EXHIBIT 10.9
LEASE
THIS LEASE, dated October 1, 1999, is made and entered into by the Landlord and
Tenant named herein who, in consideration of the covenants herein contained,
agree as follows:
ARTICLE 1 - BASIC TERMS, SCHEDULES, DEFINITIONS
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1. Basic Terms
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(A) (i) Landlord: No. 150 Cathedral Ventures Ltd.
(ii) Address of Landlord: #0000 - 000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX
X0X 0X0
(B) (i) Tenant: Xxxxx.xxx Channels, Inc.
(ii) Head Office of Tenant: Suite 205 - 1008 Xxxxx Street
Vancouver, B.C.
V6B 2X1
(C) Address of Premises: 000 - 000 Xxxxx Xxxxxx
Xxxxxxxxx, XX
(D) Floor Area of Premises: 5,271 square feet (more or less) located on
the third floor of the Building shown on Schedule "A" including the
leasehold improvements referenced in Schedule "B".
(E) (i) Term: 5 years
(ii) Renewal Terms: Three (of three years each)
(iii) Commencement Date: August 1, 1999 or upon completion of
Landlord's work, whichever last occurs.
(iv) Occupation Date: Upon completion of Landlord's work. Landlord
to use best efforts to complete no later
than July 17, 1999.
(F) Minimum Rent: (exclusive of GST)
Lease Years Sq. Ft Rate $/Sq. Ft. $/Month $/Annum
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Aug. 1/99, Feb. 29/00 3,696 $16.00 $4,928.00 $34,496.00
Mar. 1/99, Jul. 31/00 4,371 $16.00 $5,828.00 $29,140.00
2 5,271 $16.00 $7,028.00 $84,336.00
3 5,271 $16.00 $7,028.00 $84,336.00
4 5,271 $16.00 $7,028.00 $84,336.00
5 5,271 $16.00 $7,028.00 $84,336.00
Notwithstanding the above, the Landlord and the Tenant acknowledge and
agree that as contemplated by Section 4.2 hereof:
2. the Tenant is not to pay any Minimum Rent for the first two months of
the Term; and
3. the Tenant has paid Landlord a deposit of $12,792.92 which is to be
applied on account of the third months Minimum Rent ($4,928.00) and
the last months Minimum Rent ($7,028.00) and applicable GST.
(G) Permitted Use of Premises: General office use including computer
software development and ancillary offices and for no other use without the
express written consent of the Landlord.
(H) Legal Description of Lands: Parcel B of 5 & 6, Lot A of 6 & 7 of 39 to
58, Block 76, D.L. 000, Xxxx 0000, Xxxxxxxxx Xxxxxxxx, Xxxxxxxxx, X.X.
The foregoing Basic Terms are hereby approved by the parties and each reference
in this Lease to any of the Basic Terms shall be construed to include the
provisions set forth above as well as all of the additional terms and conditions
of the applicable sections of this Lease where such Basic Terms are more fully
set forth.
1.2 Schedules
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The schedules to this Lease are incorporated into and form an integral part
of this Lease.
1.3 Definitions
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In this Lease, the words, phrases and expressions set forth in Schedule "C"
are used with the meanings defined therein.
ARTICLE II - GRANT OF LEASE
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2.1 Demise
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The Landlord, being registered as owner of the Lands legally described in
Section 1.1(h),
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subject, however, to such mortgages and encumbrances as are registered
against title thereto as of the date hereof, does hereby lease to the
Tenant, for the Term and upon and subject to covenants and conditions
hereinafter expressed, the Premises.
2.2 The Landlord in addition to the foregoing does hereby grant to the Tenant
the exclusive use during the Term of two parking space located on the Lands
at no cost to the Tenant.
2.3 The Tenant and its employees and all persons lawfully requiring
communication with them shall have and are hereby granted the full, free
and uninterrupted non-exclusive right, licence and privilege at all times
and from time to time during the normal business hours of the Tenant to
enter, pass and xxxxxx over those portions of Lands and the Buildings which
are not rented to or designated for rent for the purposes of access to and
from the Premises, subject to all rules, regulations and bylaws of all
governmental authorities having jurisdiction and subject to the reasonable
rules and regulations imposed by the Landlord from time to time.
ARTICLE III - TERM, COMMENCEMENT, RENEWAL
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3.1 Term
----
The Term of this Lease shall be for the period set out in Section
1.1(e)(i), beginning on the Commencement Date.
3.2 Option to Renew
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(a) If the Tenant duly and regularly pays all rent and other sums hereunder to
be paid and performs each and every of the covenants, conditions and
provisions herein contained the Landlord shall, at the expiration of the
Term, upon request in writing by the Tenant delivered to the Landlord not
less than six (6) months prior to the expiration of the Term, grant to the
Tenant, a renewal lease of the Premises for a further term of three (3)
years from the expiration of each Term to be legally documented at the
expense of the Tenant upon the same terms and conditions as contained in
this Lease except as to the inclusion of Section 12.4 hereof and except as
to the amount of Minimum Rent which shall be equal to the Fair Market Rent
for the Premises including without limitation to the use of the Parking
Space at the commencement of the Renewal Term as agreed upon by the
Landlord and the Tenant, but in no event less than the rate in the
preceding term.
(b) In the event that the parties are unable to agree upon the Fair Market Rent
at least thirty (30) days prior to the commencement of the Renewal Term,
the matter shall be determined by arbitration in accordance with the
provisions of the Commercial Arbitration Act of British Columbia (or any
successor statute) by a single arbitrator.
(c) Notwithstanding the provisions of paragraph (a) the Tenant will only be
entitled to a maximum of three renewal options of three years each.
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ARTICLE IV - RENT
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4.1 Minimum Rent
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Subject to the provisions of Section 4.2 the Tenant shall pay to the
Landlord in and for each Lease Year, Minimum Rent in the amount per annum
set out in Section 1.1(f) for the respective Lease Year, by equal
consecutive monthly installments in the amount set out in Section 1.1(f)
for such Lease Year plus the applicable Goods and Services Tax. The
parties confirm that the Minimum Rent as set out in Section 1.1(f) is based
in part on the Premises containing an estimated 5,271 square feet of
rentable floor area. The parties agree that the final rentable floor area
of the Premises shall be determined as per the American national Standard
used by the Building Owners and Managers Association International ("BOMA")
in effect at the date of this Lease and, the Minimum Rent shall be adjusted
upwards or downwards as the case may be to reflect such final measurements
by no later than August 1st, 2000.
4.2 Payment of Minimum Rent
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The Landlord grants a two (2) month abatement of Minimum Rent from the
beginning of the Lease Term. The first monthly installment of Minimum Rent
shall be paid on or before two (2) months after the Commencement Date and
subsequent installments of Minimum Rent shall be paid strictly in advance
on the first day of each and every succeeding month throughout the Term
including the Goods and Services Tax. Notwithstanding the foregoing, the
Tenant will be responsible for its Proportionate Share of Property Taxes
and Operating Costs during the abatement period. The Landlord and the
Tenant further agree that:
(c) any portion of any leasehold improvement allowance not spent by the Tenant
will be credited on account of Minimum Rent; and
(d) the Landlord has received the sum of $12,792.92 from the Tenant which will
be applied towards the payment of the third and final months Minimum Rent
and applicable GST.
4.3 Pro Rata Adjustment of Rent
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All rent shall be deemed to accrue from day to day, and if for any reason
it shall become necessary to calculate rent for irregular periods of less
than one (1) year or one (1) month, as the case may be, and appropriate pro
rata adjustment shall be made in order to calculate rent for such irregular
period.
4.4 Payments Generally
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All payments by the Tenant to the Landlord of whatsoever nature required or
contemplated by this Lease shall be:
(a) paid to the Landlord by the Tenant in lawful currency of Canada;
(b) made when due hereunder, without prior demand therefor and without any set-
off, compensation or deduction whatsoever, at the address of the Landlord
set forth in
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Section 1.1 (a)(ii) or such other place as the Landlord may designate from
time to time to the Tenant;
(c) applied towards amounts then outstanding hereunder, in such manner as the
Landlord may, in its discretion, see fit, and without restricting the
generality of the foregoing, no acceptance by the Landlord of any amount
less than the full sum which is due and owing by the Tenant shall
constitute an accord and satisfaction or oblige the Landlord to accept in
full settlement anything less than the full amount owing and outstanding at
any time;
(d) deemed to be rent, in partial consideration for which this Lease has been
entered into, and shall be payable and recoverable as rent such that the
Landlord shall have all rights and remedies against the Tenant for default
in making any such payment which may not be expressly said to be rent as
the Landlord has for default in payment or rent; and
(e) subject to an overdue charge if any such payment is not made when due,
which charge shall be Additional Rent equal to twelve (12%) percent per
annum of the overdue amount both before and after judgement payable with
the next monthly installment of Minimum Rent, all without prejudice to any
other right or remedy of the Landlord.
ARTICLE V - ADDITIONAL RENT
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5.1 Intent of Lease
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It is the intent of the parties and agreed that this Lease shall be
absolutely net to the Landlord such that, without limiting the generality
of the foregoing, the Tenant shall pay for its own account, and without any
variation, set-off or deduction, all amounts, charges, cost, duties,
expenses, fees rates, sums, taxes and increases therein any way relating to
the Premises.
5.2 Additional Rent
---------------
Without limiting the generality of the preceding Section, the Tenant shall
pay as Additional Rent in each Lease Year the aggregate of:
(a) the Property Taxes;
(b) the Operating Costs;
(c) such other amounts, charges, costs, sums or increases therein as are
required to be paid by the Tenant to the Landlord pursuant to this Lease in
addition to Minimum Rent;
to either the Landlord or direct to suppliers as determined from time to
time by both parties. Taxes and Operating Costs are based on a
proportionate share of the building and are estimated to be $6.00 per
square foot and are to be paid on a monthly basis.
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Initial Estimated
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Lease Years Sq. Ft. Monthly
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Aug. 1/99, Feb. 29/00 3,696 $1,848.00
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Mar. 1/99, Jul. 31/00 4,371 $2,185.50
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2 5,271 $2,635.50
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3 5,271 $2,635.50
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4 5,271 $2,635.50
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5 5,271 $2,635.50
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5.3 Estimate of Additional Rent
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The Landlord may, in respect of any or all of the items of Additional Rent,
compute bona fide estimates of the amounts which are anticipated to accrue
in the next following Lease Year, calendar year or fiscal year, or portion
thereof, as the Landlord in its discretion may determine is the most
appropriate period for each or all items of Additional Rent, and the
Landlord may provide the Tenant with written notice of the amount of any
such estimate.
5.4 Payment of Additional Rent
--------------------------
With respect to any item of Additional Rent which the Landlord elects to
estimate from time to time, following receipt of the written notice of the
estimated amount thereof, the Tenant shall pay to the Landlord such amount,
in equal consecutive monthly installments throughout the applicable period
with the monthly installments of Minimum Rent. With respect to any item of
Additional Rent which the Landlord has not elected to estimate from time to
time, the Tenant shall pay to the Landlord the amount of such item of
Additional Rent, determined pursuant to the applicable provisions of this
Lease, forthwith upon receipt of an invoice therefor.
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5.5 Adjustment of Additional Rent
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Within ninety (90) days of the end of each Lease Year, calendar year or
fiscal year, or portion thereof, as the case may be, for which the Landlord
has estimated any item of Additional Rent, the Landlord shall compute the
actual amount of such item of Additional Rent, and make available to the
Tenant for examination an unaudited statement of the gross amount of such
item of Additional Rent, and the calculation of the Tenant's Proportionate
Share thereof for each year or portion thereof. If the actual amount of
such item of Additional Rent, as set out in any such statement, exceeds the
aggregate amount of the installments paid by the Tenant in respect of such
item, the Tenant shall pay to the Landlord the amount of the excess within
fifteen (15) days of the receipt of such statement. If the contrary is the
case, any such statement shall be accompanied by a refund to the Tenant of
any such overpayment without interest, provided that the Landlord may first
deduct from such refund any rent or other sum which is then owing by the
Tenant or in arrears. The Tenant may audit, if required, the Additional
Rent within 30 days after it has been given unaudited statements by the
Landlord. The cost of such audit will be for the Tenant's account unless
the audit shows errors in excess of 5% of the total, in which case the cost
will be for the Landlord's account.
5.6 Review of Additional Rent
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No party hereto may claim a readjustment in respect of any item of
Additional Rent whether paid or payable in installments or otherwise, if
based on any error of estimation, allocation, calculation or computation
thereof, unless claims in writing prior to the expiration of one (1) year
from the conclusion of the period in respect of which such item of
Additional Rent accrued.
ARTICLE VI - TAXES
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6.1 Tenant's Taxes
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The Tenant shall pay promptly when due; all business, sales, machinery,
equipment and all other taxes, assessments, charges and rates, as well as
any permit or license fees, attributable to the Premises or the property,
business, sales or income of the Tenant in respect of the Premises.
6.2 Payment of Property Taxes
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The Tenant shall pay to the Landlord as Additional Rent the Tenant's
Proportionate Share of Property Taxes.
6.3 Increases in Property Taxes
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The Tenant shall pay to the Landlord as Additional Rent an amount equal to
any increase in the Property Taxes by reason of any installation,
alteration or use made in or to the Premises by or for the sole benefit of
the Tenant or any assignee, concessionaire, licensee or subtenant of the
Tenant.
ARTICLE VII - OPERATING COSTS
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7.1 Payment of Operating Costs
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The Tenant shall pay to the Landlord as Additional Rent the Tenant's
Proportionate Share of the Operating Costs.
ARTICLE VIII - UTILITIES
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8.1 Tenant's Utilities
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The Landlord shall be responsible for heating the Premises and for the
supply of all utilities thereto and the Tenant shall pay all rates,
charges, costs and expenses as may be assessed or levied and at the rates
so assessed or levied by all suppliers of electricity, heating, air
conditioning or other utilities to the Premises.
ARTICLE IX - INSURANCE
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9.1 Tenant's Insurance
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(a) The Tenant shall, during the whole of the Term and during such other time
as the Tenant occupies the Premises, take out and maintain the following
Insurance, at the Tenant's sole expense, in such form and with such
companies as the Landlord may reasonably approve:
(i) comprehensive general liability insurance applying to all operations of the
Tenant and against claims for bodily injury, including death, and property
damage or loss arising out of the use or occupation of the Premises, or the
Tenant's business on or about the Premises; such insurance shall include
the Landlord as an additional named insured and indemnify and protect both
the Tenant and the Landlord and shall contain a "cross liability" or
"severability of interests" clause so that the Landlord and the Tenant may
be insured in the same manner and to the same extent as if individual
policies had been issued to each, and shall be for the amount of not less
than two million ($2,000,000) dollars combined single limit or such other
amount as may be reasonably required by the Landlord from time to time;
such comprehensive general liability insurance shall, for the Tenant's
benefit only, include contractual liability insurance in a form and of a
nature broad enough to insure the obligations imposed upon the Tenant under
the terms of this Lease; and
(ii) "all risks" insurance upon its merchandise, stock-in-rade, furniture,
fixtures and improvements, including leasehold improvements, and upon all
other property in the Premises owned by the Tenant or for which the Tenant
is legally liable.
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(b) The policies of insurance referred to above shall contain the following:
(ii) provisions that the Landlord is protected notwithstanding any act,
neglect or misrepresentation of the Tenant which might otherwise result
in the avoidance of a claim under such policies and that such policies
shall not be affected or invalidated by any act, omission or negligence
of any third party which is not within the knowledge or control of the
insured(s);
(iii) provisions that such policies and the coverage evidenced thereby shall be
primary and non-contributing with respect to any policies carried by the
Landlord and that any coverage carried by the Landlord shall be excess
coverage;
(iv) all property insurance referred to above shall provide for waiver of the
Insurer's rights of subrogation as against the Landlord;
(v) provisions that such policies of insurance shall not be cancelled without
the insurer providing the Landlord with thirty (30) days written notice
stating when such cancellation shall be effective.
(c) evidence satisfactory to the Landlord of such policies of insurance shall
be provided to the Landlord upon request.
(d) The Tenant shall at the written request of the Landlord maintain such other
insurance in such amounts and in such sums as the Landlord may reasonably
determine from time to time the necessity of which arises during the Term
as a result of a change in equipment use or business activity on the part
of the Tenant not contemplated at the commencement of the Term.
9.2 Increase in Rates
-----------------
The Tenant shall not do, omit or permit to be done or omitted upon the
Premises anything which shall cause any rate of insurance upon the Premises
or any part thereof to be increased or cause insurance to be cancelled. If
any such rate of insurance shall be increased as aforesaid, the Tenant
shall pay to the Landlord the amount of the increase as Additional Rent.
If any use or occupancy by the Tenant or any act or omission as aforesaid
cause an insurance policy to be cancelled the Tenant shall forthwith remedy
or rectify such use, occupation, act or omission upon being requested to do
so by the Landlord, and if the Tenant fails to so remedy or rectify, the
Landlord may at its option terminate this Lease forthwith and the Tenant
shall immediately deliver up possession of the Premises to the Landlord.
ARTICLE X - USE AND OCCUPATION
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10.1 Use
---
The Premises shall be used for the purposes set forth in Section 1.1(g) and
for no other purpose.
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10.2 Compliance with Laws
--------------------
The Tenant shall carry on and conduct its business from the Premises in
such manner as to comply with any and all statutes, by-laws, rules and
regulations of any Federal, Provincial, Municipal or other competent
authority for the time being in force, and shall not do anything upon the
Premises in contravention thereof.
10.3 Nuisance
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The Tenant shall not do or permit to be done or omit doing anything which
could damage the Premises, reasonable wear and tear excepted, or which
shall or might result in any nuisance in or about the Premises, whether to
the Landlord, any tenant of the Premises, or any other party, the whole as
determined by the Landlord, acting reasonably. In any of the foregoing
events, the Tenant shall forthwith remedy the same and if such thing or
condition shall not be so remedied, the Landlord may, after such notice if
any as the Landlord may reasonably deem appropriate in the circumstances,
correct such situation at the expense of the Tenant and the Tenant shall
pay such expense to the Landlord as Additional Rent.
ARTICLE XI - CLEANING, REPAIR
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11.1 Cleaning
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(a) The Tenant shall keep the Premises and, without limitation, the inside of
all glass windows of the Premises and all interior surfaces of the
Premises, in a neat, clean and sanitary condition and shall not allow any
refuse, garbage or other loose or objectionable wastage material to
accumulate in or about the Premises, but rather shall dispose of the same.
(b) The Tenant shall pay for its own janitorial service, cleaning or debris,
removal of garbage and such other costs as may be incurred in cleaning in
accordance with this Article.
(c) In the event the Tenant fails to clean in accordance with this Article,
upon reasonable notice to do so from the Landlord, the Landlord may clean
the same and the Tenant shall pay to the Landlord as Additional Rent the
cost thereof.
11.2 Tenant's Repairs
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(a) The Tenant shall keep and maintain the Premises and any improvements now or
hereafter erected or installed therein in good order and repair; reasonable
wear and tear and repairs for which the Landlord is responsible excepted.
(b) The Tenant, its employees or agents, shall not xxxx, paint, drill or in any
way deface any walls, ceilings, partitions, floors, wood, stone or ironwork
elsewhere in the Building without the written approval of the Landlord.
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11.3 View Repairs
------------
The Landlord may, on not less than 24 hours written notice, enter the
Premises at any reasonable time between 9:00 a.m. and 5:00 o'clock p.m.
Monday through Friday and at any time during any emergency to view the
state of repair and the Tenant shall repair according to notice in writing
from the Landlord to do so, subject to the exceptions contained in this
Article.
11.4 Landlord may Repair
-------------------
If the Tenant fails to repair as required herein and according to notice
from the Landlord within fourteen (14) days of receipt thereof, or such
longer period as may be reasonable in the circumstances, the Landlord may
make such repairs without liability to the Tenant for any loss or damage
that may occur to the Tenant's merchandise, fixtures or other property or
to the Tenant's business by any reason thereof, and upon completion thereof
the Tenant shall pay as Additional Rent the Landlord's cost for making such
repairs and provided the Landlord does not disturb the Tenant's use and
occupation of the Premises as contemplated hereby.
11.5 Taking of Possession
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The taking of possession of the Premises by the Tenant shall be conclusive
evidence against the Tenant, that at the time of taking possession, the
Premises were in good and fully satisfactory order and condition save and
except as may be specified in writing by the Tenant to the Landlord at the
time of taking possession. Notwithstanding the foregoing, the taking of
possession of the Premises by the Tenant for the purpose of undertaking the
Tenant's improvements in conjunction with or separately from the Landlord's
undertaking of the Landlord's Work as contemplated under Section 12.4 and
Schedule "B" shall not be deemed or construed as the Tenant's acceptance
that the Premises were in good and fully satisfactory order and condition
at that time.
ARTICLE XII - ALTERATIONS, FIXTURES
-----------------------------------
12.1 Tenant's Alterations
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(a) The Tenant shall not make or cause to be made any alterations, additions or
improvements or erect or cause to be erected any partitions or install or
cause to be installed any trade fixtures, exterior signs, floor covering,
interior or exterior lighting, plumbing fixtures, apparatus for air-
conditioning, cooling, heating, illuminating, refrigerating, or ventilating
the Premises, shades, awnings, exterior decorations or make any changes to
the Premises without first obtaining the Landlord's written approval
thereto, which approval shall not be unreasonably withheld.
(b) When seeking the approval of the Landlord as required by this article, the
Tenant shall present to the Landlord plans and specifications for the
proposed work.
(c) The Tenant shall be responsible for the cost of clearing any builder's lien
that may be filed with respect to improvements undertaken by the Tenant.
(d) The Landlord shall respond to any request for approval by the Tenant
hereunder within 10 days of receipt of being provided with plans and
specifications.
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12.2 Removal of Fixtures
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(a) So long as the Tenant is not in default hereunder at the expiration of the
Term, the Tenant shall then have the right to remove its trade fixtures
from the Premises but shall make good any damage caused to the Premises
resulting from the installation or removal thereof.
(b) If the Tenant fails to remove its trade fixtures and restore the Premises
as aforesaid, all such trade fixtures shall become the property of the
Landlord except to the extent that the Landlord continues to require
removal thereof.
(c) Should the Tenant abandon the Premises or should this Lease be terminated
before the proper expiration of the Term due to a default on the part of
the Tenant then, ten days immediately following such default by the Tenant,
all alterations, additions, and improvements made to the Premises but
specifically excluding all trade fixtures and furnishings of the Tenant
(whether or not attached in any manner to the Premises) shall, except to
the extent the Landlord requires the removal thereof, become and be deeded
to be the property of the Landlord, without indemnity to the Tenant and as
additional liquidated damages in respect of such default but without
prejudice to any other right or remedy of the Landlord.
(d) Notwithstanding that any alterations, additions, improvements or fixtures
are or may become the property of the Landlord, the Tenant shall forthwith
remove all or part of the same and shall make good any damage caused to the
Premises resulting from the installation or removal thereof, all at the
Tenant's expense, should the Landlord so require by notice to the Tenant.
(e) If the Tenant, after receipt of a notice from the Landlord, fails to
promptly remove any furnishings, alterations, additions, improvements and
fixtures in accordance with such notice, then the Landlord may enter into
the Premises and remove therefrom all or part of such furnishings,
alterations, additions, improvements and fixtures without any liability and
at the expense of the Tenant, which expense shall forthwith be paid by the
Tenant to the Landlord.
12.3 Landlord's Alterations
----------------------
Provided that the Landlord does not disturb the Tenants right to quiet
enjoyment, the Landlord may make any changes or additions to the apparatus,
appliances, conduits, ducts, equipment, pipes or structures of any kind in
the Premises where necessary to service premises on adjoining floors of the
Building or other parts of the Premises.
12.4 Landlord's Work
---------------
The Landlord will, upon approval of the lease by both Landlord and Tenant,
provide the premises to the Tenant in a condition sufficient for the
Tenant's contractor to commence construction of their Tenant improvements.
The Landlord shall have completed, at its cost, the Base Building upgrades
as referenced in Schedule "B" by the commencement date, unless as otherwise
may be agreed in writing.
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ARTICLE XIII - SUBSTANTIAL DAMAGE AND DESTRUCTION
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13.1 Abatement
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Subject to the provisions of Section 13.2, if during the Term the Premises
shall be damaged or destroyed by any cause whatsoever such that the
Premises are rendered unfit for occupancy by the Tenant, the Rent hereby
reserved shall xxxxx but only to the extent that the Premises are so
rendered unfit for occupancy and only during the period while the Premises
remain in such unfit condition.
13.2 Substantial Damage or Destruction
---------------------------------
In the event of Substantial Damage or Destruction of the Premises, the
Landlord may within sixty (60) days after such damage or destruction and on
giving thirty (30) days written notice to the Tenant declare this Lease
terminated forthwith, and in such event the Term shall be deemed to have
expired and the Tenant shall deliver up possession of the Premises
accordingly. Rent shall be apportioned and shall be payable, subject to any
right of abatement under Section 13.1, up to the date of termination stated
in such notice and the Tenant shall be entitled to be repaid by the
Landlord any rent paid in advance and unearned or an appropriate portion
thereof. "Substantial Damage or Destruction" means such damage as, in the
opinion of the Landlord's architect acting reasonably, requires
substantial alteration or reconstruction of the Premises or such damage to
the Premises as cannot be repaired within a period of one hundred and
eighty (180) days from the time of such damage to the state wherein the
Tenant could use substantially all of the Premises for its business.
ARTICLE XIV - ASSIGNMENT, SUBLETTING, SALE
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14.1 Assignment and Subletting
-------------------------
(a) The Tenant shall not assign this Lease in whole or in part, nor sublet all
or any part of the Premises, nor grant any license or part with possession
of the Premises or transfer any other right or interest under this Lease,
without the prior written consent of the Landlord in each instance, which
consent shall not be unreasonably withheld, so long as the proposed
assignment or sublease complies with the provisions of this Article.
Notwithstanding the foregoing, no consent of the Landlord shall be required
in the event that the Tenant assigns or sublets the whole or any portion of
the demised premises to a corporate entity controlled by, or affiliated to
the Tenant or to a corporation which controls the Tenant.
(b) Notwithstanding any assignment or sublease, the Tenant shall remain fully
liable on this Lease and shall not be released from performing any of the
terms, covenants and conditions of this Lease.
(c) If the Premises or any part thereof are sublet or occupied by anyone other
than the Tenant, then if and when the Tenant is in default in the payment
of any of the Rent reserved hereunder, the Landlord may collect rent
payable to the Tenant by such
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person(s) directly and apply it to the outstanding unpaid Rent reserved
hereby.
(d) No assignment shall be made or proposed other than to persons, firms,
partnerships, or bodies corporate who undertake in favour of the Landlord
to perform and observe the obligations of the Tenant hereunder by entering
into an assumption agreement directly with the Landlord.
(e) The prohibition against assigning or subletting without the consent
required by this Article shall be construed to include a prohibition
against any assignment or sublease by operation of law.
(f) The consent by the Landlord to any assignment or sublease shall not
constitute a waiver of the necessity of such consent to any subsequent
assignment or sublease.
14.2 Subordination
-------------
This Lease and the Tenant's rights hereunder shall be automatically
subordinate to any mortgage or mortgages, or encumbrances resulting from
any other method of financing or refinancing, now or hereafter in force
against the Premises or any part thereof, as now or hereafter constituted,
and to all advances made or hereafter to be made upon the security hereof
provided that any such mortgagee agrees with the Tenant in writing that so
long as the Tenant is not in default hereunder, it will not disturb the
Tenants use and occupancy of the Premises under this Lease or any renewal
hereof. Upon the request of the Landlord, the Tenant shall execute such
documentation as may be required by the Landlord in order to confirm and
evidence such subordination; provided however, it being understood that any
such subordination by the Tenant shall not impair the Tenant's right to
continue in possession of the Premises so demised and in confirmation of
the foregoing, the Landlord upon receipt of a written request from the
Tenant agrees to enter into a non-disturbance agreement with the Tenant and
the mortgagee of the Landlord. Further, the Landlord agrees that the
Tenant at its own expense may register a Notice of Lease against title to
the Premises.
14.3 Sale by Landlord
----------------
In the event of a sale by the Landlord of any portion or all its interest
in the Premises, the Landlord shall thereafter be entirely relieved of the
performance of all terms, covenants and obligations thereafter to be
performed by the Landlord under this Lease, to the extent of the interest
or portion so sold or transferred and it shall be deemed and construed
without further agreement between the parties that the purchaser or
transferee, as the case may be, has assumed and agreed to carry out any and
all covenants of the Landlord hereunder.
14
ARTICLE XV - INDEMNITY, LIENS
-----------------------------
15.1 Tenant's Indemnity
------------------
The Tenant shall at all times during the Term, indemnify and save harmless
the Landlord of and from all loss and damage and all actions, claims,
costs, demands, expenses, fines, liabilities and suits of any nature
whatsoever for which the Landlord shall or may become liable, incur or
suffer by reason of a breach, violation or non-performance by the Tenant of
any covenant, term or provision hereof or by reason of any builders' or
other liens for any work done or materials provided or services rendered
for alterations, improvements or repairs to the Premises, made by or on
behalf of the Tenant, or by reason of any injury occasioned to or suffered
by any person or damage to any property, by reason of any wrongful act or
omission, default or negligence on the part of the Tenant or any of its
agents, concessionaires, contractors, customers, employees, invitees or
licenses in or about the Premises not caused by the negligence or wilful
neglect of the Landlord or any of its employees or agents or invitees.
15.2 Personal Injury and Property Damage
-----------------------------------
The Landlord shall not be liable or responsible for:
(a) any personal injury or consequential damage of any nature whatsoever,
however caused, that may be suffered or sustained by the Tenant or by any
other person who may be upon the Premises; or
(b) any loss or damage of any nature whatsoever, howsoever caused, to the
Premises, any property belonging to the Tenant or to any person while such
property is in or about the Premises.
Provided the same is not caused by the negligence or wilful neglect of the
Landlord or any of its employees or agents or invitees.
15.3 Liens
-----
The Tenant shall, immediately upon demand by the Landlord, remove or cause
to be removed, and thereafter institute and diligently prosecute any action
pertinent thereto, any builder's or other lien or claim of lien referenced
in Section 15.1 hereof noted or filed against or otherwise constituting an
encumbrance on the Landlord's title to the Lands. Without limiting the
foregoing obligations of the Tenant, the Landlord may cause the same to be
removed, in which case the Tenant shall pay to the Landlord as Additional
Rent the cost thereof, including the Landlord's complete legal costs.
15.4 Landlord's Indemnity
--------------------
The Landlord shall at all times during the Term indemnify and save harmless
the Tenant and its directors, officers, employees, agents and invitees of
and, from all loss and damage and all actions, claims, costs, demands,
expenses, fines, liabilities and suits of any nature whatsoever for which
any one or more of the Tenant and its directors, officers, employees,
agents and invitees
15
shall or may become liable, incur or suffer by reason of:
(a) a breach, violation or non-performance of any of the Landlord's covenants
hereunder; or
(b) any injury occasioned to or suffered by any person or damage to any
property, by reason of any wrongful act or omission, defaut or negligence
by or on the part of the Landlordor any of its agents, concessionaires,
contractors, customers, employees, invitees or licenses in or about the
Lands and/or Building;
not caused by Tenant or any of its directors, officers, emplyoees, agents
or invitees.
16
ARTICLE XVI - DEFAULT, REMEDIES, TERMINATION
--------------------------------------------
16.1 Default
-------
If and whenever:
(a) the Tenant shall be in default in the payment of any money, whether hereby
expressly reserved or deemed as rent, or any part thereof, and such default
shall continue for ten (10) days following any specific due date on which
the Tenant is to make such payment or, in the absence of such specific due
date, for the ten (10) days following written notice by the Landlord
requiring the Tenant to pay the same; or
(b) the Tenant's leasehold interest hereunder, or any goods, chattels or
equipment of the Tenant located in the Premises shall be validly taken or
seized after due process in execution or attachment, or if any writ of
execution shall issue against the Tenant and not be discharged within
twenty one (21) days of its issuance, or the Tenant shall become insolvent
or commit an act of bankruptcy or become bankrupt or take the benefit of
any Act that may be in force for bankrupt or insolvent debtors or become
involved in voluntary or involuntary winding up, dissolution or liquidation
proceedings, or if a receiver or receiver and manager shall be appointed
for the affairs, business, property or revenues of the Tenant; or
(c) The Tenant shall fail to commence, diligently pursue and complete the
Tenant's work to be performed pursuant to any agreement to lease pertaining
to the Premises or other agreement signed by the parties or fail to open
for business when required by the provisions of the Lease, or vacate or
abandon the Premises or fail or cease to operate pursuant to the provisions
of this Lease or otherwise cease to conduct business from the Premises, or
use or permit or suffer the use of the Premises for any purposes other than
as allowed pursuant to this Lease, or fail to remedy or rectify any act or
omission hereunder, or move or commence, attempt or threaten to move its
goods, chattels and equipment out of the Premises other than in the routine
and ordinary course of business; or
(d) the Tenant commences a wholesale removal of trade fixtures, goods or
chattels of the Tenant sufficient to negate the Landlord's remedy of
distraint for unpaid rent; or
(e) the Premises become and remain vacant for a period of five (5) consecutive
days other than a holiday vacation office closure of which the Landlord has
been given prior notice or the Premises are used by any persons other than
such as are entitled to use them hereunder; or
(f) The Tenant assigns, transfers, encumbers, sublets or permits the occupation
or use or the parting with or sharing possession of all or any part of the
Premises by anyone
17
except in a manner permitted by this Lease; or
(g) re-entry is permitted under any other term of this Lease; or
(h) the Tenant fails to observe, perform or keep each and every of the
covenants, agreements, stipulations, obligations, conditions and other
provisions of this Lease to be observed, performed and kept by the Tenant
and persists in such default, in the case of monetary payments, beyond the
ten (10) day period stipulated in paragraph (a) aforesaid or, in the case
of any other default, after ten (10) days written notice from the Landlord
requiring that the Tenant remedy, correct or comply or, in the case of any
such default which would reasonably require more than ten (10) days to
rectify, unless the Tenant shall commence rectification within the said ten
(10) day notice period and thereafter promptly and diligently and
continuously proceed with the rectification of any such default;
then, and in each of such cases, and at the option of the Landlord and in
addition to any other rights or remedies the Landlord may have pursuant to
this Lease or at law, the Landlord may immediately re-enter upon the
Premises and may expel all occupants thereof and remove all property from
the Premises and such property may be removed and sold or disposed of by
the Landlord in such manner as it deems advisable, including by private
sale, or may be stored in a public warehouse or elsewhere at the cost and
for the account of the Tenant, all without service of notice or resort to
legal process and without the Landlord being considered guilty of trespass
or becoming liable for any loss or damage which may be occasioned thereby.
If the Landlord elects to re-enter the Premises as herein provided, or if
it takes possession pursuant to the legal proceedings or pursuant to any
notice provided for by law, it may either terminate this Lease or it may
from time to time without terminating this Lease, make such alterations and
repairs as are necessary in order to relet the Premises, or any part
thereof, for such term or terms (which may be for a term extending beyond
the Term) and at such rent and upon such other terms, covenants and
conditions as the Landlord in its sole discretion considers advisable.
16.2 Landlord may Perform
--------------------
If the Tenant shall fail to observe, perform or keep any of the provisions
of this Lease to be observed, performed and kept by the Tenant, the
Landlord may, but shall not be obliged to, at its discretion and without
prejudice to any other right, claim, or action it may have, rectify the
default of the Tenant, whether or not performance by the Landlord on behalf
of the Tenant is otherwise expressly referred to in the applicable Section
of this Lease. For such purpose the Landlord may make any payment or do or
cause to be done, such things as may be required including, without
limiting the generality of the foregoing, entry upon the Premises. Any
such performance by or at the behest of the Landlord shall be at the
expense of the Tenant and the Tenant shall pay to the Landlord as
Additional Rent the cost thereof.
16.3 Distress
--------
If and whenever the Tenant shall be in default in the payment of any money,
whether hereby expressly reserved or deemed as rent, or any part thereof,
the Landlord may, without notice or any form of legal process whatever,
enter upon the Premises and seize, remove and sell by
18
judicial or formal process or by private sale the Tenant's goods, chattels
and equipment at any place to which the Tenant or any other person may have
removed them, in the same manner as if they had remained and been
distrained upon the Premises, all notwithstanding any rule of law or equity
to the contrary, and the Tenant hereby waives and renounces the benefit of
any present or future statute or law limiting the Landlord's right of
distress or sale.
16.4 Costs and Interest
------------------
All costs, expenses and expenditures of the Landlord, incurred upon any
default by the Tenant hereunder, including, without limitation, the legal
costs incurred by the Landlord on an indemnification basis as between
solicitor and his own client shall, forthwith on demand, be paid by the
Tenant to the Landlord as Additional Rent.
All rent and other sums due to the Landlord pursuant to the terms of this
Lease shall be paid by the Tenant promptly when due, and if not so paid,
shall bear interest from their respective due dates at the rate of twelve
(12) percent per annum, both before and after default, demand and
judgement.
19
16.5 Vacate Upon Termination, Survival
---------------------------------
At the termination of this Lease, whether by affluxion of time or
otherwise, the Tenant shall vacate and deliver up possession to the Tenant,
subject to the exceptions from the Tenant's obligation to repair and
subject to the Tenant's rights and obligations in respect of removal and
the Tenant shall thereupon surrender all keys to the Premises to the
Landlord at the place then fixed for payment of rent and shall inform the
Landlord of all combinations on locks, safes and vaults, if any, in the
Premises. The indemnity agreements contained in this Lease shall survive
the termination of this Lease.
16.6 Additional Rights on Re-Entry
-----------------------------
If the Landlord shall re-enter the Premises or terminate this Lease, then:
(a) notwithstanding any such re-entry, termination, or the Term thereby
becoming forfeited and void, the provisions of this Lease relating to the
consequence of termination shall survive;
(b) the Landlord may use such force as it may deem necessary for the purpose of
gaining admittance to and retaking possession of the Premises and the
Tenant hereby releases the Landlord from all actions, proceedings, claims
and demands whatsoever for or in respect of any such forcible entry or any
loss or damage in connection therewith or consequential thereupon;
(c) the Landlord may relet the Premises or any part thereof for a term or terms
which may be less or greater than the balance of the Term and may grant
reasonable concessions in connection therewith; and
(d) the Tenant shall pay to the Landlord on demand:
(ii) rent and all other amounts payable hereunder up to the time of re-entry or
to termination, whichever shall be the later; and
(iii) such reasonable expenses as the Landlord may incur or has incurred in
connection with the re-entering, terminating, reletting, collecting sums
due or payable by the Tenant, realizing upon assets seized, including
without limitation brokerage, legal fees and disbursements on an
indemnification basis as between a solicitor and his own client, and the
expenses of keeping the Premises in good order, repairing the same and
preparing them for reletting; and
(iv) as liquidated damages for the loss of rent and other income of the Landlord
expected to be derived from the Lease during the period which would have
constituted the unexpired portion of the Term had it not been terminated,
at the option of the Landlord, either:
(A) an amount determined by reducing to present worth at an assumed interest
rate of twelve (12) percent per annum all Minimum Rent and Additional rent
to become payable during the period which would have
20
constituted the unexpired portion of the Term, such determination to be
made by the Landlord, who may make reasonable estimates of when any such
other amounts would have become payable and may make such other assumptions
or fact as may be reasonable in the circumstances; or
21
(B) an amount equal to accelerated
(i) Minimum Rent, plus
(ii) Additional Rent,
For a period of six (6) months; or
(C) such other amount as may be claimed by the Landlord according to law.
16.7 No Waiver
---------
No provision of this Lease shall be deemed to have been waived by the
Landlord unless a written waiver from the Landlord has first been obtained
and, without limiting the generality of the foregoing, no acceptance of
rent subsequent to any default and no condoning, excusing or overlooking by
the Landlord on previous occasions of any default or any earlier written
waiver shall be taken to operate as a waiver by the Landlord or in any way
to defeat or affect the rights and remedies of the Landlord.
16.8 Remedies Cumulative
-------------------
No reference to or exercise of any specific right or remedy by the Landlord
shall prejudice or preclude the Landlord from any other remedy, whether
allowed at law or in equity or expressly provided for herein. No such
remedy shall be exclusive or dependent upon any other such remedy, but the
Landlord may, from time to time, exercise any one or more of such remedies
independently or in combination. Without limiting the generality of the
foregoing, the Landlord shall be entitled to commence and maintain an
action against the Tenant to collect any rent not paid when due without
exercising the option to terminate this Lease.
16.9 Holding Over
------------
If the Tenant continues to occupy the Premises with the written consent of
the Landlord after the expiration or other termination of the Term, then,
without any further written agreement, the Tenant shall be a Tenant from
month to month at the aggregate of:
(a) a minimum monthly rent equal to one hundred and twenty (120)
percent of the monthly Minimum Rent prevailing immediately prior to
expiration or termination;
(b) Additional Rent as herein provided;
and subject always to all of the other provisions in this Lease insofar as
the same are applicable to a month to month tenancy and a tenancy from year
to year shall not be created by implication of law; provided that if the
Tenant continues to occupy the Premises without the written consent of the
Landlord at the expiration or other termination of the Term, then the
Tenant shall be a tenant at will and shall pay to the Landlord, as
liquidated damages and not as rent, an amount equal to the aggregate set
forth above during the period of such occupancy, accruing from day to day
and adjusted pro rata accordingly and subject always to all of the other
provisions of this Lease insofar as they are applicable to a tenancy at
sufferance and a tenancy from month to month or from year to year shall not
be created by implication of law; provided that nothing herein contained
shall preclude the Landlord from taking action for recovery of possession
of the Premises.
22
ARTICLE XVII - RIGHT OF FIRST REFUSAL
-------------------------------------
The Landlord agrees to give the Tenant a Right of First Refusal to lease space
adjacent to the demised premises. If at any time during the term hereof the
Landlord receives either:
(a) an acceptable bonafide offer to lease the adjacent space in the Building;
or
(b) a conditional acceptance of a bonafide offer to lease the adjacent space in
the Building.
The Tenant shall have a Right of First Refusal to lease any available space in
the Building and will give to the Landlord written notice within the said period
of five (5) working days that the Right of First Refusal has been exercised.
ARTICLE XVIII - GENERAL PROVISIONS
----------------------------------
18.1 Time
----
Time is of the essence hereof.
18.2 Notices
-------
Any Notice required to be given hereunder by any party shall be deemed to
have been well and sufficiently given if:
(a) personally delivered to the party to whom it is intended or if such party
is a corporation to an officer of that corporation; or
(b) if mailed by prepaid registered mail, to the address of the party to whom
it is intended hereinafter set forth:
(ii) if to the Tenant:
(A) to the address of Premises, or
(B) if the Tenant is a corporation, to its registered office.
(ii) if to the Landlord, at the address set forth in Section 1.1(a)(i) or
to such other address as a party may from time to time direct in
writing.
Any Notice delivered as aforesaid shall be deemed to have been received on
the date of delivery and any Notice mailed shall be deemed to have been
received seventy two (72) hours after the date it is postmarked. If normal
mail service is interrupted after the Notice has been sent the Notice will
not be deemed to be received until actually received. In the event normal
mail service is impaired at the time of sending the Notice, then personal
delivery only shall be effective.
23
18.3 Extended Meanings
-----------------
"Hereof", "herein", "hereunder" and similar expressions used anywhere in
this Lease relate to the whole of this Lease and not to any particular
section or subsection, unless otherwise expressly provided. The use of the
neuter singular pronoun to refer to the Landlord or the Tenant is deemed a
proper reference even though the Landlord or the Tenant is an individual,
partnership, corporation or group of two or more individuals, partnerships
or corporations. The necessary grammatical changes required to make the
provisions of this Lease apply in the plural sense where there is more than
one Landlord or Tenant and to either corporations, associations,
partnerships or individuals, males or females, shall in all instances be
assumed as though in each case fully expressed.
18.4 No Transfer on Bankruptcy
-------------------------
Neither this Lease or any interest of the Tenant herein or any estate
hereby created will pass or enure to the benefit of any trustee in
bankruptcy or any receiver or any assignee for the benefit or creditors of
the Tenant or otherwise by operation of law.
18.5 Successors Bound
----------------
All rights and liabilities herein given to, or imposed upon, the respective
parties hereto shall extend to and bind the several respective heirs,
executors, administrators, successors and assigns of the said parties and
if there is more than one party described in Section 1.1(b), they shall all
be bound jointly and severally by the terms, covenants and agreements
herein on the part of the Tenant. No rights, however shall enure to the
benefit of any assignee of the Tenant unless the assignment to such
assignee has been first approved by the Landlord. All covenants,
agreements, stipulations, obligations and other provisions of this Lease to
be observed, performed and kept by the Tenant shall run with the land and
therefore be enforceable by all successors of the Landlord.
18.6 Headings
--------
The headings in this Lease have been inserted for reference and as a matter
of convenience only and in no way define, limit or enlarge the scope of
meaning of this Lease or any provisions hereof.
18.7 Limitation on Terms and Conditions
----------------------------------
The terms and conditions herein contained together with those contained in
an Offer to Lease signed by the parties on or before May 25, 1999
constitute the entire agreement between the parties and shall supersede all
previous oral or written communications. In the event there is any
conflict between any term or condition in this Lease and any term or
condition in the aforesaid Offer to Lease, the latter shall prevail.
18.8 Tenant's Acceptance
-------------------
The Tenant hereby accepts this Lease of the Premises, to be held by the
Tenant, subject to the conditions, restrictions and covenants set forth
herein.
24
ARTICLE XIX - LANDLORD'S COVENANTS
19.1 Quiet Enjoyment
---------------
The Landlord covenants with the Tenant for quiet enjoyment, for so long as
the Tenant is not in default hereunder, and except for permitted
interventions described in Sections 11.1(c), 11.3 and 11.4 herein.
19.2 Taxes
-----
The Landlord covenants with the Tenant to pay, subject to the provisions of
this Lease, all Property Taxes that may be charged, levied, rated or
assessed against the Lands and the Building. If, in the sole opinion and
discretion of the Landlord, any Property Taxes are not fair and equitable,
the Landlord may take all steps necessary to contest or appeal the validity
thereof, but the Tenant shall not postpone or omit payment of the Tenant's
Proportionate Share of Property Taxes because of any such appeal or on-
going contest or otherwise provided that the Landlord shall notify and
account to the Tenant for any portion to which the Tenant may be entitled
of any savings, refund or reduction which may be forthcoming as a result of
such appeal or contest.
19.3 Repair
------
The Landlord covenants with the Tenant to keep the HVAC Facilities and the
common area and facilities from time to time forming part of the Lands and
the Buildings in good order and repair. The Landlord further agrees to
make Structural Repairs to the Building and repairs necessitated by damage
from hazards covered by insurance which the Landlord has maintained or is
obligated to maintain unless such repairs are necessitated by the acts or
omissions of the Tenant, its agents, employees, invitees or licensees.
19.4 Landlord's Insurance
--------------------
The Landlord shall take out and maintain during the Term:
(a) all risk commercial insurance, including earthquake and flood, to the full
replacement value of the Building;
(b) loss of rental income insurance not to exceed one year's net rental
revenue;
(c) general liability insurance, including general liability insurance in
respect of common areas forming part of the Lands and Building in an amount
of not less than $2,000,000.00 in respect of any injury to or death of one
or more persons and loss of or damage to property of others; and
(d) boiler and machinery insurance for direct damage and associated loss of
rental income.
25
The aforesaid insurance shall exclude the exercise of any claim by the
Landlord's insurer against the Tenant by subrogation and shall provide that
such insurance may not be terminated, cancelled or materially altered
unless thirty (30) days' written notice of such termination, cancellation
or material alteration is given by the insurers to the Tenant. The
Landlord shall, upon the request of the Tenant, deliver to the Tenant
certificates of such insurance, or the original or certified copy of such
insurance policies.
19.5 Access
------
The Landlord agrees that the Tenant and its employees shall have access to
the Premises twenty four (24) hours a day, seven (7) days a week.
26
IN WITNESS WHEREOF the parties hereto have executed this Lease as of the day and
year first above written.
THE COMMON SEAL OF (the Landlord)
NO. 150 CATHEDRAL VENTURES LTD.
was hereunto affixed in the presence of:
/s/
----------------------------------------
AUTHORIZED SIGNATORY C/S
/s/
----------------------------------------
AUTHORIZED SIGNATORY
THE COMMON SEAL OF (the Tenant)
XXXXX.xxx CHANNELS, INC.
was hereunto affixed in the presence of:
/s/
----------------------------------------
AUTHORIZED SIGNATORY C/S
/s/
----------------------------------------
AUTHORIZED SIGNATORY
27
SCHEDULE "A"
------------
Layout of the 5,271 square feet of rentable area on the third floor of the
Building.
(Map or Plan).
Note: Not shown here is two (2) parking spaces in the Building (the "Parking
Space") which are reserved for the exclusive use of the Tenant during the Term
and any Renewal Term of the Lease.
28
SCHEDULE "B"
------------
The Landlord shall provide the premises finished, to the extent as set out below
as per the Tenant's space plan including the following and will carry out such
work with all due diligence. It is understood that some of the Landlord's Work
can only be undertaken contemporaneously with or subsequent to work done by the
Tenant's and that certain work, including correction of deficiencies may be
undertaken or completed subsequent to the commencement date of the lease.
LANDLORD'S WORK:
1. Electrical: Provide sufficient power to the building for the needs of the
Tenant.
2. Paint: Provide entire interior perimeter walls to be dry-walled and
sanded ready for painting or to a painted finish.
3. Flooring: Floor smooth and ready for Tenant's floor finish.
4. HVAC: Install HVAC unit of a size and capacity sufficient for the
Tenant's intended use by reputable supplier complete with industry standard
guarantee and maintenance service contract. The Tenant is responsible for
distribution of the HVAC. Specifications and final design to be provided by
the Landlord's engineer .
TENANT'S WORK:
The Landlord will complete the premises to a basic "turnkey" position to a
maximum leasehold improvement allowance of $25.00 per square foot of the
rentable area as per the Tenant's space plan including the following: All
additional leasehold improvements will be the responsibility of the Tenant and
must be approved in writing by the Landlord's consultants prior to the start of
construction.
1. Electrical: Electrical outlets, light switches and dedicated
circuits as required in office area as per space plan.
2. Lighting: As required as per space plan.
3. Paint: All walls and interior doors to be painted to Tenant's
choice of colour.
4. Flooring: Install new carpet or floor covering to Tenant's choice
of colour.
5. Partitions: Partition walls as per space plan.
6. HVAC: Distribution of HVAC.
7. Venetian Blinds: Building standard blinds.
29
8. The Tenant will deliver a layout to the Landlord to construct the Tenant's
work as above within seven (7) days of acceptance of this Offer to Lease.
The Landlord will be responsible for any permits required for the
alterations for the demised premises.
9. The Tenant will approve the plan and all tenders for the Tenant's Work in
writing, prior to commencement of construction.
30
SCHEDULE "C"
------------
Definitions
-----------
In this Lease, the following words, phrases and expressions are used with the
meanings defined as follows:
1. Additional Rent means any sum or sums payable by the Tenant to the Landlord
pursuant to any provision of the Lease, all of which are recoverable by the
Landlord as rent, other than Minimum Rent.
2. Building means the building located on the Lands containing an aggregate of
46,000 square feet (more or less) on four storeys and within which the
Premises are located and contains the number of square feet of floor area
set out in Section 1.1(d) (more or less).
3. Commencement Date means that date set out in Section 1.1(e)(ii).
4. Fair Market Rent means the amount (exclusive of Additional Rent) that a
willing tenant and a willing landlord would accept in bonafide
negotiations, without any additional inducements, for a lease of the
Premises for a three (3) year term. Fair Market Rent shall be agreed upon
or determined upon consideration of the most recent leases and market
renewal leases for comparable buildings and terms that are near the
Premises. Appropriate adjustments may be made for lease duration,
inducements and any other special term or condition of such other leases.
5. "HVAC Facilities" means the heating, ventilating and air conditioning
system installed by the Landlord on the third floor of the Building for the
sole and exclusive use of the Tenant in connection with its use and
occupation of the Premises.
6. Landlord means the party or parties described in Section 1.1(a) and the
heirs, executors, administrators, successors and assigns thereof.
7. Lands means the lands described in Section 1.1(h) upon which the Building
is located.
8. Lease Year means, in the case of the first Lease Year, the period beginning
on Commencement date and terminating twelve (12) months from the last day
of the calendar month in which the Commencement Date occurs and, in the
case of each subsequent Lease Year, means each twelve (12) month period
after the First Lease Year.
9. Minimum Rent means the rent set out in Section 1.1(f).
10. Notice includes requests, demands, designations, statements or other
writings in this Lease required or permitted to be given by the Landlord to
the Tenant or by the Tenant to the Landlord and all writs, originating
notices of motion, affidavits and any other ancillary documents in support
of all legal proceedings.
31
11. "Operating Costs" means all of the Landlord's outlays, costs, charges and
expenses, without duplication which are paid or incurred by the Landlord to
operate, supervise, repair and maintain the Lands and the Building,
including without limitation, the cost of supplying electricity, water and
other utilities not separately metered; cleaning and janitorial services;
snow and ice removal; striping and repairing parking areas; supervising,
policing and providing security; painting; planting and landscaping;
operating and maintaining garbage compaction equipment; the cost of repairs
and replacements to the Building; insurance premiums; the salaries and
remuneration (including contributions towards fringe benefits, unemployment
insurance and similar contributions and worker's compensation assessments)
of persons and staff employed by the Landlord to provide security,
management, maintenance, supervisory and operating services for the
Building. Notwithstanding the foregoing there shall be excluded from the
Operating Costs, without duplication:
iai costs properly chargeable to capital account including periodic
depreciation on the capital cost to the Landlord of the Building;
ibi costs incurred by the Landlord in selling, leasing, syndicating, financing,
mortgaging or hypothecating any interest of the Landlord in the Lands or
the Building; and payments of principal and interest under any mortgages on
the Building;
ici corporate, income, profits or excess profit taxes assessed upon the income
of the Landlord;
idi Structural repairs;
iei the costs to repair damage to the extent that insurance proceeds are
actually recovered by the Landlord in respect thereof;
ifi depreciation of the machinery, equipment and fixtures of the Landlord
located anywhere on the Lands or the Building;
igi replacements required in respect of the HVAC facilities; and
ihi costs resulting from damage caused by the negligence or wilful act of the
Landlord or any persons for whom it is responsible in law; and
iii costs described in the definition of Operating Costs in the preceding
paragraph which relate solely to the Premises and pursuant to the Lease are
payable by the Tenant.
1. Premises means the premises on the third floor of the Building demised by
the Landlord to the Tenant pursuant to this Lease and containing the square
footage (more or less) described in Section 1.1(D) hereof.
2. Proportionate Share, at any point in time, means a fraction the numerator
of which is the square footage of the Premises being leased at that point
in time as per Section 1.1(F) and the denominator of which is the square
footage of all of the rentable premises in the Building, including the
Premises.
3. Property taxes means all general, special, local improvement, school and
water taxes, levies,
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rates and charges from time to time imposed against the Premises, or any
part thereof, by municipal or other governmental authorities having
jurisdiction, together with the costs of contesting or negotiating the
same, but exclusive of income taxes, business place of business taxes,
estate, inheritance, succession, capital levy or transfer tax. (Should it
be found that due to changes in the method of levying or collection or any
tax, levy, rate or charge to be imposed upon the Premises, or any part
thereof, or should any new tax, levy, rate or charge be levied or imposed
in lieu of or in addition to those contemplated by the above definition,
the Landlord and the Tenant hereby agree to negotiate an amendment or new
provision to this Lease as is necessary to deal with such tax, levy, rate
or charge, in an equitable manner so as to obviate any injustice or
inequity which shall have arisen and should the Landlord and the Tenant
fail to agree on such amendment or new provision the same shall be settled
by arbitration in accordance with the Commercial Arbitration Act of British
Columbia, and amendments thereto, or any like statute in effect from time
to time).
4. Sales Tax means any sales tax, goods and services tax, business transfer
tax, value added tax or any similar tax imposed against the Landlord by the
Government of Canada, or any provincial or municipal government to the
extent that such tax is imposed against the Landlord or is required to be
paid or collected by the Landlord by reason of any payment by the Tenant to
the Landlord pursuant to any provision of this Lease.
5. Structural Repairs means only repairs to the foundations, the structural
subfloors, columns and beams and the structural portions of bearing walls
and roofs of the Premises and specifically excludes maintenance of every
kind.
6. Tenant means the party or parties described in Section 1.1(b) and the
heirs, executors, administrators, successors and permitted assigns thereof.
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