1
Exhibit 10.8
OFFICE LEASE
BETWEEN
302 TOWN CENTRE LIMITED
- AND -
DELANO TECHNOLOGY CORP.
PART OF THE 2ND FLOOR, 3RD FLOOR & 4TH FLOOR
302 TOWN CENTRE BOULEVARD
MARKHAM, ONTARIO
INDEX
OFFICE LEASE
TABLE OF CONTENTS
ARTICLE 1
SPECIAL PROVISIONS
ARTICLE 2
PREMISES, TERM AND ACCEPTANCE
OF THE PREMISES
Section 2.1 Premises
Section 2.2 Use of Additional Areas
Section 2.3 Grant and Term
Section 2.4 Construction of Premises
ARTICLE 3
RENT
Section 3.1 Covenant to Pay
Section 3.2 Basic Rent
Section 3.3 Pre-Authorized Payments/Postdated Cheques
Section 3.4 Advance Rent
Section 3.5 Rent Past Due
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ARTICLE 4
TAXES AND OPERATING COSTS
Section 4.1 Taxes Payable by Landlord
Section 4.2 Taxes Payable by Tenant
Section 4.3 Business Taxes and Other Taxes of the Tenant
Section 4.4 Tenant's Proportionate Share of Operating Costs
Section 4.5 Payment of Taxes and Operating Costs
Section 4.6 Administration Fee
ARTICLE 5
BUILDING - CONTROL AND SERVICES
Section 5.1 Control of the Building
Section 5.2 Landlord's Services
Section 5.3 Tenant's Responsibilities
Section 5.4 Relocation of the Premises - Intentionally Deleted
Section 5.5 Additional Services
ARTICLE 6
UTILITIES
Section 6.1 Charges for Utilities
ARTICLE 7
USE OF THE PREMISES
Section 7.1 Use of the Premises
Section 7.2 Conduct of Business
Section 7.3 Observance of Law
Section 7.4 Hazardous Substances
ARTICLE 8
INSURANCE AND INDEMNITY
Section 8.1 Tenant's Insurance
Section 8.2 Increase in Insurance Premiums
Section 8.3 Cancellation of Insurance
Section 8.4 Loss or Damage - Intentionally Deleted
Section 8.5 Landlord's Insurance
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Section 8.6 Indemnification - Intentionally Deleted
Section 8.7 Release and Indemnification
ARTICLE 9
MAINTENANCE, REPAIRS AND ALTERATIONS
Section 9.1 Maintenance and Repairs by the Landlord
Section 9.2 Maintenance and Repairs by the Tenant
Section 9.3 Landlord's Approval of the Tenant's Repairs
Section 9.4 Removal and Restoration by the Tenant
Section 9.5 Tenant to Discharge all Liens
Section 9.6 Signs and Advertising
Section 9.7 Tenant Not to Overload Facilities
Section 9.8 Tenant Not to Overload Floors
ARTICLE 10
DAMAGE AND DESTRUCTION
Section 10.1 Destruction of the Premises
Section 10.2 Destruction of the Building
Section 10.3 Expropriation
Section 10.4 Architect
ARTICLE 11
ASSIGNMENT AND SUBLETTING
Section 11.1 Assignment and Subletting
Section 11.2 Assignment by the Landlord
ARTICLE 12
ACCESS AND ALTERATIONS
Section 12.1 Right of Entry
ARTICLE 13
STATUS STATEMENT, SUBORDINATION AND ATTORNMENT
Section 13.1 Status Statement
Section 13.2 Subordination and Attornment
Section 13.3 Attorney
Section 13.4 Financial Information
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ARTICLE 14
DEFAULT
Section 14.1 Right to Re-enter
Section 14.2 Right to Relet
Section 14.3 Expenses
Section 14.4 Waiver of Exemption from Distress
Section 14.5 Landlord's Rights
Section 14.6 Remedies Generally
ARTICLE 15
MISCELLANEOUS
Section 15.1 Rules and Regulations
Section 15.2 Intent and Interpretation
Section 15.3 Overholding - No Tacit Renewal
Section 15.4 Tenant Partnership or Group
Section 15.5 Waiver
Section 15.6 Accord and Satisfaction
Section 15.7 Force Majeure
Section 15.8 Notices
Section 15.9 Registration
Section 15.10 Accrual of Basic Rent and Additional Rent
Section 15.11 Compliance with the Planning Act
Section 15.12 Quiet Enjoyment
Section 15.13 Consent and Approval
Section 15.14 Non-Liability
ARTICLE 16
DEFINITIONS
SCHEDULE "A" - LEGAL DESCRIPTION
SCHEDULE "B" - FLOOR PLAN
SCHEDULE "C" - CONSTRUCTION OF THE PREMISES
SCHEDULE "D" - METHOD OF FLOOR MEASUREMENT - INTENTIONALLY DELETED
SCHEDULE "E" - RULES AND REGULATIONS
SCHEDULE "F" - ADDITIONAL PROVISIONS
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THIS LEASE is made as of November 17, 1999.
B E T W E E N:
302 TOWN CENTRE LIMITED
(the "LANDLORD")
OF THE FIRST PART
- and -
DELANO TECHNOLOGY CORP.
(the "TENANT")
OF THE SECOND PART
THIS LEASE WITNESSES that in consideration of the mutual covenants and
agreements contained in this Lease and other good and valuable consideration
(the receipt and sufficiency of which is hereby acknowledged by the parties) the
parties covenant and agree as follows:
ARTICLE 1
SPECIAL PROVISIONS
The following are certain special provisions, which are part
of, and are referred to in subsequent provisions of this Lease. Any conflict or
inconsistency between these special provisions and the provisions contained
elsewhere in this Lease will be resolved in favour of the provisions contained
elsewhere in this Lease:
SECTION 1.1 PREMISES
The Premises shall be all of the third and fourth floors and
that part of the second floor of the Building, outlined in red on Schedule "B"
attached hereto of the Building. The Premises contain a Rentable Area of
approximately THIRTY-FOUR THOUSAND, FOUR HUNDRED AND EIGHTEEN (34,418) square
feet. (Section 2.1).
SECTION 1.2 FIXTURING PERIOD - Intentionally Deleted.
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SECTION 1.3 COMMENCEMENT DATE AND TERM
The Term shall be a period of 10 years commencing on March 1,
2000 (the "Commencement Date") and ending on February 28, 2010, unless sooner
terminated or extended as provided for in this Lease.
Provided that if there is any Landlord's Work to be performed,
the Commencement Date is subject to adjustment in accordance with Section 2.4.
Notwithstanding any change in the Commencement Date calculated
in accordance with the preceding provisions hereof, the Term shall expire on the
date set forth for such expiry in the first paragraph of this Section 1.3,
subject always to earlier termination as provided for in this Lease.
SECTION 1.4 BASIC RENT
Annual payments during the Term based upon the following
annual rates per square foot of the Rentable Area of the Premises and payable in
accordance with the terms of this Lease, as follows:
Period Annual Monthly Rate per
of Term Basic Rent Basic Rent Square Foot
Commencement Date to
end of the first month $0.00 $0.00 $0.00
of the Term
One (1) month after the
Commencement Date to $413,016.00 $34,418.00 $12.00
February 28, 2005
March 1, 2005 to $481,852.00 $40,154.33 $14.00
February 28, 2010
SECTION 1.5 ADVANCE RENT
The sum of Seventy-Nine Thousand, Seven Hundred and Ninety-Two
Dollars and Thirty-Six Cents ($79,792.36) (Section 3.4).
SECTION 1.6 ADDRESS OF LANDLORD (SECTION 15.8)
c/o 81 Ronald Avenue
Toronto, Ontario, M6E 4M9
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SECTION 1.7 ADDRESS OF TENANT (Section 15.8)
Prior to the Commencement Date:
40 West Wilmont Street
Richmond Hill, Ontario, L4B 1H8
From and after the Commencement Date:
The Premises.
SECTION 1.8 INDEMNIFIER (Appendix "A")
None.
SECTION 1.9 ADDRESS OF INDEMNIFIER (Appendix "A")
Not Applicable
SECTION 1.10 USE OF THE PREMISES (Section 7.1)
The Tenant may use the Premises for office uses and as a training
centre. The Tenant may also use the Premises for any other lawful use as long as
it first obtains the Landlord's consent, which consent shall not be unreasonably
withheld.
SECTION 1.11 ADDITIONAL PROVISIONS
See Schedule "F"
ARTICLE 2
PREMISES, TERM AND ACCEPTANCE
OF THE PREMISES
SECTION 2.1 PREMISES
The Landlord leases to the Tenant, and the Tenant leases from the
Landlord, the Premises. As soon as reasonably possible and in any event prior to
the Commencement Date, the Landlord shall provide to the Tenant a certificate of
measurement from the Architect certifying the actual Rentable Area
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of the Premises and the Rentable Area of the Building. If such certificate shows
that the actual Rentable Area of the Premises is more or less than thirty-four
thousand, four hundred and eighteen (34,418) square feet of Rentable Area, the
Basic Rent shall be adjusted accordingly. It is understood and agreed that the
measurement will: (a) be in accordance with BOMA; and (b) be based upon an
actual on-site measurement of the Premises and the Building and not upon the
plans for the Premises or the Building. The Architect's certificate shall be
binding on the parties, except in the case of manifest error or if such person
has not acted in accordance with the standards of such person's profession.
SECTION 2.2 USE OF ADDITIONAL AREAS
The Tenant's use of the Premises includes the non-exclusive right of
the Tenant and persons having business with the Tenant in common with the
Landlord and all others entitled, to the use of the Common Areas and Facilities.
SECTION 2.3 GRANT AND TERM
The Tenant shall, subject to the terms of this Lease, have and hold
the Premises during the Term (being the period referred to in Section 1.3 of the
Special Provisions) subject to the observance and performance of the Tenant's
Covenants.
SECTION 2.4 CONSTRUCTION OF PREMISES
(a) The Landlord will substantially complete the work designated as
"Landlord's Work" in accordance with the provisions of Schedule "C" prior to the
Commencement Date.
(b) If the Landlord is unable to substantially complete the Landlord's
Work prior to the Commencement Date other than by reason of the Tenant's act or
omission:
(i) the Commencement Date shall, for all purposes, be
postponed to the first business day following the date that the Landlord
substantially completes the Landlord's Work and the Term shall only commence and
run from such date. The number of days from the original Commencement Date to
such postponed Commencement Date is called the "Delayed Period". Provided
however that if the plans to be agreed upon by the Landlord and the Tenant in
respect of the Landlord's Work have not been delivered to the Architect prior to
November 30, 1999, as approved (excluding interior design materials and finishes
specifications), then the Delayed Period shall be reduced by the number of days
from November 30 until such date as the plans, as approved are delivered to the
Architect; and
(ii) the Landlord shall pay the Tenant an amount (provided
such amount is a positive number) equal to $1,000.00 multiplied by the number of
days in the Delayed Period in excess of 15 days (the "Damages Amount"), such
amount representing the parties' genuine estimate of the damages that the Tenant
will suffer as a result of the Landlord not substantially completing the
Landlord's Work prior to April 1, 2000. Provided the
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Tenant is not in default beyond any cure period provided for in the Lease, the
Landlord shall pay the Damages Amount to the Tenant within 20 days following the
date that the Landlord substantially completes the Landlord's Work, failing
which the Tenant shall be entitled to deduct the Damages Amount from the Rent
otherwise payable by the Tenant. If the Tenant is in default at the time the
Damages Amount is to be paid by the Landlord and the Tenant subsequently cures
its default and is not in default under the terms of the Lease, then the
Landlord shall pay the Damages Amount within thirty (30) days following such
cure.
(c) If the Landlord's Work has only been substantially completed on the
date that the Landlord delivers vacant possession of the Premises to the Tenant,
the Landlord shall diligently proceed to fully complete all of the Landlord's
Work as quickly as possible and in doing so shall take reasonable steps to
minimize its interference with the Tenant's business operations in the Premises.
(d) The Tenant shall, at its expense, carry out all additional work
required to open the Premises for business. Such work shall be carried out in a
good and workmanlike manner, using first class materials during the month
immediately following the Commencement Date and otherwise in accordance with the
provisions of this Lease.
(e) Whenever the Landlord or the Tenant is required by the terms of
this Lease to carry out any work, repairs or replacements to the Premises or, in
the case of the Landlord, to the Building, including, without limitation, the
Landlord's Work or the Tenant's Work, the Landlord and the Tenant shall: (i) use
competent and qualified workers and, in the case of the Tenant, such workers
shall be approved by the Landlord; (ii) perform such work in a good and
workmanlike manner consistent with the general standards of first-class
buildings similar to the Building; (iii) use defect free, good quality
materials; and (iv) comply with all applicable laws, by-laws and building codes.
(f) If there is a dispute as to (i) completion of the Landlord's Work,
or (ii) the availability of the Premises for possession by the Tenant, or (iii)
the Usable Area or the Rentable Area of the Premises, the opinion of the
Architect will be final and binding.
(g) The Tenant will examine the Premises before taking possession and
unless the Tenant serves the Landlord with written notice specifying any
deficiencies or defects within ten (10) days after the Commencement Date, the
Tenant will be deemed to have examined the Premises and to have agreed that they
are in good order and that the Landlord's Work, if any, has been satisfactorily
completed. There is no promise, representation or undertaking by or binding upon
the Landlord with respect to any alteration, remodelling or redecorating of, or
installation of equipment or fixtures in, the Premises, unless expressly set
forth in this Lease.
(h) Subject to subsection (b) hereof, the Tenant acknowledges that if
there is a delay which results in the Building or the Landlord's Work not being
completed on schedule, the Tenant shall and does hereby release the Landlord
from all costs, expenses, claims, losses or damages suffered or incurred as a
result of such delay whether or not
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caused, or to the extent contributed to, by the acts, omissions or negligence of
the Landlord or those for whom it is at law responsible.
SECTION 2.5 COMPLETION OF THE PROJECT
The parties acknowledge and agree that:
(a) the Property is still in the process of being developed and completed
and that the Landlord intends to construct two (2) additional buildings (the
"ADDITIONAL BUILDINGS") on lands adjacent to the Lands;
(b) the Building, the Additional Buildings and the lands on which they are
situate will be operated by the Landlord as an integrated project (the
"PROJECT");
(c) the underground parking area currently serving the Building will serve
the entire Project;
(d) such ongoing construction activities shall not be a breach of the
covenant of quiet enjoyment, a nuisance or constitute any type of activity
entitling the Tenant to any sort of relief or claim, including without
limitation, any claim for damages as a result of any of the Landlord's
activities, except as set out in Section 2.4;
(e) during such development or any future development, use of the Common
Areas and Facilities may be temporarily impeded or obstructed or otherwise
affected, but the Landlord shall take such steps as are necessary to ensure that
there is always adequate parking for the tenants of the Building; and
(f) upon such development being completed, the exterior Common Areas and
Facilities of the Project (including, without limitation, the underground
parking facilities) will be shared by the occupants of the Project and the costs
related to the operation and maintenance (but excluding any Excluded Costs) of
such Common Areas and Facilities will be allocated by the Landlord among the
Property and the Additional Buildings comprising the Project in an equitable
manner, and the amount so allocated to the Building will be included in the
Operating Costs, and the Landlord shall, at the time of making its allocation,
provide to the Tenant a written explanation as to its method of allocation.
ARTICLE 3
RENT
SECTION 3.1 COVENANT TO PAY
The Tenant will pay Basic Rent and Additional Rent when due and
payable as set out in this Lease from and after the Commencement Date unless
otherwise specified in this Lease. All Rent shall be paid by the Tenant to the
Landlord without notice or demand and without
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abatement, deduction or set-off for any reason whatsoever, except as may be
expressly permitted by the terms of this Lease.
SECTION 3.2 BASIC RENT
The Tenant will, from and after the Commencement Date and thereafter
throughout the Term, pay the Landlord as Basic Rent, in equal consecutive
monthly instalments, in advance on the first day of each calendar month of each
Lease Year, the amounts specified in Section 1.4. Basic Rent will be pro-rated
on a daily basis for any fractional month period at the beginning or end of the
Term. When the Rentable Area of the Premises is determined the Basic Rent and
Additional Rent shall, if necessary, be adjusted retroactively to the
Commencement Date.
SECTION 3.3 PRE-AUTHORIZED PAYMENTS/POSTDATED CHEQUES
At the Landlord's request, the Tenant will participate in a
pre-authorized payment plan whereby the Landlord will be authorized to debit the
Tenant's bank account each month or from time to time during each Lease Year in
an amount equal to the Basic Rent and Additional Rent payable on a monthly
basis, and, if applicable, generally any amount payable provisionally pursuant
to the provisions of this Lease on an estimated basis. The Tenant hereby
undertakes to sign a form of application which is the same or similar to
Schedule "F" to give full force and effect to the foregoing within five (5) days
of presentation.
In lieu of the pre-authorized payment plan referred to above, the
Landlord shall be entitled to require the Tenant to present at the beginning of
each Lease Year a series of monthly postdated cheques for each such Lease Year
for the aggregate of the monthly payments of Basic Rent and Additional Rent
payable on a monthly basis, and, if applicable, generally any amount payable
provisionally pursuant to the provisions of this Lease on an estimated basis.
Despite the foregoing, so long as the tenant is Delano Technology
Corp., the Tenant shall not be required to participate in any such
pre-authorized plan or provide post-dated cheques unless it has been in monetary
default on more than three (3) occasions. If more than three (3) defaults occur,
the Tenant shall forthwith upon the request of the Landlord provide such
pre-authorized payment authorization or post-dated cheques, at the Landlord's
option, to the Landlord.
SECTION 3.4 ADVANCE RENT
The Landlord acknowledges receipt of the sum specified in Section 1.5
of the Special Provisions as Advance Rent which it will apply towards the
payment of Basic Rent (plus applicable GST) for the second and last months of
the Term except that the
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Landlord may apply all or part of the amount retained for application towards
the last month's Basic Rent as compensation for any loss or damage arising from
the breach by the Tenant of any provision of this Lease. This right will not be
construed to limit the Landlord's other rights under this Lease or at law or to
limit the amount recoverable by the Landlord for damages in respect of breaches
by the Tenant of this Lease. If the Landlord uses all or part of the Advance
Rent for the last month's Basic Rent as provided above, the Tenant will, upon
notification by the Landlord, pay to the Landlord the amount required to
reimburse it for the amounts so applied. The Landlord will not be required to
pay interest to the Tenant on the Advance Rent. The Landlord may deliver the
Advance Rent to any purchaser of the Landlord's interest in the Building or any
part thereof, whereupon the Landlord will immediately be discharged from any
further liability with respect to the Advance Rent. The Tenant will not assign
or encumber its interest in the Advance Rent except in connection with a
permitted Transfer, in which case the Tenant's interest in the Advance Rent will
be deemed to have been assigned to the permitted Transferee as of the date of
the Transfer.
SECTION 3.5 RENT PAST DUE
If the Tenant fails to pay any Rent when due, then, in addition to all
other rights and remedies available to the Landlord, the unpaid amounts will
bear interest from the due date to the date of payment at an annual rate of four
(4) percentage points above the Prime Rate, calculated and compounded monthly
or, at the Landlord's option, at the maximum annual rate permitted by law.
SECTION 3.6 ABATEMENT OF RENT
If, as a result of any negligent omissions or actions of the Landlord
or the Landlord's Employees, the Tenant is prevented from accessing or from
carrying on its business in the Premises for more than 48 hours, then all Rent
shall abate until such time as the Tenant is again able to carry on its business
from the Premises. This section shall not apply in situations where the Landlord
is exercising its right of distress or has re-entered or otherwise terminated
the Lease due to the Tenant's default or in circumstances of force majeure which
are otherwise dealt with in this Lease.
ARTICLE 4
TAXES, OPERATING COSTS AND ADMINISTRATION FEE
SECTION 4.1 TAXES PAYABLE BY LANDLORD
The Landlord will pay directly to the taxing authority all Taxes. The
Landlord may, nevertheless, defer payment of Taxes to the fullest extent
permitted by law, so long as it diligently prosecutes any contest or appeal of
Taxes. If any deferment results in interest payments, fines or other penalties
being payable, the Landlord will be solely responsible for the payment of same.
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SECTION 4.2 TAXES PAYABLE BY TENANT
(a) (i) If separate tax bills for the portion of Taxes relating to the Premises
(the "Premises Taxes") are available, then the Tenant shall pay to the Landlord,
or the taxing authorities if the Landlord so directs, the Premises Taxes for
each Lease Year. The Tenant shall promptly deliver to the Landlord receipts
evidencing the payment of all such Premises Taxes and such other information in
connection therewith as the Landlord reasonably requires.
(ii) If there are no separate tax bills for Premises Taxes, but there are
separate assessments for Premises Taxes, then the Landlord shall allocate to the
Premises for such Lease Year, a portion of the Taxes determined by reference to
such separate assessments, and the Tenant shall pay to the Landlord, the portion
of such Taxes so allocated by the Landlord.
(iii) If there are no separate tax bills for Premises Taxes and there are no
separate assessments for Premises Taxes, then the Tenant will pay its
Proportionate Share of Taxes assessed against the Property. The Landlord will
endeavour to obtain a separate assessment for the Property and its related
facilities, for the purposes of determining the Taxes applicable to the
Property.
(iv) As referred to Section 2.5 hereof, it is understood that the Building is
one of several buildings to be developed on the Project, which other buildings
may or may not be commercial buildings. The Landlord will endeavour to obtain a
separate assessment for the Property, for the purposes of determining the
Tenant's Proportionate Share of Taxes payable, but if it is not able to do so,
the Tenant will pay a Proportionate Share of the Project's taxes, as allocated
to the Property by the Landlord, acting reasonably, and the Landlord shall, at
the time of making its allocation, provide to the Tenant a written explanation
as to its method of allocation.
(b) If: (i) the Tenant or permitted Transferee or other occupant of the Premises
shall elect to have the Premises or any part thereof assessed for separate
school taxes; and (ii) there are no separate tax bills or separate assessments
relating to the Premises, then the Tenant shall pay to the Landlord as
Additional Rent, as soon as the amount of such separate school taxes is
ascertained, any amount by which the amount of separate school taxes exceeds the
amount which would otherwise have been payable for school taxes had such
election not been made by the Tenant or the Transferee or other occupant of the
Premises.
SECTION 4.3 GST
In addition to the Rent payable hereunder, the Tenant will pay to the
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Landlord (acting as agent for the taxing authority if applicable) or directly to
the taxing authority (if required by the applicable legislation) in the manner
specified by the Landlord, the full amount of all goods and services taxes,
sales taxes, value-added taxes, multi-stage taxes, business transfer taxes and
any other taxes imposed on the Landlord or the Tenant in respect of the Rent
payable by the Tenant under this Lease or in respect of the rental of space by
the Tenant under this Lease (collectively and individually, "GST"). GST is
payable by the Tenant whether characterized as a goods and services tax, sales
tax, value-added tax, multi-stage tax, business transfer tax, or otherwise. GST
so payable by the Tenant will: (i) be calculated by the Landlord in accordance
with the applicable legislation; (ii) be paid by the Tenant at the same time as
the amounts to which the GST applies are payable to the Landlord under the terms
of this Lease (or upon demand at such other time or times as the Landlord from
time to time determines); and (iii) despite anything else in this Lease, be
considered not to be Rent, but the Landlord shall have all of the same remedies
for and rights of recovery with respect to such amounts as it has for
non-payment of Rent under this Lease or at law.
SECTION 4.4 BUSINESS TAXES AND OTHER TAXES OF THE TENANT
(a) For the purposes of this section, "Business Taxes" means all business taxes,
personal property taxes, licence fees or other similar rates and assessments
levied or assessed against or in relation to the Tenant's business, assets,
Leasehold Improvements and Fixtures in the Premises and which, if not paid,
could either result in (i) a lien or other encumbrance being registered against
title to the Lands; and/or (ii) the Landlord being liable for the payment of
same.
(b) The Tenant will pay to the lawful taxing authorities all Business Taxes.
(c) The Tenant will indemnify and hold the Landlord harmless from and against
payment of all loss, costs, charges and expenses occasioned by or arising from
all Taxes and Business Taxes and any taxes which may in future be levied in lieu
of or in addition to such amounts or which may be assessed against any rentals
payable pursuant to this Lease in lieu of such amounts, whether against the
Landlord or the Tenant, including, without limitation, any increase in Taxes and
Business Taxes arising directly or indirectly out of any appeal or contestation
by the Tenant.
SECTION 4.5 TENANT'S PROPORTIONATE SHARE OF OPERATING COSTS
The Tenant will pay, in accordance with Section 4.7, the Tenant's
Proportionate Share of Operating Costs for the Property, including, without
limitation, a portion of the exterior Operating Costs for the Project as
allocated to the Property by the Landlord.
SECTION 4.6 ADMINISTRATION FEE
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The Tenant will pay in accordance with Section 4.7, an Administration
Fee equal to ten percent (10%) of the amounts payable under Sections 4.2, 4.5
and 6.1 (other than pursuant to section 6.1(a)) hereof), unless and for the
period of time that the Landlord has retained a property management company for
the Property (or the Project, as the case may be).
.
SECTION 4.7 PAYMENT OF TAXES, OPERATING COSTS AND FEES
(a) The Tenant will pay the amounts payable under Sections 4.2, 4.3, 4.4, 4.5
and 4.6 according to estimates or revised estimates made by the Landlord from
time to time in respect of periods determined by the Landlord. The Tenant's
payments will be made in monthly instalments in advance, together with Basic
Rent, for the periods in respect of which the estimates are made. When a bill
for an estimated amount is received by the Landlord, the Landlord may bill the
Tenant for the amount the Tenant is obligated to pay under this Lease and the
Tenant will immediately pay the Landlord the billed amount (less amounts
previously paid by the Tenant with respect to such billed amount on the basis of
the Landlord's estimate and which amounts are to be credited to such billed
amount).
(b) Within one hundred and twenty (120) days after the end of the period for
which the estimated payments have been made or so soon thereafter as is
reasonably possible, the Landlord will determine and advise the Tenant of the
exact amount of the Tenant's obligations under Sections 4.2 , 4.3 (if
applicable), 4.4 (if applicable), 4.5 and 6.1 and provide the Tenant with a
statement setting out such amounts. If necessary, an adjustment will be made
between the parties within fifteen (15) days after the Tenant receives such
statement. This provision shall survive the expiration or earlier termination of
the Term.
(c) Regardless of any other provision of this Lease, the amounts payable by the
Tenant pursuant to sections 4.2 and 4.5 hereof for the calendar year 2000 will
not exceed Ten Dollars ($10.00) per square foot of the Rentable Area of the
Premises.
(d) At the Tenant's request, the Landlord shall either: (i) provide to the
Tenant copies of all invoices, statements of account and all other reasonable
items which the Tenant may require in order to facilitate its review and
verification of the information contained in the statement referred to in
subsection (b) hereof; or (ii) allow the Tenant during the Landlord's regular
business hours, at the Landlord's head office and upon prior written notice to
it, to inspect and make copies of (at the Tenant's expense) the Landlord's books
and records relating to the information contained in such statement in order to
allow the Tenant to verify the information contained in such statement. If the
Tenant's review
16
reveals errors in the statement which the Landlord does not dispute, the
appropriate adjustments shall be made between the parties within thirty (30)
days of the Tenant advising the Landlord of such errors. The Tenant shall keep
all information provided or made available to it confidential, but the Tenant
shall be entitled to reveal such information to its professional advisers for
the purposes of this subsection (d). This provision shall survive the expiration
or earlier termination of the Term.
ARTICLE 5
BUILDING - CONTROL AND SERVICES
SECTION 5.1 CONTROL OF THE BUILDING
(a) The Landlord will operate and maintain the Building as would a
prudent landlord of a similar first class office building.
(b) The Project is at all times subject to the exclusive control,
management and operation of the Landlord. The Landlord has the right with
respect to such control, management and operation to:
(i) obstruct or close off all or any part of the Project for the purpose of
maintenance, repair or construction;
(ii) employ all personnel necessary for the operation and management of the
Project, either directly or through a third party property management company;
(iii) construct other improvements and make alterations, additions, subtractions
or re-arrangements, build additional storeys and construct facilities adjoining
or proximate to the Building, including underground tunnels and pedestrian
walkways and overpasses; (iv) do and perform such other acts in and to the
Project, as, in the use of good business judgment, the Landlord determines to be
advisable for the more efficient and proper operation of the Property; and
(v) control, supervise and regulate the Parking Areas in such manner as the
Landlord determines from time to time, including, without limitation, imposing
charges or rates as may from time to time be determined by the Landlord for the
use of the Parking Areas.
(c) The Landlord is not subject to any liability, nor is the Tenant
entitled to any compensation or abatement of Rent as a result of the Landlord's
exercise of its rights conferred under Section 5.1 so long as the Landlord
proceeds as expeditiously as reasonably possible to minimize interference with
the Tenant's business.
SECTION 5.2 LANDLORD'S SERVICES
(a) During the Term, the Landlord shall provide the following services
and utilities subject to force majeure upon the terms and subject to the
conditions set out in Section 5.2(b) hereof, at the Tenant's cost (either
directly or as part of Operating Costs):
17
(i) except during the completion of repairs, alterations or Leasehold
Improvements, climate control for the Premises shall be provided during the
Tenant's business hours in order to maintain a temperature adequate for normal
occupancy in accordancewith reasonable standards of interior climate control
generally pertaining at the date of this Lease applicable to normal occupancy of
premises for usual office purposes.
(ii) janitor and cleaning services to the Premises and to the Building in
accordance with the standards of other buildings of a similar type located near
the Building at the date of this Lease;
(iii) water and electricity in such quantities as the Landlord, in its sole
discretion, determines to be reasonable, shall be made available to the tenants
of the Building. As part of this obligation, the Landlord shall provide hot and
cold water to washrooms available for the Tenant's use in common with others
entitled thereto and shall furnish electricity to the Premises during the
Tenant's business hours for lighting and also for office equipment. If the
Tenant's equipment requires such Utilities in excess of the quantities normally
supplied by the Landlord and the Tenant requests the Landlord to supply such
excess quantities, facilities to supply such excess quantities may be provided
by the Landlord at the sole expense of the Tenant, if such excess facilities are
available, subject to the following conditions:
(A) the Landlord will have the right to refuse to supply such excess Utilities
if the supplying of additional facilities or excess Utilities shall materially
adversely affect the operation, the aesthetics or the Structure of the Building,
or in any material adverse way reduce the efficiency of existing electricity,
water or other Utilities supplied to the Building; and
(B) the actual cost of supplying such additional facilities or excess Utilities
shall be paid by the Tenant to the Landlord in accordance with Section 6.1
hereof, together with an amount equal to ten percent (10%) of the total cost
thereof representing the Landlord's overhead and administrative costs;
(iv) passenger elevator service for use by the Tenant and its Employees, agents
and those doing business with it in common with other persons entitled thereto,
to the Premises during the Tenant's normal business hours, subject to the
Building's usual security requirements and any other rules and regulations
required for the safe and efficient operation of the elevator servicing the
Building; and
(v) usual facilities for bringing telephone service to the Premises.
(b) The provision by the Landlord of the services and Utilities referred to
in Section 5.2(a) shall be subject to the following terms and conditions:
(i) the Landlord shall have no responsibility or liability for
failure to supply climate control services when stopped or prevented from so
doing by strikes or other causes
18
beyond the Landlord's reasonable control;
(ii) any use of the Premises not in accordance with the design standards of the
Building or any arrangement of partitions which interferes with the normal
operation of the climate control system for the Building may require changes or
alterations in the system or the ducts. Any changes or alterations so required,
if such changes can be accommodated by the Landlord's equipment, shall be made
by the Landlord, at the Tenant's expense, and only after such changes or
alterations have received the Landlord's prior written consent. If installation
of partitions, equipment or fixtures by or on behalf of the Tenant (other than
the partitions installed pursuant to the Landlord's Work as set out in Schedule
"C") necessitates the rebalancing of the portion of the climate control
equipment serving the Premises, such work will be performed by the Landlord at
the Tenant's expense, together with an amount equal to ten percent (10%) of the
total expense thereof representing the Landlord's overhead and administrative
costs, and shall be payable by the Tenant within fifteen (15) days after written
demand as Additional Rent;
(iii) the Landlord shall use reasonable efforts to adjust and balance the
climate control systems as soon as reasonably possible after the Commencement
Date;
(iv) the Landlord will not be responsible for any inadequacy of performance of
the climate control system serving the Premises if: (1) the occupancy of the
Premises exceeds one (1) person for every one hundred (100) square feet of the
Rentable Area of the Premises; or (2) the electrical power consumed in the
Premises for all purposes, exclusive of the heating, ventilating and
air-conditioning system, exceeds nine (9) watts per square foot of the Rentable
Area of the Premises (or such other level of wattage determined by the Landlord
from time to time); or (3) the window coverings or exterior windows are not kept
fully closed while the windows are exposed to direct sunlight. If the use of the
Premises does not accord with the aforementioned requirements and changes in the
climate control system are desirable or necessary to accommodate such use, the
Landlord may make such changes and the entire cost thereof shall be paid by the
Tenant to the Landlord as Additional Rent as set out in subparagraph (ii)
hereof. If, in the opinion of the Landlord, such changes result in Operating
Costs in excess of those which would have occurred had such changes not been
made, the Landlord may estimate the amount of such excess on a reasonable basis
and such amount shall be payable by the Tenant as Additional Rent in accordance
with the terms of this Lease;
(v) the elevator services provided by the Landlord shall be subject to the Rules
and Regulations attached hereto as Schedule "E". Temporary interruption of
elevator service may be required during periods when repairs, alterations or
Leasehold Improvements are being made; and
(vi) the Landlord shall not be liable and the Tenant hereby releases and holds
harmless the Landlord from any claim, loss or damage resulting from: (1) any
interruption or disruption of elevator service caused or contributed to by
mechanical failure; (2) any failure by the Landlord to provide elevator service
during any period of power interruption; (3) any cause beyond the control of the
Landlord; or (4) the carrying out
19
of any repairs, maintenance or replacements of the elevators.
SECTION 5.3 TENANT'S RESPONSIBILITIES
The Tenant will regulate those portions of the climate control
equipment within and exclusively serving the Premises so as to maintain such
reasonable conditions of temperature and humidity within the Premises as are
determined by the Landlord and its Architect and engineers so that no direct or
indirect appropriation of the heating, ventilating and air-conditioning from the
Common Areas and Facilities occurs. The Tenant shall comply with such
stipulations and with all Rules and Regulations of the Landlord pertaining to
the operation and regulation of such equipment. If the Tenant fails to comply
with such stipulations and the Rules and Regulations, the Landlord shall be
entitled to take such steps as it deems advisable to correct such defaults
(including, without limitation, entering upon the Premises and assuming control
of such equipment) without liability to the Tenant, and the Tenant will pay to
the Landlord within fifteen (15) days following invoice as Additional Rent all
costs and expenses incurred by the Landlord in so doing, together with an amount
equal to ten percent (10%) of such costs and expenses representing the
Landlord's overhead and administrative costs.
SECTION 5.4 RELOCATION OF THE PREMISES - Intentionally Deleted.
SECTION 5.5 ADDITIONAL SERVICES
(a) If the Tenant requires any Additional Services to be performed in
or relating to the Premises, it shall so advise the Landlord in writing, and the
Landlord shall have the right, but shall not be obligated, to perform any such
Additional Services.
(b) If the Landlord performs any such Additional Services, the Tenant
shall pay all costs and expenses incurred by the Landlord or on the Landlord's
behalf in performing or completing such Additional Services within fifteen (15)
days of receipt of the invoice therefor from the Landlord, together with an
amount equal to ten percent (10%) of such costs and expenses representing the
Landlord's overhead and administrative costs. If the Landlord does not wish to
exercise its right to perform any Additional Services, the Tenant shall not
cause any such Additional Services to be performed by any other Person unless
and until it has obtained the consent of the Landlord in writing to: (i) the
performance of such Additional Services; and (ii) the Person to be performing
such Additional Services, such consent not to be unreasonably withheld.
(c) If the Tenant disputes or contests the calculation of any costs or
expenses incurred by the Landlord or on the Landlord's behalf in performing or
completing such Additional Services as set out in the Landlord's invoice
therefor, it shall notify the Landlord in writing, and the Landlord shall, upon
receipt of such notice, request its senior
20
financial officer to prepare a statement of calculation with respect to such
Additional Services which shall be conclusive of such costs and expenses and
shall be binding upon the Landlord and the Tenant. The cost of preparation of
such statement shall be paid by the Tenant and shall be added to the cost of
such Additional Services. Notwithstanding any such objection or contestation by
the Tenant to the Landlord's calculation of the cost or expense of such
Additional Services, the full amount as calculated by the Landlord in its
invoice shall be due and payable within fifteen (15) days of receipt of such
invoice, and shall be readjusted, if necessary, within fifteen (15) days
following the Tenant's receipt of the statement from the Landlord's senior
financial officer.
(d) Subject to force majeure and so long as the Tenant is not in
default beyond any cure periods provided for in this Lease, the Landlord shall,
at additional cost to the Tenant and subject to the standard Building
requirements, provide electric power, hot and cold running water, heat (when
necessary), air-conditioning (when necessary) and lights within the Premises,
twenty-four (24) hours per day, seven (7) days a week, at the going rate
(without any gross-up or profit factor for the Landlord save and except for its
10% administration fee).
(e) Subject to force majeure and so long as the Tenant is not in
default beyond any cure periods provided for in the Lease, the Landlord shall
allow the Tenant access to the Premises twenty-four (24) hours per day and,
where elevator service exists in the Building, shall ensure that elevator
service to the Premises is available to the Tenant 24 hours per day. However, in
accessing the Premises outside of normal business hours, the Tenant shall comply
with all reasonable security regulations which the Landlord may impose for the
general security of the Building.
ARTICLE 6
UTILITIES
SECTION 6.1 CHARGES FOR UTILITIES
(a) If there are separate meters (other than check meters) installed
pursuant to Section 6.1(d) for the Premises, the Tenant will pay Utilities
directly to the Utility suppliers on the basis of the separate meters.
(b) If there are no separate meters for the Premises, the Tenant will
pay to the Landlord, or as the Landlord otherwise directs, as Additional Rent,
the aggregate, without duplication, of:
(i) the cost of all Utilities applicable or attributable to the Premises, as
determined by the Landlord;
(ii) the costs of any other charges levied or assessed in lieu of or in
addition to such Utilities as determined by the Landlord; and
21
(iii) all costs incurred by the Landlord in determining or allocating the
charge for Utilities including, without limitation, professional engineering and
consulting fees.
Charges for Utilities will be paid in equal monthly instalments in advance on
the basis of an initial rate determined by the Landlord or its engineers. Such
initial rate shall be based upon the Tenant's Proportionate Share of the
Utilities. If the Landlord or its engineers determine that the Tenant's use of
Utilities is in excess of the standard usage of general office premises in the
Building, then the Landlord shall be entitled to charge the Tenant an additional
amount for such excess consumption on such reasonable basis as may be determined
by the Landlord or its engineers, together with all costs incurred by the
Landlord in determining or allocating the additional charge for Utilities. The
Landlord shall provide the Tenant a written explanation as to its method of
determining such additional charge at the same time that it invoices the Tenant
for such additional charge (but, for greater certainty, the Landlord shall only
have to do so once, and thereafter whenever the Landlord changes the then
current methodology. The parties acknowledge and agree that at the date of
execution of this Lease there are no separate meters in the Building designed to
measure the consumption of Utilities in the Premises.
(c) The Landlord will have the exclusive right to attend to the
replacement of standard electric light bulbs, tubes and ballasts in the Premises
throughout the Term on the basis determined by the Landlord in accordance with
good commercial practice. The Landlord, at its option, may either include the
cost of replacement in Operating Costs or require the Tenant to pay a monthly
charge for such replacement (subject to adjustment based on actual costs) per
bulb, tube and ballast. If the Landlord elects not to relamp and reballast on a
scheduled basis, then the replacement of these standard electric light bulbs,
tubes and ballasts in the Premises will be undertaken by the Landlord at such
time as they actually burn out and after notice from the Tenant that replacement
is required. In that event, the cost of replacement and installation will be
paid by the Tenant with the next monthly payment of Additional Rent, together
with an amount equal to ten percent (10%) of such cost representing the
Landlord's overhead and administrative costs.
(d) The Tenant shall pay for the cost of any metering which the Tenant
requests the Landlord to install in the Premises for the purpose of assisting in
determining the consumption of any Utility in the Premises, in which case, at
the Landlord's option, the Tenant shall be billed separately for such Utility
pursuant to subsection (a) hereof and the costs of same shall no longer be
included in Operating Costs.
(e) In no event shall the Landlord be liable for, nor shall the
Landlord have any obligation with respect to any interruption or cessation of,
or failure in the supply of, any Utilities, services or systems in, to or
serving the Building or the Premises, whether or not supplied by the Landlord or
otherwise.
ARTICLE 7
USE OF THE PREMISES
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SECTION 7.1 USE OF THE PREMISES
The Premises will be used solely for the purpose specified in
Section 1.10 of the Special Provisions and the Tenant will not use or permit or
suffer the use of, the Premises or any part thereof for any other business or
purpose.
SECTION 7.2 CONDUCT OF BUSINESS
In occupying the Premises, the Tenant will commence and carry
on its business operations and use the Premises in a reputable and first-class
manner from and after the Commencement Date and throughout the Term. The Tenant
will not commit or permit to be committed any waste or injury to the Premises,
the Leasehold Improvements or Fixtures or any other part of the Project or any
nuisance therein or any use or manner of use causing annoyance to other tenants
and occupants of the Project. The Tenant agrees not to refer to the Building by
any name other than that designated from time to time by the Landlord and the
Tenant will use the name of the Building for the business address of the Tenant
but for no other purpose. Upon at least thirty (30) days prior written notice to
the Tenant, the Landlord may change the name of the Building and the Landlord
shall not be responsible for any costs or expenses incurred by the Tenant as a
result of such change of name.
SECTION 7.3 OBSERVANCE OF LAW
The Tenant will, at its expense, and subject to Section 9.3:
(i) comply with all provisions or changes of law and other requirements of all
governmental bodies which pertain to or affect the Premises or require or govern
the making of any repairs, alterations or other changes of or to the Premises or
the Tenant's use of it;
(ii) obtain all necessary permits, licences and approvals relating to the use of
the Premises and the conduct of business therein; and
(iii) comply with all reasonable directions given or regulations introduced by
the Landlord or measures introduced by any governmental or quasi-governmental
authority from time to time in the interest of energy conservation and to
control Operating Costs whereby the Landlord may by the use of a pulse or other
system turn out or reduce all lighting in the Premises by local switching for
the Premises and reduce energy consumption in the Premises or in the Building.
However, if the Tenant does not participate in such measures with respect to the
Premises, the Tenant may be required to pay, as Additional Rent, for the
additional energy consumed in the Premises as a result of its not participating
in such measures. In addition, it is understood and agreed that any and all
costs and expenses paid or incurred by the Landlord in installing energy
conservation equipment and systems and safety or life support systems shall be
included in Operating Costs.
23
Notwithstanding the foregoing, the Tenant shall not be responsible for any
non-compliance of the Premises with respect to the requirements of any laws,
orders, ordinances, rules and regulations of any governmental authority having
jurisdiction and which exists on the date the Tenant takes possession of the
Premises, and the Landlord, at its sole cost and expense, shall promptly take
all actions necessary and perform all work necessary to correct such
non-compliance. In addition, the Tenant shall not be responsible for making any
repairs or improvements to the Premises which may be required by any of the
aforesaid bodies if the Tenant would not have to make such repairs or
improvements pursuant to the other terms of this Lease, or unless such repairs
or improvements are necessitated as a result of the Tenant's business operations
in the Premises, in which case the Tenant will be responsible.
SECTION 7.4 HAZARDOUS SUBSTANCES
(a) The Tenant covenants and agrees to utilize the Premises and operate its
business in a manner so that no part of the Premises are used to generate,
manufacture, refine, treat, transport, store, handle, dispose of, transfer,
produce or process any Hazardous Substances. Further the Tenant hereby covenants
and agrees to indemnify and save harmless the Landlord and those for whom the
Landlord is in law responsible from any and all losses, costs, claims, damages,
liabilities, expenses or injuries caused or contributed to by any Hazardous
Substances which are at any time located, stored or incorporated in any part of
the Premises, provided that the Tenant or the Tenant's Employees were
responsible for such Hazardous Substances as provided in subsection (d) hereof.
(b) The Tenant hereby agrees that the Landlord or its authorized representatives
shall have the right to conduct such environmental site reviews and
investigations as it may deem necessary for the purposes of ensuring compliance
with this Section 7.4. The Landlord shall be solely responsible for the costs of
such audit, unless same reveals a default on the part of the Tenant of its
obligations under this Lease regarding Hazardous Substances.
(c) The Tenant's obligations pursuant to this Section 7.4 shall survive the
expiration or earlier termination of the Term.
(d) Notwithstanding any other provision of this Lease, the Tenant shall not be
responsible for any Hazardous Substances located on or in the Premises, the
Building or the Project unless same were brought upon, located on or in, stored
or incorporated into the Premises, the Building or the Project as a result of
the act or omission of the Tenant or the Tenant's Employees.
(e) The Landlord shall be solely responsible for all Hazardous Substances
located on the Premises, the Building and the Project prior to the Commencement
Date ("Existing Hazardous Substances"). If a work order is issued in respect of
any Existing Hazardous Substances, the Landlord will be solely responsible for
carrying out the work required by such work order, and the Landlord shall be
entitled to access the Premises, on prior
24
reasonable notice (except in the case of emergency, in which event no notice
shall be required), as necessary, to perform such work.
ARTICLE 8
INSURANCE AND INDEMNITY
SECTION 8.1 TENANT'S INSURANCE
(a) The Tenant shall, throughout the period that the Tenant is given
possession of the Premises and during the entire Term, at its sole cost and
expense, take out and keep in full force and effect the following insurance:
(i) "all risks" (excluding flood and earthquake) insurance in an amount of at
least ninety percent (90%) of the full replacement cost, insuring all property
owned by the Tenant, or for which the Tenant is legally liable or installed by
or on behalf of the Tenant, and located within the Building including, but not
limited to, furniture, Fixtures, installations, alterations, additions,
partitions and all other Leasehold Improvements. Such insurance shall include a
standard joint loss agreement. The Landlord shall be named as an insured and the
Mortgagee shall be named as a loss payee in such insurance policies, but only in
respect of the Leasehold Improvements and Fixtures (other than trade fixtures)
in the Premises;
(ii) broad form boiler and machinery insurance on a blanket repair and
replacement basis with limits for each accident in an amount at least equal to
90% of the replacement cost of all Leasehold Improvements and of all boilers,
pressure vessels, air-conditioning equipment and miscellaneous electrical
apparatus owned or operated by the Tenant (other than equipment owned by the
Landlord) or by others (other than the Landlord) on behalf of the Tenant in the
Premises. The Landlord shall be named as an additional insured and the Mortgagee
shall be named as a loss payee pursuant to the terms of the standard Insurance
Bureau of Canada mortgage clause in such insurance policies; and
(iii) public liability and property damage on an occurrence basis insurance
including personal injury liability, bodily injury liability, contractual
liability, "all-risks" tenants' legal liability for the full replacement costs
of the Premises, non-owned automobile liability and owners' and contractors'
protective insurance coverage with respect to the Premises and the Common Areas
and Facilities, coverage to include the business operations conducted by the
Tenant and any other Person on the Premises. Such policies shall be written on a
comprehensive basis with limits of not less than $3,000,000.00 for bodily injury
to any one or more persons. The Landlord and the Mortgagee shall be named as an
additional insured in such insurance policies.
(b) The following terms and conditions are applicable to the insurance
policies specified under section 8.1(a):
(i) the policies specified under sections 8.1(a)(i) and (ii) shall contain the
25
Mortgagee's standard mortgage clause and may have reasonable deductibles. If
there is a dispute as to the full replacement cost, the determination of the
Landlord's insurers shall prevail;
(ii) the Tenant shall use best efforts to obtain a waiver of subrogation in
respect of the policies specified under sections 8(a)(i) and (ii) in favour of
the Landlord and the Landlord's Employees;
(iii) all of the policies shall be taken out with insurers qualified to carry on
business in Ontario;
(iv) all of the policies shall be non-contributing with and only apply as
primary and not as excess to any other insurance available to the Landlord;
(v) none of the policies shall be invalidated as respects the interests of the
Landlord and the Mortgagee by reason of any breach or violation by the Tenant of
any warranties, representations, declarations or conditions contained in the
policies; and
(vi) all of the policies shall contain an undertaking by the insurers to notify
the Landlord and the Mortgagee in writing not less than 30 days prior to any
material change, cancellation or termination.
(c) The Tenant agrees to deliver certificates of insurance to the
Landlord within a reasonable period of time following receipt of the Landlord's
written request for same.
(d) If there is damage or destruction to the Leasehold Improvements or
Fixtures (other than trade fixtures) in the Premises, the Tenant will use the
full insurance proceeds received in respect of such damage or destruction for
the sole purpose of repairing or restoring them. If there is damage to or
destruction of the Building and as a consequence thereof this Lease is
terminated under Sections 10.1 or 10.2, then, if the Premises have also been
damaged or destroyed, the Tenant will pay the Landlord all of its insurance
proceeds relating to the Leasehold Improvements and Fixtures (other than trade
fixtures). For greater certainty, if: (i) any portion of the insurance proceeds
are payable solely to the Tenant, and not to the Landlord, to compensate the
Tenant for the loss of its future use of the Leasehold Improvements and Fixtures
(other than trade fixtures); and (ii) such payment to the Tenant does not
decrease the amount payable to the Landlord to compensate it for the loss of the
Leasehold Improvements and Fixtures (other than trade fixtures) on the
replacement basis contemplated by section 8.1(a), then the Tenant shall be
entitled to retain such portion.
SECTION 8.2 INCREASE IN INSURANCE PREMIUMS
If: (a) the occupancy of the Premises; (b) the conduct of
business in the Premises; or (c) any acts or omissions of the Tenant in the
Premises or in any other part
26
of the Project results in any increase in premiums to the insurance carried by
the Landlord with respect to any part of the Building, the Tenant will pay the
increase in premiums within fifteen (15) days after invoices for additional
premiums are rendered by the Landlord. In determining whether the Tenant is
liable for increased premiums and the amount for which the Tenant is
responsible, a schedule issued by the organization that computes the insurance
rate on the Project showing the components of the rate will be conclusive
evidence of the items that make up the rate.
SECTION 8.3 CANCELLATION OF INSURANCE
If any insurance policy in respect of any part of the Building
is cancelled or threatened by the insurer to be cancelled, or the coverage
reduced by the insurer by reason of the use and occupation of the Premises and
if the Tenant fails to remedy the condition giving rise to cancellation,
threatened cancellation or reduction of coverage within forty-eight (48) hours
after notice by the Landlord, the Landlord may, at its option, either: (a)
exercise its rights of re-entry including termination under Article 14; or (b)
at the Tenant's expense, enter upon the Premises and remedy the condition giving
rise to the cancellation, threatened cancellation or reduction.
SECTION 8.4 LOSS OR DAMAGE - INTENTIONALLY DELETED
SECTION 8.5 LANDLORD'S INSURANCE
(a) The Landlord shall maintain in full force and effect during the
Term, such insurance with respect to the Property (including the leaseholds in
the Building) against such occurrences and in such amounts and on such terms and
conditions and with such deductibles as would be obtained by a prudent landlord
of a similar property, and which will include the following:
(i) broad form boiler and machinery insurance on items owned by the Landlord
(except for the Leasehold Improvements in the leasable premises and property
that the Tenant and other tenants of the Building are required to insure);
(ii) "all-risks" insurance which shall insure the Building for an amount of not
less than ninety percent (90%) of the replacement cost thereof from time to time
(including foundations), against loss or damage by perils as may now or
hereafter from time to time be embraced by or defined in a standard all-risk
insurance policy;
(iii) rental value insurance in such amount as would be carried by a prudent
landlord in the circumstances and in any event for an indemnity period of at
least twelve (12) months;
(iv) third party liability hazards including exposure to personal injury, bodily
injury
27
and property damage on an occurrence basis including insurance for all
contractual obligations and covering all actions of all authorized employees,
subcontractors and agents while working on behalf of the Landlord. Such policy
shall contain a limit of not less than $2,000,000.00 for combined bodily injury
and property damage.
(b) Landlord shall use best efforts to obtain a waiver of subrogation
in all property, boiler and machinery and rental income insurance policies which
are taken out by the Landlord in respect of the Property, provided that if
obtainable at a cost, same shall be obtained at the Tenant's expense.
(c) Notwithstanding the Landlord's obligation to insure as set out
above and the Tenant's contribution to the cost of the Landlord's insurance
premiums: (i) intentionally deleted (ii) no insurable interest is conferred upon
the Tenant under the Landlord's insurance policies; and (iii) the Tenant has no
right to receive proceeds from the Landlord's insurance policies.
SECTION 8.6 INDEMNIFICATION - Intentionally Deleted.
SECTION 8.7 RELEASE AND INDEMNIFICATION
(a) Notwithstanding anything to the contrary in this Lease
contained:
(i) subject to Sections 8.7(a)(ii) and (iii), each of the Landlord and Tenant
hereby releases the other and waives all claims against the other and those for
whom the other is in law responsible with respect to occurrences insured against
or required to be insured against by the releasing party, whether any such
claims arise as a result of the negligence or otherwise of the other or those
for whom it is in law responsible (in the case of the Landlord, the Landlord's
Employees and, in the case of the Tenant, the Tenant's Employees);
(ii) such release and waiver shall be effective only to the extent of proceeds
of insurance received by the releasing party and proceeds which would have been
received if the releasing party obtained all insurance required to be obtained
by it under this Lease and for this purpose deductible amounts shall be deemed
to be proceeds of insurance received;
(iii) notwithstanding anything to the contrary in this Section 8.7(a), the
Landlord and Tenant shall each be liable to any third person (being any person
other than the Landlord, the Landlord's Employees, the Tenant or the Tenant's
Employees) to the extent of their respective fault or negligence and each shall
be entitled to full indemnity and contribution from the other to the extent of
the other's fault or negligence.
(b) To the extent not released under Section 8.7(a), each party shall
indemnify and save harmless the other from all liabilities, damages, losses or
expenses arising out
28
of:
(i) any breach, violation or non-performance by the indemnifying party of any
covenant, condition or agreement in this Lease on the part of the indemnifying
party to be observed or performed;
(ii) any contract, lien or mortgage on the Project, the Property or the Premises
and any loss, cost or expense arising from or occasioned by the act, default or
negligence of the indemnifying party, its officers, agents, servants, employees,
contractors, customers, invitees or licensees; and
(iii) any obligation of the indemnifying party arising or outstanding upon the
expiration or earlier termination of this Lease.
Such indemnity shall survive the termination of this Lease, anything to the
contrary notwithstanding.
ARTICLE 9
MAINTENANCE, REPAIRS AND ALTERATIONS
SECTION 9.1 MAINTENANCE AND REPAIRS BY THE LANDLORD
Save and except for the Tenant's maintenance and repair
obligations and save and except as may be otherwise provided in this Lease, the
Landlord will maintain and repair the Structure of the Building and the
mechanical, electrical, heating, ventilating, air-conditioning and other base
building systems of the Building, as would a prudent owner of a similar
first-class office building. The cost of such maintenance and repairs will be
included in Operating Costs, except to the extent such costs constitute an
Excluded Cost. However, if the Landlord is required, due to the business carried
on by the Tenant, to make repairs or replacements to the Structure or any other
part of the Building by reason of the application of laws, ordinances or other
regulations of any governmental body, or by reason of any act, omission or
default of the Tenant or those for whom the Tenant is in law responsible, then
the Tenant will be liable for the total cost of those repairs or replacements
plus ten percent (10%) of the total cost representing the Landlord's overhead
and administrative costs.
SECTION 9.2 MAINTENANCE AND REPAIRS BY THE TENANT
(a) Subject to section 9.2(b), the Tenant will at all times, at its
expense, maintain the whole of the Premises including without limitation, all
interior partitions, doors, electrical, lighting, wiring, plumbing fixtures and
equipment and the heating, ventilating and air-conditioning systems and
equipment within and exclusively serving the Premises in good order, first-class
condition and repair, reasonable wear and tear only excepted. The Tenant will
make all such repairs and replacements with due diligence and dispatch.
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(b) The Tenant's obligation to repair the Premises shall not include
the following, all of which shall be made by the Landlord:
(i) repairs to the Structure of the Building or repairs
resulting from structural weaknesses or defects, improper materials or
workmanship or faulty construction;
(ii) repairs or maintenance which the Landlord is obligated to
make pursuant to this Lease;
(iii) repairs or replacements the cost of which would constitute
a capital expenditure in accordance with generally accepted accounting
principles; and
(iv) repairs or replacements which are covered by warranties
in favour of the Landlord from third parties.
(c) If required by the Landlord or any governmental authority, the
Tenant will, at its expense, remove from the Premises any Hazardous Substances
for which it is responsible under this Lease. The foregoing obligation to remove
such Hazardous Substances shall survive the expiration or earlier termination of
the Term of this Lease.
(d) Notwithstanding anything contained in this Lease, if any such
repairs or replacements to the Premises or to any Leasehold Improvements
installed by or on behalf of the Tenant in the Premises, affect the Structure of
the Building, or any part of the electrical, mechanical, plumbing, heating,
ventilating, air-conditioning, lighting or other base building systems of the
Building, such work shall be performed only by the Landlord at the Tenant's sole
cost and expense. Upon completion thereof, the Tenant shall pay to the Landlord,
as Additional Rent within fifteen (15) days after demand, both the Landlord's
reasonable costs relating to such repairs or replacements including the fees of
any architectural and engineering consultants plus a sum equal to ten percent
(10%) of the total cost thereof representing the Landlord's overhead and
administrative costs.
(e) The Tenant will leave the Premises in a reasonably neat and tidy
condition at the end of each day in order that the Landlord's cleaning services
can be performed.
(f) The Tenant will advise the Landlord of any damage to or breakage of
the glass in or forming part of the Premises (including outside windows and
doors on or at the perimeter of the Premises) and the Landlord will complete all
needed repairs and replacements to such glass with due diligence. The cost of
completing such repairs and replacement shall payable by the Tenant as part of
Operating Costs except in the event that the repairs or replacements to the
glass are required as a result of the negligence or wilful acts or omissions of
the Tenant or those for whom it is at law responsible, in which event the cost
thereof shall be payable by the Tenant to the Landlord, as Additional Rent,
within fifteen (15) days of invoice.
(g) At the expiration or earlier termination of the Term, the Tenant
will surrender the Premises to the Landlord in as good a condition as the Tenant
is required to
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repair and maintain them throughout the Term.
(h) Notwithstanding any other provisions of this Lease, other than
section 8.7 to which this section 9.2(h) is subject, if the Building or any part
thereof, or any equipment, machinery, facilities or Leasehold Improvements
contained therein or made thereto, or the Structure thereof requires repair or
replacement or becomes damaged or destroyed through the negligence, carelessness
or misuse of the Tenant or those for whom it is in law responsible or by any
Person having business with the Tenant or by the Tenant or those for whom it is
in law responsible in any way stopping up or damaging the climate control,
heating and air-conditioning apparatus, water pipes, drainage pipes or other
equipment or facilities or parts of the Building, the cost of the resulting
repairs, replacements or alterations plus a sum equal to ten percent (10%) of
the cost thereof representing the Landlord's overhead and administrative costs
will be paid by the Tenant to the Landlord as Additional Rent within fifteen
(15) days after demand therefor by the Landlord.
(i) The Tenant shall, when it becomes aware of it, notify the Landlord
of damage to, or deficiency or defect in any part of the Building, including the
Premises, any equipment or utility systems, or any installations located in the
Building or the Premises, provided the Landlord shall not have any obligation in
respect thereof, subject to the terms of this Lease.
SECTION 9.3 LANDLORD'S APPROVAL OF THE TENANT'S REPAIRS
(a) So long as the Tenant is not in default of any of the Tenant's
Covenants beyond any cure period provided for in this Lease, the Tenant shall
only be required to obtain the Landlord's consent to the carrying out of any
Alterations if same involve the Structure of the Building or any of its systems.
However, the Tenant shall be required to obtain the Landlord's consent to the
initial Tenant's work in the Premises.
(b) If the Landlord's consent to the making of any Alterations is
required, then the Landlord will not be required to consider any request for its
approval until the Tenant has submitted to it details of the proposed work,
including professionally prepared drawings if requested by the Landlord, and
specifications conforming to good engineering practices. Any approval shall be
conditional upon the Tenant delivering to the Landlord prior to the commencement
of any such Alterations:
(i) evidence satisfactory to the Landlord that the Tenant has
obtained, at its expense, all necessary consents, permits,
licences and inspections from all governmental and regulatory
authorities having jurisdiction; and
(ii) security in an amount and form required by the Landlord, as
an indemnification against construction liens, costs, damages and
expenses resulting from such Alterations.
(c) All Alterations will be performed by competent workmen: (i) at the
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Tenant's expense; (ii) in a good and workmanlike manner; (iii) in accordance
with the drawings and specifications approved by the Landlord, where such
approval is required; and (iv) subject to the reasonable regulations, controls
and inspection of the Landlord.
Notwithstanding the foregoing, the Landlord shall be entitled to
withhold its consent or approval to any proposed Alterations if, in its
reasonable opinion, such Alterations decrease the Market Rental value of the
Premises or are inconsistent or incompatible with the general design or quality
of the Building.
(d) Any Alterations requiring the Landlord's consent and which are made
by the Tenant without the prior consent of the Landlord or not made in
accordance with the drawings and specifications approved by the Landlord will,
if requested by the Landlord, be promptly removed by the Tenant and the Premises
restored to their previous condition at the Tenant's expense.
(e) If however, all or any portion of the proposed Alterations affect
the Structure or any of the electrical, mechanical or other base building
systems of any part of the Building, such Alterations (or the appropriate
portion of them), if approved by the Landlord, will be performed only by the
Landlord, and the Tenant shall pay to the Landlord, within fifteen (15) days
following invoice, the cost of completing such Alterations together with an
amount equal to ten percent (10%) of such cost representing the Landlord's
overhead and administrative costs.
SECTION 9.4 REMOVAL AND RESTORATION BY THE TENANT
(a) All Leasehold Improvements and Fixtures (other than trade fixtures)
made by the Tenant, or made by the Landlord on the Tenant's behalf immediately
become the property of the Landlord upon affixation or installation and will not
be removed from the Premises at any time unless permitted or required by the
Landlord. The Landlord is under no obligation to repair, maintain or insure
these Leasehold Improvement, or Fixtures. The Tenant shall not be required or
entitled to remove any Leasehold Improvements or Fixtures (other than trade
fixtures) from the Premises at the end of the Term. However, the Tenant shall
remove its signage from the Building if required by the Landlord. The Tenant
shall forthwith repair any damage to the Premises caused by the installation or
removal of the trade fixtures or, if applicable, the signage. In addition, the
Tenant will, prior to the end of the Term, at its cost, remove from the Premises
any Hazardous Substances for which the Tenant is responsible hereunder. The
Tenant's obligation to observe and perform this covenant shall survive the
expiration of the Term or earlier termination of this Lease. If the Tenant does
not remove any such Hazardous Substances from the Premises at the end of the
Term, such Hazardous Substances or materials may, without further notice to the
Tenant, be immediately removed from the Premises and may be disposed of or
stored, at the option of the Landlord, and as the Landlord sees fit. Any costs
or expenses incurred or damages suffered by the Landlord in removing, disposing
or storing such Hazardous Substances shall be paid by the Tenant to the
Landlord, within fifteen (15) days following the Tenant's receipt of an invoice
from the Landlord, together with an amount equal to ten percent (10%) of such
costs and expenses representing the Landlord's overhead and administrative
costs.
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(b) If the Tenant does not remove all of its trade fixtures at the end
of the Term, all such trade fixtures may, without further notice to the Tenant,
be immediately removed from the Premises and may be disposed of, sold or stored,
at the option of the Landlord, and as the Landlord sees fit. Any costs or
expenses incurred by the Landlord in removing, disposing, selling or storing
such trade fixtures shall be paid by the Tenant to the Landlord, within fifteen
(15) days following invoice, together with an amount equal to ten percent (10%)
of such costs and expenses representing the Landlord's overhead and
administrative costs. Any trade fixtures not removed from the Premises at the
end of the Term, will at the Landlord's option, become the property of the
Landlord (and, in such event, this paragraph shall have the effect of assigning
the Tenant's right and title in such trade fixtures to the Landlord) and may be
removed from the Premises and sold or disposed of by the Landlord in such manner
as it deems advisable.
(c) The Tenant shall, in the case of every installation or removal of
Leasehold Improvements, Fixtures or trade fixtures either during or at the
expiration of the Term, effect the same at times prescribed by the Landlord and
utilizing only those elevators designated by the Landlord and shall promptly
make good any damage caused to the Premises or the Building or any part thereof
by the installation or removal of such Fixtures and Leasehold Improvements, all
at its sole expense.
SECTION 9.5 TENANT TO DISCHARGE ALL LIENS
(a) The Tenant shall ensure that no construction liens or other liens
or encumbrances in respect of materials supplied or work done or to be done by
the Tenant or on behalf of the Tenant or related to the Tenant's Work shall be
registered against or shall otherwise affect the Project or any part thereof or
the Landlord's or the Tenant's interest in the Premises.
(b) If a lien or other encumbrance is registered against or otherwise
affects the Project the Landlord's, or the Tenant's interest therein, and the
Tenant fails to discharge or vacate or cause any such lien or encumbrance to be
discharged or vacated within fifteen (15) days after it is filed or registered,
then, in addition to any other rights or remedies of the Landlord, the Landlord
may (but shall not be obligated to) discharge or vacate the lien or encumbrance
by paying the amount claimed into court and the amount so paid, plus an amount
equal to ten percent (10%) thereof representing the Landlord's overhead and
administrative costs, together with all costs and expenses (including legal
costs and expenses) plus interest at the Prime Rate, shall be immediately due
and payable by the Tenant to the Landlord as Additional Rent within fifteen (15)
days following demand.
SECTION 9.6 SIGNS AND ADVERTISING
(a) The Tenant shall solely be entitled to install in and on the
Premises signs and advertising materials, provided that all of same comply with
all applicable laws, the
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Tenant first obtains the Landlord's consent and the provisions of this Section
9.6 are complied with. The Tenant shall be entitled to have exclusive exterior
signage rights on two (2) sides of the top of the Building, such sides being
determined by the Tenant.
(b) Save as referred to in subsection (a), the Tenant will not place or
permit any notice, lettering or other signage on any part of the outside of the
Building without the Landlord's approval. The Landlord may prescribe a uniform
pattern of identification signs for tenants to be placed in a location
designated by the Landlord. The Landlord shall install, at the Tenant's sole
cost, the Landlord's standard tenant identification signs in accordance with the
Landlord's design criteria, on or near the main door to the Premises and, at the
Landlord's option, at other locations on the floor on which the Premises are
located.
(c) At the expiration of the Term of this Lease, the Tenant will remove
all signs, pictures, advertisements, notices, letterings or decorations from the
Premises at the Tenant's expense and will promptly repair all damages caused by
its installation and removal.
(d) The Landlord may provide a directory board in the main lobby of the
Building in a location designated by the Landlord in which event the Tenant's
name shall be displayed therein and the costs associated with the directory
board shall be included in Operating Costs.
SECTION 9.7 TENANT NOT TO OVERLOAD FACILITIES
The Tenant will not install any equipment which will exceed or
overload the capacity of any utility, electrical or mechanical facilities in the
Premises and the Tenant will not bring into the Premises or install any utility,
electrical or mechanical facility or service which the Landlord does not
approve. The Tenant agrees that if any equipment installed by the Tenant
requires additional utility, electrical or mechanical facilities, the Landlord
may, in its sole discretion, if they are available, elect to install them at the
Tenant's expense and in accordance with plans and specifications to be approved
in advance in writing by the Landlord.
SECTION 9.8 TENANT NOT TO OVERLOAD FLOORS
The Tenant will not bring upon the Building or the Premises
any machinery, equipment, article or thing that by reason of its weight, size or
use, might in the opinion of the Landlord damage the Building or the Premises
and will not at any time overload the floors of the Premises. If any damage is
caused to the Building or the Premises by any machinery, equipment, object or
thing or by overloading, the Tenant will forthwith repair such damage, or, at
the option of the Landlord, pay the Landlord within fifteen (15) days after
demand as Additional Rent the cost of repairing such damage plus a sum equal to
ten percent (10%) of such cost representing the Landlord's overhead and
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administrative costs.
ARTICLE 10
DAMAGE AND DESTRUCTION
SECTION 10.1 DESTRUCTION OF THE PREMISES
Regardless of any other provision of this Lease, if at any time during
the Term the Building is damaged or destroyed by fire, lightning or tempest or
by other casualty (the date of such damage or destruction being called the
"Damage Date"), then and in every such event:
(a) if the damage or destruction renders twenty five percent (25%) or
more of the Rentable Area of the Building unfit for occupancy or it is
impossible or unsafe to use and occupy it, or if in the opinion of the Landlord
the Building is damaged or destroyed to such a material extent or the damage or
destruction is of such a nature that the Building must be or should be totally
or partially demolished, whether or not the Premises are damaged or destroyed
and whether the Premises are to be reconstructed in whole or in part or not, or
if Building, or any material and significant portion thereof, is damaged or
destroyed in respect of a casualty for which the Landlord is not insured
hereunder and was not required to be insured against, the Landlord may at its
option terminate this Lease by giving to the Tenant notice in writing of such
termination within sixty (60) days of the Damage Date, in which event this Lease
and the Term hereby demised shall cease and be at an end as of the Damage Date
and the Rent shall be apportioned and paid in full to the Damage Date;
(b) if the damage or destruction is such that the Premises are rendered
wholly unfit for occupancy or it is impossible or unsafe to use and occupy them,
and if in either event, the damage, in the opinion of the Architect cannot be
repaired with reasonable diligence within one hundred and eighty (180) days from
the Damage Date, then the Landlord or the Tenant may terminate this Lease by
giving to the other notice in writing of such termination within thirty (30)
days after receipt of the Architect's certificate, in which event this Lease and
the Term hereby demised shall cease and be at an end as at the Damage Date and
the Rent shall be apportioned and paid in full to the Damage Date.
(c) If neither the Landlord nor the Tenant terminates this Lease, the
Landlord will do the Landlord's Reconstruction and, to the extent of insurance
proceeds actually received by the Landlord (or which would have been received
had the Landlord not been in default of its insurance obligations under this
Lease), the Rent will abate from the Damage Date until the earlier of:
(i) sixty (60) days after the Landlord has completed the
Landlord's Reconstruction; and
(ii) the date upon which the Tenant commences its business
operations
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from the Premises;
(the "ABATEMENT PERIOD"). The term "Landlord's Reconstruction" in this
section means the reconstruction or repair of the Premises in accordance with
section 9.1 of this Lease. Once the Landlord has substantially completed its
Restoration Work the Tenant will complete all work required to fully restore the
Premises for the Tenant's business operations. If any part of the Building is
destroyed or damaged and the Landlord does not elect to terminate this Lease,
the Landlord will commence diligently to restore the Building, but only to the
extent of the Landlord's obligations as set out pursuant to the terms of the
various leases for the premises in the Building, and exclusive of any tenant's
responsibilities set out therein. If the Landlord elects to restore the
Building, the Landlord may restore according to plans and specifications and
working drawings other than those used in the original construction of the
Building;
(d) if the damage or destruction is such that the Premises are wholly
unfit for occupancy or if it is impossible or unsafe to use or occupy it, but if
in either event the damage, in the opinion of the Landlord, can be repaired with
reasonable diligence within one hundred and eighty (180) days from the Damage
Date, the Landlord will do the Landlord's Reconstruction and to the extent of
insurance proceeds actually received by the Landlord ( or which would have been
received had the Landlord not been in default of its insurance obligations under
this Lease), the Rent will abate throughout the Abatement Period;
(e) if in the opinion of the Landlord the damage or destruction to the
Building or the Premises (as the case may be) can be made good, as aforesaid,
within one hundred and eighty (180) days from the Damage Date and the damage or
destruction is such that a portion of the Premises is capable of being partially
used for the purposes for which it is hereby demised, then the Landlord will do
the Landlord's Reconstruction and, to the extent of insurance proceeds actually
received by the Landlord (or which would have been received had the Landlord not
been in default of its insurance obligations under this Lease) the Rent will
abate proportionately to the part of the Premises rendered untenantable
throughout the Abatement Period. Despite the foregoing, if the Tenant acting
reasonably, determines that it would not be commercially feasible for it to
carry on its business in that portion of the Premises which is not destroyed,
and does not in fact occupy such portion of the Premises, then all Rent shall
abate throughout the Abatement Period, to the extent of insurance proceeds
actually received by the Landlord ( or which would have been received had the
Landlord not been in default of its insurance obligations under this Lease)
(f) if the Landlord elects to repair, reconstruct or rebuild the
Project in accordance with the provisions of this section, it is acknowledged
and agreed by the Tenant that the Landlord shall be entitled to use plans and
specifications and working drawings in connection therewith other than those
used in the original construction of the Project, but the Premises as rebuilt,
will have reasonably similar layout, facilities and services to those in the
Premises prior to such damage; and
(g) the Landlord shall exercise its rights set out in this section
acting bona fide
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and not in a manner discriminating against the Tenant and not primarily for the
purpose of depriving the Tenant of its rights under this Lease.
SECTION 10.2 EXPROPRIATION
Both the Landlord and Tenant agree to co-operate with the
other regarding an expropriation of the Premises or the Property or any part
thereof, so that each may receive the maximum award to which they are
respectively entitled at law. To the extent that any portion of the Property
other than the Premises is expropriated, then, the full proceeds accruing or
awarded as a result will belong to the Landlord and the Tenant will abandon or
assign to the Landlord any rights which the Tenant may have or acquire by
operation of law to those proceeds or awards and will execute all such documents
as in the opinion of the Landlord are necessary to give effect to this
intention. No party shall assert any claims against the other arising out of
such expropriation, condemnation or taking.
SECTION 10.3 ARCHITECT
The opinion, decision or certificate of the Architect will
bind the parties as to: (a) the percentage of the Rentable Area of the Building
damaged or destroyed; (b) the period of time required to restore the Premises or
the Building; (c) whether or not the Premises are rendered untenantable and the
extent of such untenantability; (d) the date upon which the Landlord's or
Tenant's obligations restoration obligations are completed or substantially
completed and the date when the Premises are rendered tenantable; and (e) the
state of completion of any work of either the Landlord or the Tenant under this
Lease.
ARTICLE 11
ASSIGNMENT AND SUBLETTING
SECTION 11.1 ASSIGNMENT AND SUBLETTING
(a) After the date that the Tenant's Work in the Premises is completed,
the Tenant shall have the right at any time during the Term or an Extension Term
to effect a Transfer upon obtaining the written consent of the Landlord, such
consent not to be unreasonably withheld or delayed. However, notwithstanding any
statutory provisions to the contrary, the Landlord will be deemed to be
reasonable if it bases its decision whether or not to consent on any or all of
the following factors:
(i) whether the Transfer is contrary to any covenants or restrictions granted by
the Landlord to other existing or prospective tenants or occupants of the
Building, or to the Mortgagee or any other parties;
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(ii) whether in the Landlord's opinion the financial background, business
history and capability of the Transferee is satisfactory; and
(iii) whether in the Landlord's opinion the Transferee will be able to pay the
Rent in full when due and payable.
(b) The consent by the Landlord to any Transfer will not constitute a
waiver of the necessity for consent to any subsequent Transfer.
(c) This prohibition against a Transfer without first obtaining the
Landlord's consent applies to a change in the direct or indirect effective
voting control of the Tenant from the Person(s) holding voting control at the
date of this Lease (or if the Tenant is not a corporation, at the date of the
assignment of this Lease to a corporation), unless the Tenant is a public
corporation whose shares are listed and traded on any recognized stock exchange
in Canada or the United States or the change is pursuant to a public offering of
the Tenant's shares.
If the Tenant is a partnership or is controlled by a partnership (either
directly or indirectly), this prohibition against a Transfer also includes a
change in the constitution of the partnership resulting from the withdrawal of
any of the partners existing as of the Commencement Date (or if the Tenant is
not a partnership, at the date of the assignment of this Lease to a partnership)
or the addition of any partners to the partnership subsequent thereto. This
prohibition against a Transfer also includes an assignment by operation of law.
(d) No Transfer may be made where any portion of Rent is lower than
then current Market Value for the Building.
(e) If the Tenant intends to effect a Transfer, then the Tenant will
give prior written notice to the Landlord of such intent, specifying the
proposed Transferee and providing additional information regarding the
Transferee which the Landlord may reasonably require in order to determine
whether or not to provide its consent, including without limitation, a copy of a
bona fide written offer, if any, with respect to the proposed Transfer which the
Tenant is prepared to accept subject to compliance with the provisions of this
Lease and which must disclose any and all Rent payments (or other consideration
on account of or in lieu of Rent, provided that the Tenant need not disclose the
portion of the purchase price attributable to the Lease), made or to be made by
the proposed Transferee as consideration for such Transfer and any other
information concerning the financial or business status of the Transferee that
the Landlord requires. The Landlord will, within fifteen (15) days after having
received notice and all necessary information, notify the Tenant in writing
either that:
(i) it consents or does not consent to the Transfer. If the
Landlord does not give its consent, it shall provide the Tenant with its reasons
for not giving its consent at the time it advises the Tenant that it is not
providing its consent; or
(ii) it elects to cancel this Lease in preference to giving
consent
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(provided that the Landlord acknowledges that so long as the Tenant is Delano
Technology Corp., the Landlord shall not be entitled to terminate this Lease
upon the Tenant requesting the Landlord's consent to a Transfer). If the
Landlord elects to cancel this Lease, the Tenant will notify the Landlord
in writing within fifteen (15) days thereafter of the Tenant's intention
either to refrain from the Transfer or to accept the cancellation of this
Lease. If the Tenant fails to deliver its notice within the fifteen (15)
day period, this Lease will be terminated upon the date stipulated by the
Landlord in its notice of cancellation. If the Tenant advises the Landlord it
intends to refrain from the Transfer, then the Landlord's election to cancel
this Lease will be void.
(f) If there is a Transfer, the Landlord may collect Rent from the
Transferee, and apply the net amount collected to the Rent required to be paid
pursuant to this Lease, but no acceptance by the Landlord of any payments by a
Transferee will be a waiver of the requirement for the Landlord's consent to
such Transfer, or the acceptance of the Transferee as the Tenant, or a release
of the Tenant from the further performance by the Tenant of its covenants or
obligations.
(g) Any documents evidencing the consent to the Transfer will be
prepared by the Landlord or its solicitors, and all reasonable legal costs
incurred by the Landlord and the Landlord's then-standard fee with respect
thereto (such Landlord's fee, not including legal costs, not to exceed $500.00)
will be paid by the Tenant to the Landlord or its solicitors as Additional Rent.
(h) Notwithstanding a Transfer, the Tenant will be jointly and
severally liable with the Transferee on this Lease and will not be released from
performing any of the Tenant's Covenants, except in respect of an Extension
Term, the option for which has not yet been exercised or the term of which has
not yet commenced.
(i) If the Tenant receives consent under Section 11.1, it will be
subject to the following conditions that:
(i) all Rent received by the Tenant from any subtenant as a
result of the Transfer shall be for the Tenant's sole account;
(ii) in the case of an assignment, each of the Transferee and
the Landlord shall enter into an agreement with the other agreeing to observe
and perform all of their respective covenants and agreements in this Lease to be
observed and performed; and
(iii) if this Lease is disaffirmed, disclaimed, repudiated or
terminated by any trustee in bankruptcy of a Transferee, the original Tenant
named in this Lease or any Transferee (except the bankrupt Transferee) will be
considered, upon notice from the Landlord given within thirty (30) days after
the disaffirmation, disclaimer, repudiation or termination, to have entered into
a lease (the "Remainder Period Lease") with the Landlord, on the same terms and
conditions as are contained in this Lease, mutatis mutandis, except that the
term of the Remainder Period Lease shall commence on the date of the
disaffirmation, disclaimer, repudiation or termination and shall expire on the
date this Lease would have
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expired had it not been so disaffirmed, disclaimed, repudiated or terminated.
(j) Regardless of the provisions of this Lease requiring the Landlord's
consent to a Transfer, the Tenant shall not require the Landlord's consent to
effect a Transfer to:
(i) any person who is controlled by, a subsidiary of, or
affiliated with (as those terms are defined in the Business Corporations Act
(Ontario) as at the date of this Lease) the Tenant;
(ii) a successor corporation resulting from a merger,
amalgamation or corporate reorganization of the Tenant, provided that the net
worth of such successor is equal to or greater than that of the Tenant; or
(iii) a bona fide purchaser for value of the Tenant's
business.
The Tenant shall provide the Landlord with prior written notice of any such
Transfer and the Landlord and Transferee shall enter into an agreement with one
another as referred to in Section 11.1(i)(ii). No such Transfer shall release
the Tenant, except in accordance with subsection 11.1(h).
SECTION 11.2 ASSIGNMENT BY THE LANDLORD
If there is a sale, lease or other disposition by the Landlord
of the Building, Property, the Project or any part thereof, or the assignment by
the Landlord of this Lease or any interest of the Landlord hereunder, and to the
extent that the purchaser or assignee assumed the covenants and obligations of
the Landlord hereunder, the Landlord will, thereupon and without further
agreement, be relieved of all further liability with respect to its covenants
and obligations.
ARTICLE 12
ACCESS AND ALTERATIONS
SECTION 12.1 RIGHT OF ENTRY
The Landlord and its agents have the right to enter the
Premises at all reasonable times and upon not less than one (1) Business Day's
written notice (except in the event of an emergency, when the Landlord can enter
at any time) to show them to prospective purchasers, lessees or mortgagees, and
to examine them and make repairs, alterations or changes to the Premises or the
Building as the Landlord considers necessary including, without limitation,
repairs, alterations or changes to the pipes, conduits, wiring, ducts and other
installations in the Premises where necessary to serve another part of the
Building. For that purpose, the Landlord may take all required
40
material into the Premises and may have access to all ducts located under the
floor or above the ceiling and access panels to mechanical shafts and the
Landlord has the right to check, calibrate, adjust and balance controls and
other parts of the heating, ventilating and air-conditioning. The Rent will not
abate while any repairs, alterations or changes are being made due to loss or
interruption of the business of the Tenant or otherwise, and the Landlord will
not be liable for any damage, injury or death caused to any Person, or to the
property of the Tenant or of others located on the Premises as a result of the
entry.
ARTICLE 13
STATUS STATEMENT, SUBORDINATION AND ATTORNMENT
SECTION 13.1 STATUS STATEMENT
At any time and from time to time during the Term, either
party shall, at the request of the other (the "Requester"), execute and deliver
to the Requester or to whom the Requester may reasonably direct, a statement in
writing, in the form supplied by the Requester, or, if the Requester is the
Landlord, a certificate to any proposed purchaser, assignee, lessor or
mortgagee, which will contain such statements, acknowledgments and information
as is customarily called for in status statements and estoppel certificates
delivered in conjunction with commercial tenancies, and which statement will, in
any event, certify that the Lease is unmodified and in full force and effect (or
if modified, stating the modification and that the Lease is in full force and
effect as modified), the commencement date of the Lease, the amount of Rent then
being paid under this Lease, the dates to which Rent has been paid, whether or
not there is any existing default on the part of the Requester of which the
other party (the "REQUESTEE") is aware and any other particulars regarding this
Lease, the Premises, the Building or the Project as the Requester may reasonably
require. The Requestee shall execute and return such statement to the Requester
within ten (10) days following the date that the request for such statement was
made.
SECTION 13.2 SUBORDINATION AND ATTORNMENT
(a) This Lease and the Tenant's rights hereunder are, and will at all
times be, subordinate to all ground or underlying leases, mortgages, trust deeds
or the charge or lien resulting from, or any instruments of, any financing,
refinancing or collateral financing (collectively, an "Encumbrance") or any
renewals or extensions thereof from time to time in existence against the
Property or any part thereof, and the Tenant will, upon request, execute any
document requested by the Landlord to confirm the subordination of this Lease to
any Encumbrance and to the advances made or to be made on the security of the
Encumbrance. The Tenant will also, if requested: (i) attorn to the Owners, the
holder of any Encumbrance or any representative, receiver or receiver-manager
appointed or designated by the Owner or the holder of any Encumbrance; and (ii)
attorn to the purchaser or transferee of the Property (or any part of it) or of
any ownership or equity interest in the Property (or any part of it).
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(b) The Tenant will, if possession is taken under, or any proceedings
are brought for possession under or the foreclosure of, or in the event of the
exercise of the power of sale under, any Encumbrance, attorn to the Encumbrancer
or the purchaser upon any such foreclosure, sale or other proceeding and
recognize the Encumbrancer or the purchaser as the Landlord under this Lease.
(c) Subject to subsection (d) hereof, the form and content of any
document confirming or effecting the subordination and attornment provided for
in this Section 13.2 will be that required by the Landlord or the holder of any
Encumbrance or the purchaser or transferee in each case, and each such document
will be executed and delivered by the Tenant to the Landlord within ten (10)
days after the Landlord requests it.
(d) The Landlord shall, on the earlier of this Lease being signed and
the Commencement Date, provided the Tenant has concluded its negotiations as
hereinafter referred to, obtain a non-disturbance agreement in writing from all
existing Encumbrancers who have priority over the Tenant's leasehold interest in
the Premises. Despite the preceding provisions of this Section, this Lease shall
not be subordinated to and the Tenant shall not be required to subordinate this
Lease to any future Encumbrancer unless such person provides a non-disturbance
agreement to the Tenant. The non-disturbance agreement referred to above shall
be in the Encumbrancer's standard form, subject to such reasonable changes as
may be negotiated directly by the Tenant with such Encumbrancer, at the Tenant's
expense, and which will in any event provide that so long as the Tenant is not
then in default, the Tenant shall be entitled to remain undisturbed in its
possession of the Premises subject to the terms and conditions of this Lease
regardless of the exercise of any or all of the rights of any such Encumbrancer
under its security.
SECTION 13.3 POWER OF ATTORNEY
In circumstances where the Tenant has failed to comply with
the Tenant's Covenants beyond the applicable cure period provided for in this
Lease, the Tenant hereby irrevocably appoints the Landlord as the attorney for
the Tenant with full power and authority to execute and deliver in the name of
the Tenant any instrument or certificates required to carry out the intent of
Sections 13.1 or 13.2 which the Tenant shall have failed to sign and deliver.
SECTION 13.4 FINANCIAL INFORMATION
The Tenant will, upon request, provide the Landlord with such
information as to the Tenant's financial standing and corporate organization as
the Landlord or the Mortgagee requires, provided that so long as the Tenant is
Delano Technology Corp., this provision shall have no application save and
except for information as may be reasonably required in connection with a
request for consent to a Transfer.
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ARTICLE 14
DEFAULT
SECTION 14.1 RIGHT TO RE-ENTER
If and whenever:
(a) the Tenant fails to pay any Rent on the day or dates appointed for the
payment thereof and such failure continues for ten (10) days following written
demand for the payment thereof being made by the Landlord; or
(b) the Tenant fails to observe or perform any of the Tenant's Covenants (other
than the payment of Rent and the covenants set out below in subparagraph (c) for
which no notice shall be required) and, if the breach is remediable:
(i) fails to remedy such breach within fifteen (15) days of
the receipt or deemed receipt by the Tenant of written notice from the Landlord
respecting such breach; or
(ii) if such breach cannot be reasonably remedied within such
fifteen (15) day period, the Tenant fails to commence to remedy such breach
within fifteen (15) days and thereafter fails to proceed diligently to remedy
such breach; or
(c) the Tenant becomes bankrupt or insolvent or takes the benefit of any act now
or hereafter in force for bankrupt or insolvent debtors or files any proposal or
makes any assignment for the benefit of creditors or any arrangement or
compromise; a receiver or a receiver-manager is appointed for all or a portion
of the Tenant's property; any steps are taken or any action or proceedings are
instituted by the Tenant or by any other party to dissolve, wind-up or liquidate
the Tenant or its assets; the Tenant abandons the Premises, or sells or disposes
of the trade fixtures, goods or chattels of the Tenant or removes them from the
Premises so that there would not in the event of such sale or disposal be
sufficient trade fixtures, goods or chattels of the Tenant on the Premises
subject to distress to satisfy all Rent due or accruing hereunder for a period
of at least three (3) months; the Premises become and remain vacant for a period
of five (5) consecutive Business Days; the Tenant effects or permits a Transfer
without the Landlord's consent where required; this Lease or any of the Tenant's
assets are taken under any writ of execution; or re-entry is permitted under any
other terms of this Lease;
(d) the Tenant is in default of the provisions of section 8.1 and fails to
correct such default within forty eight (48) hours of receipt of notice of such
default;
then the Landlord, in addition to any other rights or remedies available to it,
has the immediate right of re-entry upon the Premises and it may repossess the
Premises and enjoy them as of its former estate and may expel all Persons and
remove all property
43
from the Premises and such property may be removed and sold or disposed of by
the Landlord as it deems advisable or may be stored in a public warehouse or
elsewhere at the cost and for the account of the Tenant, all without service of
notice or resort to legal process and without the Landlord being considered
guilty of trespass or becoming liable for any loss or damage which may be
occasioned. If the Landlord re-enters the Premises (except for the purpose of
leving a distress) or terminates this Lease, the Landlord shall not be entitled
to take possession of or sell any of the Tenant's equipment, furniture, trade
fixtures or other personal property located on the Premises without first
allowing the Tenant a period of ten (10) days following the date of such
re-entry or termination to remove same.
SECTION 14.2 RIGHT TO RELET
(a) If the Landlord elects to re-enter the Premises, or if it takes
possession pursuant to legal proceedings or pursuant to any notice provided for
by law, it may either terminate this Lease or it may without terminating this
Lease make any alterations and repairs as are necessary in order to relet the
Premises. Upon each reletting (which reletting the Landlord may do at such
rental and upon such other terms and conditions as the Landlord in its sole
discretion may deem advisable) all rent received by the Landlord will be
applied, first to the payment of any indebtedness other than Basic Rent or
Additional Rent due hereunder; second, to the payment of any costs and expenses
of reletting including reasonable brokerage fees and reasonable solicitor's fees
and the costs of alterations and repairs; third, to the payment of Basic Rent
and Additional Rent due and unpaid hereunder; and the residue, if any, will be
held by the Landlord and applied in payment of future Rent as it becomes payable
hereunder. No re-entry or taking possession of the Premises will be construed as
an election on its part to terminate this Lease unless a written notice of that
intention is given to the Tenant. Notwithstanding any such reletting without
termination, the Landlord may at any time thereafter elect to terminate this
Lease for such previous breach.
(b) If the Landlord terminates this Lease, in addition to other
remedies available, it may recover from the Tenant, unless a court orders
otherwise, all damages the Landlord incurs by reason of the Tenant's breach,
including the cost of recovering the Premises, all reasonable legal costs
incurred by the Landlord and the Basic Rent, Additional Rent and GST which would
have been payable for the remainder of the Term had the Lease not otherwise have
been terminated, all of which shall be immediately due and payable by the Tenant
to the Landlord.
(c) Upon the occurrence of any of the events referred to in Section
14.1, in addition to all other rights, the full amount of the current month's
instalment of Basic Rent and Additional Rent, together with the next three
months' instalments of Basic Rent and Additional Rent, all of which will be
deemed to be accruing due on a day-to-day basis, will become due and payable
upon the default continuing beyond the applicable notice period as accelerated
rent, and the Landlord may distrain for the same, together with any arrears then
unpaid.
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SECTION 14.3 EXPENSES
If legal action is brought for recovery of possession of the
Premises, for the recovery of Basic Rent, Additional Rent and GST or any other
amount due under this Lease, or because of the breach of any other of the
Tenant's obligations, the Tenant will pay to the Landlord all reasonable
expenses incurred therefor, including reasonable solicitors' fee (on a solicitor
and his client basis), unless a court otherwise awards, plus ten percent (10%)
of such expenses to cover the Landlord's overhead and administrative costs.
SECTION 14.4 WAIVER OF EXEMPTION FROM DISTRESS
Despite the Commercial Tenancies Act, or any other applicable
Act, legislation, or any legal or equitable rule of law, none of the goods and
chattels of the Tenant which are on or have at any time been on the Premises
will be exempt from levy by distress for Basic Rent or Additional Rent in
arrears by the Tenant. The Landlord shall not be entitled to exercise its right
of distress unless Rent has been in arrears for a period of ten (10) days
following written notice of such arrears having been given by the Landlord to
the Tenant.
SECTION 14.5 LANDLORD'S RIGHTS
(a) If the Tenant fails to pay any Additional Rent payable to a third
party when due, the Landlord may, but will not be obligated to, pay all or part
of the amount payable.
(b) If the Tenant is in default in the performance of any of its other
covenants or obligations under the Lease beyond the applicable cure period as
contemplated in Section 14.1, the Landlord may, but will not be obligated to,
after giving reasonable notice (it being agreed that forty-eight (48) hours is a
reasonable notice of default in respect of Section 8.1) or, without notice in
the case of an emergency, perform or cause to be performed all or part of what
the Tenant failed to perform and may enter upon the Premises and do those things
that the Landlord considers necessary for that purpose. The Tenant will pay to
the Landlord as Additional Rent, within fifteen (15) days following invoice, the
Landlord's expenses incurred under this Section 14.5 plus an amount equal to ten
percent (10%) of those expenses for the Landlord's overhead and administrative
costs. The Landlord will have no liability to the Tenant for loss or damages
resulting from its action or entry upon the Premises.
SECTION 14.6 REMEDIES GENERALLY
Mention in this Lease of any particular remedy of the Landlord
or the Tenant in respect of the default by the Tenant or the Landlord, as the
case may be, does
45
not preclude the Landlord or the tenant, s the case may be, from any other
remedy in respect thereof, whether available at law or in equity or by statute
or expressly provided for in this Lease. No remedy shall be exclusive or
dependent upon any other remedy, but the Landlord or the Tenant, as the case may
be, may from time to time exercise any one or more of such remedies generally or
in combination, such remedies being cumulative and not alternative.
SECTION 14.7 LANDLORD'S DEFAULT
If the Landlord fails to observe or perform any of the
Landlord's Covenants and such failure continues after the Tenant has provided
the Landlord with fifteen (15) days written notice of such failure (unless the
Landlord has commenced to remedy such failure within such fifteen (15) day
period and is diligently proceeding to remedy same), the Tenant may rectify such
default and the Landlord shall be responsible for, and shall pay to the Tenant
within thirty (30) days following demand, all reasonable costs incurred by the
Tenant as a result of such default, including, without limitation, the
reasonable costs incurred by the Tenant in rectifying such default (if the
Tenant elects to rectify such default). If the Landlord fails to pay any such
costs within such thirty (30) day period, the Tenant shall be entitled to deduct
such costs from Rent.
ARTICLE 15
MISCELLANEOUS
SECTION 15.1 RULES AND REGULATIONS
The Rules and Regulations adopted by the Landlord including,
without limitation, those set out in Schedule "E", are made a part of this
Lease, and the Tenant will observe them. The Landlord reserves the right to
amend or supplement the Rules and Regulations applicable to the Premises or the
Property or any part thereof as in the Landlord's judgment are needed for the
safety, care, cleanliness and efficient operation of the Building. Notice of the
Rules and Regulations and amendments and supplements, if any, will be given to
the Tenant and the Tenant, its invitees or those for whom the Tenant is at law
responsible, will thereupon observe them provided that they do not contradict
any terms, covenants and conditions of this Lease. Any breach of any of the
Rules and Regulations by the Tenant, its invitees or those for whom the Tenant
is at law responsible, shall constitute a breach under this Lease and all
remedies and rights generally available to the Landlord for a breach by the
Tenant under this Lease shall be available and may be applied against the
Tenant. In the event of any inconsistency between the rules and regulations and
the provisions of this Lease, the provisions of this Lease shall govern. The
Landlord shall act reasonably and in a non-discriminatory manner in making and
enforcing such rules and regulations, which rules and regulations shall not
unduly interfere with the Tenant's business. The Landlord shall enforce such
rules and regulations against the tenants of the Building.
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SECTION 15.2 INTENT AND INTERPRETATION
(a) NET LEASE
The Tenant acknowledges that, except as otherwise expressly
set out in this Lease:
(i) it is intended that this Lease is a completely
carefree and triple net lease to the Landlord;
(ii) the Landlord is not responsible during the Term for
any costs, charges, expenses and outlays of any nature whatsoever arising from
or relating to the Premises, or the use and occupancy thereof; and
(iii) the Tenant will pay all charges, impositions, costs
and expenses of every nature and kind relating to the Premises.
(B) OBLIGATIONS AS COVENANTS AND SEVERABILITY
Each obligation or agreement of the Landlord or the Tenant
expressed in this Lease, even though not expressed as a covenant, is considered
to be a covenant for all purposes. If any provision of this Lease is or becomes
invalid, void, illegal or unenforceable, it shall be considered separate and
severable from the Lease and the remaining provisions shall remain in force and
be binding upon the parties as though such provision had not been included.
(c) ENTIRE AGREEMENT AND AMENDMENT OR MODIFICATION
This Lease and the Schedules, and Riders, if any, attached
together with the Rules and Regulations set forth all covenants, promises,
agreements, conditions or understandings, either oral or written, between the
Landlord and the Tenant. No alteration or amendment to this Lease will be
binding upon the Landlord or the Tenant unless in writing and signed by the
Tenant and the Landlord.
(d) GOVERNING LAW
This Lease will be construed in accordance with and governed
by the laws of the Province of Ontario.
(e) TIME OF THE ESSENCE
Time is of the essence of this Lease and of every part of it.
SECTION 15.3 OVERHOLDING - NO TACIT RENEWAL
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If the Tenant remains in possession of the Premises after the
end of the Term without having signed a new lease or an extension of Term
agreement, there is no tacit renewal of this Lease or the Term, notwithstanding
any statutory provisions or legal presumptions to the contrary, and the Tenant
will be deemed to be occupying the Premises as a tenant from month-to-month at a
monthly Basic Rent equal to one and one-half (1-1/2) times the monthly amount of
Basic Rent payable during the last month of the Term, and otherwise, upon the
same terms, covenants and conditions as are set forth in this Lease (including
the payment of Additional Rent) so far as these are applicable to a monthly
tenancy.
SECTION 15.4 TENANT PARTNERSHIP OR GROUP
(a) If the Tenant is a partnership ("Tenant Partnership") each Person
who is presently a member of the Tenant Partnership, and each Person who
subsequently becomes a member of any successor Tenant Partnership will be and
continue to be liable jointly and severally for the full performance of, and
will be and continue to be subject to, the terms, covenants and conditions of
this Lease, whether or not the Person ceases to be a member of the Tenant
Partnership or successor Tenant Partnership.
(b) If the Tenant is comprised of more than one (1) Person, each such
Person will be and continue to be liable jointly and severally for the full
performance of, and will be and continue to be subject to, the terms, covenants
and conditions of this Lease, whether or not the Person ceases to be actively
involved in the business operations conducted from the Premises.
SECTION 15.5 WAIVER
The waiver by either party of any breach of the other of any
term, covenant or condition herein contained, is not deemed to be a waiver of
such term, covenant or condition or of any subsequent breach of the same or of
any other term, covenant or condition herein contained. The subsequent
acceptance of Rent by the Landlord is not deemed to be a waiver of any preceding
breach by the Tenant regardless of the Landlord's knowledge of the preceding
breach at the time of acceptance of the Rent. No term, covenant or condition of
this Lease is deemed to have been waived by the Landlord unless the waiver is in
writing by the Landlord.
SECTION 15.6 RENT PAID WITHOUT DEDUCTION
Except as otherwise expressly stated in this Lease, all Rent
to be paid by the Tenant to the Landlord will be paid without any deduction,
abatement, set-off or compensation whatsoever, and the Tenant hereby waives the
benefit of any statutory or other rights in respect of abatement, set-off or
compensation in its favour at the time hereof or at any future time.
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SECTION 15.7 ACCORD AND SATISFACTION
No payment by the Tenant or receipt by the Landlord of a
lesser amount than the monthly payment of Rent stipulated is deemed to be other
than on account of the earliest stipulated Rent, nor is any endorsement or
statement on any cheque or any letter accompanying any cheque or payment as Rent
deemed an acknowledgement of full payment of accord and satisfaction. The
Landlord may accept and cash any cheque or payment without prejudice to the
Landlord's right to recover the balance of the Rent due or to pursue any other
remedy provided in this Lease.
SECTION 15.8 FORCE MAJEURE
Notwithstanding anything in this Lease, if either party is
bona fide delayed or hindered in or prevented from the performance of any term,
covenant or act required hereunder by reason of strikes or labour troubles;
inability to procure materials or services; power failure; restrictive
governmental laws or regulations; riots; insurrection; sabotage; rebellion; war;
act of God; climatic conditions; or other reason whether of a like nature or not
which is not the fault of the party delayed in performing work or doing acts
required under the terms of this Lease, then the performance of that term,
covenant or act is excused for the period of the delay and the party delayed
will be entitled to perform that term, covenant or act within the appropriate
time period after the expiration of the period of the delay. However, the
provisions of this Section do not operate to excuse the Tenant from the prompt
payment of Rent.
SECTION 15.9 NOTICES
Any notice, demand, request or other instrument which may be
or is required to be given under this Lease will be personally delivered or sent
by telecopy, fax or registered mail postage prepaid and will be addressed (a) if
to the Landlord, to the address specified in Section 1.6 of the Special
Provisions, and (b) if to the Tenant, at the address specified in Section 1.7 of
the Special Provisions. Any notice, demand, request or consent is conclusively
deemed to have been given or made on the day upon which it is personally
delivered or sent by telecopy or fax, or, if mailed, then four (4) Business Days
following the day of mailing, as the case may be. Either party may give written
notice of any change of its address and thereafter the new address is deemed to
be the address of that party for the giving of notices. If the postal service is
interrupted or is substantially delayed, any notice, demand, request or other
instrument must be personally delivered.
SECTION 15.10 REGISTRATION
Neither the Tenant nor any one on the Tenant's behalf or
claiming under the Tenant will register this Lease. However, either party may
register a document for the purpose only of giving notice of this Lease or of
any assignment of this Lease, or any sublease of the Premises, which will (a) if
requested by the Tenant, be prepared by the
49
Tenant or its solicitors at the Tenant's expense, and (b) only describe the
parties, the Premises, the Term, the Commencement Date and the expiration date
of the Term, the extension rights contemplated in paragraph 1 on Schedule "F",
the Tenant's expansion rights contained in paragraph 4 on Schedule "F", the
Tenant's right of first refusal rights contained in paragraph 5 on Schedule "F"
and the Tenant's parking rights and shall not disclose the financial terms of
this Lease. Such document shall be subject to the approval of the Landlord's
solicitors, but at the Landlord's expense. Such approval shall be obtained prior
to the document being registered, and shall be prepared by the Tenant and
registered at the sole cost and expense of the Tenant.
SECTION 15.11 ACCRUAL OF BASIC RENT AND ADDITIONAL RENT
Rent will be considered as annual and accruing from day-to-day
based upon a three hundred and sixty-five (365) day calendar year and where it
becomes necessary for any reason to calculate Rent for an irregular period of
less than one (1) year, an appropriate apportionment and adjustment will be
made.
SECTION 15.12 COMPLIANCE WITH THE PLANNING ACT
It is a condition of this Lease that the subdivision control
provisions of the Planning Act (Ontario), and amendments thereto, be complied
with if they apply. If the provisions of the Planning Act do apply, then until
any necessary consent to the Lease is obtained, the Term (including any
extensions thereof) and the Tenant's rights granted by this Lease are deemed to
extend for a period only of twenty-one (21) years less one (1) day from the
Commencement Date.
SECTION 15.13 QUIET ENJOYMENT
If the Tenant pays the Rent and observes and performs all its
terms, covenants and conditions, the Tenant shall and may peaceably possess and
enjoy the Premises for the Term without any hindrance, interruption or
disturbance from the Landlord or any other Person lawfully claiming by, from or
under it, unless otherwise permitted under the terms of this Lease.
SECTION 15.14 CONSENT AND APPROVAL
Whenever a party (the "Deciding Party") is making a
determination (including, without limitation, a determination of whether or not
to provide its consent or approval where the Deciding Party's consent or
approval is required), designation, calculation, estimate, conversion or
allocation under this Lease, the Deciding Party shall (unless this Lease
specifically provides to the contrary) act reasonably, in good faith and without
undue delay, unless the Lease otherwise provides. If the Deciding Party refuses
to provide its consent or approval when requested to do so, it shall provide the
party requesting such consent or approval (the "Requesting Party") with the
reasons for its refusal at the same time as it advises the Requesting Party that
it refuses to provide its
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consent or approval. Each accountant, architect, engineer or surveyor, or other
professional Person employed or retained by the Landlord will act in accordance
with the applicable principles and standards of that Persons' profession.
ARTICLE 16
DEFINITIONS AND INTERPRETATION
SECTION 16.1 DEFINITIONS
In this Lease, unless there is something in the subject matter or
context inconsistent therewith, the following words and terms, which may be used
in the singular or the plural, have the respective meanings given them as
follows:
"Additional Rent" means all sums of money or charges required to be paid by the
Tenant under this Lease (except Basic Rent) whether or not designated
"Additional Rent" or payable to the Landlord;
"Additional Buildings" has the meaning given that term in section 2.5;
"Additional Services" means the services and supervision thereof by the Landlord
referred to in Section 5.5 hereof, and all other services of any nature or kind
supplied by the Landlord in addition to those required to be supplied by the
Landlord to the Tenant pursuant to this Lease, except for any services which the
Landlord elects to supply to all of the tenants of the Building the cost of
which is included in Operating Costs;
"Alterations" means any repairs, replacements, decorations, Leasehold
Improvements or other alterations made by the Tenant or its representatives to
any part of the Premises, or made by any other tenant to any other Premises in
the Building;
"Architect" means the architect, surveyor or space planner from time to time
named by the Landlord. The decision of the Architect whenever required by this
Lease (or requested by the Landlord) and any certificate prepared or approved by
the Architect will be final and binding, except in the case of manifest or
demonstrable error;
"Basic Rent" means the sums payable by the Tenant to the Landlord as set out in
Section 3.2 of this Lease;
"BOMA" means the Standard Method for Measuring Floor Area in Office Buildings -
American National Standard, as approved June 7, 1996 and known as BOMA
Z65.1-1996;
"Building" means the multi-storey office building erected on the Lands and
located in the City of MARKHAM, Province of ONTARIO, known municipally as 302
TOWN CENTRE BOULEVARD, MARKHAM and forming a part of the Project, from and
including the lowest floor or level of the Building to and including the roof
thereon, the Common Areas and
51
Facilities, the Parking Areas, and the areas and facilities serving the
Building, as determined by the Landlord, which areas and facilities may include,
without limitation, lobbies, foyers and vestibules, sidewalks, storage and
mechanical areas, janitor rooms, mail rooms, telephone, mechanical and
electrical rooms, stairways, escalators, elevators, truck and receiving areas,
driveways, loading docks and corridors and shall also include the Retail Area,
the Office Area, the Storage Areas and those areas designated or intended by the
Landlord to be leased or used for service, administration, management, safety
and operational purposes;
"Business Day" means any day which is not a Saturday, Sunday or a statutory
holiday observed in Ontario, and "Business Days" shall have a corresponding
meaning;
"Capital Taxes" - intentionally deleted;
"Common Areas and Facilities" means: (a) those areas, facilities, utilities,
improvements, equipment and installations in the Property, or the Project as the
case may be, which, from time to time, are not designated or intended by the
Landlord to be leased to tenants of the Building, or the Project as the case may
be; and (b) those areas, facilities, utilities, improvements, equipment and
installations which serve or are for the benefit of the Project, whether or not
located within, adjacent to, or near the Building and which are designated from
time to time by the Landlord as part of the Common Areas and Facilities,
including, without limitation, all areas, facilities, utilities, improvements,
equipment and installations which are provided or designated (and which may be
changed from time to time) by the Landlord for the use or benefit of the
tenants, their employees, customers and other invitees in common with others
entitled to the use and benefit thereof in the manner and for the purposes
permitted by this Lease;
"Excluded Costs" means the following:
(a) any and all costs of repairs or replacements to the Structure;
(b) any and all costs and expenses incurred as a result of faulty construction
or design, improper materials or workmanship or defects or weaknesses in respect
of the Structure of the Building;
(c) any income taxes, corporation taxes, capital taxes, business taxes, or other
taxes personal to the Landlord, or interest or penalties relating to the late
payment by the Landlord of any taxes, whether personal to the Landlord or not;
(d) any ground rentals, and any principal, interest or other carrying charges or
mortgage payments or other financing costs in respect of the Project;
(e) any and all costs and expenses which are considered to be capital expenses
in accordance with generally accepted accounting principles. However, the
Landlord may amortize any such costs and expenses over the useful life of the
item to which such costs and expenses relate in accordance with generally
accepted accounting principles and may
52
include in the Operating Costs applicable to each year of the term of the Lease,
the amortized amount attributable to such year of the term;
(f) depreciation and interest on the undepreciated portion of items located on
the Lands which may be depreciated;
(g) any costs or expenses (including real property taxes) in respect of any
lands which do not form part of the Project as parking area, landscaped area or
built upon common area;
(h) any reserves for future expenditures which would be incurred subsequent to
the then current accounting year;
(i) any costs incurred by the Landlord to the extent that the Landlord receives
insurance proceeds (or would have received had it taken out the insurance
required by this Lease to be taken out by it);
(j) any increase in the cost of the Landlord's insurance where such increase is
attributable to the actions or omissions of other tenants or occupants of the
Building;
(k) all work to the Premises necessitated by the non-compliance of the Landlord
or its contractors, subcontractors, suppliers or those for whom the Landlord is
responsible at law, with governing codes, by-laws, laws, regulations and
ordinances relating to the construction of the Premises;
(l) all costs attributable to the operations of any other tenant in the
Building, other than occupancy costs;
(m) all amounts paid by the Landlord for enforcing or honouring the leases of
any other tenant or occupant of the Building or for remedying or fulfilling the
obligations, whether to the Landlord or to any other party, of any other tenant
or occupant of the Building;
(n) all hard and soft costs of development and construction, reconstruction and
redevelopment of the Building (except for those items of work designated in this
Lease as the Tenant's work), including, without limitation, any levies, charges,
fees or assessments imposed by governmental authorities having jurisdiction over
the development and construction of the Building (such as, by way of example,
development charges, education development charges, cash in-lieu-of land
conveyances, sewer impost charges and Building permit fees);
(o) any amounts paid by the Landlord to persons, firms or corporations which do
not deal with the Landlord at arm's length (as determined pursuant to the Income
Tax Act (Canada)) to the extent, if any, that such payments exceed the amount
which would be paid to person, firms or corporations which do deal with the
Landlord at arm's length;
53
(p) amounts expended by the Landlord for advertising and promotion of the
Building;
(q) the amount of any leasing commissions, tenant inducements, legal fees or
tenant allowances in connection with leasing any part of the Building;
(r) costs of improving or renovating space for a tenant or space vacated by a
tenant;
(s) costs or expenses to the extent recoverable by warranty or recoverable from
third parties (subject to the other provisions of this Lease)and any amounts
directly chargeable by the Landlord to any other tenant or tenants other than as
Operating Costs or Taxes;
(t) all goods and services tax payable by the Landlord on the purchase of goods
and services included in Operating Costs to the extent that the Landlord may
claim same as a credit or refund in determining its net tax liability on account
of goods and services tax;
(u) all management and administration costs (including wages and benefits) for
offsite or head office overhead of the Landlord (but this provision shall not
prohibit the inclusion of the Landlord's administrative fee);
(v) costs or expenses arising from or relating the existence of a Hazardous
Substance on the Lands on which the Premises are located, or the containment or
removal of such pollutants, including, without limitation, all costs of making
any alterations, repairs or replacements in connection with or as a result of
such Hazardous Substances, unless the Tenant is responsible for Hazardous
Substances being located on such Lands; and
(w) expenses for the defense of the Landlord's title to the Premises and/or the
Building;
(x) charitable or political contributions; and
(y) artwork costs in excess of $20,000 per item except as artwork costs in
excess of such amount may be required by a regulatory or other municipal or
government authority.
"Extension Term" has the meaning given that term in paragraph 1 on Schedule "F";
"Fixtures" means all fixtures (other than trade fixtures) and equipment
installed in the Premises, affixed in any manner thereto or to any of its
systems;
"Fixturing Period" - intentionally deleted;
"Hazardous Substances" means any contaminant, pollutant, dangerous substance,
potentially dangerous substance, noxious substance, toxic substance, hazardous
waste, flammable, explosive or radioactive material, urea formaldehyde foam
insulation, asbestos, PCB's or any other substances or materials that are
declared or defined to be hazardous, toxic, contaminants or pollutants in or
pursuant to any applicable federal, provincial or municipal statute, by-law or
regulation;
54
"Indemnifier" - intentionally deleted;
"Landlord" means the party of the First Part and includes the Landlord and its
duly authorized representatives;
"Landlord's Covenants" means all of the terms, covenants and conditions of this
Lease on the part of the Landlord to be observed and performed;
"Landlord's Employees" means the Landlord's directors, officers, employees,
servants, agents and those for whom the Landlord is responsible at law;
"Landlord's Work" means all construction and other work referred to as
"Landlord's Work" in Schedule "C" attached hereto; "Lands" means the lands
underneath, adjacent and appurtenant to the Building, as more particularly
described in Schedule "A" attached to this Lease or as such Lands may be
altered, expanded or reduced from time to time;
"Lease" means this agreement and all the terms, covenants and conditions set out
herein, as amended from time to time in accordance with Section 15.2(c) hereof;
"Leasehold Improvements" means all items generally considered as leasehold
improvements at law, including without limitation all installations, alterations
and additions from time to time made, erected or installed in the Premises by or
on behalf of the Tenant, or any previous occupant of the Premises or by or on
behalf of tenants in other premises in the Building including, without
limitation, all partitions however affixed and whether or not moveable, heating,
ventilating and air-conditioning systems, facilities and equipment, light
fixtures, internal stairways and doors, floor, wall and ceiling coverings, and
any and all fixtures, facilities, equipment or installations installed by or on
behalf of the Landlord in accordance with Schedule "C". For greater certainty,
only free-standing furniture, equipment and trade fixtures not in any material
way connected to the Premises or to any Utilities system shall not be considered
a Leasehold Improvement;
"Market Rental" means, at any given time, the then current market net rental
rate for net leases with similar terms (including, without limitation, the
length of the term and the frequency of adjustments in rent, if any) entered
into at arm's length for premises of similar size, age, quality and use,
similarly improved and fixtured in similar office buildings in the vicinity of
the Building;
"Mortgagee" means any mortgagee or chargee (including any trustee for
bondholders), from time to time, of the Project or any part thereof, or of the
Landlord's or the Owners' interest in the Project;
"Normal Business Hours" means the hours from 8:00 a.m. to 6:00 p.m. on Mondays
to Fridays unless such a day is a statutory holiday;
55
"Operating Costs" means the total amounts incurred, paid or payable whether by
the Landlord or by others on behalf of the Landlord which are applicable or
attributable to the Property (or the Project, as the case may be) for the
complete management, administration, operation, insuring, repair and maintenance
of the Property (or the Project, as the case may be)(including, without
limitation, interior and exterior maintenance and janitorial services and the
cost of utilities consumed in the Building) as a first class property. Operating
Costs shall be calculated without duplication of expense, without profit to the
Landlord (which shall not be construed so as to eliminate the Landlord's
administration fees) and in accordance with generally accepted accounting
principles applied on a basis consistent with previous years. Operating Costs
include, without limitation and without duplication, the aggregate of:
(a) the total annual costs of insuring the Property (or the Project, as the case
may be) and equipment and other property servicing the Property (or the Project,
as the case may be) from time to time as the Landlord, or the Mortgagee, from
time to time determines;
(b) the cost of cleaning (including carpet cleaning and window cleaning), snow
removal, garbage and waste collection and disposal, including the cost of
performing the work referred to in Section 5.2(a), and the cost of security,
supervision and traffic control;
(c) the aggregate of the costs and amounts paid by the Landlord, to the extent
such costs are not separately metered and paid for directly by individual
tenants, for Utilities used in the maintenance, operation, heating, ventilating
and air-conditioning of the Building;
(d) salaries, wages and other amounts paid or payable for all management,
supervisory, and operational personnel including the Property (or the Project,
as the case may be) manager, engineers, janitors, caretakers, security staff,
management personnel (in each case whether employed by the Landlord or pursuant
to a third party management contract) and all other related staff and the total
charges (including contributions and premiums for fringe benefits, unemployment
insurance, and Workers' Compensation, pension plan contributions and similar
premiums and contributions) of any independent contractors or managers, engaged
in the repair, care, maintenance, security, management and cleaning of the
Property (or the Project, as the case may be);
(e) the cost of the rental of any equipment and signs, and the cost of supplies,
used by the Landlord in the maintenance and operation of the Property or the
Project as the case may be and the cost of the directory board signage in the
Building;
(f) audit fees and the cost of accounting services incurred in the preparation
of the statements referred to in this Lease and the financial statements related
thereto, and in the computation of the Rent and other charges payable by tenants
of the Building;
(g) the cost of all repairs to and maintenance (including, without limitation,
56
landscaping maintenance) and operation of the Property (or the Project, as the
case may be) and the systems, facilities and equipment serving the Building
(including without limitation, the components of the heating, ventilating and
air-conditioning systems serving portions of the Building which are maintained
and repaired by the Landlord) and all repairs undertaken by the Landlord for the
general safety and benefit of the tenants of the Property (or the Project, as
the case may be) or to reduce Operating Costs and the cost of installing
separate meters for any utilities in the Building incurred generally with
respect to the Building;
(h) if the costs described in paragraph (g) above constitute a capital
expenditure in accordance with generally accepted accounting principles, the
Landlord may amortize any such costs and expenses in accordance with generally
accepted accounting principles and may include in the Operating Costs applicable
to each year of the term of the Lease, the amortized amount attributable to such
year of the term;
(i) all Taxes attributable to the Property (or the Project, as the case may be);
(j) all business taxes and other Taxes, if any, from time to time payable by the
Landlord with respect to the Common Areas and Facilities;
(k) the Market Rental, business taxes and other Taxes, if any, attributable to
space in the Building occupied by the Landlord or the Building manager for
management, supervisory or administrative purposes including, without
limitation, space leased or used for service, administration, management, safety
and operational purposes; and
(l) if the Landlord has retained an arm's length property manager for the
Property (or the Project, as the case may be), the amount charged to the
Landlord by such property manager.
From the total of the above costs, there shall be deducted (but only if
originally included):
(i) all net recoveries which reduce Operating Costs received by the Landlord
from tenants as a result of any act, omission, default or negligence of such
tenants or by reason of a breach by such tenants of provisions in their
respective leases (other than recoveries from such tenants under clauses in
their respective leases requiring their contribution to Operating Costs); and
(ii) net proceeds received by the Landlord from insurance policies taken out by
the Landlord to the extent that the proceeds relate to Operating Costs.
Despite the foregoing, Operating Costs shall not include any Excluded Costs;
"Parking Areas" means the improvements constructed, or which may be constructed,
in or as part of the Building or the Property for use as parking facilities and
the areas and facilities that are appurtenant solely to those improvements,
including, without limitation, the underground parking facilities serving the
Project;
57
"Person", if the context allows, includes any person, firm, partnership or
corporation, or any group of persons, firms, partnerships or corporations or any
combination thereof.
"Premises" means the premises demised by this Lease as set out in Section 2.1;
"Prime Rate" means the annual rate of interest from time to time publicly quoted
by any Canadian chartered bank designated by the Landlord as its reference rate
of interest for determining rates of interest chargeable in Toronto on Canadian
dollar demand loans to commercial customers;
"Project" has the meaning given that term in Section 2.5;
"Property" means the Building and the Lands as herein defined, and as the same
may be modified, altered, amended or otherwise changed in the future;
"Proportionate Share" means a fraction to be calculated by the Landlord, in each
case being a fraction which has as its numerator the Rentable Area of the
Premises and as its denominator the Rentable Area of the Building. The Landlord
may recalculate or adjust the Tenant's Proportionate Share from time to time due
to changes, additions or improvements to the Building;
"Rent" means all Basic Rent and Additional Rent payable hereunder;
"Rentable Area" of any portion of the Building, including the Premises, shall be
determined in accordance with BOMA, and adjusted from time to time to take
account of any structural, functional or other change affecting the Building;
"Retail Area" - intentionally deleted;
"Storage Areas" means all those areas (which in all cases are separate and apart
from leasable premises) to be used by tenants for storage in conjunction with
use of leasable premises.
"Structure" means the foundations, roof (including the roof membrane), exterior
wall assemblies including weather walls and bearing walls, subfloor and
structural columns and beams of the Building and any other portions of the
Building designated by the Landlord from time to time as Structure;
"Taxes" means all real property taxes, rates, duties and assessments (including
local improvement taxes, except for those imposed in connection with the
original construction of the Property or any part of it), imposts, charges or
levies, whether general or special, that are levied, rated, charged or assessed
against the Property (or the Project, as the case may be) or any part thereof or
Rent therefrom from time to time by any lawful taxing authority, whether
federal, provincial, municipal, school or otherwise, and any taxes or other
amounts which are imposed in lieu of, or in addition to, any such real property
taxes whether of the foregoing character or not and whether in existence at the
Commencement
58
Date or not, including, without limitation, any excise tax, business transfer
tax or any tax levied, rated, charged or assessed in respect of the rental of
space by the Tenant under this Lease, and any real property taxes or other taxes
levied or assessed against the Landlord on account of its interest in the
Property (or the Project, as the case may be) or any part thereof, or its
ownership thereof, as the case may be, calculated on the basis of the Building
or buildings being assessed as a fully leased and operational building or
buildings, and the reasonable costs and expenses incurred for consulting,
appraisal, legal and other services to the extent they are incurred in an
attempt to minimize or reduce any of the foregoing real property taxes or other
taxes referred to above;
"Tenant" means the party of the Second Part. If there is more than one Tenant,
any notice required or permitted by this Lease may be given by or to any one of
them and has the same force and effect as if given by or to all of them. Any
reference to "Tenant" includes, where the context allows, the Tenant's
Employees;
"Tenant's Covenants" means all of the terms, covenants and conditions of this
Lease on the part of the Tenant to be observed and performed including, without
limitation ,the payment of Basic Rent and Additional Rent;
"Tenant's Employees" means the Tenant's directors, officers, employees,
servants, agents and those for whom the Tenant is responsible at law;
"Tenant's Work" means all construction and other work required to be provided or
performed in order to render the Premises complete and suitable to open for
business, including without limitation, all work designated as Tenant's Work in
Schedule "C" attached hereto but excluding those items specifically referred to
as "Landlord's Work";
"Term" means the term of this Lease as set out in Section 1.3, any extended or
renewal term and any overholding period;
"Transfer" means any of:
(a) an assignment of this Lease by the Tenant in whole or in part;
(b) any arrangement, written or oral, whether by sublease, licence
or otherwise, whereby rights to use space within the Premises are granted to any
Person (other than the Tenant) from time to time, which rights of occupancy are
derived through or under the interest of the Tenant under this Lease; and
(c) a mortgage or other encumbrance of this Lease, or the
Leasehold Improvements or Fixtures or of all or any part of the Premises, or any
interest therein; and
"Transferee" means any Person deriving rights through a Transfer;
"Utilities" means all gas, electricity, water, sewer, steam, fuel, power,
telephone and
59
other utilities used in or for the Building or the Premises, as
the case may be, or allocated to the Premises by the Landlord in accordance with
the terms of this Lease.
SECTION 16.2 INTERPRETATION
The provisions of Schedule "C" attached hereto in respect of
Tenant's Work shall apply in respect of work performed by the Tenant at the
commencement of the Term and throughout the Term of this Lease.
IN WITNESS WHEREOF, the Landlord and the Tenant have signed and sealed this
Lease.
302 TOWN CENTRE LIMITED
Per:__________________________
Name:
Title:
Per:__________________________
Name:
Title:
DELANO TECHNOLOGY CORP.
Per:__________________________
Name:
Title
Per:__________________________
Name:
Title:
60
SCHEDULE "B"
FLOOR PLAN
See Diagrams Attached.
SCHEDULE "C"
CONSTRUCTION OF THE BUILDING
ARTICLE 1
Landlord's Work
The Landlord's Work shall consist of completing the Building in
accordance with the Landlord's specifications, which shall include the
following:
(a) in the Premises, constructing 2 training rooms, 60 private offices and
meeting rooms, 3 boardrooms, 1 kitchen , 1 lunch room , 2 kitchenettes, a
reception area with marble entrance (the foregoing shall not include equipment
and fixtures). All paint, carpet, marble, vinyl tiles and cabinets to be
selected by Tenant from Landlord's standard samples for a class "A" office
building;
(b) elevator to be card accessed controlled after business hours;
(c) card access system for front door of the Building and all other doors
leading to the Premises and the underground parking area serving the Building
(the "Parking Area");
(d) the installation of such lighting in the Parking Area as to make same well
lit and secured;
(e) the lobby on the Main Floor to be finished in accordance with a Class "A"
office building including a tenant's directory;
(f) all windows to be covered with horizontal Venetian blinds;
(g) all doors to be full height wood with individual locks;
(h) all offices and work areas to have individual light switches;
(i) washrooms on all floors as per code;
(j) after hour access only through enter phone system or card access system;
61
(k) supply cabling conduit or trays for all floors of the Building;
(l) change the colour of utility room on the roof of the Building;
(m) all lighting in the office area to be glare free lighting;
(n) installation of such controls so that the lighting, heating and
air-conditioning to the Premises may be controlled by the Tenant 24 hours a day,
seven days a week, at no additional cost to the Tenant, other than the actual
cost of the Utilities consumed and the costs set out in Section 5.5;
(o) landscaping to be completed no later than June 2000 subject to force
majeure;
(p) all exterior lighting to be according to code at a minimum but must be well
lit for security of employees;
(q) lit pylon sign listing all tenants in the Building to be placed in such
location as determined by the Landlord's architect;
(r) construction of a deck on the second floor "walk out" area, with glass
sliding door access;
(s) to supply a qualified space planner for the Tenant to enable the Tenant to
plan the office layout at no cost to the Tenant; and
(t) to supply halogen pot lights in board rooms and entranceways to provide
reasonable illumination.
ARTICLE 2
Tenant's Work
(a) Any alterations or construction not included as part of the Landlord's Work
and any changes desired by the Tenant which depart from the Building's standard
or which involve the use of materials not standard to the Building are the
Tenant's Work. The Tenant's Work is subject to the Landlord's prior written
approval and shall be completed at the expense of the Tenant.
(b) All permits necessary for the installation of the Tenant's Leasehold
improvements and approval of plans must be obtained from the applicable
authorities prior to the commencement of installations by the Tenant at its
expense. The Tenant's Work shall be carried out in accordance with section 9.3.
62
(c) The Tenant and its contractors are responsible to remove garbage and debris
from the Premises daily and place same into garbage containers provided by the
Landlord for that purpose. All tenants will be assessed their share, as
reasonably determined by the Landlord, of the cost of providing empty garbage
containers on the job site during the construction of their Premises. Any of the
Tenant's garbage or debris removed by the Landlord's employees will be charged
to the Tenant's account and shall be payable as Additional Rent by the Tenant
within fifteen (15) days following invoice.
(d) The Tenant will pay to the Landlord within fifteen (15) days of demand: (a)
all reasonable costs incurred by the Landlord with respect to supervision and
administration during the installation of the Leasehold Improvements, including
without limitation, supervision by mechanical, engineering and other
consultants; (b) all reasonable costs incurred by the Landlord during the period
the Tenant fixtures the Premises for vertical transport of men and materials
with respect to the carrying out of the Tenant's Work in the Premises; and (c)
all other costs incurred by the Landlord during the period the Tenant fixtures
the Premises as more particularly set out in Section 2.4 of the Lease.
ARTICLE 3
Procedures
Section 3.1 The Tenant shall, prior to entering any portion of the Building or
the Premises for the commencement of the Tenant's Work, complete each of the
following obligations to the Landlord's satisfaction:
(a) prepare and submit to the Landlord for approval (in triplicate) working
drawings and specifications for the Tenant's Work as prepared by one or more
qualified design engineers, each of whom to be approved by the Landlord. The
Tenant's submission shall include full architectural, mechanical, electrical and
structural drawings and specifications.
(b) The Landlord shall notify the Tenant either of its approval thereof or of
all the specific changes required by it and the Tenant shall then promptly
prepare and submit to the Landlord within fifteen (15) days next following,
complete drawings and specifications so amended.
(c) For the preparation of its mechanical and electrical plans and the
specifications for the plumbing, heating, ventilating, air conditioning,
sprinklers and electrical systems, the Tenant shall employ persons suitably
qualified in that field acceptable to the Landlord and such plans and
specifications shall be subject to the prior written approval of the Landlord
and the Landlord's consultants.;
(d) provide the Landlord with certificates of insurance in a form satisfactory
to the Landlord, duly executed by the Tenant's insurers evidencing that the
insurance required to be placed by the Tenant pursuant to the Lease has been
obtained;
(e) ensure that all work on or in respect of the Premises is performed by
competent
63
workmen in a good and workmanlike manner. All contractors shall be subject to
the prior reasonable approval of the Landlord;
(f) provide evidence satisfactory to the Landlord that the Tenant has obtained
at its expense all necessary consents, permits and licenses from all appropriate
governmental and regulatory authorities. Should the Tenant fail to obtain any
such required consent, permit or license, the Landlord may, but shall not be
obliged to, obtain same on behalf of the Tenant, the cost or expense incurred by
the Landlord shall be payable by the Tenant as Additional Rent within fifteen
(15) days following invoice, and the Landlord shall be entitled to exercise all
of the remedies contained in Article 14 hereof; and
(g) provide evidence satisfactory to the Landlord of the Tenant's work schedule
for completion of the Tenant's Work.
ARTICLE 4
Requirements after Performance of Tenant's Work
The Tenant shall, upon completion of the Tenant's Work and if
requested by the Landlord:
Section 4.1 Provide the Landlord with statutory declarations of the head
contractor and one of the Tenant's officers (the "declaration"):
(a) stating that the Tenant's Work has been performed in accordance with all of
the provisions of the plans and specifications approved by the Landlord and
Schedule "C" and that all deficiencies (if any) which the Landlord has brought
to the Tenant's attention have been corrected;
(b) stating that there are no construction lien or other liens or encumbrances
registered or otherwise outstanding against the Premises or the Building in
respect of work, services or materials relating to the Tenant's Work and that
all accounts for work, services or materials have been paid in full with respect
to all of the Tenant's Work;
(c) listing each contractor and subcontractor who did work or provided materials
in connection with the Tenant's Work;
(d) confirming the date on which the last work was performed and materials were
supplied.
Section 4.2 Deleted.
Section 4.3 Provide to the Landlord a clearance certificate issued under the
Workers' Compensation Act in respect of each contractor and subcontractor listed
on the declaration.
64
Section 4.4 Obtain and provide to the Landlord a copy of every occupancy and
other permit which may be required by any governmental or other regulatory
authority having jurisdiction, to permit the Tenant to open for business.
Section 4.5 Provide the Landlord with a certificate of a professional engineer
or architect acceptable to the Landlord, certifying that the Tenant's Work has
been carried out in accordance with the plans and specifications as approved by
the Landlord, the Architect and the Landlord's engineering consultants.
ARTICLE 5
Liens
Section 5.1 The Tenant shall ensure that no construction liens or other liens or
encumbrances in respect of materials supplied or work done or to be done by the
Tenant or on behalf of the Tenant or related to the Tenant's Work shall be
registered against or shall otherwise affect the Project or any part thereof or
the Landlord's, or the Tenant's interest in the Project or any part thereof.
ARTICLE 6
General
Section 6.1 The opinion in writing of the Architect shall be binding on both the
Landlord and the Tenant respecting all matters of dispute regarding the
Landlord's Work and the Tenant's Work, including the state of completion and
whether or not the work is completed in a good and workmanlike manner and in
accordance with the approved plans.
Section 6.2 The Landlord or public utility companies, subject to the Landlord's
approval, shall have the right prior to and throughout the term of the Lease to
install utility lines, drainage and other pipes, conduits, wires or ductwork
where necessary through the ceiling space, column space or other parts of the
Premises and to maintain, repair or replace same. The Tenant shall, prior to and
throughout the Term of the Lease, provide the Landlord with free and
uninterrupted access for such purpose as and when required, after receipt of
reasonable notice with respect to the requirement for such access.
Section 6.3 The Landlord, or the Architect or contractor, shall at all times
have access to inspect the Tenant's Work whenever it is in preparation or
progress.
SCHEDULE "D"
METHOD OF FLOOR MEASUREMENT
Intentionally Deleted
SCHEDULE "E"
65
RULES AND REGULATIONS
A.. The Tenant will not place or permit any debris, garbage, trash or refuse to
be placed or left in or upon any part of the Building outside of the Premises.
B.. The Landlord will permit the Tenant and the Tenant's employees and all
Persons lawfully requiring communication with them to have the use of the main
entrance and the stairways, corridors, elevators, if any, or other mechanical
means of access leading to the Premises, subject to the Building's security
systems and requirements. At times other than during Normal Business Hours the
Tenant and its employees will have access to the Building and to the Premises
only in accordance with the Rules and Regulations and will be required to
identify themselves satisfactorily and to register in any book which may at the
Landlord's option be kept by the Landlord for that purpose. In no event will the
Tenant be permitted to move in or out of the Premises during Normal Business
Hours.
C.. The Landlord will permit the Tenant and its employees to use the washrooms
on the Tenant's floor of the Building.
D.. The Tenant will permit access to the Premises for window cleaners to clean
the windows of the Premises during Normal Business Hours.
E.. The sidewalks, entrances, passages, elevators and staircases will not be
obstructed or used by the Tenant, its agents, servants, contractors, invitees or
employees for any purpose other than ingress to and egress from the Premises or
the Building.
F.. The Tenant, its agents, servants, contractors, invitees or employees, will
not bring in or take out, position, construct, install or move any safe or other
heavy machinery or equipment or anything liable to injure or destroy any part of
the Building without first obtaining the written consent of the Landlord. The
Landlord will have the right to prescribe the weight permitted and the position
thereof, and the use and design of planks, skids or platforms, to distribute
weight. All damage done to the Building by moving or using any heavy equipment
or other office equipment or furniture will be repaired at the expense of the
Tenant. The moving of all heavy equipment or other office equipment or furniture
will occur only by prior arrangement with the Landlord. No Tenant will employ
anyone to do its moving in the Building other than staff of the Building, unless
permission to employ anyone else is given by the Landlord and the reasonable
cost of such moving will be paid by the Tenant. Safes and other heavy office
equipment and machinery will be moved through the halls and corridors only upon
steel bearing plates. No freight or bulky matter of any description will be
received into the Building or carried in the elevators except during hours
approved by the Landlord.
G.. The Tenant will not place or cause to be placed any additional locks upon
any doors of the Premises without the approval of the Landlord and subject to
any reasonable conditions imposed by the Landlord.
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H.. Canvassing, soliciting and peddling in or about the Building are prohibited.
Intentionally Deleted.
I.. The Tenant will not place or maintain any supplies, merchandise or other
articles in any vestibule or entry of the Premises, on the footwalks adjacent
thereto or elsewhere on the exterior of the Premises or elsewhere in the
Building.
J.. The Tenant will not permit or allow any odours, vapours, steam, water,
vibrations, noises or other undesirable effects to emanate from the Premises or
any equipment or installation therein, which in the Landlord's opinion, are
objectionable or cause any interference with the safety, comfort or convenience
of the Building by the Landlord or the occupants and tenants thereof or their
agents, servants, invitees or employees.
K.. The Tenant will use only the Building standard window blinds as determined
by the Landlord and will not install or permit to be installed on or adjacent to
the windows in the Premises any other window coverings or shades of any type
whatsoever whether or not visible from the outside of the Building, including,
without limitation, drapes, curtains, blinds or shades.
L.. The Tenant shall not receive or ship fixtures, equipment or articles of any
kind whatsoever except through facilities, doors and elevators designated by the
Landlord and at hours prescribed by the Landlord and under the supervision of
the Landlord, its agents or employees.
M.. The Tenant will, at its expense, comply with any waste management, disposal
and recycling requirements of both the Landlord and any applicable governmental
authorities.
SCHEDULE "F"
ADDITIONAL PROVISIONS
1. Right to Extend
(a) The Tenant may extend the term of this Lease for one further term of five
(5) years (such term being called the "Extension Term"), commencing on the day
following the date of expiration of the Term, provided that the Tenant shall
only be entitled to extend this Lease if it:
(i) is not in default of any provision of the Lease beyond any cure period
provided in respect of such default in the Lease; and
(ii) advises the Landlord in writing that it wishes to extend this Lease not
less than 6 months prior to the expiration of the Term.
(b) If the Tenant exercises its right of extension in accordance with the
foregoing, this Lease shall be extended upon the same terms and conditions
herein contained, save and except as follows:
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(i) there will be no further right of extension;
(ii) the Landlord will not be required to perform the Landlord's Work, if any,
and the Tenant will not be required to perform the Tenant's Work, if any, and
the Tenant will not be entitled to any leasehold improvement allowance, tenant
inducement or rent free period;
(iii) the Basic Rent shall be the then current fair Market Rental of the
Premises, as established by the mutual agreement of the Landlord and the Tenant
but not less than that payable in the last year of the Term. If the Basic Rent
for the Extension Term has not been agreed upon by the Landlord and the Tenant
at least 90 days prior to the expiry of the Term, the Basic Rent for the
Extension Term will be determined in accordance with the following procedure:
(A) each party will within five (5) Business Days of the expiry of the time
period referred to above appoint a qualified real estate appraiser and advise,
in writing, the other party of the person appointed (which notice shall set out
the Appraiser's name, address, phone and fax number and experience);
(B) within five (5) Business Days of both Appraisers being appointed, the two
Appraisers so chosen shall appoint a third Appraiser and advise the Landlord and
the Tenant of such appointment;
(C) if either party fails to appoint an Appraiser within five (5) Business Days
of receiving written notice from the other party of the appointment of such
party's Appraiser, then the Appraiser so appointed shall determine the fair
market rental value of the Premises in accordance with the procedure set out
below;
(D) in order to be selected as an Appraiser, the person so selected shall be
qualified by education, experience and training to value real estate for rental
purposes in the Province of Ontario and have been ordinarily engaged in the
valuation of real property in the Greater Toronto area for the 5 years
immediately preceding their appointment;
(E) acting independently of each other, each of the 3 Appraisers within 30 days
after the appointment of the third Appraiser (or, if only 1 Appraiser is
appointed, that Appraiser) shall submit to the Landlord and the Tenant a written
report and appraisal stating his/her opinion as to the Market Rental of the
Premises during the Extension Term. The 2 of the 3 appraisals reported by the 3
Appraisers which are closest in amount shall be averaged and the Basic Rent for
the Extension Term will be equal to such averaged amount (or, if only 1
Appraiser has been appointed, the Basic Rent for the Extension Term will be
equal to the amount determined by such Appraiser). Provided that in no event
shall the Basic Rent be less than that payable during the last year of the Term.
The determination of the Basic Rent for the Extension Term in accordance with
the foregoing will be conclusive and binding upon the Landlord and the Tenant;
and
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(F) the cost of the Appraiser selected by a party shall be borne by that party
and the costs of the third Appraiser shall be borne equally by the parties.
2. Tenant Financing
The Landlord acknowledges and agrees that if the Tenant obtains bank or
other institutional financing (such lender being called the "Bank"), and if
requested by the Bank, the Landlord will waive its right to distrain against the
personal property of the Tenant in favour of the rights which the Bank may, at
any time, have with respect to the personal property of the Tenant. The Landlord
shall also agree with the Bank that in no event will the Landlord exercise any
right to or claim any interest in the personal property of the Tenant in
priority to the security interests of the Bank, whether pursuant to the
Landlord's right of distress or under any security agreement that the Landlord
may hold, or otherwise.
3. Landlord's Representations and Warranties
The Landlord represents and warrants that as of the Commencement Date:
(a) it is the registered owner in fee simple of the Lands and such Premises are
unencumbered;
(b) it has the full right and authority to enter into this Lease with the Tenant
and to lease the Premises to the Tenant in accordance with this Lease;
(c) to the best of its information and belief, all heating and air conditioning
equipment and all mechanical, electrical and plumbing systems serving the
Premises shall be in good working order on the Commencement Date; and
(d) to the best of its information and belief, there is no asbestos, PCB's of
any other contaminants contained within the Premises and the Premises have not
otherwise been contaminated by any dangerous, toxic or hazardous substances or
contaminants as contemplated by the Environmental Protection Act (Ontario).
4. Expansion
From and after the date the parties sign this Lease to June 1, 2000
(the "VACANT PERIOD"), the Landlord shall not lease all of any part of the
balance of the second floor of the Building (the "BALANCE"). At any time during
the Vacant Period, the Tenant shall be entitled to give written notice to the
Landlord advising the Landlord that it wishes to lease the Balance, whereupon
this Lease shall be deemed to be amended so that the Premises includes the
Balance, except that:
(a) the Landlord's Work shall consist of such work which the Tenant requires to
be done to the Premises, provided that such work which shall consist of open
space finish, using materials comparable to or the same as those used for the
balance of the Second
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Floor (the "BALANCE WORK");
(b) the Landlord shall complete the Balance Work within thirty (30) days
following the date that the Tenant advises the Landlord of the Balance Work; and
(c) the Tenant shall not be required to pay any Rent in respect of the Balance
until the date that the Landlord notifies the Tenant that the Balance Work has
been substantially completed, upon which date Rent, including Basic Rent on the
Balance at the rate per square foot then in effect for the Premises, shall
commence to be payable.
5. Right of First Refusal
(a) From and after the date the parties sign this Lease, so long as the Tenant
is Delano Technology Corp. and is not in default beyond any cure period provided
for in the Lease and is in occupation of the whole of the Premises, if the
Landlord makes or receives from a third party (the "Third Party") a bona fide
offer (which shall include any agreement or offer prepared by the Landlord and
which is made and acceptable to such third party, any counter-offer or other
response thereto) to lease premises (the "Additional Premises") in the first of
the Additional Buildings provided such building is to be used for commercial
office purposes (the "First Building") to be constructed by the Landlord (the
"Third Party Offer"), the Landlord shall immediately deliver a true copy of the
Third Party Offer to the Tenant. Despite the foregoing, this section shall:
(i) not apply if the Additional Premises which are the subject matter of the
Third Party Offer exceed 20,000 square feet; and
(ii) cease to apply upon the Tenant leasing at least 20,000 square feet in the
First Building.
(b) Upon receiving a true copy of the Third Party Offer, the Tenant shall have
two(2) Business Days (the "Acceptance Period") within which to advise the
Landlord in writing that it wishes to lease all or any part of the Additional
Premises on the same terms as contained in the Third Party Offer, save and
except that (A) the term shall be co-terminus with the Term; and (B) the Tenant
may use the Additional Premises for the same uses as the Premises (collectively,
the "Modified Terms"). If the Tenant:
(i) so advises the Landlord within the Acceptance Period, the Landlord shall
lease the Additional Premises to the Tenant on the terms contained in the Third
Party Offer; or
(ii) fails to so advise the Landlord within the Acceptance Period, the Landlord
shall be entitled to lease the Additional Premises to the Third Party in
accordance with the Third Party Offer.
(c) If the Landlord and the Third Party amend a material term of the Third Party
Offer, the Landlord shall again be required to comply with the provisions of
this section.
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(d) For greater certainty, the Tenant's rights contained in this section shall
continue throughout the Term and shall in no way be diminished or extinguished
by the Tenant failing to elect to lease the Additional Premises at any time or
times during the Term.
(e) The Tenant shall prior to taking possession of any portion of the Additional
Premises execute an amending agreement to this Lease.
6. Parking
Throughout the Term, the Tenant and all persons using the Project shall
be entitled to the use of two hundred and twenty-five (225) parking spots in
common with all other users thereof in the underground parking facilities
serving the Building at no additional rental cost. The Tenant shall be entitled
to up to twenty-five (25) of such spots as being for the Tenant's exclusive use
in a location designated by the Landlord.
7. Garbage Disposal Box
Throughout the Term, the Landlord shall make available to the Tenant, a
garbage disposal box and the Landlord shall be responsible for the removal of
all garbage from such disposal box, the costs of which may be included in
Operating Costs.