EXHIBIT 10.2
HARBOUR CENTRE
OFFICE LEASE
TABLE OF CONTENTS
PAGE
ARTICLE 1.01: DEFINITIONS - GENERAL. . . . . . . . . . . . . . . 1
ARTICLE 1.02: DEFINITIONS - LANDLORD AND TENANT. . . . . . . . . 4
ARTICLE 1.03: CONSTRUCTION OF LEASE TERMS. . . . . . . . . . . . 4
ARTICLE 1.04: CAPTIONS . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 1.05: CALCULATION OF "TENANT'S FLOOR AREA" AND "NET
RENTABLE AREA" OF THE BUILDING . . . . . . . . . . 4
ARTICLE 1.06: NET LEASE. . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 2.01: LEASED PREMISES. . . . . . . . . . . . . . . . . . 5
ARTICLE 3.01: TERM OF LEASE. . . . . . . . . . . . . . . . . . . 5
ARTICLE 4.01: RENT . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 4.02: ADJUSTMENT OF RENT WHEN AREAS ARE MEASURED AND
CHANGED. . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 5.01: COMMENCEMENT AND CONDUCT OF BUSINESS . . . . . . . 6
ARTICLE 6.01: BUSINESS AND OTHER TAXES . . . . . . . . . . . . . 6
ARTICLE 7.01: TAX ON TENANTS LEASEHOLD IMPROVEMENTS,
MACHINERY TAX. . . . . . . . . . . . . . . . . . . 6
ARTICLE 8.01: TAX ON LEASED PREMISES . . . . . . . . . . . . . . 6
ARTICLE 9.01: TAX ON LANDS NOT SEPARATELY ASSESSED . . . . . . . 7
ARTICLE 10.01: PER DIEM ADJUSTMENT OF TAXES . . . . . . . . . . . 7
ARTICLE 11.01: OPERATING COSTS. . . . . . . . . . . . . . . . . . 7
ARTICLE 12.01: PAYMENT OF ESTIMATED ADDITIONAL RENTALS. . . . . . 7
ARTICLE 13.01: ADDITIONAL ELECTRICITY CHARGES . . . . . . . . . . 8
ARTICLE 14.01: REPLACEMENT OF BULBS, TUBES, BALLASTS AND LIGHT
FIXTURE PARTS. . . . . . . . . . . . . . . . . . . 8
i
ARTICLE 14.02: COST OF METERS . . . . . . . . . . . . . . . . . . 8
ARTICLE 14.03: TENANTS USE OF ELECTRICITY . . . . . . . . . . . . 8
ARTICLE 15.01: COST OF REPAIRS PAYABLE BY TENANT. . . . . . . . . 8
ARTICLE 15.02: REPAIR OF LEASED PREMISES BY TENANT. . . . . . . . 9
ARTICLE 15.03: PEACEABLE SURRENDER. . . . . . . . . . . . . . . . 9
ARTICLE 15.04: TIDY CONDITION OF LEASED PREMISES. . . . . . . . . 9
ARTICLE 16.01: OCCUPATION OF LEASED PREMISES. . . . . . . . . . . 9
ARTICLE 16.02: ASSIGNMENT, SUBLETTING, PARTING WITH POSSESSION. . 9
ARTICLE 16.03: LANDLORD'S RIGHTS. . . . . . . . . . . . . . . . . 9
ARTICLE 16.04: TRANSFER OF SHARES OF TENANT . . . . . . . . . . . 10
ARTICLE 16.05: TENANT'S RECORDS OF SHAREHOLDINGS. . . . . . . . . 10
ARTICLE 17.01: RULES AND REGULATIONS. . . . . . . . . . . . . . . 10
ARTICLE 17.02: CHANGES TO RULES AND REGULATIONS . . . . . . . . . 10
ARTICLE 18.01: USE OF LEASED PREMISES . . . . . . . . . . . . . . 11
ARTICLE 18.02: INCREASE IN INSURANCE PREMIUMS . . . . . . . . . . 11
ARTICLE 19.01: TENANT'S INSURANCE . . . . . . . . . . . . . . . . 11
ARTICLE 20.01: CANCELLATION OF INSURANCE. . . . . . . . . . . . . 12
ARTICLE 21.01: OBSERVANCE OF LAW. . . . . . . . . . . . . . . . . 12
ARTICLE 22.01: WASTE AND NUISANCE . . . . . . . . . . . . . . . . 13
ARTICLE 23.01: ENTRY BY LANDLORD. . . . . . . . . . . . . . . . . 13
ARTICLE 24.01: INDEMNIFICATION OF LANDLORD. . . . . . . . . . . . 13
ARTICLE 25.01: EXHIBITING PREMISES. . . . . . . . . . . . . . . . 13
ARTICLE 26.01: ALTERATIONS BY TENANT. . . . . . . . . . . . . . . 13
ARTICLE 26.02: ALTERATION OF BUILDING . . . . . . . . . . . . . . 14
ARTICLE 26.03: ALTERATION OF PIPES, CONDUITS, ETC . . . . . . . . 14
ARTICLE 26.04: ALTERATION OF LEASED PREMISES. . . . . . . . . . . 14
ARTICLE 27.01: REPLACEMENT OF GLASS . . . . . . . . . . . . . . . 14
ARTICLE 28.01: SIGNS AND ADVERTISING. . . . . . . . . . . . . . . 14
ARTICLE 29.01: NAME OF BUILDING . . . . . . . . . . . . . . . . . 15
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ARTICLE 30.01: SUBORDINATION AND ATTORNMENT . . . . . . . . . . . 15
ARTICLE 31.01: ACCEPTANCE OF PREMISES . . . . . . . . . . . . . . 15
ARTICLE 32.01: CERTIFICATES . . . . . . . . . . . . . . . . . . . 15
ARTICLE 33.01: QUIET ENJOYMENT. . . . . . . . . . . . . . . . . . 15
ARTICLE 34.01: LANDLORD'S ADDITIONAL COVENANTS. . . . . . . . . . 15
ARTICLE 35.01: TAXES AND RATES PAYABLE BY LANDLORD. . . . . . . . 15
ARTICLE 36.01: CLIMATE CONTROL BY LANDLORD. . . . . . . . . . . . 16
ARTICLE 36.02: ENERGY CONSERVATION BY TENANT. . . . . . . . . . . 16
ARTICLE 37.01: ELEVATOR SERVICE . . . . . . . . . . . . . . . . . .16
ARTICLE 38.01: ELEVATOR SERVICE INTERRUPTIONS . . . . . . . . . . 16
ARTICLE 39.01: JANITORIAL SERVICES. . . . . . . . . . . . . . . . 17
ARTICLE 40.01: WATER AND ELECTRICITY. . . . . . . . . . . . . . . 17
ARTICLE 41.01: REPAIR AND MAINTENANCE . . . . . . . . . . . . . . 17
ARTICLE 42.01: TRADE FIXTURES . . . . . . . . . . . . . . . . . . 17
ARTICLE 42.02: REMOVAL OF TRADE FIXTURES. . . . . . . . . . . . . 18
ARTICLE 43.01: FIXTURES . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE 44.01: TIME FOR REPAIR BY LANDLORD. . . . . . . . . . . . 18
ARTICLE 45.01: LANDLORD'S INSURANCE . . . . . . . . . . . . . . . 18
ARTICLE 46.01: DAMAGE -ABATEMENT OF RENT. . . . . . . . . . . . . 19
ARTICLE 46.02: DAMAGE TO LEASED PREMISES - TERMINATION. . . . . . 19
ARTICLE 46.03: DAMAGE TO BUILDING - TERMINATION . . . . . . . . . 19
ARTICLE 47.01: LOSS AND DAMAGE. . . . . . . . . . . . . . . . . . 19
ARTICLE 48.01: DELAYS . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 49.01: DEFAULT. . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 50.01: COSTS. . . . . . . . . . . . . . . . . . . . . . . 21
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ARTICLE 51.01: DISTRESS . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 52.01: RIGHT OF ENTRY . . . . . . . . . . . . . . . . . . 21
ARTICLE 53.01: RIGHT OF TERMINATION . . . . . . . . . . . . . . . 21
ARTICLE 54.01: PAYMENT OF RENT AND PERFORMANCE OF COVENANTS . . . 21
ARTICLE 55.01: ADDITIONAL RIGHTS AND REMEDIES OF LANDLORD
ON DEFAULT . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 56.01: NON-WAIVER . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 57.01: OVERHOLDING BY TENANT. . . . . . . . . . . . . . . 22
ARTICLE 58.01: DIRECTORY BOARD. . . . . . . . . . . . . . . . . . 22
ARTICLE 59.01: ACCRUAL OF RENT. . . . . . . . . . . . . . . . . . 22
ARTICLE 60.01: SALE BY LANDLORD . . . . . . . . . . . . . . . . . 22
ARTICLE 61.01: NOTICE . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 61.02: NOTICE BY DELIVERY . . . . . . . . . . . . . . . . .23
ARTICLE 62.01: LAWS OF PROVINCE APPLY . . . . . . . . . . . . . . 23
ARTICLE 63.01: PAYMENT IN CANADIAN FUNDS. . . . . . . . . . . . . 23
ARTICLE 64.01: LEASE ENTIRE AGREEMENT . . . . . . . . . . . . . . 23
ARTICLE 65.01: BINDING EFFECT . . . . . . . . . . . . . . . . . . 23
ARTICLE 66.01: TIME OF THE ESSENCE. . . . . . . . . . . . . . . . .23
ARTICLE 67.01: REGISTRATION . . . . . . . . . . . . . . . . . . . 24
ARTICLE 68.01: TERMINATION UPON REGISTRATION. . . . . . . . . . . 24
ARTICLE 69.01: OPTION TO RENEW. . . . . . . . . . . . . . . . . . 24
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SCHEDULES
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SCHEDULE 1 - PLAN OF LEASED PREMISES
SCHEDULE 2 - SUMMARY OF TERMS OF. LEASE
SCHEDULE 3 - RULES AND REGULATIONS
SCHEDULE 4 - OPTIONS TO RENEW
SCHEDULE 5 - DEMISING
SCHEDULE 6 - LEASEHOLD IMPROVEMENTS
SCHEDULE 7 - LANDLORD'S WORK
SCHEDULE 8 - ADDITIONAL ELECTRICAL CHARGES
SCHEDULE 9 - EARLY TERMINATION
SCHEDULE 10 - EXISTING LEASE ON SUITE 2040
SCHEDULE 11 - RIGHT OF FIRST REFUSAL
SCHEDULE 12 - OFFER TO LEASE (dated April 20, 1999)
v
LEASE
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THIS INDENTURE is made the 11th day of August, 1999.
BETWEEN:
HARBOUR CENTRE COMPLEX LIMITED, as attorney-
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in-fact for Lord Realty Holdings Limited and
Privest Properties Ltd., P.O. Box 12050,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇;
(the "Landlord")
OF THE FIRST PART
AND:
NETNATION COMMUNICATIONS (CANADA) INC,
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P.O. Box 12129
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555 West Hastings Street
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Vancouver, B.C.
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V6B 4N6
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(the "Tenant")
OF THE SECOND PART
DEFINITIONS
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1.01 The Parties hereto agree that when used in this Lease or in any
Schedule attached to
this Lease, the following words or expressions have the meanings hereinafter set
forth:
(a) "herein", "hereof', "hereby", "hereunder", "hereto", "hereinafter" and
similar expressions refer to this Lease and not to any particular section,
paragraph or other portion hereof, unless there is something in the subject
matter or context inconsistent therewith.
(b) "Building" means that part of Harbour Centre presently known as the Harbour
Centre Office Tower and consisting of 21 office floors and 2 mechanical
floors located between the 5th (elevation 217.16 feet) and the ceiling of
the 28th floor (elevation 493.16 feet) together with the office tower
entrances and lobby at Hastings Street level (elevation (154.25 feet) and
the elevators and elevator shafts from the Hastings Street level to the
ceiling of the 28th floor.
1
(c) "Business Day" means any of the days from Monday to Friday inclusive of
each week unless such day is a holiday.
(d) "Capital Tax" means the tax or excise imposed upon the Landlord which is
measured by or based in whole or in part upon the capital employed by the
Landlord at and after the date of the substantial completion of
construction of the Building, imputed as if the amount of such tax or
excise were that amount due if the Building were the only real property of
the Landlord and includes the amount of any capital or place of business
tax levied by the Provincial Government or other applicable taxing
authority against the Landlord with respect to the Building, which at the
present is calculated as one fifth (1/5) of one percent (1%) of the
Landlord's "taxable paid-up capital" as defined in the applicable
legislation.
(e) "Commencement Date" means the date set out in Section 1 of Schedule 2.
(f) "Common Areas and Facilities" means (a) those areas, facilities, utilities,
improvements, equipment and installations in the Building which, from time
to time, are not designated or intended by the Landlord to be leased to
tenants of the Building, and (b) those areas, facilities, utilities,
improvements, equipment and installations which serve or are for the
benefit of the Building, whether or not located within, adjacent to, or
near the Building and which are designated or intended by the Landlord from
time to time as part of the Common Areas and Facilities of the Building.
Common Areas and Facilities includes, without limitation, all areas,
facilities, utilities, improvements, equipment and installations which are
provided or designated (and which may be changed from time to time) by the
Landlord for the use or benefit of the tenants, their employees, customers
and other invitees in common with others entitled to the use or benefit
thereof in the manner and for the purposes permitted by this Lease.
(g) "Harbour Centre" means the Lands and includes the Building and any other
buildings or improvements thereon and therein.
(h) "Landlord's Architect" means such firm of professional architects or
engineers as the Landlord may from time to time engage and includes any
consultant or consultants from time to time appointed by the Landlord or
the Landlord's Architect.
(i) "Lands" means those lands located in the City of Vancouver and described as
Block 13, District Lot 541, Plan 15728.
(j) "Leased Premises" means that part of the Building as outlined in red on the
plan attached hereto as Schedule 1, but excluding the exterior face of the
Building.
(k) "Net Rentable Area of the Building" means 249,755 square feet provided that
if from time to time there is a significant change in the rentable space in
the Building as a result of an addition thereto, partial destruction
thereof, or other cause, "Net Rentable Area of the Building" shall
thereafter mean the number of square feet of net rentable area of the
Building determined in accordance with Section 1.05 hereof.
2
(l) "Normal Business Hours" means the hours from 7:30 a.m. to 6:00 p.m. on
Business Days and the hours from 7:30 a.m. to 1:00 p.m. on Saturdays except
when Saturday is a holiday.
(m) "Operating Costs" means the total amounts paid or payable whether by the
Landlord or others on behalf of the Landlord for climate control and
maintaining, operating and repairing the Building, including without
limiting the generality of the foregoing, Capital Tax, the aggregate of the
amount paid for all fuel used in heating and the purchase of steam for
heating or other purposes, the amount paid or payable for all electricity
furnished by the Landlord to the Building, the amount paid or payable on
account of relamping and reballasting pursuant to Section 14.01 hereof; the
amount paid or payable for all hot and cold water other than that
chargeable to tenants by reason of their extraordinary consumption of
water; the amount paid or payable for all labour and/or wages including
benefits, and other payments made to or for the benefit of janitors,
caretakers, and other employees of the Landlord (including wages and
benefits of the building manager) involved in the maintenance of the
Building, managerial and administrative expenses related to the Building;
the total charges of any independent contractors employed in the repair,
care, maintenance, and cleaning of the Building, the amount paid or payable
for all supplies (including all supplies and necessities which are
occasioned by everyday wear and tear); the costs of window cleaning,
maintenance of the Directing Board of the Building, telephone and utility
costs; the cost of accounting services necessary to compute the rents and
charges payable by the tenants of the Building; the cost of operating,
repairing and maintaining the Building elevators; the cost of porters,
guards and other protection services; payments for general maintenance and
repairs to the plant and equipment supplying climate control; and the
amount paid for premiums for all insurance including that provided for in
Section 45.01 hereof. There shall be included in Operating Costs that
portion, which the Landlord acting reasonably considers to be applicable to
the Building, of any and all costs and expenses of the same nature as the
foregoing costs and expenses but which are incurred either:
(i) with respect to the Building in common with other parts of Harbour
Centre; or
(ii) with respect to parts of Harbour Centre used by tenants of the
Building and their employees and those doing business with them in
common with the tenants of other elements of Harbour Centre and their
employees and those doing business with them,
Operating Costs shall not include depreciation except:
(iii) depreciation of costs incurred for repairing and replacing fixtures,
equipment and facilities serving or comprising the Building (including
the heating, ventilating, air conditioning and climate control systems
serving the Building) which by their nature require periodic repair or
replacement and which are not charged fully in the year in which they
are incurred, at rates determined from time to time by the Landlord in
accordance with sound accounting principles;
3
(iv) cost of improvements properly charged to the Landlord's capital
account which substantially reduce Operating Costs and herein defined
amortized over their useful life as determined by the Landlord in
accordance with sound accounting principles; and
(v) interest calculated at two (2) percentage points per annum above the
annualized average daily prime bank commercial lending rate charged
during the period for which Operating Costs are being calculated by
any Canadian chartered bank designated from time to time by the
Landlord upon the undepreciated or unamortized portion of the cost
referred to in the preceding subsections (m)(iii) and (iv).
Except as provided in subsection (m)(v) above, Operating Costs shall not
include interest on debts, capital retirement of debt, or other costs
property chargeable to capital account, or costs directly chargeable by the
Landlord to any tenant or tenants of the Building pursuant to sections of
this Lease other than Section 11.01 hereof and the corresponding provisions
of their respective leases, or costs for which the Landlord is reimbursed
by the proceeds of insurance claims to the extent of such reimbursement. If
at any time during any fiscal period the Building shall be less than
ninety-five percent (95%) occupied by tenants, the Landlord shall have the
right to adjust any cost incurred in the Building that is related to tenant
occupancy so that the Landlord will fully recover its expenditure and
Operating Cost for such fiscal period shall be deemed to be the amount of
Operating Cost which would have been Incurred if the Building had been
ninety-five percent (95%) occupied by tenants during the whole of the
fiscal period.
(n) "Proportionate Share" means the fraction that has as its numerator the
Tenant's Floor Area and which has as its denominator the Net Rentable Area
of the Building.
(o) "Rent" includes amounts referred to as rent, rental, additional rent or
additional rental.
(p) "Taxes" means all real property taxes, rates, duties and assessments
(including local improvement taxes), impost charges or levies, whether
general or special, that are levied, rated, charged or assessed against
Harbour Centre or any part or parts thereof from time to time by any lawful
taxing authority (whether federal, provincial, municipal, school or
otherwise), and any taxes or other amounts which are imposed in lieu of, or
in addition to, any such real property taxes (whether of the foregoing
character or not and whether in existence at the Commencement Date or not),
and any such real property taxes and any amounts in lieu thereof levied or
assessed against the Landlord or the owner of Harbour Centre with respect
thereto or its interest therein but excludes such taxes as Capital Tax,
capital gains taxes, corporate, income, profits or excess profits taxes.
(q) "Tenant's Floor Area" means, subject to Section 4.02, the number of square
feet set out in Section 2 of Schedule 2, calculated in accordance with
Section 1.05.
(r) "Term" means the period set out in Section 3 of Schedule 2.
4
(s) "Fair Market Rent" means that rent that would be paid for leases of similar
duration for office space similar to the Leased Premises in office
buildings of similar age, class, size, amenities and leasehold improvements
as between persons dealing in good faith and at arm's length but excluding
consideration of any signing bonus, leasehold improvement allowance, rent
free period or other inducement payment.
When applicable, the Landlord and Tenant shall make bona fide efforts to
agree as to the fair Market Rent payable. If, however, the parties have not
agreed as to the amount of rent by the sixtieth (60th) day prior to the
commencement of the term in question, then such rent shall be determined
either:
(i) by an arbitrator mutually agreed upon by the parties who shall be a
person currently active in the Province of British Columbia as an
Accredited Real Estate appraiser having not less than five years
experience as an appraiser; or
(ii) if the parties are unable to agree as to an arbitrator pursuant to the
clause (i) of this paragraph, then such Fair Market Rent shall be
determined by a single arbitrator in accordance with the provisions of
the Commercial Arbitration Act S.B.C. 1986, c. 3 and amendments
thereto or legislation in substitution therefore.
DEFINITIONS - LANDLORD AND TENANT
-------------------------------------
1.02 Unless the context otherwise requires, the word "Landlord" wherever it
is used herein shall be construed to include and shall mean the Landlord, its
successors and/or assigns, and the word "Tenant" shall be construed to include
and shall mean the Tenant, and the executors, administrators, successors and/or
assigns of the Tenant and when there are two or more tenants, or two or more
persons bound by the Tenant's covenants herein contained, their obligations
hereunder shall be joint and several; the word "Tenant" and the personal pronoun
"it" relating thereto and used therewith shall be read and construed as
"Tenants", and "his", "her", "its", or "their" respectively, as the number and
gender of the party or parties referred to each require and the number of the
verb agreeing therewith shall be construed so as to agree with the said word or
pronoun so substituted.
CONSTRUCTION OF LEASE TERMS
------------------------------
1.03 All 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 provision hereof. If any provision or provisions of this Lease
are illegal or not enforceable, it or they shall be considered separate and
severable from this 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.
CAPTIONS
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1.04 The captions appearing within the body of this Lease have been inserted
as a matter of convenience and for reference only and in no way define, limit or
enlarge the scope or meaning of this Lease or of any provision hereof.
5
CALCULATION OF "TENANT'S FLOOR AREA" AND
"NET RENTABLE AREA OF THE BUILDING"
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1.05 "Tenant's Floor Area" and "Net Rentable Area of the Building" shall be
calculated from
time to time as follows:
(a) Single Tenancy Floor The net rentable area, whether above or below
----------------------
grade, shall be calculated (from dimensioned Architect's drawings) to the inside
face of the glass on outer Building walls. It shall include all space within
outer Building walls except for stairs, elevator shafts, and flues and stacks
for washrooms. No deduction shall be made for washrooms, janitor closets, or
electrical or telephone cupboards within and servicing that floor or for any
other rooms, corridors or areas available to the tenant on that floor for its
use, furnishings or personnel, or for any columns or projections located wholly
or partially within the space, or for any enclosures, ducts, flues, piping or
rooms used for the purpose of cooling. heating or ventilating.
(b) Multiple Tenancy Floor The net rentable area, whether above or below
------------------------
grade, shall be the sum of all rentable spaces on that floor with the rentable
space of each office on such floor being calculated (from dimensioned
Architect's drawings) to the inside face of the glass as described above for a
single tenancy floor, to the face of permanent interior walls, to the
centre-line of partitions forming public corridors, and to the centre-line of
partitions separating adjoining rentable spaces. No deductions shall be made for
any columns or projections located wholly or partially within the rentable
space, or for any enclosures around the periphery of the Building used for the
purpose of cooling, heating or ventilating.
The common area of an office floor, which includes all elevator lobbies,
corridors, washrooms, janitor closets and electrical and telephone cupboards
contained on that floor, any enclosures, ducts, flues, piping or rooms used for
the purpose of heating or cooling or ventilating and not included above shall be
computed by deducting the net rentable space based on multiple tenancy from the
net rentable space based on single tenancy, and shall be allocated pro rata to
the net rentable space of Tenant's premises on that floor to determine Tenant's
Floor Area.
NET LEASE
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1.06 The Tenant acknowledges and agrees that it is intended that this Lease
is a completely carefree net lease to the Landlord, except as expressly herein
set out, that the Landlord is not responsible during the Term for any costs,
charges, expenses and outlays of any nature whatsoever arising from or relating
to the leased Premises, or the use and occupancy thereof, or the contents
thereof or the business carried on therein, and the Tenant shall pay all
charges, impositions, costs and expenses of every nature and kind relating to
the Leased Premises except as expressly herein set out.
LEASED PREMISES
----------------
2.01 In consideration of the Rent, covenants and agreements hereinafter
reserved and contained on the part of the Tenant to be respectively paid,
observed and performed, the Landlord hereby demises and leases to the Tenant the
Leased Premises, together (subject to Section 17.01 hereof) with the right of
6
the Tenant, the Tenant's employees, agents, suppliers and persons having
business with the Tenant in common with the Landlord, its other tenants,
subtenants and ail others entitled thereto to the use of the following:
(a) the entrance foyer and lobby of the Building;
(b) the corridors and lavatories on the floor(s) of the Building on which
the Leased Premises are situate;
(c) public entrance doors, halls, stairways, passages, elevators, in the
Building; and
(d) the shipping and receiving areas in Harbour Centre designated from
time to time by the Landlord.
TERM OF LEASE
---------------
3.01 TO HAVE AND TO HOLD the Leased Premises unto the Tenant for and during
the Term subject to the payment of Rent and the fulfillment by the Tenant of the
covenants and conditions hereinafter set forth.
RENT
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4.01 The Tenant shall pay without deduction, set-off or abatement to the
Landlord or to such other party as the Landlord may designate, yearly and every
year during the Term, a rent of the amount set out in Section 4 of Schedule 2 in
lawful money of Canada payable in equal consecutive monthly installments of the
amount set out in Section 5 of Schedule 2 in advance on the first day of each
month during the Term, the first of such payments to be made on the Commencement
Date. If the Term commences on any day other than the first or expires on any
day other than the last day of a month, rent for the fractions of a month at the
commencement and at the end of the Term shall be adjusted pro rata on a per diem
basis. If the Tenant shall commence to do business from the Leased Premises
prior to the Commencement Date the Tenant shall pay during such period a pro
rata rental calculated on a per diem basis. The Tenant, if requested by the
Landlord, shall deliver to the Landlord at the beginning of each year of the
Term, a series of monthly postdated cheques for such year for the amount of Rent
payable hereunder,
ADJUSTMENT OF RENT WHEN AREAS ARE MEASURED AND CHANGED
--------------------------------------------------------------
4.02 PROVIDED, that if the Tenant's Floor Area was estimated by or on behalf
of the Landlord for the purposes of this Lease because the rentable area thereof
could not be accurately calculated prior to the execution of the Lease, or if
the rentable area of the Leased Premises changes at any time during the Term,
then, when the rentable area of the Leased Premises can be accurately calculated
and if the estimate previously made was not correct or has changed, the Tenant's
Floor Area shall then be calculated as set forth in Section 1.05 and the
appropriate adjustments made with respect to Rent payable under this Lease.
7
COMMENCEMENT AND CONDUCT OF BUSINESS
----------------------------------------
5.01 The Tenant shall commence its business in the Leased Premises on the
Commencement Date and thereafter shall operate its business in the whole of the
Leased Premises in a reputable manner and in compliance with the provisions of
this Lease and the requirements of all applicable governmental laws and
regulations during all Business Days during the Term hereof, provided that
nothing in this Section shall require the Tenant to carry on business during any
period prohibited by any law or by-law regulating or limiting the hours during
which such business may be carried on.
BUSINESS AND OTHER TAXES
---------------------------
6.01 The Tenant shall pay all taxes levied, rates, imposed, charged or
assessed against and in respect of the Tenant's occupancy of the Leased Premises
or in respect of the personal property, trade fixtures, furniture and facilities
of the Tenant or the business or income of the Tenant on and from the Leased
Premises if, as and when the same become due, and will indemnify and keep
indemnified the Landlord from and against all payment of all loss, costs,
charges and expenses occasioned by or arising from any and all such taxes, and
also if the Tenant or any person occupying the Leased Premises or any part
thereof shall elect to have the Leased Premises thereof assessed for Separate
School taxes, the Tenant shall pay to the Landlord as soon as the amount of the
Separate School taxes is ascertainable, any amount by which the Separate School
taxes exceed the amount which would have been payable for school taxes had such
election not been made as aforesaid.
The Tenant further covenants and agrees that upon written request of the
Landlord the Tenant will promptly deliver to it for inspection receipts for
payment of all taxes, payable .by the Tenant under this Section 6.01 which were
due and payable up to one (1) month prior to such request, and in any event will
furnish the Landlord if requested by the Landlord, evidence of such payments
satisfactory to the Landlord before the 21st day of January in each year
covering payments for the preceding year.
TAX ON TENANT'S LEASEHOLD IMPROVEMENTS MACHINERY TAX
----------------------------------------------------------
7.01 The Tenant shall pay to the Landlord as additional rental in accordance
with Section 12.01 hereof, in respect of each applicable tax year, an amount
equal to that portion of the Tax for such tax year as reasonably determined by
the Landlord, which may reasonably be regarded as being attributable to the
fixtures, improvements, installations, alterations, additions, equipment and
machinery from time to time made, erected or installed in the Leased Premises by
or on behalf of the Tenant or by or on behalf of any previous occupant of the
Leased Premises.
TAX ON LEASED PREMISES
-------------------------
8.01 The Tenant shall (i) pay as additional rental to the Landlord or to the
taxing authorities if the Landlord so directs, and discharge in each year during
the Term and within the times provided for by the taxing authorities, all Taxes
that are levied, rated, charged or assessed from time to time against or with
respect to the Leased Premises or any part thereof, on the basis of a separate
real property tax bill and separate real property assessment notice rendered by
any lawful taxing authority; (ii) provide the Landlord within ten (10) days
after demand, with a copy of any separate tax bills and assessment notices for
the Leased Premises or any part thereof; (iii) promptly deliver to the Landlord
8
receipts evidencing the payment of all such Taxes payable to any such taxing
authorities as aforesaid and furnish such other information in connection,
therewith as the Landlord reasonably requires: and (iv) pay as additional rent
its Proportionate Share of all Taxes levied, rated, charged or assessed against
the Common Areas and Facilities on the basis of a separate tax bill for the
Common Areas and Facilities, and as the Landlord shall reasonably allocate to
the tenants of the Building; and (v) pay to the federal, provincial or municipal
authority imposing the same all service, business transfer, transaction value,
ad valorem or other taxes by whatever name called, if any, assessed upon and as
a direct result of the payment of rent hereunder as often as such taxes become
due and whether or not such taxes are applicable on the date of the execution of
this lease or become applicable thereafter. In the event that such taxes are by
statute, by-law or regulation, imposed upon or payable by the Landlord as
recipient of the rent, the Tenant shall reimburse the Landlord for the full
amount of such taxes within thirty (30) days of such taxes becoming due.
TAX ON LANDS NOT SEPARATELY ASSESSED
-----------------------------------------
9.01 If, with respect to any Taxes, there are not separate real property tax
bills and separate real property assessment notices for the Leased Premises and
the Common Areas and Facilities the Tenant shall pay within ten (10) days after
demand therefore by the Landlord, as additional rental, a share (the "Tenant's
Share"), as reasonably allocated to the Leased Premises by the Landlord of all
such Taxes which are levied, rated, charged or assessed by any lawful authority
against, or in relation to Harbour Centre. The Tenant's Share of such Taxes
shall be determined as follows:
The Landlord shall reasonably allocate any Taxes for which separate real
property tax bills and separate real property assessment notices are not
issued, firstly as between the Building and the other improvements
comprising Harbour Centre; and secondly as between each of the individual
leasable premises within the Building; in each case on such basis as the
Landlord in its sole opinion determines equitable, having regard, among
other things, to the various uses of the premises within Harbour Centre and
the Building intended for leasing, the cost of original construction and
the location of each of the individual leasable premises within the
Building.
The Tenant shall pay such portion of the Taxes allocated to the Leased Premises
as aforesaid. The foregoing payment constitutes the Tenant's Share of Taxes and
shall be made in accordance with Section 12.01.
PER DIEM ADJUSTMENT OF TAXES
--------------------------------
10.01 If the Term of this Lease does not commence or end at the beginning or
end of a calendar year, respectively, the Taxes that the Tenant is required to
pay pursuant to Sections 8.01 and 9.01 hereof shall be subject to a per diem
adjustment based upon a period of 365 days.
9
OPERATING COSTS
----------------
11.01 The Tenant shall pay to the Landlord as additional rental in
accordance with Section 12.01 hereof the Tenant's Proportionate Share of
Operating Costs during each year of the Term. If the Term does not commence or
end at the beginning or end of a calendar year, respectively, such amount
payable by the Tenant for the appropriate periods of the Term shall be estimated
by the Landlord acting reasonably and reduced proportionately on a per diem
basis.
PAYMENT OF ESTIMATED ADDITIONAL RENTALS
-------------------------------------------
12.01 Any additional rentals payable by the Tenant under Sections 7.01,
8.01, 9.01 and
11.01 hereof shall be paid as follows unless otherwise provided:
(a) In each year of the Term the Tenant shall pay to the Landlord monthly
in advance one-twelfth (1/12th) of the amount of such additional
rentals payable under Sections 7.01, 8.01, 9.01 and 11.01 for each
year of the Term as reasonably estimated by the Landlord in advance to
be due from the Tenant. Such estimate may be adjusted by the Landlord
and the Tenant shall pay installments of such additional rentals
according to such estimate, as adjusted.
(b) If the aggregate amount of such additional rental payments made by the
Tenant in any year of the Term should be greater than such additional
rentals due for such year, then should the Tenant not be otherwise in
default hereunder, the amount of such excess will be applied by the
Landlord to the next succeeding installments of such additional
rentals due hereunder; and if there be any such. excess for the last
year of the Term, the amount thereof will be refunded by the Landlord
to the Tenant within thirty (30) days after the Landlord's financial
statements have been prepared for the Landlord's fiscal year during
which the expiration or earlier termination of the Term occurs
provided the Tenant is not otherwise in default under the terms of the
Lease at the date of expiry or earlier termination of this Lease.
(c) Notwithstanding the foregoing, if the Landlord is required to prepay
any amount which it is entitled to collect in whole or in part from
the Tenant or if the Landlord is required to pay any such amount more
frequently than required as at the Commencement Date the Tenant shall
pay to the Landlord its portion of such amount calculated in
accordance with this Lease forthwith upon demand.
ADDITIONAL ELECTRICITY CHARGES
--------------------------------
13.01 If, in the Landlord's reasonable opinion, the Tenant causes any extra
or unusual power consumption beyond the average power consumption of other
tenants in the Building, including, by way of example only, that caused by
special equipment, by multiple shift occupancy or by occupancy during other than
Normal Business Hours then the Landlord may estimate the cost of such extra or
unusual power consumption and charge such cost directly to the Tenant. The
Tenant shall pay any such costs to the Landlord on written demand as additional
rent.
10
REPLACEMENT OF BULBS, TUBES, BALLASTS AND LIGHT FIXTURE PARTS
---------------------------------------------------------------------
14.01 The Landlord shall have the exclusive right to attend to any
replacement of electric light bulbs, tubes and light fixture parts in the Leased
Premises throughout the Term. The Landlord may adopt a system of relamping and
reballasting periodically on a group basis in accordance with good practice.
COST OF METERS
----------------
14.02 The Tenant covenants to pay for the cost of any metering which may be
requested by the Tenant to be installed by the Landlord in the Building for the
purpose of determining any utility (including electricity and water) consumed in
the Leased Premises or which may be reasonably required by the Landlord to
measure any excess usage of electricity or water.
TENANT'S USE OF ELECTRICITY
------------------------------
14.03 The Tenant's use of electricity in the Leased Premises shall be for
the operation of lighting and business machines, electrical fixtures such as
personal computers and other small office machines and lamps and shall not at
any time exceed the capacity of any of the electrical conductors and equipment
in or otherwise serving the Leased Premises.
In order to ensure that such capacity is not exceeded and to avert possible
adverse effect upon the Building's electrical services, the Tenant shall not,
without the Landlord's prior written consent in each instance, connect any
additional fixtures, appliances or equipment (other than normal office
electrical fixtures, lamps, personal computers and similar small office
machines) to the Building's electrical distribution system or make any
alteration or addition to the electric system of the Leased Premises existing at
the commencement of the Term. If the Landlord grants such consent, the cost of
all additional risers and other equipment required therefore shall be paid as
additional rental by the Tenant to the Landlord upon demand. As a condition to
granting such consent, the Landlord may require the Tenant to agree to an
increase in the additional rental for electricity by an amount which will
reflect the increased cost to the Landlord of the additional services to be
furnished by the Landlord.
COST OF REPAIRS PAYABLE BY TENANT
--------------------------------------
15.01 If the Building, other parts of Harbour Centre, the elevators,
boilers, engines, pipes and other apparatus (or any of them) used for the
purpose of climate control of the Building or other parts of Harbour Centre or
operating the elevators, or if the water pipes, drainage pipes, electric
lighting or other equipment of the Building or other parts of Harbour Centre or
the roof or outside walls of the Building or other parts of Harbour Centre
require repair or are damaged or destroyed through the negligence, carelessness
or misuse of the Tenant, his servants, agents, employees or anyone permitted by
him to be in the Building, or through him or them in any way stopping up or
injuring the heating apparatus, elevators, water pipes, drainage pipes or other
equipment or part of the Building or Harbour Centre, the cost of the necessary
repairs, replacements of alterations shall be borne by the Tenant who shall pay
the same to the Landlord as additional rental forthwith on demand.
11
REPAIR OF LEASED PREMISES BY TENANT
----------------------------------------
15.02 The Tenant shall repair the Leased Premises, including without
limiting the generality of the foregoing, all interior partitions, fixtures and
leasehold improvements in the Leased Premises and all electrical and telephone
outlets and conduits and any fixtures and shelving, and special mechanical and
electrical equipment not a normal part of the Building installed by or for the
Tenant, reasonable wear and tear, damage resulting from structural defect, fire,
lightning and tempest and other casualty with respect to which the Landlord has
received proceeds of insurance only excepted; and the Landlord may enter and
view the state of repair and the Tenant will forthwith repair according to
written notice in writing, subject only to the foregoing exceptions.
PEACEABLE SURRENDER
--------------------
15.03 At the end of the Term or upon the sooner termination of the Term, the
Tenant shall peaceably surrender and yield up the Leased Premises to the
Landlord in good repair and in a state of broom cleanliness, subject only to the
exceptions set forth in Sections 15.02 and 43.01 hereof.
TIDY CONDITION OF LEASED PREMISES
-------------------------------------
15.04 The Tenant agrees to leave the Leased Premises in a reasonably tidy
condition at the end of each Business Day for the purpose of the performance of
the Landlord's cleaning services.
OCCUPATION OF LEASED PREMISES
--------------------------------
16.01 The Tenant shall not permit any part of the Leased Premises to be used
or occupied by any persons other than the Tenant, any subtenants permitted under
Sections 16.02 and 16.03, and the employees of the Tenant and of any such
permitted subtenant, and shall not permit any part of the Leased Premises. to be
used or occupied by any licensee or concessionaire, or permit any persons to be
upon the Leased Premises other than the Tenant, such permitted subtenants, and
their respective employees, customers and others having lawful business with
them.
ASSIGNMENT, SUBLETTING, PARTING WITH POSSESSION
---------------------------------------------------
16.02 The Tenant shall not assign this Lease nor sublet nor part with
possession of all or part of the Leased Premises without the prior written
consent of the Landlord, which consent shall not be unreasonably withheld;
provided however, such leave to any assignment or subletting shall not relieve
the Tenant from its obligations for the payment of Rent and for the full and
faithful observance and performance of the covenants, terms and conditions
herein contained during the Term and any Renewal Term.
LANDLORD'S RIGHTS
------------------
16.03 Provided further and notwithstanding anything hereinbefore set forth:
(a) If at any time of any proposed assignment or subletting, and from time
to time, the Tenant proposes to assign this Lease or sublet all or
part of the Leased Premises, the Tenant shall send to the Landlord a
notice in writing setting forth the name and address of the proposed
assignee or subtenant and such information as to the nature of its
12
business and its financial responsibility and standing as the Landlord
may reasonably require, and all the terms and conditions of the
proposed assignment or sublease. Within fifteen (15) days from the
submission of such notice of the Tenant the Landlord may elect to
terminate this Lease by giving to the Tenant a notice of intention to
do so, fixing a date of termination not sooner than. the date the
subtenant or assignee proposes to occupy the Leased Premises and the
Tenant shall deliver up vacant possession of the Leased Premises on
such date of termination and the Lease shall terminate and adjustments
shall be made in Rent, Taxes and other charges payable by any party
under this Lease. If the Landlord fails -to elect to terminate this
Lease pursuant to the foregoing, the provisions of Sections 16.02,
16.03(d) and 16.03(e) shall apply to such assignment or subletting.
(b) A notice by the Tenant to the Landlord pursuant to Section 16.03(a)
may be withdrawn by the Tenant at any time prior to the earlier of the
proposed effective date specified therein and the day which is ten
days after the date of the Landlord's notice responding thereto.
(c) The Tenant shall have the right without the consent of the Landlord,
to assign this Lease to a company incorporated or to be incorporated
by the Tenant provided that the Tenant owns or beneficially controls
all the issued and outstanding shares in the capital of the company.
Such assignment shall, however, not relieve the Tenant from its
obligations for the payment of rent and for the full and faithful
observance and performance of the covenants, terms and conditions
herein contained.
(d) Any document or consent evidencing an assignment of this Lease or a
subletting of all or part of the Leased Premises if consented to by
the Landlord shall be prepared by the Landlord or its solicitors and
all legal costs with respect thereto together with the amount of
$250.00 on account of the Landlord's administrative costs shall be
paid by the Tenant to the Landlord forthwith upon demand as additional
rent. Any consent by the Landlord shall be subject to the Tenant
causing such assignee or sublessee to promptly execute an agreement
directly with the Landlord agreeing to be bound by all of the terms,
covenants and conditions contained In this Lease as if such assignee
or sublessee had originally executed this Lease as Tenant.
(e) Any assignment or purported assignment of this Lease (except in
accordance with Section 16.03 (c)), subletting or licensing, or
purported subletting or licensing of all or part of the Leased
Premises without the Landlord's written consent as herein provided
shall be null and void.
TRANSFER OF SHARES OF TENANT
--------------------------------
16.04 If the Tenant is a corporation or if this Lease is assigned to a
corporation, and if at any time during the Term any part or all of the corporate
shares or voting rights of shareholders shall be transferred by sale,
13
assignment, bequest, inheritance, trust, operation of law or other disposition,
or treasury shares be issued so as to result in a change in the control of said
corporation by reason of ownership of greater than fifty percent (50%) of the
voting shares of the corporation or otherwise, such a change of control shall be
deemed to be an assignment of this tease and the Tenant shall forthwith notify
the Landlord in writing of such change and the Landlord shall have the right to
terminate this Lease and the Term, at any time after such change of control by
giving the Tenant sixty (60) days prior written notice of such termination.
TENANT'S RECORDS OF SHAREHOLDINGS
------------------------------------
16.05 The Tenant shall, upon request of the Landlord, make available to the
Landlord from time to time for inspection or copying or both, all books and
records of the Tenant which, alone or with other data, show the applicability or
inapplicability of Section 16.04. If any shareholder of the Tenant shall, upon
request of the Landlord, fail or refuse to furnish to the Landlord any data
verified by the affidavit of such shareholder or other credible person, which
data, alone or with other data show the applicability of Section 16.04 then the
Landlord may terminate this Lease on sixty (60) days written notice.
RULES AND REGULATIONS
-----------------------
17.01 The Tenant and the Tenant's employees and all persons visiting and
doing business with the Tenant in the Leased Premises shall be bound by and
shall observe the Rules and Regulations attached to this Lease as Schedule 3 and
any further and other reasonable rules and regulations made hereafter by the
Landlord relating to the Building or to the Leased Premises of which notice in
writing shall be given to the Tenant and all such rules and regulations shall be
deemed to be incorporated into and form part of this Lease.
CHANGES TO RULES AND-REGULATIONS
-----------------------------------
17.02 The Landlord shall have the right to make such other and further
reasonable rules and regulations as in its judgement may from time to time be
needed for the safety, security, care and cleanliness of the Building or Harbour
Centre and for the preservation of good order therein, and the same shall be
kept and observed by the Tenant, its employees and invitees.
USE OF LEASED PREMISE
------------------------
18.01 The Leased Premises shall not be used other than for the purposes set
out in Section 7 of Schedule 2 and only for such purposes as comply with the
terms of this Lease and all applicable laws, by-laws, regulations or other
governmental ordinances from time to time in existence and the Tenant shall not
carry on or permit to be carried on in the Leased Premises any retail trade or
business.
INCREASE IN INSURANCE PREMIUMS
---------------------------------
18.02 The Tenant agrees that it will not keep, use, sell or offer for sale
in or upon the Leased Premises any article that may be prohibited by any
insurance policy in force from time to time covering the Building. In the event
that the Tenant's occupancy or conduct of business in, or on the Leased
Premises, whether or not the Landlord has consented to the same, results in any
increase in premiums for the insurance carried from time to time by the Landlord
14
in respect of the Building, the Tenant shall pay any such increase in premiums
as additional rent within ten (10) days after bills for such additional premiums
shall be rendered by the Landlord. In determining whether increased premiums are
a result of the Tenant's use or occupancy of the Leased Premises a schedule
issued by the person computing the insurance rate on the Building showing the
various components of such rate shall be conclusive evidence of the several
items and charges which make up such rate- The Tenant shall promptly comply with
all reasonable requirements of the insurance authority or of any insurer now or
hereafter in effect relating to the Leased Premises.
TENANT'S INSURANCE
-------------------
19.01
(a) The Tenant shall during any rent free period and the entire Term
hereof, at its sole cost and expense, take out and keep in full force
and effect and in the names of the Tenant, the Landlord and the
mortgagees of the Landlord as their respective interests may appear,
the following insurance:
(i) Insurance upon property of every description and kind owned by
the Tenant or for which the Tenant is legally liable, or
Installed by or on behalf of the Tenant (and which is located
within the Building), including without limitation furniture,
fittings, installations, alterations, additions, partitions,
fixtures and anything in the nature of a leasehold improvement,
in an amount not less than ninety percent (90%) of the full
replacement cost thereof, with coverage against at least, the
perils of fire and standard extended coverage including sprinkler
leakages (where applicable), earthquake., flood and collapse. If
there is a dispute as to the amount that comprises full
replacement cost, the decision of the Landlord or the mortgagees
of the Landlord shall be conclusive;
(ii) Business interruption insurance in such amount as will reimburse
the Tenant for direct or indirect loss of earnings attributable
to all perils commonly insured against by prudent tenants or
attributable to prevention of access to the Leased Premises or to
the Building as a result of such perils;
(iii) Public liability and property damage insurance including
personal injury liability, contractual liability, non-owned
automobile liability and owners' and contractors' protective
insurance coverage with respect to the Leased Premises and the
Tenant's use of any part of the Building and which coverage shall
include the activities and operations conducted by the Tenant and
any other person on the Leased Premises and shall not exclude
water damage. Such policies shall be written on a comprehensive
basis with limits of not less than $5,000,000.00 for bodily
injury to any one or more persons, or property damage, and such
15
higher limits as the Landlord or the mortgagees of the Landlord
may reasonably require from time to time, and all such policies
shall contain a severability of interest clause and a cross
liability clause;
(iv) Tenant's legal liability insurance for the full replacement cost
of the Leased Premises, such coverage to include the activities
and operations conducted by the Tenant and any other persons on
the Leased Premises; and
(v) Any other form or forms of insurance as the Tenant or the
Landlord or the mortgagees of the Landlord may reasonably require
from time to time in form, in amounts and for insurance risks
against which a prudent tenant would protect itself.
(b) All policies required to be written on behalf of the Tenant pursuant
to subsections 19.01(a)(i) and 19.01(a)(ii) shall contain a waiver of
any subrogation rights which the Tenant's insurers may have against
the Landlord and against those for whom the Landlord is, in law,
responsible, whether any such damage is caused by the act, omission or
negligence of the Landlord or by those for whom the Landlord is, in
law, responsible.
(c) All policies shall be taken out with insurers acceptable to the
Landlord and in a form satisfactory from time to time to the Landlord.
The Tenant agrees that certificates of insurance or, if required by
the Landlord or the mortgagees of the Landlord, certified copies of
each such insurance policy and evidence of all renewals thereof will
be delivered to the Landlord as soon as practicable after the placing
or renewing of the required insurance. All policies shall contain an
undertaking by the insurers to notify the Landlord and the mortgagees
of the Landlord in writing not less than thirty (30) days prior to any
material change, cancellation or other termination thereof.
(d) The Tenant covenants and agrees that in the event of damage or
destruction to the leasehold improvements in the Leased Premises
covered by insurance required to be taken out by the Tenant pursuant
to subsection 19.01(a)(i), the Tenant will use the proceeds of such
insurance for the purposes of repairing or restoring such leasehold
improvements. In the event of damage to or destruction of the Building
entitling the Landlord to terminate this Lease pursuant to Sections
46.02 or 46.03 hereof, then, if the Leased Premises have also been
damaged, the Tenant will pay to the Landlord all of its insurance
proceeds relating to the leasehold improvements in the. Leased
Premises and if the Leased Premises have not been damaged, the Tenant
will deliver to the Landlord, in accordance with the provisions of
this Lease, the leasehold improvements and the Leased Premises.
CANCELLATION OF INSURANCE
---------------------------
20.01 If any insurance policy upon the Building or any part thereof,
including without limitation, the insurance referred to in Section 45.01, shall
be cancelled or shall be threatened by the insurer to be cancelled or the
coverage thereunder is reduced in any way by reason of the use or occupation of
the Leased Premises or any part thereof by the Tenant or by any assignee or
16
subtenant of the Tenant or by anyone permitted by the Tenant to be upon the
Leased Premises, the Landlord may, at its option, enter upon the Leased Premises
and attempt to remedy such condition and the Tenant shall upon demand pay the
cost thereof to the Landlord as additional rent. In the event that the Landlord
is unable to remedy such condition or elects not to attempt to remedy such
condition, the Landlord may re-enter the Leased Premises forthwith and thereupon
the provisions of Section 52.01 hereof shall apply, notwithstanding the
provisions of Section 49.01 hereof. The Landlord shall not be liable for any
damage or injury caused to any property of the Tenant or of others located on
the Leased Premises as a result of such entry.
OBSERVANCE OF LAW
-------------------
21.01 The Tenant shall comply with all provisions of law including without
limitation, federal and provincial legislative enactments, building by-laws, and
any other governmental or municipal regulations which relate to the
partitioning, equipment, operation and use of the Leased Premises, and to the
making of any repairs, replacements, alterations, additions, changes,
substitutions or improvements of or to the Leased Premises. And the Tenant shall
comply with all police, fire and sanitary regulations imposed by any federal,
provincial or municipal authorities, or made by insurance underwriters, and
shall observe and obey all governmental and municipal regulations and other
requirements governing the conduct of any business conducted in the Leased
Premises. Notwithstanding the foregoing it shall be the Landlord's
responsibility to comply with federal and provincial legislative enactments,
building by-laws and any other governmental or municipal regulations which
relate to the Building insofar as they may require changes of a structural
nature in the Building, provided nevertheless that such changes shall be the
responsibility of the Tenant if they are changes or additions required to be
made in or to the Tenant's improvements or partitioning (whether above or below
the ceiling tile) whether such changes be considered structural or not or if
such changes are required by reason of the nature of the use or improvements
contemplated or made by the Tenant.
WASTE AND NUISANCE
--------------------
22.01 The Tenant shall not do or suffer any waste or damage or disfiguration
or injury to the Leased Premises or the fixtures and equipment thereof and shall
not place therein any safe, heavy business machinery, computers, data processing
machines, or other heavy things without first obtaining the consent in writing
of the Landlord and, if requested by the Landlord, by the Landlord's Architect,
and shall not use or permit to be used any part of the Leased Premises for any
dangerous, noxious or offensive trade or business, and shall not cause or permit
any nuisance in, at, on or from the Leased Premises.
ENTRY BY LANDLORD
-------------------
23.01 The Tenant shall permit the Landlord, its servants or agents to enter
upon the Leased Premises at any reasonable time and from time to time for the
purpose of inspecting and of making repairs, alterations or improvements to the
Leased Premises or to the Building, or for the purpose of having access to the
underfloor ducts, or to the access panels to mechanical shafts (which the Tenant
agrees not to obstruct), and the Tenant shall not be entitled to compensation
for any inconvenience, nuisance or discomfort occasioned thereby. The Landlord,
its servants or agents may at any time and from time to time enter upon the
17
Leased Premises for the purposes provided for in Section 20.01 hereof, and such
entry by the Landlord shall not be or be deemed to be re-entry. The Landlord
shall have the right to enter the Leased Premises in order to check, calibrate,
adjust and balance controls and other parts of the heating, ventilation and
climate control system during Normal Business Hours upon reasonable notice.
Provided that the Landlord shall proceed under this Section 23.01 in such manner
as to minimize interference with the Tenant's use and enjoyment of the Leased
Premises. Entry by the Landlord upon the Leased Premises or any part or parts
thereof from time to time pursuant to this Section 23.01 shall not be or be
deemed to be a re-entry.
INDEMNIFICATION OF LANDLORD
-----------------------------
24.01 The Tenant shall indemnify the Landlord and save it harmless from and
against any and all loss (including loss of rentals payable by the Tenant
pursuant to this Lease), claims, actions, damages, liability and expense in
connection with loss of life, personal injury or damage to property arising from
any occurrence in, upon or at the Leased Premises, or the occupancy or use by
the Tenant of the Leased Premises or any part thereof, or occasioned wholly or
in part by any act or omission of the Tenant, its agents, contractors,
employees, servants, licensees, concessionaires or invitees or by anyone
permitted to be on the Leased Premises by the Tenant. In case the Landlord
shall, without fault on its part, be made a party to any litigation commenced by
or against the Tenant, then the Tenant shall protect and hold the Landlord
harmless and shall pay all costs, expenses and reasonable legal fees incurred or
paid by the Landlord in connection with such litigation.
EXHIBITING PREMISES
--------------------
25.01 The Tenant shall permit the landlord and its agents to exhibit the
Leased Premises to prospective tenants during Normal Business Hours of the last
six (6) months of the Term and to exhibit the Leased Premises at any time for
the purposes of the Landlord's own financing and refinancing and to exhibit the
Leased Premises to any prospective purchaser of the Landlord's interest in the
Building.
ALTERATIONS BY TENANT
-----------------------
26.01 The Tenant will not make, install or erect in or to the Leased
Premises any installations, alterations, additions, or partitions without
submitting the drawings and specifications therefor to the Landlord and
obtaining the Landlord's prior written consent in each instance, which consent
shall not be unreasonably withheld. The Tenant must obtain the Landlord's prior
written consent to any change or changes in such drawings or specifications
submitted as aforesaid and shall pay the cost to the Landlord of having its
architects examine such changes prior to proceeding with any work based on such
drawings or specifications. Such work shall be performed by contractors engaged
by the Tenant under written contract approved in writing by the Landlord and
subject to all reasonable conditions which the Landlord may impose but the
Landlord may at its option require that the Landlord's contractors be engaged
for any mechanical or electrical work or other leasehold improvement. Any work
performed by or for the Tenant shall be performed by competent workmen whose
labour union affiliations are not incompatible with those of any workmen who may
be employed in the Building or in Harbour Centre by the Landlord, its
contractors or subcontractors. The Tenant shall submit to the Landlord's
supervision over construction and promptly pay to the Landlord's or the Tenant's
subcontractors as the case maybe, when due, the cost of all such work and of all
materials, labour and services involved therein , and of all decorations and
18
changes in the Building, its equipment or services, necessitated thereby. The
Tenant covenants that the Tenant will not suffer or permit any Builders' or
other liens for work, labour, services or materials ordered by the Tenant or for
the cost of which the Tenant may be In any way obligated or any conditional
sales agreements or chattel mortgages to attach to the Leased Premises or to the
Building or any part thereof and that whenever and so often as any such liens or
claims therefor or conditional sales agreements or notice thereof or chattel
mortgages shall be filed or registered the Tenant shall within twenty (20) days
after the Tenant has notice thereof procure the discharge thereof by payment or
by giving security or in such other manner as is or may be required or permitted
by law. The Tenant shall allow the Landlord to post and keep posted on the
Leased Premises any notice which the Landlord may wish to post under the
provisions of the Builders' Lien Act R.S.B.C. 1979 c. 40) or any legislation
which may amend or replace such Act or any similar legislation. The Tenant
shall, at its own cost and expense, take out or cause to be taken out any
additional insurance reasonably required by the Landlord to protect the
Landlord's and the Tenant's interest during the period of alteration. The Tenant
shall be responsible to obtain and pay for any building permits and other
permits.
ALTERATION OF BUILDING
------------------------
26.02 The Landlord hereby reserves the right at any time and from time to
time to make changes in, additions to, subtractions from or rearrangements of
the Building including without limitation, all improvements at any time thereon,
all entrances thereto and exits therefrom, and to grant, modify and terminate
easements or other agreements pertaining to the use and maintenance of all or
parts of the Building.
ALTERNATIONS OF PIPES, CONDUITS, ETC.
-----------------------------------------
26.03 The Landlord shall have the right to use and make changes or additions
to the pipes, wires, conduits and ducts in the Leased Premises where necessary
to serve other premises in the Building but not in any way so as to interfere
materially with the use and enjoyment of the Leased Premises so caused. The
Tenant shall not unduly obstruct such pipes, conduits and ducts in the Leased
Premises so as to prevent reasonable access thereto.
ALTERATION OF LEASED PREMISES
--------------------------------
26.04 Prior to the Commencement Date the Landlord may alter or relocate the
Leased Premises to the extent found necessary by the Landlord to accommodate
changes in construction design or facilities including major alterations and
relocations but provided always that the Leased Premises as altered or relocated
shall be in all material respects comparable to the Leased Premises as defined
herein.
19
REPLACEMENT OF GLASS
----------------------
27.01 The Tenant shall pay the cost of replacement of any glass broken on
the Leased Premises including outside windows and doors of the perimeter of the
Leased Premises (including perimeter windows in the exterior walls) during the
continuance of this Lease, with as good quality and size and in the case of
perimeter windows, with glass of the same type and colour unless the glass shall
be broken by the Landlord, its servants, employees or agents on its behalf.
SIGNS AND ADVERTISING
-----------------------
28.01 The Tenant shall not paint, display, inscribe, place or affix any
sign, picture, advertisement, notice, lettering or direction on any part of the
outside of the Building or in the interior of the Leased Premises and visible
from the outside of the Building. The Landlord may prescribe a uniform pattern
of identification signs for tenants to be placed on the outside of the
entrance-way leading into the Leased Premises and other than such identification
signs, the
Tenant shall not paint, display, inscribe, place or affix any sign, picture,
advertisement, notice
lettering or direction on the outside of the Leased Premises for exterior view
without the prior
written consent of the Landlord.
NAME OF BUILDING
------------------
29.01 The Tenant shall not refer to the Building by any name other than that
designated from time to time by the Landlord nor use such name for any purpose
other than that of the business address of the Tenant, provided that the Tenant
may use the municipal number of the Building assigned to it instead of the name
of the Building.
SUBORDINATION AND ATTORNMENT
------------------------------
30.01 This Lease is and shall be subject, subordinate and postponed to all
mortgages (including any deed of trust and mortgage securing bonds and all
indentures supplemental thereto) which may now or hereafter charge or affect the
Lands and to all renewals, modifications, consolidations, replacements and
extensions of such mortgages, to the intent that, without execution of any
document other than this Lease, such mortgages and all renewals, modifications,
consolidations, replacements and extensions thereof shall have. priority over
this Lease notwithstanding the respective dates of execution or registration
thereof and notwithstanding the provisions of this Section 30.01 that follow.
Without limiting the generality of the foregoing, the Tenant agrees to execute
promptly any document in confirmation of such subordination, postponement and
priority which the Landlord may request and the Tenant hereby irrevocably
constitutes the Landlord the agent or attorney of the Tenant for the purpose of
executing any such document and of making application in the name of the Tenant
at any time and from time to time to register postponements of this Lease in
favour of any such mortgage or any renewal, modification, consolidation,
replacement or extension of any such mortgage In order to give effect to
the-foregoing provision of this Section 30.01. In the event of any mortgagee of
the Landlord going into possession of the Lands or the Building, the Tenant
shall attorn to and become the Tenant of such mortgagee.
20
ACCEPTANCE OF PREMISES
------------------------
31.01 The Tenant shall examine the Leased Premises before taking possession
hereunder and unless the Tenant furnishes the Landlord with a notice in writing
specifying any defect in the construction of the Leased Premises or otherwise
within ten (10) days after such taking of possession then the Tenant shall
conclusively be deemed to have examined the Leased Premises and to have found
them in order, and such taking of possession without giving the notice aforesaid
within such ten (10) days shall be conclusive evidence that at the Commencement
Date the Leased Premises were in good order and satisfactory condition, subject
only to latent defects, if any. The Tenant agrees that there is no promise,
representation or undertaking by or binding upon the Landlord with respect to
any alteration, remodeling or redecoration of or installation of equipment or
fixtures in the Leased Premises, except such, if any, as are expressly set forth
in this Lease.
CERTIFICATES
------------
32.01 The Tenant agrees that it will at any time and from time to time upon
not less than ten (10) days prior notice execute and deliver to the Landlord a
statement in writing certifying that this Lease is unmodified and in full force
and effect (or, if modified, stating the modifications and that the same is in
full force and effect as modified), the amount of the annual rent and additional
rent then being paid hereunder, the dates to which the same, by installments or
otherwise, have been paid, and whether or not there is any existing default on
the part of the Landlord of which the Tenant has notice.
QUIET ENJOYMENT
----------------
33.01 The Landlord covenants with the Tenant for quiet enjoyment provided
the Tenant is
not in default under this Lease.
LANDLORD'S ADDITIONAL COVENANTS
---------------------------------
34.01 The Landlord further covenants with the Tenant as follows:
TAXES AND RATES PAYABLE BY LANDLORD
----------------------------------------
35.01 The Landlord shall pay all Taxes including without limiting the
generality of the foregoing, water rates with respect to the Lands and the
Building, except such as the Tenant has herein covenanted to pay.
CLIMATE CONTROL BY LANDLORD
------------------------------
36.01 The Landlord shall provide climate control to the Leased Premises
during Normal Business Hours to maintain a temperature adequate for comfortable
occupancy, except during the making of repairs, alterations or improvements and
provided that the Landlord shall further have no responsibility or liability for
failure to supply climate control service when stopped as aforesaid or when
prevented from so doing by strikes or any cause beyond the Landlord's reasonable
control. Any changes or alterations in the system or ducts through which the
climate control system operates required because of any use of the Leased
Premises not in accordance with the design standards or arrangements of
partitioning prescribed by the Landlord, if such changes can be accommodated by
21
the Landlord's equipment, shall be made by the Tenant at its cost and expense
but only with the written consent of the Landlord first had and obtained, such
consent not to be unreasonably withheld, and in accordance with drawings and
specifications and by a contractor first approved in writing by the Landlord,
such approval not to be unreasonably withheld. If installation of partitions,
equipment or fixtures by the Tenant necessitates the rebalancing of the climate
control equipment in the Leased Premises the same will be performed by the
Landlord at the Tenant's expense. The Tenant acknowledges that one (1) year may
be required after the Tenant has fully occupied the Leased Premises in order to
adjust and balance the climate control systems.
ENERGY CONSERVATION BY TENANT
--------------------------------
36.02 The Tenant covenants with the Landlord:
(a) to cooperate with the Landlord In the conservation of ail forms of
energy in the Building, including without limitation the Leased
Premises;
(b) to comply with all laws, by-laws, regulations and orders relating to
the conservation of energy and affecting the Leased Premises or the
Building;
(c) at its own cost and expense to comply with all reasonable requests and
demands of the Landlord made with a view to such energy conservation;
and
(d) that any and ail costs and expenses and any capital improvements paid
or incurred by the Landlord in complying with such laws, by-laws,
regulations and orders, so far as the same shall apply to or
reasonably be apportioned to the Building by the Landlord, shall be
included in the Landlord's costs and expenses of maintaining and
operating the Building for the purposes of Section 11.01.
The Landlord shall not be liable to the Tenant in any way for any loss, costs,
damages or expenses whether direct or consequential, paid, suffered or incurred
by the Tenant as a result of any reduction in the services provided by the
Landlord to the Tenant or to the Building as a result of the Landlord's
compliance with such laws, by-laws, regulations or orders.
ELEVATOR SERVICE
-----------------
37.01 Subject to the Rules and Regulations referred to in Section 17.01, the
Landlord shall furnish elevator service during Normal Business Hours to the
Tenant and its employees and those doing business with the Tenant in common with
others except when repairs are being made, provided that the Tenant and such
employees and all other persons using the same shall do so at their own risk.
ELEVATOR SERVICE INTERRUPTIONS
--------------------------------
38.01 There shah be no liability on the Landlord for any claim in respect of
any failure by the Landlord to provide elevator service during any power failure
or other cause beyond the control of the Landlord or by reason of the carrying
out of any repair, maintenance or replacement of elevators, nor shall there be,
consequent upon the foregoing, any repayment of or reduction in the rent
reserved hereby.
22
JANITORIAL SERVICES
--------------------
39.01 When reasonably necessary from time to time the Landlord shall cause
the floors to be swept and windows to be cleaned and the desks, tables and other
furniture of the Tenant to be dusted all in keeping with a first class office
building but with the exception of the obligation to cause such work to be done,
the Landlord shall not be responsible for any act or omission or commission on
the part of the person or persons employed to perform such work and such work
shall be done at the Landlord's direction without interference by the Tenant,
his servants or employees.
WATER AND ELECTRICITY
-----------------------
40.01 The Landlord shall make available hot and cold water and, if
available, chilled water in reasonable quantity and shall make available
electricity in normal quantity provided that, if the Tenant's equipment requires
utilities in excess of normal quantities, facilities to supply excess quantities
may be provided by the Landlord at the sole expense of the Tenant subject to the
following conditions and provided that:
(a) the Landlord's Architect shall determine that such excess facilities
are so required by the Tenant's equipment;
(b) it is within the capabilities of the Landlord and the existing
structure to provide such excess utilities;
(c) the landlord shall have the right to refuse to supply in the event
that the supplying of additional facilities shall In any way affect
the operation of, the aesthetics of or structure of the Building or in
any way reduce the efficiency of existing electricity, water or other
utility supplied to the Building or any part thereof;
(d) the supplying of additional facilities in order to make the required
utilities available to the Tenant shall be subject to compliance with
all provisions of law including, without limitation, federal arid
provincial legislative enactments, building by-laws and other
governmental or municipal regulations which shall in any way relate to
the work necessary to be undertaken to make said utilities available;
and
(e) the Tenant shall pay to the Landlord, as additional rental from time
to time upon demand a charge as determined by the Landlord's Architect
for the supply of chilled water to the Leased Premises.
REPAIR AND MAINTENANCE
------------------------
41.01 Subject to the other provisions of this Lease imposing obligations in
this respect upon the Tenant, the Landlord shall repair, replace and maintain
the external and structural parts of the Building which do not comprise a part
of the Leased Premises and are not leased to others, janitor and equipment
23
closets and shafts within the Leased Premises designated by the Landlord for use
by it in connection with the operation and maintenance of the Building, and
shall perform such repairs, replacements and maintenance with reasonable
dispatch, in a good and workmanlike manner, but the Landlord shall not be liable
for any damages, direct, or indirect or consequential, or for damages for
personal discomfort, illness or inconvenience of the Tenant, or the Tenant's
servants, clerks, employees, invitees or other persons by reason of failure of
such equipment, facilities or systems or reasonable delays in the performance of
such repairs, replacements and maintenance, unless caused by the deliberate act
or omission, or the negligence of the Landlord, its servants, agents or
employees.
TRADE FIXTURES
---------------
42.01 The Tenant may install Its usual trade fixtures in the usual manner,
provided such installation does not damage the structure of the Leased Premises
or the Building and provided further that the Tenant shall have submitted
detailed plans and specifications for such trade fixtures to the Landlord and
obtained its prior written consent thereto which consent shall not be
unreasonably withheld. Only new and unused trade fixtures may be installed by
the Tenant. The Tenant will not sell, dispose of or remove any of its fixtures,
goods or chattels from or out of the Leased Premises during the Term without the
consent of the Landlord, unless the Tenant is substituting new fixtures, goods
or chattels of equal or greater value or is bona fide disposing of individual
items which have become excess for the Tenant's purposes; and the Tenant will
not permit its fixtures, goods and chattels (or any of them.) to become subject
to any lien, mortgage, charge or encumbrance.
REMOVAL OF TRADE FIXTURES
----------------------------
42.02 All trade fixtures installed by the Tenant in the Leased Premises
shall remain the property of the Tenant and shall be removed at the expiration
of the Term, or other termination thereof, provided the Tenant shall promptly
repair, at its expense, any damage to the Leased Premises caused by any such
removal, and provided further, that the Tenant shall not at such time be in
default under any covenant or agreement contained herein; and if in default, the
landlord shall have a lien on such fixtures and apparatus as security against
loss or damage resulting from any such default by the Tenant and said fixtures
and apparatus shall not be removed by the Tenant until such default is cured,
unless otherwise directed by the Landlord. Trade fixtures include but are not
limited to the three (3) NC water cooled units located in the leased premises
and bearing the serial numbers: 93070157, 990010117 and 99010137.
FIXTURES
--------
43.01 Provided further, any or all installations, alterations, additions,
partitions and fixtures other than trade fixtures in or upon the Leased
Premises, whether placed there by the Tenant or the Landlord or a previous
occupant of the Leased Premises, shall, immediately upon such placement, become
and shall thereafter remain the property of the Landlord without compensation
therefor to the Tenant. Notwithstanding anything herein contained, the Landlord
shall be under no obligation to repair, maintain, replace or insure such
installations, alterations, additions, partitions and fixtures or anything in
the nature of a leasehold improvement made or installed by or on behalf of the
24
Tenant or a previous occupant of the Leased Premises. The Landlord may elect
that any or all installations made or installed by or on behalf of the Tenant
hereunder or under the provisions of any previous lease of the Leased Premises
to the Tenant to whom this Lease is granted be removed at the expiry or earlier
termination of the Term and it shall be the Tenant's obligation to restore at
its expense the Leased Premises to the condition they were in previous to such
alterations, installations, partitions and fixtures.
TIME FOR REPAIR BY LANDLORD
-------------------------------
44.01 If any elevator of the Building or any of the boilers, engines, pipes,
climate control equipment or other apparatus or any of them used for the purpose
of climate control or operating any elevator, or if the water pipes, drainage
pipes, electric lighting or other equipment of the Building get out of repair or
become damaged or destroyed the Landlord shall have a reasonable time in which
to make such repairs or replacements as may be reasonably required for the
resumption of those services to the Leased Premises which it has by this Lease
expressly agreed to provide and the Tenant shall not be entitled to any
compensation or damages therefor, Should any of such equipment of the Building
or elevators become impaired, damaged or destroyed through the deliberate act or
omission, or the negligence of the Tenant or its employees or through it or them
making use of or permitting others to make use of improper paper in the water
closets or in any other manner or way stopping up or injuring such climate
control equipment, elevators, water pipes, drainage pipes, electric lighting or
other equipment, the expense of the necessary repair shall be borne by the
Tenant who shall pay the same to the Landlord upon demand as additional rent.
Nothing in this Section shall, however, obligate the Landlord to provide any
services to the Leased Premises or to make any repairs not herein. specifically
required to be provided or made by the Landlord.
LANDLORD'S INSURANCE
---------------------
45.01 The Landlord covenants and agrees that throughout the Term it will
insure the Building (excluding foundations and excavations) and the machinery,
boilers and equipment contained therein owned by the Landlord (excluding any
property with respect to which the Tenant or other tenants are obliged to insure
pursuant to the provisions of Section 19.01 hereof or pursuant to the
corresponding provisions of their respective leases) against damage by fire and
extended perils coverage in such reasonable amounts as would be carried by a
prudent owner of a similar property. The Landlord will also, throughout the
Term, carry public liability and property damage insurance with respect to the
operation of the Building in reasonable amounts as would be carried by a prudent
owner of a similar property. The Landlord may, but shall not be obliged to, take
out and carry any other form or forms of insurance as it or the mortgagees of
the Landlord may reasonably determine advisable. Notwithstanding any
contribution by the Tenant to the cost of insurance premiums, as provided
herein, the Tenant acknowledges that it has no right to receive any proceeds
from any such insurance policies carried by the Landlord.
DAMAGE - ABATEMENT OF RENT
------------------------------
46.01 If the Leased Premises or Building are destroyed or damaged to such an
extent that the Leased Premises are totally unfit for occupancy or if reasonable
access thereto shall be impossible, Rent shall ▇▇▇▇▇ until the Leased Premises
are repaired or rebuilt. If the Leased Premises are damaged and the damage is
such that the Leased Premises can be partially used, then until such damage
25
shall have been repaired, Rent shall ▇▇▇▇▇ while repairs are in progress by the
same proportion as the area of the Leased Premises rendered unfit for occupancy
is of the Tenant's Floor Area and if the damage or destruction arises from or
out of a casualty against which the Landlord is fully insured, the Landlord
agrees that it will, with reasonable diligence, repair the leased Premises
unless the Tenant is obliged to repair under the terms hereof, or unless this
Lease is terminated pursuant to the provisions of Sections 46.02 or 46.03. The
obligation of the Landlord to repair or rebuild pursuant to this Section 46.01
is conditioned upon the Landlord obtaining all necessary permits and other
approvals of authorities required for such repair or rebuilding.
DAMAGE TO LEASED PREMISES - TERMINATION
--------------------------------------------
46.02 If the Leased Premises are damaged or destroyed by any cause
whatsoever or reasonable access thereto shall be impossible, and if, in the
opinion of the Landlord reasonably arrived at, the Leased Premises cannot be
rebuilt or made fit for the purposes of the Tenant or reasonable access provided
(on a temporary or permanent basis) within ninety (90) days of the damage or
destruction, the Landlord, instead of rebuilding or making the Leased Premises
fit for the Tenant, or providing reasonable access may at its option terminate
this Lease by giving to the Tenant, within thirty (30) days after such damage or
destruction, notice of 'termination, and thereupon Rent and any other payments
for which the Tenant is liable under this lease shall be apportioned and paid to
the date of such damage and the Tenant shall immediately deliver up possession
of the Leased Premises to the Landlord.
DAMAGE TO BUILDING-TERMINATION
--------------------------------
46.03 Irrespective of whether the Leased Premises are damaged or destroyed
or reasonable access made impossible, in the event that fifty percent (50%) or
more of the rentable area of the Building or twenty percent (20%) of the
rentable area of the whole of Harbour Centre is damaged or destroyed by any
cause whatsoever, and if, in the opinion of the Landlord reasonably arrived at,
the said rentable area or areas cannot be rebuilt or made fit for the purposes
of the tenants of such space within one hundred and eighty (180) days of the
damage or destruction, the Landlord may at its option terminate this Lease by
giving to the Tenant, within thirty (30) days after such damage or destruction,
notice of termination requiring vacant possession of the Leased Premises sixty
(60) days after delivery of the notice of termination and thereupon Rent and any
other payments for which the Tenant is liable under this Lease shall be
apportioned and paid to the date on which vacant possession is required and the
Tenant shall deliver up possession of the Leased Premises to the Landlord in
accordance with such notice of termination.
LOSS AND DAMAGE
-----------------
47.01 The Landlord shall not be liable or responsible in any way:
(a) for any death or injury arising from or out of any occurrence in, upon
or at the Building or for damage to property of the Tenant or others
located on the Leased Premises, nor shall it be responsible in the
event of damage to any property of the Tenant or others from any cause
26
whatsoever, whether or not such damage, loss, injury or death results
from the negligence of the Landlord, its agents, servants or employees
or others for whom it may be responsible. Without limiting the
generality of the foregoing, the Landlord shall not be liable for any
injury or damage to persons or property resulting from fire,
explosion, falling plaster, steam, gas, electricity, water, rain, snow
or leaks from any part of the Leased Premises or from the pipes,
appliances, or plumbing works, roof, street, or subsurface of any
floor or ceiling or from any other place or because of dampness or
climatic conditions or from any other cause of whatsoever nature. The
Landlord shall not be liable for any damage whatsoever caused by any
other tenant or persons in the Building, or by an occupant of adjacent
property thereto, or the public, or construction of any private,
public or quasi-public work. All property of the Tenant kept or stored
on the Leased Premises shall be so kept or stored at the risk of the
Tenant only and the Tenant shall indemnify the Landlord in the event
of any claims arising out of damages to the same, including any
subrogation claim by the Tenant's insurers;
(b) for any act or omission (including theft, malfeasance or negligence)
on the part of any agent, contractor or person from time to time
employed by it to perform janitor services or security services, in or
about the Leased Premises or the Building; or
(c) for loss or damage however caused, to money, securities, negotiable
instruments, papers or other valuables of or held by the Tenant.
DELAYS
------
48.01 Whenever and to the extent that the Landlord shall be unable to
fulfil, or shall be delayed or restricted in the fulfillment of any obligation
hereunder in respect of the supply or provision of any service or utility or the
doing. of any work or the making of any repairs by reason of being unable to
obtain the material, goods, equipment, service, utility or labour required to
enable it to fulfill such obligation or by reason of any statute, law or
Order-In-Council or any regulation or order passed or made pursuant thereto or
by reason of the order or direction of any administrator, controller or board,
or any governmental department or officer or other authority, or by reason of
not being able to obtain any permission or authority required thereby, or by
reason of any other cause beyond its control whether of the foregoing character
or not, the Landlord shall be entitled to extend the time for fulfillment of
such obligation by a time equal to the duration of such delay or restriction,
and the Tenant shall not be entitled to compensation for any inconvenience,
nuisance or discomfort thereby occasioned. and shall not be entitled to cancel
this Lease.
DEFAULT
-------
49.01 If and whenever:
(a) the Rent hereby reserved, or any part thereof, is not paid when due,
whether lawfully demanded or not, or there is non-payment of any other
amounts which the Tenant is obligated to pay under any provisions
hereof, and such default shall continue after seven (7) days notice by
the Landlord requiring the Tenant to rectify the same; or
27
(b) the Term hereby granted, or any goods, chattels or equipment of the
Tenant, shall be taken or exigible in execution or in attachment or if
a writ of execution shall issue against the Tenant; or
(c) the Tenant or the Co-Covenantor, if any, shall become insolvent or
commit an act of bankruptcy or become bankrupt or take the benefit of
any Act that may be in force for bankrupt or insolvent debtors or
become involved in voluntary or involuntary winding-up proceedings or
if a receiver shall be appointed for the business, property, affairs
or revenues of the Tenant or the Co-Covenantor, if any; or
(d) the Tenant shall make a bulk sale of its goods or move or commence,
attempt or threaten to move its goods, chattels and equipment out of
the Leased Premises (other than in the routine course of its business)
or shall cease to conduct business from the Leased Premises; or
(e) the Tenant shall not observe, perform and keep each and every of the
covenants, agreements, provisions, stipulations and conditions herein
contained to be observed, performed and kept by the Tenant and shall
persist in such failure after fifteen (15) days notice by the Landlord
requiring that the Tenant remedy, correct, desist or comply or in the
case of any such breach which reasonably would require more than
fifteen (15) days to rectify unless the Tenant shall commence
rectification within the fifteen day notice period and thereafter
promptly and diligently and continuously proceed with the
rectification of the breach; or
(f) the Demised Premises shall be vacated or remain unoccupied for ten
(10) days;
then and in every case the then current and the next ensuing three (3) months
rent, and the additional rental for the current year (to be reckoned at rates
estimated by the Landlord acting reasonably) shall immediately become due and
payable and the Landlord may re-enter and take possession of the Leased
Premises, or any part thereof in the name of the whole, and have again,
repossess and enjoy the Leased Premises in its former estate, anything herein to
the contrary notwithstanding, as though the Tenant were holding over after the
expiration of the Term, and the Term shall, at the option of the Landlord,
forthwith become forfeited and determined and accelerated Rent shall be
recoverable by the Landlord as if it were rent in arrears, but the Tenant shall
remain liable under this Lease. If more than one person shall constitute the
Co-Covenantor, the word "Co-Covenantor", where used in this Section 49.01, shall
be construed as referring separately to each and every person constituting the
Co-Covenantor.
COSTS
-----
50.01 The Tenant shall pay as additional rent and indemnify the Landlord
against all .costs and charges lawfully and reasonably incurred, including legal
expenses actually incurred in enforcing payment of Rent and all other charges
payable by the Tenant hereunder and in obtaining possession of the Leased
28
Premises after default of the Tenant or upon expiration or earner termination of
this Lease, or in enforcing any covenant, provision or agreement of the Tenant
herein contained.
DISTRESS
--------
51.01 The Tenant waives and renounces the benefit of any present or future
statute taking away or limiting the Landlord's right of distress, and covenants
and agrees that notwithstanding any such statute none of the goods and chattels
of the Tenant on the Leased premises at any time during the Term shall be exempt
from levy by distress for rent in arrears.
RIGHT OF ENTRY
----------------
52.01 The Tenant further covenants and agrees that on the Landlord's
becoming entitled to re-enter upon the Leased Premises under any of the
provisions of this Lease the Landlord, in addition to all other rights, shall
have the right to enter the Leased Premises as the agent of the Tenant either by
force or otherwise, without being liable for any prosecution therefor and to
relet the Leased Premises as the agent of the Tenant, and to receive the Rent
therefor, and as agent of the Tenant to take possession of any furniture or
other property on the Leased Premises and to sell the same together with any
trade fixtures on which the Landlord has a lien pursuant to Section 42.02 at
public or private sale and either in bulk or by individual item without notice
and to apply the proceeds of such sale and any Rent derived from reletting the
Leased Premises, after deducting its costs of conducting such sale and its costs
of reletting, on account of the Rent under this Lease, and the Tenant shall be
liable to the Landlord for the deficiency, if any.
RIGHT OF TERMINATION
----------------------
53.01 The Tenant further covenants and agrees that on the Landlord's
becoming entitled to re-enter upon the Leased Premises under any of the
provisions of this Lease, the Landlord in addition to all other rights, shall
have the right to determine this Lease and the Term forthwith by giving notice
in writing to the Tenant and thereupon Rent shall be computed, apportioned and
paid in full to the date of such determination of this Lease, and any other
payments for which the Tenant is liable under this Lease shall be paid and the
Tenant shall forthwith deliver up possession of the Leased Premises to the
Landlord and the Landlord may re-enter and take possession of the same.
PAYMENT OF RENT AND PERFORMANCE OF COVENANTS
--------------------------------------------------
54.01 The Tenant shall pay to the Landlord in the manner specified herein,
without any deduction, set-off or abatement, all Rent hereby reserved and all
amounts which are collectible by the Landlord as rent, and in the event the
Tenant shall fail to pay any such amount when due and payable hereunder, such
amount shall bear interest payable by the Tenant as additional rent at the rate
of twenty-four-percent (24 /a) per annum from the date upon which the same . was
due until actual payment thereof. The Tenant shall observe and perform all terms
and provisions of this Lease on its part to be observed and performed and shall
not do or suffer to be done anything contrary to any term or provision hereof.
29
ADDITIONAL RIGHTS AND REMEDIES OF LANDLORD ON DEFAULT
------------------------------------------------------------
55.01 In addition to all rights and remedies of the Landlord available to it
in the event of any default hereunder by the Tenant either by any other
provision of this Lease or by statute or the general law the Landlord:
(a) shall have the right at all times to remedy or attempt to remedy any
default of the Tenant and in so doing may make any payments due or
alleged to be due by the Tenant to third parties and may enter upon
the Leased Premises to do any work or other things therein, and in
such event all costs and expenses of the Landlord in remedying or
attempting to remedy such default shall be payable by the Tenant to
the Landlord forthwith upon demand; and
(b) shall have the same rights and remedies in the event of any
non-payment by the Tenant of any amounts payable by the Tenant under
any provision of this Lease as in the case of a non-payment of Rent.
NON-WAIVER
----------
56.01 No condoning, excusing or overlooking by the Landlord or any default,
breach or nonobservance by the Tenant at any time or times in respect of any
covenants, provisos or conditions herein contained shall operate as a waiver of
the Landlord's rights hereunder in respect of any continuing or subsequent
default, breach or non-observance or so as to defeat or affect in any way the
rights of the Landlord in respect of any such .continuing or subsequent default
or breach, and no waiver shall be inferred from or implied by anything done or
omitted by the Landlord save only by express waiver in writing. All rights and
remedies of the Landlord contained in this Lease shall be cumulative and not
alternative.
OVERHOLDING BY TENANT
-----------------------
57.01 If the Tenant continues to occupy the Leased Premises after 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
double the rent herein reserved pro rated in relation to the periods of time
during which the Tenant is an overholding tenant, and on the terms and
conditions herein set out except as to length of tenancy.
DIRECTORY BOARD
----------------
58.01 The Tenant shall be entitled to have one name inserted in the
Directory Board of the Building, and the Landlord shall design the style of such
identification, and the Directory Board shall be located in an area designated
by the Landlord in the main lobby,
ACCRUAL OF RENT
-----------------
59.01 Rent shall be considered as annual and accruing from day to day, and
where it becomes necessary for any reason to calculate such Rent for an
irregular period of less than one year an appropriate apportionment and
adjustment shall be made. Where the calculation of any additional rental is not
made until after the termination of this Lease, the obligation of the Tenant to
30
pay such additional rental shall survive the termination of this Lease and such
amounts shall be payable by the Tenant upon demand by the Landlord.
SALE BY LANDLORD
------------------
60.01 In the event of a sale, transfer or lease by the Landlord of the
Building or a portion thereof containing the Leased Premises or the assignment
by the Landlord of this Lease. or any interest of the Landlord hereunder, the
Landlord shall, without further written agreement, to the extent that such
purchaser, transferee or lessee has become bound by the covenants and
obligations of the Landlord hereunder, be freed, released and relieved of all
liability or obligations under this Lease.
NOTICE
------
61.01 Any notice, request, statement or other writing pursuant to this
Lease shall be deemed to have been given if sent by registered prepaid post as
follows:
To the Landlord:
Harbour Centre Complex Limited
P.O. Box ▇▇▇▇▇ - ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
or such other address as the Landlord shall notify the Tenant in writing at any
time or from time to time;
To The Tenant:
at the Leased Premises, if delivered, or if
sent by registered prepaid post at the address
set out in Section 8 of Schedule 2;
and such notice shall be deemed to have been received by the Landlord or the
Tenant, as the case may be, on the second business day after the date on which
it shall have been so mailed except in the event of labour disputes or other
disruptions affecting postal service occurring prior to the deemed date of
receipt thereof In which case notice will not be deemed to have been received
until actually received.
NOTICE BY DELIVERY
--------------------
61.02 Notice shall also be sufficiently given if and when the same shall be
delivered, in the case of notice to Landlord, to an executive officer of the
Landlord, and In the case of notice to the Tenant, to him personally or to an
executive officer of the Tenant if the Tenant is a corporation. Such notice, if
delivered, shall be conclusively deemed to have been given and received at the
time of such delivery. If in this Lease two or more persons are named as Tenant,
31
or are obligated to fulfil the obligations of the Tenant hereunder, such notice
shall also be sufficiently given if and when the same shall be delivered
personally to any one of such persons. Provided that either party may, by notice
to the other, from time to time designate another address in Canada to which
notices mailed more than ten (10) days thereafter shall be addressed.
LAWS OF PROVINCE APPLY
-------------------------
62.01 This Lease shall be deemed to have been made in and shall be construed
in accordance with the laws of the Province of British Columbia. All matters and
disputes, whether sounding in contract or in tort relating to the validity,
construction, interpretation, breach or enforcement of this Lease shall be
determined before the courts of the Province of British Columbia and the Tenant
thereby attorns to the jurisdiction of the courts of the Province of British
Columbia in all such matters and disputes.
PAYMENT IN CANADIAN FUNDS
----------------------------
63.01 The rentals reserved hereunder and all other amounts required to be
paid or payable
under the provisions of this Lease shall be paid in lawful money of Canada at
par at Vancouver, British Columbia.
LEASE ENTIRE AGREEMENT
------------------------
64.01 The Tenant acknowledges that there are no covenants, representations,
warranties, agreements or conditions expressed or implied, collateral or
otherwise forming part of or in any way affecting or relating to this Lease or
the Leased Premises save as expressly set out in this Lease and that this Lease,
[ILLEGIBLE] including the Schedules attached and the Rules and Regulations,
constitutes the entire agreement between the Landlord and the Tenant and may not
be modified except as herein explicitly provided or except by subsequent
agreement in writing of equal formality hereto executed by the Landlord and the
Tenant. Notwithstanding the foregoing the Tenant shall remain liable to pay for
those improvements in the Leased Premises which, have been made by the Landlord
for or on behalf of the Tenant and which are in excess of the work otherwise
required to be done by the Landlord and the Landlord's fee for supervision and
overhead, as to all of which reference may be made to the Offer to Lease made by
the Tenant and accepted by the Landlord to which the form of this Lease was a
Schedule.
BINDING EFFECT
---------------
65.01 Subject to the provisions of this Lease respecting assignment by the
Tenant, this Lease shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns.
TIME OF THE ESSENCE
----------------------
66.01 Time shall be of the essence in all respects hereunder.
32
REGISTRATION
------------
67.01 The Tenant covenants and agrees that the Landlord shall not be obliged
to execute or deliver this Lease in form registrable under the Land Title Act or
any other statute in part material therewith that the Tenant will not register
or record this Lease against the title to the Lands.
TERMINATION UPON REGISTRATION
-------------------------------
68.01 If the Tenant or any person claiming through or under him, whether by
descent, purchase or otherwise, shall apply to have this Lease registered
against the title to the leased Premises or the Lands or shall apply to file or
register any notice of or caveat with respect to this Lease or the interest of
the Tenant arising hereunder against such title or shall institute any
proceedings to effect any such registration, the Landlord may at any time
thereafter terminate this Lease and the Term upon giving written notice of such
termination to the Tenant.
OPTION TO RENEW
-----------------
69.01 The Landlord grants to the Tenant an option to renew this Lease on the
terms and conditions set out in Schedule 4 hereto.
IN WITNESS WHEREOF the parties hereto have executed this Lease under seal
as of the day and year first above written.
THE CORPORATE SEAL of HARBOUR CENTRE )
COMPLEX LIMITED was hereunto affixed in the )
presence of: ) c/s
)
/s/ )
--------------------------------------------------
Authorized Signatory: )
)
/s/ )
--------------------------------------------------
Authorized Signatory: ▇▇▇ ▇▇▇▇, General Manager )
THE COMMON OR CORPORATE SEAL OF )
NETNATION COMMUNICATIONS (CANADA) INC. )
was hereunto affixed in the presence of: )
)
/s/ )
--------------------------------------------------
Authorized Signatory ) c/s
)
(Print Name and Title) )
)
/s/ )
--------------------------------------------------
Authorized Signatory )
)
(Print Name and Title) )
33
SCHEDULE 1
-----------
PLAN OF LEASED PREMISES
--------------------------
HARBOUR CENTRE
---------------
14TH FLOOR OFFICE TOWER
--------------------------
SCALE: 1 INCH = 20 FEET
(Insert drawing)
The purpose of this plan is to identify the approximate location of the Leased
Premises in the Building. The Landlord reserves the right at any time to
relocate, rearrange or alter the buildings and structures, other premises,
Common Areas and Facilities and the Leased Premises from that shown on this
floor plan.
34
SCHEDULE 2
----------
To Lease dated August 11, 1999 made between Harbour Centre Complex Limited, as
Landlord, and NetNation Communications (Canada) Inc., as Tenant.
----------------------------------------
SUMMARY OF TERMS
------------------
1. The Commencement Date shall be May 08, 1999
2. The Tenant's Floor Area determined in accordance with Section 1.05 of the
Lease is 6,684 square feet (620.94 square metres).
3. The Term of the Lease is three (3) years and zero (0) months and zero (0)
days, from and including the Commencement Date and ending on the 30th day
of April 2002.
4. The amount of annual rent payable shall be:
Year 1 - $ 106,944.00 per annum ($16.00 per square foot)
----------
Year 2 - $ 106,944.00 per annum ($16.00 per square foot)
----------
Year 3 - $ 106,944.00 per annum ($16.00 per square foot)
----------
5. The amount of monthly rent payable shall be:
Year 1 - $ 8,912.00 per month
--------
Year 2 - $ 8,912.00 per month
--------
Year 3 - $ 8,912.00 per month
--------
6. The amount of estimated additional rent payable by the Tenant at the
Commencement Date is Eighty Seven Thousand Eight Hundred Twenty Seven
---------------------------------------------------
Dollars and Seventy Six Cents ($87,827.76) per annum payable monthly in
---------------------------------------------
advance.
7. The Leased Premises shall be used solely for:
the purpose of a general business office
---------------------------------------------------------------------------
---------------------------------------------------------------------------
8. The Tenant's address for notice is:
P.O. Box 12129
------------------------
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------
Vancouver. B.C.
------------------------
V6B 4N6
------------------------
35
9. The Tenant has paid a deposit of Ten thousand seven hundred thirty one
-------------------------------------
dollars and eight cents ($10,731.08) to be credited to the Rent for the
--------------------------
last month of the Term.
36
SCHEDULE 3
----------
RULES AND REGULATIONS
---------------------
1. The Tenant shall not place or permit to be placed or left in or upon any
part of the Building outside the Leased Premises, or in or upon part of the
Building of which the Leased premises form a part, any debris or refuse.
The cost of removal or cleaning of debris and refuse shall be charged to
the Tenant.
2. The Landlord shall permit the Tenant and the Tenant's employees and all
persons lawfully requiring communication with them to have the use during
Normal Business Hours in common with others entitled thereto of the main
entrance and the stairways, corridors, elevators or other mechanical means
of access leading to the Leased Premises. At times other than during Normal
Business Hours the Tenant and the employees of the Tenant and persons
lawfully requiring communication with the Tenant shall have access to the
Building and to the Leased Premises only in accordance with the Rules and
Regulations.
3. The Landlord shall permit the Tenant and the employees of the Tenant in
common with others entitled thereto, to use the washrooms on the floor of
the Building on which the Leased Premises are situated or, in lieu thereof,
those washrooms designated by the Landlord, save and except when the
general water supply may be turned off from the public main or at such
other times when repair and maintenance undertaken by the Landlord shall
necessitate the non-use of the facilities.
4. The Tenant shall not permit any cooking in the Leased Premises without the
written consent of the Landlord.
5. The sidewalks, entries, passages, escalators, elevators and staircases
shall not be obstructed or used by the Tenant, its agents, servants,
contractors, invitees or employees for any purpose other than ingress to
and egress from the offices. The Landlord reserves entire control of all
parts of the Building employed for the common benefit of the tenants and
without restricting the generality of the foregoing, the sidewalks,
entries, corridors and passages not within the Leased Premises, washrooms,
lavatories, air-conditioning closets, fan rooms, janitor's closets,
electrical closets and other closets, stairs, escalators, elevator shafts,
flues, stacks, pipe shafts and ducts and shall ▇▇▇▇ the right to place such
signs and appliances therein as it may deem advisable, provided that
ingress to and egress from the Leased Premises is not unduly impaired
thereby.
6. The Tenant, its agents, servants, contractors, invitees or employees, shall
not bring in or take out, position, construct, install or move any safe,
business machinery or other heavy equipment or anything liable to, injure
or destroy any part of the Building without first obtaining the consent in
writing of the Landlord. In giving such consent, the Landlord shall have
the right in its sole discretion to prescribe the weight permit- platforms
to distribute the weight thereof. All damage done to the Building by moving
or using any such heavy equipment or other office equipment or furniture
shall be repaired at the expense of the Tenant. The moving of all heavy
equipment or other office equipment or furniture shall occur only by prior
37
arrangement with the Landlord. No Tenant shall employ anyone to do its
moving in the Building other than the staff of the Building unless
permission to employ someone else is given by the Landlord and the
reasonable cost of such moving shall be paid by the Tenant. Safes and other
heavy office equipment and machinery shall be moved through the halls and
corridors only upon steel bearing plates. No freight or bulky matter of any
description will be received into the Building or carried in the elevators
except during hours approved by the Landlord and in the elevator designated
by the Landlord for such use.
7. The Tenant shall not place or cause to be placed any additional locks upon
any of the Leased Premises without the approval of the Landlord and subject
to any conditions imposed by the Landlord. Two keys shall be supplied by
the Landlord for each entrance door to the Leased Premises and all locks
shall be standard to permit access to the Landlord's master key, if
additional keys are requested, they must be paid for by the Tenant. No one,
other than the Landlord's staff, will have keys to the outside entrance
doors of the Building.
8. The water closets and other water apparatus shall not be used for any
purpose other than those for which they were constructed, and no sweepings,
rubbish, rags, ashes or other substances shall be thrown therein. Any
damage resulting from misuse shall be borne by the Tenant by whom or by
whose agents, servants, or employees the same is causedThe Tenant shall not
let water run unless it is in actual use, and shall not deface or mark any
part of the Building, or drive nails, spikes, hooks, or screws into the
walls or woodwork of the Building.
9. The Tenant shall not do or permit anything to be done in the Leased
Premises, or bring or keep anything therein which will in any way increase
the risk of fire or the rate of fire insurance on the Building or Harbour.
Centre or on property kept therein, or obstruct or interfere with the
rights of other tenants or In any way injure or annoy them or the Landlord,
or violate or act at variance with the laws relating to fires or with the
regulations of the Fire Department, or with the conditions of any insurance
upon said Building or any part thereof, or violate or act in conflict with
any of the rules and ordinances of the Board of Health or with any statute
or municipal by-law.
10. No one shall use the Leased Premises for sleeping apartments or residential
purposes, or for the storage of personal effects or articles other than
those required for business purposes.
11. The Tenant shall permit window cleaners to clean the windows of the Leased
Premises during Normal Business Hours.
12. Canvassing, soliciting and peddling in or about the Building and in the
parking area are prohibited.
13. The Tenant shall not receive or ship articles of any kind except through
facilities, and designated doors and at hours designated by the Landlord
under the supervision of the Landlord.
38
14. It shall be the duty of the respective tenants to assist and cooperate with
the Landlord in preventing injury to the premises demised to them
respectively.
15. No inflammable oils or other inflammable, dangerous or explosive materials
save those approved in writing by the Landlord's insurers shall be kept or
permitted to be kept in the Leased Premises.
16. No bicycles or other vehicles shall be brought within the Building without
the consent of the Landlord.
17. No animals or birds shall be brought into the Building without the consent
of the Landlord.
18. The Tenant shall not install or permit the installation or use of any
machine dispensing goods for sale in the Leased Premises or the Building or
permit the delivery of any food or beverages to the Leased Premises without
the approval of the Landlord or in contravention of any regulations fixed
or to be fixed by the Landlord. Only persons authorized by the Landlord
shall be permitted to deliver or to use the elevators in the Building for
the purpose of delivering food or beverages to the Leased Premises.
19. If the Tenant desires telegraphic or telephonic connections, the Landlord
will direct the electricians as to where and how the wires are to be
introduced, and without such directions no boring or cutting for wires will
be permitted. No gas pipe or electric wire will be permitted which has not
been ordered or authorized by the Landlord. No outside radio or television
aerials shall be allowed on the Leased Premises without authorization in
writing by the Landlord.
20. The Tenant shall not cover or obstruct any of the skylights and windows
that reflect or admit light into any part of the Building except for the
proper use of approved blinds and drapes.
21. Any hand trucks, carry-alls, or similar appliances used in the Building
with the consent of the Landlord shall be equipped with rubber tires, slide
guards and such other safeguards as the Landlord shall require.
22. The Tenant shall not permit undue accumulations of garbage, trash, rubbish
or other refuse within or without the Leased Premises or cause or permit
noise, vibrations or objectionable odours to emanate or be dispelled from
the Leased Premises,
23. The Tenant shall not place or maintain any supplies or other articles in
any vestibule or entry of the leased Premises, on the hallways adjacent
thereto or elsewhere on the exterior of the Leased Premises or the
Building.
24. The Tenant agrees to the foregoing Rules and Regulations, which are hereby
made a part of this Lease, and each of them, and agrees that for such
persistent infraction of them, or any of them, as may in the opinion of the
Landlord be calculated to annoy or disturb the quiet enjoyment of any other
tenant, or for gross misconduct upon the part of the Tenant, or any one
under it, the Landlord may declare a forfeiture and cancellation of the
Lease and may demand possession of the Leased Premises upon one (1) week's
notice.
39
25. In order to ensure efficient operation of the air-conditioning system, no
window shades, curtains, blinds, or screens other than those prescribed by
the Landlord or agreed to in writing by the Landlord shall be attached to,
hung up or used in connection with any window or door in the Leased
Premises, no article shall-be placed on or permitted to block any convector
and the Landlord may require the Tenant to keep exterior window coverings
drawn.
26. All persons entering and leaving the Building at any time, except during
Normal Business Hours, shall register in the book kept by the Landlord and
the Landlord shall have the right to prevent any person from entering or
leaving the Building unless provided with a pass in a form to be approved
by the Landlord. Any person found in the Building at such time without such
pass shall be subject to the surveillance of the employees and agents of
the Landlord.
27. The Landlord shall, at its sole discretion, from time to time, determine
the location, design and use of a directory board upon which the Tenant
shall be entitled to have its name shown.
40
SCHEDULE "4"
------------
OPTIONS TO RENEW
----------------
1. Provided that the Tenant shall not be in default under any of the covenants
or conditions of this Lease, the Landlord hereby grants to the Tenant two
rights of renewal, exercisable by the Tenant giving written notice to the
Landlord not less than three (3) months prior to the expiration of the
Initial Term with respect to the first Renewal Option and not less than
three (3) months prior to the expiration of the first Renewal Term with
respect to the second Renewal Option, to renew the Term of this Lease for
two (2) further periods of one (1) year each (in this Lease called the
"Renewal Terms").
2. There shall be no further right of renewal beyond the second Renewal Term.
3. The renewal leases shall contain the same covenants, conditions and
agreements as are contained in this Lease, except:
(a) the right of renewal already exercised shall be omitted;
(b) any section or clause of this Lease which requires revision to state
correctly the manner in which it is .to be applied during the Renewal
Terms shall be so revised; and
(c) Rent for the Renewal Terms shall be determined as provided in
paragraph 4 hereof.
4. The Rent payable with respect to the Renewal Terms shall be the greater of:
(a) the Rent payable during the final year of this Lease with respect to
the first Renewal Term or the Rent payable during the final year of
the first Renewal Term with respect to the second Renewal Term; or
(b) the Fair Market Rent (as defined in Article 1.01, Section (s) of the
Lease) for the Leased Premises as at the commencement date of each of
the Renewal Terms.
5. The parties shall make bona fide efforts to agree as to the Fair Market
Rent with respect to the Leased Premises as at the commencement date of
each of the Renewal Terms. If, however, the parties have not agreed as to
the amount of rent by the sixtieth (60th) day prior to the commencement of
each of the Renewal Terms, then such rent shall be determined either:
(a) by an arbitrator mutually agreed upon by the parties who shall be a
person currently active in the Province of British Columbia as an
Accredited Real Estate appraiser having not less than five years
experience as an appraiser; or
41
(b) if the parties are unable to agree as to an arbitrator pursuant to
clause (a) of this paragraph, then such rental shall be determined by
a single arbitrator In accordance with the provisions of the
Commercial Arbitration Act S.B.C. 1986, C.3 and amendments thereto or
legislation in substitution therefore.
42
SCHEDULE "5"
------------
DEMISING
--------
The Tenant is allowed to demise the Leased Premises into two units and separate
Leases for each will be drawn up at the Tenant's request. The Landlord will
survey the demised premises, at it's cost, and allot the area to each unit
accordingly.
SCHEDULE "6"
------------
LEASEHOLD IMPROVEMENTS
----------------------
The Tenant shall be responsible for providing their own Leasehold improvements,
beyond the improvements noted on the plan attached to the Offer to Lease,
including designer fees, architectural inspection fees, demolition and
construction costs and signage, all in keeping with the Landlord's Tenant
Guidelines and to the prior approval of the Landlord.
SCHEDULE "7"
------------
LANDLORD'S WORK
---------------
The Landlord shall improve the premises in accordance with the plan attached to
the offer to Lease and the Tenant shall contribute a total of $7,400.00 towards
these costs upon occupancy of the premises. The work will include paint to the
walls, sanding and painting all doors and new cabinets in the kitchen,
SCHEDULE "8"
------------
ADDITIONAL ELECTRICAL CHARGES
-----------------------------
Should the Tenant require it, the Landlord can make available Emergency Power to
the Leased Premises at a one time charge of $300.00 per amp. The Landlord shall
not be liable for any indirect or consequential damage resulting from any
failure of the building's emergency generator however caused but shall at times
maintain It In good operating condition. The entire accrued amount (including
the one time charge) paid for the Emergency Power will not exceed $300.00 per
amp.
SCHEDULE "9"
------------
EARLY TERMINATION
-----------------
Should, after the initial twelve (12) months of the term, MetroNet's service to
NetNation deteriorate to an unacceptable level the Tenant may terminate this
Lease with one (1) months' written notice and payment of the unamortized amount
of the initial Tenant improvements as paid far by the Landlord in the amount of
$29,000.00 Canadian Funds, amortized from May 1, 1999 to April 30, 2000 using
the "Straight-Line" method.
43
SCHEDULE "10"
-------------
EXISTING .LEASE ON SUITE 2040
-----------------------------
The Tenant shall have the option to cancel the Lease dated October 1, 1998
between the parties hereto on Suite 2040, at any time during the Term of this
Lease giving one (1 ) months' written notice.
SCHEDULE "11"
-------------
RIGHT OF FIRST REFUSAL
----------------------
The Landlord shall grant to the Tenant one Right of First Refusal offer on Suite
1440 on the 14th floor of the building during the term hereof at the same rate
of this lease. Upon written notification from the Landlord of the available
space, the Tenant shall have ten (10) calendar days to exercise such right,
failing which, the Landlord shall be free to lease such space to third parties.
44
SCHEDULE 12
-----------
Harbour Centre
April 19, 1999
NetNation Communications
P.O. Box 12129
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇, ▇.▇.
V6B 4N6
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Dear ▇▇. ▇▇▇▇▇▇:
Re: Offer to Lease Suite #1410, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
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We are pleased to provide, for your approval and acceptance, this Offer to Lease
to accommodate NetNation Communications in Harbour Centre Complex.
A summary of the basic terms is as follows:
Term: The Term of the Lease shall be three (3) years
commencing May 1, 1999 and terminating April 30,
2002.
Leased Premises: Suite 1410, ("as is") according to the attached
layout.
Rentable Area: 6,684 square feet of Rentable Area as outlined in
red on the attached plan (Schedule "A").
Permitted Use: The Tenant shall be allowed to demise the space
into two units and separate leases for each unit
will be drawn up at the Tenant's request. The
Landlord will survey the demised premises and
allot the area to each unit at the Landlord's
cost. The Tenant shall use the Premises for the
purpose of a general business office.
Basic Rent: The annual rent shall be payable in twelve (12)
equal monthly installments in advance on the first
day of each month during the said Term on the
following rental structure:
Years 1-3 : $16.00 net per square foot per annum,
plus GST.
D.T. The premises shall be ready for occupancy on May
8th and the rent shall ▇▇▇▇▇ until that date.
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Operating Costs & Taxes: In addition to the Basic Rent herein provided, the
Tenant agrees to pay to the Landlord, in twelve
(12) equal monthly installments, on the first day
of each month during the Term Additional Rent as
defined in the Lease, which is presently estimated
by the Landlord to be $13.14 per square foot plus
GST, per annum. Additional Rent includes the
following:
(a) Tenant's proportionate share of taxes as
defined in the Lease; and
(b) Tenant's proportionate share of operating
expenses as defined in the Lease.
Leasehold Improvements: Regarding improvements beyond the attached layout,
the Tenant shall be responsible for providing
their own Leasehold improvements, including
designer fees, architectural inspection fees,
demolition and construction costs and signage, all
in keeping with the Landlord's Tenant Guidelines
and to the prior approval of the Landlord.
Landlord's Work: The Landlord shall improve the premises in
accordance to the attached plan and the Tenant
shall contribute a total of $7,400,00 towards
these costs upon occupancy of the premises. The
work will include paint to the walls, sanding and
painting all the doors and new cabinets in the
kitchen. - D.T.
Deposit: The Tenant shall deliver within twenty four (24)
hours of acceptance of this Offer, a cheque in the
amount of $10,731.08 payable to the Landlord,
which shall be added to the current deposit on
account for you existing premises for a total
deposit of $16,230.98 on account for the last
months' Basic Rent and Additional Rent under the
Lease if this Offer to Lease is accepted. If this
Offer to Lease is not accepted, the Deposit in the
amount of $10,731.08 will be returned immediately
to the Tenant. In the event this Offer to Lease,
is accepted, and subject to the acceptance of the
"Lease Form" by the Tenant, but the Tenant
thereafter fails to comply with any of the
provisions contained herein , the Landlord may, at
its option, terminate this Agreement, in which
event the entire Deposit shall be absolutely
forfeited to the Landlord as liquidated damages.
Additional Electrical The Landlord can make available Emergency Power to
Charges: the leased premises at a one time charge
of $500.00 per single phase amp plus $10.00 per
month per single phase amp, The Landlord shall not
be liable for any indirect or consequential damage
resulting from any failure of the building's
emergency generator however Caused but shall at
times maintain it in good operating condition. The
entire accrued amount (including the one time
charge) paid for the Emergency Power will not
exceed $300.00 per amp.
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Early Termination (also see
"Tenant's Conditions"
below): Should, after the initial twelve (12) months of
the term, MetroNet's service to NetNational
deteriorate to an unacceptable level the Tenant
may terminate the Lease with one (1) months
notice. The Tenant may vacate the Leased Premises
with one (1) months notice after the initial
twelve (12) months of the term with a payment, of
the unamortized amount of the initial Tenant
improvements as paid for by the Landlord in the
amount of $29,000.00 Canadian Funds. The
amortization period is from May 1, 1999 to April
30, 2002 by the "straight-line" method.
Lease Form: The Lease shall be in the same format as the
existing lease for Suite 2040 and amended only to
incorporate the terms and conditions of this
offer.
Present Lease: The Tenant shall have the option to cancel the
present lease at suite 2040 at any time during the
term of this agreement giving one (1) month
notice.
Option to Renew: The Landlord shall grant the Tenant two Options to
Renew the Term of the Lease far a further period
of one (1) year each on the terms and conditions
as in this offer set out in Schedule "4" to the
form of lease in Schedule B. - D.T.
Right of First Refusal: The Landlord shall grant to the Tenant one Right
of First Refusal offer on suite 1440 that becomes
available on the 14th floor of the building during
the term hereof at the same, rate of this lease.
Upon written notification from the Landlord of the
available space, the Tenant shall have ten (10)
calendar days to exercise such right, tailing
which, the Landlord shall be free to lease such
space to third parties.
Tenant Conditions: This offer is subject to the Landlord confirming
to the Tenant that the air conditioning system
contemplated by the Tenant : by the Tenant can be
accommodated in the suite, with the ability to use
10 gallons of water per minute. Once the
municipality will restrict it, the tenant will
have the right to terminate the lease with one (1)
month notice in advance. - D.T.
Binding Contract: This Offer, if accepted, shall constitute a
binding agreement to enter into the Lease upon the
terms and conditions as herein contained and as
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contained and expanded upon in the Lease and the
Schedules and riders thereto, if any.
Survival of Offer: The provisions of this Offer to Lease shall
survive the execution and delivery of the Lease,
provided that such provisions shall be deemed to
be, and survive as covenants and conditions, and
provided further that in the I event of any
discrepancy as between the terms and conditions of
this Offer and those contained in the Lease, the
provisions contained in the offer shall prevail.
The foregoing, once approved by the Landlord, shall become a binding Offer to
Lease between the parties. This Offer is open for acceptance until 5:00 p.m.
Tuesday, April 20, 1999, subject to prior letting.
Yours truly,
HARBOUR CENTRE COMPLEX LIMITED
/s/
-----------------------------------------
▇▇▇ ▇▇▇▇
General Manager
JH/sj
ACCEPTED ON THIS 20th DAY OF APRIL, 1999.
TENANT: NETNATION COMMUNICATIONS
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/s/
-----------------------------------------
APPROVED ON THIS 22nd DAY OF APRIL, 1999.
LANDLORD: HARBOUR CENTRE COMPLEX LIMITED
/s/
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[MAP - FLOOR PLAN]
49
Harbour Centre
December 16, 1999
NetNation Communications (Canada) Inc.
P.O. Box 12129
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇.
V6B 4N6
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Dear ▇▇. ▇▇▇▇▇▇▇▇:
Re: Amendment to Lease - Expansion Area
---------------------------------------
Once executed, this letter will serve to amend the Lease dated August 11, 1999
between Harbour Centre Complex Limited as Landlord and NetNation Communications
(Canada) Inc. as Tenant, effective January 1, 2000.
Schedule 2 shall be amended to include an "Expansion Area" as follows:
Schedule 2, #1 - The Commencement Date with respect to the Expansion Area
shall be January 1, 2000.
Schedule 2, #2 - The Rentable Area of the Expansion Area is 3,992 Square
Feet (370.86 square meters) as outlined in red on
Schedule "A" attached hereto.
Schedule 2, #3 - The term with respect to the Expansion Area is Two (2)
years and Four (4) months from and including the
Commencement Date and ending on the 30th day of
April, 2002.
Schedule 2, #4 & #5 - Rent with respect to the Expansion Area shall be:
$ 63,872.00 per annum
$ 5,322.67 per month
$ 16.00 per square foot
Schedule 2, #6 - Additional Rent with respect to the Expansion Area shall
be:
The amount of additional rent payable by the Tenant at
the Commencement Date is Fifty Three Thousand Seven
Hundred and Seventy Two Dollars and Twenty Four Cents
($53,772.24) per annum.
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The Tenant has paid a deposit In the amount of $19,387.82 to be credited to the
rent for the last two months' of the Term of this Expansion Area.
The following schedules will be added:
Schedule "12" Leasehold Improvements for the Expansion Area:
Regarding improvements beyond the layout attached to the offer to lease dated
October 20, 1999, the Tenant shall be responsible for the cost of providing
their own Leasehold Improvements, including, building permits, designer fees,
architectural inspection fees, demolition and construction costs and signage,
all In keeping with the Landlord's Tenant Guidelines.
Schedule "13" Landlord's Work with respect to the Expansion Area only.
The Landlord shall Improve the Leased Premises in accordance with the plan
attached to the offer to lease dated October 20, 1999 including:
- remove 50% of wall on gridline 6 between grids A & B;
- remove wall approximately on gridline C between gridline 6 & 7;
- remove and make good the door at gridline D7;
- re-carpet the expansion area to building standard with the exception of the
new room found on gridlines 6 & 7 and B & E colour to be chosen by Tenant;
- remove the wall on grid line 6 between gridlines B & D location to be
determined by the Tenant;
- re-paint the expansion area colour to be chosen by the Tenant
Schedule "14" Power:
The Tenant shall pay the costs of utilities consumed within the Leased Premises,
which consumption shall be separately metered. The Tenant shall, at its own cost
and expense, install a separate meter in the Leased Premises. The unit cost of
power shall not be greater than the average cost of power to all tenants not
metered separately.
Schedule "15" Chilled Water Loop:
The Landlord has installed a "chilled water loop" system within the complex. The
Landlord acknowledges that the Tenant may require this service and will make it
available to the Tenant at the then prevailing rate at the Tenant's option.
Schedule "16" Early Termination with respect to the Expansion Area only:
The Tenant may vacate the Leased Premises with one (1) month written notice
after the initial twelve (12) months of the term upon payment of the unamortized
amount of the initial Tenant Improvements as paid for by the Landlord.
All other terms and conditions of the Lease dated August 11, 1999 shall be in
full force and effect and govern this Expansion Area.
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We trust you find this in order and ask that you indicate your acceptance of the
above by signing all three (3) copies of this letter in the space provided below
and return same to this office for final execution by the Landlord by no later
than Thursday, December 23, 1999. Upon completion, we will return one copy for
your files.
Yours truly, '
HARBOUR CENTRE COMPLEX LIMITED
/s/
-----------------------------------------
▇▇▇ ▇▇▇▇
General Manager
JH/kb
AGREED AND ACCEPTED THIS 23rd DAY OF DECEMBER, 1999
PER: /s/
-----------------------------------------
NETNATION COMMUNICATIONS (CANADA) INC.
AGREED AND ACCEPTED THIS 30th DAY OF DECEMBER, 1999
PER: /s/
-----------------------------------------
HARBOUR CENTRE COMPLEX LIMITED
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