EXHIBIT 10.32
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS AGREEMENT made as of the 3rd day of May, 2002
BETWEEN:
INNOVATIVE METAL FIXTURES INC.
13200 VULCAN WAY, RICHMOND, B.C. V6V 1J8
(the "Assignor")
OF THE FIRST PART
AND:
AARON WIRE & METAL PRODUCTS LTD.
13191 MITCHELL ROAD, RICHMOND, B.C. V6V 1M7
(the "Assignee")
OF THE SECOND PART
AND:
BROADWAY PROPERTIES LTD.
#1O1-1177 WEST BROADWAY, VANCOUVER, B.C. V6H 1G3
(the "Landlord")
OF THE THIRD PART
WHEREAS:
A. By a written agreement of lease dated the 1st day of June, 2001 (the
"Lease"), a true copy of which is attached hereto as Schedule "A", made between
the Landlord as landlord and the Assignor as tenant, the Landlord leased unto
the Assignor those certain premises located in the City of Richmond, Province of
British Columbia, civically described as 13200 Vulcan Way (the "Premises"), for
an initial term of Seven (7) years from the 1st day of June, 2001 to be fully
completed and ended on the 31st day of May, 2008, and upon the further terms
and conditions set forth in the Lease;
B. The Assignor desires to assign all of its right and title in and to the Lease
and in and to the Premises to the Assignee; and
C. The Landlord has agreed to consent to such assignment, on the further terms
and conditions set out herein.
WITNESS that in consideration of the premises herein and of other good and
valuable consideration (the receipt and sufficiency of which is hereby
acknowledged by each of the parties hereto), the parties hereto covenant and
agree as follows:
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1. Effective the Effective Date (as hereinafter defined), the Assignor
absolutely assigns unto the Assignee all of its right, title and
interest in and to the Premises and in and to the Lease, together with
the unexpired residue of the term thereof, and together with all of the
benefits and advantages to be derived therefrom, to have and to hold
the same unto the Assignee subject to the observance and performance by
the Assignee of all of the terms, covenants and conditions contained in
the Lease on the part of the tenant therein to be observed and
performed.
2. The Assignee covenants and agrees with the Assignor and the Landlord
that it will from and including the Effective Date assume, be bound by
and be liable under and will observe and perform each and every one of
the terms, covenants and conditions contained in the Lease on the part
of the tenant therein to be observed and performed, including without
limitation payment of rent and all other amounts payable to the
Landlord pursuant to the provisions of the Lease.
3. The Assignee covenants and agrees with the Assignor and the Landlord
that it will indemnify the Assignor and the Landlord and save them
harmless from and against any and all actions, suits, costs, expenses,
charges, damages, losses, claims and demands for or on account of
non-payment of the rent and the non-performance or non-observance of
the said terms, covenants and conditions in the Lease on the part of
the tenant to be observed and performed.
4. The Assignor and the Landlord confirm and acknowledge to the Assignee
that Schedule "A" hereto is a true copy of the Lease.
5. The Assignor covenants and agrees with the Assignee that the Lease is a
valid and subsisting lease, that the terms, covenants and conditions
thereof on the part of the tenant therein to be observed and performed
have been duly observed and performed up to the Effective Date hereof,
that the Assignor is the proper party to grant this assignment, and
that, subject to the payment of rent and the observance and performance
of the terms, covenants and conditions of the Lease, the Assignee may
peaceably enjoy the Premises for the unexpired term of the Lease and
any renewal thereof without interruption by the Assignor or any person
claiming through the Assignor.
6. The Landlord confirms and acknowledges that the rent and other amounts
due under the Lease have been duly paid up to and including April 30,
2002, and that, with the exception of the rent due and payable for the
month of May, 2002, the Landlord is not presently aware of any default,
monetary or otherwise, by the Assignee under the terms of the Lease.
7. The Landlord hereby consents to the assignment of the Lease from the
Assignor to the Assignee, provided that the covenant in the Lease
against assignment or subletting without the prior written consent of
the Landlord shall remain in full force and effect and shall apply to
any further assignment or subletting of the Premises.
8. The Assignor acknowledges and agrees that nothing herein shall have the
effect of releasing or relieving the Assignor from its obligation to
observe and perform fully all of the terms, covenants and conditions
contained in the Lease on the part of the tenant therein to be observed
and performed.
9. The Assignor declares and acknowledges to the Landlord that all of its
ownership, right, title and interest (including future and contingent)
in and to any security deposit held by the Landlord pursuant to the
Lease are hereby transferred to the Assignee absolutely.
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10. This Agreement will enure to the benefit of and be binding upon the
parties hereto, their successors and assigns, subject to compliance
with the provisions of the Lease regarding transfer and assignment.
11. For the purposes of this Agreement, the "Effective Date" shall mean May
14, 2002:
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the
date first above written.
INNOVATIVE METAL FIXTURES INC. )
)
Per: /s/ STAN HILLIER )
-------------------- )
Authorized Signatory ) c/s
)
Per: )
-------------------- )
Authorized Signatory )
THE COMMON SEAL OF AARON WIRE & )
METAL PRODUCTS LTD. was hereunto )
affixed in the presence of )
)
Per: /s/ KEVIN MCGOVERN )
-------------------- )
Authorized Signatory ) c/s
)
Per: )
-------------------- )
Authorized Signatory )
THE COMMON SEAL OF BROADWAY )
PROPERTIES LTD. was hereunto )
affixed in the presence of: )
)
Per: /s/ [ILLEGIBLE] )
-------------------- )
Authorized Signatory ) c/s
)
Per: )
-------------------- )
Authorized Signatory )
SCHEDULE "A" Page 3
INDUSTRIAL LEASE
BETWEEN
BROADWAY PROPERTIES LTD.
LANDLORD
AND
INNOVATIVE METAL FIXTURES INC.
TENANT
13200 VULCAN WAY
RICHMOND, B.C.
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LEASE SUMMARY
THIS LEASE SUMMARY is attached to and forms part of the Indenture of Lease dated
for reference June 1, 2001
BETWEEN
BROADWAY PROPERTIES LTD., #101 - 1177 West Broadway,
Vancouver, B.C. V6H lG3
(the "Landlord")
AND:
INNOVATIVE METAL FIXTURES INC., 13200 Vulcan Way,
Richmond, B.C. V6V 1J8
(the "Tenant")
ARTICLE OR CLAUSE
Schedule A Civic Address of the Premises: 13200 Vulcan Way,
Richmond, B.C.
1.1(ee) and 3 Term: Seven (7) years.
1.1(d) Commencement Date: June 1, 2001.
1.1(f) Expiry Date: May 31, 2008.
4.1(a) Annual Basic Rent:
<Table>
<Caption>
YEARS PER SQ. FT. PER ANNUM PER MONTH
- ----- ----------- -------------- -------------
1 - 3 $ 4.00 $ 203,880.00 $ 16,990.00
4 - 6 $ 4.25 $ 216,622.50 $ 18,051.88
6 - 7 $ 4.50 $ 229,365.00 $ 19,113.75
</Table>
7.1 Use of Premises: Light metal and wire fabricating, manufacturing,
electrostatic painting and curing, assembly of finished goods,
warehousing, wholesale distribution of such products, warehousing of
other complimentary products for distribution purposes, and associated
offices, and for no other purposes without the prior approval of the
Landlord as set out herein.
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16.4 Landlord's Address for Rent Payments and Notices:
Broadway Properties Ltd.
Suite 101, 1177 West Broadway,
Vancouver, B.C. V6H 1G3
Attention: Mr. Al Roadburg
16.4 Tenant's Address for Notices:
13200 Vulcan Way
Richmond, B.C.
V6V 1J8
Attention: Stan Hillier
16.19 Deposit: A total of $38,631.01 (including GST), of which the sum of
$18,179.30 shall form the "Prepaid Rent" and the sum of $20,451.71
shall form the "Security Deposit".
Schedules: Schedule A Description and Plan of Premises
The articles, clauses, or Schedules of this Lease identified above in the margin
are those articles, clauses, or Schedules where references to particular Lease
information initially appears. Each such reference shall incorporate the
applicable information from this Lease Summary.
The Corporate Seal of BROADWAY )
PROPERTIES LTD. has been affixed )
to this document in the presence )
of: )
)
)
- -------------------------------- )
Authorized Signatory ) c/s
)
)
- -------------------------------- )
Authorized Signatory )
The Corporate Seal of INNOVATIVE )
METAL FIXTURES INC. has been )
affixed to this document )
in the presence of: )
) c/s
)
- -------------------------------- )
Authorized Signatory )
Page 6
THIS LEASE made and dated for reference 1st day of June, 2001
BETWEEN:
BROADWAY PROPERTIES LTD., #101 - 1177 West Broadway,
Vancouver, B.C. V6H 1G3
(the "Landlord")
AND:
INNOVATIVE METAL FIXTURES INC., 13200 Vulcan Way,
Richmond, B.C. V6V 158
(the "Tenant")
1. DEFINITIONS
1.1 The Landlord and the Tenant hereby agree that in this Lease the
following words or phrases shall, unless there is something in the
context inconsistent therewith, have the meanings hereinafter set out:
(a) "ADDITIONAL RENT" shall mean:
(i) to the extent such are not paid directly by the Tenant,
the Utility Costs and Tenant's Taxes,
(ii) the Operating Expenses, and
(iii) all other sums which may be payable to the Landlord
hereunder or reimbursable to the Landlord hereunder,
including, without limitation, all interest and penalties
payable by the Tenant hereunder, whether or not such sums are
referred to as Rent or Additional Rent or otherwise,
but Additional Rent shall not include the Annual Basic Rent;
(b) "ANNUAL BASIC RENT" shall mean the amount specified as such in the
Lease Summary as amended by written agreement of the Landlord and the
Tenant from time to time;
(c) "BUILDING" shall mean the building and improvements erected or to be
erected on the Lands;
(d) "COMMENCEMENT DATE" shall mean the date specified as such in the Lease
Summary;
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(e) "ENVIRONMENTAL LAWS" means any statutes, laws, regulations, orders,
bylaws, standards, guidelines, permits, and other lawful requirements
of any governmental authority having jurisdiction over the Premises 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;
(f) "EXPIRY DATE" shall mean the date specified as such in the Lease
Summary;
(g) "GST" means the tax levied under Part IX of the Excise Tax Act (Canada)
as the same may be amended or substituted from time to time;
(h) "HAZARDOUS SUBSTANCE" or "HAZARDOUS SUBSTANCES" means any pollutants,
contaminants, deleterious substances, underground or above ground
tanks, asbestos materials, hazardous, corrosive, or toxic substances,
special waste or waste of any kind, or any other substance which is now
or hereafter prohibited, controlled or regulated under Environmental
Laws;
(i) "INSURANCE Costs" shall mean all premiums and other amounts, which the
Landlord may expend in effecting or maintaining insurance coverage
under the provisions of this Lease;
(j) "LANDS" shall mean all and singular those certain parcels or tracts of
land described in Schedule A;
(l) "LANDLORD" shall mean the owner or the mortgagees in possession for the
time being of the Premises only during and in respect of their
respective periods of interest in the Premises;
(m) "LANDLORD'S MORTGAGEES" shall mean any and all existing or proposed
mortgagees, debenture holders, and trustees on behalf of mortgagees
holding any Mortgages;
(n) "LEASE" shall mean this indenture together with the Lease Summary and
all schedules attached hereto;
(o) "LEASEHOLD IMPROVEMENTS" means all fixtures (other than the Tenant's
trade fixtures), improvements, additions, partitions, equipment, and
alterations from time to time made to or installed in the Premises by
any person;
(p) "LEASE SUMMARY" shall mean pages (i) through (ii) attached to and
forming part of this Lease and headed "Lease Summary";
(q) "MANAGEMENT FEE" [intentionally deleted];
(r) "MORTGAGES" shall mean all mortgages, debentures, deeds of trust, and
mortgages securing bonds and all instruments and indentures
supplemental thereto which may now or hereafter
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charge the Lands and Premises, and all renewals, modifications,
consolidations, replacements, and extensions thereof;
(s) "OPERATING EXPENSES" shall mean all expenses of the Landlord actually
incurred in connection with the operation and maintenance of all or any
portion of the Lands, the Building, and the Premises and, without
restricting the generality of the foregoing, shall include:
(i) the Taxes;
(ii) the Insurance Costs;
(iii) all charges for water, gas, electricity, and other
utilities and services billed or charged directly to the
Landlord and used on or in respect of any part of the Lands
and the Building and all fittings, machines, apparatus,
meters, and any other thing leased in respect thereof, and all
work and services performed by any corporation, authority, or
commission in connection with such utilities, but excluding
Utility Costs (to the extent not paid directly by the Tenant);
(iv) repairs and maintenance of all or any portion of the
Lands and the Building performed by the Landlord (provided it
is understood and agreed that the Landlord has no obligation
to repair or maintain the same), but specifically excluding
structural repairs and maintenance, including roof repairs and
roof replacement, if required; and
(v) GST or other Sales Taxes on goods and services provided by
or on behalf of the Landlord;
but Operating Expenses shall not include interest on the Landlord's
debt or capital retirement of the Landlord's debt;
(t) "OPERATING YEAR" shall mean a twelve (12) month period which shall be
established by the Landlord from time to time, commencing on the first
day of a month in any calendar year and ending on the last day of the
12th following month, provided that the first operating period shall
commence on the Commencement Date and end on the last day of the
Landlord's designated Operating Year next following and the last
operating period shall terminate to coincide with the Expiry Date;
(u) "PREMISES" shall mean the entire Lands and the Building (which Building
comprises approximately 50,970 rentable square feet of office and
manufacturing space) thereon, as shown on the plan attached hereto as
Schedule A, together with the Leasehold Improvements, and as of the
Commencement Date are as described in the Lease Summary and as set out
in Schedule A hereto.;
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(v) "PREPAID RENT" means the sum referenced as such in the Lease Summary,
to be applied by the Landlord toward the Annual Basic Rent due and
payable for the first month of the Term.
(w) "PRIME RATE" means the rate of interest, expressed as an annual rate,
at the relevant time or times, established by the Royal Bank of Canada
at its main branch in Vancouver, British Columbia, as a reference rate
for commercial loans in Canadian dollars to its best commercial
customers and commonly referred to by the Royal Bank of Canada as its
"prime rate";
(x) "RELATIVE PORTION" shall mean, with respect to any amount payable under
this Lease, that fraction which has as its denominator the period of
time expressed in days in respect of which an amount payable hereunder
is calculated and which has as its numerator the number of days within
the same calculation period, but which fall within the Term or any
renewal period;
(y) "RELEASE" includes release, spill, leak, pump, pour, emit, discharge,
eject, escape, leach, dispose, or dump;
(z) "RENT" shall mean the Annual Basic Rent and the Additional Rent;
(aa) "ROOF" shall mean the roof membrane, roof insulation, and roof deck of
the Building;
(bb) "SALES TAXES" shall mean any and all taxes, fees, levies, charges,
assessments, rates, duties, and excises (whether characterized as sales
taxes, purchase taxes, goods and services taxes, or any other form)
which are imposed on the Landlord, which the Landlord is liable to pay
or which the Landlord is liable to collect and remit, 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
Premises or any portion thereof, on the Rent payable under this Lease
or any portion thereof, or in connection with the business of renting
the Premises or any portion thereof, including, without limitation,
GST.
Provided however that Sales Taxes shall exclude all of the following:
(i) income tax on the income of the Landlord under Part I of
the Income Tax Act (Canada) as it existed on the Commencement
Date,
(ii) the Tenant's Taxes,
(iii) the Taxes, and
(iv) corporation capital tax.
(cc) "SECURITY DEPOSIT" means the sum referenced as such in the Lease
Summary, to be held by the Landlord pursuant to clause 16.19 hereof;
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(dd) "SIGN" shall mean any sign, picture, notice, lettering, direction, or
other advertising or informational device of whatever nature;
(ee) "TAXES" shall mean all taxes, fees, levies, charges, assessments,
rates, duties, and excises which are now or may hereafter be levied,
imposed, rated, or assessed upon or with respect to the Lands or the
Building or any part thereof or any personal property of the Landlord
used therefor, whether levied, imposed, rated, or assessed by the
government of Canada, the government of British Columbia, or any
political subdivision, political corporation, district, municipality,
city, or other political or public entity, and whether or not now
customary or in the contemplation of the parties on the date of this
Lease. Without restricting the generality of the foregoing, Taxes shall
include all:
(i) real property taxes, general and special assessments, and
capital taxes;
(ii) taxes, fees, levies, charges, assessments, rates, duties,
and excises for transit, housing, schools, police, fire, or
other governmental services, or for purported benefits to the
Lands or the Building;
(iii) local improvement taxes, service payments in lieu of
taxes, and taxes, fees, levies, charges, assessments, rates,
duties, and excises, however described, that may be levied,
rated, or assessed as a substitute for, or as an addition to,
in whole or in part, any property taxes or local improvement
taxes; and
(iv) costs and expenses, including legal and other
professional fees and interest and penalties on deferred
payments, incurred by the Landlord in contesting or appealing
any taxes, assessments, rates, levies, duties, excises,
charges, or other amounts as aforesaid;
but Taxes shall exclude all of the following:
(v) income tax on the income of the Landlord under Part I of
the Income Tax Act (Canada) as it existed on the Commencement
Date,
(vi) the Tenant's Taxes,
(vii) the Sales Taxes, and
(viii) corporation capital tax.
(ff) "TENANT'S TAXES" shall mean all taxes, fees, levies, charges,
assessments, rates, duties, and excises which are now or may hereafter
be levied, imposed, rated, or assessed by any lawful authority relating
to or in respect of the business of the Tenant or relating to or in
respect of personal property and all business and trade fixtures,
machinery and equipment, cabinet work, furniture, and movable
partitions owned or installed by the Tenant at the expense of the
Tenant or being the property of the Tenant, or relating to or in
respect of the Leasehold
Page 11
Improvements or other improvements to the Premises built, made, or
installed by the Tenant, on behalf of the Tenant or at the Tenant's
request, whether any such amounts are included by the taxing authority
in the Taxes;
(gg) "TERM" shall mean the term specified in the Lease Summary;
(hh) "TRANSFER" shall mean any transfer, assignment, charge, mortgage,
sublease, licence, sharing of possession, parting with possession, or
any other disposition of this Lease or any estate or interest therein
or the Premises or any part thereof, including without limitation a
transfer by operation of law;
(gg) "TRANSFEREE" shall mean any person to whom a Transfer is made or
intended to be made; and
(hh) "UTILITY COSTS" shall mean all charges for water, gas, telephone,
electric light and power, and all other utilities and services used on
or in respect of the Premises or any part thereof, together with all
costs and charges for all fittings, machines, apparatus, meters, and
any other thing leased or supplied in respect thereof and all costs and
charges for all work and services performed by any corporation,
authority, or commission in connection with such utilities and services
in respect of the Premises.
2. THE DEMISE
2.1 DEMISE OF PREMISES
In consideration of the rents, covenants, conditions, and agreements hereinafter
respectively reserved and contained, the Landlord hereby leases to the Tenant
the Premises.
2.2 CONDITION OF PREMISES
The Premises are provided to the Tenant in an "as is, where is" condition save
that the Landlord shall, on or before the Commencement Date and at the
Landlord's sole cost and expense, perform the following work therein:
(a) OFFICE PREMISES:
(i) make operational the door between the office and the warehouse
which is screwed shut;
(ii) finish repainting the walls (white) and the doors (black),
including the above described door;
(iii) replace the carpet in the office and the flooring in the adjacent
washrooms and first aid room with linoleum or tile flooring (color:
medium to dark blue);
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(iv) replace all ceiling tiles;
(v) clean windows;
(vi) replace all broken window panes;
(vii) check office heating system and make sure operational;
(viii) clean up washrooms and first aid room: repaint (white), provide
new flooring as described above, and repair fixtures, if required;
(ix) replace door missing on one of the washrooms; and
(x) make operational the sink in the first aid room, which is missing
water supply and taps.
(b) WAREHOUSE PREMISES:
(i) existing fluorescent lighting to be made fully operational and
upgraded to Workers' Compensation Board levels as follows:
(1) 24,000 square foot low ceiling section, lights all raised
to maximum, approximately 13' to 14' height, 50 foot candles
of illumination;
(2) 24,750 square foot high ceiling section, lights all raised
to 20' height, 50-foot candles of illumination in north 60%,
30 foot candles of illumination in south 40%
(ii) alternatively, the Tenant may choose to have the Landlord's cost
to upgrade the existing fluorescent lighting applied toward replacing
with new halogen lighting, and the Tenant will pay the rest;
(iii) check warehouse unit heaters and make sure operational;
(iv) service all loading doors and put in good working order, noting in
particular that:
(1) the large roll up door at the south east corner was hit
and is severely damaged, and
(2) the double man door slightly north of the above is screwed
shut and is missing some hardware;
(v) the trailer/washroom is to remain "as is", and the Tenant is to
clean up the interior and possibly relocate;
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(vi) complete the repair of warehouse floor cracks and the sealing of
the floor surface; and
(vii) paint all interior warehouse walls (white).
(c) GENERAL
(i) repair and seal all existing roof vents;
(ii) proceed with roof membrane repairs as soon as possible, it being
understood that if it is determined that the roof has to be replaced in
certain sections, the Tenant would prefer the work to be completed
prior to the Tenant taking occupancy;
(iii) ensure that all emergency lighting and exit lighting meets
municipal requirements; and
(iv) check sprinkler system.
(d) EXTERIOR
(i) repair wall at south east corner of the Building which, along with
the loading door, appears to have been hit by a truck,
(ii) paint exterior walls to cover any reference to the past tenant,
Avcorp;
(iii) exterior lights need to be checked (they seem to always be on);
and
(iv) remove all debris on asphalt of the property (car windshields,
sheet metal and litter located in particular on the southeast corner of
the property).
2.3 TENANT NOT LIABLE
Notwithstanding anything to the contrary in this Lease contained, and
specifically notwithstanding the provisions of clause 15.4 hereof, the Tenant
shall not be liable for any Hazardous Substance in or on the Premises which was
deposited and/or released or caused to be deposited and/or released into or onto
the Premises prior to the date on which the Tenant took possession of the
Premises, unless such Hazardous Substance was deposited or released into or onto
the Premises by the Tenant or those for whom the Tenant is, in law, responsible.
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3. TERM
3.1 INITIAL TERM
The Tenant shall have and hold the Premises, subject to the exceptions and
reservations aforesaid, unto the Tenant for the Term from and including the
Commencement Date until and including the Expiry Date.
4. RENT
4.1 ANNUAL BASIC RENT AND ADDITIONAL RENT
The Tenant shall pay to the Landlord during the Term the following Rent payable
at the Landlord's address specified in the Lease Summary or at such other place
as the Landlord may from time to time designate in writing, in the following
installments:
(a) the Annual Basic Rent (plus applicable GST) payable in advance in
consecutive monthly instalments on the first day of each and every
month in each and every year of the Term, commencing on the
Commencement Date and continuing until and including the first day of
the month in which the Expiry Date falls; and
(b) the Additional Rent payable in advance in consecutive monthly
instalments on the first day of each and every month in each and every
year of the Term, commencing on the Commencement Date and continuing
until and including the first day of the month in which the Expiry Date
falls, unless indicated otherwise in this Lease.
The Landlord confirms that the estimated Additional Rent payable by the Tenant
is approximately $1.20 per square foot of the rentable area of the Premises per
annum.
The Landlord acknowledges receipt of the Prepaid Rent, which shall be applied by
the Landlord to the Annual Basic Rent (plus applicable GST) due and payable for
the first month of the Term.
4.2 TO PAY
The Tenant shall pay the Annual Basic Rent and Additional Rent when due in
accordance with the provisions of this Lease.
4.3 NO ABATEMENT
The Tenant covenants and agrees with the Landlord that all of the Rent payable
under this Lease shall be paid by the Tenant without demand, deduction, set-off,
or abatement whatsoever, except as specifically provided in subclause 10.1(a).
The Tenant covenants and agrees that the Landlord may at its option apply all
sums received from or due to the Tenant against any amounts due and payable
hereunder in such manner as the Landlord may see fit, regardless of any
designation or instructions by the Tenant to the contrary.
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4.4 POST-DATED CHEQUES
The Tenant covenants and agrees that, if the Landlord so requests, the Tenant
shall deliver to the Landlord prior to the commencement of each Operating Year a
series of post-dated cheques each in the amount of the monthly instalments of
the Annual Basic Rent (plus GST applicable thereon) and the Additional Rent for
that Operating Year.
4.5 ADJUSTMENT
If the Term shall commence or cease on a day other than the commencement of or
the end of any period of time in respect to which any amount payable hereunder
is calculated, then the Tenant shall pay to the Landlord its Relative Portion of
such amount for such period of time. Without limiting the generality of the
foregoing, if the Term does not subsist during the whole of any calendar year,
the Tenant shall pay the Relative Portion of estimated and actual Operating
Expenses for such Operating Year.
4.6 ACCRUAL OF ANNUAL BASIC RENT
The Annual Basic Rent shall accrue from day to day. Where the calculation of any
Additional Rent is not made until the termination or expiry of this Lease, the
obligation of the Tenant to pay such Additional Rent shall survive the
termination or expiry of this Lease and such amounts shall be payable by the
Tenant upon demand by the Landlord.
4.7 NET LEASE
It is the intention of the parties that this Lease shall be a net lease and that
the Annual Basic Rent provided to be paid to the Landlord hereunder shall be net
to the Landlord and shall yield to the Landlord the entire such rental during
the Term and any renewal thereof without abatement for any cause whatsoever
except as set forth in subclause 10.1(a). Save as specifically set forth in this
Lease, all costs, expenses, and obligations of every kind and nature whatsoever
relating to the Premises whether or not herein referred to and whether or not of
a kind now existing or within the contemplation of the parties, shall be paid by
the Tenant.
4.8 SALES TAXES
The Landlord will, acting reasonably, estimate the amount of Sales Taxes to be
paid in advance with monthly payments of Rent for the period to which the
estimate applies; and any necessary adjustment will be made in the same manner
as set out in clause 5.2. Amounts payable by the Tenant as Sales Taxes will not
be deemed to be Rent or Additional Rent, but the Landlord will have the same
rights and remedies for non-payment of Sales Taxes as it has for non-payment of
Rent.
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5. ADDITIONAL RENT
5.1 ESTIMATED EXPENSES
The Landlord shall have the right to make reasonable estimates of the amount of
any or all of the Additional Rent for each Operating Year during the Term.
5.2 PAYMENT
The Tenant shall pay to the Landlord in equal monthly instalments on the first
day of each month during each Operating Year the Additional Rent or any portion
thereof as estimated by the Landlord for the Operating Year which falls in whole
or in part within the respective Operating Year. In the event that the Tenant
makes any overpayment to the Landlord on account of any Additional Rent payable
under this Article 5 during any Operating Year, the Tenant shall be entitled to
a credit or a refund, at the Landlord's option, to the Tenant's account in
respect of the payment of such item of Additional Rent for the next succeeding
Operating Year. Upon the expiry of the Term and any renewal thereof and the
fulfilment by the Tenant of all of its obligations under this Lease, any
remaining credit shall be refunded to the Tenant.
5.3 LANDLORD'S CERTIFICATE
A certificate of an officer of the Landlord as to the actual Additional Rent or
any portion thereof for any Operating Year shall be final and binding upon the
Tenant and the Landlord.
6. TENANT'S TAXES AND UTILITY COSTS
6.1 PAYMENT
The Tenant shall promptly pay to the applicable authorities the Tenant's Taxes
and the Utility Costs as they become due.
6.2 EVIDENCE OF PAYMENT
The Tenant shall provide to the Landlord, when and if requested by the Landlord,
receipts for payments made by the Tenant in respect of the Tenant's Taxes and
the Utility Costs.
7. USE OF PREMISES
7.1 USE OF PREMISES
The Tenant shall not use the Premises nor allow the Premises to be used for any
purpose other than that specified in the Lease Summary without the prior
approval of the Landlord (not to be unreasonably withheld), nor in any manner
inconsistent with such use and occupation, and the Tenant shall not, at any time
during the Term or any renewal thereof, commit or suffer to be committed any
waste upon the Premises, nor shall the Tenant use, exercise, carry on, or
permit, or
Page 17
suffer to be used, exercised, or carried on, in, or upon the Premises, or any
part thereof, any noxious, noisome, or offensive art, trade, business,
occupation, or calling, or keep, sell, use, handle, or dispose of any
merchandise, goods, or things which are objectionable, or by which the Premises
or the Lands or any part thereof may be damaged or injuriously affected, and no
act, matter, or thing whatsoever shall, at any time during the Term or any
renewal thereof, be done in or upon the Premises or any part thereof which may
result in annoyance, nuisance, grievance, damage, or disturbance to the
occupiers or owners of any other lands or premises or to the holders of any
registered easement, right of way, or other encumbrance charging the whole or
part of the Lands or the Building, PROVIDED THAT the Landlord hereby confirms
and acknowledges that, provided the Tenant uses the Premises for the purpose set
out in the Lease Summary and conducts such use in compliance with the provisions
of clause 7.2, below, such use by the Tenant will not be deemed to be in breach
of the foregoing. The Tenant shall use its best efforts to prevent anything
being done on the Premises or the Lands which may result in any premises other
than the Premises being picketed or otherwise subjected to industrial action or
demonstrations. The Tenant shall forthwith take all action and proceedings
reasonably necessary to cause such picketing, industrial action, and
demonstrations to cease without delay. The Tenant shall not place in the
Premises any heavy machinery or equipment without first obtaining the consent,
in writing, of the Landlord. The Tenant shall immediately advise the Landlord of
the presence of, and shall do all things necessary to remove, any dangerous
condition from time to time existing on the Premises and arising as a result of
the act or omission of the Tenant or any person for whom the Tenant is, at law,
responsible. non-compliance with the provisions of this clause 7.1.
7.2 COMPLIANCE WITH LAWS
The Tenant shall do, observe, and perform all of its obligations and all matters
and things necessary or expedient to be done, observed, or performed by the
Tenant by virtue of any law, statute, bylaw, ordinance, regulation, or lawful
requirements of any governmental authority or any public utility lawfully acting
under statutory authority, and all demands and notices in pursuance thereof
whether given to the Tenant or the Landlord and in any manner or degree
affecting the exercise or fulfillment of any right or obligation arising under
or as a result of this Lease and affecting the Premises and the use thereof by
the Tenant. If any such demand or notice is given lawfully requiring the
execution of works by reason of anything done, omitted, or permitted by the
Tenant, then:
(a) if such notice is given to the Tenant, the Tenant shall forthwith
deliver the same or a true copy thereof to the Landlord and the Tenant
shall forthwith execute, at its own expense, to the satisfaction of the
Landlord and the person giving such notice, all such works as the
Landlord may approve in writing in order to comply with the
requirements of that notice; and
(b) if such notice is given to the Landlord, the Landlord shall notify the
Tenant and thereupon the Tenant shall forthwith execute, at its own
expense, to the satisfaction of the Landlord and the person giving such
notice, all such works as the Landlord and the person giving such
notice may require in order to comply with the requirements of the said
notice.
Page 18
Notwithstanding the foregoing, the Landlord shall have the right to execute any
such works and the Tenant shall afford to the Landlord all necessary access to
the Premises and other facilities for such purpose and the Tenant shall, on
demand by the Landlord, pay to the Landlord all costs and expenses incurred by
the Landlord in executing and performing any and all such works.
8. INDEMNITY AND INSURANCE
8.1 TENANT'S INSURANCE
(a) The Tenant shall, at its sole cost and expense during the Term and
during such other period of time that the Tenant occupies the Premises,
take out and maintain in full force and effect, the following:
(i) "all risks" insurance upon all merchandise,
stock-in-trade, furniture, fixtures, equipment, Leasehold
Improvements, and other property of every kind and description
located at the Premises, owned by, or made or installed by or
on behalf of the Tenant and any sub-tenant or licensee or for
which the Tenant is responsible or legally liable, in an
amount at least equal to the full insurable value thereof,
calculated on a stated amount co-insurance and replacement
cost basis;
(ii) automobile liability insurance to a limit of liability of
not less than $2,000,000 in any one accident, covering all
licensed motor vehicles owned by the Tenant and used in
connection with its and its licensee's or sub-tenant's
business carried on from the Premises;
(iii) comprehensive bodily injury and property damage
liability insurance applying to the operations of the Tenant
and its licensee or sub-tenant carried on from the Premises
and which shall include, without limitation, personal injury
liability, product liability, contractual liability, non-owned
automobile liability, and protective liability coverage with
respect to the occupancy of the Premises by the Tenant; and
such insurance shall be written for an amount of not less than
$3,000,000 per occurrence, or such higher amount as the
Landlord may from time to time reasonably require;
(iv) tenant's all risks legal liability insurance in an amount
not less than the replacement cost of the Building;
(v) broad form comprehensive boiler and machinery insurance on
all boilers and pressure vessels in the Premises;
(vi) business interruption insurance in such amounts as will
reimburse the Tenant for direct or indirect loss of earnings
attributable to all perils required to be insured against by
the Tenant hereunder; and
Page 19
(vii) any other form or forms of insurance as the Landlord may
reasonably require from time to time in amounts and for perils
against which a prudent tenant acting reasonably would protect
itself in similar circumstances.
(b) All policies of insurance referred to in this paragraph shall include
the following provisions:
(i) the policies shall not be affected or invalidated by any
act, omission, or negligence of any person which is not within
the knowledge or control of the insured thereunder;
(ii) subject to subclause 10.1(b), all property damage
policies written on behalf of the Tenant shall contain a
waiver of any subrogation rights which the Tenant's insurers
may have against the Landlord and against those for whom the
Landlord is, in law, responsible, whether any insured loss or
damage is caused by the act, omission, or negligence of the
Landlord, or by those for whose acts the Landlord is, in law,
responsible, or otherwise;
(iii) all policies of liability insurance shall include the
Landlord and any persons, firms, or corporations affiliated
with the Landlord and designated by the Landlord as additional
insureds and shall provide that each person, firm, or
corporation insured under such policies shall be insured in
the same manner and to the same extent as if separate policies
had been issued to each; and
(iv) all policies shall contain an undertaking by the insurers
to give the Landlord not less than 30 days' prior written
notice of any cancellation or other termination thereof, or
any change which restricts or reduces the coverage afforded
thereby.
(c) The Tenant agrees that certificates of insurance shall be delivered to
the Landlord as soon as practicable after the placing thereof. The
Tenant shall, when required by the Landlord, forthwith provide to the
Landlord evidence that all premiums for all insurance policies have
been paid.
(d) For good and valuable consideration, and subject to clause 8.4, the
Tenant does hereby release and relieve the Landlord and those persons
for whom the Landlord is, in law, responsible, from liability and
responsibility for, and waives its entire claim for recovery of any
loss or damage whatsoever arising out of or incident to, the occurrence
of any of the perils covered by, or which would be covered by, the
insurance policies which the Tenant is obligated to obtain and maintain
in force under the terms of this Lease.
(e) The Tenant shall not do or permit anything to be done upon the Premises
whereby any policy of insurance against loss or damage to the Premises
or against legal liability for damage to persons or property caused by
the ownership, maintenance, use, or occupancy of the Premises, the
Lands, or the Building, or by reasons of the conduct of any business
carried on thereon, may be invalidated; and for such purpose, upon
receipt of notice in writing from any insurer of the Premises, the
Lands, or the Building requiring the execution
Page 20
of works or a discontinuance of any operations in order to correct such
situation, the Tenant shall comply therewith.
(f) The Tenant agrees that if the Tenant fails to take out or keep in force
any insurance coverage referred to in this clause 8.1, or if any such
insurance is not approved by the Landlord and the Landlord's
Mortgagees, and the Tenant does not rectify the situation within 72
hours after written notice by the Landlord to the Tenant setting forth
the Landlord's objections, then the Landlord shall have the right,
without assuming any obligation in connection therewith, to effect such
insurance coverage and shall have the right to recover all costs and
premiums incurred in effecting such insurance coverage from the Tenant
pursuant to clause 8.1.
8.2 INDEMNIFY LANDLORD
The Tenant shall indemnify and save harmless the Landlord from and against any
and all manner of actions or causes of action, damages, costs, loss, or expenses
of whatever kind (including without limitation legal fees on a solicitor and
client basis) which the Landlord may sustain, incur, or be put to by reason of
or arising out of any act or omission of the Tenant or any persons for whom the
Tenant is, at law, responsible, or from the use or occupation of the Premises,
the Lands, or the Building, in whole or in part and, without limiting the
generality of the foregoing, from the non-observance or non-performance by the
Tenant or any persons for whom the Tenant is, at law, responsible of any of the
obligations imposed under the provisions of any laws, ordinances, regulations,
or requirements of any federal, provincial, municipal, or other authority, or
any of the covenants, agreements, terms, conditions, and provisos contained in
this Lease to be observed and performed by the Tenant; and such liability to
indemnify and save harmless shall survive any termination of this Lease and the
expiry of the Term or any renewal hereof, anything in this Lease to the contrary
notwithstanding.
8.3 LANDLORD'S INSURANCE
(a) The Landlord shall, during the Term and any renewal thereof, take out
and maintain in full force and effect insurance against all risks of
physical loss or damage to the Building, and such fixtures and
improvements as the Landlord shall determine, including the perils of
flood and earthquake and including gross rental value insurance, in
amounts equal to the full insurable value thereof calculated on a
replacement cost basis, and subject to such deductibles as the Landlord
may reasonably determine. Provided however that the full insurable
value shall not include, and the insurance shall not cover, any
property of the Tenant, whether owned by the Tenant or held by it in
any capacity, nor Leasehold Improvements nor any other property of
whatsoever kind and description located at the Premises whether made or
installed by or on behalf of the Tenant. The Landlord shall, upon 30
days' written notice from the Tenant, advise the Tenant of the amount
of the deductible referred to in this subclause.
(b) The Landlord shall, upon written request by the Tenant, provide the
Tenant with evidence from time to time that such insurance has been
effected.
Page 21
(c) The Landlord may, but shall not be obligated to, take out and carry any
other form or forms of insurance as the Landlord or the Landlord's
Mortgagees may consider advisable or beneficial, including, without
limiting the foregoing, comprehensive liability insurance and boiler
and machinery insurance.
(d) Notwithstanding any contribution by the Tenant to any Insurance Costs
as provided for herein, no insurable interest shall be conferred upon
the Tenant under policies carried by the Landlord.
8.4 LIMITATION OF LIABILITY OF LANDLORD
(a) The Landlord shall not be liable for any personal injury, death, or
property loss or damage sustained by the Tenant or its employees,
agents, sublessees, licensees, or those doing business with it on the
Premises, in the Building, or on the Lands, no matter how caused,
except to the extent caused by the negligence of the Landlord or those
persons for whom the Landlord is, in law, responsible; and the Tenant:
(i) shall indemnify the Landlord against all actions or
liabilities arising out of such personal injury, death, or
property damage or loss, except to the extent caused by the
negligence of the Landlord or those persons for whom the
Landlord is, in law, responsible; and
(ii) hereby releases the Landlord and its officers, agents,
and employees from all claims for damages or other expenses
arising out of such personal injury, death, or property loss
or damage, except to the extent caused by the negligence of
the Landlord or those persons for whom the Landlord is, in
law, responsible.
(b) Without limiting the foregoing, the Landlord shall not be liable for
any personal injury, death, or property loss or damage sustained by
the Tenant or its employees, agents, sublessees, licensees, or invitees
on the Premises, in the Building, or on the Lands caused by theft or
breakage or by steam, water, rain, snow, radioactive materials,
microwaves, deleterious substances, gases, pollutants, or any other
materials or substances which may leak into, or issue or flow from any
neighboring lands or adjacent premises, or from the water, steam, or
drainage pipes or plumbing works of the same or from any place, or any
loss or damage caused by or attributable to the condition or
arrangements of any electric or other wiring, or any damage caused or
anything done or omitted to be done by any other tenant or occupant of
the Lands except to the extent caused by the negligence of the Landlord
or by those persons for whom the Landlord is, in law, responsible; and
the Tenant:
(i) shall indemnify the Landlord against all actions or
liabilities arising out of such personal injury, death, or
property damage or loss except to the extent caused by the
negligence of the Landlord or those persons for whom the
Landlord is, in law, responsible; and
Page 22
(ii) hereby releases the Landlord and its officers, agents,
and employees from all claims for damages or other expenses
arising out of such personal injury, death, or property loss
or damage, except to the extent caused by the negligence of
the Landlord or those persons for whom the Landlord is, in
law, responsible.
9. MAINTENANCE, REPAIRS, AND ALTERATIONS
9.1 REPAIR BY TENANT
The Tenant shall, at all times during the Term and any renewal thereof and at
its own expense, promptly maintain, decorate, clean, renew, repair and replace
the Premises and all parts thereof in a reasonable operating condition,
excluding repairs and replacements required by reasonable wear and tear, and
including, without limiting the foregoing, the Building (excluding structural
repairs and maintenance, and specifically excluding roof repairs and roof
replacement, if required), equipment, fixtures, machinery, facilities,
equipment, and appurtenances installed by the Tenant or installed by the
Landlord as part of the Building, and specifically including all systems and
services serving the Building including but not limited to plumbing, heating,
ventilation, air-conditioning, electricity and gas. The Tenant shall also heat
the Premises in a reasonable manner so as to prevent any damage thereto by
reason of frost or moisture. At the end or sooner termination of the Term or any
renewal thereof the Tenant shall yield up to the Landlord, without notice from
the Landlord, the Premises including all fixtures, repaired, decorated, paved,
cleaned, renewed, and maintained in the condition required under this Lease.
Without limiting the generality of the foregoing, the Tenant shall repaint all
internal work of the Premises which the Landlord may from time to time require
to be repainted, such repainting to be done by the Tenant during every fifth
year of the Term and any renewal thereof and also during the earlier of:
(a) the last year of the Term or any renewal thereof, or
(b) the Thirty (30) day period immediately following the termination or
surrender of this Lease.
All repainting shall be in accordance with reasonable specifications approved by
the Landlord and shall be completed to the reasonable satisfaction of the
Landlord.
9.2 REPAIR ON NOTICE
(a) The Tenant shall permit the Landlord and its duly authorized agents or
nominees, with or without workers and others, at all reasonable times
to enter upon the Premises for the purpose of examining the state of
repair, condition, and use thereof, and to permit such entry after the
Landlord shall have given 24 hours' notice in writing to the Tenant of
such intended entry and examination, or without notice in the event of
an emergency or a perceived emergency, and in every case the Tenant
shall afford the Landlord all aid and facilities in such entry and
examination, and upon notice in writing of defect or want of repair
being given by the Landlord to the Tenant, to cause the same to be
repaired, as required by clause 9.1, within 30 days from the date of
the giving of such notice by the Landlord. If the Tenant
Page 23
shall at any time default in the performance or observance of any of
the covenants in this Lease for or relating to the repair, replacement,
maintenance, cleaning, renewal, or decoration of the Premises or any
part thereof and such default shall continue for 30 days after notice
in writing from the Landlord of default in respect of repair,
replacement, maintenance, cleaning, renewal, or decoration of the
premises, then the Tenant shall permit the Landlord and its duly
authorized agents and nominees, with or without workers and others, and
without prejudice to the Landlord's right of re-entry, to enter into
and upon the Premises and repair, replace, decorate, clean, renew, and
maintain the same at the expense of the Tenant; and the Tenant shall
afford the Landlord all aid and facilities in doing or causing the same
to be done and shall repay to the Landlord on demand all costs and
expenses in respect of such repairs, replacements, maintenance,
cleaning, renewal, and decoration as aforesaid.
(b) The Tenant shall pay to the Landlord administration charges of the
Landlord in the sum of 15% of the total cost of any work specifically
completed by the Landlord on behalf of the Tenant, such work being
deemed to be the responsibility of the Tenant.
9.3 BUSINESS AND TRADE FIXTURES
The Tenant may install its usual business and trade fixtures in the usual manner
in the Premises, provided such installation does not damage the Premises and
provided further that, if requested by the Landlord, the Tenant shall have
submitted to the Landlord plans and specifications for such business and trade
fixtures and obtained the prior written consent of the Landlord thereto, which
consent shall not be unreasonably withheld. All business and trade fixtures
owned or installed by the Tenant in or on the Premises shall remain the property
of the Tenant and shall be removed by the Tenant at the expiration of the Term
or any renewal thereof or at the sooner termination thereof, provided that the
Tenant at its expense shall repair any damage to the Premises caused by such
removal. Such removal by the Tenant shall be permitted provided that the Tenant
is not in default under any covenant or agreement contained herein at the time
of such removal; and if in default, the Landlord shall have a lien on the
Tenant's business and trade fixtures as security against loss or damage
resulting from any such default by the Tenant, and the Tenant's business and
trade fixtures shall not be removed by the Tenant until such default is cured,
unless otherwise directed by the Landlord. The Landlord may elect to require the
Tenant to remove all or any part of the business and trade fixtures owned or
installed by or on behalf of the Tenant at the expiration or termination of the
Term or any renewal thereof, in which event such removal shall be done at the
Tenant's expense and the Tenant shall, at its expense, repair any damage to the
Premises caused by such removal. If the Tenant does not remove its business and
trade fixtures forthwith after written demand by the Landlord, such property
shall, if the Landlord elects, be deemed to become the Landlord's property or
the Landlord may remove the same at the expense of the Tenant and the cost of
such removal shall be paid by the Tenant forthwith to the Landlord on written
demand, and the Landlord shall not be responsible for any loss or damage to such
property as a result of such removal.
Page 24
9.4 ALTERATIONS AND ADDITIONS
The Tenant shall not remove, alter, or change the position or style of, or add
to, the Premises or any part thereof, or make any excavations on the Lands,
without in any and every such case having first submitted plans and
specifications thereof to the Landlord and having obtained the prior written
consent of the Landlord thereto. All work shall be done in a good and
workmanlike manner by contractors or tradespeople approved in writing by the
Landlord. The Tenant shall pay to and reimburse the Landlord forthwith on demand
for all costs and expenses incurred by the Landlord in the review and approval
of any plans and specifications by the Landlord's architects and engineers. The
Tenant shall obtain and pay for all required building and occupancy permits in
respect of its work as aforesaid. The Tenant shall, at its own cost and expense,
take out or cause to be taken out any additional insurance coverage reasonably
required by the Landlord to protect the respective interests of the Landlord and
the Tenant during all periods when any such work is being performed.
9.5 LEASEHOLD IMPROVEMENTS
Any and all Leasehold Improvements, but not Tenant's business and trade fixtures
in or upon the Premises, whether placed there by the Tenant or the Landlord or a
previous occupant of the Premises, shall immediately upon such placement become,
and shall thereafter remain, the property of the Landlord without compensation
therefor to the Tenant. Notwithstanding anything herein contained, the Landlord
shall be under no obligation to repair, maintain, replace, or insure the
Leasehold Improvements. The Landlord may elect that any or all Leasehold
Improvements made or installed by or on behalf of the Tenant under this Lease be
removed at the expiry or earlier termination of the Term or any renewal thereof,
and it shall be the Tenant's obligation to restore the Premises to the condition
in which they were prior to the installation of the Leasehold Improvements. Such
removal and restoration shall be at the sole expense of the Tenant. The Tenant
shall not mortgage, charge, encumber, or grant any security interest in any
Leasehold Improvements made or installed by or on behalf of the Tenant
hereunder.
9.6 REPAIR BY LANDLORD
The Landlord shall, at all times during the Term and any renewal thereof and at
its own expense, maintain, repair and replace the structural elements of the
Building (including structural repairs and maintenance, and specifically
including roof repairs and roof replacement, if required), such maintenance,
repairs and replacements to be carried out in a reasonably timely manner upon
notice from the Tenant, subject to clause 16.7 of this Lease.
10. DAMAGE, DESTRUCTION, OR EXPROPRIATION OF THE PREMISES
10.1 DAMAGE AND DESTRUCTION
(a) If the Building is damaged by fire or other casualty which renders all
of the Premises within such Building or a substantial area of the
Premises within such Building unusable by the Tenant or otherwise
materially adversely affects the business carried on by the Tenant
therein, then the Rent shall from and after the date of the damage
abate in the same
Page 25
proportion as such unusable area of the Premises within such Building
bears to the total area of the Premises in such Building, and such
abatement shall continue until such unusable area of the Premises in
such Building is capable of use by the Tenant or until this Lease is
terminated with respect thereto, whichever shall first occur.
(b) Except as provided in subclause 10.1(c), if the Building is damaged by
fire or other casualty, and the damage is covered by insurance held by
the Landlord under this Lease, then the damage to such Building shall
be repaired by the Landlord at its expense provided that the Landlord
shall not be obligated to repair damage to the Building which is in
excess of the proceeds of insurance received by the Landlord. The
Tenant shall, at its expense, repair all Leasehold Improvements and any
installations, alterations, additions, partitions, improvements, and
fixtures made by or on behalf of the Tenant. At the option of the
Landlord, such repairs shall be performed by the Landlord at the
expense of the Tenant if the Landlord considers that this would be more
efficient and cost effective. All repairs which the Landlord is
required to make hereunder shall be made with due diligence, provided
that the Landlord shall not be liable to the Tenant for any loss or
damage suffered by the Tenant as a result of any delay which may arise
by reason of adjustment of insurance on the part of the Landlord or on
account of the circumstances described in clause 16.7.
(c) If, in the Landlord's opinion, the Building is damaged by fire or other
casualty to the extent that it cannot reasonably be repaired or rebuilt
within 90 days after the occurrence of such damage, and if the Landlord
shall consequently decide not to restore the same, then the Landlord
shall, within 15 working days after the happening of such fire or other
casualty, give to the Tenant a notice in writing of such decision and
thereupon the Term and any renewal of this Lease shall expire with
respect to such Building effective the 15th business day following the
occurrence of the damage, and the Tenant shall vacate such Building and
the Lands pertaining thereto and surrender the same to the Landlord,
and all rights of the Tenant hereunder shall cease and determine with
respect thereto within two business days following the effective date
of termination. If the Building is damaged as aforesaid and the
Landlord does not give notice as aforesaid, then the Landlord shall
diligently proceed to repair or rebuild such Building in accordance
with subclause 10.1(b). If such repair or rebuilding is not completed
and available for occupation by the Tenant within 180 days from the
time of the fire or other casualty causing the damage, the Tenant may
at its option, to be exercised within 10 days of the termination of the
said period of 180 days (or the termination of such later period as
extended by clause 16.7) by notice in writing, terminate this Lease and
all of the rights of the Tenant hereunder with respect thereto, and the
Tenant shall then have no further liability for Rent in respect of such
Building for any period after the date of termination.
(d) For greater certainty, if this Lease is terminated with respect to the
Building pursuant to the foregoing provisions of this clause 10.1, such
termination shall not affect this Lease with respect to the remainder
of the Premises, and the parties will enter into an agreement whereby
this Lease is amended to refer only to those portions of the remises
with respect to which this Lease has not been terminated.
Page 26
10.2 EXPROPRIATION
If the whole of the Premises shall be acquired or condemned by an authority
having the power for such acquisition or condemnation then the Term and any
renewal thereof shall cease from the date of entry by such authority. If less
than the whole of the Premises shall be so acquired or condemned, then this
Lease shall remain in effect with respect to the balance of the Premises, and
the provisions of subclause 10.1 shall apply. Nothing herein contained shall
prevent the Landlord or the Tenant or both from recovering damages from such
authority for the value of their respective interests or for such other damages
and expenses allowed by law.
11. ASSIGNMENT AND SUBLETTING
11.1 ASSIGNMENT AND SUBLETTING
(a) The Tenant shall not make, grant, execute, enter into, consent to, or
permit any Transfer without the prior written consent of the Landlord,
such consent not to be unreasonably withheld. In the event that the
Tenant desires to make, grant, execute, enter into, consent to, or
permit any Transfer then the Tenant shall give prior written notice to
the Landlord of such desire, specifying therein the proposed Transferee
and providing to the Landlord such information on the nature of the
business of the proposed Transferee, together with its financial
responsibility and standing, as the Landlord may reasonably require,
together with the terms and conditions of the proposed Transfer. The
Tenant shall also deliver to the Landlord a copy of the Transfer
intended to be executed by the Tenant and the Transferee, together with
the Landlord's administration fee required hereunder. The Landlord
shall, within 10 business days thereafter, notify the Tenant in writing
that:
(i) it consents to such Transfer, or
(ii) that it does not consent to such Transfer, in which event
the Landlord must advise the Tenant of its reason for not
consenting.
(b) Provided always and notwithstanding subclause 11.1(a), the Landlord's
consent to a Transfer does not constitute a waiver of the necessity for
the Tenant to obtain the prior written consent of the Landlord to any
subsequent Transfer, and no Transfer shall in any manner release the
Tenant from its obligations for the payment of the Rent and the
observance and performance of the covenants, terms, and conditions
herein provided during the Term and any renewal of the Term.
(c) Upon the initial request for a Transfer together with receipt from the
Tenant of the administration fee and undertaking required in subclause
11.1(d), and provided that the Landlord does not withhold its consent
to such Transfer, the Landlord shall provide to the Tenant its standard
form written agreement pertaining to Transfers. The Tenant shall
require each Transferee, at the time of any Transfer, to execute and
deliver the Landlord's standard form written agreement between the
Tenant, the Landlord, and the Transferee wherein the Transferee agrees
to observe and perform all of the covenants, agreements, provisos,
terms,
Page 27
and conditions of this Lease, and wherein the Tenant acknowledges and
agrees that it shall continue to be liable under this Lease during the
Term and any renewal of the Term. If either the Tenant or the
Transferee fails to execute and deliver the said standard form written
agreement then the Landlord shall have the right to refuse to grant its
consent to such Transfer, or where such consent is not required the
Transfer shall not be effective until the said standard form written
agreement is executed and delivered by the Tenant and the Transferee.
Without in any way restricting the generality of the Landlord's right
to refuse consent to any Transfer, the Landlord shall have the right to
refuse to consent to any Transfer if the Lease is not in good standing.
(d) The Tenant shall, together with its initial request to the Landlord for
consent to any Transfer, pay to the Landlord an administration fee of a
minimum of $250 or such other greater fee as the Landlord may
reasonably charge from time to time, and the Tenant shall also
undertake to reimburse to the Landlord any solicitors' fees and any
other costs, charges, and expenses which may be incurred by the
Landlord in connection with the Tenant's request for consent to any
Transfer.
(e) If the Tenant is a corporation or if the Transferee is a corporation,
and at any time during the Term or any renewal thereof any or all of
the corporate shares or voting rights of shareholders of the Tenant or
the Transferee shall be transferred by sale, assignment, bequest,
inheritance, trust, operation of law, or other disposition, or treasury
shares be issued, so as to result in the control of the Tenant or the
Transferee having changed from one person or group of persons to
another person or group of persons without the prior written consent of
the Landlord, which consent shall not be unreasonably withheld, then
and so often as such a change of control shall occur the Landlord shall
have the right to terminate this Lease at any time after such change of
control by giving the Tenant 60 days' prior written notice of such
termination. The Tenant shall, upon request by the Landlord, make
available to the Landlord from time to time for inspection and copying
all books and records of the Tenant which alone or with other data show
the applicability or otherwise of this subclause. This subclause shall
not be applicable to any transfer of shares which are listed on a
security exchange regulated by governmental authority. Further, this
subclause shall not be applicable to any allotments, transfers or other
share transactions between the existing shareholders of the Tenant
(determined as at the Commencement Date) so long as no new shareholders
are created thereby.
12. DEFAULT
12.1 PAYMENTS BY LANDLORD REGARDED AS RENT
If the Tenant shall fail to observe or perform any of the covenants or
obligations of the Tenant under or in respect of this Lease, the Landlord may
from time to time at its discretion perform or cause to be performed any of such
covenants or obligations or any part thereof, and for such purpose may do such
things as may be requisite, and may enter upon the Premises to do such things;
and all costs and expenses incurred and expenditures made by or on behalf of the
Landlord shall be forthwith paid by the Tenant to the Landlord. If the Tenant
fails to pay the same, the
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Landlord may add the same to the Rent and recover the same by ail remedies
available to the Landlord for the recovery of Rent in arrears. Nothing in this
clause 12.1 shall require the Landlord to directly or indirectly commence or
complete such performance of the Tenant's covenants or obligations. If the
Landlord shall suffer or incur any damage, loss, cost, or expense whatsoever for
which the Tenant is in any way liable hereunder, by reason of any failure of the
Tenant to observe or comply with any of the covenants or agreements of the
Tenant in this Lease, then in every such case the amount of any such damage,
loss, cost, or expense shall be due and payable by the Tenant to the Landlord on
demand by the Landlord and the Landlord shall have the right at its option to
add the cost or amount of any such damage, loss, cost, or expense to the Rent
hereby reserved, and any such amount shall thereupon immediately be due and
payable as Rent and recoverable by the Landlord by all remedies available to the
Landlord for the recovery of Rent in arrears.
12.2 RE-ENTRY ON DEFAULT
The Tenant further covenants with the Landlord that in the event of the breach,
non-observance, or non-performance of any covenant, agreement, stipulation,
proviso, condition, rule, or regulation herein contained on the part of the
Tenant to be kept, performed, or observed hereunder, and any such breach,
non-observance, or non-performance shall continue for fifteen (15) days after
written notice thereof to the Tenant by the Landlord, or, notwithstanding the
foregoing, if any payments of the Rent or any part thereof are not paid when
they become due and the same remain unpaid for two (2) business days after
written notice thereof to the Tenant by the Landlord (provided that the Landlord
shall not be obligated to provide such notice regarding nonpayment of Rent more
than twice in any 12 month period), or in case the Term shall be taken in
execution or attachment for any cause whatsoever, then and in any such case the
Landlord, in addition to any other remedy now or hereafter provided, may
re-enter and take possession immediately of the Premises or any part thereof in
the name of the whole by reasonable persons and property therefrom, and may use
such reasonable force and assistance in making such removal as the Landlord may
deem advisable to recover at once full and exclusive possession of the Premises;
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,
non-observance, or non-performance of any covenant or agreement on the part of
the Tenant to be kept, observed, or performed.
12.3 BANKRUPTCY OR INSOLVENCY OF TENANT
(a) If during the Term or any renewal thereof any of the goods and chattels
of the Tenant shah be seized or taken in attachment by any creditor of
the Tenant, or if a writ of execution, sequestration, or extent shall
issue against the goods and chattels of the Tenant, or if any petition
or other application is presented to any court of competent
jurisdiction for the dissolution, liquidation, or winding-up of the
Tenant or for the appointment of a receiver or receiver and manager, or
if the Tenant shall become bankrupt or insolvent or take the benefit of
any statute now or hereafter in force for bankrupt or insolvent
debtors, or if the Premises shall be used for any purpose other than
permitted by clause 7.1 without the prior written consent of the
Landlord, or if the Tenant shall make an assignment for the benefit of
creditors or shall make any sale or other disposition of all or
substantially all of its goods and chattels (except incidental to its
amalgamation with any other company), then and in
Page 29
every case the Tenant shall be, and be deemed to be, in default under
this Lease; the then current and the next ensuing three (3) months'
Annual Basic Rent and Additional Rent (to be determined for the current
year at rates estimated by the Landlord acting reasonably) and any
additional money owing hereunder shall immediately become due and
payable; the Landlord may re-enter and take possession of the Premises
or any part thereof in the name of the whole, and have again,
repossess, and enjoy the Premises in its former estate, anything herein
to the contrary notwithstanding, as though the Tenant were holding over
after the expiration of the Term; and the Term and any renewal thereof
shall, at the option of the Landlord, forthwith become forfeited and
determined and the then current and the next ensuing three (3) months'
Annual Basic Rent, the Additional Rent (to be determined for the
current year at rates estimated by the Landlord acting reasonably) and
any additional money owing hereunder shall be recoverable by the
Landlord as if it were Rent in arrears, but the Tenant shall remain
liable under this Lease.
(b) The Tenant acknowledges and agrees that, unless it receives the prior
written consent of the Landlord, under no circumstances shall it file
any notice of termination, repudiation, or disclaimer seeking to take
advantage of s. 65.2 of the Bankruptcy and Insolvency Act, R.S.C. 1985,
c. B-3 as amended from time to time and hereby waives any and all
rights to do so. The Tenant agrees that if, in breach of this section,
it files such a notice, the Landlord may, in addition to all of its
other remedies, produce and rely on this section in challenging the
validity of the notice in the court proceedings contemplated by s. 65.2
of the Bankruptcy and Insolvency Act; and the Landlord may, in those or
any other proceedings, apply for injunctive relief or other relief
against the Tenant filing the notice.
12.4 SALE AND RELETTING
The Tenant further covenants and agrees that upon the Landlord becoming entitled
to re-enter upon the Premises under any of the provisions of this Lease, the
Landlord, in addition to all other rights and remedies, shall have the right to
enter the Premises as the agent of the Tenant either by reasonable force or
otherwise without being liable for any prosecution therefor, and to relet the
Premises as the agent of the Tenant, and to receive all rent therefor, and as
agent of the Tenant to take possession of any business and trade fixtures of the
Tenant and any goods and property whatsoever on the Premises, and to sell the
same at public or private sale without notice, and to apply the proceeds of such
sale and any rent derived from reletting the Premises in payment of the Rent due
under this Lease, after deducting its costs of conducting such sale and its
costs of reletting; and the Tenant shall be liable to the Landlord for any
deficiency.
12.5 TERMINATION
The Tenant further covenants and agrees that upon the Landlord becoming entitled
to re-enter upon the Premises under any of the provisions of this Lease, the
Landlord, in addition to all other rights and remedies, shall have the right to
forthwith terminate this Lease and the Term or any renewal thereof and all of
the rights of the Tenant hereunder by giving notice in writing addressed to the
Tenant of its intention so to do, and any other payments for which the Tenant is
liable under this Lease shall be paid and the Tenant shall forthwith deliver up
possession of the Premises to the
Page 30
Landlord, and the Landlord may re-enter and take possession of the Premises
without limitation to its right to claim damages arising from the Tenant's
breach.
12.6 DISTRESS
At any time that the Landlord is entitled to levy distress against the goods and
chattels of the Tenant, it may use such reasonable force as it may deem
necessary for the purpose of gaining admission to the Premises without being
liable for any action in respect thereof or for any loss or damage occasioned
thereby, and the Tenant hereby expressly releases the Landlord from all actions,
proceedings, claims, or demands whatsoever for or on account of or in respect of
any such forcible entry or any loss or damage sustained by the Tenant in
connection therewith.
12.7 LANDLORD'S EXPENSES ENFORCING LEASE
If it is necessary for the Landlord to retain the services of any person for the
purpose of assisting the Landlord in enforcing any of its rights under this
Lease or otherwise available at law, the Landlord shall be entitled to collect
from the Tenant the cost of all such services including, but not limited to,
charges by any bailiff effecting a distress to which a bailiff is entitled at
law (and no more) and all legal fees and disbursements incurred in enforcing the
Landlord's rights hereunder and in connection with all necessary court
proceedings at trial or on appeal on a solicitor and own client basis, as if the
same were Rent reserved and in arrears hereunder (provided that the Tenant shall
have the right to have any such legal accounts assessed pursuant to the Legal
Profession Act).
12.8 REMEDIES CUMULATIVE
No remedy conferred upon or reserved to the Landlord under this Lease, by
statute or otherwise, shall be considered exclusive of any other remedy, but the
same shall be cumulative and shall be in addition to every other remedy
available to the Landlord and all such remedies and powers of the Landlord may
be exercised concurrently and from time to time and as often as the Landlord
deems expedient.
13. SUBORDINATION, ATTORNMENT, AND STATUS CERTIFICATE
13.1 PROVIDE FINANCIAL INFORMATION
Whenever any of the Landlord's Mortgagees, in connection with any financing of
the Lands or the Building or any part thereof, shall require information
relating to the financial position of the Tenant, and providing such Landlord's
Mortgagee is a bank, trust company, credit union, insurance company or other
similar institutional lender, the Tenant, within 30 days after receipt by it of
a notice in writing from the Landlord requesting such information, shall furnish
directly to such Landlord's Mortgagee copies of the financial statements of
profit and loss and surplus or deficit, in respect of each of the three years
immediately preceding the year in which such notice is given. All such
information shall be used by such Landlord's Mortgagees in connection with such
financing only, and shall be supplied to such Landlord's Mortgagees on the
condition that the information be treated on a confidential basis.
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13.2 SUBORDINATION
This Lease is and shall be subject, subordinate, and postponed to all Mortgages
to the extent that without execution of any document other than this Lease, the
Mortgages shall have priority over this Lease notwithstanding the respective
dates of execution, delivery, or registration thereof. Without limiting the
generality of the foregoing, the Tenant agrees to promptly execute any document
in confirmation of such subordination and postponement of this Lease to any of
the Mortgages, provided however that such subordination or postponement shall
not be effective with respect to a specific Mortgage unless and until the
Landlord's Mortgagee holding such Mortgage shall confirm in writing to the
Tenant that the Tenant shall have the right, if not in default under this Lease,
to remain in possession of the Premises in accordance with the terms of this
Lease in the event that such Landlord's Mortgagee obtains title to the Premises
by way of foreclosure or otherwise.
13.3 ATTORNMENT
Whenever required by any of the Landlord's Mortgagees under any of the
Mortgages, or in the event of an exercise by any of the Landlord's Mortgagees of
the power of sale in any of the Mortgages, the Tenant shall attorn to and
become, in each case, a tenant of such Landlord's Mortgagees or any purchaser
from such Landlord's Mortgagee for the then unexpired residue of the Term upon
all of the terms and conditions hereof.
13.4 ESTOPPEL CERTIFICATE
The Tenant shall at any time and from time to time upon 10 days' prior notice
from the Landlord execute and deliver to the Landlord, or the Landlord's
Mortgagees, or a prospective purchaser of the whole or any portion of the
Landlord's interest in the Lands or the Building, a statement in writing
confirming the terms of this Lease, certifying that this Lease is unmodified and
in full force and effect (or, if modified, stating the modifications and that
the same is in full force and effect as modified), and certifying the amount of
the Rent then being paid hereunder, the dates to which the Rent and other
charges hereunder have been paid, that the Landlord has complied with all the
terms of this Lease, that the Premises are acceptable to the Tenant, that the
Tenant shall not amend, modify, or surrender this Lease or make any prepayment
of the Rent other than the Rent for the current month without the prior written
consent of the Landlord's Mortgagees or prospective purchaser, that there are no
outstanding set-offs or equities disclosed or undisclosed as between the
Landlord and the Tenant, that no money other than a maximum of one month's Rent
in accordance with the provisions of the Lease has been prepaid by the Tenant to
the Landlord, that the Tenant is aware of the assignment by the Landlord to the
Landlord's Mortgagees of all Rents under this Lease, and any other matters
pertaining to this Lease in respect of which the Landlord may desire
certification.
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14. QUIET ENJOYMENT
The Landlord covenants with the Tenant for quiet enjoyment, subject to the
charges, exceptions and reservations in Article 2 and subject to any rights of
entry by the Landlord as provided in this Lease.
15. MISCELLANEOUS COVENANTS
15.1 SIGNS
The Tenant shall not, at any time, affix or exhibit or permit to be affixed or
exhibited upon any part of the Premises except within the Premises, any Sign,
unless such Sign shall have been first approved in writing by the Landlord
(acting reasonably) and unless such Sign complies at all times with the
requirements of any lawful authority having jurisdiction over the same. If any
Sign no longer complies with the terms of the consent given by the Landlord or
the requirements of any lawful authority having jurisdiction over the same, then
the Landlord, after giving the Tenant thirty (30) days' notice, shall have the
right at any time to remove any such Sign at the Tenant's expense; and the
costs, charges, and expenses of such removal shall forthwith be paid by the
Tenant to the Landlord. The repair provisions of clauses 9.1 and 9.2 shall also
apply to the Signs.
15.2 RUBBISH
The Tenant shall keep the Premises clean and tidy and in good order.
15.3 ABATE NUISANCE
Upon written notice to the Tenant from the Landlord or from any lawful authority
having jurisdiction, the Tenant shall forthwith, at its sole expense, abate any
nuisance caused by vibration, noise, or offensive smell, or by any undue
emission of smoke, vapour, or dust caused by the Tenant or arising directly or
indirectly out of the operations carried on upon the Premises.
15.4 POLLUTION
The Tenant shall:
(a) not use or permit to be used all or any part of the Premises for the
sale, storage, manufacture, disposal, use, or any other dealing with
any Hazardous Substances, without the prior written consent of the
Landlord, which may be unreasonably withheld,
(b) strictly comply, and cause any person for whom it is in law responsible
to comply, with all Environmental Laws regarding the use and occupancy
of the Premises;
(c) promptly provide to the Landlord a copy of any environmental site
assessment, audit, or report relating to the Premises conducted by or
for the Tenant at any time, and, at the Landlord's request from time to
time, obtain from an independent environmental consultant
Page 33
approved by the Landlord an environmental site assessment of the
Premises or an environmental audit of the operations at the Premises,
including any additional investigations as the environmental consultant
may recommend;
(d) promptly notify the Landlord in writing of any release of a Hazardous
Substance or Hazardous Substances or any other occurrence or condition
at the Premises or any adjacent property which would contaminate the
Premises or subject the Landlord or the Tenant to any fines, penalties,
orders, investigations, or proceedings under Environmental Laws;
(e) on the expiry or earlier termination of this Lease, or at any time if
requested by the Landlord or required by any governmental authority
pursuant to Environmental Laws, remove from the Premises all Hazardous
Substances and remediate any contamination of the Premises or any
adjacent property resulting from Hazardous Substances, in either case
brought onto, used at, or released from the Premises by the Tenant or
any person for whom it is in law responsible. The Tenant shall perform
these obligations promptly at its own cost and in accordance with
Environmental Laws. All such Hazardous Substances shall remain the
property of the Tenant, notwithstanding any rule of law or other
provision of this Lease to the contrary and notwithstanding the degree
of their affixation to the Premises;
(f) indemnify the Landlord and its directors, officers, employees, agents,
successors, and assigns from any and all liabilities, actions, damages,
claims, losses, costs, fines, penalties, and expenses whatsoever
(including all legal and consultants' fees and expenses and the cost of
remediation of the Premises and any adjacent property) arising from or
in connection with:
(i) any breach of or non-compliance with the provisions of
this paragraph by the Tenant; or
(ii) any release or alleged release of any Hazardous Substance
or Hazardous Substances at or from the Premises related to or
as a result of the use and occupation of the Premises or any
act or omission of the Tenant or any person for whom it is in
law responsible.
The obligations of the Tenant under this clause 15.4 shall survive the expiry or
earlier termination of this Lease.
15.5 NO EXCAVATION
The Tenant shall not excavate, dig, or extract any sand, gravel, earth, or
minerals of any description out of the Lands.
Page 34
15.6 EASEMENTS
The Tenant shall not, without the prior written consent of the Landlord, permit
any encroachment, right of way, easement, or other encumbrance to be made or
entered into, against, or upon the Premises or the Lands or any part thereof.
15.7 LIENS
The Tenant shall use its best efforts to ensure that no claim of lien shall be
filed in respect of any work which may be carried out by it or on its behalf in
the Building or on the Lands, and if a claim of lien shall be filed in respect
of any such work the Tenant shall take all necessary steps to have the claim of
lien cancelled and discharged from the Lands and the Building within 15 days of
the date the Tenant has knowledge of such filing, and the Tenant shall indemnify
and save harmless the Landlord from any and all loss, cost, expense, damage, and
liability in respect of such claim of lien. The Landlord, in addition to any
right or remedy, shall have the right, but shall not be obliged, to discharge
any claim of lien from the Lands and the Building by paying the amount claimed
to be due or by procuring a discharge of such liens by deposit in the
appropriate court, and in any such event the Landlord shall be entitled, if it
so acts, to expedite the prosecution of any action for the enforcement of such
claim of lien by the lien claimant and to pay the amount of the judgment, if
any, in favour of the lien claimant with interest and costs. In any such event
the Tenant shall forthwith pay to and reimburse the Landlord for all money
expended by the Landlord and all costs and expenses incurred by the Landlord.
15.8 REGISTERED CHARGES
The Tenant shall pay all money owed by it under any security interest or other
charge registered or filed against the Lands or the Building, and immediately
upon all of the payments having been made thereunder, the Tenant shall obtain a
memorandum of satisfaction or other appropriate document of discharge and shall
register the same at its own expense in the proper land title office or other
appropriate office of public record as the Landlord may require to discharge the
same from the title to the Lands and the Building.
15.9 EXHIBIT PREMISES
The Landlord shall have the right to exhibit the Premises to:
(a) prospective tenants or subtenants during the nine (9) month period
prior to the Expiry Date or the date of expiration of and any renewal
of the Term; and
(b) the Landlord's Mortgagees and prospective mortgagees and any
prospective purchaser of the whole or any part of the Landlord's
interest in the Premises;
and for such purposes the Landlord may place upon the Premises a sign or notice
stating that the Premises are for rent or for sale, and the Landlord shall have
the right of entry to the Premises at
Page 35
any reasonable time, and the Tenant at its option may have a servant or agent
present at the time of such entry.
15.10 NO AUCTIONS
The Tenant shall not permit any sale by auction nor any fire sale, bankruptcy
sale, moving sale, going-out-of-business sale, or bulk sale to be held upon the
Premises or any part thereof.
16. MISCELLANEOUS
16.1 REGISTRATION OF LEASE
The Landlord shall have no obligation to execute and deliver this Lease in
registrable form, provided however that if the Tenant pays all costs, expenses,
fees, and taxes in connection with the registration of this Lease in the
appropriate land title office and the costs of any plans required for such
registration, the Landlord shall execute and deliver this Lease in registrable
form. If this Lease is so registered, the Tenant covenants and agrees to
executed and deliver to the Landlord a registrable release of this Lease upon
the expiration or earlier termination hereof, such covenant to survive the
expiration or termination of this Lease.
16.2 NO WARRANTIES
The Tenant acknowledges and agrees that no representations, warranties,
agreements, or conditions have been made other than those expressed herein, and
that no agreement collateral hereto shall be binding upon the Landlord unless it
be made in writing and duly executed on behalf of the Landlord.
16.3 NO WAIVER
(a) The failure of either party hereto to exercise any right or option in
connection with any breach or violation of any term, covenant, or
condition herein contained shall not be deemed to be a waiver or
relinquishment of such term, covenant, or condition nor of any
subsequent breach of the same or any other term, covenant, or condition
herein contained. The subsequent acceptance of the Rent or any portion
hereunder by the Landlord shall not be deemed to be a waiver of a
preceding breach by the Tenant of any term, covenant, or condition of
this Lease.
(b) The acceptance of any of the Rent from, 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 rights, title, or
interest of such person as a Transferee or otherwise in the place and
stead of the Tenant.
(c) The acceptance by the Landlord of a part payment of any money required
to be paid hereunder shall not constitute waiver or release of the
right of the Landlord to payment in full of such money.
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16.4 NOTICES
All notices, demands, and requests which may be or are required to be given
pursuant to this Lease shall be in writing and shall be sufficiently given if
delivered personally to the party or an officer of the party for whom it is
intended, or faxed with a confirmation copy mailed, or mailed prepaid and
registered to the respective addresses specified in the Lease Summary or such
other addresses as the parties may from time to time advise by notice in
writing. The Tenant shall require each Transferee to supply its respective
mailing address to the Landlord. The date of receipt of any such notice, demand,
or request shall be deemed to be the date of delivery of such notice, demand, or
request if delivered or if faxed as aforesaid it shall be deemed to be received
on the next day following the date of transmission (excluding Saturdays,
Sundays, and statutory holidays in British Columbia), or if mailed as aforesaid
it shall be deemed to be received on the third day next following the date of
such mailing (excluding Saturdays, Sundays, and statutory holidays in British
Columbia), unless there is between the date of mailing and actual receipt a mail
strike or other labor dispute which adversely affects mail service in British
Columbia, in which case the party giving the notice, demand, or request shall
deliver such notice, demand, or request by an alternative method.
16.5 PEACEFUL SURRENDER
The Tenant shall, at the expiration or sooner determination of the Term,
forthwith peacefully surrender and yield up unto the Landlord the Premises and
its appurtenances, together with all fixtures or improvements which at any time
during the Term shall be made therein or thereon, in the state of repair
required to be maintained by the Tenant hereunder, without notice from the
Landlord; and shall deliver to the Landlord all keys to the Premises which the
Tenant has in its possession.
16.6 HOLDING OVER
If the Tenant shall hold over with the Landlord's written consent after the
expiration of the Term or any renewal thereof, and the Landlord shall accept the
new Rent or any portion thereof, the new tenancy thereby created shall be deemed
to be a monthly tenancy and not a yearly tenancy and shall be subject to the
covenants and conditions herein contained insofar as the same are applicable to
a tenancy from month to month, except that if the Tenant remains in possession
without the Landlord's written consent, the monthly instalments of Annual Basic
Rent shall be two (2) times the monthly instalments of Annual Basic Rent
payable for the last month of the later of the Term or any renewal thereof,
pro-rated on a daily basis for each day that the Tenant remains in possession,
and in addition the Tenant shall be liable for all costs, expenses, losses, and
damages resulting or arising from the failure of the Tenant to deliver up
possession of the Premises to the Landlord.
16.7 INABILITY TO PERFORM
Whenever and to the extent that either party shall be unable to fulfill, or
shall be delayed or restricted in the fulfilment of any obligation hereunder by
reason of being unable to obtain the material, goods, equipment, service,
utility, or labor required to enable it to fulfill any such
Page 37
obligation, or by reason of any statute, law, or order-in-council or any
regulation or order passed or made pursuant thereto, or by reason of the order
or direction of any administrator, controller, or board, or any governmental
department or officer or other authority, or by act of God, or by reason of not
being able to obtain any permission or authority required thereby, or by reason
of strikes, lockouts, or other industrial disturbances, explosion, breakage or
accident to machinery, or by reason of any other cause beyond its control
whether of the foregoing character or not, the time for fulfillment of such
obligation shall be extended by a time equal to the duration of such delay or
restriction, and the other party shall not be entitled to compensation for any
inconvenience, nuisance, discomfort, or damage thereby occasioned, and shall not
be entitled to cancel or terminate this Lease, provided the foregoing shall not
operate to excuse the Tenant from prompt payment of Rent as and when due
hereunder.
16.8 INTEREST
Interest on any money due to the Landlord under this Lease shall be paid by the
Tenant and shall accrue on a daily basis at the Prime Rate plus 3% per annum,
such rate of interest to be calculated and compounded monthly, not in advance,
from the respective date upon which any such money becomes due to the Landlord.
16.9 GOVERNING LAW
This Lease shall be construed in accordance with, and governed by, the laws of
the province of British Columbia.
16.10 NUMBER AND GENDER
Where required the singular number shall be deemed to include the plural and the
neuter gender the masculine or feminine.
16.11 COVENANTS
The Landlord and the Tenant agree that all of the provisions of this Lease are
to be construed as covenants and agreements as though the words imparting such
covenants and agreements were used in each separate provision thereof. Should
any provision or provisions of this Lease be illegal or not enforceable, it or
they shall be considered separate and severable from this Lease and its
remaining provisions shall remain in force and be binding upon the parties as
though the said provision or provisions had never been included.
16.12 TIME OF THE ESSENCE
Time shall be of the essence of this Lease, save as herein otherwise specified.
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16.13 HEADINGS
Any captions, headings, and marginal notes throughout this Lease are for
convenience and reference only and the words and phrases contained therein shall
in no way be held or deemed to define, limit, describe, explain, modify,
amplify, or add to the interpretation, construction, or meaning of any provision
of or the scope or intent of this Lease nor in any way affect this Lease.
16.14 ENUREMENT
This Lease shall extend to, be binding upon, and enure to the benefit of the
Landlord and the Tenant and their respective heirs, executors, administrators,
successors, and permitted assigns.
16.15 CONTINUATION OF OBLIGATIONS
This Lease and the obligations of the Tenant hereunder shall continue in full
force and effect notwithstanding any change in the person or persons comprising
the Landlord.
16.16 LANDLORD'S LIMIT OF LIABILITY
The term "Landlord" as used in this Lease so far as covenants or obligations on
the part of the Landlord are concerned shall be limited to mean the Landlord as
described in the Lease Summary, while it retains its interest in the Premises,
but upon a sale, transfer, or other disposition of that interest, the Landlord
shall be automatically and immediately relieved from all liability arising out
of the requirement for performance of any obligations on the part of the
Landlord herein contained, it being understood and agreed hereby that the
obligations contained in this Lease on the part of the Landlord shall be binding
upon the Landlord, its successors, and assigns, only during and in respect of
the respective successive periods of its interest in the Premises. The Tenant
agrees to attorn to a purchaser, transferee, or person acquiring the interest of
the Landlord in the Premises, such attornment to be effective and self-operative
without the necessity of the execution of any further instrument on the part of
the Landlord, the Tenant, or any other person.
16.17 CONSENTS
Wherever and whenever the approval or consent of the Landlord is required to be
obtained, such approval or consent may be given by such officers, agents,
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. Subject to the terms of this Lease
and save as otherwise expressly provided herein, such nominees, appointees, or
delegates shall not unreasonably withhold approval of or consent to, and shall
not unreasonably reject, any matter or thing submitted for approval or consent,
and every such approval or consent given shall be in writing and may contain
such reasonable conditions and stipulations as the Landlord may deem fit.
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16.18 AMENDMENTS
This Lease shall constitute the entire agreement between the parties with
respect to the subject matter hereof and shall not be modified, amended, or
waived except by an instrument in writing duly executed and delivered by the
parties or by their successors and permitted assigns.
16.19 DEPOSIT
The Security Deposit is deposited with the Landlord to be held without interest
as security for the faithful performance by the Tenant of all the terms,
covenants, and conditions of this Lease; and if, at any time during the Term,
Annual Basic Rent, or Additional Rent is overdue and unpaid, the Landlord may,
at its option, apply any portion of the Security Deposit toward the payment of
such overdue Annual Basic Rent or Additional Rent without thereby limiting or
excluding any other rights which the Landlord may have hereunder, or at law or
in equity. If the Security Deposit is not so applied during the Term, then such
sum shall be applied on account of Annual Basic Rent payable for the last month
of the Term. In the event the entire Security Deposit amount or any portion
thereof is applied by the Landlord toward the payment of overdue Rent prior to
the expiry of the Term, then the Tenant shall forthwith on demand by the
Landlord remit to the Landlord such sum as is sufficient to restore the Security
Deposit to the initial amount (plus Sales Tax applicable thereon).
16.20 SCHEDULES
The Schedules attached hereto are hereby incorporated and form part of this
Lease.
17. SPECIAL PROVISIONS
17.1 FREE ANNUAL BASIC RENT
Provided the Tenant is in possession of the Premises, has executed this Lease in
a form satisfactory to the Landlord and is not in default hereunder, the Tenant
shall not be responsible for any Annual Basic Rent for the first, second,
thirteenth and fourteenth months of the Term, being the months of June and July,
2001 and June and July, 2002, provided the Tenant shall pay all other expenses
and charges provided for in this Lease throughout such period.
17.2 EARLY POSSESSION FOR FIXTURING
Notwithstanding that the Commencement Date is June 1, 2001, the Tenant shall
have possession of the Premises as of May 15, 2001 for the purpose of performing
its Leasehold Improvements therein. During such period of occupancy prior to the
Commencement Date the Tenant shall be bound by and shall observe and perform all
of the terms, covenants and conditions of this Lease save for those related to
payment of Rent. Notwithstanding the foregoing, the Tenant shall not have
possession of the Premises until the Tenant has provided the Landlord with the
insurance required hereunder.
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17.3 PARKING
The Tenant shall have the use of all existing parking and loading areas on the
Property.
17.4 OPTION TO EXTEND
The Landlord covenants and agrees with the Tenant that if the Tenant duly and
punctually observes and performs the covenants, agreements, and provisos in this
Lease on the part of the Tenant to be observed and performed, the Landlord will,
at the expiration of the Term and upon the Tenant's written request delivered to
the Landlord in accordance with clause 16.4 not later than six (6) months prior
to and not earlier than twelve (12) months prior to the expiration of the Term,
grant to the Tenant an extension of the term of the lease of the Premises for a
further period of three (3) years (the "Extended Term") upon all the terms,
covenants, agreements, and provisos contained in this Lease except for this
right of renewal, and except for the Annual Basic Rent payable during the
Extended Term, which shall be the prevailing fair market rate for the Premises
as of the commencement of the Extended Term having regard to premises of similar
size, quality of improvements, use and location, and if the Landlord and the
Tenant have not mutually agreed on the amount of such Annual Basic Rent at least
two months prior to the commencement of the Extended Term such Annual Basic Rent
shall be decided by binding arbitration pursuant to the Commercial Arbitration
Act of British Columbia, but in any event the Annual Basic Rent payable during
the Extended Term shall not be less than that paid during the last year of the
initial Term of this Lease. Until the Annual Basic Rent has been determined as
provided herein, the Tenant shall continue to pay the monthly Annual Basic Rent
payable during the last year of the Term as well as Additional Rent. The
Landlord and the Tenant acknowledge and agree that, by this clause, the Tenant
is only given the option of renewing the Term for one Extended Term, and at the
expiration of the Extended Term there shall be no further right of renewal.
If the Landlord and the Tenant have failed to agree as to the Annual Basic Rent
payable for the Premises with respect to the Extended Term by the date specified
above, the determination of such Annual Basic Rent shall be referred to a single
arbitrator pursuant to the provisions of the Commercial Arbitration Act of
British Columbia for determination in accordance with the foregoing, and the
provisions of this section shall be deemed to be a submission to arbitration
within the provisions of the Commercial Arbitration Act and any statutory
modifications or reenactment thereof.
Failure of the Tenant to exercise its option to extend the Term of this Lease in
accordance with the foregoing shall render such option null and void and
incapable of exercise.
17.5 LIGHTING UPGRADE
The Landlord agrees to contribute the sum of $15,000.00 plus GST (the "Lighting
Upgrade Allowance") toward the Tenant's proposed replacement of the warehouse
lighting within the Premises with Holophane metal halide fixtures. Such Lighting
Upgrade Allowance will be paid in full to the Tenant upon completion of the
upgrade and upon receipt from the Tenant of a statutory declaration that the
Tenant's contractor has been paid in full for the same, provided however that
the
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Landlord shall be entitled to hold back from such payment an amount equal to 15%
of the Lighting Upgrade Allowance until the expiry of the applicable lien
holdback period pursuant to the Builders Lien Act (British Columbia).
IN WITNESS WHEREOF the parties have duly executed and delivered this Lease as of
the day and year first above written.
The Corporate Seal of BROADWAY )
PROPERTIES LTD. has been affixed to this )
document in the presence of: )
)
)
- ------------------------------------------ )
Authorized Signatory ) C/S
)
)
- ------------------------------------------ )
Authorized Signatory )
The Corporate Seal of INNOVATIVE METAL )
FIXTURES INC. has been affixed to this )
document in the presence of: )
)
)
)
- ------------------------------------------ ) C/S
Authorized Signatory )
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SCHEDULE A
DESCRIPTION AND PLAN OF PREMISES
DESCRIPTION
<Table>
<Caption>
LOT CIVIC ADDRESS LEGAL DESCRIPTION LAND AREA BUILDING AREA
- ----- ----------------- -------------------------- ----------- --------------------
Lot C 13200 Vulcan Way, PID 003-752-305 2.39 acres 50,970 square feet,
Richmond, B.C. Lot "C", Section 20, Block comprised of 2,400
5 North, Range 5 West, square feet office
NWD, Plan 25054 and 48,570 square
feet warehouse
</Table>
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PLAN
(LAYOUT)
END OF DOCUMENT