LEASE
THIS INDENTURE made the 1st day of August, 1999.
BETWEEN:
CHUNG PING CHENG and YUEH CHUN WU, 6790 Grant Place, Burnaby,
British Columbia V5B 4X2
(hereinafter called the "Landlord")
OF THE FIRST PART
AND:
MILINX MARKETING GROUP INC. of Suite No. 900 - 1080 Howe
Street, Vancouver, British Columbia
(hereinafter called the "Tenant")
OF THE SECOND PART
WITNESS that in consideration of the rents, covenants and agreements hereinafter
reserved and contained on the part of the Tenant (and the Indemnitor, if any) to
be paid, observed and performed, the Landlord hereby demises and leases unto the
Tenant the Premises hereinafter described, all on the terms, conditions and
covenants as hereinafter set forth.
1. DEFINITIONS
1.1 In this Lease:
(a) "Base Building Work" means installation of the standard Building t-bar
ceiling, light fixtures, sprinklers, HVAC (including heat pumps and
ducting) and window blinds;
(b) "Building" means the building of which the Premises form a part;
(C) "Commencement Date" means the earlier of:
(i) the date upon which the Tenant first carries on business in the
Premises; and
(ii) sixty (60) days after the Landlord completes the Base Building
Work;;
(d) "Deposit" means the deposit described in subsection 3.3.
(e) "Fixturing Period" means the period commencing the date upon which the
Landlord completes the Base Building Work and ending on the day prior
to the Commencement Date;
(f) "Lands" means those lands and premises situate in the City of
Vancouver, Province of British comprising District Lot 541, Strata
Plan LMS 1608;
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(g) "Lease Year" means each twelve (12) consecutive calendar month
commencing on the 1st day of the month following the Commencement
Date;
(h) "Operating Expenses" means those operating expenses described in
subsection 4.1 hereof;
(i) "Premises" means that portion of the Lands known as suite no. 801
- 1080 Howe Street, being Strata Lot 40, comprising one thousand
two hundred and eighty-two (1,282) rentable square feet;
(j) "Rent" the term "rent" used herein shall include basic rent as set
forth in subsections 3.1 and 17.1, Operating Expenses and additional
rent as set forth in subsection 4.4; and
(k) "Term" means the period commencing on the Commencement Date and ending
on the 30th day of June, 2004.
1.2 Interpretation. Where required, the singular number shall be deemed to
include the plural and the neuter gender shall include the masculine or
feminine. Where there is more than one Tenant, they shall be jointly and
severally bound to the fulfillment of their obligations hereunder.
1.3 Severability. If any one or more of the provisions contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of such provision or provisions shall
not in any way be affected or impaired thereby in any other jurisdiction
and the validity, legality, and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby in any other
jurisdiction and the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby;
1.4 Included Words. Words importing the singular include the plural and
vice-versa, and words importing gender include all genders.
1.5 Entire Agreement. This Agreement constitutes the entire agreement between
the parties pertaining to the subject matter hereof and supersedes all
prior agreements, understandings, negotiations and discussions whether oral
or written, of the parties and there are no warranties, representations or
other agreements between the parties in connection with the subject matter
hereof except as specifically set forth herein.
1.6 Headings. The section and subsection headings are included solely for
convenience, are not intended to be full or accurate descriptions of the
content, or to be considered part of this Agreement.
1.7 Cross-references. Unless otherwise stated, all references in this Agreement
to a designated "section", "subsection" or other subdivision is to the
designated section, subsection or other subdivision of this Agreement.
1.8 Currency. Unless otherwise indicated, all dollar amounts referred to in
this Agreement are in Canadian funds.
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1.9 Governing Law. This Agreement shall be construed and enforced in accordance
with the laws of the Province of British Columbia, and the laws of Canada
applicable therein, and will be treated in all respects as a British
Columbia contract.
2. TERM
2.1 The Landlord leases the Premises to the Tenant for and during the Term,
unless sooner terminated as hereinafter provided.
3. BASIC RENT
BasicRent. The Tenant shall pay throughout the Term, without deduction,
setoff or abatement, to the Landlord at the address of the Landlord
specified herein or to such other place as the Landlord may direct in
writing from time to time, basic rent, commencing on the Commencement Date,
payable in advance on the first day of each month by way of equal monthly
installments as follows:
Basic Rent Per Square
Period Foot Per Annum Period Monthly
of Term Triple Net Basic Rent Basic Rent
-------------- --------------------- ---------- ----------
Commencement $11.00 To be To be
Date to June 30, Calculated Calculated
2001
July 1, 2001- $11.50 $14,743.00 $1,228.58
June 30, 2002
July 1, 2002- $12.00 $30,768.00 $1,282.00
June 30, 2004
3.2 Adjustments. In the event that the Commencement Date is not the first day
of the month, or in the event the Lease expires or is determined on a date
other than the last day of the month, the rent payable hereunder shall be
adjusted accordingly.
3.3 Deposit. The Landlord acknowledges being in receipt of a damage and
security deposit (the "Deposit") from the Tenant in the amount of Four
Thousand Two Hundred Sixty-Two ($4,262.00) Dollars, which sum the Landlord
will hold without interest and apply against the Rent due together with
Goods and Services Tax thereon in respect of the last two (2) months of the
Term, provided that:
(a) the Tenant has not committed any default under the Lease prior to the
time of such application;
(b) the Premises are not damaged and are left in a condition satisfactory
to the Landlord upon the expiration or termination of this Lease; and
(c) the Tenant has not failed to vacate the Premises at the proper time.
If any of the foregoing has occurred, the Landlord shall be entitled
(without prejudice to any other rights and remedies available to it) to
use, retain or apply all or part of the Deposit for
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the payment of any rent which the Tenant has not paid when due or as
compensation on account of any loss or damage arising from the breach or
default by the Tenant of any provision of this Lease. If the Landlord uses,
retains or applies all or part of the Deposit for a purpose other than
payment of the aforesaid months' Rent plus Goods and Services Tax, then the
Tenant will, forthwith upon demand, pay to the Landlord the amount required
to restore the Deposit to its original amount.
4. ADDITIONAL PAYMENTS
4.1 Definition of Operating Expenses. "Operating Expenses" shall mean and
include all expenses incurred and payable in connection with the ownership,
operation, maintenance, repair and management of the Premises and the
improvements thereon and, without restricting the generality of the
foregoing, shall include:
(a) all taxes, rates and assessments, whether general or special, levied
or assessed for municipal, school or other purposes, or levied or
assessed by any lawful government authority for such purposes with
respect to the said Premises, but excluding taxes on income or
profits;
(b) the cost of insurance which the Landlord may obtain in respect of the
Premises, and any deductible amount up to a maximum of One Thousand
($1,000.00) Dollars applicable to any claim made by the Landlord under
such insurance;
(C) maintenance fees, assessments, management fees and all other charges
and expenses charged by the Strata Corporation including but not
limited to such charges for repairing, operating and maintaining the
Building and the equipment servicing the Building and of all
replacements and modifications to the Building and such equipment,
including those made in order to comply with laws or regulations
affecting the Building or the Premises but excluding any special
assessments levied by the Strata Corporation in respect of repairs to
the Building or the Building's structural walls, roof, plumbing,
heating and ventilation systems, or exterior;
(d) all ordinary costs and expenses of the Landlord for repairing,
operating and maintaining the Premises and the equipment servicing the
Premises; and
(e) any and all license fees and taxes imposed in connection with the
occupancy of the Premises or with the particular business of the
Tenant or in connection with any form of equipment or machinery used
by the Tenant in the Premises.
4.2 Payment of Operating Expenses. The Tenant shall pay one hundred (100%)
percent of the Operating Expenses. The amount of Operating Expenses and
other additional rent which the Tenant is to pay under this Lease shall be
estimated by the Landlord for the Lease Year and the Tenant shall pay
1/12th of such estimated amount and monthly installments in advance on the
first day of each and every month throughout the Term. Notwithstanding the
foregoing, if the Landlord is required to prepay any amount which it is
entitled to collect in whole or in part from the Tenant, including, but not
limited to, the expenses referred to in subsection 4.1(a), or if the
Landlord is required to pay any such amount more frequently and required as
at the commencement date of the Term then the Tenant shall pay to the
Landlord such amount calculated in accordance with this Lease forth with
upon demand. Within ninety (90) days after the end of each Lease Year the
Landlord shall furnish to the Tenant a statement of the actual costs upon
which the Operating Expenses and additional rent are -4-
calculated. If the amount payable by the Tenant as shown on the statement
is greater or less than the Operating Expenses and additional rent paid by
the Tenant then the amount refundable to the Tenant or due and payable to
the Landlord, as the case may be, shall be made within fourteen (14) days
after delivery of the statement.
4.3 Net Lease. Except as may be otherwise provided herein with regard to
structural and other capital repairs to the Building which are to be the
Landlord's costs hereunder, the parties hereto agree that it is their
purpose, intent and agreement that the rent herein shall be absolutely net
to the Landlord so that this Lease shall yield net to the Landlord the rent
free of any charges, assessments, impositions or deductions of any kind and
without abatement, deduction or setoff and under no other circumstances or
conditions, whether now existing or hereafter arising or whether beyond the
present contemplation of the parties, shall the Landlord be required to
make any payments of any kind whatsoever, or be under any obligation or
liability hereunder. All costs, expenses and other obligations of every
kind and nature whatsoever relating to the premises including additional
rent shall be paid by the Tenant (except as herein expressly set forth).
4.4 Additional Rent. Without prejudice to any of the remedies of the Landlord
herein, any money payable by the Tenant to the Landlord hereunder other
than basic rent, whether defined as rent or otherwise, shall be deemed to
be rent, shall be paid as additional rent, shall be collectible as rent
and, unless otherwise provided in this Lease, shall be payable either on
demand or when stated herein to be due or if not so stated and arising from
payments made by the Landlord, then same shall be due and be paid with the
monthly instalment of rent following the date that payment was made by the
Landlord.
4.5 Rent Arrears. Any rent not paid on the due date shall, without prejudice to
any of the rights of the Landlord arising from such breach, bear interest
at the prime rate of interest charged by the Hongkong Bank of Canada on
commercial loans to its most credit worthy customers in Canada plus five
(5%) percent per annum from such due date until paid.
4.6 GST. Notwithstanding any other provision of this Lease, the Tenant shall
pay to the Landlord an amount equal to any and all Goods and Services Tax
at the full tax rate applicable from time to time in respect of the rent
payable and property taxes of the Premises pursuant to this Lease. The
amount of Goods and Services Tax so payable by the Tenant shall be
calculated by the Landlord in accordance with the applicable legislation
and shall be paid to the Landlord at the same time as the amounts to which
such Goods and Services Tax apply. The amount payable by the Tenant under
this subsection shall be deemed not to be rent, but the Landlord shall have
all of the same remedies for and rights of recovery of such amount as it
has for recovery of rent under this Lease.
5. USE OF THE PREMISES
5.1 Nature of Business. The Tenant shall use the Premises continuously
throughout the Term for the purpose of a business office only (including
internet system development and telecom related purposes) and for no other
purposes without the prior written consent of the Landlord, which consent
the Landlord may arbitrarily withhold in its sole discretion and, subject
to the provisions of section 12 hereof, shall not permit any part of the
Premises to be used or occupied by any person other than the Tenant, its
employees and invitees.
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5.2 Business Name. The Tenant will conduct business on or from the Premises
under the name of "Milinx Marketing Group" and the names of the Tenant's
affiliated companies.
6. TENANT'S COVENANTS
THE TENANT COVENANTS WITH THE LANDLORD:
6.1 Rent. To pay rent and to pay all sums payable herein as additional rent,
without any abatement, setoff, compensation or deduction whatsoever.
6.2 Utility Charges. To pay promptly all charges for gas, water and sewer,
electricity, telephone service, fuel and other utilities supplied to or
used by the Tenant or consumed in or on the Premises.
6.3 Overloading Utility Facilities. Not to install equipment in or on the
Premises that may exceed or overload the capacity of utility facilities.
6.4 Overloading Floors. Not to place in or on the Premises any safe, heavy
equipment or other heavy item, which may exceed the specifications for the
Building relating to bearing loads, without obtaining the prior written
consent of the Landlord.
6.5 Maintenance. To pay all charges for the operation and maintenance of all
equipment, facilities and services, including lighting, mechanical and
heating and air conditioning facilities, and of all computer and
telecommunications equipment and services, and all charges for re-lamping
of light fixtures within the Premises.
6.6 Glass. To restore forthwith at the Tenants expense and with glass of the
same colour and quality, any broken or damaged glass on the Premises.
6.7 Metering. At its own expense, if requested by the Landlord, to install
separate meters to record the rate of consumption of the utilities
described in subsection 6.2 hereof.
6.8 Repairs. To maintain and keep in good repair, at its own expense, the
Premises including any leasehold improvements and all trade fixtures
therein, the store front, all glass and utilities and all heating,
air-conditioning and ventilating equipment therein, save and except for
structural defects and for maintenance and repairs that are the
responsibility of the Strata Corporation, and to forthwith repair the
Premises according to notice given in writing by the Landlord or its agents
where such repairs are the Tenants responsibility hereunder.
6.9 Entry to Inspect. To permit the Landlord, its agents or employees at all
reasonable times and at any time in the case of an emergency, to enter and
view the state of repair and to repair the Premises according to notice
given in writing as provided in subsection 6.8 hereof, to the extent of the
obligations of the Tenant as herein provided.
6.10 Condition of Premises. To keep the Premises free of rubbish and debris at
all times and to provide proper receptacles for waste and rubbish.
6.11 Waste and Nuisance. Not to do, suffer or permit any act or neglect which
may in any manner, directly or indirectly, cause injury or damage to the
Premises or to the Building or to any equipment therein, or to any fixtures
or appurtenances thereof or which may be or
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become a nuisance or interference to any of the occupants of the Building
or which may, in the opinion of the Landlord, render the Building or any
part thereof less desirable or injure the reputation thereof as a first
class building.
6.12 Hazardous Materials. To ensure that the Tenant, its agents, employees and
contractors shall not use, manufacture, store or dispose of any flammable
explosives, hazardous or toxic wastes or materials, or other similar
substances on, under or about the Premises or the Building.
6.13 Rules and Regulations of the Landlord. To ensure that the Tenant and its
servants, employees and agent shall observe faithfully and comply strictly
with such reasonable rules and regulations as the Landlord may from time to
time adopt. Written notice of any additional rules and regulations shall be
given to the Tenant. Nothing in this Lease contained shall be construed to
impose upon the Landlord any duty or obligation to enforce the rules and
regulations, or the terms, covenants or conditions in any other lease
against any other tenant or occupant of the Building and the Landlord shall
not be liable to the Tenant for violation of the same by any other occupant
or tenant, its servants, employees, agents, visitors or licensees.
6.14 Signs. Not to paint, display, inscribe, place or affix any sign, fixture,
advertisement, notice, lettering or direction on any part of the outside of
the Building or the Premises or which would be visible from the outside the
Building or the Premises without the Landlord's prior written consent,
which consent the Landlord may arbitrarily withhold in its sole discretion.
6.15 Show Premises. During the last six (6) months of the Term to permit a
notice "To Let" to be put and remain on the Premises in a conspicuous
position and to permit the Landlord or its agents to exhibit the Premises
to prospective tenants during normal business hours and to exhibit the
Premises for the purposes of the Landlord's own financing, refinancing and
to exhibit the Premises to any prospective purchaser of the Building or of
the Landlord's interest therein but not so as to cause any undue
interference of the Tenant's business.
6.16 Insurance. To obtain and maintain throughout the Term and any extension or
renewal thereof, at the expense of the Tenant, but for the common benefit.
of the Landlord and the Tenant:
(a) comprehensive general public liability (including bodily injury, death
and property damage) insurance on an occurrence basis with respect to
the business carried on, or in or from the Premises and the Tenants
use and occupancy thereof of not less than Three Million
($3,000,000.00) Dollars; and
(b) all risk direct damage insurance upon its fixtures, improvements and
all parts of the Premises which the Tenant is obligated to repair
under subsections 6.6 and 6.8 hereof, to the full replacement value
thereof, and broad boiler insurance on any boiler in the Premises; and
each insurance referred in subsections 6.16(a) and (b) shall include the
Landlord as a named insured as its interest may appear, and shall protect
the Landlord in respect of claims by the Tenant as if the Landlord were
separately insured; and all insurance required to be maintained by the
Tenant hereunder shall be on terms and with insurers to which the Landlord
has no reasonable objection and shall provide that such insurers shall
provide to the Landlord thirty (30) days prior written notice of
cancellation or material alteration of such
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terms. The Tenant shall furnish to the Landlord certificates or other
evidence acceptable to the Landlord as to the insurance from time to time
required to be effected by the Tenant and its renewal or continuation in
force. If the Tenant shall fail to take out, renew and keep in force such
insurance, the Landlord may do so as the agent of the Tenant and the Tenant
shall repay to the Landlord any amounts paid by the Landlord as premiums
forthwith upon demand. If any policy of insurance upon the Building or the
Premises or any part thereof shall be cancelled by the insurer by reason of
the use or occupation of the Premises or any part thereof by the Tenant or
by anyone permitted by the Tenant to be on or in the Premises, the Landlord
may, at its option, determine this Lease forthwith by leaving upon the
Premises notice in writing of its intention to do so and thereupon rent and
any other payments for which the Tenant is liable under this Lease shall be
paid in full to the date of such determination, and the Tenant shall
immediately deliver up possession of the Premises to the Landlord and the
Landlord may re-enter and take possession of the Premises.
6.17 Invalidation of Insurance. Not to do or permit anything to be done whereby
any policy of insurance on the Building or the Premises or any part thereof
may become void or voidable or whereby the premium thereon may be increased
other than in the ordinary course of business as permitted under subsection
5.1.
6.18 Notice of Defects. To give the Landlord immediate notice in case of fire or
accident or malfunctioning of any of the mechanical or electrical systems
in the Premises or in the Building of which the Tenant or its employees may
be aware. The Tenant covenants and agrees that the Landlord shall at all
times be at liberty to approve of and permit the erection or placement of
signs and advertisements by other tenants in the Building of which the
Premises herein form a part on the exterior of the said Building.
6.19 Governmental Regulations. To abide by and comply with all bylaws, building
codes, rules and regulations of any federal, provincial, municipal or other
governmental authority which in any manner relate to or affect the Premises
and the conduct of the Tenant's business thereon and to indemnify and save
harmless the Landlord from any costs, charges and damage which the Landlord
may incur or suffer by reason of the breach of any such bylaw, building
code, rule or regulation.
6.20 Indemnity. To indemnify the Landlord and save it harmless from any and all
liability, damage, cost, claims, and causes of action whatsoever arising
from any breach or violation by the Tenant of any of the Tenants covenants
or obligations under this Lease or from the use and occupation of the
Premises by the Tenant hereunder, its employees, agents, customers,
contractors or other invitees, licensees or concessionaires or by anyone
permitted by the Tenant to be on the Premises, or from the Tenant's failure
to abide by and comply with all laws, rules and regulations of every
municipal or other authority which in any manner may relate to or affect
the business conducted on or the use of the Premises by the Tenant.
6.21 Peaceful Surrender. At the expiration of the Term or any extension or
renewal thereof, or upon sooner termination of this Lease, to peaceably
surrender and yield up to the Landlord the Premises in good and substantial
condition and repair.
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7. THE LANDLORD COVENANTS WITH THE TENANT:
7.1 Quiet Enjoyment. For quiet enjoyment.
7.2 Repairs. The Landlord shall use its best efforts to cause the Strata
Corporation to repair and maintain the Building and the structure of the
Premises and all systems and equipment servicing the Premises, subject to
section 10.
8. IMPROVEMENTS
8.1 Alterations. The Tenant agrees not to make any alterations, additions or
improvements in or to the Premises without obtaining the Landlord's prior
written consent, such consent not to be unreasonably withheld. The Tenant
shall provide the Landlord with all drawings, specifications and other
information required by the Landlord in respect of such proposed work and
shall reimburse the Landlord for any costs incurred in respect of
professional consultants retained by the Landlord to assist with the
Landlord's assessment of such proposed work. All such work shall be done
only by contractors or tradesmen or mechanics approved in writing by the
Landlord and at the Tenant's sole expense and at such time and in such
manner as the Landlord may approve. No alterations, additions or
improvements shall be made to the Premises without the Tenant first
obtaining all necessary permits (including building permits) and said
alterations, additions or improvements shall be carried out diligently and
in a timely and workmanlike manner until all necessary final approvals are
obtained including final inspections from all requisite departments of the
City of Vancouver.
8.2 Intentionally Deleted.
8.3 Builders Lien. The Tenant shall indemnify and save the Landlord harmless
from and against all claims which may arise pursuant to the Builders Lien
Act of British Columbia as it may from time to time be amended in respect
of any materials or services supplied in respect to the Premises and the
Tenant shall forthwith remove any builders liens placed against the lands
of which the Premises form a part and the Tenant shall allow the Landlord
to post and to keep posted on the Premises any notice which the Landlord
may wish to post under the provisions of the said Builders Lien Act.
8.4 Tenants Chattels. All articles of personal property and all furniture,
business and trade fixtures, and machinery and equipment, owned or
installed by the Tenant at the expense of the Tenant in the Premises shall
remain the property of the Tenant and may be removed by the Tenant at its
expense, provided that the Tenant shall repair any damage to the Premises
or the Building caused by the removal of same and further provided that if
the Tenant does not remove such property forthwith after written demand by
the Landlord, such property shall, if the Landlord elects, be deemed to
become the property of the Landlord or the Landlord may remove the same at
the expense of the Tenant, in which case the cost of such removal shall be
paid by the Tenant forthwith to the Landlord on demand and the Landlord
shall not be responsible for any loss or damage to such property because of
such removal.
8.5 Fixturing Period. During the Fixturing Period the Tenant may occupy the
Premises jointly with the Landlord and the Landlord's contractor and agents
and shall not be responsible for basic
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rent and additional rent hereunder, except that the Tenant shall be
responsible for the utility costs separately metered or charged in respect
of the Premises and shall be bound by all other terms of this Lease from
the date of first occupancy of the Premises by the Tenant for the purpose
of fixturing the Premises.
8.6 Completion of the Premises. The Tenant shall be responsible for all work
required by the Tenant to complete the Premises for occupancy including the
installation of all telephone, computer and special communications
equipment, wiring and fixtures. Any work for which the Tenant is
responsible shall be designed, performed and completed subject to the
Landlord's approval, not to be unreasonably withheld, it being agreed that
such work shall be completed within the Fixturing Period.
8.7 Failure to Open for Business. If the Tenant fails to open the Premises for
business fully fixtured, stocked and staffed by the expiry of the Fixturing
Period then the Landlord, in addition to the remedies herein provided, may
terminate this Lease upon not less than thirty (30) days notice to the
Tenant unless the Tenant opens for business fully fixtured, stocked and
staffed before the expiration of the notice.
9. LIMITATIONS ON LANDLORD'S LIABILITY
9.1 General Limitation of Liability. The Landlord shall not be responsible for
any damage which may be caused nor shall the Tenant be entitled to claim
any diminution of rent or other compensation should it become advisable, in
the sole discretion of the Landlord, to stop, or if there is otherwise a
stoppage in, the operation of any heating apparatus or any air conditioning
apparatus or any electric or water service, or any of the engines, boilers
or machinery pertaining thereto but in such case the Landlord shall use its
best efforts to recommence any such operations as may have been affected
and the Landlord shall not be liable for any damage which may be caused to
the Tenant or to the employees of the Tenant as a result of such stoppages.
The Landlord shall not be liable for any damage in or upon the Premises,
arising from any reason or cause whatsoever, including any default or
neglect by the Strata Corporation relating to its responsibilities as a
strata corporation, or for any personal injuries sustained by the Tenant,
its officers or employees or other persons, or for any property loss
howsoever occurring and the Tenant shall have no right to diminution of
rent in any of such cases; and, without restricting the generality of the
foregoing, the Landlord shall not be liable for any injury or damage to
person or property resulting from fire, explosion, falling plaster, steam,
gas, electricity, water, rain, or snow or leaks from any part of the
Building, or from pipes, appliances or plumbing works or from the roof,
street or subsurface or from any other place or by dampness or for any such
injury or damage by any cause of whatsoever nature.
9.2 Interruptions. The Landlord does not warrant that any service or facility
provided by it hereunder will be free from interruption caused or required
by maintenance, repairs, renewals, modifications, strikes, riots,
insurrections, labour controversies, accidents, fuel shortages, government
intervention, force majeure, act of God or other cause or causes beyond the
Landlord's reasonable care and control. No such interruption shall be
deemed an eviction or disturbance of the Tenant's enjoyment of the Premises
nor render the Landlord liable in damages to the Tenant nor relieve the
parties from their obligations under this Lease. -10-
9.3 No Representations. The Tenant acknowledges having made its own independent
investigation of the Premises and of the Building and as to the condition
of same and as to the laws, by-laws and regulations which affect the
operation of any business in the Premises and the Tenant states that in
entering into this Lease it has not relied on any representations or
promises as to these or other matters by the Landlord and states that there
are no representations, warranties or conditions other than those expressed
in this Lease and no agreement collateral hereto shall be binding upon the
Landlord unless made in writing and signed by or on behalf of the Landlord.
10. DAMAGE TO OR DESTRUCTION OF THE PREMISES
10.1 Damage and Repair. In the event that the Premises or the Building are
damaged by fire or other casualty so as to render the Premises partially or
wholly unfit for occupancy then:
(a) if the damage cannot be repaired in the opinion of the Landlord's
architect within one hundred twenty (120) days after the date thereof,
the Landlord may terminate this Lease as of the said date, by notice
to the Tenant within thirty (30) days after such damage and, in that
case, the Tenant shall immediately surrender the Premises to the
Landlord and shall pay rent accrued to the date on which the said
damage occurred but shall not be entitled to any damages or
compensation;
(b) if the damage can be repaired in the opinion of the Landlord's
architect within one hundred twenty (120) days after the date thereof
or if the Landlord shall not have given notice of termination pursuant
to the provisions of subsection 10.1(a) hereof, the Landlord shall, or
the Tenant, or both, as the case may be (according to the nature of
the damage and their respective obligations to repair), forthwith
commence and carry out with due diligence the repair thereof, and this
Lease shall continue in full force and effect.
In the event of substantial damage to the Building such that the Strata
Corporation resolves not the rebuild the Building then, notwithstanding the
foregoing, this Lease shall be terminated as of the date of the damage and,
in that case, the Tenant shall immediately surrender the Premises to the
Landlord and shall pay rent accrued to the date on which the said damage
occurred but shall not be entitled to any damages or compensation.
10.2 Abatement of Rent. Unless the damage under subsection 10.1(b) is caused by
the negligence of the Tenant or its assignee, sublessee, concessionaire,
licensee, or officer, employee, customer or other invitee of any of them,
the rent payable under this Lease shall abate proportionately, having
regard to such part of the Premises as have been rendered unfit for
occupancy, until the repairs which are the obligation of the Landlord have
been completed.
11. EXPROPRIATION
11.1 If the Building shall be acquired or condemned by any authority having the
power for such acquisition or condemnation, for any public or quasi-public
use or purpose, then and in that event the Term of this Lease shall cease
from the date of entry by such authority. If only a portion of the Building
shall be so acquired or condemned but affecting Premises, this Lease shall
cease and terminate at the Landlord's option and, if such option is not
exercised by the Landlord, an equitable adjustment of rent, payable by the
Tenant for the remaining portion of
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the Premises, shall be made. In either event, however, and whether all or
only a portion of the Building shall be so acquired or condemned, nothing
herein contained shall prevent the Landlord or the Tenant or both from
recovering damages from such authority for the value of their respective
interests or for such other damages and expenses as are allowed by law.
12. ASSIGNMENT AND SUBLETTING
12.1 Prohibition on Assignment and Subletting. The Tenant shall not assign,
sublet, grant any right of occupancy of all or part of the Premises or
grant or permit any charge or encumbrance against the Premises or the
Tenants interest therein without the Landlord's prior consent in writing,
which consent shall not be unreasonably withheld, provided that the Tenant
has not defaulted in payment of any Rent under this Lease and is not in
default under this Lease at the time of the request for consent and that no
such assignment, subletting or grant for Which such consent has been
provided shall in any manner release the Tenant from any covenant to be
observed or performed by it hereunder. The Tenant acknowledges that it
shall be reasonable for the Landlord to consider, among other things, the
responsibility, reputation, financial standing and business of the proposed
assignee, sublessee or grantee. Any such assignment, sublease or grant
relating to this Lease if consented to by the Landlord will be prepared by
the Landlord or its solicitors, and all legal costs of its preparation will
be paid by the Tenant. Notwithstanding the foregoing, provided that the
Tenant has not defaulted under this Lease, the Tenant shall be entitled to
assign or sublet all or a portion of the Premises to any company that is
non-arm's length to the Tenant, without the Landlord's consent, upon
written notice to the Landlord.
12.2 No Waiver and Implications of Failure to Obtain Consent. The consent by the
Landlord to an assignment or subletting will not constitute a waiver of its
consent to a subsequent assignment or subletting. This prohibition against
assignment or subletting includes a prohibition against an assignment or
subletting by operation of law. If this Lease is assigned, or if all or
part of the Premises is sublet or occupied by anybody other than the
Tenant, in any case without the consent of the Landlord when required, the
Landlord may collect rent from the assignee, subtenant or occupant, and
apply the net amount collected to the rent herein reserved, but no such
assignment, sublease, occupancy or collection will be considered a waiver
of this covenant, or the acceptance of the subtenant or occupant as tenant.
12.3 Change in Control. In the event that the Tenant is a corporation and if
after the date of the execution of this Lease the shares of the Tenant are
transferred by sale, assignment, bequest, inheritance, operation of law or
other disposition, or issued by subscription or allotment, or cancelled or
redeemed, so as to result in a change in the effective voting or other
control of the Tenant, or if other steps are taken to accomplish such a
change in control, then the Tenant will promptly notify the Landlord in
writing of the change in control the same will be considered to be an
assignment of this Lease to which section 12.1 applies. This paragraph
shall not apply in the event that the Tenant has its voting shares publicly
trading on any stock exchange.
13. CERTIFICATE, ATTORNMENT AND SUBORDINATION
Certificate as to Lease. The Tenant shall from time to time, and within ten
(10) days of receiving request from the Landlord, execute and deliver to
any proposed purchaser or
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(a) the Tenant is in possession of the Premises;
(b) this Lease is in full force and effect and unamended, or if the
same has been amended, specifying such amendments;
(c) the Landlord is not currently in default under any term,
condition or covenant required to be performed by the Landlord
hereunder, or if the Landlord is in default under any one or more
of such terms, conditions or covenants, specifying the nature of
each such default;
(d) the date to which the rents hereunder have been paid;
(e) the amount of any deposit hereunder; and
(f) there is no right of setoff against any rents due hereunder.
13.2 Attornment. The Tenant shall, if requested to do so by the Landlord, agree
with any mortgagee of the whole or any portion of the Premises to attorn to
and become the tenant of such mortgagee if the mortgagee shall become a
mortgagee in possession, if such mortgagee shall agree that so long as the
Tenant pays the rent and observes and performs the covenants and provisos
herein contained on its part to be performed, the Tenant shall be entitled
to hold, occupy and enjoy the Premises, subject to any rights the mortgagee
may have as a lessor, free from any interference by the mortgagee or any
person claiming by or through the mortgagee.
13.3 Subordination. This Lease shall be deemed to be subordinate to any charge
or mortgage, including any deeds of trust and mortgages and all indentures
supplemental thereto, which now or hereafter during the Term affect or
relate to the Premises and all modifications or renewals thereof. The
Tenant agrees to execute promptly from time to time any assurance which the
Landlord may require to confirm this subordination and hereby constitutes
the Landlord, the agent or attorney of the Tenant for the purpose of
executing any such assurance and of making application at any time and from
time to time to register the postponement of this Lease in favour of any
such mortgage or charge in order to give effect thereto, provided that such
mortgage or charge shall permit the Tenant to continue in quiet possession
of the Premises in accordance with the terms and conditions of this Lease
so long as the Tenant is not in default hereunder whether such mortgage or
charge is in good standing or not.
14. DEFAULT
14.1 Re-entry. If and whenever the rent hereby reserved or any additional rent
as herein described or any part thereof, whether the same are lawfully
demanded or not, is not paid when due, or if the Tenant (or the Indemnitor,
if any) shall violate or neglect any other covenant, agreement or
stipulation herein contained on its part to be kept, performed or observed
for a period of seven (7) days after notice thereof from the Landlord, or
if the Premises shall become vacated or remain unoccupied for fifteen (15)
days, then the Landlord, in addition to any other remedy now or hereafter
provided by law, may at its option and without notice terminate this Lease
forthwith and re-enter and take possession of the Premises immediately by
force if necessary, and may remove all persons and property therefrom and
may use such force and assistance in making such removal as the Landlord
may deem advisable to recover at once full and exclusive possession of the
Premises and --13--
such re-entry shall not operate as a waiver or satisfaction in whole or in
part of any right, claim or demand arising out of or connected with any
breach or violation by the Tenant of any covenant or agreement on its part
to be performed or observed.
14.2 Bankruptcy. If the Term hereby granted or any of the goods or chattels of
the Tenant or the Indemnitor shall be at any time seized in execution or
attachment by a creditor of the Tenant (or the Indemnitor, if any) or if
the Tenant (or the lndemnitor, if any) shall make an assignment for the
benefit of creditors or a bulk sale or become bankrupt or insolvent or take
the benefit of any Act now or hereafter in force for bankrupt or insolvent
debtors, or if the Tenant (or the lndemnitor, if any) is a corporation and
an order shall be made for the winding up of the Tenant or any Indemnitor,
as the case may be, or other termination of its corporate existence, then
this Lease shall, at the option of the Landlord, cease and determine and
the Term shall immediately become forfeit and the then current month's rent
and the next ensuing three (3) months' rent shall immediately become due
and payable and the Landlord may re-enter and take possession of the
Premises as though the Tenant or other occupants of the Premises were
holding over after the expiration of the Term without any right whatever.
14.3 Right to Relet. If the Landlord re-enters, as herein provided, it may
either terminate this Lease or it may from time to time without terminating
the Tenant's obligations under this Lease, make alterations and repairs
considered by the Landlord necessary to facilitate a reletting, and relet
the Premises or any part thereof as agents of the Tenant for such term or
terms and at such rental or rentals and upon such other terms and
conditions as the Landlord in its reasonable discretion considers
advisable. Upon each reletting all rent and other monies received by the
Landlord from the reletting will be applied, firstly to the payment of
indebtedness other than rent due hereunder from the Tenant to the Landlord,
secondly to the payment of costs and expenses of the reletting including
brokerage fees and solicitor's fees and costs of the alterations and
repairs, and thirdly to the payment of rent due and unpaid hereunder. The
residue, if any, will be held by the Landlord and applied in payment of
future rent as it becomes due and payable. If rent received from the
reletting during a month is less than the rent to be paid during that month
by the Tenant, the Tenant will pay the deficiency to the Landlord. The
deficiency will be calculated and paid monthly. No re-entry by the Landlord
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. Despite a
reletting without termination, the Landlord may elect at any time to
terminate this Lease for a previous breach. If the Landlord terminates this
Lease for any breach, in addition to other remedies it may recover from the
Tenant all damages it incurs by reason of the breath including the cost of
recovering the Premises, reasonable legal fees and the worth at the time of
termination of the excess, if any, of the amount of rent and charges
equivalent to the rent reserved in this Lease for the remainder of the Term
over the then reasonable rental value of the Premises for the remainder of
the Term, all of which amounts immediately will be due and payable by the
Tenant to the Landlord. In determining the rent which would be payable by
the Tenant after default, the annual rent for each year of unexpired Term
will be equal to the averaged fixed basic rent paid or payable by the
Tenant from the beginning of the Term to the time of default, or during the
preceding three (3) full calendar years, whichever period is shorter.
14.4 Distress. If the Landlord shall be entitled to levy distress against the
goods and chattels of the Tenant, it may use such force as it may deem
necessary for the purpose and for gaining admission to the Premises without
being liable to any action in respect thereof or for any loss or damage
occasioned thereby and the Tenant hereby expressly releases the Landlord
from all actions, proceedings, claims or demands whatsoever for or on
account or in respect of
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any such forcible entry or any loss or damage sustained by the Tenant in
connection therewith.
14.5 Performing Tenant's Obligations. If the Tenant fails to perform an
obligation of the Tenant under this Lease, the Landlord may perform the
obligation and for that purpose may enter upon the Premises without notice
and do such things upon or in respect of the Premises as the Landlord
considers necessary. The Tenant will pay as additional rent all expenses
incurred by or on behalf of the Landlord under this subsection plus ten
(10%) percent for overhead upon presentation of a bill therefor. The
Landlord will not be liable to the Tenant for loss or damages resulting
from such action by the Landlord.
14.6 Landlord's Expenses Enforcing Lease. In the event that it shall be
necessary for the Landlord to retain the services of a lawyer or bailiff or
any other proper person for the purpose of assisting the Landlord in
enforcing any of its rights hereunder, the Landlord shall be entitled to
collect from the Tenant the cost of all such services incurred by the
Landlord as if the same were rent reserved and in arrears hereunder.
15. CONDOMINIUM ACT PROVISIONS
15.1 Interpretation. In this section 15 and where used elsewhere in this Lease,
the following words shall have the following meanings:
(a) "Condominium Act' means the Condominium Act, R.S.B.C., 1996, Chapter
64 and any amendments and successor legislation thereto;
(b) "Strata Corporation" means the Strata Corporation created pursuant to
the Condominium Act with respect to the Building;
(c) "By-laws" means the by-laws of the Strata Corporation in force under
the Condominium Act as amended by the Strata Corporation from time to
time;
(d) "Rules and Regulations" means the rules and regulations of the Strata
Corporation from time to time;
(e) "Owner" means owner as that term is defined in the Condominium Act;
(f) "Strata Lot" means a strata lot as that term is defined in the
Condominium Act.
15.2 Tenant's Obligations. Notwithstanding any other provision of this Lease,
the Tenant hereby agrees as follows:
(a) to comply with the Condominium Act and the By-laws and Rules and
Regulations;
(b) at the time of execution of this Lease, to deliver to the Landlord an
executed Form "D" under the Condominium Act with respect to the
Premises;
(c) to promptly pay to the Landlord as additional rent the amount of all
regular monthly strata maintenance fees which may be levied by the
Strata Corporation from time to time during the Term against the
Landlord as Owner of the Premises, provided that the Tenant shall have
no obligation to pay for special assessments; and --15--
(d) that if, pursuant to the Condominium Act, a Form "B" thereunder is
registered against title to the Premises the Tenant shall within ten
(10) days after receipt of notice thereof obtain and file a discharge
of the Form "B" from title to the Premises.
15.3 No Assignment as Owner. Nothing herein contained shall be construed or
deemed to be an assignment by the Landlord to the Tenant of any of the
Landlord's rights and powers as Owner of the Premises.
15.4 Strata Corporation. The Landlord and the Tenant agree that the provisions
contained in this Lease shall be subject to and deemed to be modified as
required to comply with the terms of the Condominium Act, the By-laws and
Rules and Regulations to reflect the fact that the Premises comprise a
strata lot of which the Landlord is Owner and that certain payments and
obligations of the Landlord hereunder may in fact be made or performed by
the Strata Corporation. Where any payments to be made or obligations to be
performed or which may be made or performed by the Landlord hereunder are
in fact made or performed by the Strata Corporation the Landlord shall be
deemed to have fulfilled its obligations hereunder and any corresponding
repayment or obligations of the Tenant may thereafter be made to or
performed for the benefit of the Strata Corporation where any obligations
to be performed by the Landlord hereunder are obligations of the Strata
Corporation under the Condominium Act or the Bylaws or the Rules and
Regulations, the Landlord's obligation shall be interpreted as meaning that
the Landlord shall use its best efforts to cause the Strata Corporation to
perform such obligations.
16. RENEWAL
16.1 Provided that, and for so long as the Tenant pays the Rent and performs
each and every of the covenants, conditions and agreements in the Lease
reserved and contained and on the part of the Tenant to be paid and
performed and is not and has not been in default in respect of any of the
same and there has been no adverse change of any sort in the Tenant's
financial condition or capacity the Landlord will, upon the request in
writing by the Tenant given at least six (6) months and not more than
twelve (12) months prior to the expiration of the Term (the "Notice
Period"), grant to the Tenant a renewal lease of the Premises for one (1)
further term of five (5) years upon and subject to the covenants,
conditions and agreements as are set forth in the Landlord's standard form
of lease for the Building then in use, save and except that the renewal
lease shall not contain any provision for further renewal and the annual
basic rent shall be the market rate for similar premises of similar size,
use and location one hundred twenty (120) days prior to the expiry date of
this Lease, without deduction of allowance for or consideration of any
tenant inducements, leasehold improvement allowances, rent free periods,
lease take-overs, turnkey or "build-to-suit" arrangements or other
concession or inducement offered of given by landlords to achieve such
rental (the "New Annual Basic Rent"). If requested by the Tenant during the
Notice Period, the Landlord will provide the Tenant with a copy of its
standard form of lease for the Building then in use. The New Annual Basic
Rent shall be mutually agreed to by the Landlord and the Tenant at least
ninety (90) days prior to the expiration of the Term, and failing agreement
shall be determined by three (3) accredited real estate brokers (the "Three
Experts") at least thirty (30) days prior to the expiration of the Term,
which experts shall be familiar with rental rates in the area of the
Premises, one of whom shall be appointed by the Landlord (the "Landlord's
Expert") and all costs associated with the Landlord's Expert shall be the
sole responsibility of the Landlord, and one expert shall be appointed by
the Tenant (the "Tenant's Expert") and all costs associated with the
Tenant's Expert shall be the sole
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responsibility of the Tenant. The appointment of the third expert (the
"Third Expert") shall be agreed upon by the Landlord's Expert and the
Tenant's Expert and 50% of costs attributable to the Third Expert shall be
borne by the Tenant and the remaining 50% of costs attributable to the
Third Expert shall be borne by the Landlord. Together the Three Experts,
acting reasonably, shall make the final determination of the New Annual
Basic Rent and should the Three Experts be unable to agree among themselves
on the determination, the opinion of the majority, being two (2) of the
Three Experts, shall be final and binding on the Landlord and Tenant. The
determination of the New Annual Basic Rent shall be considered an
arbitration pursuant to the Commercial Arbitration Act of British Columbia.
16.2 In the event that the New Annual Basic Rent is determined by the Three
Experts pursuant to subsection 16.1, such New Annual Basic Rent shall apply
to the first and second years of the renewal term, the annual basic rent in
respect of the third year of the renewal term shall be Fifty (.50) Cents
per square foot higher than the annual basic rent in effect during the
second year of the renewal term and the annual basic rent in respect of the
fourth and fifth years of the renewal term shall be Fifty (.50) Cents per
square foot higher than the annual basic rent in effect during the third
year of the renewal term.
17. OVERHOLDING
17.1 If the Tenant shall continue to occupy the Premises after the expiration of
the renewal term which may be granted hereby and the Landlord shall accept
rent, the new tenancy thereby created shall be deemed to be a monthly
tenancy with the basic rent equal to one hundred and twenty-five percent
(125%) of the basic monthly rent for the last month of the Term and shall
be otherwise subject to the covenants and conditions including additional
rent and Goods and Services Tax in this Lease insofar as the same are
applicable to a tenancy from month to month.
18. WAIVER
18.1 The failure of the Landlord or the Tenant to insist upon strict performance
of any covenant or condition contained in the Lease or in the rules and
regulations attached hereto shall not be construed as a waiver or
relinquishment in the future of any such covenant, condition or rules and
regulations. The acceptance of any rent or the performance of any
obligations hereunder by a person other than the Tenant shall not be
construed as an admission by the Landlord of any right, title or interest
of such person as a subtenant, assignee, transferee or otherwise in the
place and stead of the Tenant. All rights and remedies of the Landlord in
this Lease contained shall be cumulative and not alternative.
19. NOTICES
19.1 Notice. Any notice, waiver or other communication required or permitted to
be given hereunder shall be in writing and signed by or on behalf of such
party and shall be given to the other party by delivery thereto, or by
sending by prepaid registered mail, telex, facsimile, telegram or cable to
the address of the other party as hereinbefore set forth or to such other
address of which notice is given, and any notice shall be deemed not to
have been sufficiently given until it is received. Any notice or other
communication contemplated herein shall be deemed to have been received on
the day delivered, if delivered, on the fourth business day following the
mailing thereof, if sent by registered mail, and the second
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business day following the transmittal thereof, if sent by telex,
facsimile, telegram or cable. If normal mail, telex, far-simile, telegram
or r-able service shall be interrupted by strike, slowdown, force major or
other cause, the party sending the notice shall utilize any of the such
services which have not been so interrupted or shall deliver such notice in
order to ensure prompt receipt of same by the other party.
20. MISCELLANEOUS
20.1 Amendment. No alteration, amendment, change or addition to this Lease will
be binding upon the Landlord and the Tenant unless in writing and signed by
the parties hereto.
20.2 Time of the Essence. Time is of the essence of this Lease and each
provision hereof.
20.3 No Registration. This Lease or any notice hereof or any caution or other
instrument indicating an interest in the Premises by virtue of this Lease
shall not be executed in registerable form nor registered against the title
to the Premises.
20.4 Further Assurances. Each of the parties hereby covenants and agrees to
execute any further and other documents and instruments and to do any
further and other things that may be necessary to implement and carry out
the intent of this Agreement.
20.5 Successors and Assigns. This Agreement shall enure to the benefit of and be
binding upon the parties hereto, their respective heirs, executors,
administrators, successors and permitted assigns.
21. ADDITIONAL PROVISIONS
21.1 Landlord's Base Building Work. The Landlord shall be responsible for
completing the Base Building Work in respect of the Premises.
Notwithstanding the foregoing, upon the Landlord commencing the Base
Building Work the Tenant shall pay the Landlord, as contribution to the
cost of such work, the sum of Four Thousand Two Hundred and Sixty-Two
($4,262.00) Dollars (inclusive of any applicable GST). The Landlord shall
work in conjunction with the Tenant and the Tenant's architect/space
planner and make its best efforts to complete the Base Building Work as
soon as reasonably possible. Notwithstanding the foregoing, the Tenant
acknowledges that the Base Building Work is being installed in conjunction
with similar work being installed by 356535 B.C. Ltd. elsewhere in the
Building. If the Landlord does not complete the Landlord's Base Building
Work as aforesaid then the Tenant may, but shall not be obligated to,
complete such work at its cost and set-off such costs against Rent payable
hereunder provided that:
(a) the terms and conditions of subsection 8.1 shall apply; and
(b) such Tenant's costs are reasonable and represent the lowest of three
(3) arms-length bids, copies of which are to be provided to the
Landlord together with such other documents that the Landlord may
reasonably request for verification of such costs.
21.2 Cancellation. The Tenant shall have the night to cancel this Lease
effective the 30th day of June, 2001 by way of providing at least three (3)
months' prior written notice to the Landlord together with a payment to the
Landlord delivered with such notice in the amount of Six Thousand Nine
Hundred Thirty-Six ($6,936.00) Dollars (plus any applicable GST).
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21.3 Rebuilding Demising Wall. Upon the expiration or any earlier termination of
the Term or any renewal thereof the Tenant shall rebuild, at the Tenant's
cost, the demising wall between suite nos. 801 and 802 of the Building to
the same standards and specifications as similar demising walls in the
Building and, in doin so, the Tenant shall comply with subsections 6, 19,
8.1 and 8.3 or this Lease.
The parties hereto have executed this Lease on the day and year first above
written.
SIGNED, SEALED AND DELIVERED BY
CHUNG PING CHENG and YUEH CHUN WU In the
presence of:
/s/ /s/
- ------------------------------------------ ----------------------------------
Name Chung Ping Cheng
- ------------------------------------------ /s/
Address ----------------------------------
Yueh Chun Wu
- ------------------------------------------
- ------------------------------------------
Occupation
MILINX MARKETING GROUP INC.
by its Authorized Signatory (ies)
/s/
- ----------------------------------------------
Authorized Signatory
- ----------------------------------------------
Authorized Signatory
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