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EXHIBIT 10.36
SCHEDULE "A"
SUBLEASE AGREEMENT
This Sublease made as of the 1st day of July, 2001.
BETWEEN:
THE BUSINESS DEPOT LTD.
30 Centurian Drive
Suite 106
MARKHAM, Ontario L3R 8B9
(hereinafter called the "Sublandlord")
OF THE FIRST PART
- AND -
STARTEK CANADA SERVICES, LTD.
237 22nd Street
Greeley, CO.
USA 80631
(hereinafter called the "Subtenant")
OF THE SECOND PART
WHEREAS by a Lease dated the 31st day of August, 1993
(Headlease), Executive Properties Limited Partnership ("Original Landlord")
leased to the Sublandlord certain premises comprising of approximately 20,000
square feet of ground floor premises (the "Premises") at 940 Futures Gate in the
City of Kingston, Province of Ontario, more particularly described in Schedule
"A";
AND WHEREAS the Original Landlord and the Sublandlord agreed
to amend the Headlease by an Amendment to Lease dated the 15th day of February,
1996 and the 20th day of January, 1996;
AND WHEREAS the Original Landlord sold the Premises and
assigned the Headlease to 1139114 Ontario Limited ("New Landlord") on April
23rd, 1996;
AND WHEREAS the Sublandlord has agreed with the Subtenant to
sublease the Leased Premises, upon the terms and conditions set forth in this
Sublease Agreement.
AND WHEREAS the New Landlord has given its consent, in
writing, to this Sublease;
NOW THEREFORE in consideration of the mutual covenants and
agreements herein to be observed and performed by the Subtenant;
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1. GRANT AND TERM
The Sublandlord hereby subleases the Premises to the Subtenant
for a term of approximately ten (10) years commencing on the earlier of
September 1, 2001 and the date the Subtenant opens for business in the Premises
(the "Commencement Date") to and including the 31st day of August, 2011 (the
"Term"). The last day of the term of the Lease shall be reserved to the
Sublandlord.
2. BASE RENT
The Subtenant shall pay to the Sublandlord Base Rent in equal
consecutive monthly instalments, in advance on the first day of each month as
follows:
<Table>
<Caption>
ANNUAL BASE RENT ANNUAL BASE MONTHLY BASE
PERIOD OF TIME PER SQUARE FOOT RENT RENT
- ------------------------------------- -------------------------- ------------------------- -----------------------------
Commencement Date to August 31,
2011 $11.92 $238,400.00 $19,866.67
- ------------------------------------- -------------------------- ------------------------- -----------------------------
</Table>
Upon execution hereof, Subtenant shall submit to the Sublandlord the sum of
$19,866.67 plus G.S.T. to be applied against the first month's Base Rent when it
becomes due.
3. SUBTENANT'S COVENANTS
The Subtenant covenants with the Sublandlord as follows:
(a) to pay to the Sublandlord all sums and amounts accruing
or becoming due and payable by the Sublandlord pursuant
to the Headlease, other than Fixed Rent under the
Headlease, and the cost of all HVAC servicing contracts
for the Premises to which the Sublandlord is a party,
all of which amounts are payable as Additional Rent
and, together with Base Rent are hereinafter to be
referred to as "Rent";
(b) to pay to the appropriate taxing authority and
discharge in each year of the Term all taxes, duties,
assessment, licensing fees and payments as shall be
assessed, levied or charged against or in respect of
the use or occupation of the Premises or with respect
to any fixtures or equipment installed therein or
thereon, not otherwise included in Additional Rent;
(c) to pay to the Sublandlord any goods and services tax,
business transfer tax, value added tax, multi stage
sales tax or any like tax imposed on the Sublandlord by
any governmental authority on any rent whether Base
Rent or Additional Rent payable by the Subtenant and
shall reimburse the Sublandlord for the amount of such
tax forthwith upon demand as Additional Rent;
(d) to keep the Premises clean and to make all necessary
repairs to the Premises in accordance with the repair
obligation imposed on the Sublandlord under the
Headlease except as otherwise provided herein;
(e) to use and occupy the Premises only for general and
administrative offices and for a customer service
centre;
(f) to permit the New Landlord and the Sublandlord and
persons authorized by them at all reasonable times to
enter and examine the condition of the Premises and
upon notice to repair in accordance with the notice,
provided that such repairs are the obligation of the
Subtenant pursuant to this Sublease, and to indemnify
the Sublandlord against any breach of this covenant in
this Sublease;
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(g) not to do or permit or suffer to be done any action
whereby any policy of insurance for the Centre or the
Premises may become void or voidable or any insurance
premium increased and if any premium is increased by
such action, to pay to the Sublandlord the increase in
premium together with all expenses incurred by the
Sublandlord in connection with the renewal or
replacement of policies occasioned by breach of this
covenant, and all payments to be made by the Subtenant
pursuant, to this covenant shall be deemed to be
additional rent;
(h) not to assign, sublet or part with or share possession
of all or any part of the Premises without obtaining in
each instance the prior written consent of the
Sublandlord not to be unreasonably withheld or delayed
(provided, however, that such consent shall not be
required with respect to an assignment or sublease to
the Subtenant's affiliates, joint venture partners,
subsidiaries or any entity owned and controlled by the
Subtenant) and to be bound by the provisions of the
Headlease with respect to assigning and subletting;
provided further that the Subtenant shall not assign,
sublet or share possession of all or any part of the
Premises for any use that is, in the opinion of the
Sublandlord, competitive with the Sublandlord's office
supply business;
(i) to permit, during the last six months of the Term of
this Sublease, the Sublandlord or the New Landlord to
affix upon the Premises a notice to let the Premises
and to permit the Sublandlord or the New Landlord and
their agents and prospective tenants at all reasonable
times to view the Premises;
(j) to yield up the Premises with all fixtures (other than
Subtenant's fixtures) and additions at the termination
of this Sublease in good and tenantable repair,
according to the repair obligations of the Subtenant
under this Sublease, and
(k) except as otherwise provided in this Sublease, to
perform and observe all of the covenants on the part of
the Sublandlord to be performed and observed pursuant
to the Headlease in so far as such covenants are
applicable to the Premises and keep the Sublandlord
indemnified against all actions, proceedings, damages,
expenses, claims and demands in respect of such
covenants.
4. SUBLANDLORD'S COVENANTS
The Sublandlord hereby covenants with the Subtenant:
(a) for quiet enjoyment;
(b) to pay such amounts and to perform and observe the
covenants on its part contained in the Headlease with
respect to the Premises as far as such covenants are
not required to be performed and observed by the
Subtenant;
(c) to keep indemnified the Subtenant from all actions,
proceedings, damages, costs, claims and expenses
arising from any omission by the Sublandlord to pay
when due the rent reserved under the Headlease or
breach of any of the Sublandlord's covenants contained
in the Headlease so far as they relate to the Premises.
Provided, notwithstanding the foregoing, the
Sublandlord shall in no way be responsible for any
indirect or consequential damages suffered by the
Subtenant by reason of the failure of the Headlandlord
to fulfil its obligations in accordance with the
Headlease; and
(d) to exercise, upon written notice from the Subtenant,
such rights as may accrue to the Subtenant hereunder
and to take commercially reasonable
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steps, upon written notice from the Subtenant
specifying the default on the part of the Headlandlord,
to cause the Headlandlord to perform and observe the
covenants on the part of the Headlandlord to be
performed and observed pursuant to the Headlease in so
far as such covenants are applicable to the Premises.
The Sublandlord in any way be responsible for any
damages suffered by the Subtenant by reason of the
failure of the Headlandlord to fulfil its obligations
pursuant to the Headlease.
5. SPECIAL COVENANTS
The Sublandlord and the Subtenant further agree as follows:
(a) Subtenant shall sublease the Premises on an "as is"
basis; subject to the following Sublandlord's work and
Sublandlord's responsibilities and costs:
(i) Provide a minimum of 600 volts/600 amp service
to the Premises.
(ii) Disability compliance with all existing areas
except for Subtenant's Premises.
(iii) Designate, pave, light and stripe the 68
parking spaces provided in the Headlease for
Subtenant's exclusive use.
(iv) Maintain the roof, including all repairs,
during the Term.
(v) Sublandlord will be responsible for repairs
and maintenance of the existing HVAC system.
Cost for repairs or maintenance will be passed
through to Subtenant as operating expenses.
(vi) Provide, 50 non-exclusive and 68 exclusive
spaces for parking at no cost to Subtenant
throughout the term of the Sublease, as set
out in the Headlease, in the areas marked on
Schedule "B" annexed hereto.
All of Sublandlord's work shall be done in a good and
workmanlike manner promptly in accordance with all applicable
laws and in coordination with Subtenant's work.
(b) Subtenant shall have the right for early occupancy for
installation of phones, furniture, equipment, cabling,
etc. sixty (60) days before the Commencement Date.
Subtenant shall not be required to pay Rent during this
Early Occupancy Period. However, Subtenant shall pay
all taxes and utilities and have appropriate insurance
in place.
(c) Sublandlord shall provide Subtenant with an option to
cancel the Sublease at any time after the fifth (5th)
year of the lease with three (3) months prior written
notice and payment of three (3) month's Base Rent and
unamortized brokerage fees as a termination penalty.
(d) Without liability for additional rental (which includes
Base Rent) or any other charge thereafter, the
Subtenant shall have the right to install supplemental
equipment into, on top of, or adjacent to the Premises.
Supplemental equipment shall include, but not be
limited to, such items as a data network, an emergency
generator with a fuel tank placed outside the building
at a place mutually agreeable to Sublandlord and
Subtenant, an uninterruptible power supply system with
batteries, and security equipment. The exterior
placement of such items shall be in locations mutually
agreed to by Sublandlord and Subtenant and subject to
local codes and ordinances, and in accordance with the
Headlease and Headlandlord's approval. Subtenant
responsible for costs of installation removal and any
damages caused.
(e) Without liability for additional rental (which includes
Base Rent) or any other charge thereafter, except as
expressly stated hereunder, Subtenant shall be
permitted, at its sole cost and expense, for the Term,
to exclusively use the roof of the Premises to install
and operate thereon,
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dishes/earth satellite disks (not to exceed ten (10)
feet in diameter) and whip antenna and equipment
enclosures (collectively, "Rooftop Communication
Equipment"), with necessary conduit and sleeving from
the roof to the Premises in locations as selected by
Subtenant, provided the same complies with all
applicable governmental rules, regulations, ordinances
and codes, and is within the allowable structural
loading of the building. All penetration of roof must
be pre-approved by Sublandlord acting reasonably.
Subtenant shall be responsible for costs of
installation removal and any damages caused.
(f) Subtenant shall provide and coordinate with Bell
Canada's Network Management Division, without cost to
the Sublandlord, fiber optic capacity to the Premises
from Princess Street by the commencement date.
(g) Subtenant shall be entitled to retain one hundred
percent (100%) of profits from permitted subleases,
provided Subtenant remains liable for lease payments
required under this Sublease.
(h) Subtenant shall have prominent exterior identification
of its corporate name and/or logo on at least two (2)
sides of the Premises, subject to local codes and
ordinances. The Subtenant acknowledges that no pylon
rights are available.
(i) The Sublandlord will not exercise its renewal options
contained in the Headlease. It will be the obligation
of the Subtenant to negotiate direct with the Landlord
to secure any extension of term.
(j) Subtenant may operate in the Premises twenty-four (24)
hours a day/seven (7) days a week.
(k) Subject to the Headlease, Sublandlord grants to
Subtenant the non-exclusive license during the Term to
have access through or to use in common with all others
entitled thereto and for their intended purposes such
portions of the common areas of the property described
in Schedule "A" of the Headlease as are reasonably
required for access to or the use and occupancy of the
Premises for their intended purposes, all for the use
by Subtenant and its agents, customers and employees,
at no additional cost to the Subtenant.
(l) Additional Rent for the first year of the Term is
estimated by Sublandlord to be four dollars ($4.00) per
square foot.
6. DEFAULT
In the event of the occurrence of any of the following:
(a) any petition in bankruptcy or for reorganization or
arrangement is filed by or against the Subtenant, or
the Subtenant becomes insolvent or any receiver,
trustee or liquidator is appointed for any of the
Subtenant's assets or the Subtenant makes any
assignment for the benefit of creditors; or
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(b) the Subtenant fails to make any payment of Rent
pursuant to the provisions of this Sublease when due
and such failure continues for a period of three (3)
days after written notice to the Subtenant (it being
agreed that the continuance of any such failure for
five (5) days after notice is to be conclusively deemed
a material breach of this Sublease), or
(c) the Subtenant defaults in the performance of any
covenant, agreement or obligation, other than for the
payment of Rent, required by the Sublease to be
performed by the Subtenant and such default continues
for a period of twenty (20) days after written notice
to the Subtenant, it being agreed that the continuation
of any such default for twenty (20) days after notice
is to be conclusively deemed a material breach of this
Sublease; or
(d) the Subtenant abandons or vacates the Premises;
the current month's rent, together with rent for the three (3) months next
ensuing shall immediately become due and payable and it shall be lawful for the
Sublandlord, at any time thereafter, to re-enter into and upon the Premises or
any part thereof, in the name of the whole and to have, repossess and enjoy the
same again as of its former state or to re-enter the Premises as agent for the
Subtenant and to lease the Premises at such rent and for such term as the
Sublandlord may deem reasonable, or at the election of the Sublandlord by the
Sublandlord giving notice of termination, to terminate this Sublease. The only
notices necessary to terminate this Sublease are those expressly provided for in
this Subsection. On the termination of this Sublease whether by lapse of time or
otherwise the Subtenant will immediately surrender to the Sublandlord possession
of the Premises and the improvements in the condition in which the Subtenant is
required to maintain the Premises under this Sublease. No acceptance of Rent by
the Sublandlord after termination of this Sublease or after notice of
termination shall constitute a waiver of such termination or notice or
reinstatement of this Sublease. No termination of this Sublease shall discharge
or impair the Subtenant's obligation to pay any Rent accrued to the date of
termination. Nothing contained in this Sublease shall operate in any way to
create a merger or alter or prejudice any rights, remedies or priorities of the
Sublandlord against the Subtenant under any other agreement or agreement between
them.
7. CURE DEFAULT
In the event that the Subtenant shall be in default of any of
its covenants hereunder or fails to make any payment pertaining to the Premises
on or before the day such payment is due (unless such payment is being actively
contested and all required security posted) the Sublandlord shall give to the
Subtenant notice in writing stating the said default with reasonably sufficient
particularity and requiring the said default to be remedied. If such default is
not remedied within a reasonable period given the nature of the default the
Sublandlord may, in its discretion, make such payment or remedy such default and
the Subtenant shall reimburse the Sublandlord for such payment or pay the total
costs and expenses incurred in remedying such default together with an
administration and supervisory fee equal to ten percent (10%) thereof and the
Subtenant covenants and agrees to pay same on demand.
8. LEASEHOLD MORTGAGES
The Subtenant shall be entitled, if lawfully permitted, to
grant a mortgage or charge on its interest in the Sublease to secure the
indebtedness of the Subtenant or borrowed monies, provided that the said
mortgage or charge does not otherwise contravene the terms of the Headlease and
provided further that the holder of such mortgage or charge acquires no rights
by virtue thereof against the Sublandlord or the Headlandlord unless and until
the holder of such mortgage or charge and the Sublandlord and, if applicable,
the Headlandlord have entered into an agreement with respect to same and the
Sublandlord agrees to act reasonably and promptly when requested to negotiate
such an agreement with the holder of such mortgage or charge of the Subtenant's
leasehold interest.
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9. SUBTENANT'S INSURANCE
The Subtenant shall secure as and from the Possession Date
from a solvent and responsible insurance company and maintain throughout the
Term and any renewal thereof, in full force and effect insurance upon property
of every nature, description and kind owned by the Subtenant for which the
Subtenant is legally liable and which is located within the Subleased Premises
including the Subtenant's fixtures, stock in trade, furniture and equipment for
the full replacement cost thereof with coverage against at least, the perils of
fire and standard extended coverage including sprinkler leakage, broad form
boiler and machinery insurance on a blanket repair and replacement basis with
limits for each accident in an amount not less than the replacement cost of all
the Subtenant's leasehold improvements and all boiler, pressure vessels, air
conditioning equipment and miscellaneous electrical apparatus; business
interruption insurance in such amounts as will reimburse the Subtenant for
direct or indirect loss of earnings attributable to all perils insured against;
public liability insurance and property damage insurance including personal
injury liability, contractual liability, employers liability and owners and
contractors protective insurance coverage, such policies to be written on a
comprehensive basis with inclusive limits of not less than $5,000,000.00 for
bodily injury or property damage and to contain a severability of interest
clause and cross liability clauses (if available); and tenant's legal liability
insurance for the actual cash value of the Premises including loss of use
thereof. The Sublandlord shall be an additional insured on such policies and the
Subtenant agrees to provide to the Sublandlord certificates of insurance or
where requested certified copies of such policies of insurance. In the event the
Subtenant fails to take out or to keep in force such insurance the Sublandlord
has the right, without assuming any obligation in connection therewith, upon
forty-eight (48) hours written notice to effect such insurance at the sole cost
of the Subtenant and all cost and expenses including the premiums therefore paid
by the Sublandlord shall be paid by the Subtenant and the Subtenant covenants
and agrees to pay such on demand.
10. DELIVERY OF POSSESSION
The Subtenant will accept possession of the Premises as of
July , 2001, (the "Possession Date") and the Subtenant shall insure the Premises
from the Possession Date.
11. CONSTRUCTION LIENS
If any construction, mechanics' or other lien or order for the
payment of money or any notice of intention to file a lien shall be filed
against the Premises, by reason of or arising out of any labour or material
furnished or alleged to have been furnished or to be furnished to or at the
request of the Subtenant, the Subtenant shall cause such lien to be cancelled
and discharged by bond or otherwise as allowed by law at the Subtenant's expense
within ten (10) business days after the Subtenant has been notified that a lien
has been file. The Subtenant shall also defend on behalf of the Sublandlord and
the Headlandlord, at the Subtenant's expense, any action, suit or proceeding
which may be brought thereon or for the enforcement of such lien, and shall pay
any damages and satisfy and discharge any judgement entered thereon and
indemnify the Sublandlord against any claim or damage resulting herefrom.
12. FORCE MAJEURE
Notwithstanding anything to the contrary contained in this
Sublease, if either party shall be unable to perform any of the terms,
obligations or conditions contained herein or in the lease or any Schedules due
to strikes, walkouts, labour disputes, civil commotion, war or warlike
operations, sabotage, fire, act of God, inability to procure materials or
services or governmental delay or otherwise beyond the reasonable control of
such party, other than financial inability, then such party shall be deemed not
to be in default under this offer or the lease for the period of such delay and
the time for performance of any such term, obligation or condition shall be
extended for the period of such delay.
13. NOTICE OF SUBLEASE
The Subtenant shall be entitled to register a notice of this
Sublease in a form approved by the Sublandlord. Upon the request of either party
hereto, the other party shall join in the execution of a memorandum or so-called
"short form" of this Sublease for the purposes of
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registration. Said memorandum or short form of this Sublease shall describe the
parties, the Subleased Premises and the Term of this Sublease, and shall be
prepared at the expense of the party making the request.
14. HEADLEASE TO GOVERN
This Sublease and all rights and interest of the Subtenant
under this Sublease are and shall at all times be expressly subordinate and
subject to all of the Terms and provisions of the Headlease and this Sublease
shall terminate on any termination of the Headlease. Subject to the obligations
of the Subtenant set out herein, the Sublandlord will perform the obligations
contained in the Headlease with respect to the Premises so far as they are not
required by the Sublease to be formed and observed by the Subtenant.
The Subtenant assumes and agrees to be bound by and to keep
and perform each and every one of the covenants, agreements and obligations with
respect to the Premises to be performed by the Sublandlord as Tenant in the
Headlease, save and except payment of Fixed Rent, and covenants to save harmless
and keep the Sublandlord and the successors indemnified from and against all
proceedings, damages cost, claims and expenses arising from or incurred by
reason of the Subtenant's failure to perform promptly any of such covenants,
agreements and obligations.
15. NOTICE
Any notice herein provided or permitted to be given by the
Subtenant to the Sublandlord or by the Sublandlord to the Subtenant shall be in
writing and shall be sufficiently given if mailed by prepaid, registered post,
or delivered to the other party at the address of such party set forth above or
transmitted by facsimile in the case of the Sublandlord to 905-513-9107 or to
the Subtenant at 303-388-9970 (Attention: Vice President, Real Estate). Any such
notice given as aforesaid shall be conclusively deemed to have been given, if
mailed, on the fifth (5th) business day following the day of mailing or, if sent
by facsimile transmission, on the next following business day, excluding
Saturdays and Sundays, or if delivered, on the day on which such notice is
delivered. In the event of a postal strike only transmission by facsimile or
personal delivery shall be permitted. Either party may at any time give notice
in writing to the other of any change of address of the party giving such notice
and from and after the giving of such notice, the address therein specified
shall be deemed to be the address of such party for the giving of notices
hereunder. The word "notice" in this paragraph shall be deemed to include any
request, settlement or other writing in this Sublease provided or permitted to
be given by the Sublandlord to the Subtenant or by the Subtenant to the
Sublandlord.
Notwithstanding anything contained in this Sublease, the
Sublandlord covenants with the Subtenant to make or cause to be made all such
acts, deeds, assurances and things at Sublandlord's cost as may be required or
necessary to prevent a forfeiture of the Headlease, provided that such
forfeiture is not caused by any act or omission of the Subtenant, including
commencement of a court application for relief from forfeiture.
16. SUCCESSORS AND ASSIGNS
This Sublease and everything contained in it including all
schedules annexed to it shall enure to the benefit of and be binding upon the
parties hereto and their respective permitted successors and assigns.
17. TIME
Time is of the essence of this Sublease and each and every
provision in it.
18. GOVERNING LAW
This Sublease shall be construed and governed in accordance
with the laws of the Province of Ontario.
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19. COUNTERPARTS
This agreement may be signed in counterparts and facsimile
signatures shall be binding as originals.
20. SUBORDINATION
This Sublease and the rights of Subtenant hereunder are and
shall be subject and subordinate to any and all mortgages, trust deeds, and
charges (any of which are herein called "Mortgage" or "Mortgages") now or which
in the future may be registered against the lands described in Schedule "A" to
the Headlease, or any portion thereof, and including all renewals, extensions,
modifications and replacements of any Mortgages from time to time. Subtenant
shall at any time on notice from Headlandlord or Sublandlord or a holder of any
Mortgage attorn to and become a tenant of the holder of any of such Mortgages
upon the same terms and conditions as set forth herein and shall execute
promptly on request by Headlandlord or Sublandlord any certificates, agreements,
instruments of postponement or attornment or other such instruments or
agreements as requested from time to time to postpone or subordinate this
Sublease and all of Subtenant's rights hereunder to any of such Mortgages or to
otherwise give full effect to any of the provisions of this paragraph.
Provided that the Subtenant is not in default hereunder,
Sublandlord shall obtain or cause to be obtained from the holder of any
Mortgage, in respect of which Subtenant has executed and delivered an instrument
of postponement, subordination or attornment as required hereby, a
non-disturbance agreement to permit Subtenant to continue in occupation of the
Premises in accordance with and subject to the terms of this Sublease so long as
Subtenant is in full and prompt compliance with all of its terms.
21. RECITALS
The recitals contained in this Sublease are true and correct
and form an integral part of this Sublease.
IN WITNESS WHEREOF the Parties hereby have duly executed this
Sublease as of the day and year above written, by affixing their respective
corporate seals under the hands of their proper signing officers duly authorized
in that behalf.
THE BUSINESS DEPOT LTD.
Per: /s/ William Heffernan
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William Heffernan
Vice President Real Estate
Per:
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We/I have authority to bind the corporation.
STARTEK CANADA SERVICES, LTD.
Per: /s/ E. Preston Sumner, Jr.
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E. Preston Sumner, Jr.
Executive Vice President
Per:
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We/I have authority to bind the corporation.