Exhibit 10.4
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THIS DEVELOPMENT AGREEMENT dated the 29th day of December, 1999
BETWEEN:
CANDEREL MANAGEMENT INC.
(hereinafter "the Developer")
AND:
ENTRUST TECHNOLOGIES LIMITED
(hereinafter "Entrust")
WHEREAS Entrust and the Developer have prepared the Project Definition Binder,
pursuant to which the parties now enter into this Development Agreement;
WHEREAS the Developer will design and build the Premises pursuant to the terms
of this Development Agreement; and
WHEREAS Entrust has agreed to lease the Premises on the terms and conditions of
the Lease Agreement to be executed concurrently with this Development Agreement.
NOW, THEREFORE, in consideration of the mutual covenants, agreements, conditions
and undertakings in this Development Agreement, the Developer and Entrust
covenant and agree as follows:
SECTION 1
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RECITALS
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The recitals set out above are true and correct.
SECTION 2
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DEFINITIONS
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In this Development Agreement:
"Base Building Core & Shell" means the structures, facilities and improvements
described in the Project Definition Binder as being the Landlord's
responsibility to provide on its own behalf including, without limitation, the
Exterior Building Amenities, as amended during the course of development under
and subject to this Development Agreement.
"Building" means the turnkey office building to be constructed under and subject
to the terms of this Development Agreement, consisting of approximately 146,100
square feet of total floor rentable area.
"Business Day" means a day on which the Land Registry Office for the Land Titles
Division of Ottawa-Carleton is open for business with the public.
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"Commencement Date" has the meaning ascribed to it in the Lease Agreement.
"Construction Lien Act" means the Construction Lien Act, R.S.O. 1990, c. C.30,
as amended.
"Construction Plans and Specifications" means the final plans and specifications
for the Base Building Core & Shell.
"Delay Days" means the calendar days of delay beyond the date of Substantial
Performance of the Base Building Core & Shell and the Tenant Fit-Up.
"Development Schedule" means the schedule annexed to this Development Agreement
as Schedule "2", as amended by the Developer from time to time (provided that no
amendment may reduce the period of time for any action to be taken by Entrust
unless Entrust otherwise agrees in writing).
"Entrust Delay" means delays arising directly or indirectly out of acts or
omissions by Entrust or any person for whom Entrust is responsible in law,
including, without limitation, delays arising from change orders, the
specifications imposed (except to the extent specifically set forth in the
Project Definition Binder) or materials or equipment selected by Entrust or
Entrust's failure to take any action within the time contemplated by the
Development Schedule.
"Exterior Building Amenities" means the structures, facilities and improvements
exterior to the Building:
(i) described in the Project Definition Binder; and / or
(ii) set forth in the Site Plan,
including, without limitation, landscaping, parking, paving, striping, curbing,
grading and drainage, exterior lighting, flagpoles and signage to the extent:
(i) described in the Project Definition Binder; and / or
(ii) set forth in the Site Plan.
"Force Majeure Delay" excludes Entrust Delay and means delays caused by:
(i) acts of God, war, civil commotion, fire, flood or other casualty,
government regulations not in effect on the date of this Development
Agreement and labour disputes (other than those limited to the site of the
Building;
(ii) inability to obtain materials, goods, equipment, service, utility or
labour, inability to procure any licence or permit or unusual delay by
common carrier, provided that the Developer has exercised commercially
reasonable efforts and has diligently attempted to avoid and to mitigate
such cause(s) of delay; and
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(iii) other matters beyond the reasonable control of the Developer, provided
that the Developer has exercised commercially reasonable efforts and has
diligently attempted to avoid and to mitigate such cause(s) of delay.
"General Conformity Plans and Specifications" has the meaning ascribed to it in
subsection 3.3(b).
"Lands" means the parcel of land in the City of Kanata, Ontario described in
Schedule "l", consisting of approximately 11.58 acres.
"Lease Agreement" means the lease agreement being executed by the parties
contemporaneously with, and collateral to, this Development Agreement, pursuant
to which Entrust is leasing the Land and the Building.
"Owner" means 3559807 CANADA INC.
"Owner's Mortgagee" means any mortgagee of the Owner holding a mortgage of the
Lands or holding a mortgage of a ground lease granted by the Owner in respect of
the Lands.
"Preliminary Plans and Specifications" means the preliminary plans and
specifications for the Base Building Core & Shell to be prepared by the
Developer's, design consultants and accepted by Entrust.
"Premises" means the Base Building Core & Shell and the Tenant Fit-Up.
"Progress Drawings and Specifications" means the second and subsequent
generations of the Preliminary Plans and Specifications, other than the
Construction Plans and Specifications.
"Project Definition Binder" means the binder of documents and information
assembled and accepted by the parties dated December 20, 1999, representing the
understanding and agreement of the parties as to the scope and definition of the
Building and the Exterior Building Amenities.
"Site Plan" means the site plan for that part of the Lands on which the Building
and the Exterior Building Amenities will be located to be prepared by the
Developer, accepted by Entrust and which is to be approved by the City of
Kanata, as amended from time to time (provided that after acceptance by Entrust,
any material amendments, other than amendments required by municipal
authorities, are subject to further acceptance by Entrust, to be granted or
denied within four (4) Business Days of request for it).
"Substantial Performance" has the meaning ascribed to it in section 2 of the
Construction Lien Act and shall be evidenced by a Certificate or Certificates of
Substantial Performance issued by the Developer's architect, as to the Base
Building Core & Shell, and by the principal of the Developer's interior design
firm, as to the Tenant Fit-Up, which Certificate or Certificates shall be in the
standard form contemplated by the Construction Lien Act. "Substantially
Performed" has a corresponding meaning. Notwithstanding the foregoing, the
parties hereto agree that items of a minor nature relating to the exterior of
the Building (such as landscaping) which could not reasonably be completed
because of weather conditions and which do not materially affect Entrust's
ability to enjoy the Building are not to be considered in calculating
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whether or not Substantial Performance has occurred. For the purposes of this
Agreement, the said items are to be referred to as "the Finishing Items".
"Substantial Performance Date" means October 23, 2000 subject to revision in
accordance with the terms of this Development Agreement.
"Tenant Fit-Up" means the design, procurement, construction, commissioning and
all related management and supervision with respect to the structures,
facilities and improvements on the interior of the Building, including the
structures, facilities and improvements described as being part of the tenant
fit-up in the Project Definition Binder, but excluding Base Building Core &
Shell. The structures, facilities and improvements to be included in Tenant
Fit-Up that have been identified as of the date of this Development Agreement
are listed in the Project Definition Binder.
"Tenant Fit-Up Plans and Specifications" means the final plans and
specifications for the Tenant Fit-Up.
"Tenant's Work" means all work relating to the furnishing and installation of
trade fixtures, furnishings, cabling, equipment and other tangible personal
property which Entrust may desire and which is not required of the Developer
under the Construction Plans and Specifications or the Tenant Fit-Up Plans and
Specifications and which may be installed by Entrust.
SECTION 3
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DESIGN AND CONSTRUCTION OF BASE BUILDING CORE & SHELL AND
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TENANT FIT-UP
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3.1 The Developer's Design and Construction Obligations
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(a) The Developer shall design and construct the Base Building Core & Shell in
accordance with:
(i) any change orders implemented pursuant to subsection 3.4;
(ii) plans, specifications, clarifications, confirmations or modifications
(other than the General Conformity Plans and Specifications (as that
term is defined in subsection 3.3)) proposed by the Developer which
may be approved in writing by Entrust from time to time;
(iii) the General Conformity Plans and Specifications; and
(iv) the Project Definition Binder, provided that the Developer may make
changes to the mechanical, electrical or architectural design or
specifications if the performance criteria set forth in the Project
Definition Binder are met or exceeded.
If there is any conflict among the provisions of subparagraphs (i), (ii),
(iii) and (iv) of this paragraph 3.1(a), then subparagraph (i) prevails
over subparagraphs (ii), (iii) and (iv),
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subparagraph (ii) prevails over subparagraphs (iii) and (iv) and
subparagraph (iii) prevails over subparagraph (iv).
(b) The Developer shall design and construct the Tenant Fit-Up in accordance
with the Tenant Fit-Up Plans and Specifications, subject to any change
orders implemented pursuant to subsection 3.4.
(c) If and when Entrust becomes aware of any error in, omission from or
discrepancy between:
(i) the Construction Plans and Specifications; and
(ii) the Project Definition Binder, subject to any change orders
implemented pursuant to subsection 3.4 and to any approved plans,
specifications, clarifications, confirmations or modifications
referred to in subparagraph 3.1(a)(ii),
then Entrust shall forthwith provide written notice to the Developer
setting out in reasonable detail the error, omission or discrepancy.
(d) The Developer shall commence and diligently prosecute and complete the
design and construction of the Base Building Core & Shell and Tenant Fit-Up
in accordance with the terms and conditions of this section 3.
3.2 Development Schedule
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Subject to extension for Force Majeure Delay or Entrust Delay, the Developer
shall perform its work by the dates set out in the Development Schedule. The
Developer shall: (i) monitor and control the progress of the work relative to
the Development Schedule; (ii) provide proposed updates or revisions of the
Development Schedule to Entrust's authorized representative from time to time;
and (iii) advise Entrust of any revisions required as the result of delays,
indicating the impact expected from the change in schedule. The Developer shall
advise Entrust in writing, providing reasonable particulars of any alleged
Entrust Delay which will affect the Development Schedule forthwith after the
Developer becomes aware of the delay.
3.3 Entrust Review and Acceptance of Plans and Specifications
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(a) The parties acknowledge that the Developer shall prepare and Entrust is to
review and accept the Site Plan, and the Preliminary Plans and
Specifications and that the Developer has, as of the date of execution
hereof prepared and Entrust has received and tentatively accepted a
preliminary Site Plan, Development Schedule dated December 17, 1999 and
preliminary Plans and Specifications attached as Schedules hereto.
(b) In consultation with Entrust, the Developer shall cause the Construction
Plans and Specifications to be promptly prepared in conformity with: (i)
the Project Definition Binder (subject to subparagraphs 3.1(a)(i), (ii) and
(iv)); (ii) the Preliminary Plans and Specifications; and (iii) the
Progress Drawings and Specifications and in compliance with applicable
zoning and other laws, codes, by-laws and governmental regulations. The
Developer shall submit to Entrust, for the sole purpose of obtaining
Entrust's
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acknowledgment that they are in general conformity with the Project
Definition Binder (subject to subparagraphs 3.1(a)(i), (ii) and (iv), the
following (the "General Conformity Plans and Specifications"):
(i) Site Plan (preliminary Site Plan being Drawing No. A01 dated
November, 1999);
(ii) typical floor plate (as set forth in Drawing No. A04 dated November,
1999);
(iii) building elevations (for aesthetic purposes only) (as set forth in
Drawings Nos. A08 and A09 dated November, 1999);
(iv) overall concept of mechanical and electrical systems (as set forth in
the Section C-1 of the Project Definition Binder under the heading
"Mechanical/Electrical Outline Specification" prepared by X. X. XxXxx
Engineering dated November 24, 1999);
(v) ground floor plan (as set forth in Drawing No. A03 dated November,
1999)
For greater certainty, Entrust's review of the General Conformity Plans and
Specifications does not diminish in any way the Developer's obligation to design
and construct the Base Building Core & Shell in a good and workmanlike manner
fit for the purpose intended and in accordance with applicable law. The General
Conformity Plans and Specifications shall be initialed by both parties and shall
be deemed to be incorporated by reference as part of this Development Agreement.
(c) In consultation with Entrust, the Developer shall cause the Tenant Fit-Up
Plans and Specifications to be prepared in conformity with the Project
Definition Binder (except as the requirements of the Project Definition
Binder may be amended by written instructions received from Entrust). The
Developer shall submit the Tenant Fit-Up Plans and Specifications to
Entrust for Entrust's review and, in the case of architectural and interior
design plans and specifications forming part of the Tenant Fit-Up Plans and
Specifications, for Entrust's acceptance. Upon acceptance by Entrust, the
architectural and interior design plans and specifications forming part of
the Tenant Fit-Up Plans and Specifications supersede the provisions of the
Project Definition Binder. The Tenant Fit-Up Plans and Specifications shall
be initialed by both parties and shall be deemed to be incorporated by
reference as part of this Development Agreement. The Tenant Fit-Up Plans
and Specifications shall be prepared by the Developer and reviewed by
Entrust in accordance with the time frames contemplated by the Development
Schedule,
(d) The Developer shall prepare promptly any additional plans which may be
required by all authorities having jurisdiction in order to obtain all
necessary permits and approvals. The Developer shall comply with the
requirements of the governmental agencies having jurisdiction and public
utilities (including, without limitation, the granting of easements for
public services). The Developer shall obtain all preliminary and final
building permits necessary to construct and permit occupancy of the
Premises in accordance with the Construction Plans and Specifications, the
Tenant Fit-Up Plans and Specifications and the Development Schedule. The
Developer shall bear the costs (including, without limitation, applicable
development charges) associated with obtaining permits for the
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Base Building Core & Shell and Entrust shall bear the costs (including,
without limitation, applicable development charges) associated with
obtaining permits for the Tenant Fit-Up.
3.4 Change Orders
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Prior to completion of construction, Entrust may from time to time in its
discretion order modifications to the Preliminary Plans and Specifications, the
Progress Drawings and Specifications, the Construction Plans and Specifications
and the Tenant Fit-Up Plans and Specifications, subject to an appropriate
extension of the Substantial Performance Date (if applicable). Each
modification requested by Entrust is subject to the following:
(a) the consent of the Developer (which consent may only be withheld as set out
in Section 2 of Schedule "F" of the Lease);
(b) if the modification increases or decreases total cost of the Base Building
Core & Shell, then the cost of the modification will be dealt with as set
out in Section 2 of Schedule "F" of the Lease;
(c) if consented to, the cost of the modification is to be dealt with as set
out in Section 4.1 (c) of this Development Agreement.
If at any one time Entrust requests modifications which both increase and
decrease costs, then only the net cost effect of those modifications shall be
considered, provided that the cost effect of modifications to the Base Building
Core & Shell and to the Tenant Fit-Up shall be considered separately.
Entrust also may, in its discretion, require certain immaterial (i.e., at no
change of cost or change in time or material change in design) field
modifications in the Tenant Fit-Up Plans and Specifications without the consent
of the Developer. The Construction Plans and Specifications shall not be
amended by the Developer in any manner which materially affects the Tenant Fit-
Up Plans and Specifications without the written consent of Entrust.
Except for immaterial field modifications to the Tenant Fit-Up Plans and
Specifications as described above, approval of all modifications requested by
Entrust to or affecting the Construction Plans and Specifications or the Tenant
Fit-Up Plans and Specifications and approval of modifications requested by the
Developer to or affecting the Tenant Fit-Up Plans and Specifications must be in
writing and signed or initialed by both parties through their authorized
construction representatives from time to time. As of the date of this
Development Agreement, Entrust's authorized representative is Xxxxx Xxx or Xxxxx
Xxxxxx and the Developer's authorized representative is Xxxxxxxx Xxxxx, Xxxxxxx
Xxxxxx, Oakley Xxxxxx or Xxxxx Xxxxxxxx. Each party shall give written notice
to the other of any change in the individuals who have full binding authority to
approve modifications. If a party withdraws the authority of any such
individual by written notice to the other party, then that withdrawal is not
valid unless the notice specifies a new authorized construction representative
for the withdrawing party. The Developer shall obtain approval of one of
Entrust's authorized construction representatives for any modifications or
contemplated modifications (the cost of investigating which is Entrust's)
requested by Entrust to or affecting the Construction Plans and Specifications
or the Tenant Fit-Up Plans and
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Specifications and for any modifications requested by the Developer to or
affecting the Tenant Fit-Up Plans and Specifications and the Developer is solely
responsible for any changes not approved by one of Entrust's authorized
representatives.
If the Developer forecasts that any changes or modifications requested by
Entrust may cause a delay in meeting the Substantial Performance Date, then the
Developer shall give Entrust notice of the estimated number of Delay Days (which
Delay Days are to be deemed to cause an Entrust Delay). If Entrust decides to
have the Developer proceed with the change or modification, then the Substantial
Performance Date shall be extended by the actual number of Delay Days.
3.5 Reporting
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From and after the execution of this Development Agreement, the Developer shall
submit to Entrust monthly written reports describing: (i) the status of the
Developer's obligations under this Development Agreement; (ii) the status of
Base Building Core & Shell and Tenant Fit-Up change orders requested by Entrust
to the date of the report; and (iii) any material deviation from the
Construction Plans and Specifications and Tenant Fit-Up Plans and
Specifications. The Developer's bi-weekly reports shall be accompanied by
architectural and engineering inspection reports received during the preceding
two week period which relate to the Tenant Fit-Up. In addition, the Developer
shall submit to Entrust monthly written reports describing: (i) the schedule of
the Developer's obligations under this Development Agreement and (ii) the status
of the Tenant Fit-Up budget to the date of the report.
3.6 Contractors and Consultants
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The Developer shall be the construction manager for the construction of the
Premises and is responsible for all work described in the Construction Plans and
Specifications and the Tenant Fit-Up Plans and Specifications. Entrust also has
authorized the Developer's use of the following consultants:
for architecture: Xxxxxxxxxx & Goodz, Architects
for mechanical/electrical engineering: X.X. XxXxx Engineering Ltd.;
for structural engineering: Adjeleian Xxxxx Xxxxxx Limited;
for civil engineering: Novatech Engineering Consultants Ltd.;
for interior design: Xxxxxx Xxxxxxx
for landscape architecture: Xxxxxxxx Levstek;
for elevator consulting: Xxxxxx, Xxxxxx & Associates;
for food service consulting: Design Food Services Incorporated;
for soils: Xxxxxx Associates.
The Developer shall not use any other consultants for the functions and purposes
listed above in connection with the design and construction of the Premises
without first obtaining Entrust's written approval.
3.7 Warranties
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(a) The Developer warrants and guarantees that the Base Building Core & Shell
will be constructed in a good and workmanlike manner and shall correct
promptly, at its sole cost
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and expense, defects or deficiencies in workmanship, materials and
equipment not caused by normal wear and tear or by the negligence or
misconduct of Entrust which appear during the period of one (1) year from
the date of Substantial Performance.
(b) The Developer warrants and guarantees that the Tenant Fit-Up will be
constructed in a good and workmanlike manner and shall correct promptly, at
its sole cost and expense, defects or deficiencies in workmanship,
materials and equipment not caused by normal wear and tear or by the
negligence or misconduct of Entrust which appear during the period of one
(1) year from the date of Substantial Performance.
(c) The Developer shall provide the necessary qualified resources to ensure
that all Base Building Core and Shell CAD standard drawings are provided
and added to Entrust's database and will deliver as-built drawings, CAD
representations (updated with all changes of the as-built condition upon
completion) and training manuals to Entrust within ninety (90) calendar
days after Substantial Performance of the Premises. All Tenant Fit-Up CAD
standard drawings are also to be provided and added to Entrust's database
as well as as-built drawings, CAD representations.
(d) Without limiting the scope, nature or timing of any claims under the
warranties in this subsection 3.7, Entrust and the Developer shall inspect
the Premises immediately prior to the expiry of each warranty period for
the purpose of agreeing on a list of warranty items to be rectified or
completed. The Developer shall promptly commence and diligently pursue to
correction and completion the work set forth in any deficiency list arising
out of that inspection. If the Developer disputes any item on the
deficiency list, then the matter shall be settled in accordance with the
provisions of section 12.
(e) To the extent that they are assignable, any and all warranties obtained by
the Owner or Developer and relating to the Base Building Core & Shell and
the Tenant Fit-Up shall and are hereby assigned to Entrust jointly with the
Owner and Developer, so that each party shall be able to enforce such
warranties in order to assist them to comply with their respective
obligations under this Development Agreement and the Lease.
3.8 Substantial Performance
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(a) Substantial Performance The Developer shall Substantially Perform the
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construction of the Premises in accordance with the Construction Plans and
Specifications and Tenant Fit-Up Plans and Specifications and shall deliver
up possession of the Premises to Entrust no later than the Substantial
Performance Date, subject to extension for Force Majeure Delay or Entrust
Delay. Finishing Items are to be completed as soon as possible after
weather conditions permit such completion.
(b) Notice of Substantial Performance The Developer shall notify Entrust from
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time to time of the expected date of Substantial Performance of: (i) the
Base Building Core & Shell; (ii) the Tenant Fit-Up; or (iii) components of
the Base Building Core & Shell or Tenant Fit-Up selected by the Developer
as being ready for Tenant's Work, in each case at least thirty (30)
calendar days before the expected date of the applicable Substantial
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Performance, and subsequently shall notify Entrust of the actual date of
the applicable Substantial Performance.
(c) Joint Inspection/Deficiency List Within five (5) calendar days after the
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later of (i) receipt by Entrust of the Developer's notice of the actual
date of Substantial Performance or (ii) the actual date of Substantial
Performance as set forth in the Developer's notice, Entrust has the right
to attend at the Premises together with a representative of the Developer
for the purpose of carrying out a joint inspection with the Developer and
the Developer's representative of the Substantially Performed work to which
the Developer's notice relates and agreeing on a list of items to be
rectified or completed.
(d) Dispute as to Deficiency List If either party disputes the inclusion or
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exclusion of any item from the parties' joint deficiency list, then the
matter shall be referred to and determined by an arbitration conducted in
accordance with section 12. If applicable, this subsection constitutes the
required submission to arbitration.
(e) Correction of Deficiencies In any event, the Developer shall promptly
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commence and diligently pursue to correction and completion the work set
forth in the joint deficiency list and shall complete it within thirty (30)
calendar days after the preparation of the joint deficiency list (except
for items which cannot be completed within that thirty (30) day period for
reasons beyond the Developer's reasonable control, provided the Developer
shall diligently pursue the correction and completion of those items).
(f) Deemed Acceptance Upon the expiration of the five (5) day period referred
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to in paragraph 3.8(c), Entrust shall be deemed to have accepted the
Substantially Performed work to which the Developer's notice relates and
the Developer shall be deemed to have satisfied all of its obligations in
respect to it, save and expect for the uncompleted and incorrectly
completed items described in the joint deficiency list and latent defects.
Entrust's deemed acceptance of that work and the Developer's deemed
satisfaction of its obligations in respect to it does not diminish in any
way the Developer's warranties and guarantees given to Entrust pursuant to
subsection 3.7.
3.9 Remedies For Failure to Deliver Premises on the Substantial Performance
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Date
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Entrust shall have no right to terminate the Lease Agreement or to xxxxx rent
due under the Lease Agreement for any failure by the Developer to meet the
Substantial Performance Date, as extended for Force Majeure Delay or Entrust
Delay. The effect of Force Majeure Delay, Entrust Delay and the failure of the
Developer to meet the Substantial Performance Date (as extended for Force
Majeure Delay or Entrust Delay) on the determination of the Commencement Date is
governed by the Lease Agreement.
The Developer agrees that it shall assign a project manager satisfactory to
Entrust, acting reasonably, for the construction of the Base Building Core &
Shell as well as the Tenant Fit-Up and that such project manager shall be
dedicated on a full-time basis to such construction. Entrust hereby confirms
that Xxxxxxx Xxxxxx is a project manager satisfactory to Entrust.
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3.10 General Conditions Regarding Construction Work
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All of the work to be performed by, through and under the Developer shall be
done: (i) in a good and workmanlike manner; (ii) in compliance with all
applicable construction-related legislation, bylaws, ordinances, regulations,
building codes, rules, orders,, licences, zoning and building requirements
applicable to it; and (iii) in accordance with this Development Agreement.
After Substantial Performance, the Developer shall obtain and evidence to
Entrust all permits and authorizations permitting lawful occupancy of the
Premises. The Developer shall bear the costs (including, without limitation,
applicable development charges) associated with obtaining permits for the Base
Building Core & Shell and Entrust shall bear the costs (including, without
limitation, applicable development charges) associated with obtaining permits
for the Tenant Fit-Up.
Except for Tenant's Work and subject to:
(a) the Developer's allowance to Entrust of the sum of Fifteen Dollars
($15.00) per square foot of rentable area of the Building (exclusive of
G.S.T.) in respect of the Tenant Fit-Up;
(b) Entrust paying for the cost of the Tenant Fit-Up in excess the said
Fifteen Dollars ($15.00) per square foot of rentable area of the Building
(exclusive of G.S.T.); and
(c) Entrust paying for the cost of certain items in excess of the Allowance
(as contemplated by section 3.14 of this Agreement),
the Developer shall pay all construction trades and suppliers monies properly
due and owing to them and shall comply with the provisions of the Construction
Lien Act and all applicable construction-related legislation, bylaws,
ordinances, regulations and building codes. The Developer shall ensure that
there are no lien claims, notices of security interests or other such
encumbrances registered against Entrust's leasehold interest in the Building as
at and after the Substantial Performance Date arising as a result of the
Developer's failure to comply with its obligations under this subsection. In
the event of any such lien claim, notice or other encumbrance, the Developer
shall take whatever steps may be required to vacate forthwith the registration
of it. The Developer also shall indemnify Entrust and hold Entrust harmless
with respect to any and all claims (including, without limitation, solicitor-
client costs) arising out of the supply of services and materials to the
Developer, its construction manager or trades and suppliers for the construction
of the Premises (subject to Entrust's payment of that portion of the cost of the
Tenant Fit-Up which is in excess of Fifteen Dollars ($15.00) per square foot of
rentable area of the Building (exclusive of G.S.T.) in accordance with the terms
of this Development Agreement).
3.11 Entrust's Installations Prior to Completion
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Entrust, at its sole cost and expense, shall perform Tenant's Work. All
Tenant's Work shall be performed in accordance with the provisions of this
subsection.
In performing the Tenant's Work, Entrust shall pay all construction trades and
suppliers monies properly due and owing to them and comply with the provisions
of the Construction Lien Act and all applicable construction-related
legislation, bylaws, ordinances, regulations and building
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codes. Entrust shall ensure that there are no lien claims, notices of security
interests or other such encumbrances registered against the Lands or Building
arising from the Tenant's Work or, to the extent that the cost of the Tenant
Fit-Up exceeds Fifteen Dollars ($15.00) per square foot of rentable area of the
Building (exclusive of G.S.T.), arising from Entrust's failure to pay that
excess in accordance with the terms of this Development Agreement. In the event
of any such lien claim, notice or other encumbrance, Entrust shall take whatever
steps may be required to vacate forthwith the registration of it. Entrust shall
indemnify and hold the Developer and the Owner harmless from any construction
lien claims (including, without limitation, solicitor-client costs) arising out
of the Tenant's Work or, to the extent that the cost of the Tenant Fit-Up
exceeds Fifteen Dollars ($15.00) per square foot of rentable area of the
Building (exclusive of G.S.T.), arising from Entrust's failure to pay that
excess in accordance with the terms of this Development Agreement, including,
without limitation, claims arising out of the supply of services and materials
to Entrust, its trades and suppliers for the Tenant's Work.
After the execution of this Development Agreement and the Lease Agreement and
prior to the Substantial Performance Date, the Developer shall permit
representatives, agents, employees, contractors, architects and engineers
designated by Entrust to enter on the Lands and in the Building at their own
risk for the purpose of performing the Tenant's Work without payment of rent or
other charges except costs relating to the work performed (such as hoisting and
garbage removal and clean-up). Any such entry and the performance of Tenant's
Work: (i) shall be done on notice by Entrust to the Developer; (ii) must not
hamper or delay the Developer's construction work; (iii) shall be scheduled and
coordinated with the Developer's work; (iv) shall be done in accordance with the
Development Schedule; and (v) shall be subject to the reasonable rules and
regulations of the Developer. Until Substantial Performance of the Base Building
Core & Shell, the Developer shall pay the cost of water, sewer, electricity and
other utilities used for the construction of the Base Building Core and Shell
and Entrust shall be responsible for the payment of such items after such time
as well as payments related to such items with respect to the Tenant Fit-Up and
the Tenant's Work.
Without limiting the generality of the foregoing and subject to Force Majeure
Delay and Entrust Delay, the Developer will grant Entrust access on or before
the applicable date(s) set out in the Development Schedule to perform Tenant's
Work in the communication rooms and also will grant Entrust access to other
areas in the Building required to connect communications or electrical cabling
to those rooms, provided that those rooms are not required to be fully completed
or operational by that date and subject to the reasonable rules and regulations
of the Developer. The final locations of those rooms may change during the
course of development, but if Entrust has provided all necessary information to
the Developer in accordance with the Development Schedule with respect to the
location and design of those rooms, then the Developer will provide Entrust
access to those rooms on or before the applicable date(s) set out in the
Development Schedule (subject to Force Majeure Delay and Entrust Delay).
3.12 Entrust's Right of Entry To Review Progress of Construction
-----------------------------------------------------------
Whenever Entrust considers it appropriate, the Developer shall permit
representatives, agents, employees, lenders, contractors, appraisers, architects
and engineers designated by Entrust to enter the Lands and Building at their own
risk for the purpose of reviewing the progress of construction without the
payment of rent or other charges; provided that except as set forth
13
below in this subsection 3.12 and in subsection 7.1, Entrust is not assuming any
liability whatsoever as a result of any such entry or review and no such entry
and review diminishes in any way the responsibilities of the Developer under
this Development Agreement. Any such entry: (i) shall be done on notice by
Entrust to the Developer; (ii) is subject to the reasonable rules and
regulations of the Developer; and (iii) must not hamper or delay the Developer's
construction work (including not giving any instructions to construction
personnel on the job site).
3.13 Approvals
---------
No approval, consent, authorization or acceptance required or contemplated under
this Development Agreement shall be unreasonably withheld or delayed and each
such approval, consent, authorization or acceptance must be given within the
time frame, if any, contemplated by the Development Schedule or this Development
Agreement.
3.14 Base Building Core & Shell Budget
---------------------------------
The parties acknowledge that the budget for the Base Building Core & Shell
includes certain allowances totaling $235,000.00 (the "Allowance"), being
allowances for signage ($25,000.00), relocation of existing signage or new
Building signage ($20,000.00) and landscaping and hardscaping ($150,000.00),
smoking shelter ($15,000.00), security desk ($15,000.00) and bicycle shelter
($10,000.00). Subject to the Developer's obligations to comply with applicable
laws (including municipal site plan requirements), the said allowances may be
used by Entrust as Entrust sees fit. Provided that the Allowance is not
exceeded, Entrust shall also have the ability to allocate or reallocate portions
of the Allowance as between cost items and categories as it sees fit. For
clarity, in the event that the total actual costs for the items set out above
exceeds the Allowance, such excess cost shall be paid by Entrust within forty-
five (45) days after receipt of invoice from time to time from the Developer,
subject to the provisions of the Construction Lien Act.
SECTION 4
---------
TENANT FIT-UP
-------------
4.1 General
-------
(a) The Developer shall ensure that each part of the Tenant Fit-Up complies
with and conforms to all applicable municipal by-laws for its intended use
and meets or exceeds all fire and life safety requirements of the Ontario
Building Code, including all barrier-free provisions and guidelines, as of
the date on which a building permit is issued for that part.
(b) The services supplied and the roles and responsibilities assumed by the
Developer in respect of the Tenant Fit-Up include, but are not limited to,
the services, roles and responsibilities described in the "Canadian
Standard Construction Management Contract Form Between Owner and
Construction Manager" (CCA 5 - 1988), except as otherwise agreed in
writing.
(c) The Developer shall contribute up to the sum of Fifteen Dollars ($15.00)
per square foot of rentable area of the Building (exclusive of G.S.T.) to
the cost of the Tenant Fit-Up.
14
The costs to be paid from that contribution include the costs of all plans
and permits, the cost of insurance for the Tenant Fit-Up and the costs
described in the Tenant Fit-Up economics schedule (Section A-4- Schedule
"B") in the Project Definition Binder, together with those fees set out in
Section 6 of Schedule "F" of the Lease. If the total cost of the Tenant
Fit-Up exceeds Fifteen Dollars ($15.00) per square foot of rentable area of
the Building (exclusive of G.S.T.), then the excess is payable by Entrust
within forty-five (45) days after receipt of invoice from time to time from
the Developer, subject to the provisions of the Construction Lien Act.
4.2 Services of the Developer
-------------------------
The Developer shall provide or cause to be provided the services as described in
the Project Definition Binder from time to time. As well, the Developer shall
identify alternatives and provide value engineering services for the Tenant Fit-
Up that may yield cost benefits to Entrust.
4.3 Budget
------
The Developer shall provide cost estimates to Entrust for the Tenant Fit-Up in
accordance with the Project Definition Binder during the schematic design phase,
the design development phase and the tender documents phase. After preparation
of the budget for Tenant Fit-Up and acceptance thereof by Entrust, acting
reasonably, the budget is subject to revision by the Developer during the course
of development to reflect the latest cost estimates received by it, having
regard to the progression of the schematic design phase, the design development
phase and the tender documents phase, subject to review and acceptance of those
cost estimates by Entrust, acting reasonably. The budget shall be monitored and
controlled by the Developer so that it is not exceeded, other than as a result
of changes ordered by Entrust or Force Majeure or with Entrust's agreement. The
budget shall provide an allowance for contingencies equal to ten (10%) percent
of all costs, it being understood that all unused allowances and contingencies
in the Tenant Fit-Up budget shall be to the credit of Entrust.
4.4 Quality Assurance / Quality Control
-----------------------------------
The Developer shall supply a qualified Quality Assurance / Quality Control
manager who may be an employee of the Developer (subject to Entrust's reasonable
approval) who will use commercially reasonable efforts to ensure that all
aspects pertaining to the quality of the Tenant Fit-Up are met or exceeded, in
accordance with the Project Definition Binder until the completion of the Tenant
Fit-Up Plans and Specifications and then in accordance with the Tenant Fit-Up
Plans and Specifications. The Developer's monthly written reports during Tenant
Fit-Up construction shall include a section entitled "Quality Assurance/Quality
Control" in which all material exceptions are reported and described.
4.5 Schedule
--------
Subject to Force Majeure Delay and Entrust Delay, the Developer is responsible
for the timely delivery of materials, equipment and labour required to perform
and complete the Tenant Fit-Up in accordance with the Development Schedule.
Entrust is responsible to provide the necessary input, review and approvals
required by the Developer in a timely manner in accordance with the Development
Schedule. The Developer shall provide to Entrust detailed sub-schedules
reflecting
15
activities in the Tenant Fit-Up design and procurement phases. The sub-schedules
shall incorporate the time frames described in the Development Schedule and
shall provide further detail pertaining to the Developer's design activities and
Entrust input, review and approval dates. In the sub-schedules, the Developer
also shall illustrate in detail procurement activity, including, without
limitation, long-term delivery items, tender packages, tender processes, tender
analysis, tender recommendation and contract award. In all cases, the Developer
shall immediately notify Entrust in writing if and when the Developer forecasts
that the Tenant Fit-Up will or may cause a delay in the Substantial Performance
Date or the Commencement Date.
4.6 Procurement
-----------
The Developer shall issue all Tenant Fit-Up work for tender and shall obtain no
less than three (3) competitive quotations for all Tenant Fit-Up work, subject
to Entrust's written agreement to accept less than three (3) quotations. The
Developer shall provide to Entrust copies of the approved tender packages to be
issued for tender, all correspondence during the tender period and all tender
submissions. The Developer shall provide its review and analysis of all tender
submissions and shall make a recommendation for contract award to Entrust. Upon
receipt of Entrust's approval and instructions, the Developer shall award the
Tenant Fit-Up contract(s) (which award the Developer agrees Entrust may direct
to a tendering party which may not have been the lowest bidder). If the
quotations received as a result of tendering exceed the most recent budget cost
estimates which have been prepared by the Developer and accepted by Entrust
reflecting the then current accepted design status of the Tenant Fit-Up and if
required by Entrust, the Developer shall arrange to re-design and re-tender as
required to ensure that .costs are within the project budget for the Tenant Fit-
Up, the cost of such re-design and re-tender to be borne by the Developer if it
was negligent in the performance of its obligations hereunder, and otherwise to
be borne by Entrust. In all respects, the Developer shall clearly differentiate
between Base Building Core & Shell work and Tenant Fit-Up work and shall use
commercially reasonable efforts to ensure compatibility and coordination between
them.
Notwithstanding anything to the contrary in this subsection 4.6:
(a) wherever Tenant Fit-Up mechanical and electrical work interfaces with Base
Building Core & Shell mechanical and electrical systems and any warranty
for the Base Building Core & Shell mechanical or electrical system may be
affected if the work is performed by another person, the Base Building Core
& Shell mechanical and electrical subcontractor must be used; and
(b) if Entrust fails to provide information in a timely manner to allow the
Developer to obtain competitive pricing, then the Developer may require
unit pricing.
4.7 Construction
------------
(a) All changes and additions to building systems to be located in the ceiling
space, including, but not limited to, lighting, sprinklers, life support
systems, HVAC diffusers, electrical distribution systems and ceiling grid
and tiles, that are part of the Tenant Fit-Up are subject to approval by
Entrust. It is understood that the Developer shall be
16
responsible to install, at its cost, the Base Building Core & Shell
building systems in the ceiling spaces with due regard to the Tenant Fit-Up
requirements, so long as:
(i) Entrust adheres to the Development Schedule;
(ii) the Tenant Fit-Up item is delivered and capable of being carried out
within the Development Schedule; and
(iii) Entrust gives all necessary information requested by the Developer
before the installation of those building systems as part of the
construction of the Base Building Core & Shell.
It is also understood that the Tenant shall pay for the incremental costs
associated with the Tenant Fit-Up as it impacts the Base Building Core & Shell
ceiling systems. If, however, the Developer installs the Base Building Core &
Shell ceiling systems without due regard to the Tenant Fit-Up requirements, and
Entrust has complied with its obligations set out in the Development Schedule,
then the costs of relocating the Base Building Core & Shell ceiling systems
shall be borne by the Developer. If Entrust does not give all necessary
information requested by the Developer in accordance with the Development
Schedule before the installation of those building systems as part of the
construction of the Base Building Core & Shell or if Entrust requests any
additions to those building systems, then any changes to those systems resulting
from the Tenant Fit-Up and all additions to those building systems are at
Entrust's cost and, if applicable, the Substantial Performance Date may be
extended for Entrust Delay.
(b) All wall coverings that are part of the Tenant Fit-Up and all floor
coverings that are part of the Base Building Core & Shell (except for those
parts of the Base Building Core & Shell which are usually regarded as
common areas in multi-tenant office buildings, such as lobbies and
washrooms) are subject to approval by Entrust. The Developer agrees to
consult with Entrust with respect to floor coverings for those parts of the
Base Building Core & Shell which are usually regarded as common areas in
multi-tenant office buildings.
(c) Subject to subsection 7.1, the Developer shall take all necessary
precautions to protect the Tenant Fit-Up work at Entrust's expense during
construction and acknowledges that it is responsible for all damages caused
by the Developer or those for whom the Developer is in law responsible
prior to Substantial Performance of the Premises and turnover to Entrust.
(d) Subject to subsection 3.4, at Entrust's request the Developer shall in good
faith consider changes to the Base Building Core & Shell so as to satisfy
Entrust's requirements for the Tenant Fit-Up, provided that Entrust adheres
to the Development Schedule and gives all necessary information required by
the Developer in a timely manner to enable the Developer to make the
requested changes, if the Developer deems them feasible.
17
SECTION 5
---------
REPRESENTATIONS AND WARRANTIES OF THE DEVELOPER AND ENTRUST
-----------------------------------------------------------
5.1 The Developer's Representations and Warranties
----------------------------------------------
(a) The Developer represents and warrants that on the Commencement Date, the
Owner will have good and marketable title in fee simple to the Lands,
subject only to covenants, restrictions, agreements, rights-of-way,
easements, mortgages and other encumbrances registered on title to or
otherwise affecting the Lands and title defects, encroachments or
irregularities of a minor nature. Schedule "1" sets out the covenants,
restrictions, agreement, rights-of-way, easements, mortgages and other
encumbrances of record with respect to the Lands as of the date of this
Development Agreement.
(b) The Developer represents and warrants as follows:
(i) The Developer is a corporation, duly organized, validly existing and
in good standing under the laws of Canada and is qualified to do
business in the Province of Ontario.
(ii) The Developer has full capacity, right, power and authority to
execute, deliver and perform this Development Agreement and all
documents to be executed by the Developer pursuant to it, and all
required corporate actions and approvals have been duly taken and
obtained. The individual(s) signing this Development Agreement and
all other documents executed or to be executed pursuant to it on
behalf of the Developer are duly authorized to sign them and to bind
the Developer. This Development Agreement and all documents to be
executed pursuant to this Development Agreement by the Developer are
binding upon and enforceable against the Developer in accordance with
their respective terms.
(iii) There are no claims, causes of action or other litigation or
proceedings pending or, to the best of the Developer's knowledge,
threatened with respect to the Developer or any of its related
corporations which would affect the operation of the Lands or
Building or any part of them or the Developer's ability to enter into
and perform its obligations under this Development Agreement.
The Developer shall notify Entrust within ten (10) calendar days of receipt of
notice of any contemplated, threatened or anticipated: (i) special tax or
assessment to be levied against the Lands or Building; (ii) widening, change of
grade or limitation on use of streets abutting the Lands or Building; (iii)
change in the zoning classification of the Lands or Building; or (iv) change in
the tax assessment of the Lands or Building, in each case of which the Developer
has been put on notice.
5.2 Entrust's Representations and Warranties
----------------------------------------
Entrust represents and warrants as follows:
(a) Entrust is a corporation, duly organized, validly existing and in good
standing under the laws of Canada and is qualified to do business in the
Province of Ontario.
18
(b) Entrust has full capacity, right, power and authority to execute, deliver
and perform this Development Agreement and all documents to be executed by
Entrust pursuant to it, and all required action and approvals have been
duly taken and obtained. The individuals signing this Development Agreement
and all other documents executed or to be executed pursuant to it on behalf
of Entrust are duly authorized to sign them on Entrust's behalf and to bind
Entrust. This Development Agreement, the Lease Agreement and all documents
to be executed pursuant to this Development Agreement by Entrust are
binding upon and enforceable against Entrust in accordance with their
respective terms.
(c) There are no claims, causes of action or other litigation or proceedings
pending or, to the best of Entrust's knowledge, threatened with respect to
Entrust which would affect Entrust's ability to enter into and perform its
obligations under this Development Agreement or the Lease Agreement.
SECTION 6
---------
NO LIABILITY FOR ENTRUST
------------------------
Nothing in this Development Agreement, including, without limitation, any
review, acceptance, authorization, initialing or approval by Entrust of the
design, construction, commissioning or development of the Premises, in whole or
in part, diminishes in any way the Developer's obligations to construct the Base
Building Core & Shell and the Tenant Fit-Up in a good and workmanlike manner and
to construct the Base Building Core & Shell and Tenant Fit-Up in accordance with
applicable law.
SECTION 7
---------
INDEMNITY
---------
7.1 Entrust's Indemnity
----------
Entrust shall indemnify and hold harmless the Developer, the Owner and the
Owner's Mortgagee, their respective officers, directors, employees and agents
and their respective successors and assigns against any and all liabilities,
losses, damages, costs, expense (including reasonable legal fees and expenses),
claims, demands or judgments of any nature arising during the period prior to
the Commencement Date from:
(a) entry on the Lands or in the Building by Entrust, its representatives,
agents, employees, lenders, contractors, appraisers, architects or
engineers after the date of this Development Agreement and before the
Substantial Performance of the Premises;
(b) the performance of the Tenant's Work; or
(c) Entrust's failure to pay in accordance with the provisions of this
Development Agreement any sums payable by Entrust under it.
Entrust is not liable in any case to any indemnified party for any liabilities,
obligations, claims, damages, penalties, causes of action, costs or expense to
the extent that they result from the negligence or misconduct of the indemnified
party or the negligence or misconduct of the Developer, any related corporation
of the Developer, or any contractor, subcontractor or material
19
supplier of the Developer or of a related corporation of the Developer. If the
Developer, any agent of the Developer, the Owner or the Owner's Mortgagee is
made a party to any litigation commenced against Entrust (for liabilities
covered by Entrust's indemnity as specified above) and if Entrust, at its
expense, fails to provide the Developer, its agent, the Owner or the Owner's
Mortgagee with counsel approved by the Developer, its agent, the Owner or the
Owner's Mortgagee, as applicable (which approval shall not be unreasonably
withheld), then Entrust shall pay all costs and reasonable legal fees and
expenses incurred or paid by the Developer, its agent, the Owner or the Owner's
Mortgagee in connection with that litigation. Notwithstanding anything contained
in this Development Agreement to the contrary, Entrust has no liability
whatsoever for consequential, special, exemplary or punitive damages of the
Developer under this Development Agreement or to the Owner under the Lease
Agreement, provided that: (i) the Owner is not precluded from collecting rent
under the Lease Agreement as a result of the deemed commencement of the Lease
Agreement notwithstanding Entrust Delay and (ii) if the Owner is unable to draw
funds from the Owner's Mortgagee on the funding date for the Owner's take-out
financing for the Building as a result of Entrust Delay, Entrust's failure to
execute any subordination agreement or certificate required by the Owner's
Mortgagee, the terms of which have been agreed to by Entrust, within three (3)
business days of receipt of it or otherwise due to the fault of Entrust, then
Entrust shall be liable for and shall indemnify and save harmless the Owner or
Developer as the case may be from any consequential costs and expenses incurred
by it (including, without limitation, all costs and expenses incurred to the
Owner's Mortgagee).
7.2 The Developer's Indemnity
-------------------------
Save for those matters for which Entrust is to give its indemnity pursuant to
the provisions of subsection 7.1, the Developer and Owner assume liability for
and shall protect, defend and indemnify Entrust, Entrust's officers, directors,
employees and agents and their respective successors and assigns against and
hold them harmless for all liabilities, losses, damages, costs, expense
(including reasonable legal fees and expenses), claims, demands or judgments of
any nature as follows (including claims by third parties):
(a) relating to any provincial, federal, municipal or other sales, use, excise
or other taxes due and payable by the Developer;
(b) actually arising from or in connection with the construction, condition,
maintenance, or use of the Premises during the period prior to the
Commencement Date;
(c) relating to the Premises and the appurtenances to them and the use of them
by the Developer or anyone claiming by, through or under the Developer
which may arise with respect to this Development Agreement; and
(d) arising from or in connection with any of the following events during the
period prior to the Commencement Date:
(i) any injury to or the death of any person arising out of or directly
connected with the ownership, use, non-use, operation, possession,
condition, construction, repair or rebuilding of the Premises or
adjoining property, sidewalks, streets or ways or
20
resulting from the condition of any of them during the period prior
to the Commencement Date;
(ii) any claims by third parties to the extent proximately resulting from:
(A) any actual violation by the Developer of any provision of this
Development Agreement; (B) any legal requirement affecting the
Premises during the period prior to the Commencement Date; (C) any
agreement relating to the Premises to which the Developer is a party
or by which the Developer is bound; (D) any contract or agreement to
which the Developer is a party; or (E) any restriction, law,
ordinance or regulation affecting the Premises or the ownership, use,
non-use, condition, construction, repair or rebuilding of them or of
adjoining property, sidewalks, streets or ways; or
(iii) the Developer's failure to pay in accordance with the provisions of
this Development Agreement any sums payable by the Developer under
it.
The Developer is not liable in any case to any indemnified party for any
liabilities, obligations, claims, damages, penalties, causes of action, costs or
expenses to the extent that they result from the negligence or misconduct of the
indemnified party or the negligence or willful misconduct of Entrust or its
subsidiaries. The foregoing shall not be construed to give rise to any third
party beneficiary rights with respect to any person or entity who is not an
indemnified party. If Entrust or any agent of Entrust is made a party to any
litigation commenced against the Developer and if the Developer, at its expense,
fails to provide Entrust or its agent with counsel approved by Entrust or its
agent, as applicable (which approval shall not be unreasonably withheld), then
the Developer shall pay all costs and reasonable legal fees and expenses
incurred or paid by Entrust or its agent in connection with that litigation. The
Developer has no liability to Entrust for any consequential, special, punitive
or exemplary damages under this Development Agreement or the Lease Agreement.
SECTION 8
---------
INSURANCE
---------
8.1 Entrust's Insurance
-------------------
(a) Liability Insurance At all times prior to Substantial Performance of the
Premises Entrust shall maintain insurance covering:
(i) Tenant's Work and any materials Entrust causes to be delivered to the
Building; and
(ii) Entrust's liability for maintenance and use of the Building.
Such insurance shall provide limits of not less than $10,000,000 combined single
limit coverage with respect to bodily injury or death to persons and to property
damage.
21
8.2 The Developer's Insurance
-------------------------
(a) Liability Insurance At all times prior to Substantial Performance of the
-------------------
Premises, the Developer shall maintain insurance covering:
(i) the Developer's liability with respect to all construction that the
Developer may perform in connection with the Lands or Premises under
this Development Agreement; and
(ii) the Developer's liability for ownership, maintenance and use of the
Lands and Building;
Such insurance shall provide limits of not less than $10,000,000 combined single
limit coverage with respect to bodily injury or death to persons and to property
damage.
(b) Casualty Insurance At all times prior to Substantial Performance of the
Premises, the Developer shall maintain:
(i) all-risk casualty insurance covering the Premises against loss or
damage resulting from fire and other insurable casualties in the
amount of the full replacement value of the Premises;
(ii) delayed start-up insurance in the amount of $4,000,000; and
(iii) general wrap-up insurance in the amount of $10,000,000.
8.3 General Requirements
--------------------
(a) Provisions of Policies. The Developer and Entrust shall use reasonable
----------------------
efforts to maintain insurance policies:
(i) on an occurrence basis;
(ii) providing primary coverage;
(iii) containing endorsements requiring thirty (30) calendar days' advance
written notice to named insureds of any cancellation or reduction in
coverage; and
(iv) written by financially sound insurance companies whose policies are
valid in the Province of Ontario.
Any policy may be a so-called blanket policy covering additional locations.
Promptly upon the request of either party, the Developer or Entrust shall
provide the other with evidence of the insurance required under this section 8.
All policies which affect the Building shall name Entrust, the Developer, the
Owner and the Owner's Mortgagee as loss payees as their interests may appear, in
the case of casualty policies, and as additional insureds as their interests may
appear, in the case of liability policies.
22
(b) Release: Waiver of Subrogation. The Developer and Entrust each release the
------------------------------
other from liability for damage to the property of the other to the extent
of insurance maintained under this section 8. The Developer and Entrust
shall use reasonable efforts to obtain waivers of subrogation rights by
their respective insurers against the other in all casualty insurance
policies affecting any portion of the Building and shall promptly notify
the other party of those waivers.
SECTION 9
---------
REMEDIES
--------
All rights and remedies of the parties set out in this Development Agreement are
cumulative and not alternative and, except as set forth in subsections 3.9, 7.1
and 7.2 are without prejudice to any further or other remedies available to the
parties at law.
SECTION 10
----------
TIME
----
Time is of the essence with respect to this Development Agreement, subject to
Force Majeure Delay and Entrust Delay.
SECTION 11
----------
RISK OF LOSS OF PREMISES
------------------------
(a) If at any time or from time to time prior to Substantial Performance of the
Premises any proceedings are contemplated, commenced or consummated for the
taking of the Building, the Exterior Building Amenities or a material
portion of either of them for public or quasi-public use which materially
affect Entrust's use and enjoyment of the Premises, then the Developer
shall forthwith give notice to Entrust. That notice shall, if possible, be
accompanied by a sketch of the portion of the Building or Exterior Building
Amenities which is affected by the taking and a metes and bounds
description delineating the area affected. If any taking of the Building,
the Exterior Building Amenities or any material portion of either of them
for public or quasi-public use prevents the Developer from complying with
its obligations under this Development Agreement such that this Development
Agreement is frustrated in law, then either party may elect to terminate
this Development Agreement by written notice to the other party given no
later that thirty (30) calendar days from the date of the notice of taking.
If this Development Agreement is terminated as aforesaid, then Entrust will
cooperate with the Developer to attempt to maximize any and all awards and
other compensation for any such taking. Entrust may make a separate claim
to the taking authority for Entrust's expenses including, without
limitation, its expenses related to Tenant's Work to the extent incurred.
(b) Until Substantial Performance of the Premises, the risk of loss or damage
to the Premises (but not the Tenant's Work) by fire or otherwise is the
Developer's. In the event of any fire or other insured damage: (i) the
Developer shall forthwith give written notice of it to Entrust; (ii) a
Force Majeure Delay shall be deemed to have occurred; and (iii) the
Developer shall complete the Premises in accordance with the terms of this
Development Agreement. The Developer's notice shall specify the extent of
the damage and the
23
estimated time to repair the damage. If the Premises are materially damaged
by an occurrence against which the Developer is not insured or required to
be insured under this Development Agreement or beyond the extent to which
the Developer is required to insure under this Development Agreement and if
the cost to repair such uninsured damage would exceed $1,000,000 as
determined by the Developer, acting reasonably, then the Developer may
elect, in its discretion, to terminate this Development Agreement or to
complete the Premises in accordance with the terms of this Development
Agreement (in which event a Force Majeure Delay shall be deemed to have
occurred), subject to the requirements of the Owner's Mortgagee.
SECTION 12
----------
DISPUTES
--------
12.1 Differences between the parties as to the interpretation, application or
administration of this Development Agreement shall be submitted to arbitration
pursuant and subject to the Arbitration Xxx 0000 by one arbitrator. The
arbitrator shall be selected by the parties within ten (10) days after the
giving of written notice by either party to the other that the matter or
disagreement is to be submitted to arbitration, and failing agreement within
that ten (10) day period either party may apply to a Judge of the Superior
Court, Eastern Ontario District for the purpose of having that Judge appoint the
arbitrator. The expense of the arbitration shall be borne equally between the
parties, subject to the jurisdiction of the arbitrator, in his or her
discretion, to award the costs of the arbitration to either party. Any award by
the arbitrator under this subsection is final and binding and is not subject to
appeal.
12.2 The arbitration of any dispute under subsection 12.1 shall not affect the
obligation of 'the Developer to comply with the Development Schedule or the
Substantial Performance Date (subject to extension for Force Majeure Delay or
Entrust Delay) and, as part of the arbitration, the arbitrator shall determine
the proportion of the costs which each party shall bear of any work or other
requirement in dispute performed by the Developer in order to comply with its
obligations under this subsection.
SECTION 13
----------
ASSIGNMENT
----------
13.1 Subject to:
(a) the right of the Developer to assign this Development Agreement to the
Owner's Mortgagee as security for financing its obligations under this
Development Agreement; and
(b) the right of the Developer to assign this Development Agreement to a third
party ("the Third Party"), so long as:
(i) the Developer is not released from its obligations hereunder;
(ii) the Third Party agrees with Entrust that it is bound by the provisions
of this Agreement;
24
(iii) the Third Party is not a direct competitor of Entrust or an affiliate
of such a competitor (as in the Canada Business Corporations Act,
R.S.C. 1985, as such Act is constituted as at the date of execution
of this Agreement); and
(iv) Canderel Management Inc. continues to be the party which carries out
the Developer's obligations hereunder,
the Developer and Entrust have no right to assign this Development Agreement or
the obligations under it.
SECTION 14
----------
NOTICES
-------
All notices, demands, requests, instructions and other communications to be
given or made under this Development Agreement shall be in writing and given by:
(i) messenger or a recognized overnight delivery service; (ii) registered or
certified mail, return receipt requested and postage prepaid; or (iii) facsimile
transmission, as follows:
(a) If to Entrust:
c/o Entrust Technologies Incorporated
One Preston Park South
Suite 400
0000 Xxxxxxx Xxxx Xxxx.
Xxxxx, XX
XXX 00000
Attention: Controller
Fax: (000) 000-0000
with a copy to:
(i) prior to the Commencement Date,
Entrust Technologies Limited
000 Xxxxx Xxxx
Xxxxx X00
Xxxxxx, Xxxxxxx
X0X 0X0
Attention: The Facilities Manager
Fax: (000) 000-0000
(ii) on and after the Commencement Date, at the Building
25
(b) If to Developer: c/o Canderel Management, Inc.
0000 Xxxx Xxxx Xxxx,
Xxxxx 000,
Xxxxxx, Xxxxxxx,
X0X 0X0
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: The Senior Vice-President
With a copy to: c/o Canderel Management Inc.
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx X0X 0X0
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: The President
With a copy to the Owner at: c/o Canderel Management Inc.
0000 Xxxx Xxxx Xxxx,
Xxxxx 000,
Xxxxxx, Xxxxxxx
KlV 0Y3
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: The Senior Vice-President
With a copy to: c/o Canderel Management Inc.
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx X0X 0X0
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: The President
or to such other person or address as may be designated by written notice from
either party to the other. Any notice is deemed to have been given and received:
(i) if sent by messenger or overnight delivery service, then on the date of
receipt; (ii) if sent by mail, then three (3) calendar days after mailing; or
(iii) if sent by facsimile transmission during normal business hours, then on
the date of transmission or if sent by facsimile transmission outside of normal
business hours, then on the following Business Day. Any notice given by
facsimile transmission must be confirmed by overnight recognized courier
delivery.
SECTION 15
----------
PUBLIC ANNOUNCEMENT
-------------------
26
Neither party shall make any public announcement of this transaction or other
matters covered by this Development Agreement or by the Lease Agreement without
the other party's prior written consent.
SECTION 16
----------
SUCCESSORS AND ASSIGNS
----------------------
This Development Agreement is binding upon and endures to the benefit of the
parties to it and their successors. This Development Agreement shall not be
amended and no provision of it may be waived except by an instrument in writing
signed by the party against whom enforcement of the amendment or waiver is
sought.
SECTION 17
----------
GOVERNING LAW
-------------
This Development Agreement and the transactions contemplated by it shall be
interpreted, governed and enforced in accordance with the laws of the Province
of Ontario.
IN WITNESS WHEREOF the undersigned have executed this Development Agreement and
affixed their corporate seals through their duly authorized signing officer or
officers.
CANDEREL MANAGEMENT INC.
Per: /s/ Xxxxxxx Xxxxxx (c/s)
----------------------------
I have authority to Name: Xxxxxxx Xxxxxx
bind the corporation ----------------------------
Title: Secretary
----------------------------
3559807 CANADA INC.
(with respect only to Section 7.2)
Per: /s/ Xxxxxxx Xxxxxx (c/s)
----------------------------
I have authority to Name: Xxxxxxx Xxxxxx
bind the corporation ----------------------------
Title: Secretary
----------------------------
ENTRUST TECHNOLOGIES LIMITED
Per: /s/ Xxxxx X. Xxxxxxxx (c/s)
---------------------------
Name: Xxxxx X. Xxxxxxxx
Title: SVP & CFO
Per: ____________________________(c/s)
Name: ___________________________
27
Title: __________________________
We have authority to bind the corporation.
28
SCHEDULE "1"
LEGAL DESCRIPTION OF LANDS/ENCUMBRANCES
LEGAL DESCRIPTION
Part of Xxxx 0, Xxxxxxxxxx 0, Xxxxxxxx xx Xxxxx, now in the City of Kanata,
Regional Municipality of Ottawa-Carleton, designated as parts 4, 5, 6 and 7 on
Plan 4R-15831
ENCUMBRANCES
INSTRUMENT DOCUMENT
NUMBER
MH3261 Easement in favour of the Hydro-Electric Power Commission of Ontario
MH3289 Easement in favour of the Hydro-Electric Power Commission of Ontario
MH3515 Easement in favour of the Hydro-Electric Power Commission of Ontario
MH3622 Easement in favour of the Hydro-Electric Power Commission of Ontario
MH3993 Easement in favour of the Hydro-Electric Power Commission of Ontario
MH4019 Easement in favour of the Hydro-Electric Power Commission of Ontario
N483594 Easement in favour of The Kanata Hydro-Electric Commission
LT563174 Easement in favour of Kanata Hydro-Electric Commission
LT599592 Easement in favour of The Kanata Hydro-Electric Commission
LT 1097015 Charge in favour of Fussen Investment (Ontario) Inc.
XX0000000 Charge in favour of Xxxx-Xxxxx Developments Inc.
29
SCHEDULE "2"
DEVELOPMENT SCHEDULE
6 pages attached
30
SCHEDULE "3"
PRELIMINARY XXXX XXXX, XXXXXXX XX XXXXXXXX, XXXXX XXXXX
0 pages attached
