Exhibit 4.5
LEASE
BETWEEN:
RIVERPOINTE STRATEGIES PARTNERSHIP
(THE "LANDLORD")
OF THE FIRST PART
AND:
CANADIAN SPRINGS WATER COMPANY
(THE "TENANT")
OF THE SECOND PART
AND:
SPARKLING SPRING WATER LIMITED
(THE "INDEMNIFER")
OF THE THIRD PART
TABLE OF CONTENTS
ONE TENANT, ONE PROPERTY
ARTICLE 1. GRANT AND BASIC TERMS.................................. 1
1.1 Grant.................................................. 1
1.2 Reservation............................................ 2
1.3 Basic Terms............................................ 2
ARTICLE 2. TERM OF LEASE.......................................... 5
2.1 Term................................................... 5
2.2 State of Property...................................... 6
ARTICLE 3. BASIC ANNUAL RENT, ADDITIONAL RENT, DEPOSIT............ 6
3.1 Rent................................................... 6
3.2 Arbitration of Rent.................................... 7
3.3 Rental Deposit......................................... 7
3.4 Deposit Application.................................... 7
3.5 Additional Rent........................................ 8
3.6 No Deductions.......................................... 8
3.7 Net Lease.............................................. 8
3.8 Postdated Cheques...................................... 8
3.9 Interest............................................... 9
3.10 Rent Abatement......................................... 9
ARTICLE 4. USE OF THE PROPERTY.................................... 9
4.1 Use of Property........................................ 9
4.2 Conduct of Business.................................... 9
ARTICLE 5. TENANT'S COVENANTS..................................... 10
5.1 Rent................................................... 10
5.2 Utilities.............................................. 10
5.3 Sales Taxes............................................ 10
5.4 Repairs................................................ 10
5.5 View Repairs........................................... 11
5.6 Make Repairs........................................... 11
5.7 Condition at Lease End................................. 11
5.8 Maintenance Contractor................................. 11
5.9 Glass.................................................. 11
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5.10 Overload............................................... 11
5.11 Nuisance............................................... 12
5.12 Assignment, Subletting, Change in Control.............. 12
5.13 Termination Option on Assignment....................... 13
5.14 Bylaws................................................. 13
5.15 Tenant Insurance....................................... 13
5.16 Blanket Insurance...................................... 14
5.17 Landlord Insurance..................................... 14
5.18 Increased Insurance.................................... 14
5.19 Uninsured Damage....................................... 15
5.20 Refuse................................................. 15
5.21 Liens.................................................. 15
5.22 Claim Waiver........................................... 16
5.23 Indemnity From Tenant.................................. 16
5.24 Furnace................................................ 16
5.25 Auction................................................ 17
5.26 Default Costs.......................................... 17
5.27 Taxes.................................................. 17
5.28 Tax Estimate........................................... 17
5.29 Tax Adjustment......................................... 18
5.30 Improvement Taxes...................................... 18
5.31 Tenant's Business Taxes................................ 18
5.32 Proof of Tax Payment................................... 18
5.33 Reimburse Landlord..................................... 18
5.34 Operating Expenses..................................... 19
5.35 Operating Expenses Reconciliation...................... 19
5.36 Management Fee......................................... 19
5.37 Payment By Landlord.................................... 20
ARTICLE 6 LANDLORD'S COVENANTS................................... 20
6.1. Quiet Enjoyment........................................ 20
6.2 Title.................................................. 20
6.3 Taxes.................................................. 20
6.4 Repairs................................................ 20
6.5 Insurance.............................................. 20
6.6 Supplier's Warranties.................................. 21
6.7 Compliance With Laws................................... 21
6.8 Compliance With Non-Financial Charges.................. 21
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ARTICLE 7 IMPROVEMENTS AND ALTERATIONS........................... 21
7.1 Alterations............................................ 21
7.2 Restoration............................................ 21
7.3 Removal of Goods....................................... 22
ARTICLE 8 GENERAL INDEMNIFICATION AND LIMITATION OF LIABILITY.... 23
8.1 Landlord Not Liable.................................... 23
8.2 Consequential Damage................................... 23
8.3 Reciprocal Indemnity................................... 24
8.4 Landlord Right to Perform Tenant's Covenant............ 24
ARTICLE 9 SUBORDINATION AND STATUS CONFIRMATION.................. 24
9.1 Subordination.......................................... 24
9.2 Estoppel Certificates.................................. 25
ARTICLE 10 DAMAGE TO THE PROPERTY................................. 25
10.1 Damage................................................. 25
10.2 Damage Due to Tenant's Acts............................ 27
10.3 Damage to Improvements................................. 28
ARTICLE 11 EXPROPRIATION.......................................... 28
11.1 Expropriation.......................................... 28
ARTICLE 12 BANKRUPTCY, INSOLVENCY OR EXECUTION.................... 29
12.1 Insolvency............................................. 29
12.2 Determinable Lease..................................... 29
ARTICLE 13 DEFAULT................................................ 30
13.1 Default................................................ 30
13.2 Right to Relet......................................... 31
13.3 Right to Terminate..................................... 31
13.9 No Release of Liability................................ 31
ARTICLE 14 OVERHOLDING............................................ 32
14.1 Overholding............................................ 32
14.2 Overholding Rent....................................... 32
ARTICLE 15 NON-WAIVER AND CUMULATIVE REMEDIES..................... 32
15.1 No Waiver.............................................. 32
15.2 Rent From Third Party.................................. 32
15.3 Cumulative Remedies.................................... 33
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ARTICLE 16 ADVERTISING SIGNS...................................... 33
16.1 Advertising Signs...................................... 33
16.2 Indemnity to Landlord.................................. 33
ARTICLE 17 NOTICE AND DEMANDS..................................... 34
17.1 Notices................................................ 34
ARTICLE 18 MISCELLANEOUS.......................................... 34
18.1 Consents............................................... 34
18.2 Successors and Assigns................................. 35
18.3 Re-execution........................................... 35
18.4 Sign Removal........................................... 35
18.5 Enforcement Costs...................................... 36
18.6 Lease Advertising...................................... 36
18.7 Sale Advertising....................................... 36
18.8 Registration of Lease.................................. 36
18.9 Headings............................................... 37
18.10 Entire Contract........................................ 37
18.11 Time of Essence........................................ 37
18.12 Apportionment of Taxes and Costs....................... 37
18.13 Transfer By Landlord................................... 37
18.14 Joint and Several...................................... 38
ARTICLE 19 OPTION TO RENEW........................................ 38
19.1 Option to Renew........................................ 38
19.2 Renewal Terms.......................................... 38
19.3 Rent Arbitration....................................... 39
ARTICLE 20 INDEMNITY.............................................. 39
20.1 Indemnity.............................................. 39
20.2 No Release of Indemnity................................ 40
20.3 Waiver of Notices...................................... 41
20.4 New Lease With Indemnifier............................. 41
20.5 Joint and Several Obligation........................... 41
20.6 Waiver of Recourse..................................... 41
20.7 Receipt................................................ 42
20.8 No Modifications....................................... 42
20.9 Authority.............................................. 42
20.10 Joint and Several Liability of Indemnifiers............ 42
20.11 Lease References....................................... 42
20.12 Heirs and Executors.................................... 42
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ARTICLE 21 HAZARDOUS SUBSTANCE.................................... 42
21.1 Hazardous Substance.................................... 42
21.2 Hazardous Substance Property of Tenant................. 43
21.3 Removal of Hazardous Substance......................... 43
21.4 Notice of Hazardous Substance.......................... 43
21.5 Restoration After Contamination........................ 43
21.6 Cleanup Costs Indemnity................................ 44
21.7 Records................................................ 44
21.8 Cleanup Plans.......................................... 45
21.9 Indemnity to Landlord.................................. 45
21.10 Survival of Indemnification............................ 46
21.11 Tenant Not Liable...................................... 46
ARTICLE 22 DEFINITIONS............................................ 46
22.1 Definitions............................................ 46
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ONE TENANT, ONE PROPERTY
THIS LEASE dated as of March 19, 1999 is made and entered into:
BETWEEN:
RIVERPOINT STRATEGIES PARTNERSHIP, a
corporate partnership between 531968 B.C.
LTD. and RIVERPOINT BUSINESS PARK LTD.
(the "Landlord")
OF THE FIRST PART
AND:
CANADIAN SPRINGS WATER COMPANY
(the "Tenant")
OF THE SECOND PART
AND:
SPARKLING SPRING WATER LIMITED
(the "Indemnifier")
OF THE THIRD PART
who, in consideration of the rents and covenants herein contained, agree as
follows:
ARTICLE 1. GRANT AND BASIC TERMS
1.1 GRANT
The Landlord, being the owner of an estate in fee simple in the Property
(as hereinafter defined) subject to registered encumbrances, liens and
interests, if any, in consideration of the rents, covenants and agreements
herein reserved and contained on the part of the Tenant to be paid, observed and
performed, by these presents demises and leases the Property to the Tenant.
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1.2 RESERVATION
Notwithstanding anything to the contrary contained herein, the parties
agree that the Landlord has excepted and reserved unto itself, its agents,
employees and contractors the right, upon reasonable notice to the Tenant, for
free passage, with or without vehicles or other machinery, over the Property and
any Building forming part thereof or situate on the Property, to and for:
(a) the running of water and sewage and the provision of any other
utilities to any Building forming part of the Property or on land
adjoining the Property, over any part of the Property and in and
through sewers, drains or any other works made over, through, or
under any part of the Property and the right to construct or lay
down upon, under or through such part of the Property as maybe
unbuilt upon any works including without limitation gas and water
mains, culverts and sewers and electricity carrying wires and cables
and telephone and other communications related conduits, poles,
wires and cables, with power at all reasonable times to enter upon
any part of the Property for the purpose of constructing and laying
the same, or of examining the state of repair thereof, and for the
purpose of repairing or renewing the same;
(b) the performance of repairs and maintenance which it is the
Landlord's responsibility to perform pursuant to Paragraph 6.4
hereof,
on the basis that in carrying out any such operations, repairs and maintenance,
the Landlord will use its best efforts not to unreasonably disturb the Tenant's
business, provided however Rent will not abate while any such work is being
performed, and the Landlord will not be liable for any damage, injury or death
caused to any person or to the property of the Tenant or of others arising as a
result of such entry and passage unless such damage, injury or death arises as a
result of the negligence or wilful acts of the Landlord or those for whom it is,
in law, responsible.
1.3 BASIC TERMS
The basic terms of this Lease are:
(a) (i) Landlord: RIVERPOINTE STRATEGIES PARTNERSHIP
(ii) Address of Landlord: 5367 Kingsway, Burnaby, B.C. V5H 2G1
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(b) (i) Tenant (legal name): CANADIAN SPRINGS WATER COMPANY
(ii) Address of Tenant: 6560 McMillan Way,
Richmond B.C.
Tel:____________ Fax:____________
(iii) Individual to contact: Mr. Tom Ferries
(iv) Operating Name of CANADIAN SPRINGS WATER COMPANY
Business:
(c) Indemnifier(s): SPARKLING SPRING WATER LIMITED
(d) (i) Property: as described in Schedule "B"
(ii) Civic Address of 6560 McMillan Way,
Property: Richmond, B.C.
(iii) Area of Premises: approximately 45,287 square feet,
subject to Subparagraph 22.1(c)
(e) (i) Term: Twelve (12) years
(ii) Option(s) to Renew: Yes (see Article 19)
(iii) Terms of Renewal Two (2) options of four (4) years
Option(s): each at fair market Basic Annual Rent
(f) Commencement Date: May 1, 1999
(g) Termination Date: April 30, 2011
(h) Lease Void Date (if August 1, 1999
Property is not
available, see
Subparagraph 2.1(c)):
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(i) Rent:
(i) Basic Annual Rent
Lease Year Rate Per Sq. Ft. Per Annum Per Month
Per Annum
1-4 *$ 9.26 *$419,199.96 *$34,933.33
5-8 *$9.92 *$449,199.96 *$37,433.33
9-12 *$10.65 *$462,199.96 *$40,183.33
* as determined in accordance with Subparagraphs 3.1(a)(i).
The Basic Annual Rent shall be adjusted if the Area of the
Premises varies from the area set forth above.
(ii) Additional Rent: as set forth in Subparagraph 3.1(b)
(iii) Rent Abatement: N/A
(j) Permitted Use: Processing and warehousing together
with related office functions.
(k) (i) Rental Deposit: $78,912.50
(see Paragraphs 3.3 and
3.4)
(ii) Rental Deposit to be
applied as follows: first to the Rent under the Lease
for the first month of the initial
Term of this Lease, and secondly as
a security deposit.
(l) Lease Registration $500.00 (see Paragraph 18.8);
Deposit:
(m) Management Fee: 2% of Basic Annual Rent (see
Paragraph 5.36);
(n) Schedules: The schedules attached to this Lease
are incorporated into and form an
integral part of this Lease and are
as follows:
Schedule "A" - Plan of the Property
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Schedule "B" - Legal Description of
the Property and registered
encumbrances
Schedule "C" - Option to Expand
Premises
Schedule "D" - Option to Relocate
(o) Definitions: In this Lease, the words, phrases
and expressions set forth in Article
22 are used with the meanings
defined therein.
ARTICLE 2. TERM OF LEASE
2.1 TERM
TO HAVE AND TO HOLD the Property unto the Tenant during the Term, from and
including the Commencement Date to and including the Termination Date PROVIDED
THAT:
(a) if the date on which the Premises have been substantially completed
and made available for occupancy by the Tenant (the "Availability
Date") is prior to the Commencement Date, then the Tenant at its
sole option may occupy the Property from and after the Availability
Date and shall pay Rent, apportioned for the period from and after
the Availability Date until the Commencement Date, at the same rates
as are applicable with respect to the portion of the Term
immediately following the Commencement Date and the Tenant shall
during that period observe and comply with and be bound by all other
terms and conditions of this Lease insofar as they are applicable;
and
(b) if the Availability Date is subsequent to the Commencement Date, but
before the Lease Void Date, then this Lease shall not be void or
voidable nor shall the Landlord be liable for any loss or damage
resulting therefrom and the Tenant shall take possession of the
Property on the Availability Date as determined by the Landlord. In
such case the Commencement Date shall be the first day of the month
next following the Availability Date, the Term of this Lease shall
commence on the Commencement Date as so determined, the Termination
Date shall be adjusted accordingly and the immediately preceding
Subparagraph shall apply with respect to the time period between the
Availability Date and the Commencement Date; and
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(c) if the Availability Date is on or after the Lease Void Date, then,
at the Tenant's option, this Lease shall on the Lease Void Date
cease to be of any force or effect and the parties shall have no
claims against each other with respect to it or the subject matter
of it and the Renal Deposit shall forthwith be returned to the
Tenant. If the Tenant does not elect to void this Lease, then the
terms of Subparagraph 2.1(b) shall apply to the extent that they are
reasonably applicable.
2.2 STATE OF PROPERTY
The Tenant will examine the Property before taking possession of the
Property and such taking of possession will be, in the absence of an agreement
signed by the Landlord in writing to the contrary, conclusive evidence as
against the Tenant that at the time thereof the Property was in good order,
ready for occupancy and use as applicable and in condition called for under this
Lease and that no further work or improvements were required be done with
respect to the Property or any part thereof and that there was no unsatisfied
promise made by the Landlord to alter, remodel, decorate, improve or otherwise
do any work whatsoever with respect to the Property or any part thereof save and
except for defects that could not be identified by visual inspection. The Tenant
agrees that there is no representation from the Landlord with respect to the
Property other than as set out in this Lease, including without limitation any
representation with respect to the suitability of the Property for the conduct
of the Tenant's business or whether the Property is subject to a zoning which
permits the carrying of that business. The Tenant will not be required to take
possession of the Property until it is satisfied, acting reasonably, as to its
condition as contemplated in this Paragraph 2.2 unless and until an agreement
signed by the Landlord acknowledging any defects, repairs or further work or
improvements required by the Tenant.
ARTICLE 3. BASIC ANNUAL RENT, ADDITIONAL RENT, DEPOSIT
3.1 RENT
The Tenant covenants and agrees to pay to the Landlord at the Address of
the Landlord set forth in Subparagraph 1.3(a)(ii), or at such other place as the
Landlord may direct in writing, Rent in lawful money of Canada payable in
consecutive monthly instalments in advance on the first day of each and every
month during the Term hereof as follows:
(a) as Basic Annual Rent:
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(i) for those Lease Years with respect to which amounts are set
forth in the second and third columns in the table in
Subparagraph 1.3(i)(i), in amounts per month as set forth in
those columns, and
(ii) Subparagraph 3.1(a)(ii) has been intentionally deleted and
shall be of no effect.
(b) as Additional Rent:
(i) the Taxes payable by the Tenant pursuant to and as set forth
in Paragraph 5.27,
(ii) the Operating Expenses pursuant to and as set forth in
Paragraph 5.34,
(iii) the Management Fee pursuant to and as set forth in Paragraph
5.36, and
(iv) all other amounts payable by the Tenant to the Landlord
pursuant to this Lease.
3.2 ARBITRATION OF RENT
Paragraph 3.2 has been intentionally deleted and shall be of no effect.
3.3 RENTAL DEPOSIT
The Landlord acknowledges receipt of the Rental Deposit from the Tenant in
the amount set forth in Subparagraph 1.3(k)(i) and provided that the Tenant has
not committed any uncured default under the Lease prior to the time of the
intended application, the Rental Deposit shall be applied as set forth in
Subparagraph 1.3(k) (ii) and otherwise it may, at the Landlord's option, be
applied by the Landlord in accordance with the terms of the immediately
following Paragraph.
3.4 DEPOSIT APPLICATION
The Landlord may, acting reasonably, use, retain or apply all or part of
the Rental Deposit to the extent required for the payment of any Rent which the
Tenant has not paid on the date due or as compensation on account for any loss
or damage arising from the breach or default by the Tenant of any provision of
this Lease. If the Landlord uses, retains or applies all or part of the Rental
Deposit for any purpose other than the payments set forth in Subparagraph
1.3(k)(ii), then the Tenant will, forthwith upon
7
notice from the Landlord, pay to the Landlord the amount required to restore the
Rental Deposit to its original amount.
3.5 ADDITIONAL RENT
All payments, other than payments on account of Basic Annual Rent,
required to be made by the Tenant under or in respect of this Lease shall be
deemed to be Additional Rent and shall be paid as Rent to the Landlord, or to
such agent or agents of the Landlord as the Landlord shall hereinafter from time
to time direct in writing to the Tenant, and the Landlord shall have as a result
of any nonpayment of any Additional Rent the same remedies as the Landlord would
have as a result of nonpayment of Basic Annual Rent.
3.6 NO DEDUCTIONS
All rent to be paid by the Tenant to the Landlord shall be paid without
any deduction, abatement or set-off whatsoever, unless expressly set out herein.
3.7 NET LEASE
The Landlord and the Tenant agree that all expenses, costs, charges,
payments and outgoings incurred in respect of the Property, or any other matter
or thing affecting the Property shall, (unless otherwise expressly stipulated
herein to the contrary), be borne by the Tenant, save and except:
(a) costs of complying with the Landlord's specific obligations, if any,
pursuant to the terms of this Lease which are expressed to be for
the sole account of the Landlord; and
(b) all costs of initial construction of the Property,
and agree that the Rent to be paid by the Tenant shall be absolutely net to the
Landlord and free of any deduction, abatement, set-off, Taxes, charges, rates,
assessments, expenses, costs, payments or outgoings of every nature, save as set
out herein, and agree that the Tenant shall pay all Taxes, charges, rates,
assessments, expenses, costs, payments or outgoings of every nature relating to
the Property.
3.8 POSTDATED CHEQUES
Should the Tenant demonstrate a pattern of late Rent payments, the
Landlord may, at its option, require that the Tenant deposit with the Landlord
postdated cheques for monthly Rent instalments. Said cheques shall be dated and
be in amounts in
8
accordance with the monthly payments of Rent including without limitation Sales
Taxes and Management Fee.
3.9 INTEREST
When any payment of Rent shall not be paid when due, or when any cheque
provided by the Tenant for any payment of Rent is not upon presentment honoured
by the financial institution on which it is drawn, then the unpaid amount shall
bear interest at the rate or rates per annum equal to THE ROYAL BANK OF CANADA
prime lending rate as established from time to time plus two percentage points
from the due date until paid, except that with respect to Taxes any amounts if
unpaid by the Tenant to the Landlord by the due date shall bear a penalty and
interest charges equal to the penalty and interest charges charged by the
authority levying the Taxes, but this stipulation for interest and penalties
shall not prejudice or affect any other remedies of the Landlord under this
Lease.
3.10 RENT ABATEMENT
Paragraph 3.10 has been intentionally deleted and shall be of no effect.
ARTICLE 4. USE OF THE PROPERTY
4.1 USE OF PROPERTY
The Tenant shall use the Property for the Permitted Use, together with
such lawful uses as are ancillary and appropriate to the normal course of such
use of the Property, and for no other purpose, without the prior consent of the
Landlord, which consent the Landlord may not unreasonably withhold or delay, and
shall not permit or suffer any part of the Property to be used or occupied by
any person other than the Tenant, its employees, licensees, agents, customers,
and invitees except as permitted by this Lease.
4.2 CONDUCT OF BUSINESS
The Tenant shall only use the Property for the purposes as aforesaid, and
shall only conduct or carry on its business therein, in full compliance with all
applicable laws, regulations, requirements or guidelines in the Province of
British Columbia, including any applicable laws, regulations, requirements or
guidelines of the Federal Government of Canada or of the Government of the
Province of British Columbia or the Municipality.
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ARTICLE 5. TENANT'S COVENANTS
The Tenant Covenants with the Landlord:
5.1 RENT
To pay to the Landlord the Rent payable in accordance with this Lease in
the manner and at the times stipulated in this Lease without any deduction,
abatement or set-off whatsoever, unless expressly set out in this Lease;
5.2 UTILITIES
To pay all charges for water, light, electricity, power, gas and all
utilities supplied, delivered, provided to or made available upon the Property,
and if at any time and for any reason during the Term of this Lease, or any
extensions thereof, the Landlord is required to pay any of the foregoing, then
the Tenant shall forthwith pay to the Landlord a sum equal to the amount so
paid;
5.3 SALES TAXES
To pay to the Landlord an amount equal to the Sales Taxes related to any
payments to be made by the Tenant under this Lease, it being the intention of
the parties that the Landlord shall be fully reimbursed by the Tenant with
respect to any and all Sales Taxes. The amount of the Sales Taxes shall be
calculated by the Landlord in accordance with the applicable legislation and
shall be paid to the Landlord at the same time as the amounts to which Sales
Taxes apply are payable to the Landlord under this Lease or upon demand at such
other time or times as the Landlord may from time to time determine;
5.4 REPAIRS
To well and sufficiently, at its sole cost and expense, maintain, service
and repair (or replace components of) the Property and any Building forming part
thereof (including without limitation all Building areas, concrete floors,
partitioning, equipment, fixtures, heating, ventilation, air conditioning and
plumbing apparatus, electric lighting fixtures and equipment, parking areas,
driveways, loading areas, walkways and landscaping located thereon at the
Commencement Date or subsequently placed or done), and to maintain such in good
and sufficient repair and presentable appearance as a careful owner would do,
save and except only for:
(i) repairs and replacements for which the Landlord is responsible
as expressly provided in this Lease, and
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\ (ii) damage by fire, earthquake or Act of God or other casualty
against which and to the extent which the Property is required
to be insured;
5.5 VIEW REPAIRS
To permit the Landlord, its agents or employees, to enter and view the
state of repair, and to repair according to reasonable notice in writing except
as aforesaid;
5.6 MAKE REPAIRS
To make all repairs as required by this Lease, whether pursuant to a
notice from the Landlord or otherwise, in accordance with the reasonable
standard specifies by the Landlord and to make all repairs to the approval of
the Landlord, such approval not to be unreasonably withheld;
5.7 CONDITION AT LEASE END
At the expiration or earlier termination of this Lease to leave the
Property clean, in good repair and otherwise in the condition in which the
Tenant is required to maintain the same during the Term subject always to
reasonable wear and tear. However, the reasonable wear and tear shall not in any
way absolve the Tenant of its repair obligations contained in this Lease;
5.8 MAINTENANCE CONTRACTOR
To engage at its sole cost a bona fide maintenance contractor to provide
routine preventative maintenance and any necessary repairs to all plumbing,
heating, air conditioning and any other power or mechanical or utility systems
servicing the Property or any Building forming pert thereof and to only engage
such contractor as the Landlord has approved in writing prior to his engagement,
such approval is not to be unreasonably withheld;
5.9 GLASS
To restore forthwith at the Tenant's expense and with glass of the same
colour and quality any broken or damaged glass on the Property;
5.10 OVERLOAD
Not to bring upon the Property any machinery, vehicles, equipment, article
or thing that by reason of its weight, size or use might damage the Property or
any Building forming part thereof and not at any time to overload the floors of
any
11
Building, and if any damage is caused to the Property or any Building forming
part thereof by any machinery, equipment, article or thing brought on by the
Tenant or by any of its servants, agents or employees or any person having
business with the Tenant or by overloading or by any act, neglect or misuse on
the part of the Tenant or any of its servants, agents or employees or any person
having business with the Tenant, to forthwith repair or pay to the Landlord the
cost of making good such damage;
5.11 NUISANCE
Not to unreasonably do, suffer or permit any act or neglect which may in
any manner, directly or indirectly, cause injury or damage to the Property or
any other part thereof or to any fixtures thereon or appurtenances thereof or
which may be or become a nuisance or interference to any occupants of any
adjacent Property, or which, in the reasonable opinion of the Landlord, would
render the Property or any part thereof less desirable or injure the reputation
thereof;
5.12 ASSIGNMENT, SUBLETTING, CHANGE IN CONTROL
Not to assign, sublet or otherwise part with possession of the Property or
any part thereof or allow or suffer the Property or any part thereof to become
vested in or occupied by any person other than the Tenant for the whole or any
part of the Term without first obtaining the written consent of the Landlord,
such consent not to be unreasonably withheld. The Tenant may assign or sublet
the Property without the Landlord's prior approval to any company that is a
parent, subsidiary or an associate company of the Tenant, PROVIDED that this
paragraph shall continue to be applicable after any assignment or subletting
with respect to any further assignment or subletting. The Tenant agrees that no
assignment or subletting shall in any manner release the Tenant from any
covenant to be observed or performed on the part of the Tenant under this Lease
during the Term or any renewal thereof unless the Landlord agrees in writing to
release the Tenant. The parties agree that any transaction whereby the effective
control of the Tenant, if the Tenant is a corporate entity, changes, then such
change shall be deemed to be an assignment for the purposes of this Paragraph.
Without restricting the generality of the foregoing, the parties agree that the
Landlord can withhold consent to any assignment or subletting if the proposed
assignee or subtenant does not execute an instrument in a form satisfactory to
the Landlord agreeing to be bound by all of the terms and conditions and
agreements in this Lease to the same extent as the Tenant is bound. The Tenant
agrees that the Landlord shall not be obliged to consent to any modification of
this Lease to permit a change of use by any proposed assignee or subtenant;
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5.13 TERMINATION OPTION ON ASSIGNMENT
Paragraph 5.13 has been intentionally deleted and shall be of no effect;
5.14 BYLAWS
To abide by and comply with, at its own expense, all laws, by-laws, rules
and regulations of any Municipal or other governmental authority which in any
manner relate to or affect the business of the Tenant or the use of the Property
by the Tenant and to indemnify and save harmless the Landlord from all costs,
charges or damages to which the Landlord may be put or suffer by reason of any
breach by the Tenant of any such law, rule or regulation;
5.15 TENANT INSURANCE
To obtain and maintain in full force at the Tenant's sole expense, for the
benefit of the Landlord and the Tenant, insurance as follows:
(a) public liability and property damage insurance with respect to the
Property and the use thereof, such insurance to be in form and
amounts satisfactory from time to time to the Landlord, acting
reasonably, provided that the amount thereof shall be not less than
$2,000,000.00 inclusive for each occurrence of bodily injury or
death and property damage, and
(b) fire and extended coverage insurance on the Tenant's improvements to
the replacement cost thereof;
which policies of insurance shall name the Landlord as an additional insured
thereunder and shall be in a form satisfactory, and with insurers acceptable, to
the Landlord acting reasonably, and the Tenant shall deliver to the Landlord
certificates of all such policies of insurance and furnish certificates of
renewal of such insurance not less than five days prior to the expiration of any
such policy or policies. All policies of insurance shall contain a clause or
endorsement to the effect that they may not be terminated, or materially amended
or altered, for any reason except after ten days written notice thereof to the
Landlord. As often as any policies of insurance shall expire or terminate, the
Tenant shall procure renewal or additional policies on the same terms and will
provide proof of such renewal or additional policies no later than ten days
before the expiry of the then existing policy;
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5.16 BLANKET INSURANCE
The Tenant may at its option bring its obligations to insure under this
Lease within the coverage of any blanket policy or policies of insurance which
it may now or hereafter carry, by appropriate amendment, rider endorsement, or
otherwise, so long as the interest of the Landlord shall be as fully protected
thereby as if the Tenant had obtained individual policy or policies of insurance
as required in the immediately preceding Paragraph;
5.17 LANDLORD INSURANCE
To pay to the Landlord, forthwith as requested by the Landlord as part of
the Operating Expenses, the cost of insurance reasonably placed by the Landlord
with respect to the Property and all improvements thereon and any interest or
liability the Landlord has with respect thereto against loss by fire, broad
extended coverage perils, malicious damage, public liability and such other
coverages as the Landlord may reasonably desire and in such amounts as the
Landlord may reasonably desire including, without limitation, loss of rental
income arising from damage or destruction to the Property, all for the benefit
of the Landlord from time to time during the Term this Lease and any extensions
thereof. The Landlord may, at its option, bring its obligations to provide
insurance to be paid for pursuant to this Paragraph within the coverage of any
blanket policy or policies of insurance which it may now or hereafter carry by
appropriate amendment, rider endorsement, or otherwise, so long as such
insurance provides substantially the same benefit as if the Landlord had
obtained individual policy or policies of insurance. If the Landlord brings its
insurance obligations within the coverage of any blanket policy as aforesaid,
the cost of insurance for the purposes of determining the amount to be paid by
the Tenant shall equal an amount which the Landlord's insurance agent advises is
the Landlord's proportionate share of premiums under the blanket for the
Property. When such policy or policies of insurance shall expire or terminate,
the Landlord shall procure renewal or additional policies;
5.18 INCREASED INSURANCE
Not to do or permit anything to be done whereby any policy of insurance on
or relating to the Property may become void or voidable. If the Landlord in its
sole discretion agrees to permit a usage of the Property which, in accordance
with the advice from the Landlord's insurance agent, increases the cost of any
insurance relating to the Property, the Tenant shall pay to the Landlord the
amount by which the insurance premiums shall be so increased. If the Landlord
receives notice of cancellation respecting any insurance policy or if any
insurance policy upon any Building on the
14
Property or relating to any other part of the Property is cancelled or an
insurer refuses to renew it by reason of the use or occupation of the Property
or any part thereof by the Tenant or by any assignee or sub-lessee of the Tenant
or by anyone permitted or suffered by the Tenant to be upon the Property,
whether with or without the Landlord's consent, the Tenant shall remedy or cease
such use or occupation forthwith upon the Landlord's written demand to do so and
if the Tenant fails to do so forthwith or fails forthwith to procure equivalent
insurance to that cancelled or refused, the Landlord may, at its option,
forthwith terminate this Lease and the Tenant shall thereupon immediately
deliver up vacant possession of the Property to the Landlord;
5.19 UNINSURED DAMAGE
If, during the Term of this Lease and any renewals thereof, any part of
the Property (including without limitation water pipes, drainage pipes, electric
equipment, boilers, engines, any other apparatus or equipment which may be used
for the purpose of heating or air conditioning of any Building on the Property,
the roof, stairways, passageways, entrances, inside or outside walls) get out of
repair or become damaged or destroyed due to the negligence, or misuse or
carelessness of the Tenant, those for whom it is, in law, responsible, or anyone
permitted by it to be on the Property, or if through such lack of repair, damage
or destruction there is any damage or injury to the Building or any other part
of the Property, to pay to the Landlord forthwith upon demand, the expense of
the necessary repairs, replacements or alterations;
5.20 REFUSE
Not to permit the Property or any part thereof to become untidy, unsightly
or hazardous or permit unreasonable quantities of waste or refuse to accumulate
thereon and to comply with all laws, by-laws and regulations applicable thereto,
including without limitation any reasonable rules and regulations stipulated by
the Landlord to be of general application to the Property, but this Paragraph
shall not impose any obligation on the Tenant in respect of the initial
construction obligations of the Landlord under this Lease;
5.21 LIENS
Not to suffer or permit any builders' liens for work, labour, services or
material ordered by the Tenant or for the cost of which the Tenant may be in any
way obligated during the Term of this Lease or any extensions thereof to attach
to the Property or any part thereof and that whenever any such lien shall attach
or claim therefor shall be filed, and within ten days after the Tenant has
notice of the claim for liens, to procure the discharge thereof by payment or by
giving security therefor in such manner as is or may
15
be required or permitted by law. The Tenant agrees to allow the Landlord to post
and keep posted on or about the Property and any Building thereon any notice
which the Landlord may wish to post under the provisions of the Builders' Lien
Act or any legislation which may replace this Act;
5.22 CLAIM WAIVER
To waive all claims against the Landlord for damage to goods, wares and
merchandise in, upon or about the Property or any part thereof and for injuries,
including death resulting at any time therefrom, to persons in or about the
Property from any cause whatsoever arising at any time, save and except for such
claims, notion or causes of action as are caused by the negligence or wilful
misconduct of the Landlord or those for whom it is, in law, responsible;
5.23 INDEMNITY FROM TENANT
To indemnify and save harmless the Landlord from and against any and all
costs, damages, actions or causes of action which the Landlord may sustain,
incur or be put to by reason of or arising out of the use or occupation of the
Property and the exercise of any right pursuant to this Lease by the Tenant,
other than those caused by the negligence or wilful act or breach by the
Landlord, or those for whom the Landlord is in law responsible, of this Lease or
of any other agreement between the parties;
5.24 FURNACE
To the extent possible, to operate every furnace employed in the working
of engines by steam or other motive power and every other furnace or heating
device employed in any Building on the Property or on the Property so as
substantially to consume or burn the smoke produced by such furnace or heating
device and will not use or suffer to be used negligently any such furnace or
heating device and will ensure that the smoke produced therefrom is
substantially consumed or burned and will not cause or permit grit, dust or
noxious or offensive effluvia to be emitted from any engine, furnace or
apparatus on the Property contrary to any law and will use the best practical
means reasonably available for prevention or counteracting such emission,
provided that the Tenant shall not be in breach of this paragraph if the heating
equipment provided in the Building does not permit compliance with such laws as
aforesaid;
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5.25 AUCTION
Not at any time permit any sale by auction to be held upon the Property or
any part thereof without the consent in writing of the Landlord, such consent
not to be unreasonably withheld;
5.26 DEFAULT COSTS
If any payment of Rent shall not be paid when due, or if any cheque
provided by the Tenant for any payment of Rent, upon presentation, is not
honoured by the financial institution on which it is drawn, or if the Landlord
has given to the Tenant written notice of a breach of any of the agreements or
covenants made by the Tenant, and if applicable a reasonable time within which
to remedy such breach, to pay to the Landlord all reasonable costs, charges and
expenses, including without limitation any actual solicitor fees, incurred by
the Landlord for the purpose of or incidental to the preparation and service of
any such notice or of any further notice or of any proceedings to enforce the
Landlord's right under this Lease;
5.27 TAXES
To pay to the Landlord during the Term or any renewal thereof, in advance,
in equal consecutive monthly instalments and payable on the dates the monthly
instalments of the Basic Annual Rent are payable, all Taxes that are directly
attributable to the Property;
5.28 TAX ESTIMATE
The amount of Taxes as aforesaid may be estimated by the Landlord, acting
reasonably, for each year of the Term and if the Landlord furnishes to the
Tenant an estimate of such Taxes the Tenant shall pay to the Landlord such
estimated Taxes in equal monthly instalments in advance as aforesaid during such
year of the Term. The Landlord may, if during the course of any such year of the
Term there shall be an increase or decrease in the Landlord's estimate of such
Taxes for such year of the Term, adjust its estimate and, upon the Tenant being
notified of such adjustment, the Tenant's monthly instalments of such estimated
share of Taxes from and including the instalment next due after the giving of
notice of adjustment shall be adjusted in accordance with the Landlord's notice.
When the Taxes for such year of the Term are finally determined by the Landlord,
the Landlord shall furnish the Tenant with a statement showing the actual amount
of the Taxes for such year of the Term and the Landlord and Tenant covenant and
agree each with the other that if an overpayment of such Taxes has been made by
the Tenant the Landlord shall credit such amount to such Taxes for the next
17
following year of the Term and if there is no such next following year of the
Term, the Landlord shall repay the amount of such overpayment to the Tenant and
if an amount remains owing to the Landlord in respect of such Taxes the Tenant
shall forthwith pay such amount to the Landlord;
5.29 TAX ADJUSTMENT
If the Tenant has paid the Taxes for a particular tax year and the
Landlord thereafter receives a refund of any portion of such Taxes, the Landlord
shall make an appropriate refund to the Tenant;
5.30 IMPROVEMENT TAXES
To pay when due all taxes, rates, duties and assessments now charged or to
be charged against these improvements on the Property deemed to be fixtures,
machinery and similar things of a commercial or industrial undertaking which may
be removed by the Tenant;
5.31 TENANT'S BUSINESS TAXES
To pay when due all taxes, rates, duties and assessments now charged or to
be charged to the Tenant against the Tenant's personal property on the Property
or with respect to this Lease, rental, carrying on of business at or use or
occupancy of the Property, other than the income tax of the Landlord;
5.32 PROOF OF TAX PAYMENT
Upon written request of the Landlord to promptly deliver to the Landlord
for inspection, receipts for payment of all the Tenant's taxes. The Tenant may
contest the amount or validity of any such taxes, rates, levies and assessments
by appropriate legal proceedings but this shall not be deemed or in any way
construed as relieving, modifying or extending the Tenant's covenant to pay any
such taxes, rates, levies and assessments at the time and in the manner
provided;
5.33 REIMBURSE LANDLORD
To reimburse the Landlord forthwith upon demand, for all costs incurred by
the Landlord in making good any damage caused to the Building or any part of the
Property as a result of the negligence or wilful act of the Tenant, those for
whom it is, in law, responsible or other persons from time to time in or about
the Property and to reimburse the Landlord forthwith on demand for any payments
made by the Landlord
18
on behalf of the Tenant which are the Tenant's responsibility to pay under this
Lease and to pay to the Landlord any monies due pursuant to Paragraph 8.4
hereof;
5.34 OPERATING EXPENSES
To pay to the Landlord, during each year of the Term, in advance, in equal
consecutive monthly instalments payable on the dates the monthly instalment of
Basic Annual Rent is payable, the Operating Expenses. The amount of Operating
Expenses may be estimated by the Landlord, acting reasonably, for each year of
the Term and the Landlord shall furnish to the Tenant an estimate of such
Operating Expenses and the Tenant shall pay to the Landlord such estimated
Operating Expenses in monthly instalments in advance as aforesaid during such
year of the Term. The Landlord, acting reasonably, may, if during the course of
any such year of the Term there shall be any increase or decrease in the
Landlord's estimate of such Operating Expenses for such year of the Term, adjust
its estimate and upon the Tenant being notified of such adjustment the Tenant's
monthly instalments of such estimated Operating Expenses from and including the
instalment next due after the giving of notice of adjustment shall be adjusted
in accordance with the Landlord's notice;
5.35 OPERATING EXPENSES RECONCILIATION
When the Operating Expenses for a year of the Term are finally determined
by the Landlord, the Landlord shall furnish the Tenant with a statement showing
the actual amount of the Operating Expenses for such year of the Term and the
Landlord and Tenant covenant and agree that if any overpayment of such Operating
Expenses has been made by the Tenant the Landlord shall credit such amount to
such Operating Expenses for the next following year of the Term and if there is
no such next following year of the Term such amount shall be paid forthwith by
the Landlord to the Tenant and if an amount remains owing to the Landlord in
respect of such Operating Expenses the Tenant shall forthwith pay such amount to
the Landlord. In the event of a dispute as to any amount payable by the Tenant
as Operating Expenses, the dispute will be referred to a single arbitrator in
accordance with the provisions of the Commercial Arbitration Act whose decision
will be conclusive and binding upon both the Landlord and the Tenant;
5.36 MANAGEMENT FEE
To pay to the Landlord, concurrently with the payment of Basic Annual
Rent, (the "Management Fee") in the amount equal to the percentage of the Basic
Annual Rent as outlined in Subparagraph 1.3(m); and
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5.37 PAYMENT BY LANDLORD
If the Landlord is required by lawful authority or considers it desirable
to pay the Tenant's improvement taxes or business taxes payable by the Tenant
pursuant to Paragraph 5.30 and/or 5.32 which the Tenant fails or neglects to
pay, the Tenant shall pay the amount thereof to the Landlord forthwith after
written request therefor.
ARTICLE 6 LANDLORD'S COVENANTS
The Landlord covenants with the Tenant:
6.1. QUIET ENJOYMENT
For quiet enjoyment;
6.2 TITLE
That the Landlord has good and marketable title to the Property and that
it has the right to enter into this Lease;
6.3 TAXES
To pay or cause to be paid all Taxes, rates and assessments now or
hereafter levied, rated or assessed against the Property including, without
limiting the generality of the foregoing, sewer taxes and charges, but this
Paragraph 6.3 does not alter any obligations of the Tenant under any of the
Provisions of Article 5;
6.4 REPAIRS
To repair, replace and keep in repair as may be necessary, the roof deck
(excluding non-structural components), the exterior and structure of the
Building forming part of the Property, and to make all necessary structural
repairs and replacements to the Building and such other maintenances and repairs
as the Landlord shall think fit from time to time. The cost of such repairs,
maintenance and replacements shall be borne by the Tenant as provided for in
Article 5 hereof save for structural repairs required by reason of inherent
structural defects which repairs shall be made at the sole expense of the
Landlord;
6.5 INSURANCE
To insure the Building forming part of the Property and any interest or
liability the Landlord has with respect to the Building and the Property,
against loss by fire, broad extended coverage perils, malicious damage, public
liability and such other
20
coverages as the Landlord may reasonably desire in such amounts as the Landlord
may reasonably desire including, without limitation, loss of rental income. The
expense of such insurance shall be borne by the Tenant as provided for in
Article 5 hereof. Each policy of insurance will contain a waiver of the
Landlord's insurer's right of subrogation with respect to any claims against the
Tenant, its officers, directors and employees;
6.6 SUPPLIER'S WARRANTIES
That with respect to repairs for which the Landlord is not responsible
hereunder, the Landlord shall make available and hereby assigns to the Tenant
the benefit of any manufacturer's, supplier's or installer's warranties relating
to the Property;
6.7 COMPLIANCE WITH LAWS
To construct the Building in compliance with all applicable federal,
provincial and Municipal laws, regulations, bylaws, regulations and building
codes; and
6.8 COMPLIANCE WITH NON-FINANCIAL CHARGES
The Landlord represents, warrants and covenants that the Property as at
the Commencement Date will be in compliance with all of the terms and conditions
of the non-financial charges registered against the Property set out in Schedule
"B" hereto.
ARTICLE 7 IMPROVEMENTS AND ALTERATIONS
7.1 ALTERATIONS
The Tenant shall not make any major alterations, additions or improvements
in or to any improvements on the Property, nor erect, construct or install upon
the Property alterations or improvements in addition to those located thereon on
the Commencement Date or on the Availability Date (whichever is earlier),
without obtaining the Landlord's prior written consent, such consent not to be
unreasonably withheld or delayed, PROVIDED HOWEVER, that in the case of very
minor alterations and improvements such consent will not be required. All such
work shall be done at the Tenant's sole expense and at such times and in such
manner as the Landlord, acting reasonably, may approve and in accordance with
all applicable laws, bylaws and regulations.
7.2 RESTORATION
In the event that any alterations, additions or improvements are made to
the Property by the Tenant, the Tenant shall, on the written request of the
Landlord, restore
21
the Property to its original condition not later than 15 days prior to the
expiration or other termination of this Lease or of any extension thereof. The
Tenant agrees that if the Landlord by written notice to the Tenant requires
that:
(a) some or all of the alterations, additions and improvements to the
Property, other than moveable business or trade fixtures, equipment
and chattels, remain, then they shall remain as absolute property of
the Landlord without any compensation to the Tenant;
(b) the Tenant restore the Property to the condition it was in on the
earlier of the Commencement Date or the Availability Date, whichever
is earlier, to such extent as the Landlord may require while
retaining the alterations, additions and improvements specified by
the Landlord in the notice, then the Tenant shall restore in
accordance with the Landlord's notice, without in any case any
compensation to the Tenant therefor. If the Tenant does not restore
the Property forthwith after written notice by the Landlord to that
effect, the Landlord may restore same at the expense of the Tenant
and the Tenant shall, upon written demand, forthwith pay to the
Landlord the cost of such restoration.
7.3 REMOVAL OF GOODS
All articles of personal property and all business and trade fixtures,
machinery and equipment and furniture owned by the Tenant or installed by the
Tenant in the Property at the Tenant's expense shall remain the property of the
Tenant and may, provided the Tenant is not in uncured default hereunder, be
removed by the Tenant at any time during the Term of this Lease. The Landlord
may require the Tenant to remove all or any part of such property at the
expiration of this Lease or any renewals thereof. In all cases the Tenant, at
its own expense, shall repair any damage to the Property caused by such removal
or by the original installation. If the Tenant does not remove its property
forthwith after written notice by the Landlord to that effect, such property
shall, if the Landlord so elects, be deemed to become the Landlord's property or
the Landlord may remove the same at the expense of the Tenant and the Tenant
shall on written demand forthwith pay to the Landlord the cost of such removal
and any necessary storage charges. The Landlord shall not be responsible for any
loss or damage to such property because of such removal.
22
ARTICLE 8 GENERAL INDEMNIFICATION AND LIMITATION OF LIABILITY
8.1 LANDLORD NOT LIABLE
The parties agree that the Landlord shall not be liable for:
(a) any injury, or death resulting at any time from such injury, to the
Tenant, any agent or employee of the Tenant, any person visiting or
doing business with the Tenant or any other person; or
(b) damage to any property belonging to the Tenant or to any agent or
employee of the Tenant, or to the property of any person visiting or
doing business with the Tenant or to that of any other person while
such property is on the Property, whether such property has been
entrusted to any employee or agent of the Landlord or not,
and without limiting the generality of the foregoing the Landlord shall not be
liable for any loss, injury (and death resulting at any time therefrom), damage
or expense resulting from fire, explosion, falling plaster, steam, gas,
electricity, water, rain or snow or overflow or leakage of water from any part
of the Property or any the Building or Buildings located on the Property or from
pipes, appliances, drains or plumbing works or from the roof, street or
subsurface or from any other place, or in any other manner, or by seepage from
adjoining lands or by any accident or misadventure to or arising from the use
and operation of machinery, elevator, heating apparatus, electrical wiring and
appliances, gas or other pipes and appliances or any other fixtures, whether or
not such damage is incurred by the act, or default of the Landlord or those for
whom it is, in law, responsible and in any manner whatsoever, save and except
for the negligence or wilful misconduct or breach of this Lease by the Landlord
or those for whom it is, in law, responsible.
8.2 CONSEQUENTIAL DAMAGE
Under no circumstances shall the Landlord be liable for indirect or
consequential damage, or damages for personal discomfort or illness, by reason
of the non-performance or partial performance of any covenants of the Landlord
herein contained, including the heating of the Building or the operation of the
air-conditioning equipment, plumbing or other equipment in the Building or on
the Property, save and except where such damages are caused by the negligence or
wilful default by the Landlord of any of the terms of this Lease.
23
8.3 RECIPROCAL INDEMNITY
The Tenant agrees to indemnify and save the Landlord harmless and the
Landlord agrees to indemnify and save the Tenant harmless for and from all
expense, damage, loss or fines incurred or suffered by reason of any breach,
violation or non-performance of any covenant or provision of this Lease and by
reason of damage to persons or property caused by the Tenant or the Landlord,
their employees, or agents or persons visiting or doing business with the Tenant
in respect of or on the Property.
8.4 LANDLORD RIGHT TO PERFORM TENANT'S COVENANT
If the Tenant shall fail to perform or cause to be performed each and
every one of the covenants and obligations of the Tenant in this Lease
contained, on the part of the Tenant to be observed and performed the Landlord,
acting reasonably, shall have the right (but shall not be obligated) to perform
or cause the same to be performed and to do or cause to be done such things as
may be necessary or incidental thereto (including without limiting the
foregoing, the right to make repairs, installations, erections and expend
moneys) and all payments, expenses, charges, fees (including all reasonable
legal fees on solicitor and client basis) and disbursements reasonably incurred
or paid by or on behalf of the Landlord in respect thereof shall be paid by the
Tenant to the Landlord forthwith. Without limitation to the generality of the
foregoing if the Tenant shall fail to repair in accordance with the provisions
of this Lease, the Landlord, its agents or employees, acting reasonably may
forthwith enter the Property and make the required repairs and for that purpose
the Landlord may bring and leave upon the Property all necessary tools,
materials and equipment and the Landlord shall not be liable to the Tenant for
any inconvenience, annoyance or loss of business or any injury or damages
suffered by the Tenant by reason of the Landlord effecting such repairs and the
expense of such repairs shall be borne by the Tenant who shall pay same to the
Landlord forthwith upon demand.
ARTICLE 9 SUBORDINATION AND STATUS CONFIRMATION
9.1 SUBORDINATION
If required by the Landlord so to do, the Tenant shall subordinate this
Lease to any mortgages, including any deed of trust and mortgage and all
indentures supplemental thereto, or other encumbrance or encumbrances, together
with any renewal, extensions or replacements thereto, which now or hereafter
during the said Term of this Lease, affect or relate to the Property, PROVIDED
that any such subordination shall be on terms whereby the Tenant is entitled to
remain in possession of the Property while not in default under this Lease and
such Mortgagee, trustee or
24
other encumbrancer enters into a non-disturbance agreement with the Tenant. The
Tenant agrees to execute promptly, and within a period of 10 days of being so
requested by the Landlord at any time and from time to time, any documents or
assurances which the Landlord may reasonably require to confirm such
subordination, PROVIDED ALWAYS, that so long as the Tenant is not in default
under any of the terms, covenants or conditions of this Lease, neither this
Lease nor any of the rights of the Tenant hereunder shall be terminated or
subject to termination by reason of the bankruptcy of the Landlord or any action
or proceeding for foreclosure.
9.2 ESTOPPEL CERTIFICATES
At any time and from time to time within ten business days after a written
request by the Landlord, the Tenant will execute, acknowledge and deliver to the
Landlord or such assignee, Mortgagee, proposed purchaser or other person as the
Landlord designates, a certificate in a form and content reasonably requested by
the Landlord which certificate shall include, without limitation, a statement
that:
(a) this Lease is unmodified and in force and effect in accordance with
its terms (or if there have been modifications, that this Lease is
in force and effect as modified, and identifying the modification
agreements) or if this Lease is not in force and effect, that it is
not and whether or not the Tenant is in possession of the Property;
(b) the date to which Rent has been paid under this Lease, with
particulars of any prepayment of Rent;
(c) whether or not there is an existing default by the Tenant in the
payment of Rent or any other sum of money under this Lease, and
whether or not there is any other existing default by any party
under this Lease with respect to which a notice of default has been
served or could be served, and if there is such a default specifying
its nature and extent; and
(d) whether or not there are any set-offs, defence or counterclaims
against the enforcement of the obligations to be performed by the
Tenant under this Lease.
ARTICLE 10 DAMAGE TO THE PROPERTY
10.1 DAMAGE
If during the Term the Property or the Building or any part thereof shall
be damaged or destroyed by fire, or by any of the other perils insured against
by the
25
Landlord or insured against by the Tenant under the provisions of this Lease,
then in such event:
(a) if the damage or destruction is such that it does not render the
Property wholly unfit for the use for which it is hereby demised,
then this Lease shall remain in full force and effect but until such
damage or destruction has been repaired to the extent of enabling
the Tenant to use and occupy the whole of the Property, the Rent
shall abate proportionately having regard to the fair market rental
value of the part of the Property which remains fit for occupancy
and the fair market rental value of the whole of the Property. The
Landlord shall have no obligation or liability whatsoever to the
Tenant, and the Tenant shall not be entitled to nor recover any
damages whatsoever against the Landlord, for any loss occasioned by
the said damage or destruction, but the Landlord shall, with
reasonable diligence after the occurrence of the event causing said
damage and to the extent that insurance proceeds are available for
that purpose, cause the Property to be repaired to the same general
condition in which it existed at the time of such damage or
destruction;
(b) if the damage or destruction is such that the Property is rendered
wholly unfit for occupancy or it is impossible or unsafe to use and
occupy the same and if in either event the damage or destruction
can, in the opinion of the Landlord's Architect, be repaired with
reasonable diligence within 180 days from the happening of such
damage or destruction, then, if such damage or destruction can be
repaired for the amount of the net proceeds of available insurance,
this Lease shall remain in full force and effect and the Landlord
shall, with reasonable diligence, cause such damage or destruction
to be repaired and the Rent hereby reserved shall abate from the
date of the happening of such damage or destruction until the date
the damage or destruction is made good to the extent of enabling the
Tenant to use and occupy the Property;
(c) if the damage or destruction is such that the Property is rendered
wholly unfit for occupancy or it is impossible or unsafe to use and
occupy the same and if in either event the damage or destruction
cannot in the opinion of the Landlord's architect be repaired with
reasonable diligence within 180 days from the happening of such
damage or destruction, then the Landlord or the Tenant may, within
30 days next following the date of such damage or destruction
terminate this Lease by giving notice in writing to the other party
of such termination, in which event this Lease and the Term shall
cease and be at an end as of the date of such damage
26
or destruction and the Rent and all other payments for which the
Tenant is liable under the terms of this Lease shall be apportioned
and paid in full to the date of such damage or destruction and any
necessary refund shall be made with respect to payments already
made;
(d) if neither party shall exercise its option to terminate the Lease
as provided in the immediately preceding Subparagraph and if the
damage or destruction can be repaired for the amount of the net
proceeds of the said insurance, this Lease shall remain in full
force and effect and the Landlord shall, if such damage or
destruction can be repaired for the amount of the net proceeds of
available insurance, with reasonable diligence and without avoidable
delay, cause such damage or destruction to be repaired and the Rent
hereby reserved shall abate from the date of the happening of such
damage or destruction until the date when the Landlord makes the
Property available to the Tenant to resume occupancy; and
(e) if the damage or destruction is such that it does not render the
Property wholly unfit for the use for which it is hereby demised and
if the Landlord and Tenant are unable to agree on the respective
fair market rental value of the part of the Property which remains
fit for occupancy and the fair market rental value of the Property,
for the purposes of calculating the rental abatement proportion, the
matter shall be referred to a sole arbitrator in accordance with the
Commercial Arbitration Act of British Columbia, and the cost of the
arbitration shall be borne equally by the Landlord and Tenant. Fair
market rental value to be determined by arbitration shall be based
on the then current fair market rent for similar premises in similar
locations and shall be based on the use specified under this Lease.
10.2 DAMAGE DUE TO TENANT'S ACTS
If the damage or destruction referenced in the immediately preceding
Paragraph is due to the negligence or overt acts of the Tenant or its agents
and/or servants or others for whose acts the Tenant is at law responsible, then
notwithstanding anything to the contrary hereinbefore contained, and so often as
the same shall occur:
(a) The Landlord may at its option and without prejudice to any rights
of action it may have against the Tenant either:
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(i) forthwith rebuild and make the Property fit for the purposes
of the Tenant, or
(ii) by notice in writing mailed to the Tenant at its last known
address forthwith terminate this Lease and may thereafter deal
with the Property as fully and effectually as if this Lease
had not been entered into;
(b) If the Landlord shall rebuild and make the said Property fit for the
purposes of the Tenant, the Tenant shall continue to pay Rent to the
landlord as hereinbefore provided notwithstanding that the Property
may have been wholly or partly unusable as a result of such damage
or destruction.
10.3 DAMAGE TO IMPROVEMENTS
If any damage occurs to the Tenant's improvements in the Property, the
Tenant covenants to repair such damage or replace the damaged improvements, as
applicable, all to a standard specified by the Landlord acting reasonably, and
the Tenant covenants to utilize for that purpose the proceeds of the insurance
referenced in subparagraph 5.15(ii) if they are made available by the Landlord
for that purpose.
ARTICLE 11 EXPROPRIATION
11.1 EXPROPRIATION
If any part of the Property shall be taken or expropriated for a public or
quasi-public use, and a part thereof remains which is suitable for the use for
which it is hereby demised, then this Lease shall, as to the part so taken,
terminate as of the date title shall vest in the expropriator and the Rent
payable hereunder shall be adjusted so that the Tenant shall be required to pay
for the remainder of the Term only such portion of such rent as the value of the
part remaining after the expropriation bears to the value of the entire Property
at the date of expropriation. If the parties cannot agree on this value, either
the Landlord or the Tenant may submit the determination of the value to binding
arbitration by a sole arbitrator in accordance with the Commercial Arbitration
Act of British Columbia. If all of the Property is to be taken or expropriated,
or so much thereof that the aforesaid use by the Tenant shall be substantially
impaired, this Lease, at the Tenant's option exercisable by written notice
delivered by the Tenant within ten days after the taking or expropriation, shall
terminate upon the expiry of that ten day period. All compensation awarded or
granted upon any such expropriation or taking shall go to the Landlord and the
Tenant as their interests may appear.
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ARTICLE 12 BANKRUPTCY, INSOLVENCY OR EXECUTION
12.1 INSOLVENCY
In the event that:
(a) the Term hereby granted or any part of it or any of the goods or
chattels of the Tenant shall be at any time seized or taken in
execution or in attachment by any creditor of the Tenant; or
(b) the Tenant shall become insolvent or take the benefit of any Act for
bankrupt or insolvent debtors, or being an incorporated company, if
proceedings be begun to wind up the said company, whether
compulsorily or voluntarily; or
(c) an order for winding up or other termination of its corporate
existence is made; or
(d) the Property or any part thereof become vacant or unoccupied for a
period of 30 days, or is used by any person or persons other than
the Tenant, or for any other purpose than as herein provided,
without the written consent of the Landlord; or
(e) a receiver or receiver-manager with respect to the Tenant or any
property of the Tenant is appointed, whether privately or
judicially, and whether or not such receiver or receiver manager
takes or obtains possession of any property of the Tenant,
then and in every such case, at the option of the Landlord, the then current
month's Rent and the Rent for the three months next following calculated at the
same rate as would have been payable by the Tenant had no such event taken
place, shall immediately become due and payable and this Lease shall, at the
option of the Landlord, cease and be void and the Term hereby created expire and
be at an end, anything herein to the contrary notwithstanding, and the Landlord
may re-enter and take possession of the Property as though the Tenant or its
servants or other occupant or occupants of the Property were holding over after
the expiration of the said Term, and the Term shall be forfeited and void.
12.2 DETERMINABLE LEASE
This Lease is entered into on the condition, and it is a term of this
Lease, that this Lease and the tenancy created by it shall be automatically
determined by, and the
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Term shall automatically expire upon the making of, a receiving order against
the Tenant pursuant to the provisions of the Bankruptcy and Insolvency Act or
the Tenant making an assignment pursuant to that Act, to the same extent and
effect as if the date of such court order or of the making of the assignment had
been the date set for the expiration of the Term.
ARTICLE 13 DEFAULT
13.1 DEFAULT
If and whenever:
(a) the Rent payable hereunder or any part of, whether the same is
demanded or not, is not paid when due and remains unpaid for 3 days
after written notice thereof to the Tenant; or
(b) there is a breach or non-observance or non-performance by the Tenant
of any covenant, agreement or stipulation herein contained on the
Tenant's part to be kept, performed and observed, and any such
default on the part of the Tenant shall continue for 10 days after
written notice thereof to the Tenant;
then and in every such case, the Landlord, in addition to any other remedy now
or hereafter provided herein or by law, at its option may:
(c) re-enter and relet the Property as more particularly set forth in
the immediately following Paragraph; or
(d) terminate and cancel the Lease forthwith and take possession of the
Property,
without any previous notice of intention to re-enter, and may remove all persons
and property from the Property and may use such force and assistance for the
purposes as aforesaid as the Landlord may deem advisable and such re-entry shall
not operate as a waiver or satisfaction in whole or in part of any right, claim
or demand arising out of or connected with any breach or violation by the Tenant
of any covenant or agreement on its part to be performed. The Tenant hereby
waives all claims for damage to or loss of any of the Tenant's property caused
by the Landlord in re-entering and taking possession of the Property.
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13.2 RIGHT TO RELET
Should the Landlord elect to re-enter, as herein provided, or should it
take possession pursuant to legal proceedings or pursuant to any notice provided
for by law, it may either terminate this Lease or it may from time to time
without terminating this Lease make such alterations and repairs as may be
necessary in order to relet the Property, and may relet, as agent of the Tenant,
the Property or any part thereof for such term or terms which may be for a term
extending beyond the Term of this Lease) and at such rent and upon such other
terms and conditions as the Landlord, acting reasonably, in its sole discretion,
may deem advisable. Upon each such reletting all rent received by the Landlord
from such reletting for the unexpired portion of the Term shall be applied,
first, to the payment of any costs and expenses of such reletting, including
brokerage fees and solicitor's fees and of costs of such alterations and
repairs; second, to the payment of Basic Annual Rent and Additional Rent due and
unpaid hereunder; and the residue, if any, shall be held by the Landlord and
applied in payment of future Basic Annual Rent and Additional Rent as the same
may become due and payable hereunder. If such payments received from such
reletting during any month are less than that to be paid during that month by
the Tenant hereunder, the Tenant shall pay such deficiency to the Landlord. Such
deficiency shall be calculated and paid monthly. No such re-entry or taking
possession of the Property by the Landlord shall be construed as an election on
its part to terminate this Lease unless a written notice of such intention is
given to the Tenant. Notwithstanding any such reletting without termination, the
Landlord may at any time thereafter elect to terminate this Lease for such
previous breach.
13.3 RIGHT TO TERMINATE
If the Landlord at any time terminates this Lease for any breach, in
addition to any other remedies it may have, it may recover from the Tenant all
damages it may incur by reason of such breach, including the cost of recovering
the Property, reasonable solicitor's fees, including the worth at the time of
such termination of the excess, if any, of the amount of Basic Annual Rent and
Additional Rent charges equivalent to Basic Annual Rent and Additional Rent
reserved in this Lease for the remainder of the stated Term over the then
reasonable rental value of the Property for the remainder of the stated Term,
all of which amounts shall be immediately due and payable by the Tenant to the
Landlord.
13.9 NO RELEASE OF LIABILITY
No action taken by the Landlord in pursuance of this Article, whether
under what are generally known as summary proceedings or otherwise, shall
absolve, relieve
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or discharge the Tenant from any liability under this Lease and the terms of
this Paragraph shall extend and apply to all covenants and agreements on the
part of the Tenant, whether positive or negative.
ARTICLE 14 OVERHOLDING
14.1 OVERHOLDING
If the Tenant shall continue to occupy the Property after the expiration
of the Term hereby granted or any extensions thereof without the prior written
consent of the Landlord, the new tenancy thereby created shall be deemed to be a
monthly tenancy and shall be subject to the covenants and conditions contained
in this Lease insofar as the same are applicable to a tenancy from month to
month, save and except that the Basic Annual Rent shall be as set forth in the
immediately following Paragraph.
14.2 OVERHOLDING RENT
If a monthly tenancy is created pursuant to the immediately preceding
Paragraph the Tenant shall pay to the Landlord monthly payments on account of
the Basic Annual Rent in an amount equal to 150% of the monthly payments on
account of the Basic Annual Rent payable during the last Lease Year of the Term
before the creation of the monthly tenancy. Additional Rent shall continue to be
paid by the Tenant in accordance with the terms of this Lease.
ARTICLE 15 NON-WAIVER AND CUMULATIVE REMEDIES
15.1 NO WAIVER
The failure of the Landlord to insist upon strict performance of any
covenant, condition or agreement contained in this Lease or to exercise any
right or option under this Lease shall not be construed nor operate as a waiver
or relinquishment for the future of any such covenant, condition, right or
option and no waiver shall be inferred from or implied by anything done or
omitted by the Landlord, save only express waiver in writing.
15.2 RENT FROM THIRD PARTY
The acceptance of any rent or the performance of any obligation hereunder
by a person other than the Tenant shall not be construed as an admission by the
Landlord of any right, title or interest of such person as a sub-tenant,
assignee, transferee or otherwise in the place and stead of the Tenant.
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15.3 CUMULATIVE REMEDIES
All remedies of the Landlord under this Lease are cumulative and the
exercise by the Landlord of any right or remedy for the default or breach of any
term, agreement or covenant shall not be deemed to be a waiver of or to alter or
prejudice any other right or remedy to which the Landlord may be lawfully
entitled for the same default or breach.
ARTICLE 16 ADVERTISING SIGNS
16.1 ADVERTISING SIGNS
The Tenant will not at any time during the Term hereby granted affix or
exhibit or permit to be affixed or exhibited upon any part of the Property any
sign or other advertising device or other matter or thing of whatever nature
except such as shall have complied with all by-laws and regulations applicable
thereof and first been approved in writing by the Landlord, such approval not to
be unreasonably withheld, and the Tenant shall at all times ensure that such
signs or advertising devices are thereafter in accordance with such design and
specifications as the Landlord has approved. The Landlord at all times
hereinafter will be at liberty to examine the said signs or devices and the
Tenant will repair, renew, repaint or strengthen the same upon notice from the
Landlord, if the same is required in the Landlord's opinion and if the Tenant
shall fail to comply with such notice, the Landlord shall be at liberty to
repair, renew, repaint or strengthen such signs or devices and the Tenant shall
forthwith upon demand pay to the Landlord the cost, charges and expenses of such
renewal, repainting and/or strengthening, but the giving of such notice and the
undertaking of such repairs or strengthening by the Landlord shall not be deemed
an acknowledgement or admission of any liability or responsibility on the part
of the Landlord.
16.2 INDEMNITY TO LANDLORD
The Tenant agrees to indemnify and save harmless the Landlord from and
against any and all manner of actions or causes of action, damages, loss, costs
or expenses which the Landlord may sustain, incur or be put to by reason of any
permitted advertising signs now existing or which may hereafter be erected by
the Tenant, upon, over, projecting from or above the Property and shall pay the
premiums charged upon any bond of indemnity or liability insurance policy in
respect of such signs issued upon the demand of any civic, Municipal, government
or other authority, provided that such damages, loss, costs or expenses are not
caused by the negligence or wilful default by the Landlord of any of the terms
of this Lease.
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ARTICLE 17 NOTICE AND DEMANDS
17.1 NOTICES
Any notice required or contemplated by any provision of this Lease or
which the Landlord or Tenant may desire to give to the other shall be
sufficiently given by personal delivery, or in the case of emergency by
facsimile machine, and otherwise by registered letter, postage prepaid and
mailed in one of Her Majesty's Post Offices in Canada and addressed to:
(a) The Tenant at the address set forth in Subparagraph 1.3(b)(ii) or
such other address in British Columbia as the Tenant may, from time
to time in writing advise in accordance with the terms of this
Paragraph; or
(b) The Landlord at the address set forth in Subparagraph 1.3(a)(ii) or
such other address as the Landlord may, from time to time in writing
advise in accordance with the terms of this Paragraph;
and any such notice shall be effective as of the day of such personal delivery
or facsimile or if sent by post as of the third day following the date of such
posting as the case may be, PROVIDED that if sent by mail, should there be a
mail strike, slowdown or other labour dispute which might affect the delivery of
such notice, between the time of mailing and the actual receipt of the notice,
then such notice shall be effective only if actually delivered. The Landlord, if
so requested in writing by a permitted assignee of the Tenant, shall forward a
copy of any notice sent to the Tenant to such permitted assignee in the same
manner as aforesaid to the said assignee at the address specified in the said
notice.
ARTICLE 18 MISCELLANEOUS
18.1 CONSENTS
The parties agree that wherever and whenever the approval or consent of
the Landlord is required to be obtained, such approval or consent shall not be
unreasonably withheld unless otherwise stated in this Lease and may be given by
any such officer, agent, committee, person or persons as may from time to time,
be nominated or appointed in writing by the Landlord for such purpose, and any
such power of nomination or appointment may be delegated by the Landlord, and
such nominees, appointees or delegatees shall, subject to the provisions of this
Lease, have the right to withhold approval or consent to and may reject any
matter or thing submitted for approval or consent, and every such approval or
consent shall only be effective if given
34
in writing and may, subject to the terms of this Lease, contain such conditions
and stipulations as the Landlord may deem fit.
18.2 SUCCESSORS AND ASSIGNS
The parties agree that all grants, covenants, conditions, provisos,
agreements, rights, powers, privileges and liabilities contained herein shall be
read and construed as granted to, made and reserved by, imposed upon and
undertaken by the parties hereto and their respective successors and assigns,
subject to the consent of the Landlord being obtained as hereinbefore provided
to any assignment or sub-lease by the Tenant and that wherever the singular is
used the same shall be construed as meaning the plural where the circumstances
so require and that the Landlord may perform any act hereunder in person or by
or through an agent but shall remain primarily liable in respect thereof and
that in case the Tenant comprises more than one person the said grants,
covenants, conditions, provisos, agreements, rights, powers, privileges and
liabilities on the part of the Tenant shall be construed and held to be several
as well as joint on the part of such persons.
18.3 RE-EXECUTION
Each party to this Lease agrees to re-execute this Lease in this form at
any time upon the reasonable request of the other.
18.4 SIGN REMOVAL
Subject to the provisions of the Lease, upon the termination of this
Lease, the Tenant shall if the Landlord so request:
(a) remove all signs or other identifying marks from the Property and
repair any damage resulting from such removal or the original
installation, and
(b) repaint that part of the Property or the building affected by the
removal of signage in the existing colour if the Tenant has painted
or affixed a sign on the exterior of the Premises.
If the Tenant shall fail to remove all signs, identifying marks and repair any
resulting damage and/or fails to repaint the Property as aforesaid, the Landlord
may complete such work at the expense of the Tenant and the Tenant shall, upon
written demand, forthwith pay to the Landlord the reasonable cost of such
removal, repair and repainting.
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18.5 ENFORCEMENT COSTS
In any action between the Landlord and Tenant seeking enforcement of any
of the terms and provisions of this Lease or in connection with the Property,
the prevailing party in such action shall be awarded in addition to damages or
injunctive or other relief, its reasonable actual costs and expenses, including
legal expenses not limited to taxable costs. If the Landlord is the prevailing
party in an action to enforce terms and provisions of this Lease, the foregoing
amounts shall for greater certainty be deemed to be Rent payable under this
Lease.
18.6 LEASE ADVERTISING
The Landlord shall have the right, during the last six months of the Term
hereby demised or of any renewal thereof, to place upon the Property, in a place
which will not interfere with the conduct of the Tenant' s business, a notice or
notices of reasonable dimensions stating that the Property is for lease or rent,
and the Landlord shall have the right to show the Property to potential tenants
upon prior notice and at reasonable times. The Tenant covenants not to interfere
with or remove such notices and to cooperate in the showing of the Property to
potential tenants and to such agents.
18.7 SALE ADVERTISING
The Landlord shall have the right, at any time during the Term hereby
demised or any renewal thereof, to place upon the Property or any part of it, in
a place which will not interfere with the conduct of the Tenant's business, a
notice or notices of reasonable dimensions stating that the Property is for
sale, and the right to show the Property and any part of it to potential
purchasers of the Property and to agents retained by the Landlord for the
purpose of effecting the sale upon prior notice and at reasonable times. The
Tenant covenants not to interfere with or remove such notices and to cooperate
in the showing of the Property and any part of it to potential purchasers and to
such agents.
18.8 REGISTRATION OF LEASE
The Landlord is not obligated to provide this instrument in registrable
form. The Tenant may register a notice of this Lease but the Tenant shall be
responsible for the preparation of all documents, including without limitation
preparation of satisfactory plans and shall be responsible for any costs
incurred by the Landlord in reviewing the Tenant's documents. If the Tenant
intends to register notice of this Lease, then the Tenant shall also be required
to leave with the Landlord a Lease Registration Deposit in the amount specified
in Subparagraph 1.3(1). Said deposit shall be refundable upon the
36
Landlord's receipt of Lease Discharge documents from the British Columbia Land
Titles Office. For greater certainty, the parties agree that any notice of
registration of this Lease shall only identify the Property, the Premises and
the right of renewal (if applicable) but shall not otherwise contain the
business terms of this Lease.
18.9 HEADINGS
The headings to the Paragraphs in this Lease, and the words which may
appear at the beginning of various Paragraphs in bold, have been inserted as a
matter of convenience and for reference only and in no way define, limit or
enlarge the scope or meaning of this Lease or any provisions hereof.
18.10 ENTIRE CONTRACT
The Tenant acknowledges that there are no covenants, representations,
warranties, agreements or conditions expressed or implied, collateral or
otherwise forming part of or in any way affecting or relating to this Lease save
as expressly set out in this Lease, the Offer to Lease made between the Landlord
and the Tenant dated July 3, 1998 and the letters amending the Offer to Lease
dated July 14, 1998 and July 16, 1998 respectively and that this Lease, Offer to
Lease and the letters amending the Offer to Lease constitutes the entire
agreement between the Landlord and the Tenant and may not be modified except as
herein explicitly provided or except by subsequent agreement in writing of equal
formality executed by the Landlord and the Tenant.
18.11 TIME OF ESSENCE
Time shall be of the essence of this Lease.
18.12 APPORTIONMENT OF TAXES AND COSTS
If the Term of this Lease, or if a Lease Year, does not coincide with the
time period with respect to which Taxes or Operating Expenses or any other
amounts which are included in Additional Rent are payable or determined, then
the amount payable by the Tenant on account of such items shall be determined on
a prorated basis.
18.13 TRANSFER BY LANDLORD
The Tenant agrees that the Landlord which executed this Lease and any
subsequent owner of the Property remains liable for the performance of the
Landlord's obligations only during the period of its ownership of the Property,
provided that if there is a sale, lease or other disposition by the Landlord, or
such subsequent owner, of
37
the Property or any part of it, or an assignment by the Landlord, or such
subsequent owner, of this Lease or any interest of the Landlord, or of such
subsequent owner, hereunder, then the Landlord, or such subsequent owner, as
applicable, will thereupon be relieved of all further liability with respect to
its covenants and obligations but only if the purchaser or assignee agrees to be
bound by all terms, covenants and obligations of this Lease.
18.14 JOINT AND SEVERAL
All parties comprising the Landlord are jointly and severally liable to
the Tenant and its successor and assigns for all of the covenants, terms,
conditions and obligations of the Landlord set out in this Lease.
ARTICLE 19 OPTION TO RENEW
19.1 OPTION TO RENEW
Provided the Tenant has duly, regularly and punctually paid the Rent at
the times required under this Lease and has duly, regularly and punctually
performed each and every covenant, proviso and agreement herein on the part of
the Tenant to be paid and performed, it shall have an Option to Renew this Lease
for a further Term of the number of years as is set out in Subparagraph
1.3(e)(iii) with respect to the renewal option, the said option to be exercised
by delivering written notice of such exercise to the Landlord not later than six
(6) months prior to the expiration of the then current Term.
19.2 RENEWAL TERMS
The renewal Term of this Lease shall be under the same terms and
conditions as those contained herein except that:
(a) any rent free periods, rental concessions, inducements, allowances
and other similar items applicable during the initial Term will not
apply during any renewal Term;
(b) the Tenant will accept the Property on an "as is" basis at the
commencement of the renewal Term unless otherwise agreed in writing
between the Landlord and the Tenant;
(c) unless expressly set forth in Subparagraph 1.3(e)(iii), there shall
be no further Option to Renew; and
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(d) the Basic Annual Rent for the renewal Term, unless otherwise
specified in Subparagraph 1.3(e)(iii) will be the fair market Basic
Annual Rent as agreed upon by the parties hereto and failing such
agreement by a date which is two months prior to the expiration of
the immediately preceding Term either party may forthwith submit for
binding arbitration the determination of the fair market Basic
Annual Rent for that renewal term. Until such fair market Basic
Annual Rent is determined, either by agreement or arbitration, Basic
Annual Rent shall continue to be paid at the rate applicable in the
immediately preceding Lease Year. When a new Basic Annual Rent is
determined, either by agreement or arbitration, it shall be
retroactive to the commencement of the time period first referenced
in this Subparagraph and the Tenant will pay to the Landlord any
deficiency on account of Rent that has been and that should have
been paid up to the date of the determination within 14 days from
the date of the determination. PROVIDED HOWEVER ALWAYS that Basic
Annual Rent for the time period subject of this Subparagraph shall
in no event be less than the Basic Annual Rent under this Lease for
the Lease Year which immediately preceded that time period. The
Basic Annual Rent for the time period first set forth in this
Paragraph will be paid by equal consecutive monthly instalments
equal to one twelfth of the Basic Annual Rent per annum and will be
payable on the first day of each and every month after the above
referenced agreement or determination.
19.3 RENT ARBITRATION
Rent arbitration as above referred to shall be by a sole arbitrator in
accordance with the Commercial Arbitration Act of British Columbia, and the cost
of the arbitration shall be borne equally by the Landlord and Tenant. The fair
market Basic Annual Rent to be determined by the arbitration shall be based on
the then current fair market rent for similar premises in similar locations and
shall be based on the best use for which the Property may be used subject to
applicable Municipal zoning. Fair market rent shall be the rent which would be
paid for the Property as between persons dealing in good faith and at arm's
length.
ARTICLE 20 INDEMNITY
20.1 INDEMNITY
The Indemnifier covenants and agrees:
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(a) to make the due payment of all Rent payable under the Lease in
accordance with the terms of the Lease and any renewals, extensions,
or continuations thereof or overholding thereunder;
(b) to effect complete performance of all and singular the terms,
covenants, conditions and provisions in the Lease contained on the
part of the Tenant to be kept, observed and performed during the
original Term and any renewals, extensions or continuations thereof
or overholding thereunder, strictly in accordance with the terms of
the Lease; and
(c) to indemnify and save harmless the Landlord from any loss, costs or
damages arising out of any failure to perform any of the aforesaid
terms, covenants, conditions and provisions in the Lease on the part
of the Tenant to be kept, observed and performed, including without
limitation the terms and covenants in Article 20.
20.2 NO RELEASE OF INDEMNITY
The Indemnifier further agrees that this Indemnity is absolute and
unconditional and the obligation of the Indemnifier shall not be released,
discharged, mitigated, impaired, or affected by:
(a) any extensions of time, indulgences or modifications which the
Landlord may extend to or make with the Tenant, or with any assignee
or subtenant of the Tenant, in respect of the Lease or in the
performance of any of the obligations of the Tenant, or such
assignee or subtenant, under any one or more of the provisions of
the Lease;
(b) any waiver by, or neglect or failure of the Landlord to enforce any
of the terms, covenants, conditions and provisions of the Lease;
(c) any assignment of the Lease or subletting of the Property by the
Tenant or by any trustee, receiver or liquidator or any consent
which the Landlord may give to any such assignment or sublease;
(d) any release or discharge of the Tenant in any receivership,
bankruptcy, winding up or other creditors' proceeding or any
rejection, disaffirmance or disclaimer of the Lease in any
proceeding; or
(e) any additional security provided to the Landlord from the Tenant or
Indemnifier.
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20.3 WAIVER OF NOTICES
The Indemnifier hereby expressly waives notice of the acceptance of this
Indemnity and all notice of non-performance, non-payment or non-observance on
the part of the Tenant, or of any assignee or subtenant of the Tenant, of the
terms, covenants, conditions and provisions of the Lease.
20.4 NEW LEASE WITH INDEMNIFIER
In the event of termination of the Lease in accordance with the terms set
forth in this Lease, including without limitation termination in accordance with
Paragraph 5.18 or 10.2 or 12.2 or 13.3, other than by surrender voluntarily
accepted by the Landlord in writing, or in the event of disclaimer of the Lease
pursuant to any statute or court order, then the Indemnifier agrees that
forthwith upon demand from the Landlord the Indemnifier shall execute a new
lease of the Property between the Landlord and the Indemnifier as lessee for a
period equal in duration to the remaining residue of the then current Term,
(whether the original Term or any renewal Term) or which would have remained
except for the termination, unexpired from the date of such termination at the
same Basic Annual Rent and Additional Rent and with the same covenants and
provisions as are reserved and contained in the Lease.
20.5 JOINT AND SEVERAL OBLIGATION
The Indemnifier agrees and covenants with the Landlord that, without
limiting the generality of and in addition to the foregoing, the Indemnifier is
jointly and severally bound with the Tenant for the fulfillment of all
obligations, covenants and agreements of the Tenant under this Lease in the same
manner as though the Indemnifier were the Tenant named in the Lease. The
Indemnifier covenants with the Landlord that in the enforcement of its rights
hereunder the Landlord may proceed against the Indemnifier as if the Indemnifier
were named the Tenant under the Lease, as principal obligor and not as surety,
and any notice given by the Landlord to the Tenant shall be deemed to have been
given also to the Indemnifier.
20.6 WAIVER OF RECOURSE
The Indemnifier hereby expressly waives any right to require the Landlord
to proceed against the Tenant or to proceed against or to exhaust any security
held or acquired by the Landlord from the Tenant to pursue any other remedy
whatsoever which may be available to the Landlord; before proceeding against the
Indemnifier.
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20.7 RECEIPT
The Indemnifier acknowledges that it has received a copy of the Lease.
20.8 NO MODIFICATIONS
No modification of this Indemnity shall be effective unless the same is in
writing and signed by the Indemnifier and the Landlord.
20.9 AUTHORITY
The Indemnifier covenants with the Landlord that the Indemnifier has the
necessary power to give the Indemnity contained herein.
20.10 JOINT AND SEVERAL LIABILITY OF INDEMNIFIERS
If there is more than one person or party as Indemnifier hereunder, the
obligations and liabilities of such persons or parties hereunder shall be joint
and several obligations and liabilities of such persons.
20.11 LEASE REFERENCES
Wherever reference is made in this Indemnity to the Lease, such reference
shall be deemed to refer to and include the Lease, any amendment thereto and any
renewal or assignment of it.
20.12 HEIRS AND EXECUTORS
All of the terms, agreements and conditions of this Indemnity shall extend
to and be binding upon the Indemnifier and the Indemnifier's heirs, executors,
administrators, successors and assigns, and shall enure to the benefit of and
may be enforced by the Landlord, their heirs, executors, administrators,
successors and assigns.
ARTICLE 21 HAZARDOUS SUBSTANCE
21.1 HAZARDOUS SUBSTANCE
The Tenant shall not bring or permit or suffer to be brought into the
Property, and shall not use in any way, permit or suffer the use of the Property
or any part thereof to either directly or indirectly prepare, produce, use,
generate, manufacture, refine, treat, transport, store, maintain, handle,
dispose of, transfer, process, release or permit any other dealing with, any
Hazardous Substance unless it has received the prior written consent of the
Landlord, which may be unreasonably or arbitrarily withheld. Any
42
substance which the Landlord permits the Tenant to treat, store, transfer or
dispose of must be dealt with in strict compliance with all Environmental Laws
and environmental permits. The Tenant shall not release and shall not permit the
release of any Hazardous Substance into any soil, water courses, culverts,
drains or sewers except in accordance with all Environmental Laws and
environmental permits. At its own cost, risk and expense, the Tenant shall
strictly comply with all Environmental Laws and environmental permits from time
to time in force regulating the manufacture, use, storage, transportation,
treatment, disposal, release or other dealing with Hazardous Substance by the
Tenant to which the Landlord has consented.
21.2 HAZARDOUS SUBSTANCE PROPERTY OF TENANT
If any Hazardous Substance is brought onto the Property or created upon
the Property during the Term of this Lease, such Hazardous Substance shall be
the sole and exclusive property of the Tenant and not of the Landlord,
notwithstanding the degree of affixation of the Hazardous Substance or the goods
containing the Hazardous Substance to the Property and notwithstanding the
expiry or sooner termination of this Lease.
21.3 REMOVAL OF HAZARDOUS SUBSTANCE
On or before the expiration or sooner termination of this Lease, the
Tenant will remove all Hazardous Substance which have been brought onto or
created upon the Property during the Term of this Lease, whether by the Tenant
or any other person, other than the Landlord, including without limitation any
Hazardous Substance which may have been released or deposited into the soil or
ground water.
21.4 NOTICE OF HAZARDOUS SUBSTANCE
The Tenant will advise the Landlord forthwith of any release of any
Hazardous Substance on the Property or from any part of the Property to any
adjacent property and will provide the Landlord with all information, notices,
reports and other documents it has regarding such release and the remediation
steps being undertaken by the Tenant with respect to such release or as may
reasonably be required by the Landlord of the Tenant.
21.5 RESTORATION AFTER CONTAMINATION
If the presence of any Hazardous Substance or any other substance on the
Property for which the Tenant is responsible under this Lease results in any
contamination of the Property or adjacent properties, the Tenant shall promptly
take all actions at its sole risk and expense as are necessary to return the
Property to the
43
condition existing prior to the introduction of any such Hazardous Substance or
other substance onto the Property and to remedy the contamination of the
adjacent property.
21.6 CLEANUP COSTS INDEMNITY
In addition to any other indemnity found in this Lease, the Tenant will be
completely liable for and will and does hereby indemnify and save harmless the
Landlord from all cost or recovery, cleaning, cleanup costs and remediation
charges, fees, penalties or damages, whether civil or criminal, and any expense
with respect thereto, arising from cost recovery actions or required by any
decree, directive or order from any government authority relating to the
treatment, storage, disposal or transportation of Hazardous Substance on or from
the Property by the Tenant, its employees, agents, contractors or others whom
the Tenant permits to enter onto the Property or for whom the Tenant is
responsible in law. The Tenant's obligations to observe or perform the covenants
in this Article shall survive the expiration or other termination of this Lease
and any limitation periods prescribed by applicable law.
21.7 RECORDS
The Landlord may at any time and from time to time on five days prior
written notice to the Tenant have:
(i) the Property,
(ii) any records reasonably considered to be relevant for the purpose of
identifying the existence, nature and extent of any Hazardous
Substance on the Property, and
(iii) the Tenant's use, storage and disposal of such Hazardous Substance,
inspected by an environmental consultant, and the Tenant agrees to co-operate
with the consultant in its performance of each such inspection. In exercising
such right of inspection, neither the Landlord nor its consultant shall
unreasonably interfere with the Tenant's use and occupation of the Property. If
the consultant, acting reasonably, determines following any such inspection that
further testing or investigation is required in order to monitor the Tenant's
compliance with all Environmental Law relating to the use, storage and disposal
of any Hazardous Substance, the Landlord may at its own option require the
Tenant, at the Tenant's expense, to arrange for such testing or investigation,
or may arrange for such testing or investigation itself, in which case the
Landlord's reasonable costs of any such testing or investigation shall be paid
by the Tenant to the Landlord within 30 days after receipt of any invoice on
account thereof.
44
21.8 CLEANUP PLANS
If any government authority shall require the clean up of any Hazardous
Substance or other contamination held, released, spilled, abandoned or placed
upon the Property by the Tenant or those for whom it is, in law, responsible or
on any other lands or released, spilled, leaked, pumped, poured, emitted,
emptied, discharged, injected, escaped, leached, disposed or dumped into the
environment by the Tenant in the course of the Tenant's business or as a result
of the Tenant's use or occupancy of the Property, then the Tenant shall, at its
own risk and expense, prepare all necessary studies, plans and proposals and
submit same for approval, shall provide all bonds and other security required by
governmental authority and shall carry out the work required and keep the
Landlord fully informed and shall provide to the Landlord full information with
respect to proposed plans and comply with the Landlord's reasonable requirements
with respect to such plans. The Tenant further agrees that if the Landlord
determines, acting reasonably, that the Building, the Property, the Landlord or
the Landlord's reputation is placed in any jeopardy by the requirements for any
such work, the Landlord may itself undertake such work or any part thereof at
the reasonable cost and expense of the Tenant which cost shall be paid by the
Tenant within 30 days after receipt of an invoice on account thereof.
21.9 INDEMNITY TO LANDLORD
The Tenant hereby indemnifies and saves harmless the Landlord, its
directors, officers, employees and agents and the successors and permitted
assigns of the Landlord from and against all loss and expense and from and
against all claims, demands, actions, suits or other proceedings, judgments,
damages, penalties, fines, costs and liabilities, including, without limitation,
any reduction in the market value of the Property, damages for loss or
restriction in use of leasable or useable space or of any amenity of the
Property, damages arising from any adverse impact on marketing of space and sums
paid in settlement of claims, legal fees, consultants' fees and experts' fees
which arise during or after the Term and are in any manner based upon, arise out
of or are connected with the presence or suspected presence of any Hazardous
Substance in, upon, above or under the Property and any other contamination
which exists on or under the Property or which has escaped from the Property,
including, without limitation, costs incurred in connection with any
investigation of site conditions or any clean up, remedial, removal or
restoration work required by any governmental authority including that resulting
from waste, unhealthful, hazardous or dangerous conditions caused by,
contributed to or aggravated by the Tenant or any permitted transferees,
violation of any Environmental Laws or environmental permits pertaining to
Hazardous Substance. In addition, without limitation, the Tenant further
expressly agrees to compensate the Landlord for any and all costs incurred for
the removal of Hazardous
45
Substance from the Property even in the absence of an order requiring such
removal and notwithstanding that such Hazardous Substance may be stored on the
Property in compliance with all Environmental Laws or environmental permits.
21.10 SURVIVAL OF INDEMNIFICATION
The Tenant hereby expressly agrees that this indemnification shall survive
the expiration or earlier termination of this Lease and that any statutory
limitation periods on actions to enforce the obligations contained in this
Article 21 shall not be deemed to commence until the Landlord actually discovers
any such circumstances as may give rise to their enforcement and the Tenant
hereby knowingly and voluntarily waives the benefits of any shorter limitation
period. Upon the default of the Tenant under this Article, the Landlord shall be
entitled to terminate this Lease and/or recover from the Tenant any and all loss
and expense associated with the said default, in addition to any other rights
and remedies of the Landlord.
21.11 TENANT NOT LIABLE
Notwithstanding anything to the contrary provided in this Article, the
Tenant shall not be liable for any Hazardous Substance in or on the Property
which was deposited and/or released or caused to be deposited and/or released
into or onto the Property by the Landlord or those for whom it is, in law,
responsible nor shall the Tenant be liable for any Hazardous Substance deposited
or released into or onto the Property prior to the date on which the Tenant
occupied the Property, unless such Hazardous Substance was deposited or released
into or onto the Property by the Tenant or those for whom it is, in law,
responsible.
ARTICLE 22 DEFINITIONS
22.1 DEFINITIONS
In this Lease, the following words, phrases and expressions are used with
the meanings defined as follows:
(a) "Additional Rent" means any and all monies to be paid by the Tenant
to the Landlord pursuant to the Lease, other than Basic Annual Rent;
(b) "Architect" means the architect or other party performing similar
function from time to time named by the Landlord. The Architect
will be duly licensed and qualified to practice in the Province in
which the Property is located. The decision of the Architect
whenever required by this Lease (or requested by the Landlord) and
any related certificate will be rendered
46
in accordance with generally accepted architectural practices and
procedures and will be final and binding;
(c) "Area of the Premises" or "Rentable Area of the Premises" means the
area (expressed in square feet, or at the Landlord's option, in
square meters) as certified by an Architect, of the Premises
measured from the exterior face of all exterior walls, doors and
windows. The Area of the Premises includes all interior space and
there shall be no deduction or exclusion for any space occupied by
or used for columns, stairs or other interior construction or
equipment, nor shall there be any deduction for columns or
projections necessary for the Building. Where a front or entrance
of Premises is recessed from the demising lines shown on the plan
annexed hereto as Schedule "A", the area of such recess shall, for
the purposes of the calculation of the Area of the Premises only, be
a part of the Premises and within the Area of the Premises;
(d) "Availability Date" means the date on which the Property has been
substantially completed and made available for occupancy by the
Tenant;
(e) "Basic Annual Rent" means the payments referenced in Subparagraph
3.1(a);
(f) "Building" means any structure, improvement or building situate on
and forming part of the Property;
(g) "Capital Tax" means an imputed amount presently or hereafter imposed
from time to time upon the Landlord and payable by the Landlord and
which is levied or assessed against the Landlord on account of its
ownership of or capital employed in the Property. Capital Tax will
be imputed as if the amount of such tax were that amount due if the
Property were the only real property of the Landlord and Capital Tax
includes the amount of any capital or place of business tax or other
tax or assessment levied by the provincial government, federal
government or other applicable Taxing Authority against the Landlord
whether or not known as Capital Tax, Large Corporations Tax or by
any other name;
(h) "Civic Address of the Property" has the meaning set forth in
Subparagraph 1.3(d)(ii);
(i) "Commencement Date" means, subject to Subparagraph 2.1(b), the date
as set out Subparagraph 1.3(f);
47
(j) "Environmental Laws" means any statutes, laws, regulations, orders,
bylaws, standards, guidelines, permits, and other lawful
requirements of any governmental authority having jurisdiction over
the Property now or hereafter in force relating in any way to the
environment, health, occupational health and safety, or
transportation of dangerous goods, including the principles of
common law and equity;
(k) "Hazardous Substance" means any contaminant, pollutant, dangerous or
potentially dangerous, corrosive, noxious or toxic substances,
hazardous waste, flammable or explosive or radioactive material,
urea formaldehyde foam insulation, goods, equipment or materials
containing asbestos or PCBs or any other materials declared or
defined to be hazardous, toxic, special waste, contaminants,
dangerous goods, deleterious substances or pollutants in, or which
at any time during the Term are regulated as a threat or are capable
of posing a threat to public health or the environment under or
pursuant to, any applicable laws, regulations, requirements or
guidelines in the Province of British Columbia, including any
applicable laws, regulations, requirements or guidelines of the
Federal Government of Canada or of the Government of the Province of
British Columbia or of the Municipality or of any other lawful
governmental authority having jurisdiction thereto;
(1) "Indemnifier" means the person or persons who has or have executed
or agreed to execute this Lease as Indemnifier;
(m) "Landlord" means at any time in question, the then current
registered and beneficial owner or owners of the freehold or
leasehold title to the Property;
(n) "Lease" means this agreement and all Schedules attached hereto;
(o) "Lease Registration Deposit" means the amount set forth in
Subparagraph 1.3 (1);
(p) "Lease Void Date" means the date set forth in subparagraph 1.3(h);
(q) "Lease Year" means each consecutive twelve month period of the Term
commencing on the Commencement Date. The last Lease Year shall end
on the last day of the Term and accordingly the last Lease Year may
be less than twelve months;
48
(r) "Mortgagee" means any mortgagee, chargee or other encumbrancer
(including any trustee for bondholders) from time to time, of the
Property or any part of it, or of the Landlord's interest in it;
(s) "Municipality" means the municipality or city within which the
Property is situate and likewise the word "Municipal" refers to such
municipality or city;
(t) "Operating Expenses" means the total amounts reasonably incurred,
paid or payable, whether by the Landlord or by others on behalf of
the Landlord, for the maintenance, operation, repair, replacement,
management and administration of the Property. Operating Expenses
include, without limitation and without duplication or profit, the
aggregate of:
(i) the total annual costs and expenses of insuring the Property
and all improvements on it and all equipment, pylon and other
signs(s) and other property servicing the Property or any part
of it from time to time;
(ii) the cost of gas, power, water, sewer, electricity,
communications and all other utilities and services with
respect to the Property, including those for heating and
air-conditioning, (if any), together with the direct cost of
administering such utilities and services;
(iii) the cost of repairs, maintenance and replacements with respect
to the Property including structural repairs and maintenance
(but excluding repairs necessitated by structural defects),
such cost to include, without limitation the cost of painting,
repairs and maintenance of the roof of any Building on the
Property, sanitary control, refuse disposal, gardening,
landscaping on the Property, and rental of signs relating to
the Property;
(iv) the cost of the wages and salaries paid to on-site
maintenance, operating, supervisory and security personnel,
including payments for workers' compensation, unemployment
insurance, vacation pay, Canada Pension Plan and any other
fringe benefits, engaged for purposes of maintenance,
operation, supervision or security with respect to the
Property;
49
(v) the cost of independent service contracts entered into with
respect to the Property for purposes of providing maintenance,
operation, repair, replacement, supervision and security,
including without limitation, service and maintenance
contracts for inspection, servicing or maintenance of
elevators, escalators, air-conditioning, heating, mechanical
and electrical equipment, landscaping and parking, and the
cost of supplies and equipment used in connection therewith;
(vi) the cost of cleaning, snow removal, garbage and waste
collection and disposal, the costs of security and
supervision, the wages and salaries of on-site personnel and
any associated costs thereof, parking lot striping and
landscaping, and the cost of all utilities consumed in the
operation of the Property:
(vii) the cost of the purchase and rental of any equipment and
signs, and the cost of supplies, used by the Landlord in the
maintenance and operation of the Property;
(viii)Subparagraph 22.1(t)(viii) has been intentionally deleted and
shall be of no effect;
(ix) Subparagraph 22.1(t)(ix) has been intentionally deleted and
shall be of no effect;
(x) all other costs, charges and other expenses incurred by the
Landlord in maintaining, operating, replacing, servicing and
repairing the Property;
(xi) depreciation or amortization of, including without
duplication, the cost of the repair and replacement of all
equipment, meters and other fixtures, equipment and
facilities, including sprinkler and irrigation systems,
heating, ventilating and air-conditioning equipment, the roof
membrane and asphalt paving in the parking lot areas, serving
or comprising the Property which by their nature require
periodic or substantial repair or replacement, unless the
Landlord in its sole discretion charges the cost fully in the
Lease Year in which they are incurred;
(xii) all Taxes, business taxes, all Capital Taxes as they relate to
or are allocated by the Landlord to the Property and any
improvements
50
on the Property and business transfer and other taxes and
similar charges allocated by the Landlord to the Property,
except Taxes payable by the Tenant pursuant to Paragraph 5.27;
From the total of the above costs, there is deducted or excluded:
(i) net proceeds received by the Landlord from insurance policies
taken out by the Landlord to the extent that the proceeds
relate to Operating Expenses;
(ii) interest on debt or capital retirement of debt and all other
debt service charges;
(iii) costs relating to the original construction of the Building
and the original installation by the Landlord of fixtures,
equipment and facilities serving the Building including,
without limitation, costs allocable to the repair of
construction defects and structural defects and of damage
caused thereby;
(iv) costs recoverable by the Landlord pursuant to contractor's
warranties;
(v) any amounts directly chargeable by the Landlord to any other
tenants of the Property or to third parties; and
(vi) taxes on income, profits or excess profits assessed upon the
income of the Landlord or any other taxes personal to the
Landlord;
(u) "Premises" means that part of the Property outlined in red in
Schedule "A";
(v) "Property" means the land more particularly described in Schedule
"B" and includes all improvements on that land, including without
limitation any Building on the Property;
(w) "Rent" means all Basic Annual Rent and Additional Rent payable under
this Lease;
(x) "Rental Deposit" means the amount set forth in Subparagraph
1.3(k)(i) ;
(y) "Sales Taxes" means any and all taxes, fees, levies, charges,
assessments, rates, duties and excises (whether characterized as
sales taxes, purchase
51
taxes, value-added taxes, goods and services taxes) which the
Landlord is liable to pay, or to collect from the Tenant, and which
are levied, rated or assessed on the act of entering into this Lease
or otherwise on account of this Lease, on the use or the occupancy
of the Property or any portion thereof, on the Rent (whether Basic
Annual Rent or Additional Rent) payable under this Lease or any
portion thereof or in connection with the business of renting the
Property or any portion thereof, but excluding the Landlord's income
tax and other taxes personal to the Landlord. If the Sales Taxes are
reduced by reason of any exemption or deduction to which the
Landlord is entitled by virtue of:
(i) the payment by the Landlord of any taxes, fees, levies,
charges, assessments, rates, duties or excises upon the
purchase price of any lands or of any interest therein whether
before, concurrently with or after the execution and delivery
of this Lease, or
(ii) the payment by the Landlord of any taxes, fees, levies,
charges, assessments, rates, duties or excises with respect to
rents, additional rents and any other amounts payable by the
Landlord as a tenant under any lease whether such lease is now
existing or arises after the date of the execution and
delivery of this Lease,
then the Sales Taxes shall be deemed to be the amount which would have been
imposed on the Landlord with respect to the Rent (whether Basic Annual Rent or
Additional Rent) payable by the Tenant to the Landlord under this Lease had no
such exemption or deduction been permitted;
(z) "Taxes" means all real property taxes, rates, local improvement
taxes, duties and assessments, impost charges or levies, whether
general or special, that are levied, rated, charged or assessed
against the Property or any part thereof or any improvements thereon
or forming part thereof, or upon the Landlord on account of its
interest in the Property, from time to time by any lawful Taxing
Authority, whether federal, provincial, Municipal, school or
otherwise, and includes any taxes, rates, duties, assessments or
charges or other amounts which are or may in the future be imposed
in lieu thereof, or in addition thereto, whether of the foregoing
character or not and whether in existence at the Commencement Date
or not, and all costs, fees and expenses incurred by the Landlord in
contesting Taxes or in negotiating with taxing authorities with
respect to Taxes. Taxes also include all interest incurred by the
52
Landlord on tax-related payments made in excess of then current
recoveries from the Tenant of the Property;
(aa) "Taxing Authority" means any duly constituted governmental authority
whether federal, provincial, regional, Municipal or otherwise,
legally empowered to impose taxes, rates, assessments or charges on,
upon or in respect of the Property or any part of it or property
thereon;
(ab) "Term" means the term of this Lease as set forth in Subparagraph
1.3(e) and if this Lease is renewed in accordance with the Option to
Renew as set forth in the Lease then "Term" after the expiry of the
initial Term shall mean the applicable renewal Term; and
(ac) "Termination Date" means, unless earlier terminated in accordance
with this Lease and subject to Subparagraph 2.1(b), the date as set
out in Subparagraph 1.3(g).
IN WITNESS WHEREOF the parties hereto have hereunto caused their
respective corporate seals to be affixed in the presence of their proper signing
officers, duly authorized in that behalf, the day and year first above written.
THE COMMON SEALS of the Landlord,
RIVERPOINTE STRATEGIES
PARTNERSHIP were hereunto affixed in
the presence of:
531968 B.C. LTD. C/S
____________________________________
Authorized Signatory
RIVERPOINT BUSINESS PARK LTD C/S
____________________________________
Authorized Signatory
Date _______________________________
53
THE COMMON SEAL of the Tenant,
CANADIAN SPRINGS WATER
COMPANY was hereunto affixed in the
presence of:
____________________________________ C/S
Authorized Signatory
Date _______________________________
THE COMMON SEAL of the Indemnifier,
SPARKLING SPRING WATER LIMITED was
hereunto affixed in the presence of:
____________________________________ C/S
Authorized Signatory
Date _______________________________
54
SCHEDULE "A"
i
(MAP)
ii
SCHEDULE "B"
iii
(TITLE SEARCH)
iv
SCHEDULE "C"
v
SCHEDULE "C"
OPTION TO EXPAND PREMISES
The Tenant shall have the option to expand the Premises by approximately 20,000
square feet ("Expansion Area") at any time during the original Term of this
Lease or any renewals thereof provided that it is not in breach of this Lease at
the time it exercises this option. The Tenant shall provide the Landlord with
written notice of its intent to exercise this Option to Expand Premises.
The Basic Annual Rent for the Expansion Area shall be an amount mutually agreed
upon by the Landlord and the Tenant and failing such an agreement by a date
which is fourteen (14) days past the date on which the Tenant has exercised this
option to Expand Premises, the parties hereto shall forthwith submit for binding
arbitration by a sole arbitrator in accordance with the Commercial Arbitration
Act of British Columbia. The cost of such arbitration shall be borne equally by
the Landlord and the Tenant.
Upon the determination of the Basic Annual Rent for the Expansion Area, either
by agreement or arbitration, the Landlord shall forthwith prepare building plans
(to be approved by the Tenant acting reasonably) and construct the Expansion
Area. The resulting increase in Basic Annual Rent and Area of Premises shall
become effective upon the substantial completion of the Expansion Area as
determined by the Landlord and the Tenant, both acting reasonably. The Landlord
and the Tenant mutually agree to execute an Addendum to this Lease to reflect
these increases.
In the event that, upon substantial completion of the Expansion Area, the
remaining Lease Term is less than five (5) years the parties hereto mutually
agree to extend the then current Lease Term to a period of no less than five (5)
years commencing on the first day of the month next following the date of the
substantial completion of the Expansion Area. The Basic Annual Rent for the
extended potion of the Lease Term shall be fair market Basic Annual Rent as
negotiated and mutually agreed upon by the Landlord and the Tenant and failing
such an agreement by a date which is fourteen (14) days past the date on which
the Tenant has exercised its option to expand the Premises, the matter shall be
resolved in accordance with the Commercial Arbitration Act of British Columbia
as outlined herein. PROVIDED HOWEVER ALWAYS that the Basic Annual Rent for the
extended portion of the Lease Term shall in no event be less than the Basic
Annual Rent under this Lease for the twelfth year of the Lease Term. The
extended Lease Term and negotiated or arbitrated Basic Annual Rent shall be
reflected in the aforementioned Lease Addendum.
vi
SCHEDULE "D"
vii
SCHEDULE "D"
OPTION TO RELOCATE
If during the Term of this Lease the Tenant has exercised the Option to Expand
Premises as outlined in Schedule "C" herein and the expansion area has been
substantially completed, the Tenant shall have the option to relocate to an
existing facility owned by the Landlord or a related company, or to a new
facility to be constructed for the Tenant and to be owned by the Landlord or a
related company, provided that in either case the facility is at least 100,000
square feet in area ("Relocated Premises") and the Tenant is not in breach of
this Lease at the time it exercises this option to Relocate. The Tenant shall
provide the Landlord with written notice of its intent to exercise this Option
to Relocate.
The Landlord (or related company) the Tenant will use their best efforts and act
reasonably in negotiating a new lease for the Relocated Premises and the lease
for the Relocated Premises shall be based on the same terms and conditions as
this Lease to the greatest extent possible save for the Basic Annual Rent, the
Option to Expand Premises and this Option to Relocate.
Upon the commencement of the lease for the Relocated Premises this Lease shall
be rendered terminated and of no further effect, however, if the Landlord (or
related company), using its best efforts, is not able to accommodate the
Tenant's requirements this option to Relocate shall become null and void and
this Lease shall remain in full force and effect.
viii