EXHIBIT 10.18
THIS INDENTURE of Sublease made as of the 9th day of June, 1997.
IN PURSUANCE OF THE SHORT FORMS OF LEASES ACT.
B E T W E E N
ROYAL BANK OF CANADA
(hereinafter called the "Tenant")
OF THE FIRST PART
- and -
PRIMETECH CORPORATION
(hereinafter called the "Subtenant")
OF THE SECOND PART
WHEREAS by a Lease dated the 20th day of November, 1990 (hereinafter called
the "Head Lease"), a copy of which is annexed hereto as Appendix "I", Hollywood
Office Developments Inc. leased to the Tenant certain premises containing
approximately thirty-four thousand (34,000) square feet of which approximately
13,500 square feet is on the 2nd Floor and approximately 20,500 square feet is
on the 3rd Floor (hereinafter called the "Premises") located upon those lands
and premises known municipally as ▇▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ and more
particularly described in Schedule "B" attached to the Head Lease together with
access thereto, for and during a term set out therein and expiring on the 31st
day of August, 2011.
AND WHEREAS Hollywood Office Developments Inc. sold and assigned their
interest in the Head Lease to Pen York Properties Inc. (hereinafter called the
"Landlord"). Pursuant to Article 10.01 of the Head Lease, the Tenant is
permitted to sublet the Premises with the consent of the Landlord, said consent
is attached hereto as Schedule "C".
The Subtenant desires to sublease a portion of the Premises from the Tenant
pursuant to the terms
of the Lease and this Sublease.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of these
premises and other good and valuable consideration (the receipt and sufficiency
whereof is hereby
acknowledged by each of the parties hereto) and the covenants and agreements
hereinafter set forth:
1. PREAMBLE
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The parties agree that the preamble hereto shall form a part hereof and the
Tenant represents and warrants the accuracy of the matters set forth in the
first and second recitals.
2. TERM
----
The Tenant hereby subleases to the Subtenant Nine thousand, One Hundred and
Ninety-nine (9,199) square feet of rentable area on a portion of the 3rd
Floor as shown in blue on Schedule "A" attached hereto (hereinafter called
the "Demised Premises"), for and during a term of ten (10) years and four
(4) months from and including the 1st day of November, 1996, to and
including the 28th day of February, 2007, in accordance with and subject to
the terms, covenants and conditions contained in this Sublease to be
observed and performed by the Subtenant together with all other rights of
the Tenant as though the Subtenant were named as the Tenant in the Lease
(other than as expressly limited in this Sublease) at minimum annual rent
payable to the Tenant as contained hereinafter Clause 3.
3. MINIMUM RENT
------------
The Subtenant shall pay from and after the Commencement Date to the Tenant
at the offices of the Tenant, or at such other place designated by the
Tenant in lawful money of Canada, without and prior demand therefore and
without any deduction, abatement, set off or compensation whatsoever as
Rent the following:
a) Subject to Clause 4 hereinafter, during the period commencing the 1st
day of March, 1997, and ending the 29th day of February, 1999, the
Subtenant shall pay Minimum Rent, the sum of Twenty-Seven Thousand,
Five Hundred and Ninety- Seven Dollars ($27,597.00) payable in advance
in equal monthly instalments of Two Thousand, Two Hundred and Ninety-
Nine Dollars and Seventy-Five Cents ($2,299.75) each on the first day
of each month and the Subtenant shall be responsible for the payment
of Additional Rent during said period. The aforesaid Minimum Rent is
calculated on Three Dollars ($3.00) per rentable square foot.
b) During the period commencing the 1st day of March 1999 and ending the
28th day of February, 2001, the Subtenant shall pay Minimum Rent, the
sum of Thirty-Six Thousand, Seven Hundred and Ninety-Six Dollars
($36,796.00) payable in advance in equal monthly instalments of Three
Thousand and Sixty-Six Dollars and Thirty Three Cents ($3,066.33) each
on the first day of each month and the Subtenant shall be responsible
for the payment of Additional Rent during said period. The aforesaid
Minimum Rent is calculated on Four Dollars ($4.00) per rentable square
foot.
c) During the period commencing the 1st day of March, 2001 and ending the
28th day of February, 2003, the Subtenant shall pay Minimum Rent, the
sum of Fifty-Five Thousand One Hundred and Ninety-Four Dollars
($55,194.00) payable in advance in equal monthly instalments of Four
Thousand Five Hundred and Ninety-Nine Dollars and Fifty Cents
($4,599.50) each on the first day of each month and the Subtenant
shall be responsible for the payment of Additional Rent during said
period. The aforesaid Minimum Rent is calculated on Six Dollars
($6.00) per rentable square foot.
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d) During the period commencing the 1st day of March, 2003 and ending the
28th of February, 2005 the Subtenant shall pay Minimum Rent, the sum
of Sixty-Four Thousand, Three Hundred and Ninety-Three Dollars
($64,393.00) payable in advance in equal monthly instalments of Five
Thousand Three Hundred and Sixty Six Dollars and Eight Cents
($5,366.08) each on the first day of each month and the Subtenant
shall be responsible for the payment of Additional Rent during the
said period. The aforesaid Minimum Rent is calculated on Seven
dollars ($7.00) per rentable square foot.
e) During the period commencing the 1st day of March, 2005 and ending the
28th day of February, 2007 the Subtenant shall pay Minimum Rent the
sum of Seventy-Three Thousand, Five Hundred and Ninety-Two Dollars
($73,592.00) payable in advance in equal monthly instalments of Six
Thousand One Hundred and Thirty-Two Dollars and Sixty-Six Cents
($6,132.66) each on the first day of each month and the Subtenant
shall be responsible for the payment of Additional Rent during said
period. The aforesaid Minimum Rent is calculated on Eight Dollars
($8.00) per rentable square foot.
f) The Tenant acknowledges receipt of a cheque in the amount of Twenty-
Seven Thousand Three Hundred and Thirty Dollars and Fifty-Three Cents
($27,330.53) to be applied toward the Rent for the first two (2)
months as it becomes due.
g) Each monthly instalment payment of fixed annual rent shall be payable
at the times determined by the Tenant at the offices of the Tenant and
addressed as follows:
ROYAL BANK OF CANADA
Real Estate Operations
21st Floor, North Tower
Royal Bank Plaza
Toronto, Ontario
M5J 2J5
h) It is understood that all rental payments will be subject to the Goods
and Services Tax (G.S.T.).
i) All rental payments will be based on the certified rentable area.
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4. RENT FREE PERIOD
----------------
The Subtenant shall be permitted to occupy the Demised Premises if the
leasehold improvements are substantially completed prior to the
commencement date, without the payment of Minimum Rent and any Additional
Rent during the first four (4) months of the Term under this Sublease such
period being the 1st day of November, 1996 to the 28th day of February,
1997. All terms and conditions of the Sublease shall be in effect during
the Rent Free Period.
5. ADDITIONAL RENT
---------------
a) The Subtenant shall pay its proportionate share of the Tenant's realty
taxes, hydro and cost of operating, maintaining and managing the
Building (the "Additional Rent") currently estimated at $13.23 plus
G.S.T. per rentable square foot for 1997 as more set out in the Head
Lease attached as Appendix "I". The Additional Rent shall be paid in
advance in equal monthly instalments of one-twelfth (1/12) of the
annual amount on the first day of each month of the Term.
b) The Tenant shall arrange for a janitorial contact to clean the Demised
Premises for the Subtenant's account.
6. LEASEHOLD IMPROVEMENTS
----------------------
a) The Subtenant shall obtain from the Tenant and Landlord the prior
written approval for its leasehold improvements and shall be
responsible for all costs of such improvements. The Subtenant shall
provide a floor plan showing all partitions, doors, sink, carpeting,
and any other improvements that are to be constructed in the Demised
Premises. The Subtenant will obtain all required municipal/provincial
permits prior to commencing any construction within the Demised
Premises.
b) The Tenant shall provide to the Subtenant an allowance (the
"Inducement") equal to $11.00 per square foot of rentable area of the
Demised Premises plus G.S.T. towards the cost of the Subtenant's
Leasehold Improvements. Seventy percent (70%) of the Inducement shall
be paid to the Subtenant upon substantial completion of the
improvements and the remaining thirty percent (30%) upon expiry of the
45-day lien period in accordance with the Construction Lien Act.
7. NO RESTORATION
--------------
It is agreed that the Subtenant shall not be obligated to restore the
Demised Premises at the expiry of the Term to base building standard. The
Tenant agrees to accept the Demised Premises in the configuration in which
structured at that time subject to reasonable wear and tear. Subtenant
shall be responsible to remove any Leasehold Improvements that it installed
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without the written approval of the Head Landlord and to replace or restore
the areas so affected to their original condition.
8. SUB-SUBLET OR ASSIGN
--------------------
The Subtenant shall have the right to sub-sublease or assign the Demised
Premises subject to the approval of the Tenant and Landlord, such approval
not to be unreasonably withheld or denied, as per the Head Lease.
9. EXISTING SHELVING
-----------------
The existing shelving currently in the large kitchen/storage room within
the Demised Premises shall remain in the Demised Premises throughout the
Term for the sole use of the Subtenant. The Subtenant shall maintain such
items as would a prudent owner of same and shall, upon the expiration or
earlier termination of the Term, deliver same to the Tenant in the
condition which existed, subject to reasonable wear and tear.
10. PARKING
-------
If available the Tenant shall provide up to three (3) unreserved
underground parking spaces in the Building throughout the Term at the
prevailing rate which may change from time to time. The current rate is
$90.00 per month per space.
11. SIGNAGE
-------
The Subtenant, at its cost, shall be permitted to erect a small bronze
plaque mounted in the Lobby or in front of the building. The exact size and
location to be determined by the Head Landlord and in accordance with the
design criteria of the Building.
12. COVENANT OF SUBTENANT
---------------------
12.01 The Subtenant hereby covenants, and agrees to and with the Tenant
that it shall, throughout the Term hereby granted (subject as
otherwise provided herein or in the Head Lease):
(a) To use the Demised Premises for the operation of a commercial
school specializing in business skills training and ancillary
offices.
(b) To pay the Minimum Rent as provided in Article 3.
(c) In addition to the payments required by Article 3, to pay or
cause to be paid to the Tenant as Additional Rent and to
discharge before delinquency but in any event, within twenty
(20) days after the same become due and payable, all taxes,
rates, duties and assessments and other charges that may be
levied,
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rated, charged or assessed against or in respect of any and every
business carried on by the Subtenant or in the Demised Premises
or any part or parts thereof.
(d) To pay to the Tenant or as it otherwise directs, as Additional
Rent, all direct costs, charges, expenses and outlays of any
nature whatsoever arising from or relating to the Demised
Premises or to the contents thereof, which the Tenant is required
to pay under the Head Lease, including but not limited to, the
total cost of supplying water, fuel, power, telephone and other
utilities and any and all heating and air conditioning charges
(including repairs and maintenance) used or consumed in or with
respect to the Premises but excluding income or corporate taxes
of the Tenant or any payments of rent to be paid by the Tenant
under the Head Lease.
(e) To pay for the replacement of fluorescent tubes and starters.
(f) To permit the Tenant and the Landlord and persons authorized by
them at all reasonable times to enter and examine the condition
of the Demised Premises and upon notice in writing from either of
them to repair in accordance with such notice (provided the
Subtenant has the obligation under this Sublease to so repair)
and to indemnify the Tenant against the consequences of any
breach of any covenant of this Sublease.
(g) To take out and keep in full force and effect during the entire
Tenn hereby granted at its sole cost and expense and in the names
of the Landlord, the Tenant and the Subtenant such insurance as
is required of the Tenant pursuant to the terms of the Head
Lease.
(h) During the last three (3) months of the Term hereby granted, to
permit the Tenant or the Landlord to affix upon the Demised
Premises a notice to let the Demised Premises, or during such
period to permit the Tenant or the Landlord and their agents
and/or respective tenants at all reasonable times to view the
Premises.
(i) Subject as otherwise provided in this Sublease to yield up the
Demised Premises with all fixtures and improvements (other than
the Subtenant's trade fixtures) and additions at the termination
of this Sublease in good and tenantable repair.
(j) To pay for its own business taxes.
12.02 The Subtenant shall observe and perform all covenants and
obligations of the Subtenant under this Sublease and to indemnify the
Tenant against all liabilities,
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losses, fines, suits, claims, demands and actions of any kind
whatsoever arising from any breach of the same.
12.03 The Subtenant shall not do or omit to do any or thing upon the
Demised Premises which would cause a breach of any of the Tenant's
obligations under the Head Lease and to indemnify the Tenant against
all liabilities, losses, fines, suits, claims, demands and actions
of any kind whatsoever arising from any breach of same.
12.04 The Subtenant shall perform or cause to be performed with respect to
the Demised Premises all of the covenants of the Tenant under the
Head Lease, including the performance of the Tenant's obligations
and the performance generally of the Tenant's repairs therein but
except as to rent and other monetary obligations of the Tenant under
the Head Lease.
13. RIGHT TO CANCEL
---------------
The Subtenant shall have the right to cancel this Sublease at any time
after the seventh (7th) year of the Term with six (6) months prior written
notice to the Tenant and upon payment of a cancellation penalty equal to
two (2) months Net and Additional Rent for every full or partial year
remaining in the Term.
14. HEAD LEASE
----------
In all other respects, except as expressly amended or altered hereby and
except as not disclosed to the Subtenant; the Head Lease shall apply to the
Demised Premises and to the Tenant and the Subtenant; and the Tenant and
the Subtenant shall observe and perform all of the terms, covenants and
conditions contained therein as though respectively named as Landlord and
Tenant therein. The rights and remedies available to the Landlord in the
Head Lease in the event of default by the Tenant shall be available to the
Tenant as against the Subtenant in respect of the Subtenant's occupation of
the Demised Premises as though the Tenant were named as Landlord therein.
The rights and remedies available to the Tenant in the Head Lease as
against the Landlord shall be available to the Subtenant as against the
Tenant as though the Tenant were named as Landlord and the Subtenant named
as Tenant.
15. QUIET ENJOYMENT
---------------
If the Subtenant pays the Rent and other sums herein provided and observes
and performs all the terms, covenants and conditions on the Subtenant's
part to be observed and performed pursuant to the terms of this Sublease
and the Head Lease, the Subtenant shall peaceably and quietly hold and
enjoy the Demised Premises for the Term hereby granted without hindrance or
interruption by the Tenant, or any other person lawfully claiming by,
through or under the Tenant.
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16. NOTICE
------
Any notice required hereunder shall be deemed effectually given to the
Tenant if addressed by mail postage paid or delivered by hand to the Tenant
at Royal Bank of Canada, Real Estate Operations, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ or such address as the Tenant
may from time to time designate in writing. Any notice required hereunder
shall be deemed effectually given to the Subtenant if addressed by mail
postage paid or delivered by hand to the Subtenant at the Demised Premises.
Every such notice shall be deemed to have been given 72 hours after the day
it was so mailed delivered.
17. FULFILMENT OF TERMS OF HEAD LEASE
---------------------------------
The Tenant agrees with the Subtenant to pay all rents reserved by the Head
Lease and to perform and observe the covenants on its part contained in the
Head Lease with respect to the Demised Premises insofar as such covenants
are not required to be performed and observed by the Subtenant and at all
times to keep the Subtenant indemnified against all expenses, claims and
demands on account of the Tenant's non-performance of the covenants under
the Head Lease. The Tenant covenants that if the Subtenant shall discharge
its obligations under this Sublease, the Subtenant shall have and enjoy the
quiet possession and undisturbed possession of the Demised Premises subject
only as set forth in this Sublease.
18. SUCCESSORS AND ASSIGNS
----------------------
This Agreement shall ensure to the benefit of and be binding upon the
Parties hereto, their respective heirs, executors, administrators,
successors and assigns.
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IN WITNESS WHEREOF the Tenant has caused its duly authorized attorneys to
sign in that behalf, and the Subtenant has caused its corporate seal to be
affixed, duly attested by the hand of its proper signing officer in that behalf.
SIGNED, SEALED AND DELIVERED ROYAL BANK OF CANADA
Per:_________________________________________
A.M. ▇▇▇▇▇▇▇
Assistant Manager, Leasing
Per:_________________________________________
▇. ▇. ▇▇▇▇▇▇▇, Manager
Property Management and Leasing
WE HAVE THE AUTHORITY TO
BIND THE BANK
PRIMETECH CORPORATION
Per:_________________________________________
Per:_________________________________________
Per:_________________________________________
WE HAVE THE AUTHORITY TO
BIND THE CORPORATION
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