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EXHIBIT 2.5
THIS SUBLEASE made as of the 1st day of February, 1999
B E T W E E N:
VIDEOFLICKS CANADA LIMITED
(the "Headtenant")
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VIDEOFLICKS.COM LIMITED
(the "Subtenant")
WHEREAS:
1. By lease dated the 17th day of July, 1985, as amended by agreement made
August 1, 1990 and as further amended by agreement made as of May 1, 1996,
(collectively, the "Head Lease"), 1650 Avenue Road Inc. leased to the Headtenant
the premises known as 1654 Avenue Road, Toronto, Ontario, M5M 3Y1 (the
"Premises") for a term which terminates on July 31, 2000 ;
2. The Subtenant has requested the Headtenant to sublease to him 15% of the
area, in square feet, comprising the Premises (the "Subpremises"), as designated
by the Headtenant in its sole discretion and the Headtenant has agreed to grant
a sublease (the "Sublease") on the terms set out in this agreement:
NOW THEREFORE, in consideration of the rents, covenants and conditions herein to
be paid, observed and performed by the Subtenant, the Headtenant leases the
Subpremises to the Subtenant for a term commencing on the date hereof and
terminating on the day immediately prior to the date of termination of the Head
Lease, at the rent of $28,680 per year payable monthly as to $2,390 per month in
advance on the first day of each month during the term of the Sublease, the
first payment of rent hereunder to be made effective the first day of December,
1998.
1. The Subtenant covenants with the Headtenant:
(a) To pay to the Headtenant the rent reserved at the times and in the
manner provided herein without deduction or abatement;
(b) To well and sufficiently repair and maintain the Subpremises in good
and substantial repair and all buildings, fixtures and chattels
belonging thereto
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or which shall be erected therein or thereon, reasonable wear and tear
and damage by fire, lightning and tempest only excepted and to keep
the Subpremises clean;
(c) That the Headtenant and his servants and agents shall have the right
at all reasonable times to enter the Subpremises to examine the
condition of them and that if any want of repair shall be found and
notice be given to the Tenant, the Tenant shall, as soon as it is
reasonably possible to do so, sufficiently repair in accordance with
the notice;
(d) That the Subtenant shall use the Subpremises in connection with the
business of selling video/movie cassettes and related products to the
public and for no other purpose;
(e) not to use the outer walls or windows of the Premises for any notice
or name plate nor to exhibit its name, except in such form and
character as approved by the Headtenant on the directory board in the
entrance hallway to the Premises and on the glass of the outer doors
of the Premises only
(f) To perform and observe all of the covenants on the part of the
Headtenant in the Head Lease other than the covenant to pay rent
thereunder and other than covenants relating to the Premises other
than the Subpremises, and to indemnify the Headtenant against all
actions, expenses, claims and demands in respect of such covenants.
2. The Headtenant covenants with the Subtenant:
(a) For quiet enjoyment;
(b) The Headtenant shall throughout the term of the lease keep the
Subpremises insured for loss and damage by fire and shall pay when due
all premiums necessary for the above purpose provided that the
Headtenant's obligation under this covenant shall immediately cease if
the insurance covenanted for shall be rendered void by any act or
default of the Subtenant;
(c) The Headtenant shall if the Subpremises are damaged by fire reinstate
the Subpremises at his sole expense, with all reasonable speed;
(d) If the Subpremises or any part of them are damaged by fire during the
term of this Sublease, with the result that they are rendered unfit
for the conduct of the business of the Subtenant therefrom, then the
rent reserved by this lease or a fair proportion thereof in accordance
with the nature and extent of the damage shall be suspended until the
Subpremises are sufficiently repaired such that the subtenant can
conduct its business therefrom;
(e) To pay the rent reserved by the Head Lease;
(f) To perform and observe the covenants on the part of the Headtenant
contained in the Head Lease with respect to the Premises, including
the Subpremises, so far as such covenants are not required to be
performed and observed by the Subtenant; and
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(g) To at all times keep the Subtenant indemnified against all actions,
expenses, claims, and demands on account of the non-performance of the
covenants of the Headtenant in the Head Lease.
3. Provided that:
(a) The Subtenant may remove its fixtures from the Subpremises at any time
and from time to time; and
(c) The Headtenant may re-enter the Subpremises if rent shall be in
arrears for ten (10) days or upon breach by Subtenant of any of its
covenants hereunder or on the bankruptcy of the Subtenant. In addition
to the foregoing, in respect of the Subtenant, the Headtenant shall
have all of the rights of re-entry available to the lessor under the
Head Lease, a copy of which is annexed hereto, as if the Subtenant
were the lessee under the Head Lease.
4. The Subtenant from time to time may request to sublease additional space
within the Premises and the Headtenant may, in its sole discretion, increase the
area comprising the Subpremises, in which case the amount of rent payable by the
Subtenant shall increase in proportion to the increase in size of the
Subpremises and the parties hereto shall accordingly execute a written amendment
to the Sublease to reflect such changes.
WITNESS our hands and seals the day, month and year as first written above.
VIDEOFLICKS CANADA LIMITED
Per:
/s/ MICHAEL KAVANAGH
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A.S.O.
VIDEOFLICKS.COM LIMITED
Per:
/s/ MICHAEL KAVANAGH
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A.S.O.