Exhibit 10.7
MEMORANDUM OF AGREEMENT OF LEASE entered into in the City and District of
Montreal, this first day of January, 1997.
BY AND BETWEEN:
Roshan Katrak et Al., herein acting and represented by Roshan Katrak,
business woman therein domiciled and residing in the City of St. Lambert
declares;
Hereinafter referred to as the
"LANDLORD"
AND: Fibre Mobile Ltd., a body politic and corporate, duly
incorporated according to Law, having its head office and principal place of
business in the City of St. Laurent, herein acting and represented by Fritz
Klass, duly authorized hereto, as he so declares;
Hereinafter referred to as the:
"TENANT"
THIS AGREEMENT WITNESSETH:
For the term, in consideration of the rentals, and subject to the
conditions hereinafter set forth, the LANDLORD does hereby lease unto the TENANT
hereto present and accepting, the local designated as Richelieu (the "Premises")
of the building bearing civic number 3755 Richelieu in the City of St. Hubert
being composed of lot numbers 115-1150-6 and 1.
For purposes of brevity, the lease Premises contain an area of
approximately ELEVEN THOUSAND SIX HUNDRED SEVENTY FIVE (11,675) square feet and
are hereinafter referred to as the "Premises", the building of which the same
forms a part together with the access ways, driveways, parking areas, lawns, and
fences adjacent thereto and the mechanical and electrical systems thereof as
well as all accessories thereof are hereinafter referred to together as the
"Building"; and the Building together with the emplacement upon which the same
is erected is hereinafter referred to as the "Property". The TENANT acknowledges
that it has examined the Property, the Building and the Premises, and is content
and satisfied therewith and notwithstanding any other provisions contained in
these presents, the TENANT shall not impose any further obligations upon the
LANDLORD with respect to any defects and faults which may exist at the
commencement of the term, but which manifest themselves subsequently thereto.
1. DURATION OF LEASE
11 TERM
The present Lease is made for a term of five (5) years commencing on
the First Day of January, 1997, and terminating on the Last Day of
December, 2001..
For purposes of brevity, the said period is hereinafter referred to as
the "Term", and the full period of the TENANT'S occupancy of the Premises after
the commencement of the Term, whether comprised in the Term or extending beyond
the same is hereinafter referred to as the "Occupancy Period".
1.02 HOLDING OVER
Notwithstanding any law or custom to the contrary, the present Lease
shall not be subject to tacit renewal and in the event that the TENANT remains
in possession of the Premises after the expiry of the Term, or any renewal or
extension thereof, the occupancy thereof shall be deemed to be on a
month-to-month basis and the TENANT shall pay to the LANDLORD a monthly rental
equal to twelve and one-half percent (12 1/2%) of the aggregate of all sums
payable by the TENANT to the LANDLORD during the last year of the Term or
extension thereof, pursuant to the provisions of Paragraph 2.01 and 2.02 hereof.
11. RENTAL
2.01 MINIMUM ANNUAL RENTAL
TENANT covenants and agrees to pay to the LANDLORD yearly throughout
the Term of this Lease without demand, set-off, compensation or deduction
whatsoever, in lawful money of Canada a fixed minimum annual rental (hereinafter
called the "Minimum Annual Rental") as follows:
A "Minimum Annual Rental" equal to FIFTY-TWO THOUSAND, EIGHT HUNDRED
DOLLARS AND ZERO CENTS ($52,800.00) payable in equal, monthly and consecutive
instalments of
FOUR THOUSAND, FOUR HUNDRED DOLLARS AND ZERO CENTS ($4,400), in advance on the
first day of each
month representing FOUR DOLLARS AND FOURTY CENTS ($4.40) per square foot net net
per annum.The "Minimum Annual Rental" shall be increased each subsequent year
thereafter by the greater of an equal amount to three percent (3%) of the
minimum annual rental over the immediate preceeding lease year or an amount
equal to the increase in the CPI over the immediate preceeding lease year which
increase shall not in any event be less than the minimun annual rental of that
immediate preceeding lease year.
2.02 Business Taxes, Water Taxes, Taxes on Improvements and Other Taxes
2.02.01 TENANT shall pay all business taxes, water taxes, surtaxes, the
municipal taxes on non-residential properties and/or its replacement, or other
similar rates and taxes which may be levied or imposed upon the Premises or the
business carried on therein, all other rates and taxes which are or may be
payable by TENANT as tenant and occupants thereof and on TENANT'S fixtures,
equipment and machinery and any and all taxes that may be levied upon the
Alterations and/or Improvements;
If by law, regulation or otherwise, business taxes and water taxes or
other similar rates and taxes or taxes upon TENANT's fixtures, equipment,
machinery or upon Alterations and/or Improvements are made payable by landlords
or proprietors, of if the mode of collecting such taxes and/or rates to be so
altered as to make LANDLORD liable therefor instead of TENANT, TENANT shall
repay to LANDLORD prior to the due date but in any event within seven (7) days
after demand upon TENANT the amount of the charge imposed on LANDLORD as a
result of such change, and shall save LANDLORD harmless from any cost or expense
in respect thereof.
2.02.02 TENANT shall pay as additional rent, in addition to the other amounts
payable under the Lease, any multi-stage sales, sales, use consumption, the
Federal Goods and Services Tax (GST), and the Provincial Sales Tax (PST), value
added or other similar taxes imposed by the Government of Canada, or by any
provincial or local government upon LANDLORD or TENANT on or in respect of this
Lease, the payments made by TENANT, the goods and services provided by LANDLORD
hereunder including, without limitation, the rental of the Premises or
administrative service provided to TENANT or to tenants generally. Amounts
payable by TENANT under this Sub-section from time to time shall be paid when
the rent under this Lease is payable.
If required, LANDLORD agrees, at the request and cost of TENANT, to
prepare and execute any requisite forms necessary to establish that TENANT has
paid to LANDLORD the amounts payable by TENANT under this subsection and that
LANDLORD has remitted such amount to the appropriate taxing authority.
2.03 REAL ESTATE TAXES
2.03.01 For the purposes of this Section:
(i) "Real Estate Taxes" means all taxes, surtaxes, water taxes,
rates and assessments, general and special, levied or imposed
with respect to the Building (including any accessories and
improvements therein or thereto) and the Property including
where applicable, all taxes, surtaxes, water taxes, rates,
assessments and impositions, general and special, levied or
imposed for schools, public betterment, general or local
improvements.
If the system of real estate taxation shall be altered or
varied and any new tax or levy shall be levied or imposed on
the Building and/or the Property and/or the revenues therefrom
and/or LANDLORD in substitution for and/or in addition to Real
Estate Taxes presently levied or imposed on immovables in the
city, town or municipality in which the Building and Property
are situated, then any such new tax or levy shall be included
within the term "Real Estate Taxes" and the provision of this
Section 2.03 shall apply mutatis mutandis.
The amount of the Real Estate Taxes which shall be deemed to
have been levied or imposed with respect to the Building and
the Property shall be such amount as the legal authority
imposing Real Estate Taxes shall have attributed to the
Building and the Property respectively, or, in the absence of
such attribution, or, if such legal authority shall include
other immovables other than the Building and the Property in
imposing such Real Estate Taxes, such amount as LANDLORD in
the exercise of reasonable judgment shall establish.
(ii) TENANT acknowledges that it is occupying and/or responsible
for ..100%...... of the Property of which the Premises and the
Building form part of. Accordingly the parties agree that
TENANT's proportion (hereinafter referred to s the
"Proportion") to be utilized in calculating TENANT's share of
Real Estate Taxes shall be ..100%.... of any such taxes.
For purposes of information, the estimated annual rate for
Real Estate Taxes is ONE DOLLAR AND FIFTY-TWO CENTS ($1.52)
per square foot.
2.03.02 The rent payable during the term of this Lease in respect of each year
shall be increased by an amount equal to the Proportion of Real Estate Taxes
attributable to such year. TENANT shall pay to LANDLORD, not later than the tax
due date, or such other date as may be specified in writing to TENANT by
LANDLORD (hereinafter referred to as the "Specified Date"), the amount of such
increase in the annual rent.
At the option of LANDLORD, LANDLORD may at any time and from time to
time estimate the amount of increased rent as will become payable by TENANT by
the tax due date or Specified Date, and bill TENANT therefor, and in such event
TENANT shall pay to LANDLORD the full amount of such estimate in equal monthly
installments commencing with the first month following such estimate and
terminating on the tax due date or Specified Date. Such monthly amounts when
paid to LANDLORD shall be available (without interest) as a credit against
TENANT's obligations to LANDLORD under this SECTION 2.03.
Any amounts payable by TENANT hereunder shall be adjusted on a pro
rata basis to reflect the actual commencement and termination dates of this
Lease having regard too the period in respect of which the calculation of Real
Estate Taxes is made.
The obligations of the parties hereto to adjust pursuant to this
Sub-section 2.03.02 for the final period of the Lease shall survive the
expiration of the term of this Lease.
LANDLORD shall furnish to TENANT upon the specific writtenrequest of
TENANT copies of all pertinent valuation and assessment notices and of all
pertinent tax bills and notices received by LANDLORD.
2.03.03 TENANT shall pay to LANDLORD as additional rent the Proportion of any
expenses including legal, appraisal, administration and overhead expenses
including legal, appraisal, administration and overhead expenses incurred by
LANDLORD in obtaining or attempting to obtain a reduction of any Real Estate
Taxes. Real Estate Taxes which are contested by LANDLORD shall nevertheless be
included for purposes of the computation of the liability of TENANT under
Sub-section 2.03.02 provided, however, that in the event that TENANT shall have
paid any amount of increased rent pursuant to this Ssection 2.03 and LANDLORD
shall thereafter receive a refund of any portion of the Real Estate Taxes on
which such payment shall have been based, LANDLORD shall pay toTENANT the
appropriate portion of such refund after deduction of the afore mentionned
expenses.
LANDLORD shall have no obligation to contest, object to or to litigate
the levying or imposition of any Real Estate Taxes and may settle, compromise,
consent to, waive or otherwise determine in its discretion any Real Estate Taxes
without notice to, consent or approval of TENANT.
2.03.04 Nothing contained in this Section 2.03 shall be construed at any time so
as to reduce the monthly installments of rent payable hereunder below the amount
stipulated in Section 2.01.
TENANT's obligation to pay under this Section 2.03 for the final
period of the Lease shall survive the expiration of the term of this Lease.
2.03.05 Notwithstanding any law or custom to the contrary, the TENANT shall not
have the right to contest the corrections, existence or absence of any entry on
the tax roll of which the Property and/or the Building and/or the Premises are
entered or submit a complaint to any board or tribunal or court with respect
thereof, or for any other matter, without first obtaining the prior written
consent of the LANDLORD to any such contestation, which consent may be
arbitrarily withheld. If the TENANT obtains such consent, the TENANT shall
diligently prosecute any such appeal, contestation or complaint to an
expeditious resolution and shall keep the LANDLORD informed of its progress at
all times. Real Estate Taxes which are contested by the TENANT shall
nevertheless be included for purposes of computation of the liability of TENANT
under subsection 2.03.02 provided, however, that in the event that TENANT shall
have paid any amount of increased rent pursuant to this Section 2.03 and
LANDLORD shall thereafter receive a refund of any portion of the Real Estate
Taxes on which such payment shall have been based, LANDLORD shall pay to TENANT
the appropriate portion of such refund.
Notwithstanding any of the foregoing, should LANDLORD avail itself of
its right (but not obligation) to contest the levying or imposition of any Real
Estate Taxes within the appropriate delays to do so, such contestation of the
LANDLORD shall take precedence over any such contestation of the TENANT and the
provisions of Section 2.03 and subsequent shall apply to the complete exclusion
of this subsection 2.03.05 in which case TENANT shall discontinue from any
contestation it may have undertaken at TENANT's entire cost and expense.
2.04 OPERATING EXPENSES
2.04.01 For the purposes of this Section:
(i) "OPERATING EXPENSES" means (without duplication) in any period
designated by
LANDLORD (determined for each period on an accrual basis) the total cost
and expense determined in accordance with generally accepted accounting
principles and practices and incurred by the LANDLORD in each lease year to
operate and maintain the Property, the Building and the Premises and facilities
(except as otherwise payable by TENANT hereunder) including without limitation.
(a) the cost of maintaining, operating, repairing, replacing, cleaning,
heating, gardening, draining, painting, landscaping, snow and garbage
removal, electricity, fuel, gas and water, material and supplies,
service contracts including without restriction the cost to maintain,
repair and replace any equipment, machinery inclusive of the sprinkler
system as well as the cost of any additional equipment or improvements
required by law as well as the cost of executive salaries,
administration and legal fees, tax on capital and capital retirement of
debt;
(b) the cost of heating, ventilating and air-conditioning including
without limitation the cost of operating, repairing, maintaining,
inspecting and replacing the machinery, equipment and other facilities
required for the heating, ventilating and air conditioning of the
Building;
(c) the actual cost of all insurance as may be carried by LANDLORD,
such costs to include without limitation premiums, claims, deductibles
and other insurance related charges, in respect of, or attributable to
the Property, the Building and the Premises or related thereto
including without limitation all risk insurance against fire and other
perils and liability regarding casualties, injuries and damages,
boiler, machinery, and equipment insurance and rental income insurance.
Notwithstanding all the foregoing, Operating Costs shall not include
repairs of a structural nature providing same are not the result of any act or
omission of the TENANT. For the purposes hereof structural repairs shall mean
repairs of a structural nature necessitated to the foundations, outer walls,
structural columns and beams of the Premises.
(ii) TENANT acknowledges that it is occupying and/or is responsible for
..100%. of the Property of which the Premises and the Building form
part of. Accordingly the parties agree that TENANT's proportion
(hereinafter referred to as the "Proportion") to be utilized in
calculating TENANT'S share of all Operating Expenses shall be
...100%... of the aggregate of any and all Operating Expenses.
2.04.02 During each Operating Year TENANT shall pay to LANDLORD as additional
rent the Proportion of the Operating Expenses.
2.04.03 On or before the commencement of any Lease Year, LANDLORD may estimate
the amount of the Proportion of the Operating Expenses and bill TENANT therefor
in equal monthly installments, in advance, which TENANT shall pay on the first
day of each calendar month of such Lease Year.
2.04.04 At the end of each Lease Year of the term of the Lease, LANDLORD shall
furnish to TENANT a statement of the actual gross amount of the Operating
Expenses during such Operating Year and the amount of TENANT's Proportion
pursuant to this Section 2.04, showing in reasonable detail the information
relevant to the calculation and termination thereof. If such amount is greater
or less than he payments on account thereof made by TENANT pursuant to
Subsection 2.04.03, appropriate adjustments will be made within fourteen (14)
days after the delivery of such statement. Notwithstanding the foregoing, and in
view of the fact that TENANT is occupying and responsible for the entire
Property of which the Premises and the Building form part of, it is agreed that
TENANT shall have the right to engage its own personnel or contractors for
purposes of carrying out any work which would otherwise be included in the
definition of "OPERATING EXPENSES" and paying for same directly providing TENANT
shall have furnished LANDLORD with copies of all documents and invoices related
thereto and provided that in carrying out any such work and the engaging of such
contractors and/or personnel, shall at all times be in conformity with and
subject to the observance of the other provisions of this Lease Agreement
including without restriction Section vi hereof.
2.04.05 The obligations of the parties hereto to adjust pursuant to Sub-section
2.04.04 hereof shall survive the expiration of the term of the Lease.
2.05 PAYMENT OF MONIES
2.05.01 All monies payable pursuant tot his Lease by TENANT shall be payable
immediately when due without notice or demand and shall be collectible as rent
and shall be paid to LANDLORD and/or its nominees at the head office of LANDLORD
or at such place in Canada as shall be designated from time to time by Landlord
in writing to the TENANT.
2.05.02 If the term of this Lease begins on any day of the month other than the
first day, then any amounts payable hereunder for such month shall be prorated
and paid on a per diem basis.
2.05.03 Upon final determination of the actual amounts payable by TENANT
the parties shall adjust any differences between the estimated amounts so paid
and the actual amounts payable.
2.05.04 TENANT shall pay interest compounded monthly on all rent and/or amounts
collectible as rent under the terms of this Lease and not paid when due at a
rate per annum of three (3) percentage points above the prime lending rate at
the principal branch in the city of LANDLORD'S bank on the due date of such rent
or amounts.
2.05.05 TENANT hereby waives and renounces any and all existing and future
claims, set-off and compensation against any rent or other amounts due hereunder
and agrees to pay such rent and other amounts regardless of any claim, set-off
or compensation which may be asserted by TENANT or on its behalf.
2.05.06 Upon any termination of this Lease, as a condition precedent to being
permitted by LANDLORD to vacate the Premises, TENANT shall, in addition to all
other amounts which it is obliged to pay hereunder, pay to LANDLORD such amount
as is estimated by LANDLORD to represent that portion of the aggregate amount of
Real Estate Taxes and Operating Expenses payable and to become payable by TENANT
in virtue of Sections 2.03 and 2.04 hereof, and which has not yet been paid.
3.01 UTILITIES
The TENANT shall be solely responsible for and promptly pay, to the
exoneration of the LANDLORD, all costs and charges incurred in relation to the
installation supply, use or consumption of telephone services, electricity, gs
or water in or to the Premises, the Building and Property including, without
restriction, all charges made by any company, commission, or authority providing
such services for the connection or disconnection thereof and/or the maintenance
or repair of pipes, conduits, meters, cables or other media or in apparati used
for the provisions thereof. In no event shall LANDLORD have any obligation or
liability in connection with the cessation or unavailability or interruption or
suspension of any services or utilities at any time.
IV INSURANCE
4.01 PROPERTY DAMAGE AND PUBLIC LIABILITY
Throughout the Occupancy Period, the TENANT shall, at its own expense,
insure and keep insured the LANDLORD and the TENANT against loss arising from
damage to the property of the TENANT or any subtenant or licensee and any and
all other persons claiming through or under it, or any of them, or damage to any
other property howsoever occasioned by the use or occupation of the Premises or
any injury to any person or persons including death at any time resulting
therefrom occurring in or about the Premises or the accessories thereof and, in
this regard, will maintain proper policies or property damage and public
liability insurance the limits whereof initially shall be not less than
$2,000,000.00 for property damage, $l,000,000.00 for injury to one person and
$1,000,000.00 for injury in one accident and in such other amount as the
LANDLORD may, from time to time, reasonably require.
4.02 POLICIES OF INSURANCE
All contracts of insurance required herein to be maintained by the
TENANT shall be with a company or companies duly licensed to do business in
Canada and the Province of Quebec and ordinarily engaged, inter alia, in the
business of insuring against such risks and reasonably acceptable to the
LANDLORD, with loss payable to the LANDLORD. All notices to be sent in virtue of
said insurance policies shall be sent to the LANDLORD and any such policies of
insurance shall be in form and substance subject to the approval of the LANDLORD
which said approval shall not be unreasonably withheld and shall contain a
provision whereby the insurers shall not be subrogated in any rights which the
TENANT may have against the LANDLORD in respect of the indemnities paid pursuant
thereto so that, in the event of loss, the insurer or insurers shall have no
recourse of any nature whatsoever against either the LANDLORD or the TENANT. The
TENANT shall forward to the LANDLORD all policies of insurance or certificates
of insurance of all insurance policies taken out in accordance with the
provisions of the present Section IV. TENANT shall obtain from the insurers
under such policies, undertakings to notify the LANDLORD in writing at least
thirty (30) days prior to of any cancellation thereof or negative material
change relating to the said insurance coverage.
4.03 INCREASED RISK
The TENANT shall pay all extra premiums of insurance that any company
or companies with which the Building or the contents thereof may be insured,
shall exact by reason of anything carried into the Premises or stored therein by
the TENANT or any activity carried on therein by the TENANT.
4.04 COPIES OF POLICIES
Prior to the commencement of the Term and thereafter prior to the
expiry of any insurance policy maintained by the TENANT pursuant to the terms of
the present Section, the TENANT shall deliver to the LANDLORD, without demand,
certified copies of al policies or certificates of insurance of insurance
maintained by it as herein required. If the TENANT fails to deliver such
policies as aforesaid, it shall be presumed not to have taken out or maintained
in force the appropriate insurance as herein required. TENANT agrees that if
TENANT fails to take out or to keep in force such insurance, LANDLORD will have
the right to do so and to pay the premium therefor and in such event TENANT
shall repay to the LANDLORD the amount paid as premium, which repayment shall be
collectible as additional rent payable on the first day of the next month
following the said payment by LANDLORD.
V. LIABILITY
5.01 NON RESPONSIBILITY OF LANDLORD
The LANDLORD shall not, under any circumstances whatsoever save in the
case of its gross negligence be responsible for any damages suffered by the
TENANT or any other person by reason of the ownership of, original defect in or
want of repair of the Property or any part thereof and, without restricting the
generality of the foregoing, there shall be no abatement from or reduction of
rentals due hereunder nor shall the TENANT be entitled to damages, costs, losses
or disbursements from the LANDLORD regardless of the cause or reason therefore
on account of partial or total failure of, damage caused by, lessening of supply
of or stoppage of heat, air-conditioning, electric light, power, water,
plumbing, sewage or any other service, nor on account of anything coming through
or leaking from the roof, skylights, trap doors, windows or otherwise or any
defect or break in any pipes, tanks, fixtures or otherwise whereby stream,
water, snow, smoke or gas, leak issue or flow into the Premises nor on account
of any electric or other wiring, nor on account of any damage or annoyance
arising from any acts, omissions or negligence of co-tenants or other occupants
of the Property, or the owners or occupants of adjacent or contiguous
properties, nor on account of anything coming through or leaking from the roof,
skylights, trap doors, windows or otherwise or any defect or break in any pipes,
tanks, fixtures or flow into the Premises nor on account of any damage or
annoyance occasioned by the condition or arrangements of any electric or other
wiring, nor on account of any damage or annoyance arising from any acts,
omissions or negligence of co-tenants or other occupants of the Property, or the
owners or occupants of adjacent or contiguous properties, nor on account of the
making of any repairs, alterations, improvements, additions or structural
changes to the Building or any part thereof or any property adjacent to the
Property. In addition, the LANDLORD shall not be liable for any other damage to
or loss,theft, or destruction of property or death of or injury to any person or
persons, including the TENANT at any time, in, or about the Property, howsoever
occurring.
5.02 INDEMNIFICATION OF LANDLORD
Save in the case of negligence on the part of the LANDLORD, the TENANT
does hereby agree to indemnify, and save harmless the LANDLORD, the TENANT does
hereby agree to indemnify, and save harmless the LANDLORD from and against any
and all liabilities, damages, suits and actions (including judicial and
extra-judicial fees and disbursements) arising out of:
a) Damage to the property of the TENANT, any subtenant or licensee of the
TENANT, and all persons claiming through or under it, or any of them, or damage
to any other property howsoever occasioned by the use or occupation of the
Property or any part thereof;
b) Any breach, violation or non-performance of any covenant, condition or
agreement set forth in the present Lease and contained on the part of the TENANT
to be fulfilled, kept, observed or performed;
c) Any injury to any person or persons including death at any time resulting
therefrom occurring in or about the Property;
d) Failure by the TENANT to fully, faithfully and punctually comply with all of
the legitimate requirements of any public or quasi-public authority having
jurisdiction in the Property or any requirement of any insurance company or
companies with which the Building or any of the contents thereof is insured or
the Fire Underwriters Association.
The indemnification contemplated under the terms of the present
paragraph as well as all other indemnifications herein provided shall survive
the termination of this Lease in respect of claims the origin or cause of which
arose during theterm hereof. Without in any manner limiting anythingellse
contained herein, in the event that the LANDLORD is made a party to any claim,
action, suit or proceeding from and against which the TENANT has undertaken to
indemnify and save the LANDLORD harmless, the TENATN shall pay such claim or, at
its own cost and expense defend int he LANDLORD's name, by an attorney or
counselnamed by the LANDLORD, such action, suite or proceeding as well as
satisfy any condemnation, judgment or pronouncement against the LANDLORD,
principal, interest and costs, the whole to the entire exoneration of the
LANDLORD or, in the alternative, shall furnish the LANDLORD with money to pay
such claim.
VI. MAINTENANCE, ALTERATIONS AND USE
6.01 TENANT'S MAINTENANCE
The TENANT shall, at all times during the Occupancy Period, at its own
cost and expense, maintain the Premises and all accessorites thereof in a proper
state of repair and promptly effect all requisite repairs and replacements
thereof, including, without restriction, an ypipes, drains, conduits, doors,
windows, walls, floors, ceilings and plumbing, heating ventilating and
electrical equipment and fixtures therein located.
6.02 RIGHT TO ENTER AND INSPECT
The LANDLORD or any employee, servant or agent of the LANDLORD shall
be entitled upon twenty-four (24) hours prior notice, except in the case of
emergency to enter and examine the state of the maintenance, repairs, decoration
and order of the Premises and otherwise ascertain whether the TENANT is
adequately fulfilling its obligations under the terms of the preent Section. The
LANDLORD maygivenotice tot he TENANT requiring that the TENANT perform such
maintenance or effect such repairs or replacemtns as may be found necessary
pursuant to such examination but the failure of the LANDLORD to give such notice
shall not, however, relieve the TENANT from any of the obligations assumed by it
hereunder. If the TENANT fails to make any such repairs within thirty (30) days
after notice from the LANDLORD requesting the TENANT to do so, provided that
such repairs may reasonably be made within the said peeriod, the LANDLORD may,
without prejudice to any other rights or remedies it may have, make such repairs
and charge the cost thereof to the TENANT. Any costs chargeable to the TENANT
hereunder, or in virtue of any other clause of these presents, shall be payable
forthwith on demand as additional rent and shall bear interest at the rate of
Eighteen percent (18%) per annum. Nothing herein shall be construed to obligate
or require the LANDLORD to make any repairs to the Premises but the LANDLORD
shall have the right, at any time, to make urgent repairs without notice to the
TENANT and charge the costs thereof to the TENANT.
6.03 DAMAGE OR DESTRUCTION
If and whenever during the term of this Lease the Premises shall be
destroyed or damaged by fire, lightning or tempestof any other insured risk, or
otherwise, then, and in every such event the following provisions shall apply:
(a) If the damage or destruction is such that the Premises are rendered wholly
unfit for occupancy of if it is impossible or unsafe to use and occupy the same,
or if the damage is such that, in the opinion of the Architect to be given to
the TENANT within thirty (30) days of the happening of such damage or
destruction, then either the LANDLORD or the TENANT may within five (5) days
next succeeding the giving of the LANDLORD's notice as aforesaid, terminate this
Lease by giving the other party notice in writing of such termination in which
event this Lease shall cease and be at an end as at the date of such destruction
or damage and all rents which the TENANT is obliged to pay under the terms
hereof shall be apportioned and paid in full to the date of such damage or
destruction.
In the event that neither the LANDLORD nor the TENANT shall elect to terminate
this Lease as herein provided, then the LANDLORD shall repair the Pre ises with
all reasonable diligence and the rentals hereby reserved shall abate from the
ate of the happening of the damage until the damage shall have been made good to
the extent of enabling the TENANT to use and occupy the Premises;
(b) If the damage be such that the Premises are wholly unfit for occupancy or it
is impossible or unsafe to use or occupy them but in either event the damage, in
the opinion of the Architect to be given to the TENANT within thirty (30) days
from the happening of such damage, can, with reasonable diligence, be repaired
within ninety (90) days of the happening of such damage, then the rentals
payable by the TENANT hereunder shall abate from the date oof the happening of
such damage until the damage shall be made good to the extent of enabling the
TENANT to use and occupy the Premises and the LANDLORD shall repair the damage
with all reasonable diligence;
c) If in the opinion of the Architect the damage can be made good as aforesaid
within ninety (90) of the hapening of such damage or destruction and the damage
is such that the Premises are capable of being partially used for the purpose
for which they are hereby leased, then until such damage has been repaaired the
rentals payable hereunder shall abate so that the TENANT shall pay that
proportion of the said rentals which is equal to the proportion that the usable
area of the Premises is to to the total area of the Premises;
d) Not withstanding anything herein contained if any such damage or destruction
results from the fault or negligence of the TENANT or a person or persons for
whom the TENANT is in law responsible, without prejudice to any other rights or
remedies of the LANDLORD, the TENANT shall be liable for all costs and damages
and the damages may be repaired by the LANDLORD at the cost and expense of the
TENANT. In no such event shall there be any abatement of rentals payable
hereunder.
e) Notwithstanding anything herein contained the LANDLORD may in the case of
destruction or extensive damage to the Premises elect not to rebuild the same
provided that notice of such election be given to the TENANT within thirty (30)
days of such damage or destruction, in which case this lease shall
cease and be at an end as at the date of such damage or destruction and all
rentals which the TENANT is obliged to pay under the terms hereof shall be
apportioned and paid in full to the date of such damage or destruction.
6.04 ALTERATIONS, ADDITIONS, IMPROVEMENTS
The TENANT shall not make or perform any alterations, additions or
improvements, whether of a structural or nonstructural nature, in the Premises
unless the plans and specifications therefore shall have been submitted to the
LANDLORD prior to the commencement of such alterations, additions or
improvements and the latter shall have given its prior written consent thereto,
which consent shall not be unreasonably withheld. All such alterations,
additions or improvements made by the TENANT under the terms of the present
paragraphs shall be promptly executed in accordance with he approved plans and
specification and all applicable laws, by-laws, regulations and ordinances or
all public and quasi-public authorities having jurisdiction in the Property,
including, without restrictions, the Fire Underwriters Association and any
company or companies with which the Building may, at the time, be insured and
the TENANT shall be responsible for all costs incurred in connection with such
alterations and improvements the whole to the entire exoneration of the
LANDLORD. The TENANT shall maintain workmen's compensation insurance covering
all persons employed in connection with such work and shall produce evidence of
such insurance to the LANDLORD, and shall also maintain adequate general
liability insurance for the protection of the LANDLORD and the TENANT as the
LANDLORD may reasonably require. Nothing herein contained may be so interpreted
as to permit the TENANT to perform any act, retain any service, purchase any
materials or cause to be performed any works which would give rise to a
privilege, prior claim and/or hypothec on the Property. Notwithstanding the
foregoing, the value of the Premises shall not, as a result of any work proposed
to be carried out by the TENANT, be less than the value of the Premises before
the commencement of such work and the LANDLORD shall be the sole judge or such
value. If the cost of any work shall be in excess of TEN THOUSAND DOLLARS
($10,000.00) as reasonably estimated by the LANDLORD, the LANDLORD may require
the TENANT to furnish security satisfactory to the LANDLORD guaranteeing the
completion of the work and the payment of the cost thereof free and clear of all
conditional bills of sale, pledges, privileges, prior claims, hypothecs,
workmen's and supplier's liens and other similar liens and charges. All work,
when completed, shall be comprised in and form part of the Premises and shall be
subject to all the provisions of this Lease.
6.05 SUPERVISION OF LANDLORD
In the event that the TENANT shall elect to perform any alterations or
improvements to the Premises in accordance with the terms of the present
Section, all such alterations and improvements may be performed under the
general supervision of the LANDLORD and the TENANT, if he so requests and the
LANDLORD if he so accepts to perform such supervision, shall be obliged to pay
to the LANDLORD, in consideration for such supervision, a fee in an amount equal
to Ten Percent (10%) of the cost of such alterations and improvements.
6.06 DISPOSITION OF ALTERATIONS
At the expiry of the Occupancy Period the TENANT shall, at the option
of the LANDLORD, either remove all alterations performed by it in accordance
with the provisions of the present Section and restore the Premises to
substantially the same condition in which the same were found prior to the
performance of any such alterations, or abandon the Premises and surrender
ownership and possession of such alterations and improvements to the LANDLORD. I
neither case will the TENANT be entitled to receive any compensation or
indemnity in respect of such alterations or improvements or in respect of the
removal thereof.
6.07 USE OF PREMISES
The TENANT shall use the Premises solely for the purpose of carrying
on its business, and moreover the TENANT shall confine its activities to the
leased premises only and shall not store, warehouse and/or carry on any type of
work whatsoever in the common areas of the Building and/or the Property. The
TENANT shall not do or permit anything to be done in or about the Property which
would obstruct or interfere with the rights of other tenants therein or in any
way hinder or annoy them by the emission of disagreeable noise, smoke or
unpleasant odors, or which may conflict with the rules of the Fire Underwriters
Association or with the rules, regulations, laws, bylaws, ordinances or other
requirements of any public or quasi public authority having jurisdiction in the
Property or in the activities carried on therein, nor shall the TENANT install
or store in the Premises any effects which would adversely affect the structural
integrity or solidity of the Building, or any part thereof. The TENANT
represents that the Premises have been examined by the TENANT and that the
TENANT accepts same in the condition and state in which they now are. The TENANT
alone shall be responsible for obtaining from he appropriate regulatory bodies
whatever permits, licences or approvals as may be necessary, and this to the
entire exoneration of the LANDLORD. Notwithstanding the generality of the
foregoing, failure by the TENANT to obtain any such permits, licences or
approvals shall not entitle the TENANT to cancel this Lease.
6.08 FIRE PREVENTION
The TENANT shall institute and maintain such programs of fire
prevention as may be reasonably required by an y insurance company or companies
with which the Building is insured or the Fire Underwriters Association and
shall install and maintain in the Premises such fire prevention and detection
equipment as may be recommended by such company, companies or association.
6.09 SANITATION AND CLEANLINESS
The TENANT shall maintain the Premises in a tidy, orderly and clean
condition at all times and shall keep all garbage, refuse and other waste
materials emanating from the Premises in metal, ratproof and covered containers
and agrees to provide strict measure and put forth every effort for rat
prevention and other pest control, including, if required by the LANDLORD, a
regular contract with a firm of recognized exterminators.
VII. ASSIGNMENT, SUB-LET AND SHARED POSSESSION
7.01 CONDITIONAL RIGHT
The TENANT may not assign its rights hereunder or sublet or share
possession of the Premises or any part thereof without the prior consent in
writing of the LANDLORD, which consent shall not be unreasonably withheld.
Consent shall be deemed to be reasonably withheld if any such assignment, sublet
or granting of possession shall be made for an annual consideration less than
the total annual consideration (consisting of the Minimum Annual Rental and all
deemed additional rental referred to in Paragraph 2.03 hereof) as set forth in
the present Lease or the then going market value, whichever be the greater. In
the event that such consent is solicited and granted, and the TENANT assigns its
rights hereunder or sub-lets or shares possession of all or part of the
Premises, the TENANT shall notwithstanding such assignment or sub-let or sharing
of possession, remain solitarily responsible for the full and faithful
performance of all of the obligations undertaken by it hereunder, in the same
manner and to the same extent as if the said assignment had not been made, or
the said sublet not granted, or the sharing of possession not effected.
7.02 ASSIGNMENT OF SUB-RENTALS
To secure the full and faithful performance by the TENANT of all of
its obligations to the LANDLORD hereunder, the TENANT does hereby assign,
transfer and make over unto the LANDLORD hereto present and accepting, the same,
all rents now or hereafter payable to the TENANT by any subtenants or assignees
or possessors of the TENANT leasing or occupying space in the Premises. The
LANDLORD may, t its option, give notice to any such assignees or possessors of
the TENANT leasing or occupying space in the Premises. The LANDLORD may, at its
option, give notice to any such assignees or subtenants or possessors who shall,
be obliged thence forward to pay all sums otherwise payable to the TENANT and in
reduction of any sums payable or to become payable by the TENANT TO THE LANDLORD
pursuant hereto. The LANDLORD shall not be accountable to the TENANT for any
failure on its part to collect any sums payable by any assignees or sub-tenants
or possessors of the TENANT.
7.03 COPIES OF SUB-LEASE
The TENANT shall, within three days of their respective execution,
forward to the LANDLORD, authentic or certified true copies of all deeds,
contracts, agreements or instruments entered into by the TENANT whereby the
TENANT assigns any of its rights hereunder or in the Premises or sub-lets the
whole or any part of the Premises or grants any rights to possessors.
7.04 LANDLORD'S PREFERRED RIGHTS
In the event that the TENANT elects to solicit the consent of the
LANDLORD to the assignment of the former's rights hereunder or the sub-let of
the whole or any part of the Premises or to the granting of possession of any
part of the Premises (which said solicitation must, on pain of nullity thereof,
be in writing, setting forth all terms and conditions of the sub-let or
assignment or granting of possession), the LANDLORD may, at its option and by
giving written notice of its intention so to do, to the TENANT within fifteen
days of its having received the TENANT'S request to sub-let or assign or grant
possession, as aforesaid, elect to:
a) terminate the present Lease at the end of the then current year or at the
effective date of such proposed sub-let, assignment or granting of possession,
or ninety (90) days after giving the said notice to the TENANT in which case the
TENANT shall surrender vacant possession of the Premises to the LANDLORD on the
appropriate termination date and as and from the said date, neither party shall
have any future rights or obligations hereunder; or
b) become the sub-tenant or assignee or possessor of the TENANT at the same
terms and conditions as set forth in the notice given by the TENANT to the
LANDLORD soliciting consent to the sub-lease or assignment.
7.05 CORPORATE OWNERSHIP
If at any time during the term the TENANT is a corporation and if, by
the sale or other disposition of its securities, the control of such corporation
is changed, notice of which the TENANT SHALL be bound to give to the LANDLORD
within fifteen (15) days after such sale or other disposition, the LANDLORD may,
at its option, cancel the Lease upon the giving of thirty (30)days' notice to
the TENANT of its intention to cancel and this lease shall terminate upon the
expiration of the said thirty (30) day period; and this without any recourse
against the LANDLORD.
7.06 PERMITTED ASSIGNMENT OR SUBLEASE
Notwithstanding anything contained in this Lease to the contrary,
TENANT will have the right to assign the Lease or to sublet the Premises to a
bona fide franchise of the TENANT without having to obtain the prior consent of
LANDLORD, but upon giving notice to LANDLORD of the assignment or subletting is
made, however in the event of such assignment or subletting herein permitted,
TENANT shall remain solitarily responsible together with the assignee or
subtenant for the fulfilment of all obligations of the TENANT under this Lease
and all terms and conditions of the Lease shall continue to apply. In the even
TENANT is entitled to receive from said Subtenant or Assignee a minimum annual
rent higher than what is being paid by the TENANT at that point in time, such
excess sum shall be paid to LANDLORD. TENANT furthermore agrees to provide
LANDLORD with a copy of a duly executed franchise agreement.
VIII. HEATING AND ELECTRICAL SYSTEM
8.01 MAINTENANCE OF SYSTEM
Without limiting or otherwise restricting the obligations of the
TENANT pursuant to the provisions of Section I hereof, the TENANT will, at its
own expense, maintain the heating and electrical system part of the Premises in
a fit and proper condition and shall, if required by the LANDLORD, take out and
maintain in force a contract providing for the regular preventative maintenance
thereof. The TENANT'S obligation to maintain the said system shall include the
obligation tor place the same as and who such replacement shall, by reason of
use or otherwise, become necessary.
8.02 MAINTENANCE OF TEMPERATURE
The TENANT shall, at its own cost and expense, heat the Premises to a
reasonable temperature at such times as may be required. The TENANT furthermore
undertakes to operate and maintain LANDLORD'S heating system at the proper
temperature throughout the term of this lease, or any renewal thereof, in order
to thereby prevent the premises from freezing.
IX. DEFAULTS
9.01 RIGHT TO CANCEL
In the event that the TENANT fails to pay any ental payable to the
LANDLORD hereunder within five (5) days of the due date thereof, or in the event
that the TENANT fails to fully, faithfully and punctually discharge any of the
obligations incumbent upon it hereunder, and fails to remedy said default within
ten (10) days of written notification to that effect or if any execution be
issued pursuant to a judgment rendered against the TENANT, the LANDLORD shall be
entitled to cancel the present lease the whole without notice or mise-en-demeure
to the TENANT or any other party, and without prejudice to and in addition to
any other rights, recourses or remedies which the LANDLORD may enjoy against the
TENANT by reason of such default, in damages or otherwise.
9.02 PERFORMANCE BY LANDLORD
In the even that the TENANT fails to pay any sum payable to any third
party without a written reasonable explanation or perform any other obligation
incumbent upon it under the terms of the present Lease, the LANDLORD may, after
giving ten (10) days notice in writing to the TENANT, pay the said sum or
perform the said obligation in the place of the TENANT who shall be obliged to
repay the said sum so paid by the LANDLORD and reimburse any costs so incurred
by the LANDLORD in performing such obligations, together with an administrative
fee equal to Ten Percentum (10%) of the amount so paid or the cost so incurred,
to the LANDLORD without demand or other formality, the whole without prejudice
to any other rights or recourses of the LANDLORD by reason of the TENANT's
default.
9.03 DESERTION OR VACANCY
In the event that the PREMISES HALL BE DESERTED OR VACATED, THE
landlord shall be entitled , as it sees fit, to enter the same as the agent of
the TENANT either by force or otherwise, without being liable for prosecution
therefore, and to relet the same as the agent of an at the risk of the TENANT
and to receive any rental therefore, the whole on account of any sums payable by
the
TENANT to the LANDLORD hereunder. In the event that the TENANT deserts or
vacates the Premises, leaving behind therein any furniture, fixtures or other
moveable effects, the TENANT shall be deemed to have abandoned the said
furniture, fixtures and moveable effects, and the LANDLORD shall be entitled to
dispose of the same and all costs incurred by the LANDLORD in removing the said
furniture, fixtures and moveable effects from the Premises and disposing thereof
shall be reimbursed by the TENANT to the LANDLORD on demand.
9.04 BANKRUPTCY, INSOLVENCY, etc.
In the even that the TENANT becomes bankrupt or insolvent or makes an
assignment or proposal under the provisions of the Bankruptcy Act, the Winding
up Act, or any other insolvency legislation in force at the time, this Lease
shall, at the option of the LANDLORD, terminate either forthwith, or at the end
of the then current month or at the end of the then current year, the whole
without prejudice to any rights, recourses or remedies which the LANDLORD may
enjoy against the TENANT or any GUARANTOR of the TENANT's obligations hereunder
in damages or otherwise. Under such circumstances, and without prejudice to any
other rights, recourses or remedies enjoyed by the LANDLORD, the damages or
accelerated rent, which, for the purposes of the present paragraph shall be
deemed to be three (3) times the aggregate of the monthly instalments then
payable by the TENANT to the LANDLORD pursuant to paragraphs 2.01 and 2.02
hereof.
9.05 FORBEARANCE OR INDULGENCE
No covenant, term or condition of this Lease shall be waived except by
the written consent of the LANDLORD and forbearance or indulgence of the
LANDLORD in any regard whatsoever shall not constitute a waiver of the covenant,
term or condition, the LANDLORD shall be entitled to invoke any remedies under
this Lease or by law despite such forbearance or indulgence.
9.06 RIGHT TO REMEDY
In the event that the TENANT is in default to fully, faithfully and
punctually perform all of the obligations incumbent upon it hereunder, and the
LANDLORD shall have instituted proceedings to cancel the present Lease,
notwithstanding any law or custom to the contrary, the TENANT shall not have any
right to prevent such cancellation or annulment by remedying its default or
defaults, subsequent to the institution of such legal proceedings.
9.07 INDEMNITY
In the event that the LANDLORD is required to retain the services of a
solicitor to enforce the fulfillment by the TENANT of the obligations incumbent
upon it hereunder, then and n any such event, the LANDLORD shall be entitled to
demand from the TENANT in addition to and without prejudice to judicial costs
otherwise payable by the TENANT and whether or not judicial proceedings are in
fact instituted, and indemnity in an amount equal to fifteen percent (15%) of
the amount otherwise owing by the TENANT to t he LANDLORD, such sums to
indemnify the LANDLORD for additional administration expenses incurred in
connection with he enforced fulfillment by the TENANT of its obligations
hereunder.
X MISCELLANEOUS PROVISIONS
10.01 ELECTION OF DOMICILE
The TENANT hereby elects domiciled at the Premises for the purpose of
service or receipt of any Writs of Summons, Notices under the terms hereof or
other legal documents in any suit of law, action or proceedings which may arise
in respect of the present Lease or the TENANT's occupancy of the Premises.
10.02 EXAMINATION OF PREMISES
During the last six (6)months of the Term and at any time thereafter
the TENANT shall allow any person who may be desirous of obtaining a lease on
the Premises to visit the same during the normal business hours and allow
notices suitable to the LANDLORD for the purposes of reletting the Premises to
be placarded and left on the Premises during the said period. At all times
during the occupancy Period, the LANDLORD and/or its agent or representatives
shall have the right to enter into the Premises during business hours for the
purpose of exhibiting the same to prospective purchasers of the Property and
shall be entitled to affix signs on the Property with respect to the proposed
sale thereof.
10.03 NOTICE TO LANDLORD
The TENANT agrees to give to the LANDLORD prompt written notice of any
accident to or defects in the water pipes, drains, gas pipes, electric lights,
or heating apparatus or any other mechanical or physical feature in the Premises
and/or Building. The freezing of any water heating, sprinklers or other pipes or
radiators caused by the failure of the TENANT to take the necessary precautions
to prevent same, shall be the direct responsibility of the TENANT, and the
TENANT agrees to
indemnify and save harmless the LANDLORD from any and all causes of actions and
demands whatsoever which may arise as a result of any damage by water leaking
from the TENANT's Premises so caused.
10.04 SIGNS
The TENANT shall not be permitted to install or erect any sign of any
nature whatsoever on any part of the Property save with the prior consent tin
writing of the LANDLORD, which consent shall not be unreasonably withheld. Any
sign which may have been installed by another TENANT occupying the leased
premises prior to the TENANT and not being employed by the latter in any manner,
shall not be considered as forming part of the provisions herein.
10.05 SUBORDINATION
This Lease, and the rights and obligations of the parties hereunder
shall be subordinated and subjected to any charge or charges from time to time
created by the LANDLORD in respect of the Property by way of hypothec or other
real right; provided that any such charge or charges by way of hypothec or
otherwise shall not increase the rental payments herein provided and provided
further that the TENANT is given satisfactory assurance this Lease may not be
canceled or terminated by any subsequent hypothecary creditor of the LANDLORD
save upon the default of the TENANT as herein provided. At any time and from
time to time during the term hereof, as required by the LANDLORD and upon being
given such assurances as aforesaid, the TENANT obliges itself to give all such
assurances as may be reasonably required to evidence and effectuate any
subordination or postponement of the TENANT's right hereunder to holders of any
such charge or charges.
10.06 GOVERNMENTAL AND OTHER REGULATIONS
The TENANT shall, during the Occupancy Period, at its own cost and
expense, promptly observe and comply with all present and future laws, statutes,
ordinances, requirements, orders, directions, by-laws, rules and regulations of
all public and quasi-public authorities having jurisdiction in the Premises and
of all insurance company or companies insuring the Building or the Property and
the Fire Underwriters Association or other bodies exercising similar functions
whether with respect to the Premises, the condition thereof, the moveable
effects therein located or any activities carried on therein in the same manner
and to the same extent as if it were the owner of the Premises and the occupant
thereof. "LANDLORD represents and warrants that as of the execution hereof it
has not received any notice of non-compliance from any public or quasi public
authority having jurisdiction in the Premises nor from any insurance company
insuring the Building nor from other bodies exercising similar functions."
10.07 INTERFERENCE WITH RIGHTS OF OTHERS
The TENANT will not do anything or permit anything to be done on the
Premises or int he Building which may be injurious or annoying to the LANDLORD
or its other tenants, or to any person lawfully on the Premises of the LANDLORD,
or anything which the LANDLORD may deem to be a nuisance, or which may be
calculated to damage the business or reputation of the LANDLORD, or the
satisfactory operation of the Building. The TENANT shall neither do nor permit
anything to be done in or upon the Premises or the Building which will in any
way obstruct or interfere with the rights of any tenants or persons having
business within or permit any employees to smoke or congregate in the halls of
the building, or do or permit anything to be done or bring or keep anything upon
the Premises or n the Building which in any way will increase the risk of fire
and/or the rate of fire insurance on the Building, or any part thereof, or any
property kept therein, or conflict with the laws relating to fires or with the
regulations of the Fire Department and/or the Health Department, or with any of
the rules, regulations, by-laws and/or ordinances of the City of Montreal and/or
the Fire Underwriters and/or any other lawful authority.
10.08 EXPROPRIATIONS
If the whole or any part of the Premises or the whole of the Building
or so much thereof as shall render it commercially unpracticable to operate the
Building shall be expropriated or taken in any manner by any competent authority
for any purpose, the LANDLORD may, at its option, terminate this Lease with
effect from the date when possession of the Premises or building so taken shall
be required for such use and purpose by the expropriating authority. The TENANT
shall have no claim against the LANDLORD for the value of the unexpired term of
this Lease.
10.09 LANDLORD'S HYPOTHEC
As continuing and collateral security for the due and punctual
performance of TENANT's obligations under this Lease, TENANT hypothecates in
favor of LANDLORD, for the sum of One Hundred and Fifty Thousand Dollars
($..150,000..) and interest thereon at the interest rate from time to time,
calculated semi-annually and not in advance, a universality consisting of all
moveable improvements, equipment, machinery, stock, inventory, furniture,
fixtures of every kind now or hereafter located in, on or upon the Property,
Building and Premises, including all indemnities or proceeds paid or payable to
TENANT under insurance policies pertaining to or covering such moveables. The
hypothec herein created
does not constitute a floating hypothec under Article 2715 of the Civil Code of
Quebec. Upon the occurrence of a Default under this Lease, the security hereby
constituted shall become enforceable and LANDLORD shall be entitled to
immediately exercise any and all rights arising from such hypothec without any
notice or delay except as may be required by law. The hypothec referred to
herein shall constitute a first ranking charge on all assets charged thereunder.
It is agreed that all moveable effects located on the Property and/or in the
Building and/or Premises that were prior to the execution of this Lease, the
property and ownership of the LANDLORD, shall continue to remain the property
and ownership of the LANDLORD. Nothing herein contained shall be deemed to
prevent TENANT from obtaining a secured financing on its assets by way of
hypothec or otherwise providing such security granted by TENANT result from
financing obtained from a recognized financial institution in Canada dealing at
arm's length with TENANT. Furthermore, any security given by TENANT shall not
implicate nor concern the movable effects being included as part of the leased
premises or which would otherwise belong to LANDLORD. Furthermore the TENANT
shall prior to granting any security, ensure that the financial institution has
duly advised LANDLORD of its intention to take security of TENANT's assets with
a detailed description thereof including a waiver of any and all rights over
LANDLORD's property inclusive of the movable effects herein included.
10.10 ADJUSTMENTS
At the commencement and upon the expiry of the Occupancy Period, the
LANDLORD and the TENANT shall pro-rate, adjust and apportion all rentals payable
by the TENANT to the LANDLORD hereunder.
10.11 OPTION TO RENEW
Provided that the TENANT is not in default thereunder, the TENANT
shall have ..one......... (...1...) Option to extend the term of this Lease for
a period of ..five........ (..5...) years immediately following the expiration
of the initial term, that being from the first day of January 2002, and
terminating on the last day of December 2006. The option herein granted is
exercisable by written notice by the TENANT to the LANDLORD no later than six
(6) months nor earlier than eight (8) months prior to the expiry of the initial
term.
This option is granted subject to the foregoing provisions.
The option herein granted is not transferrable nor assignable. Any
right of renewal herein granted shall be deemed to be a personal right of the
TENANT and shall not pass to nor devolve upon any assignee or subtenant of this
Lease or of the rights granted thereby save and except to a bona
fide franchise.
The said lease renewed under this option shall be for the same
premises and subject to the same conditions (except that there shall be no right
of renewing this Lease) as herein set forth, save that the Minimum Annual Rental
payable by the TENANT for said option period shall be increased each lease year
of the renewed term by the greater of an equal amount to five.... percent
(...5..%) of the minimum annual rental payable for the immediate preceding lease
year or an amount equal to the increase in the CPI over the immediate preceding
lease year which increase shall not in any event be less than the minimum annual
rental of that immediate preceding lease year.
XI. INTERPRETATION
11.01 LAW TO GOVERN
The present lease shall be interpreted according to the laws of the
Province of Quebec wherein it was executed.
11.02 HEADINGS
Sectional and paragraph headings are included only for the convenience
of the parties and shall not be deemed to form part hereof.
11.03 LANGUAGE
The parties hereto have requested and hereby confirm their request
that the present Agreement be written in the English language. Les parties
declarent et par les presentes confirment leur demande que la presente
Convention soit ecrite dans la langue anglaise.
11.04 ENTIRE AGREEMENT
The present lease and the schedules annexed hereto, if any, represent
the entire agreement between the LANDLORD and the TENANT with respect to the
Premises the LANDLORD having made no representations to the TENANT except as
herein set forth. Without restricting the generality of the foregoing, nothing
herein contained shall be so interpreted as to imply that htis Lease is
conditional upon the TENANT obtaining any permits or licenses from any public
authority having jurisdiction in the Property, the Premises or any activity
carried on therein. Furthermore, the terms
of the present lease cannot be altered or varied save by express written
agreement between the parties hereto.
11.05 INTERPRETATION
Should any of the provisions of this lease and/or its conditions be
illegal or enforceable under the laws of the Province of Quebec, it or they
shall be considered severable and the lease and its conditions shall remain in
force and be binding upon the parties as though the said provision or provisions
had never been included.
11.06 PARTIES OF INTEREST
The present lease as well as the rights and obligations of the parties
hereunder shall enure to and be binding upon the parties and their respective
heirs, assigns and legatees.
11.07 TENANT'S DEPOSIT
LANDLORD acknowledges the receipt of the sum of Fifteen Thousand
Dollars ($15,000) from the TENANT as a deposit to be applied towards the last
three month's minimum rental obligations becoming due and payable by TENANT in
accordance with this Lease, provided that if TENANT should default in the
performance of any undertaking under this Lease before application of this
deposit, LANDLORD may apply such deposit towards any cost it may incur on behalf
of TENANT, provided further that if this Lease shall be terminated for any
reason before application of the said deposit, the whole of said deposit may be
retained by LANDLORD and treated as liquidated damages. Nothing herein contained
shall limit LANDLORD's right of action against TENANT for such further or other
damages or remedies arising out of any breach of this Lease by TENANT.
IN WITNESS WHEREOF, the parties hereto have signed on the date and at the place
hereinabove first mentioned.
Per:
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LANDLORD WITNESS
Per:
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TENANT WITNESS