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Lease |
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2000 |
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176KB total |
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#340948 |
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LEASE
THIS LEASE made as of the 29th day of March, 1999
PURSUANT TO THE SHORT FORMS OF LEASES ACT
BETWEEN:
AIRPORT CORPORATE CENTRE OFFICE PARK INC.
the "Landlord")
OF THE FIRST PART
AND:
CERTICOM CORP.
(the "Tenant")
OF THE SECOND PART
Articles. For convenience of reference this Lease has been divided into the
following Articles:
Article I - Definitions
Article II - Lease Term and Payments
Article III - Landlord and Tenant Covenants
Article IV - Repair and Damage
Article V - Taxes and Operating Costs
Article VI - Utilities and Additional Services
Article VII - Assigning and Subletting
Article VIII - Fixtures and Improvements
Article IX - Insurance and Liability
Article X - Subordination, Attornment and Certificates
Article XI - Events of Default and Remedies
Article XII - Miscellaneous
Article XIII - Other Provisions
List of Schedules. The following schedules form an integral part of this Lease:
Schedule "A" - Legal Description of Lands
Schedule "B" - Leased Premises
Schedule "C" - Rules and Regulations
Schedule "D" - Building Specifications
Schedule "E" - Development Schedule
Schedule "F" - Site Plan
Schedule "G" - Exclusions from Operating Costs
ARTICLE 1.00 - Definitions
1.1 Definitions. In this Lease the following defined terms shall have the
meanings set forth below.
"Additional Rent" means Operating Costs under Section 5.5, Taxes under
5.3, Electricity under 6.2, and insurance under Article IX and all other
charges, costs and expenses required to be paid by the Tenant under the
terms of this Lease (other than Base Rental) whether payable to the
Landlord or not.
"Additional Services" means the services and supervision supplied by the
Landlord to the Leased Premises and Common Area Facilities and referred
to
{PAGE}
-2-
herein or in any other provision hereof as Additional Services and any
other services which from time to time the Landlord supplies to the
Tenant at the Tenant's written request or as the Landlord deems
necessary, acting reasonably, and which are additional to the janitor and
cleaning and other services typically supplied in a first class office
building, supervision in connection with the making of any repairs or
alterations by the Tenant affecting the Base Building, building systems
or Leasehold Improvements.
"Attic Stock" means spare fan, pump and cooling tower motors, base
Building light fixtures, fuses, etc.
"Base Rental" means the Base Rental payable by the Tenant in accordance
with Section 2.3.
"Building" means the building municipally known as 5520 explorer Drive on
plan attached hereto as Schedule "F", and fronting on Explorer Drive in
the City of Mississauga, Regional Municipality of Peel.
"Capital Tax" is an amount presently or hereafter imposed from time to
time pursuant to Part III of the Corporations Tax Act (Ontario) (the
"Act") upon the Landlord or the owner of the Building and Lands and
payable by the Landlord on account of its interest in the Building and
the Lands or any part thereof, or its interest in or capital employed in
the Building and the Lands, as the case may be.
"Commencement Date" means December 15th, 1999, subject to Section 2.3
hereof.
"Common Area Facilities" means all facilities, improvements,
installations, utilities and equipment located in the Building or the
Lands immediately surrounding the Building.
"Common Areas" means those areas, facilities, utilities, improvements,
equipment and installations comprising the Lands and Building and which
are not leased or designated for lease to tenants but are provided to be
used in common by (or by the sublessees, agents, employees, customers or
licensees of) the Landlord, the Tenant, and other tenants of the Building
and other buildings on the Lands, whether or not the same are open to the
general public or a specific tenant of the Building, and include, but are
not limited to, parking areas and all vestibules for and entrances and
exits thereto; driveways, truckways and related areas; corridors and
underground or above ground tunnels or passageways; stairways,
escalators, ramps, and elevators and other transportation equipment and
systems; tenant, common and public washrooms; telephone, meter, valve,
mechanical, mail, storage, service and janitor rooms; fire prevention,
security and communication systems, any fixtures, chattels, systems,
decor, signs, facilities, or landscaping and planted areas contained
therein or maintained or used in connection therewith.
"Cost of Additional Services" shall mean in the case of Additional
Services provided by the Landlord a reasonable charge made therefor by
the Landlord which shall not exceed the cost of obtaining such services
from independent contractors and in the case of Additional Services
provided by independent contractors the Landlord's total cost of
providing Additional Services to the Tenant including the proportionate
cost of all direct labour (including salaries, wages and fringe benefits)
and materials and other direct expenses incurred, the cost of supervision
without duplication or profit and other expenses reasonably allocated
thereto.
"Insured Damage" means that part of any damage occurring to the Leased
Premises of which the entire cost of repair is actually recovered by the
Landlord (less any deductibles payable in respect thereof) under a policy
of insurance in respect of fire and other perils from time to time
effected by the Landlord, or for
{PAGE}
-3-
which the Landlord has self-insured under Section 9.1 herein, less any
deductibles payable in respect thereof.
"Land" means those lands described in Schedule "A" attached hereto.
"Lease" means this Lease between the Landlord and the Tenant, and all
amendments hereto.
"Leasehold Improvements" means all fixtures, improvements, installations,
alterations and additions from time to time made, erected or installed by
or on behalf of the Tenant or by or on behalf of any other previous
occupant in the Leased Premises (including the Landlord) with the
exception of trade fixtures, furniture and equipment, (not of the nature
of fixtures), modular office furniture systems, improvements of a
cosmetic nature such as rugs (but not broadloom), decorations and other
improvements moveable without the use of tools, but Leasehold
Improvements include all office partitions however affixed and includes
wall-to-wall and other carpeting with the exception of such carpeting
where laid over vinyl tile or other finished floor and affixed so as to
be readily removable without damage.
"Leased Premises" means approximately 25,000 square feet of Rentable Area
on the fourth floor of the Building as outlined in red on the plans
attached as Schedule "B", in accordance with current BOMA standards.
"Normal Business Hours" means the hours of 7:00 a.m. to 7:00 p.m. Monday
to Friday, except public holidays.
"Operating Costs" means the total, without duplication, of all reasonable
expenses, reasonable costs, and reasonable outlays incurred in the
complete maintenance, repair and operation of the Building and Common
Area Facilities, whether incurred by or on behalf of the Landlord.
(i) Operating Costs shall include without limiting the generality of
the foregoing but without duplication (but subject to certain
deductions as hereinafter provided), for the following expenses,
costs and outlays, but only to the extent that same are reasonable
having regard to the nature of the project: the cost of providing
complete cleaning and janitorial services, the cost of building
supplies used in the maintenance of the Building, Attic Stock,
supervisory (if any) and maintenance services, exterior
landscaping, snow removal, garbage and waste collection and
disposal, rental of equipment and signs, janitorial services to
the Common Areas of the Building, the cost of operating elevators,
the cost of heating, cooling and ventilating all space including
both rentable and non-rentable areas, the cost of providing hot
and cold water, electricity (including lighting), and the
replacement of electric light bulb tubes, starters and ballasts,
telephone and other utilities and services to both rentable and
non-rentable areas, the cost of all repairs including repairs to
the Building or services in the Building or Common Area Facilities
including elevators, depreciation on the central HVAC systems
distribution plant and associated equipment, depreciation on all
fixtures, equipment and facilities requiring periodic maintenance
or substantial replacement, the cost of window cleaning, and
providing security (if any), the cost of all insurance for
liability or fire or other casualties referred to in Article 9.1,
accounting costs incurred in connection with maintenance and
operation including computations required for the imposition of
charges to tenants and audit charges required to be incurred for
the conclusive determination of any costs hereunder, legal fees,
the amount of all salaries (only to the extent that such salaries
or a proportion thereof, relate directly to the Building), wages
and fringe benefits, unemployment and workers compensation
insurance premiums, pension plan contributions and other similar
premiums and
{PAGE}
-4-
contributions paid or provided to employees directly or a
reasonable proportion thereof engaged in the maintenance, repair
or operation of the Building, amounts paid to independent
contractors for any services in connection with such maintenance,
repair or operation, the cost of management fees (but not
exceeding fifteen percent (15%) of operating costs), and other
indirect expenses to the extent allocable to the maintenance,
repair and operation of the Building and Common Area Facilities
and all other expense of every nature incurred in connection with
the maintenance, repair and operation of the Building and Common
Area Facilities; and
(ii) the costs of any of the items cited in paragraph (i) above that
vary with the level of occupancy of the Building (such as but not
limited to cleaning and janitorial costs, garbage and waste
collection and the cost of utilities) shall be adjusted and
included in the Operating Costs as if the Building were 100%
occupied (hereinafter referred to as "Gross Up"). This Gross Up is
for the sole purpose of equitably dividing the cost of such items
among the tenant(s) actually occupying the Building and is to
ensure that: (a) this Lease is on an absolutely net net basis to
the Landlord; and (b) the Landlord is not subsidizing any tenant
in the Building for costs that would otherwise be paid in full by
the tenant if the Building was in fact 100% occupied. For further
clarity the Landlord shall not profit from the terms of this
paragraph and any Gross Up shall be net revenue neutral with
respect to cost recovery to the Landlord; and
(iii) Operating Costs shall exclude debt service, and all management
costs not allocable to the actual maintenance, repair and
operation of the Building (such as that incurred in connection
with leasing and rental advertising) and shall exclude those
amounts noted on Schedule "G" hereto.
"Property" means the Land and Building.
"Proportionate Share" shall mean the fraction which has as its numerator
the Rentable Area of the Leased Premises and has as its denominator the
total Rentable Area of the Building, whether leased or not. The total
Rentable Area of the Leased Premises shall be adjusted from time to time,
as may be reasonably necessary, to give effect to any structural or
functional changes affecting the calculation of total Rentable Areas.
"Rent" means Base Rental and Additional Rent.
"Rentable Area" in this Lease means:
(i) in the case of a single tenancy on a whole floor of the Building,
all areas within the inside finished surface of the dominant
portion of the permanent outer Building walls and shall be
computed by measuring the inside finished surface of the dominant
portion of the permanent outer Building walls and shall include
Service Areas and any special stairs and/or elevators for the
specific sole use of that floor, but excluding stairs, elevator
shafts, flues, pipe shafts and vertical ducts and the like and
their enclosing walls (the "Vertical Openings"), with no
deductions for columns or projections necessary to the Building
plus a gross-up factor for ground floor services in common with
other tenants, including, but not limited to vestibules,
corridors, elevator lobbies, mechanical, electrical, telephone,
mail, garbage and janitor's rooms, such factor to be based upon a
ratio which the ground floor Service Areas of the Building bears
to the gross floor area, less Vertical Openings of the Building;
and
(ii) in the case of a floor of the Building to be occupied by more than
one tenant,
{PAGE}
-5-
all areas from the inside finished surface of the dominant portion
of the permanent outer Building walls to the Tenant's side of
corridors and/or other permanent interior walls and to the centre
of demising partitions which separate the area occupied from
adjoining rentable premises, herein referred to as the "Usable
Area", plus a gross-up factor for the Service Areas on the floor
in common with other tenants on the same floor, including, but not
limited to, corridors, elevator lobbies, mechanical, electrical,
telephone and janitor's rooms exclusively serving the floor, such
factor to be based upon a ratio which the Service Areas of the
floor bear to the sum of the Usable Area of the floor, plus an
additional gross-up factor for ground floor services in common
with other tenants, including, but not limited to, vestibules,
corridors, elevator lobbies, mechanical, electrical, telephone,
mail, garbage and janitor's rooms, such factor to be based upon a
ratio which the ground floor Service Areas of the Building bears
to the gross floor area, less Vertical Openings of the Building.
"Rules and Regulations" means the rules and regulations attached as
Schedule "C".
"Service Areas" shall mean the area of corridors, elevator, lobbies,
service elevator lobbies, washrooms, air-cooling rooms, fan rooms,
janitor's closets, telephone and electrical closets and other closets
serving the Leased Premises in common with other premises on the same
floor.
"Taxes" means all taxes, rates, duties, levies and assessments
whatsoever, whether municipal, parliamentary or otherwise, levied,
imposed or assessed against the Building, Common Areas or Common Area
Facilities or upon the Landlord in respect thereof including Capital Tax
and commercial concentration tax, or from time to time levied, imposed or
assessed in the future in lieu thereof, or in addition thereto, whether
now contemplated or not, and those levied, imposed or assessed for
education, schools and local improvements and including all costs and
expenses (including legal and other professional fees and interest and
penalties on deferred payments), incurred by the Landlord in good faith
in contesting, resisting or appealing any taxes, rates, duties, levies or
assessments, but excluding taxes and license fees in respect of any
business carried on by tenants and occupants of the Building (including
the Landlord) to the extent such taxes are not levied in lieu of taxes,
rates, duties, levies and assessments against the Building or upon the
Landlord in respect thereof, and shall also include any and all taxes
which may in future be levied in lieu of taxes as hereinbefore defined,
and also including Large Corporations Tax or any similar or successor tax
in lieu thereof or in addition thereto assessed upon the Landlord.
"Term" means the term of the Lease stipulated in paragraph 2.2.
"Utilities" means electricity as described in Article 6.2, natural gas
and any other utility required in the operation of the Building.
ARTICLE 2.00 - LEASE TERM AND PAYMENTS
2.1 Demise. In consideration of the rents, covenants and agreements
hereinafter reserved and contained, the Landlord hereby leases to the
Tenant, for the exclusive use of the Tenant, the Leased Premises for the
Term.
2.2 Term. The Lease shall have a term of ten (10) years commencing on the
Commencement Date and ending on the date ten (10) years thereafter,
unless such term shall be sooner terminated as hereinafter provided and
subject to the Tenant's right to extend the Term as provided in Section
13.4 hereof.
{PAGE}
-6-
2.3 Base Rental. THE TENANT SHALL PAY yearly and every year during the first
five (5) years of the within Term the sum of $350,000.00 of lawful money
of Canada in twelve (12) equal monthly installments of $29,166.67, in
advance, the first of such instalment to become due and payable on the
Commencement Date (the "Base Rental").
THE TENANT SHALL PAY yearly and every year during the last five (5) years
of the within Term the sum of $400,000.00 of lawful money of Canada in
twelve (12) equal monthly installments of $33,333.33, in advance, the
first of such instalment to become due and payable on the first day of
the sixth (6th) year following the Commencement Date (the "Base Rental").
The aforesaid annual Base Rental is calculated on the basis of the
Rentable Area of the Leased Premises being 25,000 square feet at a yearly
rate of $14.00 for each square foot of Rentable Area during the first
five (5) years of the within Term and at a yearly rate of $16.00 for each
square foot of Rentable Area during the last five (5) years of the within
Term.
The Landlord shall deliver to the Tenant a certificate from an architect
certifying the area of the Leased Premises in accordance with current
BOMA Standards.
IF THE TERM COMMENCES on any day other than the first day of a month or
ends on any day other than the last day of the month, the Base Rental and
additional rental for the fractions of a month at the commencement and at
the end of the Term shall be adjusted pro rata. All Base Rental payments
shall be payable on the first of each month.
If the Leased Premises are completed by the Landlord prior to the
Commencement Date, the Tenant shall be entitled to occupy the Leased
Premises prior to the Commencement Date for purposes of readying the
Leased Premises for the Tenant's use. During such pre-term occupancy, the
Tenant will only be responsible for paying for utilities consumed in the
Leased Premises. However, it is agreed and understood that the Landlord
is not representing that it will complete the Leased Premises prior to
the Commencement Date.
If for any reason the Landlord is delayed in delivering or is unable to
give possession of the Leased Premises to the Tenant in the condition
required pursuant to the terms of this Lease on or before the
Commencement Date then the Tenant shall, subject to its right to
terminate as hereinafter set out, take possession on the date when the
Landlord delivers possession to the Tenant in the condition required
pursuant to the terms of this Lease and the Commencement Date shall be
redefined as such date. Notwithstanding the foregoing, if the Landlord is
unable to deliver possession of the Leased Premises in substantially
completed condition to the Tenant in the condition required pursuant to
the terms of this Lease by a date which is six (6) months subsequent to
the 15th of December, 1999, then within 3 days of such date the Tenant
shall have the option in its sole discretion to declare this Lease null
and void and the parties shall have no further obligation to one another.
If the Tenant does not deliver such notice in writing to the Landlord
within 3 days of such date, then the Tenant shall have no further right
to terminate this Lease and the Commencement Date shall mean that date
when the Landlord actually delivers possession of the Leased Premises to
the Tenant in the condition required pursuant to the terms of this Lease.
2.4 Prepaid Rent. Deleted intentionally.
2.5 Security Deposit. Deleted intentionally.
2.6 Post-Dated Cheques
The Tenant shall deliver to the Landlord, prior to the Tenant taking
possession of the Premises, twelve (12) post-dated cheques each in the
amount equal to the monthly Base Rental plus the Additional Rent payments
required under this Lease.
{PAGE}
-7-
One month prior to the first and subsequent anniversaries of the Lease,
the Tenant agrees to deliver twelve (12) post-dated cheques to the
Landlord.
Notwithstanding this provision, the Tenant shall not be obligated to
provide postdated cheques unless it is habitually late in making payments
pursuant to this Lease, which shall mean three (3) late payments in any
twelve (12) month period.
ARTICLE 3.00 - LANDLORD AND TENANT COVENANTS
3.1 Landlord Covenants. The Landlord covenants with the Tenant:
(a) Quiet Enjoyment. To provide for quiet enjoyment.
(b) Interior Climate Control and Utilities. To provide to the Leased
Premises during Normal Business Hours, necessary utilities for the
use of the Leased Premises by the Tenant and processed air by
means of a system for heating and cooling, filtering and
circulating, processed in such quantities, and at such
temperatures as shall be reasonable in accordance with good
standards of interior climate control generally pertaining to
normal occupancy of premises for office purposes. The Landlord
shall have no responsibility for inadequacy of the performance of
the said system if the Leased Premises depart from the design
criteria.
(c) Elevators. Subject to the supervision of the Landlord and except
when repairs are being made thereto, to furnish for use by the
Tenant and its employees and invitees in common with other persons
entitled thereto reasonable standards of passenger elevator
service to the Leased Premises. The Tenant shall be responsible
for any damages caused to the elevator as a result of taking
possession or giving up possession of the Leased Premises and
shall pay such costs forthwith upon demand as Additional Rent.
(d) Entrances, Lobbies, Etc.. To permit the Tenant and its employees
and invitees to have the use in common with others entitled
thereto of the Common Areas, Common Area Facilities, common
entrances, lobbies, stairways, elevators and corridors of the
Building giving access to the Leased Premises (subject to the
Rules and Regulations and such other reasonable limitations as the
Landlord may from time to time impose).
(e) Washrooms. To permit the Tenant and its employees and invitees, in
common with others entitled thereto to use the washrooms available
to the Leased Premises on each floor of the Building upon which
any part of the Leased Premises is located.
(f) Janitor Service. To cause when reasonably necessary from time to
time the floors and windows of the Leased Premises to be swept and
cleaned and the desks, tables and other furniture of the Tenant to
be dusted, all in keeping with a first-class office building, such
work shall be done at the Landlord's direction without
interference by the Tenant, its servants or employees.
(g) Maintenance of Common Areas. To cause the Common Areas, Common
Area Facilities, elevators, common entrances, lobbies, stairways,
corridors, washrooms and other parts of the Building from time to
time provided for common use and enjoyment to be swept, cleaned or
otherwise maintained substantially in keeping with a first-class
office building.
3.2 Tenant Covenants. The Tenant covenants with the Landlord:
(a) Rent. To pay Base Rental and Additional Rent.
{PAGE}
-8-
(b) Permitted Use. To use the Leased Premises only for the purpose of
general business offices and any other uses allowed pursuant to
applicable by-laws if approved by the Landlord acting reasonably
and not to use or permit to be used the Leased Premises or any
part thereof for any other purpose or business.
(c) Waste and Nuisance. Not to commit or permit any waste, damage or
injury to the Leased Premises including the Leasehold Improvements
and trade fixtures therein, reasonable wear and tear excluded, any
overloading of the floors thereof, any nuisance therein or any use
or manner of use causing unreasonable annoyance to other tenants
and occupants of the Building.
(d) Condition. Not to permit the Leased Premises to become hazardous
or permit unreasonable quantities of waste or refuse to accumulate
therein and at the end of each business day to leave the Leased
Premises in a condition such as to reasonably facilitate the
performance of the Landlord's janitor and cleaning services
referred to herein.
(a) By-Laws. To comply at its own expense with all municipal, federal,
provincial, sanitary, fire, building and safety statutes, laws,
by-laws, regulations, ordinances, orders or regulations pertaining
to the operation and use of the Leased Premises, the condition of
the Leasehold Improvements, trade fixtures, furniture and
equipment installed by the Tenant therein and the making by the
Tenant of any repairs, changes or improvements therein.
(f) Fire Exit Doors. To permit the installation by the Landlord of all
doors in the exterior wall of the Leased Premises necessary to
comply with the requirements of any statute, law, by-law,
regulation, ordinance, order or regulation.
(g) Rules and Regulations. To observe and to cause its employees,
invitees and others over whom the Tenant can reasonably be
expected to exercise control, the Rules and Regulations and such
further and other reasonable rules and regulations and amendments
and changes therein as may hereafter be made by the Landlord and
notified to the Tenant.
(h) Overholding. That in the event that the Tenant remains in
possession of the Leased Premises after the termination of the
original Term hereby created, without other special agreement, it
shall be at the monthly Base Rental equal to the Base Rental and
Additional Rent payable during the last month of the Term hereof,
times two, payable on the first day of each and every month and
subject in other respects to the terms of this Lease, including
those provisions requiring the payment of Base Rental and
Additional Rent in monthly installments.
3.3 Signs and Directory. Subject to Section 13.8, the Tenant covenants not to
permit, paint, display, inscribe, place or affix any sign, symbol, notice
or lettering of any kind anywhere outside the Leased Premises (whether on
the outside or inside of the Building) or within the Leased Premises so
as to be visible from the outside of the Leased Premises, with the
exception only of an identification sign at or near the entrance to the
Leased Premises and a directory listing in the main lobby of the
Building, in each case containing only the name of the Tenant and to be
subject to the approval of the Landlord as to size, location, content and
design criteria as established by the Landlord, acting reasonably. Such
identification sign and directory listing shall be installed by the
Landlord at the expense of the Tenant, which expense shall be the invoice
cost plus 15% for an administration fee. The Landlord's acceptance of any
name for listing upon the directory will not be deemed, nor will it
substitute for the Landlord's consent if required by this Lease to any
{PAGE}
-9-
sublease, assignment or other occupancy of the Leased Premises.
3.4 Inspection and Access. The Landlord shall be permitted to enter and to
have its authorized agents, employees and contractors enter the Leased
Premises, for the purpose of inspection, window cleaning, maintenance,
providing janitor service, making repairs, alterations or improvements to
the Leased Premises or the Building, or to have access to utilities and
services and access panels which the Tenant agrees not to obstruct, or to
determine the electric light and power consumption by the Tenant in the
Leased Premises and the Tenant shall provide free and unhampered access
for such purposes and shall not be entitled to compensation for any
inconvenience, nuisance, discomfort or loss caused thereby, but the
Landlord, in exercising its rights hereunder, shall proceed to the extent
reasonably possible so as to minimize interference with the Tenant's use
and enjoyment of the Leased Premises.
3.5 Exhibiting Premises. The Landlord and its authorized agents and employees
shall be permitted entry to the Leased Premises during the last six (6)
months of the term for the purpose of exhibiting them to prospective
tenants or at any time for the purposes of arranging financing for the
Building, in each case, however, the Landlord shall proceed to the extent
reasonably possible so as to minimize interference with the Tenant's use
and enjoyment of the Leased Premises.
3.6 Landlord's Control. The Tenant acknowledges that the Common Area
Facilities are at all times subject to the exclusive control and
operation of the Landlord, and the Landlord shall have the right to
construct improvements, alterations and additions thereto and to relocate
the various facilities thereon.
3.7 Financial Statements. The Tenant will, at the request of the Landlord,
supply copies of his financial statements to the Landlord or to the
mortgagees, if any, on the said lands or a prospective mortgagee. The
Landlord acknowledges that the only financial statements to be delivered
are those which are public.
ARTICLE 4.00 - REPAIR AND DAMAGE
4.1 Tenant's Repairs. The Tenant covenants with the Landlord:
(a) to keep the Leased Premises in good and reasonable state of repair
and consistent with the general standards of first-class office
buildings in Metropolitan Toronto, to perform all repairs and
replacements as a prudent tenant would do (reasonable wear and
tear excepted) to the Leased Premises including all Leasehold
Improvements and all trade fixtures therein and all glass therein;
(b) that the Landlord may enter and view the state of repair from time
to time and that the Tenant will repair if required to do so
pursuant to the terms of this Lease, according to notice in
writing and that the Tenant will leave the Leased Premises in a
good and reasonable state of repair; and
(c) that if any part of the Building other than the Leased Premises
becomes out of repair, damaged or destroyed through the negligence
or misuse of the Tenant or its employees, invitees or others over
whom the Tenant can reasonably be expected to exercise control,
the expense of repairs or replacements thereto necessitated
thereby shall be the responsibility of the Tenant.
4.2 Abatement and Termination. It is agreed between the Landlord and the
Tenant that:
{PAGE}
-10-
(a) In the event of damage to the Leased Premises or to the Building
affecting access or services essential to the conduct of business
in the Leased Premises and if the damage is such that the Leased
Premises or any substantial part thereof is rendered not
reasonably capable of use and occupancy by the Tenant for the
purposes of its business for any period of time in excess of 10
days, then
(i) unless the damage was caused by the misuse, fault,
negligence of the Tenant or its employees, invitees or
others under its control, from and after the date of
occurrence of the damage and until the Leased Premises are
again reasonably capable of use and occupancy as aforesaid,
Base Rental and Additional Rent shall abate from time to
time in proportion to the part or parts of the Leased
Premises not reasonably capable of such use and occupancy,
and
(ii) unless this Lease is terminated as hereinafter provided,
the Landlord or the Tenant as the case may be (according to
the nature of the damage and their respective obligations
to repair as provided herein, it being understood that the
Tenant shall have the obligation to repair and replace all
Leasehold Improvements and all Tenant's trade fixtures)
shall repair such damage with all reasonable diligence, but
to the extent that any part of the Leased Premises is not
reasonably capable of such use and occupancy by reason of
damage which the Tenant is obligated to repair hereunder,
any abatement of Rent to which the Tenant is otherwise
entitled hereunder shall not extend later than the time by
which repairs by the Tenant ought to have been completed
with reasonable diligence; and
(b) if either the entire or substantially all of the Leased Premises,
or premises whether of the Tenant or other tenants of the Building
comprising in the aggregate 50% or more of the Rentable Area of
the Building are substantially damaged or destroyed by any cause
to such an extent in the reasonable opinion of the Landlord cannot
be repaired or rebuilt within 160 days after the occurrence of the
damage or destruction, the Landlord may at its option, exercisable
by written notice to the Tenant given within 30 days after the
occurrence of such damage or destruction terminate this Lease in
which event neither the Landlord nor the Tenant shall be bound to
repair as provided herein and the Tenant shall instead deliver up
possession of the Leased Premises to the Landlord with reasonable
expedition but in any event within 60 days after delivery of such
notice of termination and rent shall be apportioned and paid to
the date upon which possession is so delivered up (but, subject to
any abatement to which the Tenant may be entitled under paragraph
(a) of this clause 4.2 by reason of the Leased Premises having
been rendered in whole or in part not reasonably capable of use
and occupancy), but otherwise the Landlord or the Tenant as the
case may be (according to the nature of the damage and their
respective obligations to repair described in 4.2 (a) (ii)) shall
repair such damage with reasonable diligence.
ARTICLE 5.00 - TAXES AND OPERATING COSTS
5.1 Net Net Lease. The Tenant acknowledges and agrees that it is intended
that this Lease is a completely carefree net net lease to the Landlord,
except as expressly herein set out, that the Landlord is not responsible
during the Term for any costs, charges, expenses and outlays of any
nature whatsoever arising from or relating to the Leased Premises, or the
use and occupancy thereof, or the contents thereof or the business
carried on therein, except as expressly set out herein, and the Tenant
shall pay all charges, impositions, costs and expenses of every nature
and kind
{PAGE}
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relating to the Leased Premises, except as expressly set out herein.
5.2 Landlord's Tax Obligations. The Landlord covenants with the Tenant,
subject to the provisions herein, to pay all Taxes promptly when due to
the taxing authority or authorities having jurisdiction.
5.3 Tenant's Tax Obligations. The Tenant covenants with the Landlord:
(i) to pay promptly when due to the taxing authority or authorities
having jurisdiction all taxes, rates, duties, levies and
assessments whatsoever, whether municipal, parliamentary or
otherwise, levied, imposed or assessed in respect of any and every
business carried on by the Tenant, subtenants, licensees, or other
occupants of the Leased Premises or in respect of the use or
occupancy thereof (including license fees);
(ii) to pay promptly to the Landlord when demanded or otherwise due
hereunder:
(1) all Taxes charged in respect of all Leasehold Improvements
and trade fixtures and all furniture and equipment made,
owned or installed by or on behalf of the Tenant in the
Leased Premises as Additional Rent;
(2) if by reason of the act, election or religion of the Tenant
or any subtenant, licensee or occupant of the Leased
Premises, the Leased Premises or any part of them shall be
assessed for the support of Separate Schools, the amount by
which the Taxes so payable exceed those which would have
been payable if the Leased Premises had been assessed for
the support of Public Schools; and
(3) the Tenant's Proportionate Share of Taxes as Additional
Rent in the manner stipulated herein; and
(iii) notwithstanding any other provisions of this Lease to the
contrary, the Tenant shall pay to the Landlord, at such times and
in such manner as the Landlord may direct, without duplication, an
amount equal to all goods and service taxes, sales taxes,
value-added taxes or any other taxes imposed with respect to Base
Rental, Additional Rent or other amounts payable by the Tenant to
the Landlord under this Lease, howsoever such taxes are
characterized. The amount payable by the Tenant hereunder shall
not be deemed to be Base Rental or Additional Rent but the
Landlord shall have all of the same rights and remedies for
recovery of same as it has for recovery of Base Rental and
Additional Rent hereunder.
Whenever requested by the Landlord the Tenant will deliver to it receipts
for payment of all taxes, rates, duties, levies and assessments payable
by the Tenant hereof and furnish such other information in connection
therewith as the Landlord may reasonably require.
5.4 Method of Payment of Taxes. The Tax payments required to be made by the
Tenant to the Landlord under the provisions of 5.3 (ii) herein shall be
estimated by the Landlord, and the Tenant shall pay to the Landlord in
addition to the monthly payments of Base Rental hereinbefore reserved,
one-ninth of the estimated annual tax payments in the months of January
to September, both inclusive, in each calendar year with an adjustment
being made when the property tax bill respecting the Building is received
by the Landlord for each year. The Tenant shall within sixty (60) days of
being invoiced pay to the Landlord such additional sums as may be
required in order that out of such monthly additional payments, the
Landlord may pay the whole amount of the annual taxes payable by the
Tenant as the installments thereof fall due; and if the monthly
additional payments so paid by the
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Tenant to the Landlord exceed in total the Tenant's Proportionate Share
of the annual property tax bill with respect to the Building and Lands of
which the Leased Premises form part, then the excess shall be adjusted by
the Landlord in favour of the Tenant by applying such excess on account
of the next ensuing rental payments due (following the issue of the
yearly statement) and such next ensuing rental payments shall be reduced
by such excess accordingly, unless it is the last year of the Term, in
which case, such excess shall be paid by the Landlord to the Tenant which
obligation to pay shall survive any termination of this Lease or
expiration of the Term. The Landlord shall forward to the Tenant copies
of all notices or tax bills relating to the imposition of property taxes
or other charges required hereunder to be paid as to part or all thereof
by the Tenant. In the event that the Landlord is unable to obtain or
determine a separate allocation of taxes payable by the Tenant under this
Lease, the Landlord shall have the right to make an allocation, but shall
be obligated to act reasonably and not arbitrarily.
5.5 Operating Costs. During the Term of this Lease, the Tenant shall pay to
the Landlord its Proportionate Share of Operating Costs. Prior to the
commencement of the Term of this Lease and the commencement of each
fiscal period selected by the Landlord thereafter which commences during
the Term the Landlord shall estimate the amount of Operating Costs and
the Tenant's Proportionate Share thereof for the ensuing fiscal period or
(if applicable) broken portion thereof, as the case may be, and notify
the Tenant in writing of such estimate. The amount so estimated shall be
payable in equal monthly installments in advance over the fiscal period
or broken portion thereof in question, each such installment being
payable on each monthly rental payment date provided in clause 2.3. The
Landlord may from time to time alter the fiscal period selected, in which
case, and in the case where only a broken portion of a fiscal period is
included with the Term, the appropriate adjustment in monthly payments
shall be made. From time to time during a fiscal period the Landlord may
re-estimate the amount of Operating Costs and the Tenant's Proportionate
Share thereof, in which event the Landlord shall notify the Tenant in
writing of such re-estimate and fixed monthly installments for the then
remaining balance of such fiscal period or broken portion thereof such
that, after giving credit for installments paid by the Tenant on the
basis of the previous estimate or estimates, the Tenant's entire
Proportionate Share of Operating Costs will have been paid during such
fiscal period or broken period thereof. As soon as practicable after the
expiration of each fiscal period the Landlord shall make a final
determination of Operating Costs and the Tenant's Proportionate Share
thereof for such fiscal period or (if applicable) broken portion thereof
and shall provide a statement to the Tenant and the parties shall make
the appropriate readjustment. Each 12 month period ending December 31st
shall be deemed to be an accounting year for adjusting the said Operating
Costs and within 120 days after the end of each such accounting year, the
Landlord shall compute the said costs for such accounting year and the
Proportionate Share of the Tenant therefor and shall submit to the Tenant
a statement to reflect the Operating Costs specifically permitted under
this Lease, and the said Proportionate Share thereof shall be borne by
the Tenant. To the extent that the Tenant's Proportionate Share of such
costs for such accounting year shall be greater than the total amount
actually paid by the Tenant by said monthly payments in respect of such
year the difference shall be paid by the Tenant to the Landlord within
thirty (30) days after receipt by the Tenant of such statement. Any
excess payments shall be applied by reducing the next ensuing rental
payment(s) by the amount of such excess, unless it is the last year of
the Term, in which case, such excess shall be paid by the Landlord to the
Tenant which obligation to pay shall survive any termination of this
Lease or expiration of the Term. The said accounting period may be
modified by the Landlord if reasonably necessary. The Tenant may not
claim a readjustment in respect to the Tenant's Proportionate Share of
Operating Costs based upon any error of assessment, determination or
calculation thereof unless claimed in writing prior to the expiration of
one year after the fiscal period to which the Operating Costs relate.
{PAGE}
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5.6 Payment of Additional Rent. Any Additional Rent provided for under this
Lease unless otherwise provided herein, shall become due with each
instalment of monthly Base Rental.
ARTICLE 6.00 - UTILITIES AND ADDITIONAL SERVICES
6.1 Water and Telephone. The Landlord shall furnish appropriate openings for
bringing telephone services to the Leased Premises and shall provide hot
and cold water to washrooms in the Leased Premises and to washrooms
available for the Tenant's use in common with others entitled thereto.
6.2 Electricity. The Tenant shall pay throughout the Term promptly to the
Landlord (unless paid directly to Hydro authorities pursuant to separate
billing) as Additional Rent when demanded:
(i) the cost of electric light and power supplied to the Leased
Premises monthly based on the electric light and power
requirements of the Tenant on a pro rata basis as determined from
time to time during the Term by the Landlord acting reasonably;
and
(ii) the cost of cleaning, maintaining and servicing in all respects
all electric lighting fixtures in the Leased Premises including
the cost of replacement of electric light bulbs, tubes, starters
and ballasts used to replace those installed at the commencement
of the Term. Such cleaning, maintaining, servicing and replacement
shall be within the exclusive right of the Landlord. It is
understood and agreed that the costs described in this sub-section
(ii) shall be charged to the Tenant as an Additional Service
payable upon receipt of invoice from the Landlord.
6.3 Additional Services. The Landlord, if it shall from time to time so
elect, shall have the exclusive right, by way of Additional Services, to
provide or have its designated agents or contractors provide any janitor
or cleaning service to the Leased Premises and Common Area Facilities
required by the Tenant which are additional to those required to be
provided by the Landlord hereunder, including the Additional Services
which the Landlord agrees to provide by arrangement, and to supervise the
moving of furniture or equipment of the Tenant in and out of the Building
where such moving of furniture or equipment would be disruptive to the
normal business of the Building, and the making of repairs or alterations
conducted within the Leased Premises affecting Base Building, building
systems or Leasehold Improvements. The reasonable cost of Additional
Services provided to the Tenant, whether the Landlord shall be obligated
hereunder or shall elect to provide them as Additional Services, shall be
paid to the Landlord by the Tenant from time to time within thirty (30)
days following receipt of invoices therefor from the Landlord. Costs of
Additional Services charged directly to the Tenant and other tenants
shall be credited in computing Operating Costs.
ARTICLE 7.00 - ASSIGNING AND SUBLETTING
7.1 Assignments and Sublettings. The Tenant covenants with the Landlord that
it will not assign, sublet, license or part with the possession of the
Leased Premises or any part thereof, or share the occupation of the
Leased Premises, or any part thereof, without the consent of the Landlord
in writing first had and obtained such consent not to be unreasonably or
arbitrarily withheld or delayed. Provided that as a condition of the
granting of its consent, the Landlord may require any assignee,
subtenant, licensee or occupant of the Leased Premises to execute an
agreement whereby he, it or they attorn to and become the tenants of the
Landlord as if he, it or they had executed this Lease, or, except in the
case of an absolute assignment
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of this Lease, to execute an acknowledgement that all the sublessee's or
undertenant's estate, right and interest in and to the Leased Premises
absolutely terminates upon the surrender, release, disclaimer or merger
of this Lease notwithstanding the provisions of the Landlord and Tenant
Act of Ontario, R.S.O. 1980, Chapter 232 and amendments thereof with
specific reference to Paragraphs 21 and 39 (2) thereof, or other similar
statute. The Tenant shall furnish to the Landlord copies of any
assignment, sublease, license or other agreement herein contemplated.
Notwithstanding any other provision in this section, no assignment,
subletting, licensing or parting with possession of the Leased Premises
shall in any way release or be deemed to release the Tenant (or any
guarantor hereof) from their obligations under the terms of this Lease.
Provided further that the proposed assignee, subtenant, licensee or
occupant of the Leased Premises shall be required to provide financial
statements or other financial information as the Landlord may require. It
is agreed that the Landlord may consider in determining whether to grant
consent among other matters, the following: the personal and business
history of the proposed assignee, occupant, sublessee and its key
employees. The Tenant agrees to pay the reasonable legal fees of the
Landlord's solicitor relating to the preparation of the Landlord's
consent, and determination as to whether to give the consent.
If by sale, transfer or other disposition of its shares, the control of
the Tenant is altered so that 51% of the shares are transferred in any
manner, then same shall be deemed as an assignment and the provisions of
this paragraph shall apply. The Tenant covenants and agrees to advise the
Landlord forthwith if such a transfer is contemplated. This provision
shall not apply if the Tenant is a public company.
Notwithstanding the foregoing, the Tenant shall not be required to obtain
the consent of the Landlord in the event of a sublease or assignment to
any of its parent, subsidiaries, or affiliated companies (within the
meaning of the Ontario Business Corporations Act, as amended or replaced
from time to time) provided the Tenant provides the Landlord at least
fifteen (15) days prior written notice and provided further that the
assignee or sublessee signs an acknowledgement In the Landlord's standard
form that it will be bound by all the terms and conditions of this Lease.
Furthermore, upon Landlord's acceptance of the sublessee or assignee as
such, the Tenant shall not be released from any obligations under this
Lease.
In the event of any subletting by the Tenant by virtue of which the
Tenant receives rent in the form of cash, goods, services or other
considerations from the subtenant which is higher than the rent payable
hereunder to the Landlord for the premises so sublet, the Tenant shall
pay any such excess to the Landlord, in addition to all rent and other
costs payable hereunder, for the period of time during which the said
subtenant remains in possession of the premises sublet to it.
If the Tenant herein shall receive from any assignee of this Lease,
either directly or indirectly, any Consideration (as hereinafter defined)
for the assignment of this Lease, either in the form of cash, goods or
services, the Tenant shall forthwith pay an amount equivalent to such
Consideration to the Landlord and same shall be deemed to be further
Additional Rent hereunder. For greater certainty and notwithstanding the
foregoing, "Consideration" shall only include actual consideration
received by the Tenant (in the form of cash, goods or services) for the
assignment of the Tenant's interest in the Lease only and shall not
include any consideration received by the Tenant for any assignment,
transfer or sale of the Tenant's business or the Tenant's other assets,
whether related to, located at or associated with the Leased Premises or
the business of the Tenant conducted therein.
In calculating whether there is any additional consideration payable by
an assignee or sublessee as hereinbefore provided, no deduction shall be
made for any commission payable to any agent or other party.
{PAGE}
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If the Landlord has granted to the Tenant, named on page 1 of this Lease,
any first rights of refusal, exclusive rights or options to lease
additional space or to purchase, it is agreed and understood that upon
the Tenant assigning, subletting, licensing or parting with possession of
the Leased Premises or any part thereof, the aforesaid rights referred to
shall automatically become null and void.
Notwithstanding the above provisions, within ten (10) business days after
the receipt by the Landlord of such request for consent and of all
information which the Landlord shall have requested hereunder, the
Landlord shall have the right upon written notice of termination
submitted to the Tenant to, if the request is to assign this Lease or
sublet the whole of the Leased Premises, cancel and terminate this Lease,
or to, if the request is to sublet a part of the Leased Premises only,
cancel and terminate this Lease with respect to such part, in each case
as of a termination date to be stipulated in the notice of termination
which shall be ninety (90) days following giving of such notice. However,
if such notice of termination is given by the Landlord, the Tenant shall
have five (5) days from receipt thereof to withdraw the request for
consent, in which event, the notice of termination shall be nullified. If
the request for consent is not withdrawn by the Tenant as aforesaid, then
the Tenant shall surrender the whole or part, as the case may be, of the
Leased Premises in accordance with such notice of termination and Base
Rental and Additional Rent shall be apportioned and paid to the date of
surrender and, if only a part of the Leased Premises is surrendered, Base
Rental and Additional Rent shall, after the date of surrender, abate
proportionately. If the Landlord does not elect to terminate as aforesaid
and if consent to sublease or assign will be granted, the Tenant may
assign or sublet, as the case may be, only upon the terms and to the
party set out in the offer submitted to the Landlord as aforesaid.
ARTICLE 8.00 - FIXTURES AND IMPROVEMENTS
8.1 Installation of Fixtures and Improvements. The Tenant shall not make,
erect, install or alter any Leasehold Improvements in the Leased Premises
without having requested and obtained the Landlord's prior written
approval which the Landlord shall not unreasonably delay or withhold. In
making, erecting, installing or altering any Leasehold Improvements the
Tenant will not alter or interfere with any installations which have been
made by the Landlord without the prior written approval of the Landlord
and in no event shall it alter or interfere with window coverings (if
any) installed by the Landlord on exterior windows. The Tenant's request
for any approval hereunder shall be in writing and accompanied by an
adequate description of the contemplated work and, where appropriate,
working drawings and specifications thereof. All work to be performed in
the Leased Premises shall be performed by reputable contractors approved
by the Landlord. The Landlord reserves the right to require the Tenant to
utilize the contractor(s) of the Landlord where Base Building, building
systems and/or warranties may be affected provided the Landlord agrees
that charges by such contractors shall be in keeping with that which an
arms length contractor would charge. The cost of all such work shall be
estimated by the Landlord in advance and such estimate approved by the
Tenant prior to work commencing. All such work shall be performed at the
Tenant's expense and the Tenant shall be responsible for application and
payment of all fees in connection with any permits required. All such
work shall be subject to inspection by and the reasonable supervision of
the Landlord, as an Additional Service, and shall be performed in
accordance with any reasonable conditions or regulations imposed by the
Landlord and completed in a good and workmanlike manner in accordance
with the description of the work approved by the Landlord. The Landlord
shall be entitled to supervise the work and charge the Tenant a
reasonable supervision fee. The Tenant shall be obligated to pay any
reasonable consultant's fees incurred by the Landlord for review and
approval of plans for construction of any nature after the Commencement
Date as Additional Rent. The Landlord shall not charge any fees to review
any plans and specifications save and except for reasonable out-of-pocket
expenses including
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third party consultants.
8.2 Liens and Encumbrances on Fixtures and Improvements. In connection with
the making, erection, installation or alteration of Leasehold
Improvements and all other work or installations made by or for the
Tenant in the Leased Premises the Tenant shall comply with all the
provisions of the Construction Lien Act (Ontario) and other statutes from
time to time applicable thereto and shall promptly pay all accounts
relating thereto. The Tenant will not create or cause to be created any
mortgage, conditional sale agreement or other encumbrance in respect of
its Leasehold Improvements or permit any such mortgage, conditional sale
agreement or other encumbrance to attach to the Leased Premises or to the
Building and Common Area Facilities. If and whenever any construction or
other lien for work, labour, services or materials supplied to or for the
Tenant for the cost of which the Tenant may be in any way liable or
claims therefor shall arise or be filed or any such mortgage, conditional
sales agreement or other encumbrance shall attach, the Tenant shall
within ten (10) days after receipt of notice thereof procure the
discharge thereof, including any certificate of action registered in
respect of any lien, by payment or giving security or in such other
manner as may be required or permitted by law failing which the Landlord
may in addition to all other remedies hereunder avail itself of its
remedy hereunder and may make any payments required to procure the
discharge of any such liens or encumbrances and shall be entitled to be
reimbursed by the Tenant as provided herein and its right to
reimbursement shall not be affected or impaired if the Tenant shall then
or subsequently establish or claim that any lien or encumbrance so
discharged was without merit or excessive or subject to any abatement,
set-off or defense.
8.3 Removal of Fixtures and Improvements. All Leasehold Improvements in or
upon the Leased Premises shall immediately upon the expiry of the Term or
earlier termination of this Lease, be and become the Landlord's property
without compensation therefor to the Tenant. Except to the extent
otherwise expressly agreed by the Landlord in writing no Leasehold
Improvements, trade fixtures, furniture or equipment shall be removed by
the Tenant from the Leased Premises either during or at the expiration or
earlier termination of the Term except that (1) the Tenant shall at the
end of the Term remove its trade fixtures, and (2) the Tenant shall
remove its furniture and equipment at the end of the Term and may remove
its furniture and equipment during the Term in the usual and normal
course of its business where such furniture or equipment has become
excess for the Tenant's purposes or the Tenant is substituting therefor
new furniture and equipment. The Tenant shall, in the case of every
removal either during or at the end of the Term, make good any damage
caused to the Leased Premises by the installation and removal. Provided
that upon the termination of this Lease, the Tenant, if requested by the
Landlord, shall restore the interior of the Leased Premises to its former
condition immediately prior to the installation of such alterations or
changes, including the restoration of such standard fixtures as may have
been installed by the Landlord, and if not so requested, any such changes
or alterations shall become the property of the Landlord, or
alternatively, the Tenant shall install such comparable fixtures and
materials as may then be in use. Notwithstanding any of the foregoing
provisions or any other provisions in this Lease, it is understood and
agreed that the Tenant shall not be required to remove those Leasehold
Improvements approved by the Landlord prior to their construction.
8.4 Occupational Health and Safety. The Tenant covenants and agrees that it
will ensure that a comprehensive and rigorous health and safety program
to protect workers in the Leased Premises is implemented to ensure that
no accidents or injuries occur in connection with the performance of any
Tenant's work. The Tenant will indemnify the Landlord in respect of all
claims, infractions, prosecutions, alleged infractions, losses, costs and
expenses and any fines or proceedings relating to fines or other offenses
under all occupational health and safety and any similar legislation that
might be brought, or imposed against or suffered by the Landlord or
{PAGE}
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any of its officers, directors and employees in connection with the
performance of any Tenant's work. Without limiting the obligations set
out above in this Section 8.4, the Tenant will do at least the following:
(a) ensure that all obligations imposed by statute, law or regulation
on "constructors" or other persons completing or co-ordinating any
Tenant's work are diligently and properly completed;
(b) co-operate with the Landlord in having any Tenant's work
designated as a separate project so that the Landlord does not
incur any obligations as a constructor or obligations similar to
those of a constructor at law or by regulation imposed in
connection with the performance of any Tenant's work;
(c) comply with all directions that the Landlord may give to the
Tenant in connection with the performance of any Tenant's work
having regard to construction health and safety requirements; and
(d) provide to the Landlord whatever rights of access, inspection, and
whatever information, documents and other matters the Landlord
requires in order to ensure that the Tenant's obligations under
this Section are complied with.
ARTICLE 9.00 - INSURANCE AND LIABILITY
9.1 Landlord's Insurance. The Tenant will during the whole of the Term hereby
granted as part of Operating Costs, pay its Proportionate Share of all
premiums with respect to insurance to be placed by the Landlord and
described in this Section 9.1. The Landlord agrees to maintain during the
Term, insurance coverages as follows:
(i) Property of Every Description (Building and Equipment) against the
perils of "All-Risks", under form providing coverage at least
equivalent to Commercial Building Broad Form I.A.O. Form No. 700
including "Building By-Laws Endorsements", and to be insured for
the Replacement Value, without allowance for depreciation and
Stated Amount, and with no co-insurance requirement;
(ii) "Rental Income" for the gross annual rental income on "All-Risks"
basis, as provided under Commercial Building Broad Form I.A.O.
Form 700 including "Building By-Laws Endorsements", providing
coverage at least equivalent to I.A.O. Profits Form No. 551 with
an eighteen (18) month indemnity period;
(iii) Broad Form Boiler and Machinery Policy on a blanket and
replacement basis with limits for each accident in an amount not
less than the replacement cost of the Building containing the
Leased Premises and which shall cover all boilers, pressure
vessels, air conditioning equipment and miscellaneous electrical
apparatus owned by the Landlord and which shall include PCB
coverage. It shall also include "Rental income" for the full gross
annual income equivalent to I.A.O. Profits Form No. 551 with an
eighteen (18) month indemnity period. This policy should also
provide "Building By-Laws Endorsements";
(iv) "General LiabIlity Insurance" on a Comprehensive Form and on an
"occurrence" basis without deductible with retroactive coverage
against claims for Personal and Bodily Injury and Death and/or
Property Damage occurring upon or about the Leased Premises and
for a limit no less than $5,000,000.00 inclusive for one
occurrence; and
(v) such other insurance coverage or coverages as a prudent owner of a
first
{PAGE}
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class office building would obtain for protection respecting loss
of, or damage to the Building, the Lands or the Leased Premises,
or liability arising therefrom.
All such insurance coverages shall be kept and maintained by the
Landlord, and in no event shall the coverage be less than the amount
required by any institution then holding a mortgage on the Building and
Common Area Facilities. The Tenant shall pay to the Landlord, as part of
Operating Costs, its Proportionate Share of the Landlord's insurance. The
Tenant shall not do or permit to be done any act or thing whereby
insurance coverage, premiums or any of them hereinbefore contemplated,
may be increased or cancelled by the insurer, or the Leased Premises
shall be rendered uninsurable, and if by reason of any act done or
permitted or omission, as the case may be, by the Tenant, the said
insurance coverage, premiums or any of them shall be increased, then the
Tenant, if it shall fail to rectify the event giving rise to the
increased premium after written notice thereof from the Landlord, shall
be liable to pay all of such increase in premium, with respect to the
entire coverages, and this notwithstanding that the Tenant occupies only
a portion of the Building covered by such insurance coverages, and if the
Leased Premises shall be rendered uninsurable, or if the said insurance
coverages, or any of them, shall be cancelled by reason of any act or
omission as the case may be by the Tenant and shall not be susceptible of
being replaced, after the Landlord's reasonable efforts under the
circumstances to do so, then the Landlord, after giving the Tenant at
least fourteen (14) days written notice within which to replace insurance
coverage or coverages shall, at its absolute discretion, have the right
to determine that the term hereof has expired and in such event the
Tenant shall deliver up possession of the Leased Premises as if the Term
of this Lease had expired.
PROVIDED that no act required to be done by the Tenant nor any payment
required to be made by the Tenant, including reimbursements of insurance
premiums paid by the Landlord, shall relieve the Tenant from any
liability for damage incurred by the Landlord as result of any act or
omission of the Tenant.
If any other tenant of the Building has his own insurance premiums
increased by his insurers as a result of the use or occupation by the
Tenant herein of the within Leased Premises, the Tenant covenants and
agrees with the Landlord after written notice thereof, to pay the
additional cost forthwith upon demand as Additional Rent.
The Landlord's insurance policy shall contain a waiver of subrogation in
favour of the Tenant or those for whom the Tenant is in law responsible.
9.2 Agents. The Tenant acknowledges, covenants and agrees that every right,
exemption from liability, defense and immunity of whatsoever nature
applicable to the Landlord or to which the Landlord is entitled hereunder
shall also be available and shall extend to protect every such agent of
the Landlord acting (in the course of or in connection with his
employment or otherwise) and for the purposes of all of the foregoing
provisions of this clause, the Landlord is or shall be deemed to be
acting as agent or trustee on behalf of and for the benefit of persons
who are or might be his servants, employees or agents from time to time.
9.3 Tenant's Insurance. The Tenant covenants to insure and to keep insured
during the whole of the Term, with an insurance company or companies in
good standing and upon terms and conditions all satisfactory to the
Landlord:
(i) "All-Risks" insurance upon all property owned by the Tenant or for
which it is legally liable or installed or affixed by or on behalf
of the Tenant and which is located in the Building including,
without limitation, furniture, fittings, installations,
alterations, additions, partitions and fixtures or anything in the
nature of a Leasehold Improvement made or installed by or on
behalf of the Tenant in an amount equal to the full replacement
cost thereof; if there is a
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dispute as to the amount which comprises full replacement cost the
decision of the Landlord's Architect shall be conclusive;
(ii) all parties hereto on a Comprehensive Form for bodily injury and
property damage, general liability coverage arising out of the
use, maintenance or repair of the Leased Premises and/or the
business of the Tenant or any subtenant, licensees or occupiers of
the Leased Premises; such insurance shall be for a limit of not
less than $2,000,000.00 inclusive for any one occurrence, or such
higher limits as the Landlord, acting reasonably, or any mortgagee
requires from time to time, and shall contain a severability of
interest clause, and a cross liability clause;
(iii) glass coverage for the replacement of all glass broken, cracked or
damaged in, on and about the Leased Premises; and
(iv) any other form of insurance that the Landlord or any mortgagee may
reasonably require, from time to time in form, amounts and for
insurance risks acceptable to the Landlord and any mortgagee.
The Tenant covenants and agrees to provide the Landlord with evidence of
insurance as required under this provision. Such evidence shall be by way
of a certified copy of the policy if available in timely fashion or
failing which a certificate of insurance at such time or times as the
Landlord may require. The Tenant agrees to provide same to the Landlord
forthwith after notice has been given by the Landlord to the Tenant of
its request. The Tenant's policy shall contain a waiver of subrogation in
favour of the Landlord and those for whom the Landlord is in law
responsible.
9.4 Limitation of Landlord's Liability. The Tenant agrees that:
(i) save and except for any injury, loss, damages, costs or expenses
arising as a result of the negligence of the Landlord or those for
whom the Landlord is in law responsible, the Landlord shall not be
liable for any bodily injury or death of, or loss or damage to any
property belonging to the Tenant or its employees, invitees, or
licensees or any other person in, on or about the Building and
Common Area Facilities howsoever occurring and save and except for
any injury, loss, damages, costs or expenses arising as a result
of the negligence of the Landlord or those for whom the Landlord
is in law responsible, in no event shall the Landlord be liable
for:
(1) any damage which is caused by steam, water, rain or snow
which may leak into, issue or flow from any part of the
Building or Common Area Facilities or from the pipes or
plumbing works thereof or from any other place or quarter
or for any damage caused by or attributable to the
condition or arrangement of any electric or other wiring or
for any damage caused by anything done or omitted by any
other tenant;
(2) any act or omission (including theft or malfeasance) on the
part of any agent, contractor or person from time to time
employed by it to perform janitor services, security
services, maintenance, supervision or any other work in or
about the Leased Premises or the Building or Common Area
Facilities; and
(3) loss or damage, however caused, to money, securities,
negotiable instruments, papers or other valuables of the
Tenant; and
(ii) save and except for any injury, loss, damages, costs or expenses
arising as a result of the negligence of the Landlord or those for
whom the Landlord is in law responsible, the Landlord shall have
no responsibility or liability for the failure to supply interior
climate control or elevator service when prevented from doing so
by strikes, the necessity of repairs, any order or regulation of
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any body have jurisdiction, the failure of the supply of any
utility required for the operation thereof or any other cause
beyond the Landlord's reasonable control, and shall not be held
responsible for any bodily injury, death or damage to property
arising from the use of, or any happening in or about, any
elevator.
Respecting any negligent act referred to in this Section 9.4, the
Landlord's liability shall be limited to the amount of proceeds of
insurance it has received in respect thereto or would have
received if it had maintained insurance as required under this
Lease.
9.5 Indemnity of Landlord. The Tenant agrees to indemnify and save harmless
the Landlord in respect of all claims for bodily injury or death,
property damage or other loss or damage arising from the conduct of any
work by or any act or omission of the Tenant or any assignee, subtenant,
agent, employee, contractor, invitee or licensee of the Tenant, and in
respect of all costs, expenses and liabilities incurred by the Landlord
in connection with or arising out of all such claims, including the
expenses of any action or proceeding pertaining thereto, and in respect
of any loss, cost, expense or damage suffered or incurred by the Landlord
arising from any breach by the Tenant of any of its covenants and
obligations under this Lease.
ARTICLE 10.00 - SUBORDINATION, ATTORNMENT AND CERTIFICATES
10.1 Subordination and Attornment. The Tenant agrees that this Lease and all
the rights of the Tenant hereunder are subject and subordinate to all
mortgages now or hereafter existing (including deeds of trust and all
instruments supplemental thereto) which may now or hereafter affect the
Building or Common Area Facilities and to all renewals, modifications,
consolidations, replacements and extensions thereof, provided that the
Tenant whenever requested by any mortgagee (including any trustee under a
deed of trust and mortgage) shall attorn to such mortgagee as the Tenant
upon all the terms of this Lease. Subject to the foregoing, the Tenant
agrees to execute promptly whenever requested by the Landlord or by such
mortgagee such instrument of subordination or attornment, as the case may
be, as may be required of it. At the Tenant's cost and request, the
Landlord will use its reasonable commercial efforts to obtain a
non-disturbance agreement from existing or future encumbrancers.
10.2 Certificates. The Tenant shall promptly whenever requested by the
Landlord from time to time execute and deliver to the Landlord (and if
required by the Landlord, to any mortgagee [including any trustee under a
deed of trust and mortgage] designated by the Landlord) a certificate in
writing as to the then status of this Lease, including as to whether it
is in full force and effect, is modified or unmodified, confirming the
rent payable hereunder and the state of the accounts between the Landlord
and Tenant, the existence or non-existence of defaults, and any other
matters pertaining to this Lease as to which the Landlord shall request a
certificate.
ARTICLE 11.00 - EVENTS OF DEFAULT AND REMEDIES
11.1 Events of Default and Remedies. In the event of the happening of any one
of the following events (hereinafter referred to as a "Default"):
(a) the Tenant shall have failed to pay an instalment of Base Rental
or of Additional Rent or any other amount payable hereunder when
due and such default shall be continuing for a period of more than
two (2) days after written notice by the Landlord to the Tenant of
the amount due;
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(b) there shall be a default of or with any condition, covenant,
agreement or other obligation on the part of the Tenant to be
kept, observed or performed hereunder (other than the obligation
to pay Base Rental, Additional Rent or any other amount of money)
and such Default shall be continuing for a period of more than ten
(10) days after written notice by the Landlord to the Tenant
specifying the Default and requiring that it discontinue;
(c) if any policy of insurance upon the Building or any part thereof
from time to time affected by the Landlord shall be cancelled or
about to be cancelled by the insurer by reason of the use or
occupation of the Leased Premises by the Tenant or any assignee,
sub-tenant or licensee of the Tenant or anyone permitted by the
Tenant to be upon the Leased Premises and the Tenant, after
receipt of notice in writing from the Landlord, shall have failed
to take such immediate steps in respect of such use or occupation
as shall enable the Landlord to reinstate or avoid cancellation
(as the case may be) of such policy of insurance;
(d) the Leased Premises shall, without the prior written consent of
the Landlord, be used by any other persons than the Tenant or its
permitted assigns or sub-tenants or for any purpose other than
that for which they were leased or occupied or by any persons
whose occupancy is prohibited by this Lease;
(e) the Leased Premises shall be vacated or abandoned, or remain
unoccupied, without the prior written consent of the Landlord for
seven (7) consecutive days or more while capable of being
occupied;
(f) the balance of the Term of this Lease or any of the goods and
chattels of the Tenant located in the Leased Premises, shall at
any time be seized in execution or attachment; or
(g) the Tenant shall make any assignment for the benefit of creditors
or become bankrupt or insolvent or take the benefit of any statute
for bankrupt or insolvent debtors or, if a corporation, shall take
any steps or suffer any order to be made for its winding-up or
other termination of its corporate existence; or a trustee,
receiver or receiver-manager or agent or other like person shall
be appointed of any of the assets of the Tenant;
the Landlord shall have the following rights and remedies all of which
are cumulative and not alternative and not to the exclusion of any other
or additional rights and remedies in law or equity available to the
Landlord by statute or otherwise:
(i) to remedy or attempt to remedy any Default of the Tenant, and in
so doing to make any payments due or alleged to be due by the
Tenant to third parties and to enter upon the Leased Premises to
do any work or other things therein, and in such event all
reasonable expenses of the Landlord in remedying or attempting to
remedy such Default shall be payable by the Tenant to the Landlord
on demand;
(ii) with respect to unpaid overdue Rent, to the payment by the Tenant
of the Rent and of interest (which said interest shall be deemed
included herein in the term "Rent") thereon at a rate per annum
equal to three percent (3%) above the prime commercial loan rate
charged to borrowers having the highest credit rating from time to
time by the Landlord's principal bank from the date upon which the
same was due until actual payment thereof and the maximum amount
allowed under the laws of the jurisdiction in which the Building
is located;
(iii) to terminate this Lease forthwith by leaving upon the Leased
Premises or by
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affixing to an entrance door to the Leased Premises notice
terminating the Lease and to immediately thereafter cease to
furnish any services hereunder and enter into and upon the Leased
Premises or any part thereof in the name of the whole and the same
to have again, repossess and enjoy as of its former estate,
anything in this Lease contained to the contrary notwithstanding;
and
(iv) to enter the Leased Premises as agent of the Tenant and as such
agent to re-let them and to receive the rent therefor and as the
agent of the Tenant to take possession of any furniture or other
property thereon and upon giving ten (10) days' written notice to
the Tenant to store the same at the expense and risk of the Tenant
or to sell or otherwise dispose of the same at public or private
sale without further notice and to apply the proceeds thereof and
any rent derived from re-letting the Leased Premises upon the
account of the Rent due and to become due under this Lease and the
Tenant shall be liable to the Landlord for the deficiency if any.
11.2 Payment of Rent, etc. on Termination.
(a) Upon the giving by the Landlord of a notice in writing terminating
this Lease under sub-paragraph 11.1 (iii) of this paragraph, this
Lease and the term shall terminate, Rent and any other payments
for which the Tenant is liable under this Lease shall be computed,
apportioned and paid in full to the date of such termination
forthwith, and there shall immediately become due and payable
forthwith in one lump sum, the next immediately ensuing three (3)
months' Rent (calculated as if full Base Rental and Additional
Rent are owing and not giving credit for any scheduled free Rent
period). Upon termination of this Lease and the Term, the Tenant
shall immediately deliver up possession of the Leased Premises to
the Landlord, without compensation to the Tenant, and the Landlord
may forthwith re-enter and take possession of them.
(b) The Tenant shall pay to the Landlord on demand all reasonable
costs and expenses, including reasonable lawyers' fees and
disbursements incurred by the Landlord in enforcing any of the
obligations of the Tenant under this Lease.
(c) The Tenant shall pay to the Landlord, for any monetary Default,
interest at a fixed rate per annum equal to the most favourable
rate which the Landlord's principal bank will lend money on prime
loans to commercial customers at the date when interest commences
to run plus three percent (3%) per annum. Such interest shall run
from the due date of such sum without the necessity of a demand
until payment and shall be compounded semi-annually.
11.3 Renunciation. The Tenant waives and renounces the benefit of any present
or future statute taking away or limiting the Landlord's right of
distress.
ARTICLE 12.00 - MISCELLANEOUS
12.1 Registration. The Tenant agrees with the Landlord not to register this
Lease, but nevertheless if the Tenant desires to register a notice of
this Lease, the Landlord agrees to execute a notice or acknowledgement,
if required, sufficient for the purpose in such form as the Landlord and
Tenant mutually approve provided in no event shall rental rates of this
Lease be shown.
12.2 Notice. Any notice required or contemplated by any provision of this
Lease shall be given in writing, and if to the Landlord, either delivered
to an executive officer of
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the Landlord or by facsimile transmission or mailed by prepaid registered
mail addressed to the Landlord at 3650 Victoria Park Avenue, Suite #500,
North York (Toronto), Ontario, M2H 3P7, and if to the Tenant, either
delivered to the Tenant (or to an officer of the Tenant if the Tenant is
a firm or corporation) or by facsimile transmission or mailed by prepaid
registered mail addressed to the Tenant at the Leased Premises. Every
such notice shall be deemed to have been given when delivered or, if
mailed as aforesaid in Canada, upon the day when it was mailed. The
Landlord may from time to time by notice in writing to the Tenant
designate another address in Canada as the address to which notices are
to be mailed to it.
12.3 Extraneous Agreements. The Tenant acknowledges that there are no
covenants, representations, warranties, agreements or conditions
expressed or implied relating to this Lease or the Leased Premises save
as expressly set out in this Lease and in any agreement to Lease in
writing between the Landlord and the Tenant pursuant to which this Lease
has been executed. This Lease may not be modified except by an agreement
in writing executed by the Landlord and the Tenant.
12.4 Construction. All of the provisions of this Lease are to be construed as
covenants and agreements. If any provision of this Lease is illegal or
unenforceable it shall be considered separate and severable from the
remaining provisions of this Lease, which shall remain in force and be
binding as though the said provision had never been included. The
headings and marginal sub-headings of clauses and sub-clauses are for
convenience of reference and are not intended to limit, enlarge or
otherwise affect their meanings.
12.5 Non-Waiver. No condoning, excusing or overlooking by the Landlord or the
Tenant of any default, breach or non-observance by the Tenant or the
Landlord, as the case may be, at any time or times in respect of any
covenant, agreement, proviso or condition herein contained shall operate
as a waiver of the Landlord's or the Tenant's rights hereunder in respect
of any continuing or subsequent default, breach or non-observance or so
as to defeat or affect in any way the rights of the Landlord or the
Tenant in respect of any such continuing or subsequent default or breach
and no waiver shall be inferred or implied by anything done or omitted by
the Landlord or the Tenant save only express waiver in writing.
12.6 Accord and Satisfaction. No payment by the Tenant or receipt by the
Landlord of a lesser amount than the Base Rental and Additional Rent from
time to time due shall be deemed to be other than on account of the
earliest stipulated Base Rental and Additional Rent due, nor shall any
endorsement or statement on any cheque or any letter accompanying any
cheque or payment of Base Rental or Additional Rent be deemed an accord
and satisfaction, and the Landlord may accept such cheque or payment
without prejudice to the Landlord's right to recover the balance of such
Base Rental or Additional Rent or pursue any other remedy provided in
this Lease.
12.7 Governing Law. This Lease shall be governed by and construed in
accordance with the laws of the Province of Ontario.
12.8 Time of the Essence. Time shall be of the essence of this Lease and every
part hereof.
12.9 No Partnership. Nothing contained herein shall be deemed or construed by
the parties hereto, nor any third party, as creating the relationship of
principal and agent, or a partnership, or a joint venture between the
parties hereto, it being understood and agreed that none of the
provisions contained herein nor any acts of the parties hereto shall be
deemed to create any relationship between the parties hereto other than
the relationship of Landlord and Tenant.
12.10 Force Majeure. Except as herein otherwise expressly provided, if and
whenever
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and to the extent that the Landlord shall be prevented, delayed or
restricted in the fulfilment of any obligations hereunder other than
because of a lack of financial resources on the part of the Landlord, in
respect of the supply or provision of any service or utility, the making
of any repair, the doing of any work or any other thing by reason of
strikes or work stoppages or being unable to obtain any material,
service, utility or labour required to fulfill such obligation or by
reason of any statute, law or regulation of or inability to obtain any
permission from any governmental authority having lawful jurisdiction
preventing, delaying or restricting such fulfilment, or by reason of
other unavoidable occurrence, other than because of a lack of financial
resources on the part of the Landlord, the time for fulfilment of such
obligation shall be extended during the period in which such circumstance
operates to prevent, delay or restrict the fulfilment thereof and the
Tenant shall not be entitled to compensation for any inconvenience,
nuisance or discomfort thereby occasioned.
12.11 Contra Proferentem. The Parties acknowledge and agree that both parties
have participated in the drafting of this Lease, and any rule of law
providing that ambiguities shall be construed against the drafting party,
shall be of no force or effect.
12.12 Planning Act. This Lease is expressly conditional upon compliance with
the land division provisions of the Planning Act R.S.O. 1990 (as it may
be amended from time to time), if applicable.
12.13 Access. The Tenant, its employees, invitees and customers and persons
connected with the Tenant (subject and except as in this Lease provided)
shall have the right in common with others entitled thereto from time to
time to use the parking areas, driveways, walkways, lawns, ramps (if any)
and other Common Areas in and about the Building from time to time. The
Tenant shall not unreasonably block or in any manner hinder the Landlord,
other tenants or other persons claiming through or under them or any of
them who may be authorized by the Landlord to utilize the Common Areas
from so doing. The Landlord may, acting reasonably, from time to time
permit the Tenant to have the exclusive use of portions of the parking
area which forms part of the Common Areas and to permit other tenants or
other persons to have exclusive use of portions thereof.
12.14 Transfers by the Landlord. The Landlord at any time and from time to time
may sell, transfer, lease, assign or otherwise dispose of the whole or
any part of its interest in the Leased Premises or in