THIS SUBLEASE made the 28th day of October, 1998
IN PURSUANCE OF THE SHORT FORMS OF LEASES ACT
B E T W E E N:
XXXX XXXXXXX INTERNATIONAL INC.
(hereinafter called the "Sublandlord")
OF THE FIRST PART
- and -
IDS INTELLIGENT DETECTION SYSTEMS INC.
(hereinafter called the "Subtenant")
OF THE-SECOND PART
WHEREAS:
A. By Lease dated July 31, 1989 (the "Initial Head Lease") Olympia & York
Developments limited did demise and lease unto X. Xxxxxx Xxxxxxx Inc. certain
premises consisting of 1,383 square feet on the 70th floor as Premises A and
3,361 square feet on the 70th floor as Premises B (collectively, the "Initial
Premises") in the building known as 0 Xxxxx Xxxxxxxx Place, in the City of
Toronto, Municipality of Metropolitan Toronto as therein described;
B. By Articles of Amendment dated October 17, 1989 X. Xxxxxx Xxxxxxx Inc.
changed it name to Xxxxxx-Xxxxxx Enterprises Inc.;
X. Xxxxxx-Xxxxxx Enterprises Inc. assigned the Initial Head Lease to Xxxx
Xxxxxxx International Inc. effective October 17, 1989;
D. By Agreement dated as of May 1, 1990 (the "First Amendment") the Initial
Lease was amended;
E. By Final Order of Foreclosure registered against the title to the Building on
December 15, 1995 as Instrument No. C982432, First Place Tower Inc. (the "Head
Landlord") succeeded to the interest of Olympia & York Developments Limited in
and to the Building and the Initial Head Lease;
F. By Agreement made August 19, 1996 (the "Second Amendment") the Initial Head
Lease was amended to include additional premises consisting of 1,287 square feet
on the 70th floor (the "Additional Premises");
-2-
G. Pursuant to the Initial Head Lease, the First Amendment and the Second
Amendment (collectively, the "Head Lease") the Sublandlord leases the Initial
Premises and the Addition Premises (collectively, the "Premises") being
approximately 6,031 square feet;
X. Xxxxxxxx to a sublease (the "Connor Sublease") dated September 29, 1997 the
Sublandlord subleased the Premises to Connor Capital Management Corp.
("Connor");
I. Subject to certain conditions, the Sublandlord and Xxxxxx have agreed to
surrender the Xxxxxx Xxxxxxxx;
J. The Sublandlord and the Subtenant have agreed to enter into this Sublease of
the Premises for a term at a rental and on such terms as are hereinafter set
forth;
K. The Head Landlord is being requested to give its consent in writing to this
Sublease subject to the terms and provisions of the Head Lease; and
L. Capitalized terms contained herein and not otherwise defined herein have the
respective meanings ascribed thereto in the Head Lease.
WITNESSETH that in consideration of the rents, covenants and agreements
herein contained, the Sublandlord and Subtenant agree as follows:
1. DEMISE AND TERM
1.01 The Sublandlord hereby subleases the Premises to the Subtenant TO HAVE AND
TO HOLD the Premises for a term (the "Sublease Term") of approximately sixteen
months less one (1) day, commencing on October 26, 1998 (the "Commencement
Date") and expiring on the January 30, 2000 (the "Termination Date").
1.02 The Subtenant is subleasing the Premises in an "as is" condition.
2. RENT
2.01 The Subtenant shall pay during the Sublease Term an annual basic rental for
the Premises of $90,465.00, payable in equal monthly instalments in advance of
$7,538.75 on the first day of each and every month. Such basis rent is based on
an annual rate of $15.00 per square foot of Rentable Area of the Premises per
annum (the "Basic Rent").
2.02 The foregoing Basic Rent is based on the Rentable Area of the Premises
being 6,031 square feet. If the Premises are determined to be other than 6,031
square feet of Rentable Area (measured in accordance with the terms of the Head
Lease), the Basic Rent and the Additional Rent payable pursuant to this Sublease
shall be adjusted accordingly.
2.03 The Sublandlord acknowledges receipt by CB Commercial Real Estate Group
Canada Inc. of the sum of Forty-Four Thousand Dollars ($44,000.00) as a deposit
which shall, if the Subtenant
-3-
is not in default, be applied to the Basic Rent first due and payable pursuant
to this Sublease. If the Subtenant is in default the deposit may be applied on
account of any losses damages as sustained by the Sublandlord as a result of
such default.
3. ADDITIONAL RENT
3.01 The Subtenant agrees with the Sublandlord to pay to the Sublandlord all
sums which Sublandlord is required to pay to the Head Landlord pursuant to the
provisions of the Head as additional rent ("Additional Rent"). Without limiting
the foregoing, the Subtenant shall the Sublandlord all Costs of Operation, Tax
Amounts, Utility Costs and common area costs the Sublease Term. If the Subtenant
defaults in payment of any sum due to the Sublandlord this subclause 3.01 the
Sublandlord shall have the same rights and remedies upon default as if sum were
rent in arrears.
3.02 In addition to the services charged to the Subtenant as Additional Rent,
the Subtenant agrees to pay the cost of all services used or consumed in or
provided to the Premises, without limitation utilities, telephone and other
services not available through the Head directly to the party supplying such
services.
3.03 The Head Landlord's estimate for Costs of Operation, Tax Amounts, Utility
Costs common area costs in respect of the Premises (based on normal consumption
and excluding Special Services) for calendar year 1998 is $25.73 per square foot
of Rentable Area. Additional Rent hereunder shall be payable, shall be subject
to estimates and shall be subject to adjustments in the same manner as provided
for the respective components thereof in the Lease. The Subtenant agrees to be
bound by the estimates, determinations and adjustments pursuant to the terms of
the Head Lease.
4. LETTER OF CREDIT
4.01 The Subtenant shall provide Brookfield Management Services Ltd. (the
"Manager"), on before the Commencement Date, with an unconditional irrevocable
letter or letters of credit major Canadian Chartered Bank in an aggregate amount
equal to Two Hundred Thousand ($200,000.00) in the form attached hereto as
Schedule "A", as security for its obligations hereunder. The face amount of the
letters of credit may, after the first nine (9) months of Sublease Term, be
reduced to Fifty Thousand Dollars ($50,000.00). The term of such letter of
credit shall be for a period expiring not earlier than the Termination Date.
Alternatively, the Subtenant may provide for one letter of credit in the amount
of $150,000.00 to have a term of at least nine (9) months from the commencement
of the Sublease Term and the other letter of credit in the amount of $50,000.00
expiring not earlier than the Termination Date. The letters of credit may be
called upon by the Sublandlord in the event of default by the Subtenant under
the Sublease.
5. DIRECTION TO PAY
5.01 All Basic Rent, Additional Rent and other amounts payable hereunder, shall
be paid by the Subtenant to the Manager, acting as manager on behalf of the
Sublandlord. This direction may be waived by or re-directed by the Manager and
may be revoked by the Sublandlord.
-4-
6. SUBTENANT'S GENERAL COVENANTS
6.01 The Subtenant covenants:
(i) to pay Basic Rent, Additional Rent and all other amounts
required to be paid by it in accordance with the terms of this
Sublease;
(ii) to observe and perform all covenants and obligations of the
Subtenant under this Sublease;
(iii) not to do or omit to do any act or thing upon the Premises
which would cause a breach of any of the Sublandlord's
obligations under the Head Lease;
(iv) to use the Premises for general office purposes; and
(v) to perform or cause to be performed all of the covenants of
the Sublandlord as tenant under the Head Lease, including the
performance of the tenant's repair obligations therein but
except as to rent and other monetary obligations of the
Sublandlord as tenant under the Head Lease (the obligations of
the Subtenant in that respect being limited to the payment of
Basic Rent, Additional Rent and the cost of services for the
Premises as provided in Articles 2 and 3 hereof and the
payment of taxes as provided in Article 7 hereof).
7. BUSINESS TAXES
7.01 The Subtenant shall pay all business taxes and other taxes including the
Tax Amount, parliamentary or otherwise assessed, rated or imposed upon the
Subtenant or the Sublandlord, other than the Sublandlord's income taxes, in
respect of the Subtenant's occupancy of the Premises, or any taxes assessed
against the Project which result from any alterations, fixtures, renovation,
improvements or installation made or installed by the Subtenant, or on its
behalf and will and well truly pay or cause to be paid all taxes, rates, levies,
duties, charges, assessments and impositions whatsoever, whether parliamentary,
local or otherwise, which during the Sublease Term shall at any time be rated,
taxed or imposed upon the property, business or income of the Subtenant. In the
event that the Subtenant is assessed as a Separate School supporter and by
reason thereof the amount of the taxes payable on the Premises being increased
over the amount payable as a Public School supporter, then and in such event the
Subtenant covenants and agrees with the Sublandlord to pay to the Sublandlord an
amount of such increase upon demand being made therefor in writing by the
Sublandlord. It is understood and agreed that such increase shall be payable by
the Subtenant notwithstanding the fact that at the time such demand is made, the
Subtenant may have ceased to be a tenant of the Sublandlord, but such shall be
payable only as it relates to the Sublease Term. In the event of the Subtenant
failing to pay to the Sublandlord the amount of such increase upon demand as
herein provided, then the Sublandlord shall have the same rights and remedies
for collection thereof as for rent in arrears.
8. INSURANCE
8.01 The Subtenant shall take out and keep in force during the Sublease Term
such insurance in respect of the Premises as would be obtained by a prudent
tenant of office premises in the Project
-5-
and as shall comply with the obligations of the Sublandlord as tenant under the
Head Lease and shall be subject to the same obligations and same limitations of
liability with respect to damage, loss or injury as are set out in the Head
Lease.
9. COVENANTS OF THE SUBLANDLORD
9.01 The Sublandlord covenants with the Subtenant
(i) for quiet enjoyment;
(ii) to observe and perform all covenants and obligations of the
Sublandlord under this Sublease;
(iii) to pay the Basic Rent and Additional Rent under the Head Lease
(other than Additional Rent for which the Subtenant is
responsible to pay directly to third parties (other than the
Sublandlord)); and
(iv) to enforce for the benefit of the Subtenant the obligations of
the Head Landlord under the Head Lease (the obligations of the
Sublandlord with respect to the covenants and obligations of
the Head Landlord under the Head Lease being limited to the
foregoing).
provided the Subtenant is not in default of payment of Basic Rent, Additional
Rent or other amounts payable hereunder or reserved under the Head Lease.
10. ABATEMENT AND TERMINATION
10.01 In the event of damage to or destruction of the Premises or the Project:
(i) Basic Rent and Additional Rent in respect of the Premises
shall xxxxx if and to the extent rent and additional rent
under the Head Lease abates pursuant to the terms of the Head
Lease; and
(ii) this Sublease shall terminate if either the Head Landlord or
the Sublandlord as tenant under the Head Lease shall become
entitled to terminate and shall terminate the Head Lease
pursuant to the provisions of Section 8.4 thereof.
11. LEASEHOLD IMPROVEMENTS
11.01 The provisions of the Head Lease with respect to the removal of Leasehold
Improvements are hereby incorporated in this Sublease, the appropriate changes
of reference being deemed to have been made with the intent that such provisions
shall govern the relationship between the Sublandlord and the Subtenant in
respect of such matters.
12. DEFAULT, LANDLORD'S REMEDIES ON DEFAULT
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12.01 The provisions of Sections 8.2 and 8.3 of the Head Lease are hereby
incorporated in this Sublease, the appropriate changes of reference being deemed
to have been made with the intent that such provisions shall govern the
relationship between the Sublandlord and the Subtenant in respect of such
matters.
13. NOTICE
13.01 The provisions of Section 8.21 of the Head Lease shall govern the giving
of notice hereunder. The addresses of the parties for the purpose of giving such
notice shall be:
Sublandlord: c/o Brookfield Management Services Ltd.
Xxxxx 000
000 Xxx Xxxxxx, X.X. Box 839
Toronto, Ontario
M5J2T3
ATTENTION: PRESIDENT, ONTARIO REGION
Subtenant: at the Premises
Attention: President
14. APPLICATION OF HEAD LEASE
14.01 Except as hereinbefore expressly provided, all terms, conditions,
covenants and agreements contained in the Head Lease shall apply to and be
binding upon the parties hereto and their respective successors and permitted
assigns, the appropriate changes of reference being deemed to have been made
with the intent that such provisions shall govern the relationship between the
Sublandlord and the Subtenant in respect of such matters and all capitalized
terms contained herein shall have the same meaning as contained in the Head
Lease unless otherwise stated herein. The Subtenant acknowledges receipt of a
copy of the Head Lease.
14.02 The Subtenant hereby acknowledges and agrees that it is not entitled to
exercise any rights or options granted to the Sublandlord in the Head Lease,
including without limitation any right to renew or extend the Head Lease, any
rights of first refusal and tenant improvement allowances, if any and shall not
be entitled to the benefit of any rights that are stated to be personal under
the terms of the Head Lease.
15. ASSIGNMENT AND SUBLETTING
15.01 The Subtenant shall not assign this Sublease or sublet or part with
possession of all or part of the Premises or mortgage or encumber the Sublease
without the prior written consent of the Sublandlord, which consent of the
Sublandlord shall not be unreasonably withheld or delayed without the prior
written consent of the Head Landlord pursuant to the provisions of the Head
Lease.
16. GOODS AND SERVICES TAX
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16.01 In addition to all amounts payable by the Subtenant under this Sublease,
the Subtenant sha11 pay, at the earlier of the time provided for in the
applicable legislation or at the time Rent is required to be paid under this
Sublease, all Goods and Services Taxes calculated on or in respect of amounts
payable by the Subtenant as Rent under this Sublease and, notwithstanding that
Goods and Services Taxes are not Additional Rent under this Sublease, the
Sublandlord shall have same rights and remedies for the recovery of such amounts
payable as Goods and Services Taxes as it has for amounts payable as Additional
Rent under this Sublease.
17. REPRESENTATIONS
17.01 There are no covenants, representations, agreements, warranties or
conditions in any was relating to the subject matter of this Sublease, express
or implied, collateral or otherwise, except a expressly set forth herein. This
Sublease may be amended only by an agreement in writing signed by the
Sublandlord and the Subtenant.
18. PRIOR COMMITMENTS
18.01 The Subtenant represents and warrants that there are no covenants,
restrictions o commitments given by the Subtenant to any other landlords,
tenants in other developments, it mortgagees or any other third party which
would prevent or inhibit the Subtenant from entering into this Sublease.
19. CONFIDENTIALITY
19.01 The Subtenant agrees that the contents of this Sublease are to be kept
confidential and agrees that it shall not disclose to any person, the financial
or any other terms of this Sublease, except to its professional advisors,
consultants and auditors, if any, and except as required by law.
20. SUCCESSORS AND ASSIGNS
20.01 This Sublease shall be binding upon, extend to and enure to the benefit of
each of the Sublandlord and the Subtenant and to each of their respective
permitted successors and permitted assigns.
21. CONDITIONS
21.01 The Sublease shall be conditional upon the Sublandlord and the Subtenant
being advised by the Head Landlord, on or before the Commencement Date, that it
consents to this Sublease or that its consent will be forthcoming. If such
condition is not satisfied on or before the aforementioned date, then this
Sublease shall be null and void and the deposit shall be returned to the
Subtenant forthwith together with all interest accrued thereon and without
deduction, and thereafter none of the parties hereto shall have any further
obligations hereunder.
21.02 The Sublandlord's obligations under this Sublease are conditional upon the
Sublandlord and Xxxxxx entering into a release and surrender of the Xxxxxx
Sublease and all conditions there being
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satisfied, all on or before the Commencement Date. If such condition is not
satisfied on or before the aforementioned date, then this Sublease shall be null
and void and the deposit shall be returned to the Subtenant forthwith together
with all interest accrued thereon and without deduction, and thereafter none of
the parties hereto shall have any further obligations hereunder.
IN WITNESS WHEREOF the parties hereto have executed this Sublease as of
the date first above set out.
XXXX XXXXXXX INTERNATIONAL INC.
PER: /S/ XXXX XXXXXXX
Name: Xxxx Xxxxxxx
I/We have authority Title: Managing Partner
to bind the Corporation
PER: c/s
Name:
Title:
IDS INTELLIGENT DETECTION SYSTEMS INC.
PER: /S/ XXXXX XXXXXXXXX
Name: Xxxxx Xxxxxxxxx
I/We have authority Title: COO
to bind the Corporation
PER: c/s
Name:
Title:
SCHEDULE A
FORM OF LETTER OF CREDIT
Date: , 1998
IRREVOCABLE STANDBY LETTER OF CREDIT NO. P FOR (AMOUNT)
BENEFICIARY APPLICANT
Name: Brookfield Management Services Ltd. Name:
Address: Suite 260 Address:
000 Xxx Xxxxxx
X.X. Box 839
Toronto, Ontario
M5J 2T3
Attention: President
AMOUNT: $200,000.00
EXPIRY DATE - January 30, 2000
at our counters in Toronto, Ontario
WE HEREBY ISSUE IN YOUR FAVOUR THIS IRREVOCABLE STANDBY LETTER OF CREDIT WHICH
IS AVAILABLE BY PAYMENT AGAINST YOUR WRITTEN DEMAND, ADDRESSED TO __________
BANK ., TORONTO, ONTARIO, BEARING THE CLAUSE: "DRAWN UNDER STANDBY LETTER OF
CREDIT NO. P T ISSUED BY ________ BANK." WHEN ACCOMPANIED BY THE FOLLOWING
DOCUMENTS:
1) Beneficiary's certification signed by an Officer or Director specifying
amount claimed and stating that the amount drawn is due and payable by Applicant
and that Applicant is in default of its payment obligations under a sublease
dated __________, 1997 of premises located at First Canadian Place, Toronto or
that such amount is owing or represents damages or losses arising as a result of
a default of the Applicant's obligations under such sublease or the disclaimer
or repudiation of such sublease.
2) The original of this Letter of Credit for our endorsement of any payment.
THIS LETTER OF CREDIT (AND PAYMENT HEREUNDER) WILL NOT BE RELEASED, DISCHARGED
OR AFFECTED BY THE BANKRUPTCY OR INSOLVENCY OF THE APPLICANT OR BY ANY
DISCLAIMER, BY ANY TRUSTEE IN BANKRUPTCY OR BY
THE APPLICANT CEASING TO EXIST (WHETHER BY WINDING-UP, FORFEITURE, CANCELLATION
OR SURRENDER OF CHARTER, MERGER OR ANY OTHER CIRCUMSTANCES).
PARTIAL DRAWINGS ARE PERMITTED
PROVIDED NO WRITTEN DEMAND IS MADE BY THE BENEFICIARY IN ACCORDANCE WITH THE
TERMS HEREOF PRIOR TO _______________, 1999, THE AMOUNT OF THIS IRREVOCABLE
STANDBY LETTER OF CREDIT WILL AUTOMATICALLY BE REDUCED TO $50,000.00 WITHOUT
NOTICE BEING GIVEN TO THE BANK
EXCEPT AS OTHERWISE EXPRESSLY STATED THIS CREDIT IS ISSUED SUBJECT TO UNIFORM
CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS, 1993 REVISION, ICC PUBLICATION NO.
500.
We engage to honor presentations submitted within the terms and conditions
indicated above.
