fluorescent tubes, starters
and ballasts installed on commencement of the said Term. Such maintaining,
servicing and replacing shall be within the exclusive right of the Landlord and
shall be carried out at reasonably competitive rates. Upon request by either the
Landlord or Tenant but at the sole expense of the Landlord, the Landlord will
provide submeters for the electric current for the Demised Premises.
5.4 Permitted Use
To use the Demised Premises only for general office purposes and the
designing and/or manufacturing of electronic components including integrated
circuits that will not unreasonably interfere with normal use of a first-class
high rise office building; and not to use or permit to be used the Demised
Premises or any part thereof for any other purpose or business and, more
particularly, but without limiting the generality of the last mentioned
provision, not to use or permit to be used the Demised Premises or any part
thereof for any business which is that of a bank, treasury branch, credit
union, trust or acceptance or loan company or any other
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organization engaged in the business of accepting money on deposit, or any
similar banking business (excluding insurance, stock brokers or investment
dealers), nor use or permit the use of any part of the Demised Premises for the
purpose of installation or operation of any electronic or mechanical equipment,
devices or machines by which any banking transaction, operation or function may
be available to the public, nor use nor permit the use of any part of the
Demised Premises for or as a restaurant, cafeteria, lunch counter, food
dispensary, snack bar or other food services operation, save and except for
vending machines exclusive to the Tenant. The Tenant shall have access to the
Building seven days per week and twenty-four hours per day. From and after the
7th day of December, 1998 and during the Term of the lease and any renewals
thereof, the Landlord agrees not to lease any space in the Building to a tenant
or permit any tenant to occupy space whose principal business is the designing
and/or manufacturing of integrated circuits or is in direct competition with the
Tenant's principal business on the following terms. The Tenant has submitted a
list of up to six (6) direct competitors which the Landlord agrees not to lease
space to or to permit to occupy space without the prior approval of the Tenant
which may be unreasonably and arbitrarily withheld. Further, the Tenant shall be
permitted on each anniversary of the Lease to substitute names on the
competitors list and the Landlord shall not lease space in the Building to such
competitors so identified or permit them to occupy space during the ensuring
year without the Tenant's prior approval. The Landlord acknowledges that high
local radio frequency will interfere with the Tenant's use of the Demised
Premises, and hereby agrees that the Landlord will not permit the operation or
installation or other use by third parties of radio, television or communication
transmitters or other radio frequency broadcast or transmitting devices emitting
high frequency radio or television broadcasting signals or cellular telephone
repeaters in or on the Building without the consent of the Tenant, which consent
shall not be unreasonably withheld or delayed, provided that it shall be
reasonable for the Tenant to withhold its consent if such operation,
installation or use will affect the operation or use of the Tenant's equipment
in the Demised Premises, save and except for any such transmitter or
transmitting device which may be required by the Tenant, which shall only be
installed with the consent of the Landlord, which consent may not be
unreasonably withheld or delayed. The Tenant hereby acknowledges that the
Landlord is permitted to install and operate a repeater for the Landlord's
necessary communications.
5.5 Repairs and Maintenance
Subject to the Landlord's obligations under this Lease, the Tenant
covenants with the Landlord to decorate and to make all repairs and replacements
to and to maintain in first class order and repair (subject to reasonable wear
and tear and force majeure) the Demised Premises and its appurtenances, fixtures
and equipment, including, without limitation, heating, ventilating,
air-conditioning, electrical and plumbing equipment (including a heating,
ventilating or air-conditioning equipment located outside the Demised Premises,
which serve only the Demised Premises), doors and hardware attached thereto and
plate glass and all Tenant's Improvements, including the exterior sign referred
to in Section 5.17, at the Tenant's own expense throughout the Term (provided
that all work in connection with or affecting the heating, ventilating,
air-conditioning, electrical, plumbing or other mechanical systems of the
Building shall, if the Landlord so elects, performed for the Tenant by the
Landlord and at competitive rates and, if the Landlord so elects, be performed
for the Tenant by the Landlord and at competitive rates and, if the Landlord
does not so elect, shall not be performed without prior written consent of the
Landlord, (which consent shall not be unreasonably withheld) and in any event
the cost of such work shall be paid by the Tenant), except for Structural
Repairs and for repairs necessitated by damage from hazards covered by insurance
which the Landlord has maintained or is obliged to maintain (unless such repairs
are necessitated by the acts or omissions of the Tenant, its agents, employees,
invitees or licensees). The Tenant covenants that all decoration and repairs
will be done to a standard of materials and workmanship at least equivalent to
that existing on the Commencement Date.
5.6 Condition of Premises on Termination
The Tenant covenants with the Landlord to leave the Demised Premises
in the state of repair required to be maintained by the Tenant during the Term
upon vacating the Demised Premises at the end or sooner termination of the Term.
Nothing herein contained shall be construed so as to require the Tenant to
restore the Demised Premises to the original base
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building standard or other original condition, except that the Tenant may be
required by the Landlord to remove its trade fixtures and other equipment made
by or on behalf of the Tenant which are of a special nature, structural or
substantially different than typical office finishing found in comparable
buildings for comparable uses including but not limited to equipment.
5.7 Landlord May Inspect
The Tenant covenants with the Landlord to permit the Landlord or its
authorized agents or representatives of the Landlord's mortgagee to enter and
view the state of repair of the Demised Premises during all normal business
hours upon prior written notice, save and except in emergencies, and during any
emergency and to forthwith repair and maintain according to notice in writing
from the Landlord or its agents or employees.
5.8 Repairs Where Tenant at Fault
The Tenant covenants with the Landlord that if the Building, including
the Demised Premises, the elevators, escalators, boilers, engines pipes and
other apparatus (or any of them) used for the purpose of heating or
air-conditioning the Building or operating the elevators or escalators, or if
the water pipes, drainage pipes, electrical lighting or other equipment of the
Building or the roof or outside walls of the Building get out of repair or
become damaged or destroyed through the negligence, carelessness or misuse of
the Tenant, its servants, agents, employees or anyone permitted by it to be in
the Building or through it or them in any way stopping up or injuring the
heating apparatus, elevators, escalators, water pipes, drainage pipes or other
equipment or part of the Building, the expense of all necessary repairs,
replacements or alterations shall be borne by the Tenant which shall pay the
same to the Landlord forthwith on demand, subject to the other provisions of
this Lease.
5.9 Assignment and Subletting
The Tenant shall not permit any part of the Demised Premises to be
used or occupied by any other person including any licensee or concessionaire,
other than any subtenant or assignee permitted hereunder. The Tenant covenants
with the Landlord not to assign or sublet without the prior written consent of
the Landlord, such consent not to be unreasonably withheld or delayed, provided
nevertheless:
(i) that the Landlord shall be entitled to withhold leave
arbitrarily if the Tenant has been in material default of any of
covenants of this Lease;
(ii) no consent shall be required to any assignment or sublease to a
"Permitted Transferree" (as defined in Section 10.17 (iv)
hereof) or a transferee described in Section 2 of the Lease
Riders;
(iii) no assignment or sublease shall be made to a Tenant who is an
existing tenant of the Building on the date hereof or the
Southcreek Corporate Centre Development, during the first four
(4) years of the initial Term;
(iv) if the Tenant requests the Landlord's consent to an assignment
of this lease or a subletting of the whole or any part of the
Demised Premises to any person firm or corporation, the Tenant
shall submit to the Landlord the name of the proposed assignee
or subtenant and such information as to the nature of its
business and its financial responsibility and standing as the
Landlord may reasonably require. Upon the receipt of such
request and information from the Tenant the Landlord shall in
writing within fourteen (14) days after such receipt, advise the
Tenant of its decision;
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(v) the Landlord's consent thereto shall be subject to any
assignee agreeing in writing with the Landlord to be bound by
this lease as if such assignee had originally executed this
lease as Tenant;
(vi) in no event shall any Transfer to which the Landlord may have
consented release or relieve the Tenant from its obligations
fully to perform all the terms, covenants and conditions of
this lease on its part to be performed;
(vii) the Tenant shall not display, advertise or offer the whole or
any part of the Demised Premises for the purpose of
assignment or subletting and shall not permit any broker or
other party to so do unless the complete text and format of
any such display, advertisement or offer shall have first
been approved in writing by the Landlord. Without in any way
restricting or limiting the Landlord's right to refuse any
text and format on other grounds, any text and format
proposed by the Tenant shall not contain any reference to the
rental rate for the Demised Premises;
(viii) whether or not the Landlord consents to any assignment or
subletting as aforesaid, the Tenant shall pay to the
Landlord all costs incurred by the Landlord in considering
any request by the Tenant for such consent and in completing
any of the documentation involved, including all reasonable
legal costs; and
(ix) the Tenant shall not be entitled to profit by payment of an
increased rent from any sublease or assignment.
5.10 Rules and Regulations
The Tenant covenants with the Landlord to observe the rules and
regulations set out in Schedule B and all other rules and regulations as the
Landlord may from time to time make for the operation, reparation, safety, care
or cleanliness of the Building and the Demised Premises, the operation and
maintenance of equipment, the use of the Common Areas, the hours of business,
the lighting of premises, the display of signs visible outside the Demised
Premises and the establishing and maintaining of a suitable image for the
Building, provided, however, that such rules and regulations are reasonable and
consistent with the provisions of this lease and are enforced uniformly by the
Landlord in respect of all occupants of the Building.
5.11 Observance of Law
The Tenant covenants with the Landlord in its use and occupation of
the Demised Premises, not to violate any law, by-law, ordinance, order, rule,
regulation or requirement of any federal, provincial or municipal government or
any department commission, board or officer thereof.
5.12 Waste and Nuisance
The Tenant covenants with the Landlord not to make or suffer any waste
or cause or allow to be caused any damage, disfiguration or injury to the
Demised Premises or the fixtures and equipment thereof or permit or suffer any
over-loading of the floors thereof; and not to use or permit to be used any
part of the Demised Premises for any dangerous, noxious or offensive trade,
business or other activity; and not to cause or maintain any nuisance in, at or
on the Demised Premises.
5.13 Entry by Landlord
The Tenant covenants with the Landlord to permit the Landlord or its
agents to enter upon the Demised Premises during the normal business hours upon
prior written notice (except
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in emergencies) for the purpose of making repairs, alterations, improvements or
additions to the Demised Premises or to the Building or any part thereof as
provided for in this Lease, including, without limitation, adjustments to and
changes of location of pipes, conduits, wiring, ducts and other installations
serving any part of the Building, and the Tenant shall not be entitled to
compensation for any inconvenience, nuisance or discomfort occasioned thereby,
save as otherwise provided in this Lease.
5.14 Exhibiting Premises
The Tenant covenants with the Landlord to permit the Landlord or its
agent to exhibit the Demised Premises to prospective tenants during normal
business hours of the last eight (8) months of the Term.
5.15 Liens
The Tenant covenants with the Landlord not to suffer or permit during
the Term any mechanics' or other liens for work, labour, services or materials
ordered by it or for the cost of which it may be in any way obligated to attach
to the Demised Premises or to the Building or to the Lands and that whenever
and so often as such liens shall attach or claims therefor be filed, the Tenant
shall within thirty (30) days after the Tenant has notice of the claim for lien
obtain the discharge thereof by payment or by giving security or in such other
manner as is or may be required or permitted by law.
5.16 Alterations
The Tenant shall have the right to make or erect in or to the Demised
Premises any installations, alteration, additions or partitions with the
Landlord's prior written consent in each instance (such consent not to be
unreasonably withheld or delayed) such work may be performed by employees of,
or contracted for with contractors engaged by the Tenant, subject to all
conditions which the Landlord may impose; including, without limitation, the
right, at the option of the Landlord, to require that the Landlord's
contractors be engaged for any mechanical, electrical or structural work,
provided that the Landlord shall charge the Tenant at cost for all minor
structural work and competitive rates for all structural work that is not minor
structural work. The Tenant shall promptly pay to the Landlord's contractors or
the Tenant's contractors, as the case may be, when due, the cost of all such
work and of all materials, labour and services involved therein and of all
costs of re-decoration or of alterations or additions to the Demised Premises
or the Building necessitated thereby. Without limiting the generality of any of
the foregoing, any work performed by or for the Tenant shall be performed by
competent ▇▇▇▇▇▇▇ whose trade union affiliations are not incompatible with
those of any ▇▇▇▇▇▇▇ who may be employed in the Building by the Landlord, its
contractors or subcontractors, and shall be subject to the reasonable
supervision and direction of the Landlord. The Tenant shall have the right to
make alterations and installations at its own expense from time to time during
the Lease term or any renewal thereof, provided it has the Landlord's consent
which shall not be unreasonably withheld or delayed and in accordance with the
Lease as negotiated. Furthermore, the Tenant shall not require the Landlord's
consent for any alterations and installations less than Five Thousand Dollars
($5,000.00), unless such work affects the mechanical, electrical or structural
elements of the Building. The Tenant agrees to comply with any and all Building
and Fire Code Regulations, or any other governmental body or legislation having
jurisdiction over this requirement.
5.17 Signs
Provided the Tenant is the original Tenant or a Permitted Transferee as
defined in Section 10.17 (iv), the Tenant has not been in material default, the
Tenant is in occupancy of at least 35,000 rentable square feet of office space
in the Building and the Tenant is the largest Tenant in the building, the Tenant
shall have the sole, exclusive right to install a rooftop sign at its sole
expense and the Landlord, at the Tenant's sole expense, will provide necessary
structural supports and roofing alterations. Provided the foregoing and all
other terms of this clause have been met, the Tenant shall be entitled to
install at its sole cost and expense such additional installations, subject to
the Landlord's prior approval which shall not be unreasonably withheld,
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on the roof as it may require for the purposes of its business, a position on a
building pylon sign on the Lands for the Tenant's non-exclusive use, and such
other corporate identification signage as it may require. At the Tenant's
option, the Building may be identified by the Tenant as the "Genesis Building".
Such signage shall be subject to the prior approval of the Landlord, not to be
unreasonably withheld, as to size and manner of installation. All costs in
conjunction with the maintenance, operation, removal, and repair to the Building
caused by the installation and removal of the Tenant's signage shall be paid for
by the Tenant. All signage shall be in compliance with all municipal
requirements affecting the same. Tenant shall be entitled to replace such
signage from time to time. Any approvals shall be the responsibility of the
Tenant to obtain at its sole cost. The Landlord reserves the right to offer to
other tenants, including possible retail tenants, secondary, but not rooftop,
signage placements on or about the Building and Lands. In the event the Tenant
is not the largest Tenant in the Building, but leases greater than one full
typical floor, the Tenant shall retain the right to install a rooftop sign as
well as such additional installations on the roof as it may require as provided
for herein.
Subject to the foregoing herein above, the Tenant covenants with the
Landlord that the Tenant will not paint, display, inscribe or affix any sign,
notice, lettering or direction on any part of the outside or inside of the
Building or on the Demised Premises, which have not already received the consent
of the Landlord, without the prior written consent of the Landlord, provided
that the Landlord will cause a sign showing the name of the Tenant to be placed
on the directory board or boards in the Building, and will provide the Tenant
with the Building standard signage on or beside entrance doors at the Landlord's
cost, the cost of all other signs, notices, lettering or directions to be paid
for by the Tenant.
5.18 Glass, Locks and Trimmings
The Landlord shall provide at its own expense a lock on the doors of
the Demised Premises leading to the public hallway and shall furnish the Tenant
with two keys therefor. The Tenant may obtain additional keys upon payment to
the Landlord of the Building standard rate for the same. The Tenant shall return
to the Landlord all such keys to the Demised Premises when vacating the Demised
Premises. The Tenant covenants with the Landlord that all glass, locks and
trimmings of the doors and windows in or upon the Demised Premises shall be kept
whole and whenever broken shall be immediately replaced or repaired under the
direction and to the reasonable satisfaction of the Landlord and that such
replacement and/or repairs shall be paid for by the Tenant, subject to the other
provisions of this Lease.
5.19 Rubbish
The Tenant covenants with the Landlord to keep the Demised Premises
free of rubbish and debris at all times and to provide proper receptacles for
waste and rubbish.
5.20 Blinds
The Tenant covenants with the Landlord to install blinds standard to
the Building in the Demised Premises.
5.21 Limitation of Landlord's Liability - (See Rider, Section 5 and 6)
ARTICLE VI
LANDLORD'S COVENANTS
6.1 Quiet Enjoyment
The Landlord covenants with the Tenant that the Tenant, upon paying the
rent hereby reserved and performing and observing the covenants and provisos
herein contained on its
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part to be performed and observed, shall peaceably enjoy and possess the
Demised Premises for the Term without any interruption from the Landlord or
from any other person or persons lawfully claiming by, from or under it. The
Landlord represents and warrants that it is the registered and beneficial owner
of the Lands and Building, that the Lands and Building are zoned to permit the
Tenant's use of the Building as contemplated hereby and that the Lands and the
Building are free of any hazardous materials and in compliance with all
environmental laws, by-laws and regulations now existing. The balance of the
rentable area of the Building shall be used for office purposes and other legal
uses which shall not disturb the Tenant's use and enjoyment of the Demised
Premises.
6.2 Taxes
The Landlord covenants with the Tenant to pay, subject to the provisions
of this lease, all Tax that may be charged, levied, rated or assessed against
the Building or the Lands. If, in the sole opinion and discretion of the
Landlord, any Tax is not fair and equitable, the Landlord may take all steps
necessary to contest or appeal the validity thereof, but the Tenant shall not
postpone or omit payment of the Tenant's Share of Tax for the Year whether
because of any such appeal or on-going contest or otherwise. Provided that the
Landlord shall notify and account to the Tenant for any portion to which the
Tenant may be entitled or any savings, refund or reduction which may be
forthcoming as a result of such appeal or contest, and in no event shall such
appeal or contest subject the Land or Building to forfeiture.
6.3 Repair
The Landlord covenants with the Tenant (but subject to the right of
termination contained in Section 8.1) to make as expeditiously as possible and
so as to minimize interference with the Tenant's use of the Demised Premises,
Structural Repairs and repairs necessitated by damage from hazards covered by
insurance which the Landlord has maintained or is obliged to maintain (unless
such repairs are necessitated by the acts or omissions of the Tenant, its
agents, employees, invitees or licensees), and to repair and replace as
otherwise provided in this Lease as would a prudent owner of a first-class
building.
6.4 Heating and Air-Conditioning
The Landlord covenants with the Tenant to provide heating and
air-conditioning of the Demised Premises to an extent sufficient to maintain
therein a reasonable temperature at all times during normal business hours,
except during the making of repairs related to such heating or
air-conditioning. The Landlord shall when required by the Tenant, furnish
heating and air-conditioning to the Demised Premises other than during normal
business hours, but only at the expense of the Tenant and upon receipt of notice
from the Tenant not less than one (1) hour in advance. The expense to the
Tenant for such additional heating and air conditioning and other utilities
shall be an hourly rate reflecting the Landlord's cost for such utilities
during the period of such additional use. In no event shall the Landlord have,
at any time, any obligation or liability in connection with the cessation,
unavailability, interruption or suspension of any such service provided, except
that repairs and maintenance work shall be carried out with reasonable dispatch
so as to have the least adverse effect on the business operations of the
Tenant, subject to the normal operating hours as defined herein, and subject to
the other provisions of this Lease.
6.5 Elevator Service
The Landlord covenants with the Tenant to furnish, except during the
making of repairs, passenger elevator service during normal business hours and
restricted elevator service at other times (it being agreed that operatorless
automatic elevator service shall be deemed "elevator service" within the
meaning of this section), and to permit the Tenant and the employees of the
Tenant and all persons lawfully requiring communication with them to use such
elevator service in common with others, but the Tenant and such employees and
all other persons using the same shall do so at their sole risk and under no
circumstances shall the Landlord be held responsible for any damage or injury
happening to any person while using the same or occasioned to any person by any
elevator or any of its appurtenances.
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6.6 Caretaking of Common Areas
The Landlord covenants with the Tenant to maintain and keep clean all
Common Areas as would a prudent owner of a first-class Building, including the
cutting of grass, general landscaping, washing of windows and the removal of
snow and ice in a diligent and timely manner, but, except as to the obligation
to cause such maintenance and cleaning to be done, the Landlord shall not be
responsible for any act of omission or commission or for any negligence on the
part of the person or persons employed to perform such work. All such persons
shall be bonded.
6.7 Janitorial Services
The Landlord covenants with the Tenant to supply normal janitor
services for the Demised Premises such as are in keeping with maintaining the
standard of a first class office building but, except as to the obligation to
cause such janitorial work to be done, the Landlord shall not be responsible
for any act or omission or commission or for any negligence on the part of the
person or persons employed to perform such work. All such persons shall be
bonded. All such work shall be done at the Landlord's direction and without any
interference by the Tenant, its servants or employees. The Tenant agrees to pay
for any unusual or specialty cleaning requirements necessitated by their
tenancy in addition to the Base Building janitorial provisions.
6.8 Washrooms
The Landlord covenants with the Tenant to permit the Tenant and the
employees of the Tenant in common with others entitled thereto to use the
washrooms of the Building which the Landlord may designate for the Demised
Premises.
6.9 Landlord's Work
The Landlord agrees to complete the "Landlord's Work" in Schedule "C"
in accordance with the terms thereof in a good and workmanlike manner as
expeditiously as possible.
6.10 Access
The Landlord covenants with the Tenant to permit the Tenant and
employees of the Tenant and all persons lawfully requiring communication with
them to have the use (subject to whatever restrictions the Landlord deems
reasonably necessary for security reasons) at reasonable times in common with
others of the main entrance of the Building and the stairways and corridors
leading to the Demised Premises. The Tenant shall have access to the Building
seven (7) days per week and twenty-four (24) hours per day. The Tenant
acknowledges access will be provided through a security card access system.
Access will be provided in accordance with this clause subject to reasonable
equipment failures that may occur outside the normal operating hours of the
Building.
ARTICLE VII
INSURANCE
7.1 Increase in Insurance Rates or Cancellation of Policy
The Tenant covenants with the Landlord not to 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, or any insurance policy on
the Building to be cancelled, and if the Tenant shall be in breach of these
provisions, the Tenant shall not only be responsible for all consequences
flowing therefrom and shall indemnify the Landlord in respect thereof, but also
if the rate of insurance on the Building be increased by reason of the use made
of the Demised Premises or by reason of anything done or omitted or permitted
to be done or omitted by the Tenant or anyone permitted by the Tenant to be
upon the Demised Premises, the Tenant will pay to the Landlord on demand the
amount of such increases.
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7.2 Landlord's Insurance - Mandatory
The Landlord shall take out and maintain to the full replacement value,
fire and other hazard insurance on the Building, excluding any property thereon
with respect to which the Tenant or other tenants are obligated to insure, and
its own general liability insurance, including general liability insurance in
respect of the Common Areas in an amount no less than $1,000,000.00 in respect
of any injury to or death of one or more persons and loss or damage to the
property of others. All Landlord's insurance shall, if available, contain a
waiver of subrogation in favour of the Tenant and those for whom the Tenant is
in law responsible.
7.3 Landlord's Insurance - Optional
The Landlord reserves the right to take out and maintain any insurance
which the Landlord as a prudent and reasonable property owner may deem
advisable, including without limitation, loss of rental insurance, all risks
insurance on a replacement cost basis, plate glass insurance and loss of use
and occupancy under boiler coverage.
7.4 Tenant's Insurance
Throughout the Term, the Tenant shall take out and maintain at his own
expense in the name of the Tenant;
(i) comprehensive general liability insurance of not less than
$2,000,000 combined limits in respect of bodily injury or death and
property damage arising out of the Tenant's business and/or use and
occupancy of the Demised Premises showing the Landlord and any
mortgagee of the Landlord as additional insureds as their
respective interests may appear with a severability of interest and
a cross-liability clause;
(ii) insurance upon the Tenant's furniture, fixtures, leasehold
improvements and stock-in-trade in the Demised Premises in an
amount not less than the full replacement value thereof with
coverage against at least the perils of fire and standard extended
coverage;
(iii) if applicable, broad form boiler and machinery insurance on a
blanket repair and replacement basis with limits for each accident
in an amount not less than the replacement cost of all leasehold
improvements and of all boilers, pressure vessels, air-conditioning
equipment and miscellaneous electrical apparatus owned or operated
by the Tenant or by others (other than the Landlord) on behalf of
the Tenant in the Demised Premises, or relating to or serving the
Demised Premises; and
(iv) Tenant's legal liability insurance for the actual cash value of
the Demised Premises, including loss of use thereof.
The aforesaid insurance shall exclude the exercise of any claim by the Tenant's
insurer against the Landlord by subrogation and shall provide that such
insurance may not be terminated, cancelled or materially altered unless thirty
(30) days' written notice of such termination, cancellation or material
alteration is given by the insurers to the Landlord. The Tenant shall, prior to
gaining entry to all or part of the Demised Premises, deliver to the Landlord
certificates of such insurance.
ARTICLE VIII
DAMAGE AND DESTRUCTION
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8.1 Injury to Premises and Building
If during the Term the Demised Premises or the Building shall be
destroyed by fire, lightning, tempest, explosion, acts of God or the Queen's
enemies, structural defects or weakness, impact of aircraft, riots or
insurrection or other casualty, then the following provisions shall have effect:
(i) if the Demised Premises or other parts of the Building shall
be so badly injured so as to render the Demised Premises unfit
for the Tenant's use and occupancy and shall be incapable, with
reasonable diligence, of being repaired within 180 days from
the happening of such injury, then either the Landlord or the
Tenant may declare the Term to be forthwith terminated and the
Tenant shall immediately surrender the Demised Premises to the
Landlord and shall pay rent only to the time of such injury,
and the Landlord may re-enter and repossess the Demised
Premises discharged from this lease and may remove all persons
therefrom;
(ii) if the Demised Premises or other parts of the Building shall
be capable, with reasonable diligence, of being repaired and
rendered fit for the Tenant's use and occupancy within 180 days
from the happening of such injury as aforesaid and:
(A) if the damage is such as to render the Demised Premises
wholly unfit for occupancy during the process of such
repairs, then the rent hereby reserved shall not run or
accrue after such injury or while the process of repair
is going on and the rent shall recommence immediately
after such repairs have been completed; or
(B) if the damage is so slight that the Demised Premises are
partially fit for occupancy and may be used for the
purposes of the Tenant's business, then until damage has
been repaired the rent hereby reserved shall ▇▇▇▇▇ only
in proportion to the extent that the Demised Premises
cannot be used for the purposes of the Tenant's business
and until such use is fully restored;
(iii) the certificate of the Landlord's Architect as to the extent to
which the Demised Premises are fit for occupancy, as to whether
any such injury can or cannot be repaired within a period of
180 days from the happening of any such injury or as to the
completion of repairs shall be final and binding upon the
parties hereto as to the facts so certified.
8.2 See Rider, Sections 5 and 6
ARTICLE IX
TENANT'S DEFAULT AND LANDLORD'S REMEDIES
9.1 Default and Remedies
If and whenever the rent hereby reserved, or any part thereof, shall
not be paid on
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the day which is ten (10) days after demand has been made therefor, or in case
of the breach, non-observance or non-performance of any of the covenants or
agreements or Rules and Regulations herein contained or referred to on the part
of the Tenant to be observed and performed, the Tenant is in material breach
and has failed to rectify such material breach within twenty (20) days of
receipt of notice (or if it could reasonably be expected that rectification
will take a longer period of time, has not commenced to rectify such breach
within such twenty (20) day period and thereafter proceeds to diligently
complete such rectification) or if re-entry is permitted under the terms of
this lease, then in each such case, it shall be lawful for the Landlord at any
time thereafter then without prejudice to any other rights which it has
pursuant to this Lease or at law, the Landlord shall have the following rights
and remedies, which are cumulative and not alternative:
(a) to terminate this Lease by notice to the Tenant;
(b) to enter the Demised Premises as agent of the Tenant and to relet the
Demised Premises for whatever term, and on such terms as the Landlord
in its reasonable discretion may determine and to receive the rent
therefor and as agent of the Tenant to take possession of any
property of the Tenant on the Demised Premises (other than computer
software, customer files and confidential materials), to store such
property at the expense and risk of the Tenant or to sell or
otherwise dispose of such property in such manner as the Landlord may
see fit without notice to the Tenant; to make alterations to the
Demised Premises to facilitate their reletting; and to apply the
proceeds of any such sale or reletting first, to the payment of any
expenses incurred by the Landlord with respect to any such reletting
or sale; second, to the payment of any indebtedness of the Tenant to
the Landlord other than rent; and third, to the payment of rent in
arrears; with the residue to be held by the Landlord and applied in
payment of future rent as it becomes due and payable. The Tenant
shall remain liable for any deficiency to the Landlord;
(c) to remedy or attempt to remedy any default of the Tenant under this
lease for the account of the Tenant and to enter upon the Demised
Premises for such purposes. Notice of the Landlord's intention to
perform such covenants needs to be given to the Tenant except in the
case of an emergency. If the Landlord acts reasonably, the Landlord
shall not be liable to the Tenant for any loss, injury or damage
caused by acts of the Landlord in remedying or attempting to remedy
such default and the Tenant shall pay to the Landlord all expenses
incurred by the Landlord in connection with remedying or attempting
to remedy such default;
(d) to recover from the Tenant all damages, and expenses incurred by the
Landlord as a result of any breach by the Tenant including, if the
Landlord terminates this Lease, any deficiency between those amounts
which would have been payable by the Tenant for the portion of the
Term following such termination and the net amounts actually received
by the Landlord during such period of time with respect to the
Demised Premises;
(e) to recover from the Tenant the full amount of the current month's
Basic Rent and Additional Rent together with the next 3 months'
installments of Basic Rent and Additional Rent, all of which shall
accrue on a day-to-day basis and shall immediately become due and
payable as accelerated rent;
(f) if the Lease has been terminated in accordance with Section 9.1(a),
to recover from the Tenant the unamortized portion of any commissions
paid by the Landlord to secure this Lease, calculated from the date
which is the later of the date of payment by the Landlord or the
Commencement Date, on the basis of an assumed rate of depreciation on
a straight line basis to zero over the initial Term of this Lease;
and
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(g) the Tenant waives and renounces the benefit of any present or future
stance taking away or limiting the Landlord's right of distress and
covenants and agrees that notwithstanding any such stance none of the
goods and chanels of the Tenant or of any other person in or upon the
Demised Premises at any time during the Term shall be exempt from levy
by distress for rent in arrears, save as referred to in Section (b)
hereof.
9.2 Interest on Overdue Payments and Administrative Fees
All rents and administrative costs past due shall bear an interest
rate from the date on which the same became due until the date of payment at
2% per annum in excess of the minimum interest rate for any commercial demand
loans charged by the Canadian Chartered Bank designated by the Landlord.
9.3 Bankruptcy Acts
If the Demised Premises shall be used by any person other than the
Tenant or for any purpose other than that as herein or in the Rules and
Regulations provided, without the written consent of the Landlord, or the Term
shall be at any time seized in execution or attachment by any creditor of the
Tenant or the Tenant shall make any assignment for the benefit of creditors or
become bankrupt or insolvent or take the benefit of any Act now or hereafter in
force for bankrupt or insolvent debtors or (if the Tenant is a company or
corporation) any order shall be made for the winding-up of the Tenant, or a
receiver-manager is appointed to control the conduct of the business on or from
the Demised Premises, then in any such case this lease shall, at the option of
the Landlord, cease and determine and the Term shall immediately become
forfeited and void and the then current month's Basic Rent and Additional Rent
and the next ensuing three months' Basic Rent and Additional Rent shall
immediately become due and payable and the Landlord may re-enter and take
possession of the Demised Premises as though the Tenant or other occupant or
occupants of the Demised Premises was or were holding over after the expiration
of the Term without any right whatever, but if permitted by law, the Tenant
shall continue to be liable to the Landlord for the rent hereby reserved for
the balance of the Term.
9.4 Landlord's Performance of Tenant's Obligations
Notwithstanding any other provisions herein contained, the Landlord
may, but need not, remedy any default of the Tenant. Any costs incurred by the
Landlord in performing any act which the Tenant has failed to perform or in
remedying any situation which has arisen through the neglect or default of the
Tenant shall be collectible from the Tenant as Additional Rent.
ARTICLE X
MISCELLANEOUS
10.1 Fixtures
The Tenant may at its own expense, during the Term in the usual and
normal course of its business remove its trade fixtures, provided the Tenant is
not then in default under this lease and provided the Tenant shall make good
any damage caused by such removal. All installations, alterations, additions,
partitions, built-in cabinet work and fixtures (other than trade fixtures in or
upon the Demised Premises) whether placed there by the Tenant or the Landlord,
shall immediately become the Landlord's property without compensation therefor
the Tenant at the expiration of the Term. Provided that the Tenant has not been
in material default the Tenant shall not be required to restore the Demised
Premises to the original base building standard or original condition at the
termination of the Lease, except that the Landlord may require the Tenant to
remove its trade fixtures and other equipment made by or on behalf of the
Tenant which are of a special or structural nature, or are substantially
different than typical office finishing found in comparable buildings for
comparable uses including, but not limited to, wiring
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and equipment. In the event of early termination as provided for in Section
10.17(iv), the Tenant shall be required to pay to the Landlord, 90 days prior to
vacating the Demised Premises, a contribution towards restoration of $2.50 per
square foot of Rentable Area of the Demised Premises leased on such date.
Notwithstanding anything herein contained the Landlord shall be under no
obligation to repair or maintain the Tenant's installations, alterations,
additions, partitions, built-in cabinet work, wall-to wall carpeting and
fixtures or anything in the nature of a leasehold improvement made or installed
by the Tenant.
10.2 Impossibility of Performance
It is understood and agreed that whenever and to the extent that the
Landlord or the Tenant shall be unable to fulfil or shall be delayed or
restricted in the fulfillment of any obligation hereunder (other than the
payment of Basic Rent or Additional Rent) in respect of the supply or provision
of any service or utility or the doing of any work or the making of any repairs
by reason of being unable to obtain the material, goods, equipment, service or
labour required to enable it to fulfil such obligation or by reason of any
statute, law or order-in-council or any regulation or order passed or made
pursuant thereto or by reason of the order or direction of any administrator,
controller, board, governmental department or officer or other authority, or by
reason of not being able to obtain any permission or authority required thereby,
or by reason of any other cause beyond its control whether of the foregoing
character or otherwise, the Landlord or the Tenant shall be relieved from the
fulfillment of such obligation and the other shall not be entitled to
compensation for any inconvenience, nuisance or discomfort occasioned thereby
provided that the foregoing shall not apply to the Landlord's Work described in
Section 10.17(vi) hereof.
10.3 Non-Waiver
Any condoning, waving, excusing or overlooking by the Landlord or
Tenant of any default, breach or non-observance by the Tenant or Landlord at any
time or times of or in respect of any covenant, proviso or condition herein
contained shall not operate as a waiver of the Landlord's or Tenant's rights
hereunder in respect of any subsequent default, breach or non-observance, not so
as to defeat or affect in any way the rights of the Landlord or Tenant herein
respect of any such default or breach, and no waiver shall be inferred from or
implied by anything done or omitted by the Landlord or Tenant save only express
waiver in writing. All rights and remedies of the Landlord or Tenant in this
lease contained shall be cumulative and not alternative. The subsequent
acceptance of rent hereunder by the Landlord shall not be deemed a waiver of any
preceding breach of any obligation hereunder by the Tenant other than the
failure to pay the particular rent so accepted, and the acceptance by the
Landlord of any rent from any person other than the Tenant shall not be
construed as a recognition of any rights not herein expressly granted, or as a
waiver of any of the Landlord's rights, or as an admission that such person is,
or as a consent that such person shall be deemed to be, a sub-tenant or assignee
of this lease. Nevertheless the Landlord may accept rent from any person
occupying the Demised Premises at any time without in any way waiving any right
under this lease.
10.4 No Collateral Agreement
It is understood and agreed that this lease (which includes the
Schedules annexed hereto) contains the entire agreement and understanding made
between the parties herein and that there is no representation, warranty,
collateral agreement or condition, expressed or implied, affecting this lease or
supported hereby other than such as may be expressly contained in or implied
from the provisions hereof and that this lease may not be modified except as
herein expressly provided or except by subsequent agreement in writing of equal
formality hereto executed by the Landlord and Tenant.
10.5 Notice
Any notice or request herein provided for or given hereunder if given
by the Landlord to the Tenant shall be sufficiently given if delivered or mailed
by prepaid registered post addressed to the Tenant at the address specified in
Section 1.1(v) or the Demised Premises.
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Any notice or request herein provided for or given hereunder if given by the
Tenant to the Landlord shall be sufficiently given if delivered or mailed by
prepaid registered post addressed to the Landlord at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇. Any notice or request shall be conclusively deemed to
have been given on the date of its delivery or on the second business day
following the day on which it was so mailed, as the case may be. If in this
lease two or more person are named as Tenant, such notice shall also be
sufficiently given if and when the same shall be delivered personally or mailed
as aforesaid to any one of such persons. Either party may at any time give
notice in writing to the other of any change of address in Canada of the party
giving such notice and from and after the giving such notice the address
therein specified shall be deemed to be the address of such party for the
purpose of giving such notices or requests thereafter.
10.6 Certificate
Each of the Landlord and the Tenant agrees that it will at any time
and from time to time upon not less than ten (10) days prior notice execute and
deliver to the other or to whomsoever the other directs a statement in writing
certifying that the Tenant is in possession of the Demised Premises and
commenced to pay rent on a specified date; this lease is in full force and
effect; the amount of the annual rental then being paid hereunder and of any
prepaid rent or security deposit held by the Landlord; the dates to which the
rentals, by instalments or otherwise, and other charges hereunder have been
paid; whether or not there is any existing default on the part of the Landlord
or Tenant of which the other has notice; and any additional information or
acknowledgment reasonably requested by the other.
10.7 Guarantee
Intentionally Deleted.
10.8 Subordination
Provided that the Landlord's obligations under Section 10.17(x) have
been satisfied, this lease shall be subject and subordinate to all ground and
underlying leases and to all mortgages (including any deed of trust and mortgage
securing bonds and all indentures supplemental thereto) which may now or
hereafter affect the Lands or the Building (and whether or not such mortgages
affect only the Demised Premises or the Building or affect other premises as
well) and to all renewals, modifications, consolidations, replacements and
extensions thereof and to all agreements entered into or to be entered into with
all governmental authorities having jurisdiction with respect to the development
and use, including the parking facilities, of the Building and Common Areas,
provided that the Tenant whenever requested by any landlord under a ground or
underlying lease or by any mortgage (including any trustee under a deed of trust
and mortgage) shall promptly attorn to such landlord or mortgagee as a tenant
upon all the terms of this lease. The Tenant agrees to execute promptly any
certificate in confirmation of such subordination as the Landlord may request.
The above is subject to and to be read in conjunction with Section 10.17(x).
10.9 Changes and Additions to Building
The Landlord reserves the right to make alterations or additions to
the Building, so long as the Tenant is not materially inconvenienced thereby,
or make additions to the Lands or construct improvements adjoining the Lands.
10.10 Relocation
Intentionally deleted.
10.11 Overholding
If, without objection by the Landlord, but without any further
written agreement, the Tenant shall continue to occupy the Demised Premises and
pay rent after the expiration of the
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Term other than pursuant to its option to renew, the Tenant shall be a monthly
tenant and otherwise a tenant at sufferance only, at a monthly Basic Rent equal
to 130 per cent of the monthly instalments of Basic Rent payable on the last
monthly payment date during the Term and on the terms and conditions herein set
out, in so far as the same are applicable, except as to length of tenancy.
10.12 Time of Essence
Time is of the essence of this lease.
10.13 Registration
The Tenant shall not register this lease without the written consent
of the Landlord. Upon the request of either party hereto, the other party shall
join in the execution of a short form of this lease for the purposes of
registration. Such short form shall only describe the parties, the Demised
Premises and the term of this lease, any options to renew and the special
rights referred to in Section 10.17 hereof and shall be prepared by the
Tenant's solicitors and shall be subject to the approval of the Landlord and
its solicitors. It is understood and agreed that, notwithstanding the execution
and registration of such short form, this lease (which includes the Schedules
annexed hereto) contains the entire agreement and understanding made between
the parties hereto in accordance with Section 10.4 of this lease.
10.14 Successors and Assigns
This Indenture and everything herein contained shall exceed to and
bind and may be taken advantage of by the respective heirs, executors,
administrators, successors and assigns, as the case may be, of each and every
of the parties hereto subject to the granting of any required consent by the
Landlord to an assignment or sublease.
10.15 Contra Proferendum
The Parties acknowledge and agree that both Parties have participated
in the drafting of this Lease, and any rule of law providing that ambiguities
shall be construed against the drafting party, shall be of no force or effect.
10.16 Partial Invalidity
All of the provisions of this Lease are to be construed as covenants
even though not expressed as such. If any such provision is held or rendered
illegal or unenforceable it shall be considered separate and severable from
this Lease and the remaining provisions of this Lease shall remain in force and
bind the parties as though the illegal or unenforceable provision had never
been included in this Lease.
10.17 Special Provisions
(i) Prior Occupancy
Upon substantial completion of the Landlord's Work at the
Tenant's option is shall be permitted to occupy the Demised Premises
without the payment of any Basic or Additional Rent until the
Commencement Date of the Lease.
(ii) Space Plan
Upon the completion of the "Permit Drawings" and until February
1st, 1999 the Tenant shall have the one time right at no charge to
reduce the Demised Premises up to a maximum of 10,000 square feet
consisting of one (1) contiguous unit, such area to be either on the
3rd or the 1st floor. The Tenant must notify the Landlord of such
change in writing and all terms and conditions of this Lease shall
remain in full force and effect except as a result of this change the
Basic
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Rent shall be adjusted proportionately. The Landlord agrees to pay to the
Tenant a space plan allowance equal to six cents ($0.06) plus G.S.T. per
rentable square foot of the Demised Premises upon presentation of the space
plan to the Landlord.
(iii) Parking
The Landlord agrees to provide the Tenant with up to 3.3 surface
parking spaces per 1,000 square feet (or portion thereof) of the Rentable Area
of Demised Premises at no charge throughout the term of the Lease and any
Renewals thereof on a first come, first served basis.
(iv) Lease Cancellation
Notwithstanding anything contained in the Lease to the contrary, and
provided Genesis Microchip Inc. or an affiliate or a corporation that purchased
all or substantially all of the business of Genesis Microchip Inc. whose
covenant is no less than the Tenant's (a "Permitted Transferee") is carrying on
business in all of the Demised Premises, the Tenant shall have the right to
terminate the Lease as of May 31st, 2004 upon not less than nine (9) months
prior written notice to the Landlord. During the notice period, the Tenant
shall have the right to occupy the Demised Premises under the terms of this
Lease, or the Tenant may vacate the Demised Premises and pay the Landlord a
lump sum equal to the gross rent remaining during said notice period.
In the event the Tenant exercises the right to terminate its Lease as
of May 31st, 2004 in the manner described above, then the Landlord shall be
entitled to receive from the Tenant ninety (90) days prior to vacating the
Demised Premises, a sum equivalent to three (3) months gross rent. The Landlord
is further entitled to the restoration fee of $2.50 per square foot as set out
in Section 10.1.
(v) Additional Rent - Intentionally Deleted (See Rider, Section 7)
(vi) Fixturing Period
The Tenant will provide the Landlord with a set of permit plans by
February 1, 1999. The Tenant will provide a full set of final plans and
specifications by February 15, 1999. The Landlord will substantially complete
the Building and Demised Premises in accordance with such plans and in
accordance with the work outlined in Schedule "C" attached hereto by June 1,
1999, provided that there are no material or numerous change orders which would
cause undue delay issued after February 15, 1999, with respect to the Demised
Premises by the Tenant. The Landlord will supervise the work at no cost to the
Tenant and perform the work at no profit to the Landlord. The Landlord agrees
to competitively bid the work to at least three (3) trades in each instance.
The Tenant or its designated consultant will have the opportunity to review the
bids and to provide input, acting reasonably. All costs relating to the
construction of the Tenant's Demised Premises will be paid for by the Tenant
subject to the provisions of Section 10.17 (vii) herein. The Landlord will
provide the Tenant will all copies of invoices relating to the construction of
the Demised Premises. The Tenant may elect to employ, at its expense, a project
manager to review and approve all aspects of the work in the Demised Premises
including the selection of trades, materials and invoices.
Provided that if final plans are delivered to the Landlord by February 15,
1999, and there are no material or numerous change orders issued by the Tenant
and
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such plans are consistent with building codes and/or contain finishes and
design features that will not unduly delay the municipal approval process and
the Tenant incurs occupancy costs at any other location after June 1, 1999, as
a result of the Landlord's inability to deliver the Demised Premises
substantially ready for the Tenant's use and with all of the work to be
performed substantially completed the Landlord agrees to indemnify the Tenant
for any added such occupancy costs incurred after June 1, 1999, until
completion of the Demised Premises and the Commencement Date of the lease shall
be delated by the number of days after June 1, 1999, that the Landlord delivers
the Demised Premises substantially ready for the Tenant's use. The Tenant shall
be entitled to affect such costs against Basic and Additional Rent accruing due
if not paid on a timely basis.
Provided that if final plans and specifications are not delivered to the
Landlord by February 15, 1999, or such plans are not consistent with building
codes and/or contain finishes and design features that will unduly delay the
municipal approval process, the Landlord's requirement to complete the work in
the Demised Premises will be delayed by the number of days after February 15,
1999, that the Tenant delivers the plans to the Landlord. For example, if plans
are received on February 20, 1999, the date to complete the work will be
adjusted from June 1, 1999, to June 5, 1999, and the Landlord's requirement to
indemnify the Tenant shall be similarly deferred. If the Tenant or its
representative(s) issues material or numerous change orders from the final
plans as delivered, then the Landlord's requirement to complete work in the
Demised Premises shall be delayed by the number of days of delay the Landlord's
Architect acting reasonably determines to have been caused by such material or
numerous change orders.
In the event that the Landlord anticipates at any time that it will not
substantially complete the Landlord's Work by June 1, 1999 then it shall
forthwith notify the Tenant in writing of such event.
(vii) Payment of Tenant's Improvement Costs
The Landlord agrees to complete the Tenant's Improvements in accordance
with Schedule C, paragraph 2.
The Tenant shall make drawdown payment(s) to the Landlord within fifteen (15)
days of receipt of invoices from the Landlord. Partial drawdown will occur
based on fixturing work completed and on the Tenant's designated consultant's
written certification, less proper holdbacks for construction liens, etc., if
any.
Landlord agrees not to charge the Tenant any supervision fees during the
fixturing period and will charge for only other direct out-of-pocket expenses.
(vii) Right of First Refusal
Provided that after the Commencement Date the Tenant or Permitted
Transferree, as defined in Section 10.17(iv), is in occupancy of at least 35,000
rentable square feet of office space and has not been in material default, then
after December 7, 1998 and throughout the Term, the Tenant shall have an
on-going Right of First Refusal (ROFR) to lease additional space on the balance
of the ground floor of the Building. Such additional space shall only be
occupied pursuant to an arm's length Offer to Lease.
Should the Landlord receive an arms length Offer to Lease that it is prepared
to accept, then the Tenant shall be given written notice of said Offer and the
Tenant shall have three (3) business days to advise the Landlord in writing
that it will lease said space, failing which the ROFR shall be null and void
and the Landlord shall be free to proceed to lease the space to the other
prospective tenant pursuant to the terms of the Offer. Should the Tenant
exercise this ROFR then:
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(A) the Lease shall be amended to include said ROFR space and
the ROFR space shall become part of the Demised Premises and
subject to the provisions of the Lease;
(B) notwithstanding the terms of the offer, during the first
five (5) years of the term, the ROFR space shall be leased
for a term co-terminus with the Term of the Lease and
provided that the Tenant accepts the ROFR space "as is", the
Basic Rent shall be the Basic Rent acceptable in the arms
length Offer to Lease less the amortization, based on 10%
per annum, of any allowances or other forms of inducements
over the life of the offer, as the same may be renewed.
(C) Notwithstanding the terms of the offer, the ROFR space
shall be taken on an "as is" basis, except that the Landlord
shall, within 30 days of the exercise of the option, perform
the Landlord's work described in Schedule "C" of this Offer,
subject to the conditions contained in Schedule "C",
paragraph 2(e) and (h).
This ROFR shall be an on-going rights with respect to all
additional space on the balance of the ground floor of the
Building in respect of which the Landlord receives an arm's
length Offer to Lease.
For greater certainty, any such ROFR space shall be leased by the
Tenant as a whole and not a portion of the 3rd party offer.
(ix) Goods and Services Tax (G.S.T.)
The Tenant covenants with the Landlord to pay, to the person or
authority to whom they are payable, on or before the due date thereof, any
and all sales or services taxes on the Demised Premises, however designated
which are levied, imposed or assessed by lawful authority in this Lease,
and whether they are levied, imposed or assessed against the Landlord or
the Tenant. The Tenant further covenants to indemnify and save the Landlord
harmless from any and all liability, costs, expenses or penalties incurred
by the Landlord as a result of such sales or services taxes. The Tenant's
obligation to observe or perform this covenant shall survive the expiration
or other termination of this Lease.
The Landlord will comply with all provisions of the Goods and Services Tax.
(x) Non-Disturbance
The Landlord shall provide a non-disturbance agreement to the
Tenant on terms reasonably satisfactory to the Tenants from any future
mortgages, trustee, purchaser or other encumbrancer to whom the Tenant is
required to attorn or subordinate. The initial non-disturbance agreement
shall be provided forthwith to the Tenant for its review and approval, and
executed forthwith thereafter. The Landlord represents and warrants that
the Lands and Building are not currently encumbered by mortgage or other
encumbrance. Any notice of the Lease registered on title to the Lands shall
be subordinated to any subsequent registration for the purpose of financing
the property, provided a non-disturbance agreement has been executed.
(xi) Right of First Offer
Provided that the Tenant is not in material default, then from
and after December 7, 1998 and throughout the term and renewals thereof,
the Tenant shall
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have the First Right of Offer on additional space in the Building. The
Landlord shall give the Tenant, on a semi-annual basis, notice of space which
is or will become, available for lease, in the ensuing six (6) months.
Following receipt of such notice, the Tenant shall have the next five (5) days
to elect to lease all or part of the space available, failing which the
Landlord may proceed to offer such space for lease to other tenants. In the
event the Tenant elects to lease vacant space, as per this Clause, it shall be
leased on an "as is" basis subject to the Landlord completing the work
outlined, subject to the conditions contained in Schedule "C", paragraph 2(a)
and (h), but the Tenant shall be granted a sixty (60) day rent free fixturing
period. The Basic Rent for such space shall be the then current market rate,
established in the same fashion as the rent for the Renewal term, unless said
space is leased in the first two (2) years of the lease Term, for which the
Basic Rate shall be the same as this Lease.
The lease term for any space leased under this clause shall be co-terminus to
the initial lease Term, unless otherwise agreed to between the parties.
If such available space or pending vacancy represents at least a full floor,
the Tenants shall be required to lease a minimum of 3,000 square feet of
rentable area under the terms of this clause.
All other terms and conditions of the Lease shall apply to said First Right to
Lease space as if was part of the initial premises.
(xii) Storage Space
The Landlord agrees to provide the Tenant with storage space of
approximately five hundred and eighty-five (585) rentable square feet on the P1
level of the Building as outlined in red on Schedule "G" for the term of the
Lease and any renewals thereof. The storage space shall be for the Tenant's
exclusive use and the Landlord agrees to make necessary improvements, if any,
to the space to ensure that the storage space has adequate lighting, electrical
power, and is secure and dry. The Tenant agrees to pay to the Landlord an
annual gross rent payable on a monthly basis at the rate of 66% of the
aggregate of basic and additional rent in the nature of Common Expenses, Taxes
and utilities payable pursuant to this agreement per rentable square foot per
annum.
IN WITNESS WHEREOF the parties hereto have executed this Indenture.
▇▇▇▇▇▇ PROPERTIES LIMITED
BY: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇
Senior Vice President
-------------------------------------
I/We have authority to bind the
Corporation.
GENESIS MICROCHIP INC.
BY: /s/ I. ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
I. ▇▇▇▇ ▇▇▇▇▇▇
I/We have authority to bind the
Corporation.
34
SCHEDULE B
RULES AND REGULATIONS
1. The sidewalks, entrances, elevators, stairways, corridors and fire escapes
of the Building shall not be obstructed by the Tenant or used by him for any
purpose other than for ingress and egress to and from the Demised Premises.
The Tenant shall not place or allow to be placed in the hallways, corridors or
stairways any waste paper, dust, garbage, refuse or anything else whatsoever
that would obstruct them or tend to make them appear unclean or untidy.
Nothing shall be thrown by the Tenant or his employees out of the windows or
doors or down the passages or sky lights of the Building.
2. Business machines, filing cabinets, heavy merchandise or other articles
liable to overload, injure or destroy any part of the Building shall not be
taken into it without the written consent of the Landlord, and the Landlord
shall in all cases retain the right to prescribe the weight and proper position
of all such articles and the times and routes for moving them into or out of
the Building; the cost of repairing any damage done to the Building, by the
moving or keeping of any such articles on the Demised Premises shall be paid by
the Tenant.
3. The Tenant shall not unreasonably ▇▇▇▇, paint, drill into or in any way
deface the walls, ceilings, partitions, floors or other parts of the Demised
Premises and the Building except with the prior written consent of the Landlord
as it may direct, acting reasonably.
4. The Tenant and his employees shall not in any way interfere with or annoy
other occupants of the Building or those having business with them.
5. No additional locks or bolts of any kind shall be placed upon any of the
doors or windows by tenants, nor shall any changes whatsoever be made to
existing locks or the mechanics thereof except by the Landlord, at its option.
Tenants shall not permit any duplicate keys to be made, but additional keys as
reasonably required shall be supplied by the landlord when requested by the
Tenant in writing and such keys shall be paid for by the Tenant; and upon
termination of Tenant's Lease, the Tenant shall surrender to the Landlord all
keys of the Demised Premises and other part or parts of the Building.
6. The Tenant shall give the Landlord prompt written notice of any accident
to or any defect in the plumbing, heating, air conditioning, mechanical or
electrical apparatus or any part of the Building.
7. No bicycles or other vehicles and no dog or other animal or bird shall be
brought into or kept in the Building.
8. Furniture, effects and supplies shall not be taken into or removed from
the Demised Premises except at such time and in such manner as may be
previously approved by the Landlord.
9. The Tenant will not make or permit any improper noise in the Building and:
(a) will not place any radio or television antenna on the roof or on or
in any part of the inside or outside of the Building;
(b) will not operate or permit to be operated any musical or sound
producing instrument or device inside or outside the Demised Premises
which may be heard outside the Demised Premises; and
(c) will not operate any electrical device from which may emanate
electrical waves which may interfere with or impair radio or
television broadcasting or reception from or in the Building or
elsewhere,
without the consent of the Landlord, which consent shall not be
unreasonably withheld or delayed.
10. No space in the Building shall be used for lodging, sleeping, or any
immoral or illegal purposes.
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11. All persons entering and leaving the Building at any time other than during
normal business hours shall register in the books kept by Landlord at or near
the night entrance and the Landlord will have the right to prevent any person
from entering or leaving the Building unless provided with a key to the premises
to which such person seeks entrance or a pass in a form to be approved by the
Landlord. Any persons found in the Building at such times without such keys or
passes will be subject to the surveillance of the employees and agents of the
Landlord. The Landlords shall be under no responsibility for failure to enforce
this rule.
12. The Tenant and its employees shall use such water-closets, other water
apparatus and washroom facilities in the Building as shall be from time to time
designated by the Landlord for use in connection with the Demised Premises.
The water-closets and other water apparatus shall not be used for any purpose
other than those for which they were constructed and no sweepings, rubbish,
rags, ashes or other substances shall be thrown therein. Any damage resulting
by misuse shall be borne by the tenant by whom or by whose employees the same
is caused. The Tenant shall not let water run unless in actual use.
13. The Tenant shall not permit any cooking other than in its kitchen
facilities or in the making of beverages in the Demised Premises without the
written consent of the Landlord.
14. Any hand trucks, carryalls or similar equipment used in the Building shall
be equipped with rubber tires, side guards and such other safeguards as the
Landlord shall reasonably require.
15. The Landlord shall have the right to require all persons entering and
leaving the building at hours other than normal operations hours, which are
defined as between 7:00 a.m. and 7:00 p.m. Monday through Friday, to identify
themselves to a watchman or security guard by registration or otherwise.
16. To the extent practicable, the Tenant shall be required to give at least
24 hours notice to the management office of the Building of intention to use
the freight elevator and may use same at such times as may be convenient to the
Landlord.
36
SCHEDULE C
LANDLORD'S AND TENANT'S WORK
1. On December 10, 1998, the Landlord supplied the Tenant with one (1) set of
space plans to illustrate and assist the Tenant to determine functional and
efficient space requirements. Final and detailed construction drawings of the
Demised Premises will be paid for by the Tenant.
2. The Landlord shall at its expense construct the Demised Premises and
furnish services thereto as follows (the "Landlord's Work"):
(a) Ceiling: 60" x 20" suspended T-bar ceiling complete with acoustic
ceiling tiles as per Tenant's space plan, save and except for any
expansion space, unless the expansion space is unimproved;
(b) Lighting: 60" x 20" lighting fixture complete with clear K-12 lens at
1 per 80 square foot as per Tenant's space plan. Two energy efficient
4' white T-8 lamps with 347 volt electronic ballasts.
(c) Electrical: 1.24 ▇▇▇▇▇ per square foot for lighting. Three ▇▇▇▇▇ per
square foot of "clean" power for computers and electronic equipment.
Three additional ▇▇▇▇▇ per square foot for regular power.
(d) Telephone: Telephone closet with a riser for tenant connections.
(e) Floor: Ready to receive Tenant's finish.
(f) Demising Walls: Prime painted drywall ready to accept Tenant's
finishes.
(g) Building standard window coverings on perimeter.
(h) Base Building sprinkler system and sprinkler heads as per Tenant's
space plan, save and except for any expansion space, unless the
expansion space is unimproved.
(i) HVAC: On-floor variable air volume air conditioning system with
ceiling perimeter hot-water radiation layout as per an open plan.
(j) Washrooms: Male and female washrooms provided on each floor. On
multi-tenanted floors, the access will be in common with other
Tenants.
(k) Directory: Standard Tenant's identification on main directory.
(l) General: All items and finishes supplied by the Landlord are of the
building standard. Colour, quality and quantity of such
specifications are subject to change by the Landlord if and when it
is considered desirable.
Any additional work not specified herein will be at the Tenant's expense.
3. The Tenant shall submit to the Landlord by no later than February 1,
1999 permit drawings. The Tenant will submit complete final plans and
specifications, using the design services of the Landlord's mechanical and
electrical engineers, for the work to be done by the Landlord to the Demised
Premises (the "Landlord's Work") no later than February 15, 1999. An architect
from time to time named by the Landlord (the "Landlord's Architect") or, at its
option the Landlord, shall review such plans and specifications and shall
within 2 days after receipt of same advise the Tenant in writing of the
required changes to ensure compliance with the Building plans and
specifications and the requirements of all governmental authorities having
jurisdiction; provided, the Landlord shall not be liable or responsible in any
way for any non-compliance of such plans and specifications with the
requirements of all governmental authorities having jurisdiction. The Tenant
shall make the required changes, if any, in such plans and specifications and
shall resubmit them by February 20, 1998.
4. So long as the Tenant and his employees, agents and contractors do not
interfere with the
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Landlord and its employees, agents and contractors who may be in or about the
Demised Premises for the purpose of carrying out the Landlord's Work, the
Tenant shall be entitled to enter the Demised Premises prior to the
commencement of the Term of the Lease without incurring any obligation to pay
rent, but the Tenant shall pay for all utilities and services furnished to the
Tenant and its employees, agents and contractors by the Landlord, promptly upon
being billed therefor, for the purpose and only for the purpose, of doing the
Tenant's work.
5. It is understood by the Tenant that the interior plan of the office
requirements of the Tenant may be designed either by the Landlord's Architect or
by a qualified interior designer chosen by the Tenant and satisfactory to the
Landlord, the approval of the Landlord not to be unreasonably withheld. It is
understood, however, by the Tenant that any revisions to the basic construction
of the Building in order to accommodate the requirements of the Tenant must be
designed by the Landlord's Architect and by the structural, mechanical or
electrical engineers appointed by the Landlord for the Building and such
revisions will be at the expense of the Tenant at competitive rates. If any
person other than the Landlord's Architect is retained by the Tenant, the Tenant
agrees to cause such person to include the Landlord's Architect in the
distribution of drawings made by such person for interior planning of the office
of the Tenant and the Landlord's Architect and its engineering consultants shall
provide instructions to the Landlord's General Contractor with respect to the
basic construction of the Building.
6. Prior to the commencement of the Landlord's Work, the Landlord on behalf
of the Tenant shall obtain all necessary approvals or permits that may be
required including, without limitation, building permits, Department of Labour
permits and Fire Prevention Bureau approvals.
7. The Landlord, the Tenant and the Tenant's Space Planner acting reasonably
will prepare the Punch List. Agreement will not be unreasonably withheld by
the Tenant or Landlord in the preparation of the Punch List. The Punch List
will be binding upon the Landlord and Tenant. The Landlord will complete the
Punch List items within 30 days of the preparation of the Punch List.
38
SCHEDULE D
RENEWAL OPTION
1. The Tenant shall have the Option to renew this lease for a period of five
(5) years (herein called the "renewal term"), commencing upon the day following
the date of expiration of the initial term of this lease and ending upon the
fifth anniversary of such date of expiration (the "expiration date"), subject
as follows:
(a) Such option shall be exercised by notice in writing given to the
Landlord at least nine (9) months and no more than twelve (12) months
prior to the expiration date; provided that such notice shall be
validly given only if the Tenant has not during the term of the Lease
been in a material breach of any of its covenants or obligations
under this lease.
(b) The renewal of the lease upon the exercise of such option shall be
upon the same terms and subject to all the provisions of this lease
except:
(i) the renewal term shall be as above provided, and there shall be
no right of the Tenant to further renew or extend the term of
this lease beyond the expiration of the renewal term; and
(ii) the Basic Rent to be payable by the Tenant during the renewal
term shall be the then fair annual rental for the Demised
Premises. There shall be no right of the Tenant to further rent
free periods or any Tenant inducement packages in this Renewal
Agreement.
As soon after the exercise of such option as the fair annual rental
value of the Premises has been determined, the Landlord and the Tenant
shall enter into a supplementary lease modifying this lease and
extending the term thereof, all as above provided.
(c) The expression "fair annual rental", for the purposes of this Schedule
shall mean the annual rental which could reasonably be obtained by the
Landlord for the Demised Premises from a willing tenant dealing at
arms length with the Landlord in the market prevailing at a date of
eight (8) months prior to the date upon which the renewal term is to
commence, having regard to improvement allowances and turnkey packages
being given by Landlords, the quality of the existing leasehold
improvements, cash inducements being given by Landlords, and having
regard also to renewal rentals currently being obtained for similar
space in comparable buildings within the vicinity of the Building.
(d) If the Landlord and the Tenant have not agreed as to the fair annual
rental value of the Premises by a date within eight (8) months prior
to the date upon which the renewal term is to commence, the Tenant
shall have the right to revoke its notice of intent to renew within
five (5) days from such date (in which case notice shall be deemed
never to have been given) failing which the matter shall be determined
by arbitration in the manner provided in paragraph 2 of this Schedule.
In the event that the fair annual rental value of the Premises has
not been determined by the date upon which rent therefore commences to
be payable by the Tenant, pending such determination the Tenant shall
pay rent therefore at the same rate per square foot then in effect
under the lease and the parties shall re-adjust as of the date when
rent commenced to be payable promptly upon such determination being
made.
2. Any arbitration proceedings shall be conducted pursuant to the provisions
of the Ontario Arbitration Act, 1991, as from time to time amended.
39
SCHEDULE F
SOUTHCREEK CORPORATE CENTRE
40
SCHEDULE G
STORAGE SPACE