ARTICLE I
EXHIBIT 5.17 THIS LEASE MADE in triplicate this 26th day of March, 1992 BETWEEN: THE CANADA LIFE ASSURANCE COMPANY, (hereinafter called the "Landlord") OF THE FIRST PART AND: OSIWARE INC (hereinafter called the "Tenant") OF THE SECOND PART WHEREBY the parties agree as follows: ARTICLE I INTERPRETATION 1.01 Defined Terms - General ----------------------- In this lease: "Building" means that certain building and those certain areas and improvements and amenities located on the Land. "Common Areas" means those parts of the Project designated by the Landlord for common use by the Landlord and the tenants of the Project, including without limitation, the landscaped portions of the Project, the public sidewalks and the landscaped portions of the streets adjacent to the Project,, the Delivery Facilities, and Parking Facilities if any. "Common Service Areas" means those parts of the Project, whether or not within the Building, designated by the Landlord which provide services to the Project. "Costs of Utilities" means the cost of electricity and other utilities supplied to tenants of premises in the Building as determined by the Landlord who in making its determination shall take into account the readings of any electrical check meters installed by the Tenant. "Delivery Facilities" means those portions of the Project designated by the Landlord as facilities for common use by the Landlord and tenants of the Project for deliveries. "Expert" means any architect, engineer land surveyor, chartered accountants or other professional consultant, as the case may be, appointed by the Landlord and qualified in the opinion of the Landlord to perform the particular function. 1. "Expiration of the Term" means the termination of this Lease by either effluxion of time or operations of any of its provisions. "Fixed Rent" means the amount payable under section 3.01 (a). "Insurance" means coverage with respect to the following risks in the amounts equal, in the case of the Landlord, to those maintained by prudent owners of like buildings and in the case of the Tenant, to those maintained by prudent tenants of like premises: (a) comprehensive general liability; (b) all risks coverage; (c) in the case of the Landlord: (i) boiler and machinery; and (ii) loss of rental income by reason of damage; and (d) in the case of the Tenants legal liability; and in the case of the Landlord such other coverage as the Landlord may require to maintain and in the case of the Tenant, such other coverage as the Landlord may require, in each case having regard to the risks which are customarily insured against by prudent landlords and tenants of like premises. "Landlord's Cost" means with respect to any cost incurred by the Landlord the actual amount thereof and a fee on account of management and overhead, said fee to be equal to the amount the Landlord might reasonably pay to a third party for the administration and management of the Buildings. "Leasehold Improvements" means the fixtures and improvements made by or on behalf of the Tenant in the Premises. "Notice" has the meaning set forth in section 15.04. "Parking Facility", if any, means those portions of the Project designated by the Landlord for parking. "Premises" means the portion of the Building, excluding its exterior outlined in red on the floor plan attached to, and forming part of, this Lease. "Prime" means the rate of interest from time -to time announced by The Bank of Nova Scotia as its prime rates. 2. "Project" means the improvements constructed on the Land including the Building, the Common Areas (whether on or adjacent to the Land), the Parking Facility, if any, and any other building. "Land" means the land as described in Schedule 'A' attached hereto "Rent" means the amounts payable by the Tenant to the Landlord under this Lease. "Term" means the term of this Lease as specified in section 2.03 and any permitted overholding. and "Unavoidable Delay" means any events except financial inability beyond the control of the party affected thereby which prevents the fulfillment by such party of any obligation hereunder and not caused by such party and not avoidable by the exercise of reasonable effort or foresight by such party. 1.02 Defined Terms - Operating Costs and Taxes ----------------------------------------- For the purpose of calculating the Proportionate Share of Operating Costs and Taxes: "Fiscal Year" means a calendar year provided that the Landlord may by Notice specify an annual date upon which each subsequent Fiscal Year is to begin, in which event the Fiscal Year which would otherwise be current when such annual date first occurs thereafter shall terminate on the preceding day. "Operating Costs and Taxes" means for a Fiscal Year the aggregate costs paid or payable by the Landlord in accordance with generally accepted accounting principles applied in the real estate management industry on account of Taxes Insurance and the operation, management, maintenance and repair of the Building, the Land, the Common Areas and the Common Service Areas together with a charge the annual cost of which for the purpose of this Lease shall be deemed to be management fees paid by the Landlord for the administration and management of the Building and the Land, and, if the Landlord itself manages the Building and the Land, a fee equal to the amount the Landlord might reasonably pay to a third party for the administration and management of the Building and the Land including (without limiting the generality of the foregoing) the cost amortized at Prime of all capital improvements made after the Building is substantially completed and which are required by any competent authority or which have the effect of reducing the costs which would otherwise be included in Operating Costs and Taxes, but excluding the following: (i) costs directly recoverable from tenants or insurers; 3. (ii) debt service, depreciation or other costs of a capital nature and interest on any of the foregoing except as hereinafter provided; (iii) costs of procuring any lease; and (iv) income, corporate and other taxes of a personal nature of the Landlord to the extent not imposed in lieu of Taxes. The proportion of operating Costs and Taxes attributable to the Common Areas and the Common Service Areas shall be allocated equitably by the Landlord among the tenants and will be based to the extent possible on their respective aggregate areas of Rental Space in the Building. If at any time there are unoccupied premises in the Building, the Landlord may make an equitable adjustment of the amount of Operating Costs and Taxes, by reason of the fact that unoccupied premises result in lower costs in order that the tenants of the occupied premises will bear the actual amount of the Operating Costs and Taxes attributed to their respective premises. "Taxes" means all taxes and other charges imposed by any lawful authority against the Land and any improvements thereon or upon the Landlord in respect thereof and all costs relating to any appeal thereof and includes (without limiting the generality of the foregoing) any Rental Taxes. "Proportionate Share" means the ratio, the numerator of which is the Rentable Space of the Premises and the denominator of which is the aggregate Rentable Space of the Building (exclusive of any storage areas). "Rentable Space" whether in the case of a whole floor of the Building or in the case of premises comprising part of a floor of the Building shall be determined by the Landlord's architect or land surveyor according to the American National Standard for measuring floor area in office buildings as established by the Builders Owners and Managers Association International and in effect as of the date of commencement of the Term "Rental Taxes" means tax or duty imposed upon the Landlord which is measured or based in whole or in part directly upon the Rent payable under this Lease or services provided by the Landlord whether existing at the date hereof imposed by any governmental authority. 1.03 Number, Gender and Joint and Several Liability ---------------------------------------------- The necessary grammatical changes required to make the provisions of this Lease apply in the plural sense where the Tenant comprises more than one entity and to corporations, associations, partnerships or individuals, male or females shall be assumed as though in each case fully expressed. If the Tenant is more than one person or entity its liability shall be joint and several. If the Tenant is a 4. partnership each person who is or becomes a member of the partnership or any successor partnership shall be jointly and severally liable, 1.04 Procedure for Approval ---------------------- Any requests for approval shall be requested by Notice and in the absence of reply given by Notice not later than 15 days after Notice of the request has been received, or such other period of' time as is otherwise expressly provided in this Lease the approval shall be deemed to have been given unless the approval may by the terms of this Lease be withheld in the discretion of the party whose approval is requested. Each approval shall be in writing unless by operation of the preceding sentence it is deemed to have been given. If either party withholds its approval it shall give Notice of its reason unless the approval may by the terms of this Lease be withheld in its discretion. 1.05 Divisions --------- All references in this Lease to articles sections and other subdivisions are to those in this Lease. 1.06 Entire Agreement ---------------- This Lease and the regulations imposed by the Landlord pursuant to section 14.01 constitute the entire agreement between the Landlord and the Tenant concerning the subject matter of this Lease. This Lease may only be amended by an agreement in writing signed by the parties hereto. 1.07 Reasonableness -------------- The Landlord and the Tenant shall, except as otherwise expressly provided in this Lease, each act reasonably having regard to the fact that they are the owner and a tenant, respectively, of a good quality office building, in the exercise and the enforcement of their respective rights under this Lease. Each right shall be exercisable and enforceable from time to time, except as aforesaid. 1.08 Nature of the Lease ------------------- This Lease is a completely net lease to the Landlord and accordingly, except as otherwise expressly provided in this Lease, the Landlord has no obligations to the Tenant with respect to either the Premises, the Building the Common Areas the Common Service Areas, the Parking Facility, or if any, the Project. 5. ARTICLE II DEMISE AND TERM 2.01 Demised Premises ---------------- The Landlord hereby leases the Premises to the Tenant and the Tenant' hereby leases and accepts part of the second (2nd) floor from the Landlord, (being approximately seven thousand and three hundred (7,300) square feet of Rentable Space) to have and to hold during the Term, subject to the terms of this Lease. 2.02 Licenses -------- The Landlord hereby grants to the Tenant throughout the Term and subject to control by the Landlord, a non-exclusive license, revocable at any time upon Notice by the Landlord: (a) to use those parts of the Common Areas giving access to the Premises and the Parking Facility, if any; (b) to have its name displayed on the main lobby directory board for the Building, on the floor lobby directory board on each floor on which the Premises are located and on the main door to the Premises, all such signs to be under the exclusive control of the Landlord and to conform to the uniform pattern of identification signs for tenants of the Building prescribed by the Landlord; and (c) if the Premises constitute one or more full floors of the Building to have a sign displaying the name of the Tenant in the elevator lobby of each such floor, provided that the design of the sign has been approved by the Landlord. 2.03 Term ---- The Term shall be ten (10) years beginning December is, 1992, and ending the last day of November 2002. 2.04 Surrender on Termination ------------------------ Forthwith upon the Expiration of the Term, the Tenant shall vacate and deliver up possession of the Premises in a neat and tidy state and in good and substantial repair in accordance with the Tenant's obligation under this Lease to repair the Premises, but subject to the Tenant's rights and obligations in respect of removal in accordance with sections 9.04 and 9.05. At the same time the Tenant shall surrender to the Landlord at the place then fixed for the payment of Rent all keys and other devices which provide access to the Premises, the Building or any part 6. thereof and shall inform the Landlord of all combinations to locks safes and vaults, if any, in the Premises. 2.05 Overholding ----------- If the Tenant shall continue to occupy the Premises at the expiration of this Lease with or without the consent of the Landlord and without any further written agreement the Tenant shall be a monthly tenant at one hundred and fifty percent (150%) of the monthly Fixed Rent herein reserved for the last year of the Term and otherwise on the terms and conditions herein set forth, except as to the length of tenancy. ARTICLE III RENT 3.01 Items of Rent ------------- The Tenant shall pay to the Landlord: (a) SUITE 200 --------- Per Square Foot/ Fixed Rent Lease Year Per Annum Per Month Per Annum ---------- --------- ---------------------------- 1 - 3 $ 13.00 $ 7,908.33 $ 94,900.00 4 - 5 $ 14.00 $ 8,516.67 $102,200.00 6 - 10 $ 18.00 $10,950.00 $131,400.00 (b) the Proportionate Share of operating Costs and Taxes; (c) the Cost of Utilities supplied to the Premises; (d) the Landlord's Cost on account of the following: (i) the replacement, of tubes and ballasts in the Premises; (ii) the installation and any change of the name of the Tenant on the main lobby directory board for the Building, on each floor lobby 7. directory board on which the Tenant has its name and on the main door to the Premises; (iii) any additional services and equipment agreed to be provided by the Landlord at the request of the Tenant. (e) the amount, if any, by which the operating Costs and Taxes attributed to the Premises by the Landlord exceeds the Proportionate Share of Operating Costs and Taxes if such excess is occasioned by the use or improvement of the Premises. (f) any applicable Goods and Services Tax. (g) Free Fixed Rent --------------- The Tenant shall have a free Fixed Rent period of fifteen (15) months from the date of commencement of the Terms During this period the Tenant shall pay to the Landlord its Proportionate Share of Operating Costs and Taxes and any parking rental. 3.02 General ------- All amounts payable by the Tenant to the Landlord under this Lease shall be deemed to be Rent. The Tenant shall pay Rent without abatement, deduction or set-off, except as expressly provided, in lawful money of Canada to such person and at such address as the Landlord may advise. The Tenant shall pay items of Rent of a recurring nature in advance in equal monthly installments on the first day of each month of the Term and-shall pay other items of Rent within 15 days of the delivery of an invoice therefor. The Landlord shall estimate and may re-estimate, items of Rent of a recurring and variable nature for each Fiscal Year and advise the Tenant thereof. if the Commencement Date is not the first day of a month or if the Expiration of the Term does not occur on the last day of a month, Rent for the broken period shall be pro-rata on a per diem bases. 3.03 Final Determination of Certain Items of Rent -------------------------------------------- The Landlord shall within 180 days after the end of each Fiscal Year provide to the Tenant a statement (the "Statement") setting out in detail the Proportionate Share of Operating Costs and Taxes and such other items of Rent of a recurring and variable nature for such Fiscal Year. If the aggregate monthly installments on account thereof paid during such Fiscal Year differ from the actual amount thereof set forth in the Statement, the Tenant shall pay or the Landlord shall refund the difference within 30 days after the Statement is provided. The Tenant may within the 120 day period after the Statement is provided examine the books and records of the Landlord relating to the Project. The Tenant may by Notice given within such 120 day period but not otherwise dispute the Statement 8. whereupon the matter shall be finally resolved by an Expert. If the Expert determines that the amount payable by the Tenant has been overstated by more than 3% the Landlord shall pay the fee of the Expert. If the Expert determines that the amount payable by the Tenant has not been overstated by three (3%) per cent or more the Tenant shall pay such fees. Any adjustment required to any previous payment made by the Tenant or the Landlord by reason of any such determination shall be made forthwith and shall bear interest at a rate equal to a Prime and 1% per annum from the date the Statement is provided. The Landlord may not claim a readjustment of the Proportionate Share of Operating Costs and Taxes or of any other item of Rent based upon any error of computation or allocation except by Notice given within 180 days after the Statement is provided but not otherwise. 3.04 Post-Dated Changes ------------------ At the request of the Landlord, the Tenant shall present to the Landlord. A series of monthly post-dated cheques for each lease year of the Term in respect of the aggregate of the monthly payment of Rent, in advance, and any other payments required by this Lease to be paid by the Tenant monthly in advances. The Tenant agrees that if any of the Tenant's cheques are returned for lack of sufficient funds the Tenant shall pay to the Landlord upon receipt of the Landlord's invoice for same, a minimum administrative fee of not lest than Twenty-Five Dollars ($25,00). 3.05 Deposit ------- The deposit of thirty thousand, six hundred and eighty-four dollars and twenty-one cents ($30,684.21) is to be applied in payment on the sixteenth (16th) month's rent and the balance shall be applied as a security deposit for the due performance by the Tenant of all the covenants and obligations on its part herein contained, the Landlord hereby reserving unto itself at its sole discretion the right to apply such sum to any damages resulting from any default by the Tenant of any of its covenants and obligations hereunder or towards the payment or reduction of any claim of the Landlord against the Tenant including monthly Rent. If the Deposit hereunder shall be applied in accordance with the provisions hereof, the Tenant covenants to provide sufficient funds to ensure that the Deposit remains at the level herein before indicated within ten (10) days of receipt of the Landlord's Notice therefore. The application of the Deposit as aforesaid shall be without prejudice to the Landlord in pursuing any of its other rights and remedies contained in this Lease. Provided the Tenant is not then in default under the Lease and provided that the Tenant has not, in any way, damaged the Premises, the Landlord shall, within thirty (30) days of the Tenant's vacating the Premises, return to the Tenant the balance of the security deposit referred to in section 3.05. 9. ARTICLE IV USE OF PREMISES 4.01 Use --- The Premises shall be used for business office purposes only and not for any other purpose without the prior written consent of the Landlord, which consent may be withheld at the discretion of the Landlord. The Tenant shall not permit any part of the Premises to the occupied by any person other than the Tenant and its employees and any subtenant permitted under section 10.03 and the employees of such subtenant. 4.02 Waste and Nuisance ------------------ The Tenant shall not commit or permit any waste or damage to the Premises or any manner of use causing annoyance to other tenants of the Project. 4.03 Extraordinary Equipment ----------------------- The Tenant shall not install any equipment which might affect the capacity of either the structure or the basic systems of the Building. 4.04 Fire Prevention and Energy Conservation --------------------------------------- The Tenant shall comply with the requirements of the Landlord with respect to fire prevention and, with respect to the Premises, energy conservation. 4.05 Exterior Appearance of Premises ------------------------------- The Tenant shall keep the exterior appearance of the Premises tidy and business-like and shall not erect any sign or other like object within the Premises which is visible from the exterior of the Premises. 10. ARTICLE V LIMITATION OF LIABILITIES 5.01 Unavoidable Delay ----------------- Except as herein otherwise expressly provided, it and whenever and to the extent that either the Landlord and the Tenant shall be prevented, delayed or restricted in the fulfillment of any obligations hereunder 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 (other than the payment of Rent) by Unavoidable Delay, the time for fulfillment of such obligation shall be extended during the period in which such circumstance operates to prevent, delay or restrict the fulfillment thereof, and the other party to this Lease shall not be entitled to compensation for any inconvenience, nuisance or discomfort thereby occasioned nor shall Rent xxxxx. 5.02 Limitation of Landlord's Liability ---------------------------------- The Landlord shall only be liable for any personal injury or death suffered by the Tenant or any person in its employ who may be upon the Premises or for the loss or any damage to any property located within the Premises of the Tenant or of any employee of the Tenant if caused by the actual fault or negligence of the Landlord. 5.03 Indemnity --------- The Tenant shall indemnify and save the Landlord harmless in respect of: (a) all claims and liabilities arising from any act or omission of the Tenant or any person for whose conduct the Tenant is responsible and the costs incurred by the Landlord in connection with any action pertaining thereto; and (b) any damage suffered by the Landlord by reason of the breach by the Tenant of any of its obligations under this Lease and the costs incurred by the Landlord in connection with any action pertaining thereto. The Landlord shall indemnify and save the Tenant harmless on the basis, of the preceding sentence, making necessary changes. 11. ARTICLE VI TAXES 6.01 Landlord's Taxes ---------------- The Landlord shall pay before delinquency the Taxes relating to the Building. 6.02 Tenant's Taxes -------------- The Tenant shall pay before delinquency all taxes and other charges imposed by any lawful authority against the Tenant or any sub-tenant, licensee or occupant of the Premises which if not paid would constitute either a lien on either the Land or the Building or a liability of the Landlord. 6.03 Assessment Appeals ------------------ The Tenant shall not conduct any appeal from any governmental assessment or determination of the value of the Land, the Building or the Premises. ARTICLE VII INSURANCE 7.01 Landlord's Insurance -------------------- The Landlord shall maintain Insurance with respect to its interest in the Building, the Common Areas and the Parking Facility, if any. Such insurance shall include, if available, a waiver of any right of subrogation with respect to property insurance only against the Tenant. 7.02 Tenant's Insurance ------------------ The Tenant shall maintain Insurance with respect to its interest in the Premises, the Leasehold Improvements and all operations of the Tenant in and from the Premises. The Tenant shall at the request of the Landlord provide the Landlord with certificates of such insurance. If both the Landlord and this Tenant have claims to be indemnified under any such insurance, the indemnity shall be applied first to the settlement of the claim of the Landlord and the balance to the settlement of the claim of the Tenant. Such Insurance shall include the Landlord and any Mortgagee designated by Notice by the Landlord as named insureds as their interests may appear and, if available, shall contain a cross-liability clause protecting the Landlord in respect of claims by the Tenant as if the Landlord were separately insured and a provision prohibiting the insurer from materially altering or cancelling the coverage without first giving the Landlord at least 30 days, prior written notice thereof. 12. ARTICLE VIII OPERATION, SERVICES, MAINTENANCE, REPAIR AND ACCESS BY LANDLORD 8.01 Quiet Enjoyment --------------- The Landlord covenants with the Tenant for quiet enjoyment 8.02 Standard of Operation --------------------- The Landlord shall operate and manage the Building, the Land, the Common Areas, the Common Service Areas and the Parking Facility, if any, to the standard of a good quality office building, subject to the limitations arising from the design of the Building and its basic systems. 8.03 Services to Premises -------------------- The Landlord shall provide the following services to the Premises: (a) heat, ventilation and air conditioning as required for the comfortable use and occupancy of the Premises during the normal business hours as determined by the Landlord from time to time (and being, at the date of this Lease, 8:00 a.m. to 6:00 p.m. Monday to Friday except on legal or statutory holidays); (b) electrical power for lighting and office equipment; (c) replacement of tubes and ballasts; and (d) janitorial services. 8.04 Services to Building -------------------- The Landlord shall provide for the Tenant and others the following services (a) elevators; (b) washroom facilities on each floor of the Building on which the Premises are located; (c) heat, ventilation, air conditioning, lighting, and janitorial service in the appropriate interior portions of the Common Areas; (d) snow removal and landscape maintenance for the appropriate exterior portions of the Common Areas; 13. (e) exterior window washing; (f) garbage removal; and (g) janitorial services for the appropriate interior portions of the Common Areas. 8.05 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 janitorial or cleaning services to the Premises required by the Tenant which are additional to those required to be provided by the Landlord under section 8.03, including the Additional Services which the Landlord agrees to provide by arrangement and to supervise the moving of furniture or equipment of the Tenant and the making of repairs or alterations conducted within the Premises, and to supervise or make deliveries to the Premises. The cost of Additional Services (including the Landlord's administration fee) 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 promptly upon receipt of invoices therefor from the Landlord. The cost of Additional Services charged directly to the Tenant and other tenants shall be credited in computing Operating Costs and Taxes to the extent that they would otherwise have been included. 8.06 Extra Operating Costs --------------------- Upon request by the Tenant, the Landlord may agree from time to time to arrange for extra heating, ventilating and air conditioning supply, electrical supply or for the supply of other services to the Premises above those normally provided to tenants of the Building or outside of normal business hours. The Tenant will pay to the Landlord in the manner in which Operating Costs and Taxes are paid from time to time hereunder any and all additional costs and expenses of the Landlord which may arise in respect of the use by the Tenant of the Premises for business hours that do not coincide with normal business hours for the Building generally or that may arise in respect of extra heating, ventilating and air conditioning supply, electrical supply and other services which are arranged to be provided to the Tenant as a result of its activities over and above those normally provided to the tenants of the Building or outside of normal business hours, plus an administration fee equal to fifteen percent (15%) of each component thereof. The Landlord reserves the right to install at the Tenant's expense meters to check the Tenant's consumption of electricity, water or other utilities. 8.07 Maintenance and Repair ---------------------- The Landlord shall maintain and repair the following: 14. (a) the Building and its basic systems but not the Premises or the premises of other tenants; (b) the structural elements of the Premises; and (c) the Common Areas, the Common Service Areas and the Parking Facility, if any, except where such maintenance and repair is required due to the negligence of the Tenant or those for whom the Tenant is in law responsible, in which circumstances the Tenant shall be liable for the cost of such maintenance and repair. 8.08 Access by Landlord ------------------ The Landlord may enter the Premises in order: (a) to perform its obligations hereunder; (b) to install, maintain and repair equipment within or about the Premises for the supply of services to other premises in the Building; (c) to make repairs or alterations to the Building; (d) to take such steps as the Landlord may deem necessary for the safety or preservation of the Project; and (e) to inspect the state of repair of the Premises. Prior to the exercise of this right the Landlord whenever possible shall consult with the Tenant in order to minimize inconvenience to the Tenant and in its exercise of this right shall observe the security requirements of the Tenant ARTICLE IX MAINTENANCE, REPAIR AND IMPROVEMENT BY TENANT 9.01 Maintenance of Premises ----------------------- The Tenant shall maintain and repair the Premises and the Leasehold Improvements. 9.02 Leasehold Improvements ---------------------- The Tenant may make Leasehold Improvements provided that: (a) the Tenant shall furnish the Landlord with professionally prepared plans and specifications therefore; 15. (b) such plans and specifications shall be approved by the Landlord and, at its election, any Expert; (c) the Tenant shall advise the Landlord of the identity of its contractors and tradesmen and their respective labour affiliations; (d) the Landlord shall either approve any contractors proposed by the Tenant to perform any work which may affect the structure, the walls or the systems of the Building or require that any such work be performed by either the Landlord or its contractors in which case the Tenant shall pay the Landlord's Cost on account thereof; the Landlord may refuse to allow the contractors and tradesmen of the Tenant access to the Building if their labour affiliations may conflict with those of the Landlord or those employed by it or if they are not competent; (e) the Tenant shall produce evidence satisfactory to the Landlord as to the existence of all necessary permits and sufficient insurance coverage; (f) the Tenant shall pay the Landlord's Cost on account of the fees of any Expert appointed to review the plans and specifications whether or not the work proceeds; (g) construction of the Leasehold Improvements shall be performed in accordance with the plans and specifications submitted to the Landlord and, where applicable, approved by the Landlord, subject to any conditions or regulations imposed by the Landlord and in a good and workmanlike and expeditious manner using good quality materials; (h) the Landlord may inspect construction as it proceeds (the onus being on the Tenant to advise the Landlord whenever any phase has been completed so that an inspection can be made); and (i) if the Tenant fails to observe any of the requirements of this section the Landlord may require that construction stop and that the Premises be restored to their prior condition failing which the Landlord may do so and the Tenant shall pay the Landlord's Cost on account thereof. Upon installation of any Leasehold improvements, such Leasehold Improvements shall become the property of the Landlord and shall not be removed by the Tenant except as hereinafter provided. (j) Leasehold Improvement Allowance ------------------------------- The Landlord shall pay to the Tenant a one (1) time only Tenant Leasehold Improvement Allowance of twenty five dollars ($25.00) per square foot of Rentable Area, to be applied towards the cost of Tenant 16. Leasehold Improvements. In the event the Tenant does not spend this amount to improve the Premises, the balance shall be credited to the Tenant in the form of additional Fixed Free Rent. Such allowance shall be paid to the Tenant: (i) upon presentation of bona fide paid invoices for the work and a Statutory Declaration from the Tenant certifying that the Tenant's contractors have been paid in full; and (ii) only with respect to Tenant Leasehold Improvements acquired or constructed in accordance with working drawings previously approved by the Landlord, such approval not to be unreasonably withheld. 9.03 Liens ----- If any lien under the Builders Lien Act of British Columbia, as amended from time to time, or any successor statute is registered against the title to the Building and such lien relates to material, labour or any service alleged to have been provided to the Tenants, the Tenant shall upon Notice by the Landlord cause such lien to be discharged within 5 days after such Notice has been given. If the Tenant shall fail to cause any such lien to be discharged, as aforesaid, then in addition to any other rights or remedy of the Landlord, the Landlord may (but shall not be so obligated) discharge same by paying the amount claimed to be due into Court or directly to any such lien claimant and the amount so paid by the Landlord and all costs and expenses, including solicitor's fees on a solicitor client basis, incurred for the discharge of such lien shall be due and payable by the Tenant to the Landlord as Rent upon receipt of the Landlord's invoice for same. 9.04 Removal of Leasehold Improvements - Term ---------------------------------------- The Tenant may remove Leasehold Improvements either upon the exercise of its right under, and upon the terms of, section 9.02 or with the approval of the Landlord which may [illegible]. 9.05 Removal of Leasehold Improvements - Expiration of Term ------------------------------------------------------ The Landlord may upon not less than 30 days Notice (except in the case of default and re-entry in which case no prior Notice need be given) require the Tenant before the Expiration of the Term to remove some or all Leasehold Improvements and to restore the Premises to their original condition, the cost of which shall be borne exclusively by the Tenant. Upon the Expiration of the Term, all Leasehold Improvements (including carpeting and light fixtures) and all personal property of the Tenant remaining in the Premises shall become the property of the Landlord 17. ARTICLE X TRANSFERS BY TENANT 10.01 Successors to Tenant -------------------- This Lease shall enure to the benefit of and be binding upon the executors, administrators, successors and assigns of the Tenant, subject to the limitations of this Article. 10.02 Licenses, Franchises and Concessions ------------------------------------ The Tenant shall not suffer or permit any part of the Premises to be used or occupied by any persons other than the Tenant, any subtenants permitted under section 10.03 and the employees of the Tenant and any such permitted subtenant, or suffer or permit any part of the Premises to be used or occupied by any licensee, franchisee or concessionaire, or suffer or permit any persons to be upon the Premises other than the Tenant, such permitted subtenants and their respective employees, customers and others having lawful business with them. 10.03 Assignment or Subletting ------------------------ The Tenant may assign this Lease or sublet the Premises in whole or in part provided that: (a) the Tenant shall by Notice first offer to surrender this Lease in respect of the whole or the part of the Premises (the "Subject Area") which the Tenant wishes to assign or sublet. Such offer shall be made not less than 60 days prior to the date on which the Tenant proposes' that the surrender be effective. The Landlord shall have a period of 15 days after any such offer is made to accept or to decline by Notice; (b) if the Landlord accepts the offer of the Tenant to surrender the whole or any part of the Premises pursuant to subsection (a) of this section, the Tenant shall do so upon the date specified in its Notice. If part of the Premises is to be surrendered, the Rent attributable by the Landlord thereto shall be apportioned by the Landlord and paid to the date of surrender and the Rent for the remainder of the Premises shall thereafter xxxxx and become adjusted in accordance with such attribution. The Landlord shall perform all work required to separate the surrendered part from the remainder and to make such part capable of separate use and the Tenant shall pay the Landlord's Cost on account thereof. The provisions of section 9.O5 shall apply to the surrendered part of the Premises; 18. (c) if the Landlord declines such offer or does not respond within the aforesaid period, the Tenant may within the next 180 day period either assign this Lease or sublet the Subject Area provided that: (i) the Tenant shall have received a bona fide [illegible] offer. (ii) the Tenant shall have provided to the Landlord a true copy of such offer and adequate information to enable the Landlord to assess the creditworthiness, reputation and business of the proposed assignee or subtenant; (iii) the Tenant shall have obtained the approval of the Landlord to such assignment or sublease (which may be withheld in its discretion in the case of a sublease if the rate of rent either is or might be less than that payable under this Lease); (iv) the Tenant shall assign or sublets as the case may be only upon the terms of the offer provided to the Landlord; and (v) the proposed subtenant or assignee shall have agreed with the Landlord to observe and perform all the obligations of the Tenant under this Lease with respect to the Premises or the Subject Area. (d) if within the aforesaid 180 day period the Tenant has not assigned this Lease or sublet the Subject Area, the provisions of subsection (a) of this section shall again apply; (e) the Tenant shall pay the Landlord's Cost on account of any request for approval and, if applicable, the preparation of the implementing documentation, in such form as may be acceptable to the Landlord; and (f) notwithstanding any assignment or subletting, the Tenant shall remain jointly and severally liable on this Lease and shall not be relieved from performing any of the terms, covenants and conditions of this Lease. 10.04 Change in Control ----------------- Any change in the effective control of the Tenant (including, without limitation, changes in the shareholders, directors or officers of the Tenant) shall be deemed to be an assignment of the Premises to which the provisions of section 10.03 shall apply. The Tenant shall provide to the Landlord the information described in section 10.03(c)(ii) with respect to the person or persons to whom control is passing. 10.05 Advertising of Premises ----------------------- 19. The Tenant shall not advertise or allow the Premises to be advertised as being available for lease without the approval by the Landlord of the form and content of such advertisement which shall not mention any financial terms. ARTICLE XI TRANSFER BY LANDLORD, SUBORDINATION AND ATTORNMENT 11.01 Transfer by Landlord -------------------- This Lease shall enure to the benefit of and be binding upon the successors and assigns of the Landlord. If the Landlord transfers or leases the Building, or any part thereof, and to the extent that the transferee or lessee becomes liable to perform the obligations of the Landlord hereunder, the Landlord shall thereupon no longer be liable. 11.02 Subordination and Attornment. ----------------------------- The Tenant shall upon Notice: (a) subordinate this Lease to any mortgage of the Building or the Land to the intent that this Lease and all the interest of the Tenant in the Premises shall be subject thereto as fully as if such mortgage had been executed and registered and the money thereby secured had been advanced before the execution and delivery of this Lease; and (b) agree to attorn to any mortgagee under such mortgage. 11.03 Status Certificates ------------------- The Tenant shall certify in writing to the Landlord or as it may direct that this Lease in unmodified and in full force and effect (or if modified, stating the modifications and that this Lease is in full force and effect as modified), the dates to which Rent has been paid, whether or not there is any existing default on the part of the Landlord of which the Tenant has notice and any other requested information pertaining to the performance by the Landlord and the Tenant of their respective obligations hereunder. The Tenant shall provide such statement within ten (10) days after written Notice from the Landlord requesting same. Any such statement may be conclusively relied upon by any purchaser or mortgagee of the Building or Land. 20. ARTICLE XII TERMINATION AND RENT ABATEMENT 12.01 Termination by Tenant --------------------- If the Premises or any other part of the Building, the Parking Facility, if any, the Common Areas or the Common Service Areas are damaged and the Landlord is thereby unable to fulfil its obligations to the Tenant and if in the opinion of an Expert, which shall be given not more than 45 days after the date of such damage, the damage cannot be repaired within a 180 day period (employing normal construction methods without overtime or other premium unless the Landlord otherwise instructs the Expert) then the Tenant may by Notice given not more than 15 days after receipt by the Tenant of the opinion of the Expert (whose fee shall be payable by the Tenant) terminate this Lease with effect as of the date on which such Notice is given. 12.02 Termination by Landlord ----------------------- If any part of the Building, the Parking Facility, if any, the Common Areas or the Common Service Areas is damaged and the Landlord is thereby unable to fulfil its obligations to the Tenant or to any other tenant of the Project and if in the opinion of an Expert, which shall be given not more than 45 days after the date of the damages the damage cannot be repaired within a 180 day period (employing normal construction methods without overtime or other premium), then the Landlord may by Notice given not more than 15 days after receipt by the Landlord of the opinion of the Expert terminate this Lease with effect either as of the date on which such Notice is given, if the Premises have been materially damaged or if the Premises have not been so damaged, then as of the date stipulated by the Landlord in its Notice which shall be not less than 60 days after the date on which it is given. 12.03 Abatement of Rent ----------------- If the Premises are damaged to the extent that they are incapable, notwithstanding a reasonable amount of inconvenience to the Tenant, of being used by the Tenant for their intended purpose and if the damage has not been caused by any act or omission of either the Tenant or those for whom it is responsible Rent shall xxxxx with effect as of the date of the damage in proportion to the area of the Premises so damaged until either: (a) the Landlord and the Tenant, each acting diligently, have completed their respective obligations to repair; or (b) the proceeds of any loss of rental income insurance attributable to the damage are no longer available for application on account of the 21. abatement of the Rent payable under this Lease and the rent payable under any other leases of premises in the Building affected by the same event of damage or the period of time during which such proceeds would have been available if the Landlord had performed its obligation to maintain the coverage described in part (c)(ii) of the definition of insurance has expired, whichever is the first to occur. ARTICLE XIII LANDLORD'S REMEDIES 13.01 Default and Re-Entry -------------------- If the Tenant shall fail to make any payment of Rent as and when same is due to be said hereunder and such default shall continue-for five (5) days after written Notice is given by the Landlord to the Tenant or if the Tenant fails to observe or perform any of its other obligations hereunder after Notice specifying the default and a period to cure has been given, the Tenant shall be deemed to be in default and the Landlord may at any time thereafter re-enter the Premises and terminate this Lease. Notwithstanding anything contained in section 13.01 to the contrary, in the event the Tenant fails to pay any item of Rent when same is due to be paid hereunder more than twice in any twelve (12) month period, then there shall be no obligation on the part of the Landlord to give the Tenant written Notice and the Landlord shall be entitled to proceed without notice in accordance with the Landlord's rights pursuant to Article XIII thereof. 13.02 Re-letting and Sale of Personality ---------------------------------- Whenever the Landlord becomes entitled to re-enter upon the Premises under any provision of this Lease the Landlord in addition to all other rights it may have, shall have the right as agent of the Tenant to enter the Premises and re-let them (for a term or terms shorter or longer than the balance of the Term, granting reasonable concessions in connection therewith) and to receive the Rent therefor and as the agent of the Tenant to take possession of any furniture or other property thereon and to sell the same at public or private sale without Notice and to apply the proceeds thereof and any Rent derived from re-letting the Premises upon 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. 13.03 Right of Landlord to Remedy --------------------------- If the Tenant defaults hereunder, the Landlord may proceed to remedy the defaults including the making of any payments due or alleged to be due by the Tenant to third parties, and the Tenant shall pay on demand the Landlord's Cost on account thereof, all without prejudice to the Landlord's rights and remedies for such default by the Tenants. 22. 13.04 Bankruptcy of Tenant -------------------- If the Term or a substantial portion of the property of the Tenant on the Premises is seized or taken in execution or attachment by a creditor of the Tenant or if the Tenant makes an assignment for the benefit of creditors or if a receiver-manager is appointed to control the conduct of the business on or from the Promises or if the Tenant becomes bankrupt or insolvent or takes the benefit of any act now or hereafter in force for bankrupt or insolvent debtors or if an order is made for the winding-up of the Tenant the next ensuing 3 months' rent immediately will become due and payable as accelerated rent and the Landlord may re-enter and take possession of the Premises as if the Tenant were holding over and this Lease shall forthwith be terminated upon Notice by the Landlord to this effect. Accelerated rent will be recoverable by the Landlord in the same manner as the Rent hereby reserved. 13.05 Interest -------- The Tenant shall pay to the Landlord interest at a rate equal to Prime and 5% per annum on all arrears of Rent. 13.06 Costs ----- If legal action is brought by reason of any default by either party hereunder and a default is established, the defaulting party shall pay to the other party all costs incurred therefore, including legal fees (on a solicitor and client basis). The Tenant shall also be responsible for, and shall pay to the Landlord, including, without limitation reasonable compensation for all time expended by the Landlord's own personnel legal costs on a solicitor client basis and all other costs of any kind whatsoever arising from or incurred as a result of any default of the Tenant or any enforcement by the Landlord of any of the Tenant's obligations under this Lease or any other agreement or obligation of the Tenant to the Landlord whether or not related to the Premises. The Tenant agrees that if the Tenant remains in default under this Lease after receiving Notice as required pursuant to this Lease the Landlord shall be entitled to receive from the Tenant and the Tenant shall pay a minimum administration fee of not less than Fifty Dollars ($50.00) to the Landlord which the Tenant acknowledges as being reasonable compensation for time expended by the Landlord's personnel in enforcing any of the Landlord's rights pursuant to this Lease after the giving of such Notice, it being clearly understood that the payment or demand for such agreed reasonable compensation shall not be in lieu of and shall be in addition to any other fees, costs, compensations due to the Landlord as a result of the Tenant's default pursuant to this Lease or pursuant to law or any order of court. 23. ARTICLE XIV REGULATIONS 14.01 Purpose ------- The Landlord may by Notice impose regulations from time to time, for the orderly operation of the Building, the Common Areas and the Parking Facility, if any the present regulation are attached to this Lease. 14.02 Observance ---------- The Tenant shall observe and shall cause those for whom it is responsible to observe the regulations. 14.03 Enforcement ----------- The Landlord shall enforce the regulations against all occupants of the Building but in doing so will not be obligated to commence any legal proceedings or be held liable for any claims by the Tenant or other tenants arising out of the failure of the Landlord to commence legal proceedings for any breach of regulations. ARTICLE XV MISCELLANEOUS 15.01 Exhibiting Premises ------------------- The Landlord may exhibit the Premises to prospective purchasers, prospective mortgagees and, during the last 6 months of the Term, prospective tenants. 15.02 Name of Building ---------------- The Landlord may designate the name of the Building and the Project and upon not less than 30 days' Notice may change the name of either the Building of the Project. The Tenant shall only refer to the Building and the Project by their designated names and shall only use such names as its business address. 15.03 Relocation ---------- The Landlord and Tenant agree that at any time during the Term and any renewal thereof, the Landlord shall have the right, upon providing the Tenant at least thirty (30) days' prior written Notice, to relocate the Tenant to other premises within the Building of approximately the same size, quality and interior design as the Premises provided, however, that the Tenant shall have the right to approve such new space, which approval shall not be unreasonably withheld. The Tenant shall 24. give written Notice to the Landlord of its approval or disapproval of such now space within ten (10) days of the receipt of the Landlord's Notice requesting the Tenant to relocate. The Landlord shall pay the Tenant's direct moving costs only provided the Tenant shall provide the Landlord with reasonable evidence of such costs. The relocation shall be effective on the date stated in the Landlord's Notice and the Tenant shall complete its move in one (1) weekend. In the event the Landlord relocates the Tenant to such new space, this Lease and each and all of its terms, covenants and conditions shall remain in full force and effect and be deemed applicable to such new space save and except: (i) the Right of First Refusal, if any, if the new space is located on a different floor than the original Premises; and (ii) the location and size of the Premises which shall be in accordance with the appropriate floor plan. Upon the relocation taking place, the Fixed Rent per square foot for the new space shall be the same Fixed Rent per square foot as for the Premises and the Lease will be amended accordingly. If the Tenant reasonably refuses to approve such new spaces, the Landlord shall have the right to terminate this Lease by written Notice given to the Tenant within ten (10) days following the Landlord's receipt of the Tenant's Notice disapproving such new space, which termination shall be effective sixty (60) days after the date of the original Notice. 15.04 Notice ------ Any Notice to be given pursuant to this Lease shall be in writing and shall be deemed to have been given if signed by or on behalf of the party, giving Notice and delivered or mailed by registered prepaid post to the other party as follows: (a) to the Landlord at: THE CANADA LIFE ASSURANCE COMPANY c/o COLLIERS XXXXXXXX XXXXXXX INC. 00xx Xxxxx, 000 Xxxxxxxxx Xxxxxx Xxxxxxxxx, XX X0X 0X0 and (b) to the Tenant at: Xxxxx 000 0000 Xxxxxxxx Xxxxxx Xxxx [illegible] Any Notice so given shall be deemed to have been given, if delivered, on the first business day following the date of such delivery or, if mailed, on the third 25. business day following the date of such mailing. Either party way by Notice change its address. During any interruption, threatened interruption or substantial delay in postal services, all Notices shall be delivered. 15.05 Compliance with Laws, etc. -------------------------- The Landlord and the Tenant shall at all times in the performance of their respective obligations under this Lease comply with all laws, by- laws, regulations and orders of any competent authority and with the requirements of any insurer of the interest of the Landlord in the Project. 15.06 Governing Law and Severability ------------------------------ This Lease shall be governed by and construed in accordance with the laws in force in the Province in which the Project is located. The Landlord and the Tenant agree that all of the provisions of this Lease are to be construed as covenants and agreements as though the words importing such covenants and agreements were used in each separate section hereof. Should any provision or provisions of this Lease be illegal or not enforceable, it or they shall be considered separate and severable from the Lease and its remaining provisions shall remain in force and be binding upon the parties hereto as though the said provision or provisions had never been included. 15.07 Registration ------------ The Tenant may register this Lease with the prior written approval of the Landlord, which approval the Landlord may withhold in its discretion If the Landlord provides such approval the Tenant shall not register this Lease but shall prepare and have executed by the parties hereto a short form of lease approved by the Landlord for the purpose only of enabling notice of this Lease to be registered without affecting the respective rights and obligations of the parties hereunder. The Tenant shall pay the Landlord's Cost incurred in connection with such registration and, for greater certainty, shall pay the cost of any necessary survey plan of the Premises. 15.08 Expropriation ------------- If at any time during the Term the interest of the Tenant under this Lease or the whole or any part of either the Premises or any other part of the Building shall be taken by any lawful power or authority by the right of expropriation, the Landlord may at its option, give Notice to the Tenant terminating this Lease on the date when the Tenant or Landlord is required to yield up possession thereof to the expropriating authority. Upon such termination, or upon termination by operation of laws as the case may beg the Tenant shall immediately surrender the Premises and all its interest therein, the Rent shall xxxxx and be apportioned to the date of termination, the Tenant shall forthwith pay to the Landlord the apportioned Rent, all 26. other amounts which may by due to the Landlord up to the date of termination, and the provisions of section 2.04 shall apply. The Tenant shall have no claim upon the Landlord for the value of its property or the unexpired Term of this Lease, but the parties shall each be entitled to separately advance their claims for compensation for the loss of their respective interests in the Premises and the parties shall each be entitled to receive and retain such compensation as may be awarded to each respectively. If an award of compensation made to the Landlord specifically includes an award for the Tenant the Landlord will account therefor to the Tenant. In this Section the word expropriation shall include a sale by the Landlord to an authority with powers of expropriation, in lieu of or under threat of expropriation. 15.09 Option To Renew --------------- Provided the Tenant has not been in breach of the Lease, the Tenant shall have the right to renew the Lease with respect to the Leased Premises and any additional space leased for an additional Term of five (5) years on the same terms and conditions, save only for the Fixed Rents, Free Rent and Leasehold Improvement Allowance and that there will be no further right of renewal. The rental during the renewal period will be the fair market rental agreed between the parties, and failing such agreement, as determined by arbitration pursuant to the Commercial Arbitration Act of British Columbia. However, the Fixed Rent shall not be less than the Fixed Rent payable in the last year of the Term. To exercise this rights the Tenant shall give written notice to the Landlord no earlier than nine (9) months and no later than six (6) months prior to the date of expiry of the Term. 15.10 Parking ------- The Landlord shall provide to the Tenant up to fourteen (14) parking stalls in the Building at a rental of thirty-five dollars ($35.00) per stall per month. The Tenant shall specify the number of parking stalls it requires prior to taking occupancy in the Building. The Tenant shall be responsible for payment of any applicable parking charges from the date of occupancy. The rental for stalls is subject to adjustment for comparable parking rates in the areas in the month selected by the Landlord for such adjustment. 15.11 Early Occupation By Tenant -------------------------- The Tenant shall have possession of the Leased Premises for the purposes of fixturing on April 1, 1992. During any period prior to the commencement of the Term (including the period from the date upon which the Leased Premises are ready for the construction of Tenant Improvements until the commencement of the Term) in which the Tenant is permitted to have occupancy of the Leased Premises, whether exclusively or in common with the Landlord, its contractors, subcontractors or employees, the Tenant shall be bound by all the provisions of the Lease saving those requiring payment of Fixed Rent or the Tenants Proportionate Share of Operating Costs and Property Taxes. 27. SCHEDULE C REGULATIONS Pursuant to section 14.01 the Landlord hereby imposes the following regulations: 1. Deliveries of building materials, major pieces of equipment and furniture and bulky goods shall only be made by prior arrangement with the Building management and through the Delivery Facilities. 2. The Tenant shall only use the Building key system and shall obtain all keys and cards providing access to the Building, the Parking Facility, if any and the Premises from the Landlord. No additional locks shall be installed on the doors to the Premises. 3. No bicycles or other vehicles shall be brought into the Buildings. 4. No inflammable oils or other dangerous materials shall be kept in the Buildings. 5. The Common Areas shall not be obstructed. 6. The Tenant shall provide the Landlord with the-names of all persons entitled to enter the Premises outside normal business hours. The Landlord shall only be required to allow access to the Premises by such persons. 7. The Tenant shall not install any power or water consuming machinery and equipment, except normal office equipment, without the approval of the Landlord and, if required by the Landlord, shall connect such machinery and equipment to separate meters. 8. If required by the Landlord, the Tenant shall arrange for pest controls. 9. The Tenant shall not remove or alter the Building standard window coverings, or except with the approval of the Landlord, install any additional window coverings. 10. The Tenant shall keep all window blinds down so as to prevent direct sunlight from penetrating the Premises. 11. The Landlord may restrict canvassing or peddling in the Buildings. 12. The Tenant shall maintain with the Landlord current lists of the names and license plate numbers of each employee using the Parking Facility if any and shall cause its employees to affix to their automobiles whatever manner of identification the Landlord may require. C-1. 13. The Tenant shall observe the directions of the Landlord as to parking locations in the Parking Facility, if any according to automobile size. 14. The Tenant shall leave the Premises in a condition suitable for the performance by the Landlord of its janitorial services. C-2. SCHEDULE "D" INDEMNITY AGREEMENT This agreement made as of the 24th day of April, 1992. BETWEEN: INFONET/COMPUTER SCIENCES CANADA LTD. (hereinafter called the "Indemnitor") OF THE FIRST PART - and - ADASON PROPERTIES LIMITED as agent for THE CANADA LIFE ASSURANCE COMPANY (hereinafter called the "Landlord") OF THE SECOND PART Whereas the Landlord has entered into a lease (the "Lease") dated as of the ______ day of March 1992, between it as Landlord and Osiware Inc. as tenant (the "Tenant") and the Indemnitor has agreed to execute and deliver this agreement in favour of the Landlord; Now therefore for good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged by the Indemnitor), the Indemnitor hereby agrees with the Landlord as follows: (1) the Indemnitor shall indemnify and save the landlord harmless from all damages and costs incurred by the Landlord if, during the Term of the Lease and any renewal thereof, the Landlord does not receive any amount payable by the Tenant under the case for such period which, if the Lease were in full force and effect and good standing, would be payable under the Lease; (2) if the Tenant defaults in the payment of any amount payable under the Lease or in the due performance of any other obligation of the Tenant under the Lease the indemnitor shall forthwith upon demand by the Landlord pay to the Landlord any amount so payable and all damages that may arise upon the default by the Tenant in the Payment thereof in the due performance of any such obligation; (3) the Indemnitor shall be jointly and severally bound with the Tenant to the Landlord for the performance of the obligations of the Tenant under the Lease, and its liability shall be that of a direct and primary obligor and not merely that of a surety; D-1. (4) if the Tenant defaults under the Lease the Landlord may proceed against the Indemnitor is it if were the Tenant, without waiving any of its rights against the Tenant and without any requirement that the Landlord shall first have proceeded against the Tenant or had recourse to or exhausted any of its remedies against the Tenant; (5) the obligations of the Indemnitor and the rights of the Landlord hereunder shall not be affected or in any way Prejudiced or impaired by any delay, neglect or forbearance by the Landlord in enforcing performance by the Tenant of its obligations under the Lease or by the granting by the Landlord to the Tenant of any extension of time or by any waiver by the Landlord of any of the Tenant's obligations or by any assignment or sublease or other dealing by the Tenant with the Lease or Leased Premises whether with or without the consent of the Landlord or by any want of notice to the Indemnitor or by any dealing between the Landlord and the Tenant with or without notice to the Indemnitor whereby their respective obligations and rights of either the Landlord or the Tenant are amended or by any other act or failure to act by the Landlord which would release, discharge or affect the obligations of the Indemnitor if it were a mere surety, and with the intent that this indemnity shall not be released or affected or the rights of the Landlord hereunder in any way impaired until such time as all the obligations of the Tenant under the Lease have been fully performed and satisfied; (6) the obligations of the Indemnitor hereunder shall not be released, discharged or affected by the bankruptcy or insolvency of the Tenant of any disclaimer of the Lease by any trustee in bankruptcy of the Tenant or by the Tenant ceasing to exist (whether by operation at law, winding up, forfeiture, cancellation or surrender of charter, or any other circumstance) or by any event terminating the Lease including a re-entry pursuant to the terms of the Lease; if a termination shall occur under any such provisions the Landlord may require the indemnitor to enter into a lease of the Leased Premises as a tenant upon the same terms as the lease for the then unexpired residue of the Term of the Lease including any renewal thereof; (7) if the Lease is renewed or its Term extended, for any period beyond the original termination date specified in the law, either pursuant to any option granted under the Lease or otherwise at any time, or if the Tenant holds over beyond the Term of the Lease, or if the Law is modified in any way, the obligations hereunder of the Indemnitor shall extend and apply with respect to the, full performance and observance of all of the covenants, terms, and conditions of the D-2. Tease, as existing, extended, renewed or modified and of any such amendment thereof; (8) the obligations of the Indemnitor hereunder may be assigned by the Landlord, will benefit and be enforceable by the successors and assigns of the Landlord and shall bind the heirs, executors and legal representative and the successors and assigns of the Indemnitor; and (9) this agreement shall be governed by the laws of the Province of Ontario. The Indemnitor acknowledges receipt of a copy of the Lease. In witness whereof the Indemnitor has executed this agreement. ___________________________ By:_________________________________________ Witness Seal ___________________________ By:_________________________________________ Witness D-3.