AGREEMENT OF LEASE ENTERED INTO AT THE CITY OF MONTREAL IN THE PROVINCE OF
QUEBEC.
BETWEEN: TEECAN PROPERTIES INC., a corporation incorporated under the laws
of Quebec, having its head office at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, represented by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, its President,
duly authorized in virtue of a resolution adopted by its Board of
Directors, a true copy of which is annexed hereto as Schedule A.
(referred to in this Lease as "Landlord")
AND: ▇▇▇▇▇▇ CANADA INC., a corporation incorporated under the laws of
New Brunswick, having its head office at 10th Floor Brunswick
House, ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇,
represented by ▇▇▇▇▇ ▇▇▇▇▇▇, its Vice-President of Operations,
duly authorized in virtue of a resolution adopted by its Board of
Directors, a true copy of which is annexed hereto as Schedule B.
(referred to in this Lease as "Tenant")
WITNESSETH:
SECTION I DEFINITIONS
1.01 In this Lease, the following expressions have the following meanings:
(a) "Address for Notice" means for the purpose of all notices to Landlord:
3400 ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
and for the purpose of all notices to Tenant after the Commencement
Date, the address of the Premises, and for the purpose of all notices
to Tenant prior to the Commencement Date:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇-▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
(b) "Base Rent" means an annual rent per square foot of gross constructed
area of the Building, as certified by the Project Architect, equal to:
(i) for the first five (5) years of the Term, $4.75;
(ii) for the sixth (6th) through the tenth (10th) year of the Term,
$5.25;
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(iii) for the eleventh (11th) through the fifteenth (15th) year of
the Term, $5.85;
(iv) for the sixteenth (16th) through the twentieth (20th) year of
the Term, $6.60.
(c) "Building" means, collectively, the building, structures and
improvements, including Landlord's Work, to be erected on the Land and
located at the northeast corner of the Trans Canada Highway Service
Road and ▇▇▇▇▇ Avenue, in the City of ▇▇▇▇▇▇▇▇, Quebec, having an area
of approximately 80,000 square feet, comprising approximately 19,000
square feet of finished office space on two floors and approximately
61,000 square feet of manufacturing and warehouse space.
(d) "Commencement Date" means the later of 1 September 1997 and the
date on which the Building is Substantially Completed, as certified
by the Project Architect.
(e) "Expiration Date" means the day immediately preceding the twentieth
(20th) anniversary of the Commencement Date.
(f) "Land" means the land described in Schedule C.
(g) "Landlord's Work" means the work which Landlord has undertaken to
carry out pursuant to paragraph 14.01 of this Lease.
(h) "Lease" means this Agreement of Lease including the Schedules.
(i) "Lease Year" means a period of twelve (12) months commencing on the
1st day of January and expiring on the 31st day of December next
following. If the Commencement Date is not the 1st day of January, the
first Lease Year will commence on the Commencement Date and expire on
the 31st day of December next following. If the last day of the Term
is any day other than the 31st day of December, the last Lease Year
will commence on the 1st day of January preceding the last day of the
Term and expire on the last day of the Term. Landlord may change the
Lease Year from time to time but Tenant will not be exposed to any
additional or duplicated charges as a result of such change.
(j) "Plans and Specifications" means the drawings, plans, and specifi-
cations attached hereto in Schedule D.
(k) "Premises" means the Building and the Land, including the parking
areas and exterior facilities and improvements.
(l) "Project Architect" means Gross, Kaplan, Coviensky, Architects.
(m) "Real Estate Broker" means ▇.▇. ▇▇▇▇▇▇▇▇ Limitee.
(n) "Rent" means Base Rent and additional rent as defined in paragraph
21(h).
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(o) "Real Estate Taxes" means all taxes, surtaxes, rates, levies,
impositions and assessments, general or special, and any other taxes,
surtaxes, rates, levies, impositions or assessments (including
statutory penalties and interest thereon in the event that same arise
as a result of Tenant's failure to pay amounts as and when required by
section 6.01 below) which are now or which may ever be levied or
imposed against either or both of the Land and Building for municipal,
urban community, school, public betterment, general, local improvement
or other purposes. Real Estate Taxes shall not include Landlord's or
owner's federal and provincial income taxes or Taxes on Capital. If
the system of taxation now in effect is altered and any new tax,
surtax, rate, levy, imposition or assessment is imposed or levied upon
the Land or Building or the owner thereof other than federal or
provincial income taxes and Taxes on Capital in substitution for or in
addition to those presently levied or imposed upon immoveables, Real
Estate Taxes shall include such new tax, surtax, rate, levy,
imposition or assessment.
(p) "Schedules" means:
Schedule A Resolution of Landlord
Schedule B Resolution of Tenant
Schedule C Description of Land
Schedule D Landlord's Work
(q) "Substantially Completed" in respect of any portion of the Building
means that such portion of the Building has been completed in
accordance with all applicable statutes, by-laws and regulations and
the Plans and Specifications (subject only to completion of minor
items, the lack of completion of which will not materially interfere
with Tenant's use and occupancy of such portion of the Premises) and a
certificate of substantial completion has been issued for such portion
of the Building by the Project Architect.
(r) "Taxes on Capital" means the portion (as hereafter defined) of the
capital and large corporation tax imposed against Landlord for each of
Landlord's fiscal years during the Term, which taxes are wholly or
partly computed as a function of the capital employed in respect of
the Building and Land as determined for the purposes of such tax or
taxes, but excluding all taxes on income and profits. For purposes of
this paragraph, the "portion" of such tax or taxes means the amount of
tax that would be payable if Landlord had no other property than the
Building and Land.
(s) "Taxing Authorities" means any duly constituted governmental
authority, whether federal, provincial, municipal, school or other,
legally empowered to levy or impose any Real Estate Taxes.
(t) "Tenant's Work" means all improvements, alterations, additions to the
Premises and other similar items of work, other than Landlord's Work,
which are necessary to properly prepare or complete the Premises for
use and occupancy by Tenant for the purposes of its business or which
are undertaken by Tenant during the Term.
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(u) "Term" means the period commencing on the Commencement Date and
expiring on the Expiration Date.
1.02 Any expression indicated in this Lease by quotation marks and first
letter capitalization will have the meaning ascribed to it by the provision or
context wherein it appears.
1.03 This Agreement of Lease shall bear the reference date of 25 April
1997, notwithstanding the date of its execution by either party hereto.
SECTION II LEASE OF PREMISES
2.01 Landlord hereby agrees to acquire the Land, construct the Building
and lease the Premises to Tenant for the Term and Tenant hereby agrees to lease
the Premises from Landlord for the Term, on the terms and conditions set out
herein. On the Commencement Date the Building shall be Substantially Completed
and the Premises shall be delivered to Tenant in apparent good working order and
condition.
2.02 Landlord represents and warrants to Tenant that Landlord has the
capacity and power to lease the Premises pursuant to the terms hereof, and that
the Land now complies and the Building will be constructed and on the
Commencement Date will be in compliance with all applicable laws, regulations,
by-laws, ordinances and orders, including, without limitation, those relating to
the environment. Landlord makes no representation that the intended use of the
Premises by Tenant is permitted by any applicable zoning by-law or other laws,
governmental regulations or requirements, Tenant specifically waiving the
provisions of Article 1854(2) of the Civil Code of Quebec.
SECTION III EXPIRATION
3.01 This Lease shall expire, without notice or demand being necessary,
on the Expiration Date. Notwithstanding articles 1878 and 1879 of the Civil Code
of Quebec or any law or custom to the contrary, this Lease shall not be subject
to tacit renewal. Should Tenant remain in occupation of the Premises after the
Expiration Date without having executed a written extension or renewal of this
Lease or a new lease with Landlord, then Tenant shall be deemed to occupy the
Premises under a lease from month to month at a rent equal to 150% of the Rent
last payable under this Lease, and otherwise on the same terms and conditions as
herein contained, insofar as they are applicable to a lease from month to month,
without prejudice to Landlord's right to re-enter and take possession of the
Premises and remove Tenant therefrom without notice or indemnity to Tenant and
without prejudice to Landlord's other recourses hereunder or by law.
SECTION IV BASE RENT
4.01 Tenant covenants and agrees to pay the Base Rent to Landlord in equal,
consecutive, monthly instalments, in advance on the first day of each calendar
month during the Term.
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4.02 If the Commencement Date is not the first day of a calendar month,
then each instalment of Base Rent or additional rent payable for the broken
portion of such month in which the Commencement Date occurs will be calculated
at a per diem rate of one three hundred sixty-fifth (1/365th) thereof.
SECTION V NET RENTAL
5.01 Tenant acknowledges that the Rent shall be on an absolutely net net
net return basis to Landlord, and that save only as expressly otherwise provided
by this Lease, Landlord shall not be responsible for any costs, charges,
impositions, expenses or outlays of any nature or kind whatsoever arising from
or relating to the Premises, the contents thereof, or the business carried on
therein, and Tenant shall pay, to Landlord's complete and entire exoneration,
all such costs, charges, impositions, expenses and outlays (including those
incurred by or paid for by Landlord on Tenant's behalf) including, without
limiting the generality of the foregoing, the Real Estate Taxes and Taxes on
Capital contemplated by this Lease.
SECTION VI REAL ESTATE TAXES AND TAXES ON CAPITAL
6.01 Subject to the provisions of sections 6.02 and 6.03, Tenant shall pay
to Landlord as additional rent, the amount of Real Estate Taxes payable in
respect of the Term or any part thereof, as shown on the relevant invoice or
statement issued by the competent taxing authority. Landlord shall forward to
Tenant a copy of such invoice or statement, and the amount of Real Estate Taxes
as shown on the invoice or statement shall be payable by Tenant to Landlord on
the later of the date that is three (3) days following receipt thereof by Tenant
and the day that is three (3) days prior to the due date shown on the invoice or
statement. During the first and last years of the Term (in the event same do not
coincide with tax years) the amounts Tenant is required to pay pursuant to the
foregoing shall be subject to a per diem adjustment.
6.02 Tenant, but not Landlord, shall be entitled, at Tenant's sole cost and
expense, to contest, object to or litigate the levying or imposition only of
those Real Estate Taxes which are not in whole or in part in respect of a period
after the Expiration Date and only those valuations imposed with respect to such
taxes. Tenant shall advise Landlord prior to commencing any such contestation or
objection. Landlord, but not Tenant, shall be entitled to contest, object to or
litigate the levying or imposition of all other Real Estate Taxes or valuations
imposed with respect to such taxes and Tenant hereby waives its right to do so.
6.03 In cases where Tenant is entitled to contest, object or litigate and
elects to do so, it must do so in good faith, expeditiously and with reasonable
diligence. Tenant may file such contestations or objections or litigate in
Tenant's own name (or in the name of Landlord should this be necessary) and
Landlord agrees to execute, at the request of Tenant and at Tenant's expense,
all deeds and documents reasonably necessary for the purpose thereof. Tenant may
settle, compromise, consent to, waive or otherwise determine, in its sole
discretion, all matters and things relating thereto. In cases where Landlord is
entitled to contest, object or litigate, it shall consult with Tenant regarding
the advisability of doing so but, in case of disagreement, the final decision as
to whether
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or not to do so shall rest with Landlord. If Landlord contests, objects or
litigates, it may settle, compromise, consent to, waive or otherwise determine,
in its sole discretion, all matters and things relating thereto. Tenant shall
reimburse Landlord for that proportion of the expenses reasonably incurred by
Landlord in such regard which is reasonably determined to relate to the Term,
such reimbursement not to exceed the value of the benefit derived by Tenant from
such contestation in the form of reduced Real Estate Taxes.
6.04 Throughout the Term, Tenant shall pay, as additional rent, the Taxes
on Capital. During the first and last years of the Term (in the event same do
not correspond to fiscal years of Landlord), the amount Tenant is required to
pay pursuant to the foregoing shall be subject to a per diem adjustment.
6.05 Within ninety (90) days after the end of each of Landlord's fiscal
years, Landlord shall furnish Tenant with a statement verified by Landlord's
auditors setting forth the Taxes on Capital for such year and the amounts
thereof payable by Tenant pursuant to this Section VI, said statement to show in
reasonable detail the information relevant to the calculation and determination
thereof. Tenant shall pay to Landlord the Taxes on Capital shown on such
statement within ten (10) business days after receipt thereof. Landlord
estimates the Taxes on Capital to be $30,000 for its first fiscal year.
6.06 Tenant shall pay any federal goods and services tax, Quebec sales tax,
or other value-added tax or similar tax imposed on Tenant in respect of any
amount payable by Tenant under this Lease and, where required by the applicable
legislation, Tenant will remit such taxes to Landlord at the time of the payment
of the relevant amount to Landlord in addition to the said amount. Landlord
shall promptly remit to the relevant taxing authority when due all such taxes
received from Tenant and shall provide to Tenant Landlord's registration numbers
and all such other information and documents as Tenant shall reasonably require
for purposes of claiming input tax credits or other credit or reimbursement of
such taxes so paid.
SECTION VII USE OF PREMISES
7.01 Tenant shall use the Premises as office accommodation and for those
light industrial uses which are permitted by applicable laws, by-laws,
regulations and ordinances, are reasonable and appropriate for the physical
limitations and circumstances of the Premises, and (unless Landlord otherwise
consents in writing, which consent shall not be unreasonably withheld) which are
substantially similar to the type of activities conducted by Tenant in
Pointe-Claire, Quebec as of the date hereof, and for no other purpose. Tenant
will conduct its business operations in the Premises in a reputable and
first-class manner. Tenant shall obtain and maintain all permits and licences
required for its occupancy of the Premises and for the conduct of its business
therein, Landlord makes no representation regarding zoning permits or licences
which may be required in connection with Tenant's occupancy of the Premises.
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SECTION VIII READINESS FOR OCCUPATION
8.01 In the event the Building is not Substantially Completed or the
Premises are not ready for occupation by Tenant on 1 September 1997, Tenant's
obligations under this Lease, including the payment of Rent, shall be deferred
until the Building is Substantially Completed and the Premises are ready for
occupation by Tenant.
SECTION IX UTILITIES AND ADDITIONAL CHARGES
9.01 Tenant shall pay for the cost of all utilities consumed or used in or
for the Building or on or for the Land during the Term, including, without
limiting the generality of the foregoing, the cost of water, gas, electricity,
steam, fuel and other energy. Tenant shall also pay for the cost of all
fittings, machines, apparatus, meters or other things leased or acquired in
respect of any of such utilities and for all work or services performed by any
corporation, commission or supplier in connection with any thereof.
SECTION X TENANT'S PERSONAL TAXES
10.01 Tenant shall pay as and when due all personal taxes, including,
without limiting the generality of the foregoing, water taxes, water-rate and
service taxes and business taxes, and other similar rates and taxes which may be
levied or imposed upon the Premises or upon the business carried on therein, and
also all other rates and taxes which are or may be payable by Tenant as tenant
or occupant thereof. If the mode of collecting such taxes or rates be so altered
as to make Landlord or the proprietor liable therefor instead of Tenant, or if
the system of taxation now in effect is altered and any new tax or rate be
levied or imposed upon the Premises or upon the business carried on therein, or
if by law, regulation or otherwise such taxes or rates are made payable by
landlords or proprietors, Landlord will pay such account and Tenant will repay
Landlord as additional rent on demand the amount of the benefit derived by
Tenant from such change.
SECTION XI ASSIGNMENT AND SUBLETTING
11.01 Except as otherwise provided herein, Tenant shall not assign this
Lease or sublet the Premises or any part thereof or allow the Premises or any
part thereof to be used by another without the prior written consent of
Landlord, which consent shall not be unreasonably withheld. The consent of
Landlord to any such assignment, sublease or use shall not constitute a waiver
of this section and shall not be deemed to permit any further assignment,
sublease or use by another.
11.02 Any assignee, sublessee or user shall be deemed ipso facto by virtue
of the assignment, sublease or use to have assumed all of Tenant's obligations
under this Lease. Notwithstanding the subletting or use, Tenant shall remain
solidarily responsible with the sublessee, assignee or user, without benefit of
division or discussion, for the payment of the Rent and the performance of all
of the other obligations of Tenant under this Lease.
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11.03 All requests for Landlord's consent to a proposed assignment, sublease
or use must be in writing and be received at least fifteen (15) days prior to
the date same is proposed to become effective and must specify in detail
reasonably satisfactory to Landlord:
(a) the name, address and local telephone number of the proposed assignee,
subtenant or user and, if it is a corporation, the names of the
directors and majority shareholders (or in the case of a change of
control, the names of those who would subsequently acquire effective
voting control);
(b) details of the proposed assignee's subtenant's or user's prior
business experience (including, without limiting the generality of the
foregoing, experience in the business which is permitted to be
operated in the Premises pursuant to this Lease) and the specific
terms and conditions of the proposed assignment, sublease or use; and
(c) bank and other credit references, financial statements and such other
information as Landlord may reasonably request in order to assess the
business and financial responsibility and standing of the proposed
assignee, subtenant or user.
Unless Landlord notifies Tenant otherwise within fifteen (15) days of
Landlord's receipt of the information described in this section 11.03, Landlord
shall be deemed to have consented to the proposed assignment or sublease.
11.04 If at any time effective control of Tenant is acquired or exercised
by any person or persons not having effective control of Tenant on the date of
execution of this Lease, the same shall be deemed to constitute an assignment
subject to all of the provisions of this Section XI.
11.05 Tenant will not advertise the Premises for the purpose of any
assignment, sublease or use, without obtaining the prior written approval of
Landlord to the proposed text, such approval not to be unreasonably withheld. In
no event will the rental rate appear in any advertisements.
11.06 Notwithstanding anything to the contrary contained in this Section XI,
Tenant shall have the right to assign this Lease or to sublet all or part of the
Premises to a corporation affiliated with Tenant ( as defined for the purposes
of the Canada Business Corporations Act, hereinafter referred to as the
"Affiliate"), without the prior consent of Landlord under the following
conditions:
(a) Tenant shall advise Landlord of such assignment or sublease in writing
at least ten (10) days prior to the date same is proposed to become
effective; and
(b) Affiliate shall be deemed ipso facto by virtue of such assignment or
sublease to have assumed all Tenant's obligations under this Lease
and, notwithstanding such sublease or assignment, Tenant shall remain
solidarily responsible with Affiliate, without benefit of division or
discussion, for the performance thereof.
11.07 In the event that Tenant requests Landlord's consent to the assignment
of this Lease or the sublease of all or substantially all of the Premises for
all or substantially all of the remainder of the Term, to a person or persons
not affiliated with Tenant (as defined for the purposes of the
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Canada Business Corporations Act) and who intend to use the Premises other than
for purposes of continuing the operation of all or substantially all of Tenant's
business, then Landlord shall, as an alternative to granting its consent to any
such proposed assignment or sublease, have the right to terminate this Lease
effective the date that the proposed assignment or sublease was to be effective.
Such right of cancellation must be exercised by Landlord within fifteen (15)
days of its receipt of the information described in section 11.03.
11.08 Landlord may assign its rights and obligations under this Lease to a
corporation affiliated with Landlord (as defined in the Canada Business
Corporations Act) in which event such assignee shall be entitled to exercise the
rights and shall be solidarily liable with Landlord for the obligations of
Landlord under this Lease.
SECTION XII TENANT CARE
12.01 Subject to Section XIV, Tenant shall, throughout the Term, maintain
and keep the Premises and every part thereof, including, without limiting the
generality of the foregoing, the roof, the heating, ventilating, electrical,
plumbing, mechanical and other systems, services and equipment installed therein
or thereon, and all replacements, alterations, additions and improvements
thereto, in good order and condition and perform or cause to be performed all
repairs and replacements which may from time to time be required therein or
thereto, as would a prudent owner. Without limiting the generality of the
foregoing, Tenant will be obliged to do or cause to be done all work necessary
to maintain the Premises for their intended purpose. All such work shall be
performed at Tenant's sole cost and expense. Tenant shall advise Landlord in the
first year of the Term and thereafter as requested, of the names of the
contractors with whom Tenant has entered into service contracts for the repair
and maintenance of the heating, ventilating, electrical, plumbing or mechanical
systems, and such contractors shall be reputable and competent. Tenant shall
provide to Landlord, upon request, copies of such service contracts.
12.02 Tenant shall not bring into the Building or onto the Land any
machinery, equipment, article or thing that by reason of weight, size or
operation might cause damage thereto or which might overload the floors of the
Building or structure or exceed the safe load capacity of the Land.
12.03 At the Expiration Date or earlier termination of this Lease, Tenant
shall deliver the Premises to Landlord in the state and condition in which they
are required to be maintained and kept pursuant to the provisions of this Lease.
12.04 In the event Tenant fails to comply with its obligations contained
in this Section XII, Landlord shall have the right, after giving written notice
of five (5) days to Tenant, to carry out such Obligations for Tenant and any and
all costs incurred by Landlord in so doing, shall be payable by Tenant to
Landlord, as additional rent, on demand. However, in the event any work or
action is urgently required at a time when authorized representatives of Tenant
cannot be located, Landlord may proceed with such reasonable steps as it deems
necessary, in its discretion, for the protection and preservation of the
Premises and Tenant shall reimburse Landlord for the amounts expended, as
additional rent, on demand.
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12.05 Tenant shall give Landlord prompt written notice of defects in or
damage to the Premises or any part thereof, howsoever same may occur.
SECTION XIII REPAIRS, ALTERATIONS, ADDITIONS
AND IMPROVEMENTS
13.01 All Tenant's Work shall be the responsibility of Tenant and shall be
performed at Tenant's sole cost and expense, the whole subject to the provisions
and procedures contained in this Section XIII. No Tenant's Work may be carried
out without the prior written consent of Landlord, which consent shall not be
unreasonably withheld. The withholding of Landlord's consent shall be deemed to
be reasonable if the proposed work would have the effect of materially
diminishing the value of the Premises.
13.02 All architectural and other plans and specifications prepared in
connection with Tenant's Work may be prepared by a designer or architect of
Tenant's choice but shall be subject to the Landlord's prior written approval as
contemplated in this Section XIII. Tenant shall be responsible to ensure that
Tenant's Work, as designed, complies with all relevant laws, by-laws,
regulations and ordinances as well as with the Building module and structure and
with the Building's mechanical, electrical, plumbing and other systems and
facilities. Complete working drawings, plans and specifications for Tenant's
Work, if any, must be submitted to Landlord for its prior written approval.
Landlord shall have a delay of ten (10) days following receipt of such complete
working drawings, plans and specifications to notify Tenant either of its
approval thereof or of changes Landlord requires and if Landlord fails to
respond during such ten (10) day period, Landlord shall be deemed to have
approved the drawings, plans and specifications so submitted. If Landlord
notifies Tenant with such ten (10) day period that it requires changes, Tenant
shall, within ten (10) days thereafter, submit the necessary amended drawings,
plans and specifications to Landlord. Landlord shall have the right to inspect,
at its expense, any Tenant's Work to ensure that it is in accordance with the
working drawings, plans and specifications approved by Landlord.
13.03 Tenant shall not undertake any Tenant's Work without obtaining all
necessary permits from the appropriate public authorities. All such work shall
be done by contractors approved by Landlord, which approval shall not be
unreasonably withheld, but shall be conditional upon such contractors carrying
property damage and liability insurance satisfactory to Landlord for its
operations in the Building and upon such contractors providing to Landlord a
waiver and release of any and all legal hypothecs or rights of legal hypothec
that then or thereafter exist for work done or materials supplied in connection
with Tenant's Work.
13.04 All Tenant's Work (other than trade fixtures, equipment and
accessories thereto) and all repairs and replacements in or to the Premises
shall, upon their completion, become a part of the Premises and the property of
Landlord and shall be surrendered with the Premises upon the Expiration Date or
earlier termination date of this Lease without any compensation being due
therefor by Landlord; provided, however, that Landlord shall have the option, in
its sole discretion, by written notice to Tenant at least sixty (60) days prior
to the Expiration Date, to require Tenant to remove, at Tenant's cost and under
Landlord's coordination and direction, all or any of those items of Tenant's
Work for which Landlord has reserved the right to do so in its initial consent
(including
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such as may have been made by Landlord at Tenant's request prior to or during
the Term) and, in the cases where Landlord has exercised such right, to restore
the portions of the Premises affected by the removals, or any parts thereof, to
their original condition.
13.05 Tenant may erect, at its cost and expense, signs on any street
frontage of the Premises provided that:
(a) any such signs shall comply with the requirements of the applicable
municipal and other governmental authorities;
(b) no such signs shall be erected outside or on the exterior of the
Building or within the interior thereof if the same may be seen from
the exterior thereof, unless Landlord shall have given its prior
written consent (which consent shall not be unreasonably withheld) to
the location, style, colour, size and content thereof; and
(c) Tenant shall bear the cost of the installation, repair, maintenance
and removal of any such signs.
SECTION XIV LANDLORD'S WORK AND REPAIRS
14.01 Landlord shall, at its expense, construct the Building and effect the
work more fully described in Schedule D annexed hereto and initialed by both
parties for identification, in good and workmanlike manner in accordance with
the drawings, plans and specifications set out therein, subject to such changes
as may be agreed upon by Tenant and Landlord, and in accordance with all
applicable statutes, by-laws and regulations. Landlord shall, at its own
expense, procure all necessary licenses and permits for the Landlord's Work in
accordance with such specifications, statutes, by-laws and regulations.
Upon receipt by Tenant of the Project Architect's certificate that
the Building is Substantially Completed, Tenant shall have sixty (60) days
thereafter to inspect the Building and provide to Landlord a list of any
incomplete and/or incorrectly completed items of Landlord's Work, which Landlord
shall complete or correct, as the case may be, within a reasonable period of
time thereafter.
Tenant, its workmen and contractors shall be permitted to enter the
Premises to commence installation of the items for which it is responsible to
complete in connection with Landlord's Work and Landlord and Tenant agree to
cooperate in coordinating the scheduling of such work by Tenant with Landlord's
Work. Tenant, its workmen and contractors shall not otherwise, without the
consent of Landlord, be permitted access to the Premises for purposes of
installing Tenant's trade fixtures and furnishings prior to the date on which
the Building is Substantially Completed.
Landlord shall deliver to Tenant copies of all warranties and
guarantees provided by Landlord's general contractor, subtrades and suppliers
and others that Landlord may benefit from with respect to those items which
Tenant is obligated to repair, replace, or maintain in accordance
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with the terms of this Lease, and shall assign to Tenant the benefit of all such
warranties or guarantees given to Landlord which affect the obligation of Tenant
to maintain or repair the Premises.
14.02 Notwithstanding any contrary provision of this Lease, including,
without limiting the generality of the foregoing, Sections XII and XIII,
Landlord shall be responsible for:
(a) repairs and replacements to any part of the Premises required as a
result of latent defects in the Building or any part thereof or as a
result of any negligence or wilful act of Landlord or its contractors
in the construction of the Building;
(b) repairs and replacements to any part of the Premises required in the
first year of the Term as a result of any cause whatsoever other than
misuse by Tenant or normal aging or wear and tear.
SECTION XV ACCESS TO PREMISES
15.01 Landlord, its agents and representatives may enter the Premises at all
times, after twenty-four (24) hours prior notice (except in the case of
emergency when no notice will be required), to examine their condition to view
their state of repair and condition.
15.02 Tenant shall allow the Premises to be exhibited during Business Hours,
after twenty-four (24) hours prior notice, to persons interested in acquiring or
advancing money upon the security of the Land and Building. During the last
twenty-four (24) months of the Term, Tenant shall also allow the Premises to be
exhibited, after twenty-four (24) hours prior notice, to persons interested in
leasing same.
SECTION XVI COMPLIANCE WITH LAWS
AND INDEMNIFICATION
16.01 Tenant will not do or permit anything to be done in, upon or about
the Premises or bring or keep anything therein which will in any way conflict
with or cause the Premises to be in breach or violation of the regulations of
the fire, police or health departments, any environmental laws, rules,
regulations, by-laws, ordinances or norms applicable to the Premises, or with
the laws, rules, regulations, by-laws or ordinances of the municipality in which
the Land and Building are situate, the applicable urban community (if any), or
any governmental authority having jurisdiction over the Premises or the business
conducted therein (including, without limiting the generality of the foregoing,
those relating to the environment), all of which Tenant undertakes to abide by
and conform to, including, if necessary, effecting the alterations or repairs
necessitated thereby.
Tenant covenants and agrees that it will indemnify and hold harmless
Landlord against any penalty imposed for or damage arising from the breach of
any such laws, rules, regulations, by-laws, ordinances or norms by Tenant or
those for whom Tenant is responsible.
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16.02 Tenant shall comply with the rules and requirements of all insurance
advisory organizations and all insurance companies having policies of any kind
whatsoever in effect covering the Land and Building.
16.03 Landlord shall provide to Tenant on the Commencement Date a phase one
and boring analysis from a reputable environmental consultant indicating that
the Premises are not on the Commencement Date contaminated. Tenant warrants that
during its occupancy of the Premises, it will not bring in or on to, or store or
process on the Premises any contaminants, pollutants, toxic or dangerous or
hazardous substances or materials or wastes, PCB's, friable asbestos or oil
contaminants (other than minimal quantities of inflammables normally found in
similar premises, such as cleaning solvents) which create an environmental
problem (hereinafter collectively called "Contaminants"). At the Expiration
Date, any Contaminants stored, processed or brought in or on to the Premises by
Tenant, its employees, agents, subtenants, suppliers or invitees shall be
removed by Tenant at its cost and Tenant shall supply to Landlord an
environmental analysis of the same scope as the one Landlord supplied to Tenant
on the Commencement Date. Tenant shall indemnify and hold Landlord harmless from
all losses, liabilities, damages, costs, expenses and claims of any kind
whatsoever resulting from any breach of the foregoing warranty including,
without limitation, any seepage, spillage, discharge or misuse of any
Contaminant by Tenant, its employees, agents, subtenants, suppliers or invitees
and undertakes to immediately take all such steps as are reasonably necessary to
repair any such damage at its expense and to restore the Premises or any portion
thereof damaged by such seepage, spillage, discharge, misuse or storage to their
original condition, less ordinary wear and tear.
16.04 Tenant shall indemnify Landlord and hold Landlord harmless from and
against all claims, liabilities, damages, costs, suits or actions arising from:
(a) any breach, violation or non-performance of any covenant, condition or
agreement contained in the present Lease on the part of Tenant to be
fulfilled, kept, observed or performed;
(b) any accident or injury (including death) sustained by or for any loss
of or damage to property belonging to any person or persons in, on, or
about the Building and Land occurring during the Term, caused by or
arising out of any wilful misconduct, neglect or fault by Tenant, its
servants, employees, agents, subtenants or invitees;
(c) any accident or injury (including death) sustained by or for any loss
of or damage to property belonging to any employee, servant, agent,
subtenant or invitee of Tenant, no matter how caused (except if caused
by or arising out of the intentional or gross fault of Landlord or its
employees, servants, agents, subtenants or invitees); and
(d) failure of Tenant to fully, faithfully, and punctually comply with any
legitimate requirement of any public of quasi-public authority having
jurisdiction over the Premises.
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SECTION XVII FIRE AND DESTRUCTION OF PREMISES
OR EXPROPRIATION
17.01 In the event the Building is destroyed or damaged by fire or other
cause, in whole or in part, and Landlord notifies Tenant in writing within sixty
(60) days after the damage or destruction that the Building may not, in the
opinion of Landlord's architect, be restored or rebuilt to the same nature and
quality structure within 180 days after the damage or destruction, this Lease
shall be terminated immediately as of the date of the occurrence of the event
causing such damage or destruction.
17.02 In the event that the damage or destruction is such that the Building,
in the opinion of Landlord's architect (notice of which shall be provided by
Landlord to Tenant in writing within sixty (60) days after the damage or
destruction), may be restored or rebuilt to the same nature and quality
structure within the said 180 days, then
(a) if the damage or destruction affects twenty-five percent (25%) or less
of the total area of the Building, then Landlord shall be obliged to
rebuild or restore the part of the Building so damage or destroyed; or
(b) if the damage or destruction affects more than twenty-five percent
(25%) of the total area of the Building, Landlord shall give notice to
Tenant in writing within sixty (60) days after such damage or
destruction, of its decision whether or not to rebuild or restore the
Building.
17.03 If, within the sixty (60) day notice periods specified above, no
notice is given to Tenant of the opinion of Landlord's architect or of
Landlord's decision to rebuild or restore the Building, the Building shall be
deemed to be capable of being rebuilt or restored within the said 180 days and
Landlord shall be deemed to have elected to rebuild or restore the Building.
17.04 If Landlord is obliged or elects or is deemed to have elected to
rebuild or restore the Building, this Lease will remain in full force and effect
and Tenant shall be entitled to an abatement of Rent and additional rent from
the date of the occurrence of the damage or destruction in proportion to the
part of Premises of which Tenant has been deprived until the Building or part
thereof so damaged or destroyed is, in the opinion of Landlord's architect, fit
for occupancy. In such case, Landlord agrees that the Building will be restored
or rebuilt at its cost with due dispatch to substantially the same condition in
which the Building was initially delivered to Tenant. However, in the event that
Landlord is obliged or elects or is deemed to have elected to rebuild or restore
the Building and such rebuilding or restoration is not completed within 180 days
after such obligation or election or deemed election, (subject to delays caused
by events described in section 18.02 hereof), then Tenant shall have the right
to terminate this Lease by written notice to Landlord after the expiration of
such 180 day period, and prior to the completion of the rebuilding or
restoration.
Notwithstanding the foregoing, in the event such damage or
destruction occurs within the last two (2) years of the Term, Tenant shall have
the right, exercisable by written notice to Landlord within sixty (60) days
after the damage or destruction, to terminate this Lease as of the date of the
occurrence of the event causing the damage or destruction, notwithstanding that
the Building may be restored or rebuilt within the said 180 days.
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17.05 If Landlord decides not to restore or rebuild the Building to the
same nature and quality structure, this Lease shall be terminated as of the date
of the occurrence of the event causing the damage or destruction.
17.06 In the event of the expropriation or other forceable taking or
condemnation by any competent authority for any purpose whatsoever of the whole
of the Premises or such part thereof which, in the opinion of both Landlord and
Tenant, acting reasonably, will render the remainder unsuitable or insufficient
for the economical conduct of Tenant's normal business operation, this Lease
shall cease and terminate from the date Tenant is forced to vacate the Premises
and all Rent and other payments for which Tenant is liable hereunder shall be
apportioned and paid in full to the date of such termination.
17.07 In the event of any expropriation or forcible taking or condemnation
by any competent authority for any purpose whatsoever of a part only of the
Premises which does not, in the opinion of both Landlord and Tenant, acting
reasonably, render the remainder of the Premises unsuitable or insufficient for
the economical conduct of Tenant's normal business operation, this Lease shall
remain in full force and effect with respect to the remainder of the Premises
and Landlord shall forthwith restore and repair the portion of the Premises not
expropriated to a tenantable condition. The Rent payable by Tenant hereunder
shall be reduced so as to give due allowance for the part expropriated according
to the nature and extent of such part.
17.08 Tenant shall have no claim in damages against Landlord relating to or
arising out of the expropriation, forceable taking or condemnation or arising
out of the cancellation of this Lease as a result thereof. Landlord and Tenant
shall cooperate, each with the other, in respect of any public taking of the
Premises or any part thereof so that, subject to the following rights of
Landlord (which include, without limitation, the right to receive compensation
for the Building or part thereof that is the subject of the public taking),
Tenant may receive the maximum award to which it is entitled in law for
relocation costs, business interruption and such other costs (including any
required higher rent in new premises) that it may be entitled to receive from
the expropriating authority and so that Landlord may receive the maximum award
for all other compensation arising from or relating to such public taking
(including all compensation for the Building or part thereof that is the subject
of the public taking).
SECTION XVIII NON-RESPONSIBILITY OF
LANDLORD AND TENANT
18.01 Landlord shall not be liable for any accident or injury (including
death) sustained by or for any loss of or damage to property belonging to
Tenant, its employees, servants, agents, subtenants or invitees which may result
at any time from any reason or cause whatsoever, other than the intentional or
gross fault of Landlord or its employees, servants, agents, subtenants or
invitees.
18.02 Except as otherwise expressly provided in this Lease or in any other
agreement entered into between Landlord and Tenant, Landlord will not be liable
in any manner to Tenant or to any other person claiming through Tenant for
Landlord's failure to perform any of its obligations hereunder or any damage
caused or required by strike, lock-out, riot, accident, government rule,
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regulation or order, act of God or of any enemy of the Queen, fire or other
casualty, cas fortuit, force majeure or any other cause or condition which is
beyond the reasonable control of Landlord (not including, however, delays in
issuance of permits necessary for the construction of the Building, delays
attributable to Landlord's general contractor or subcontractors or delays
attributable to unforeseen adverse site conditions that can be remedied by
Landlord without undue hardship or expense) but, upon such occurrence, Landlord
shall without delay take all reasonable steps to terminate or correct the event
or circumstance in question.
18.03 Notwithstanding anything else contained in this lease, Landlord
agrees to indemnify and hold Tenant harmless from and against any and all
claims, suits, actions, damages, costs, judgments and other expenses sustained
or incurred by Tenant in connection with any environmental matters in respect of
the Premises other than those resulting from acts or omissions by Tenant during
its occupancy of the Premises.
SECTION XIX INSURANCE
19.01 Landlord shall take out and maintain insurance on the Premises as
would a reasonably prudent landlord of similar property and all such policies of
insurance covering loss or damage to the Premises shall contain a waiver of
subrogation rights which Landlord's insurers may have against Tenant, Tenant's
insurers or persons for whom Tenant is at law responsible. Tenant shall pay to
Landlord, as additional rent upon demand, all insurance costs, premiums and
deductible payments relating to fire, casualty, liability, property damage,
boiler, loss of rental and such other forms of insurance as Landlord may, from
time to time, reasonably obtain for or in respect of the Premises, provided,
however, that Tenant shall not be responsible for any increase in the premium
payable by Landlord for any such insurance that results from any act of
negligence or fault on the part of Landlord. Landlord hereby releases and waives
any and all claims against Tenant or those for whom Tenant is in law responsible
with respect to any loss of or damage to the Premises required to be insured
against by Landlord hereunder, and agrees to indemnify and hold Tenant harmless
from any and all such claims.
19.02 Throughout the Term, Tenant shall take out and keep in force:
(a) comprehensive general liability insurance with respect to the business
carried on, in or from the Premises and the use and occupancy thereof
for bodily injury and death and damage to property of others in an
amount of at least two million dollars ($2,000,000);
(b) all-risks insurance including the perils of fire, extended coverage,
leakage from sprinkler and other fire protective devices, earthquake,
collapse and flood in respect to furniture, equipment, inventory and
stock-in-trade, fixtures and leasehold improvements located within the
Premises and such other property located in or forming part of the
Premises, including all mechanical or electrical systems (or portions
thereof) installed by Tenant in the Premises, the whole for the full
replacement cost (without depreciation) in each such instance;
(c) if any boiler or pressure vessel is operated in the Premises, boiler
and pressure vessel insurance with respect thereto;
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(d) business interruption insurance for a period of twelve (12) months;
and
(e) tenant's legal liability insurance.
19.03 All policies of insurance to be maintained by Tenant shall (i) be
in form reasonably satisfactory to Landlord, (ii) be placed with insurers
reasonably acceptable to Landlord, and (iii) provide that they will not be
canceled or permitted to lapse unless the insurer notifies both Tenant and
Landlord in writing at least thirty (30) days prior to the date of cancellation
or lapse. Each such policy shall name Landlord and any other party required by
Landlord, including, but not limited to, its property manager and hypothecary
creditors, as (an) additional insured(s) as its (their) interest(s) may appear.
Each comprehensive general liability insurance policy will contain a provision
of cross-liability or severability of interests as between Landlord and Tenant.
All other policies referred to above shall contain a waiver of subrogation
rights which Tenant's insurers may have against Landlord, Landlord's insurers
and persons under Landlord's care and control. Tenant hereby releases and waives
any and all claims against Landlord and those for whom Landlord is in law
responsible with respect to occurrences required to be insured against by Tenant
hereunder, and agrees to indemnify and hold Landlord harmless from and against
any and all such claims. Throughout the Term, Tenant shall furnish Landlord with
certificates of all such insurance policies and the renewals thereof. Tenant
shall, whenever it is requested to do so by Landlord, furnish certified copies
of the insurance policies.
19.04 Should Tenant fail to take out or keep in force the insurance
described in sections 19.02 and 19.03, Landlord will have the right to do so and
to pay the premiums therefor and in such event Tenant shall repay to Landlord
the amount paid as premiums as additional rent on demand.
SECTION XX DEFAULT
20.01 In any of the events following, namely:
(a) if Tenant shall fail to pay to Landlord when due, any instalment or
other amount of Base Rent, Real Estate Taxes, Taxes on Capital, or any
other additional rent payable under this Lease and such failure
continues beyond five (5) days after the date Landlord has notified
Tenant thereof in writing;
(b) if Tenant shall be declared dissolved, bankrupt or wound-up or shall
make any general assignment for the benefit of its creditors or take
or attempt to take the benefit of any insolvency, winding-up or
bankruptcy legislation or if a petition in bankruptcy or in winding-up
or for reorganization shall be filed by or against Tenant which is not
contested promptly by Tenant or if a receiver or trustee be appointed
for or enter into physical possession of the property of Tenant or any
part thereof;
(c) if Tenant shall assign, sublet or permit the use by others of the
Premises, in whole or in part, except in a manner herein permitted;
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(d) if any execution be issued against the property of Tenant pursuant to
a judgment rendered against Tenant;
(e) if Tenant shall fail to take possession of the Premises or if Tenant
should vacate or abandon the Premises;
(f) if any insurance carried by Landlord be canceled in consequence of the
business carried on by Tenant or in consequence of anything brought
into or stored in the Premises by Tenant, provided that Tenant is
given notice of the possibility of such cancellation;
(g) if Tenant fails to fulfil any other of its obligations hereunder
(other than those referred to in another or other paragraphs of this
section 20.01) and (i) the default is not rectified within the
specific delay applicable to the default in question stipulated in a
specific provision of this Lease, or, (ii) in the absence of any such
specific delay, Tenant has not rectified the default within ten (10)
business days after Landlord has given Tenant written notice of the
default stating with reasonable particularity the nature thereof, or
(iii) if the default referred to in sub-paragraph 20.01(g) (ii) is not
reasonably capable of being cured within such ten (10) business day
delay, Tenant does not commence to cure such default within said ten
(10) business day delay and thereafter proceed to cure same with all
due diligence;
then this Lease may be terminated ipso facto at the option of the Landlord upon
written notice to Tenant to such effect, Tenant to be in default by the mere
lapse of time for performing its obligations hereunder. It is expressly agreed
that such termination shall be in addition and without prejudice to all other
rights and recourses of Landlord as provided by law or in this Lease. Upon
termination, Tenant shall immediately vacate and surrender the Premises and all
of its rights therein and thereto and in and to the Lease to Landlord. Upon the
occurrence of any such event of default, Landlord may forthwith, without notice
or any form of legal process, and with or without termination of the Lease,
suspend any services and utilities, bolt the Premises and change the locks
thereof. Upon termination, Landlord may forthwith, without notice or any form of
legal process, re-enter upon and take possession of the Premises, remove or
cause to be removed therefrom any persons and property occupying same and re-let
the Premises to whomsoever it may choose and, recover from Tenant all amounts
due, expenses of such re-letting and Rent for the six (6) months next succeeding
the date of such termination or such longer period as may be allowed by law, all
of which shall immediately become due and payable, the whole without limiting,
diminishing or extinguishing the liability of Tenant.
20.02 In the event of the bankruptcy, insolvency, winding-up, dissolution
or reorganization of Tenant, there shall immediately become due and exigible in
favour of Landlord, on account of accelerated rent, an amount equal to the Rent
for a period of three (3) months next following the bankruptcy or insolvency or
for such longer period of time as may be allowed by any applicable bankruptcy or
insolvency legislation in force from time to time. Furthermore, in the event of
Tenant's continued occupancy of the Premises after the filing of a proposal or a
notice of intention to file a proposal pursuant to the provisions of the
Bankruptcy and Insolvency Act, S.C. 1992 C-27, as amended from time to time, or
any replacement legislation, and such continued occupancy commences on a day
which is not the first day of a calendar month, any amounts of Rent payable on a
monthly basis for such month and for any other partial month shall be calculated
on a per diem
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basis and be paid in advance. The rights of Landlord under this section 20.02
are in addition to and not in substitution for, nor shall they limit or
otherwise restrict, any other rights, claims and recourses that Landlord may
have, including, without limiting the generality of the foregoing, those
contained in section 20.01.
SECTION XXI ADDITIONAL PROVISIONS
(a) Landlord: In the event of any sale or sales of the Premises, Landlord
shall be and hereby is entirely released and relieved of all covenants
and obligations of Landlord hereunder, provided such purchaser agrees
to assume and carry out any and all covenants and obligations of
Landlord hereunder.
(b) Amendment of Lease: No assent or consent to changes in or waiver of
any part of this Lease shall be deemed or taken as made unless the
same be done in writing and attached or endorsed hereon by the
parties. No covenant, term or condition of the present Lease
stipulated in favour of Landlord shall be waived, except by express
written consent of Landlord, whose forbearance or indulgence in any
regard whatsoever shall not constitute a waiver of the covenant, term
or condition to be performed by Tenant; and until complete performance
by Tenant of the said covenant, term or condition, Landlord shall be
entitled to invoke any remedies available under this Lease or by law
despite such forbearance or indulgence.
(c) Punctual Payment: All sums owing by Tenant under this Lease not paid
when due shall thereafter bear interest until paid at a rate
equivalent to two percent (2%) above Landlord's borrowing rate from
its bank from time to time.
Landlord may impute any of Tenant's payments in payment of any sum
which has become due hereunder, regardless of any designation or
imputation by Tenant.
(d) Successors and Assigns: All the covenants herein contained shall be
deemed to have been made by and with the heirs, executors,
administrators and permitted assigns or successors of each of the
parties hereto, and if more than one Tenant, the covenants herein
contained on the part of Tenant shall be construed as being solidary
and where necessary reference to Tenant as being of the masculine
gender or in the singular number shall be construed as being in the
feminine or neuter gender or in the plural number.
(e) Brokerage Commission: As part of the consideration for the granting of
this Lease, Tenant represents and warrants that, with the exception of
the Real Estate Broker, if any, named in Section 1.01 of this Lease,
no broker, agent or other intermediary introduced the parties or
negotiated or was instrumental in negotiating or consummating this
Lease. Landlord shall be responsible for any fees payable to the Real
Estate Broker.
(f) Notice and Demands: Any notice or demand given by Landlord to Tenant
shall be deemed to be duly given when served upon Tenant personally,
on the business day following
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transmission when faxed to Tenant, or on the fourth (4th) business day
after mailing when mailed to Tenant at the Address for Notice.
(g) Publication of Lease: This Lease shall not be published at length but
only by short-form version thereof and then only after the form and
terms of such short-form version thereof have been approved by
Landlord, the whole at the cost of Tenant, including the cost of
publication and providing a copy to Landlord. Should this Lease be
published, Tenant shall, at the expiration or termination thereof,
cause same to be radiated at its expense, failing which Landlord will
have the right to cause such radiation and charge Tenant with the cost
of same.
(h) Additional Rent: Subject to any other provision of this Lease
expressly stipulating the contrary, all amounts payable to Landlord by
Tenant in virtue of this Lease, with the exception of the Rent, shall
be additional rent and collectible as such.
(i) Payment Requirements: Tenant shall pay all amounts which it is
required to pay in virtue of this Lease in lawful money of Canada to
Landlord at its offices in ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ or at such other
place or to such other person as may be specified from time to time by
Landlord, without prior demand for payment thereof being necessary and
without any deduction, abatement, diminution, subrogation, set-off or
compensation whatsoever.
(j) Prior Agreements: The present lease cancels and supersedes any and all
prior letters of intent, leases and agreements, written or otherwise,
entered into by Landlord and Tenant regarding the Premises leased
hereunder.
(k) Severability: If for any reason whatsoever, any term, obligation or
condition of this Lease or the application thereof to any person, firm
or corporation or to any circumstance is to any extent held to be or
is rendered invalid, unenforceable or illegal, then such term,
obligation or condition shall be deemed to be independent of the
remainder of this Lease and to be severable and divisible therefrom,
and its invalidity, unenforceability or illegality shall not affect,
impair or invalidate the remainder of this Lease or any part thereof
and the remainder of this Lease not affected, impaired or invalidated
will continue to be applicable and enforceable to the fullest extent
permitted by law against any person, firm or corporation and to any
circumstance other than those as to which it has been held or rendered
invalid, unenforceable or illegal.
(l) Governing Law: This Lease shall be construed and interpreted in
accordance with the laws of the Province of Quebec.
(m) Captions: The captions appearing in 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 any provision
thereof.
(n) Time of the Essence: Except where otherwise provided by an express
provision of this Lease, Tenant shall be in default by the mere lapse
of time for performing its obligations hereunder.
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(o) Rights Cumulative: No right, remedy or recourse conferred upon or
reserved to Landlord by this Lease is intended to be exclusive of any
other right, remedy or recourse conferred upon or reserved to Landlord
by this Lease or by law, all of which rights, remedies and recourses
shall be cumulative and not in the alternative.
(p) Currency: Unless otherwise indicated, all amounts expressed herein in
dollars shall be deemed to be expressed in Canadian dollars.
(q) Waiver: Tenant specifically waives the provisions of Article 1883 of
the Civil Code of Quebec and Article 65.2 of the Bankruptcy and
Insolvency Act (Canada).
SECTION XXII SECURITY
22.01 As security for the performance by Tenant of its obligations here-
under, Tenant shall provide to Landlord concurrently with the execution of this
Lease and shall have renewed as often as necessary thereafter, an irrevocable
letter of credit issued by the NationsBank or such other bank as may be agreed
upon by Landlord and Tenant, in Canadian or US dollars as follows:
(a) for the first ten (10) years of Term, the letter of credit shall be
for an amount equivalent to CDN $800,000;
(b) for the eleventh (11th) through the fifteenth (15th) year of the Term,
the letter of credit shall be for an amount equivalent to CDN
$500,000; and
(c) for the sixteenth (16th) through the twentieth (20th) year of the
Term, the letter of credit shall be for an amount equivalent to CDN
$250,000.
22.02 The Canadian dollar equivalent of a letter of credit issued in US
dollars shall be computed at the rate of exchange published by the issuing bank
on the date of its issuance and if such rate of exchange thereafter changes such
that the Canadian dollar equivalent of the amount of the letter of credit is
less than ninety-five percent (95%) of the relevant amount stipulated in section
22.01, Tenant shall have the amount of the letter of credit increased to such
Canadian dollar equivalent amount.
22.03 If partial drawings are made under the letter of credit as per-
mitted thereunder and hereunder, Tenant shall ensure that the amount of the
letter of credit is restored to the amount provided for in section 22.01, within
ten (10) days thereafter.
22.04 Landlord shall reimburse Tenant the cost of maintaining such letter of
credit, up to an amount equal to one-half of one percent (0.5%) of the amount
stipulated in the letter of credit. Such reimbursement shall be paid by Landlord
granting to Tenant a credit against Rent owing hereunder on each anniversary of
the Commencement Date.
22.05 Landlord shall be entitled to draw on the letter of credit only in
the events and only to the extent provided hereafter:
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(a) if an event of default has occurred under this Lease and any notice
and cure periods have expired, Landlord shall be entitled to demand
payment under the letter of credit up to the amount owing by Tenant
under this Lease at the time of the demand;
(b) if at least fifteen days prior to the expiration date of the letter of
credit, Tenant has not furnished to Landlord evidence that the letter
of credit has been renewed (or, if the letter of credit is subject to
automatic renewal, Landlord is notified at any time by the issuer of
the letter of credit that it will not be renewed) and the letter of
credit has not been replaced, then Landlord shall be entitled, within
fifteen (15) days prior to the expiration date of the letter of
credit, and without further notice to Tenant, to draw on the full
amount of the letter of credit, but only in accordance with the terms
and conditions set out in section 22.06; and
(c) if Tenant fails to have the amount of the letter of credit restored as
required by section 22.03, and after any notice and cure periods have
expired, and such amount has not been replaced, then Landlord shall be
entitled to draw on the full amount of the letter of credit, but only
in accordance with the terms and conditions set out in section 22.06.
22.06 The terms and conditions referred to in paragraphs 22.05 (b) and (c)
are as follows:
(a) the funds received by Landlord under the letter of credit are invested
in an interest-bearing account;
(b) the interest earned on such funds shall accrue to the benefit of
Tenant;
(c) such funds so held by Landlord and the interest accrued thereon shall
be paid forthwith to Tenant upon the restoration of the amount of the
letter of credit or upon the renewal of the letter of credit or the
issuance of a replacement letter of credit or other security
acceptable to Landlord; and
(d) if an event of default should occur under this Lease which extends
beyond the expiration of any notice and cure periods provided for
herein, while the funds are so held by Landlord, the amount to be paid
to Tenant pursuant to paragraph (c) above shall be reduced by the
amount owed by Tenant to Landlord as a consequence of such event of
default, and such amount so owed by Tenant to Landlord shall cease to
be subject to the terms of this section 22.06.
SECTION XXIII EXPANSION
23.01 Tenant shall have the right (subject to the approval of Landlord's
mortgage lender which approval Landlord shall use reasonable efforts to obtain)
to require Landlord to expand the warehouse and manufacturing portion of the
Building by up to 25,000 square feet. In the event that Tenant exercises such
option, the Term shall be extended to the extent necessary to ensure that there
will remain at least fifteen years from the completion of the expansion to the
expiration of the Term. Landlord shall determine the rent that would be payable
for such expansion taking into account the cost of the expansion, the return on
investment required by Landlord, acting reasonably, and prevailing interest
rates and real estate investment market conditions, as well as the rent for the
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additional term for the original Building taking into account prevailing
interest rates and real estate investment market conditions, and shall
communicate such amounts to Tenant. If the parties do not agree on the rent,
Tenant shall be deemed to have withdrawn its request for the expansion.
SECTION XXIV SCHEDULES
24.01 The Schedules are included in and form an integral part of this Lease.
SECTION XXV ASSIGNMENT TO TENANT'S LENDER
25.01 Landlord consents to the assignment by Tenant of its interest in this
Lease to Tenant's secured lenders as security for Tenant's obligations to such
lenders, provided that the terms and conditions of any such assignment are
reasonably satisfactory to Landlord and that the obligations of Tenant hereunder
shall continue to be performed. In addition, Landlord shall enter into such
agreements with Tenant's secured lenders as may be reasonably requested by such
lenders including, without limitation, agreements waiving Landlord's lien,
hypothec or charge over any equipment, machinery, inventory and other movable
property of Tenant located on the Premises.
SECTION XXVI SUBORDINATION
26.01 Landlord declares that it may assign its rights under this Lease to a
lending institution or any mortgagee, hypothecary creditor or lender as
collateral security for any loan and in the event that any such assignment is
given and executed by Landlord and notification thereof is given to Tenant,
Tenant agrees that it will, if and whenever reasonably required to do so by
Landlord, subordinate this Lease to any such mortgage, hypothec or loan arranged
by Landlord on the security of the Premises, provided that such assignee or
holder of such mortgage, hypothec or loan delivers to Tenant a "non-disturbance"
agreement in form reasonably satisfactory to Tenant whereby such assignee or
holder agrees that so long as Tenant continues to pay the Rent and otherwise
performs its obligations under this Lease, and no default exists hereunder
(which continues beyond the expiration of any notice and cure period provided
for herein), Tenant may remain in quiet possession of the Premises in accordance
with the terms of this Lease.
26.02 If this Lease is not published prior to the rights of the lender or
lenders, if any, providing financing for Landlord's acquisition of the Land or
development and construction of the Building thereon, then Tenant's obligations
hereunder are conditioned upon Tenant receiving within sixty (60) days after the
date hereof an acceptable non-disturbance agreement from such lender or lenders
whereby such lender or lenders agree to the above non-disturbance provisions.
26.03 Tenant agrees that it will at any time and from time to time upon no
less than ten (10) business days prior written notice, execute and deliver to
Landlord in form reasonably acceptable to Tenant, a statement in writing
certifying that this Lease has been validly executed and delivered by Tenant
pursuant to due corporate action properly taken by it and is unmodified and in
full force and effect (or, if modified, stating the modification and stating
that same is in full force and effect
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as modified), the Commencement Date and the Termination Date, the amount of Base
Rent and any other amounts then being paid as additional rent hereunder, the
dates to which, by instalment or otherwise, Base Rent and additional rent
payable hereunder have been paid, whether or not there is any existing default
on the part of Landlord of which Tenant is aware and such other matters as
Landlord or its lender or any prospective purchaser may reasonably request. Any
such statement may be conclusively relied upon by any prospective purchaser or
purchasers or lender.
SECTION XXVII ENGLISH LANGUAGE
27.01 The parties have requested that this Lease be prepared in the English
language. Les parties ont demande que le present Bail soit redige en anglais.
SECTION XXVIII ARBITRATION
28.01 In the event the parties are unable to resolve any dispute arising out
of or in connection with this Lease, the parties agree that such dispute shall
be submitted to arbitration by written notice given by one party to the other
setting out with reasonable detail the issue in dispute. Within ten (10)
business days after such notice, the parties shall agree on the appointment of
one arbitrator. If the parties cannot agree on an arbitrator within such delay,
each party shall, within ten (10) business days thereafter, each choose one
arbitrator, and within five (5) business days after both such arbitrators are
chosen, the two of them shall choose a third arbitrator. The decision of the
arbitrator or arbitrators, as the case may be, shall be rendered within ninety
(90) days after the appointment of the panel and shall be final and binding and
non-appealable, except for the reasons set forth in article 946.4 of the Quebec
Code of Civil Procedure. All proceedings shall take place in Montreal and the
language of the arbitration shall be English. The arbitration proceedings shall
be governed by Book VII of the Quebec Code of Civil Procedure to the extent not
inconsistent with the provisions of this section 28.01. Each party shall pay its
own costs and share equally the costs of the arbitration.
SECTION XXIX SURETYSHIP
29.01 As security for the performance by Tenant of its obligations here-
under, Tenant shall provide to Landlord concurrently with the execution of this
Lease and shall cause to remain in force throughout the Term, an agreement of
suretyship or guarantee executed by DT Industries, Inc. in favour of Landlord
guaranteeing the performance by Tenant of its obligations under this Lease.
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IN WITNESS WHEREOF the parties have signed these presents at the place
and on the date indicated below.
SIGNED by LANDLORD on the 30th day of April 1997.
TEECAN PROPERTIES INC.
(signed ▇▇▇▇ ▇▇▇▇▇▇▇)
--------------------------
Witness: ▇▇▇▇ ▇▇▇▇▇▇▇
(signed ▇▇▇▇▇ ▇▇▇▇▇) Per: (signed ▇▇▇▇▇▇▇ ▇▇▇▇▇▇)
-------------------------- ------------------------------
Witness: ▇▇▇▇▇ ▇▇▇▇▇ ("Landlord")
SIGNED by TENANT on the 30th day of April 1997.
▇▇▇▇▇▇ CANADA INC.
(signed ▇▇▇▇▇ ▇▇▇▇▇)
--------------------------
Witness: ▇▇▇▇▇ ▇▇▇▇▇
(signed ▇▇▇▇ ▇▇▇▇▇▇▇) Per: (signed ▇▇▇▇▇ ▇▇▇▇▇▇)
-------------------------- ------------------------------
Witness: ▇▇▇▇ ▇▇▇▇▇▇▇ ("Tenant")
