Exhibit 99.1
OFFER TO LEASE
THIS OFFER TO LEASE MADE as of the 22nd day of September, 2005.
BETWEEN: XXXXXXXXX DEVELOPMENTS LTD.
# 130 - 0000 Xxxxxxxxxxx Xxx
Xxxxxxxx, X.X.
X0X 0X0
(Fax: (000) 000-0000)
(hereinafter referred to as the "Landlord")
OF THE FIRST PART
AND: MIDNET (Canada) Inc,
000 - 0000 X. Xxxxxxxx Xx.
Xxxxxxxxx XX X0X 0X0.
(hereinafter referred to as the "Tenant")
OF THE SECOND PART
AND: Xxxx Xxxx
x/x 000- 0000 X.Xxxxxxxx Xx
Xxxxxxxxx XX X0X 0X0
(hereinafter referred to as the "Indemnitor" )
OF THE THIRD PART
shall, upon acceptance of this Offer to Lease by the Landlord, constitute a
valid and binding agreement to lease between the Landlord and the Tenant.
Page 1 of 16 Initial
THE TENANT HEREBY OFFERS TO LEASE the premises from the Landlord outlined in red
on the plan attached hereto as Schedule "A" (the "Leased Premises") of the
building (the "Building") to be constructed on property (the "Shopping Centre")
at 0000 Xxxxxxxxxxx Xxx, Xxxxxxxx, X.X. on the following terms and conditions:
1. LEASED PREMISES
The CRU # 1290 and floor area is approximately 294 square feet of the Leased
Premises;
The CRU # ____ and floor area is approximately ______ square feet of the Leased
Premises;
The CRU # ____ and floor area is approximately ______ square feet of the Leased
Premises;
as shown outlined in red on Schedule "A" which forms part of this Offer to
Lease.
2. LEASE TERM
Year 2 Year 3 Year 4 Year 5
The lease term shall be for a period of... one year commencing on the
Commencement Date as defined in Clause 7 (the "Term").
3. MINIMUM RENT
The minimum rental rate during the Term shall be basic rent as follows:
CRU#
1290 year 1 $130 $3,185
Page 2 of 16 Initial
Minimum Monthly Rent shall be payable in advance in equal monthly payments.
All of the above rental figures are subject to Goods and Services Tax ("G.S.T.")
plus applicable tax(es) and levies.
4. ADDITIONAL RENT
The Tenant shall, throughout the Term, pay as additional rent (i.e. common
expenses) to the Landlord its proportionate share of the property taxes and
operating expenses for the Shopping Centre (the "Additional Rent").
Additional Rent shall be payable in advance in equal monthly payments.
Adjustments shall be made in each calendar year. Additional Rent shall be
subject to G.S.T. plus applicable tax(es) and levies.
Page 3 of 16 Initial
It is the intention that the lease arising herefrom will be a completely net
lease to the Landlord. The Tenant shall be responsible for its proportionate
share of utilities, property taxes, security, improvement, landscaping,
insurance, maintenance, legal, accounting, management fee, administrative fee,
maintenance costs and all other costs payable in respect of the Shopping Centre.
This Additional Rent .including applicable property taxes is currently estimated
at $23.50 per square foot per year.
The Tenant shall be responsible for its own business axes, insurance and
telephone installation and any related charges for its business operations. Food
Court surcharge fees are applicable to all Food Court Tenants.
5. PROMOTION AND MEDIA FUND
The Tenant shall pay as additional rent to the Landlord a contribution to the
promotion and media fund for the Shopping Centre. The promotion and media fund
is currently estimated at $3.80 per square foot per year and is subject to an
annual adjustment.
6. FIXTURING PERIOD
The Tenant shall have a fixturing period of 45 days starting from October 14,
2005 of Minimum Monthly Rent and Additional Rent, to complete the Tenant's work
in the Leased Premises as set out in Clause 13. During this period, the Tenant
shall be responsible for the utility costs and shall be bound by all other terms
of this Offer to Lease and the lease arising herefrom:
7. COMMENCEMENT DATE
(a) The commencement date of the Term (the "Commencement Date") shall be the
29th day of November , 2005.
Page 4 of 16 Initial
8. USE AND OPERATING NAME
The Leased Premises shall not be used for any purpose other than retailing video
phones and related accessories and services,and any other devices approved by
the Landlord and the Tenant shall provide to the Landlord the details of its
merchandise mix for approval before signing the Lease and shall be operated
continuously by the Tenant throughout the Term under the operating name of. (-
to be submitted by Tenant to Landlord for approval. The Tenant shall also keep
in stock in the Leased Premises a full and ample line of merchandise for the
purpose of carrying on its retail business therein, and maintain an adequate
sales force to serve all customers properly.
9. EXECUTION OF LEASE
Upon acceptance of this Offer to Lease by the Landlord, the Tenant and the
Indemnitor agree to sign and execute the Landlord's current form of lease
incorporating the terms of this Offer to Lease (the "Lease") within fifteen,
(15) days of delivery of same by the Landlord. If the Tenant does not execute
the Lease within fifteen (15.) days, the Landlord may elect to cancel this Offer
to Lease and any deposit made by the Tenant shall be forfeited to the Landlord.
10. SUBSTANTIAL COMPLETION
11. SIGNAGE
All signage has to be approved by the Landlord. The location of the signage
shall be designated by the Landlord.
If an illuminated exterior store front sign panel (the "light box") is available
for the Tenant's exclusive use, such availability shall be at the sole
discretion of the Landlord. The Tenant shall rent such light box from the
Landlord and pay the Landlord monthly.
Page 5 of 16 Initial
The rate shall be $2.50 per linear foot per month and subject to change. All
signage shall be predominantly in English, with English taking up not less than
two-thirds of each sign, and other language(s) and character(s) shall not exceed
one-third of each sign.
12. DEPOSIT
The Tenant will tender a deposit cheque with this Offer to Lease in the amount
of $6,370 made payable to the Landlord. The deposit shall be applied on account
of the Minimum Monthly Rent (G.S.T. not included) for the first month in which
Minimum Monthly Rent is payable and the last month of the Term. The Tenant will
also tender a security deposit cheque equal to the last month's Minimum Monthly
Rent in the amount of $3,185.00 made payable to the Landlord.
13. TENANT'S WORK
The Tenant shall submit all of its plans and specifications regarding any
Tenant's work in the Leased Premises for approval by the Landlord or its
representatives. The Tenant shall pay to the Landlord, on demand, a fee of
$500.00 in connection with the review of the said plans and specifications for
submission to the City of Richmond such rate is subject to change.
If the Tenant's drawings need to be reviewed by the structural engineer,
electrical and mechanical consultants of the Landlord, an additional fee will be
levied.
Upon the Landlord's approval, such approval shall be at the Landlord's sole
discretion, and the issuance of the building permit from the authorities having
jurisdiction, the Tenant will begin and will thereafter diligently perform and
complete the Tenant's work and will use its best efforts to complete its work
within the period specified by the Landlord. The Tenant shall cause the Leased
Premises to be fixtured in a good and workmanlike and first class manner and
shall ensure that all necessary approvals of municipal and other governmental
authorities having jurisdiction are promptly obtained. All work shall be
performed by competent designers and tradesmen compatible with those employed by
the Landlord and its contractors and is subject to the supervision of the
Landlord. During this period, the Landlord may occupy the Leased Premises
jointly with the Tenant for the purpose of completing the Landlord's work.
Page 6 of 16 Initial
During this period, the Tenant shall take out and keep in force comprehensive
general public liability insurance with respect to the construction of the
leasehold improvements with coverage for any one occurrence or claim of no less
than one million dollars ($1,000,000), which insurance shall include the
Landlord as an additional named insured and shall protect the Landlord in
respect of claims by the Tenant as if the Landlord was separately insured. The
Tenant shall also furnish to the Landlord written evidence of good standing with
Workers' Compensation Board during the fixturing period.
The Tenant agrees to take all steps necessary to promptly discharge any builders
liens arising out of work done with respect to the Leased Premises at the
Tenant's own expense.
The Tenant agrees to comply with the design criteria of the Landlord, and
failure to comply shall be deemed a default under the terms of this Offer to
Lease. All the Tenant's Work required by the Tenant to complete the Leased
Premises for occupancy shall be carried out in a good and workmanlike manner
with good workmanship and with new materials which shall all be of a high
quality and conforming to the best standards of practice, and shall not be in
contravention of the codes or regulations of the municipality or any other
authority having jurisdiction:
Within fifteen (15), days of the date the Landlord reviews and being satisfies
with the Tenant's financial and credit worthiness, the Tenant shall provide the
Landlord with 2 sets of sepia and 3 sets of prints of preliminary plans and
specifications which shall demonstrate design preparation of detailed working
drawings and design specifications. Preliminary plans and specifications shall
be accompanied by sample boards of finishes and an artistic rendering. The
Tenant further agrees that it shall appoint one of the interior designer from
the suggested list of such professionals provided by the Landlord to complete
the Tenant's drawings and design.
14. OPTION TO RENEW
Provided that the Tenant is not in default under the terms of the Offer to Lease
and the Lease, the Tenant shall have the option to renew the Lease for one
Page 7 of 16 Initial
additional term of one(1) year five (5) years by giving the Landlord written
notice of its intention to renew no later three (3) six (6) months prior to the
expiry of the Term. Such renewal term shall be on the same terms and conditions
as are contained in the Lease, except the amount of the Minimum Monthly Rent and
the percentage applicable to the Percentage Rent payable, this right of renewal
and any other term and condition of the Lease that the Landlord in its sole
discretion considers necessary to be amended or deleted in order to achieve a
more efficient management, operation and control of the Shopping Centre. Rent
for the renewal term shall not be less than the rent payable for the last year
of the Term.
15. OPENING HOURS
The Tenant agrees to keep the Leased Premises open for business during customary
business days and hours and for such further days and additional hours as
required by the Landlord and subject to applicable City By-Laws. The Tenant
shall open for business each day of the year (except Christmas Day) for the
following hours:
Sundays, Mondays, Tuesdays, 11:00 a.m. or earlier to 7:00 p.m, or later
Wednesdays and Public Holidays
Thursdays, Fridays & Saturdays 11:00 a.m. or earlier to 9:00 p.m. or later
16. FINANCIAL INFORMATION
This Offer to Lease is subject to the Landlord reviewing and being satisfied
with the Tenant's financial and credit worthiness within two (2) days from the
acceptance date of this Offer to Lease, failing which this Offer to Lease shall
be null and void. This subject condition is included for the benefit of the
Landlord and may be waived at its sole option. The Tenant shall provide to the
Landlord such information in writing as the Landlord may require with respect to
the financial responsibility and standing and
Page 8 of 16 Initial
corporate organization of the Tenant in order that the Landlord may properly
consider the within Offer to Lease. The Landlord agrees to keep all such
information confidential. The Tenant and/or the Indemnitor hereby consent to any
credit investigation which may be instituted by the Landlord as a result of this
Offer to Lease.
17. ASSIGNING AND SUBLETTING
The Landlord may, at its option, prepare or cause to be prepared one or more
Strata Plan(s), the same to be prepared in accordance with the provisions of the
STRATA PROPERTY ACT. It is understood and agreed between the Landlord and the
Tenant that the deposit of the Strata Plan(s) shall operate as a conversion of
the Lease into a lease from the Landlord to the Tenant of the applicable strata
lot as shown on the Strata Plan(s) (being the Leased Premises described herein)
subject to the applicable terms and conditions contained in the Lease and to the
provisions of the Strata Property Act, and the regulations made thereunder.
19. RADIUS RESTRICTION
The Tenant, nor any officer or shareholder of the Tenant, shall directly or
indirectly engage in or furnish any financial aid or other support or assistance
of any nature to any business, enterprise or undertaking which in any manner or
degree is competitive with the Permitted Use, if such competitive business,
enterprise or undertaking is in whole or in part conducted from premises situate
within a distance of two (2) miles from any part of the Shopping Centre,
provided that this restriction shall not apply to any business enterprise of the
Tenant which is in operation as of the date of this Lease.
20. PARKING REGULATIONS
The Tenant shall comply with all parking regulations imposed by the Landlord
from time to time.
Page 9 of 16 Initial
21. PROPERTY DEVELOPMENT
The Landlord reserves the right to terminate this Lease or change the location
of the Leased Premises to a new location ("New Premises") to facilitate any
expansion, demolition, major renovation or structural alteration of the Shopping
Centre. If the Landlord intends to expand or make alterations to the Shopping
Centre, it may, upon providing at least six (6) months written notice to the
Tenant, elect to either:
a. cancel this Lease without any compensation whatsoever to the Tenant;
or
b. change the location of the Leased Premises within the Shopping Centre
or any expansion of the Shopping Centre which the Landlord considers,
in its sole and absolute discretion, to be suitable for the Tenant. In
such event the Landlord shall not be responsible for any losses, costs
or expenses of the Tenant arising from any such relocation; provided
that if the duration of the Term is at least five (5) years, or if the
duration of the Term is less than five (5) years but the Tenant is
entitled to at least one (1) renewal term such that the aggregate
duration of the Term and the renewal term exceeds five (5) years; then
(i) should the Landlord elect to relocate the Tenant on or before the
5th anniversary of the Commencement Date, the Landlord shall be
responsible for the cost of improving the New Premises to a standard
which is, in the reasonable opinion of the Landlord, similar to that
of the Leased Premises as of the date of relocation (the "Previous
Standard"); and (ii) should the Landlord elect to relocate the Tenant
after the 5th anniversary of the Commencement Date, the Landlord and
the Tenant shall bear equally the cost of improving the New Premises
to the Previous Standard.
Page 10 of 16 Initial
The obligations of the Tenant under the Lease shall be jointly and severally
indemnified by the Indemnitor.
24. APPLICABLE LAW
This Offer to Lease shall be governed by and construed under the laws of the
Province of British Columbia and the laws of Canada applicable therein.
25. NOTICE
Any notice or other communication required or permitted to be given under this
Offer to Lease will be in writing, unless otherwise specified, and will be
effectively given if mailed in Canada by first. class mail, postage prepaid,.
delivered or sent by telecopier or other electronic means of communication which
results in a printed signed document, addressed or directed to the Landlord, the
Tenant and the Indemnitor, as required, at their respective addresses on the
front page of this Offer to Lease or to such other address or number as a party
may specify by notice given as set out above.
Any notice or other communication will be deemed to have been received if
delivered or sent by fax or other electronic means, on the day of delivery or
transmission if it is a business day and otherwise on the next succeeding
business day, and if mailed, on the third business day following the date on
which it was mailed. If at the time of giving of notice there is a postal
dispute, all communications will be delivered or sent by telecopies or other
electronic means of communication which results in a printed signed document.
For the purposes of this notice provision, "business day" means any day Monday
through Friday, except statutory holidays.
Page 11 of 16 Initial
26. OTHER TERMS AND CONDITIONS
(a) The Tenant covenants that it shall maintain in strictest confidence
and not disclose to any third party in any way whatsoever the contents
or any part of the contents of this Offer to Lease except where
compelled by law. Without limiting the generality of the foregoing,
the Tenant acknowledges that all matters under this Lease between the
Landlord and the Tenant in connection with this Lease, the Leased
Premises and/or the Shopping Centre, including but not limited to
operational and promotional matters, shall be dealt with on an
individual basis between the Landlord and the Tenant.
(b) Time shall be of the essence of this Offer to Lease.
(c} All Schedules are by this reference deemed incorporated herein and
made part of the agreement between the parties.
(d) The Tenant shall participate in the Landlord's pre-authorized monthly
payment plan of Minimum Monthly Rent and Additional Rent (plus
applicable G.S.T.) effective as of the Commencement Date.
(e) For those premises where water will be constantly used or stored e.g.
food catering services including but not limited to restaurants, food
court units, aquariums and the like, the entire kitchen floor area or
such area as determined by the Landlord must be waterproofed prior to
the installation of floor tiles, carpets or other flooring systems.
Page 12 of 16 Initial
(f) The Tenant acknowledges that the Landlord intends to install video
phones carried by the Tenant in Landlord's Aberdeen Residence project.
As such, the Tenant agrees to grant an exclusive right to the Landlord
for a period of EIGHT (8) months from the Commencement Date to carry
and advertise the Tenant's video phones, accessories and related
services. During such period, the Tenant shall not directly or
indirectly involve in any promoting, selling or contracting activities
in association with its products and services in any other real estate
developments located in the GVRD.
(g) The Landlord agrees to provide certain area inside the presentation
centre of Aberdeen Residence located at Xxxx #0000, Xxxxxxxx Xxxxxx
for promoting the video phones and services offered by the Tenant. The
Tenant shall be responsible for the setup and installation of all the
promotion fixtures and equipment. Layout plans of setup must be
approved by the Landlord prior to installation. The Tenant shall also
provide its own staffing in its daily sales activities of its products
and services. The Landlord will have its own staff assist in
explaining the features of the video phones to the purchasers of
Aberdeen Residence but will not have involvement in the Tenant's
sales/promotion activities at Unit #1120 or at the Leased Premises.
The Landlord has its sole right to determine the opening and operation
of the presentation centre at Unit #1120. In the event that the
Landlord decides to close down the presentation centre at any time in
the future, it has its sole right to do so and the Tenant agrees that
it will discontinue its sales activities at Unit #11.20 and dismantle
and remove all its fixtures, equipment and apparatus from the
presentation centre at its sole costs. Upon closing of the
presentation centre, there is no further obligation between the
Landlord and the Tenant whatsoever at Unit #1120 and in such event,
the eight-month exclusivity will automatically terminate on the date
that the presentation centre permanently closes for business.
The Landlord confirms that the Leased Premises, #1290and Unit #1120
are both equipped with 10 megabit per second lan access provided the
Tenant installs its OWN server in the communication room in the
Shopping Centre to facilitate the access. The Tenant agrees that it
shall pay the Landlord the following set up and monthly fees for
accessing the lan service throughout the Term:
1. a one-time set up fee of $100;
2. a monthly Ian access service fee of $25; and
3. a monthly fee for co-location of Tenant's server at Landlord's
communication room of $50. All fees are subject to 7*% GST. The
landlord acknowledges that the Tenant requires a minimum 1mbs/sec
bi-directional access to the internet. In the event that the
landlord fails to provide such access to the tenant. The Tenant
shall have a right to terminate/or suspend the lease.
Page 13 of 16 Initial
27. DURATION OF OFFER AND ACCEPTANCE
This Offer to Lease is made the 22nd day of September 2005 and is open for
acceptance by the Landlord until 11:59 p.m. on the 29th day of September 2005
Executed by the Tenant )
by its Authorized Signatory )
)
)
/s/ Xxxx Xxxx )
------------------------- )
Print Name: Xxxx Xxxx )
Position: President/CEO )
)
)
-------------------------- )
Print Name: )
Position: )
Page 14 of 16 Initial
SIGNED, SEALED AND DELIVERED )
by the Tenant in the presence of: )
)
/s/ Xxxx Xxxx )
--------------------------------- )
Signature: ) Tenant
)
Xxxx Xxxx )
--------------------------------- )
Print Name: )
)
--------------------------------- )
Occupation )
)
--------------------------------- )
Address: )
SIGNED, SEALED AND DELIVERED )
by the Indemnitor in the presence of: )
)
/s/ Xxxxxxx Xx )
--------------------------------- )
Signature: )
)
Xxxxxxx Xx ) Indemnitor
--------------------------------- )
Print Name: )
)
--------------------------------- )
Address: )
)
--------------------------------- )
Occupation: )
Page 15 of 16 Initial
SIGNED, SEALED AND DELIVERED )
by the Indemnitor in the presence of: )
)
)
--------------------------------- )
Signature: )
)
) Indemnitor
--------------------------------- )
Print Name: )
)
--------------------------------- )
Address: )
)
--------------------------------- )
Occupation: )
The foregoing Offer is hereby accepted as of the ___ day of ____________, 20__
Executed by the Landlord,
Xxxxxxxxx Developments Ltd., by its
Authorized Signatory
--------------------------------- )
Print Name: )
)
--------------------------------- )
Position:
Page 16 of 16 Initial
