EXHIBIT 10.32
LEASE
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇.▇.
THIS INDENTURE made effective as of the 1st day of June, 2000.
BETWEEN:
DISCOVERY PARKS INCORPORATED having an office at #602 - 1401 West
----------------------------
Broadway, in the City of Vancouver, in the Province of British
Columbia, V6H 1H6
(the "Lessor")
AND:
▇▇▇▇▇▇▇▇▇.▇▇▇, INC. having an office at 208 - 4400 Dominion Street,
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Burnaby, in the Province of British Columbia, V5G 4G3
(the "Lessee")
WHEREAS:
A. The Lessor is the owner of the Land and Building described herein; and
B. The Lessor has agreed to lease a portion of the Building to the Lessee on
the terms herein contained.
WITNESSES that in consideration of the rents, covenants and agreements
hereinafter reserved and contained on the part of the Lessee to be paid,
observed and performed the Lessor hereby demises and leases the Premises to the
Lessee as hereinafter described all on the terms, conditions and covenants as
hereinafter set forth.
1.0 PREMISES
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1.1 The Premises means that portion of the Land located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ comprising 16,500 square feet on the third floor and
8,250 square feet on the second floor of the Building situated thereon, as set
out in Schedule "A" attached hereto.
2.0 TERM
----
2.1 To have and to hold the Premises for and during the term of five (5)
years commencing on the 1/st/ day of September, 2000, and expiring on the
31/st/ day of August, 2005.
3.0 RENT
----
3.1 Yielding and paying therefore unto the Lessor at its office at #602 -
1401 West Broadway, Vancouver, B.C., V6H 1H8, or at such other place as the
Lessor may direct in writing, rent for Premises in the sum set out hereunder,
payable in advance on the first day of each and every month of the Term as
follows:
Period Annual Net Rent Monthly Net Rent
------ --------------- ----------------
TERM $420,750.00 $35,062.50
($17.00 per square feet)
3.2 Notwithstanding the foregoing, the Lessee shall not be required to pay
Annual Net Rent for the 25/th/ or 37/th/ month of the Term except for applicable
Operating Expenses and Taxes.
3.3 The Lessor acknowledges receipt from the Lessee of a deposit of
$105,930.00 which shall be applied on account of the payment of rent, operating
costs and taxes for the first and last months of the term.
3.4 Upon determination of the actual Rentable Area by the Lessor's architect,
the Rent shall be adjusted accordingly on the basis of the actual square footage
multiplied by $17.00 per square foot per annum.
4.0 USE OF DEMISED PREMISES
-----------------------
4.1 The Lessee will use the Premises for Research and Development and for
related business activities including on-line computer maintenance and support
and for no other purpose without the written consent of the Lessor and, subject
to the provisions of Section 6.11 of this Lease, will not permit any part of the
Premises to be used or occupied by any persons other than the Lessee, its
employees and invitees.
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5.0 DEFINITIONS
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5.1 In this Lease, unless otherwise stated, the following terms will have
the following meanings:
(a) "Annual Net Rent" means the rent described in Section 3.1 hereof;
(b) "Building" means the building intended for the carrying on of Research
and Development uses as herein defined, located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇.▇., and in which the Premises are situated;
(c) "Business Days" means the Monday to Saturday inclusive in each week,
save and except any such day that be declared, by lawful authority, a
holiday;
(d) "Land" means that certain parcel or tract of land situate in Burnaby
and more particularly known as a portion of PID: ▇▇▇-▇▇▇-▇▇▇, ▇▇▇ ▇,
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇, Group 1, NWD, Plan LMP41517;
(e) "Lessee's Taxes" means all taxes, licenses, rates, duties and
assessment imposed or levied by lawful authority covering any period
during the Term and relating to or in respect of the business or
profession of the Lessee or relating to or in respect of improvements,
fixtures, machinery or chattels or equipment brought onto the Premises
by the Lessee or being the property of the Lessee or relating to or in
respect of improvements to the Premises built, made or installed by
the Lessee or at the Lessee's request, or being any special or
additional taxes, licenses, rates, duties and assessments which the
Lessee or any sub-Lessee or licensee of the Lessee shall elect or
cause to have the Premises or any part thereof assessed or charged
with, whether any such taxes, licenses, rates, duties and assessments
are payable in law by the Lessee or by the Lessor and whether such
taxes, licenses, rates, duties and assessments are included by the
taxing authority in the taxes, licenses, rates, duties and assessments
or levied on or with respect to the Building.
(f) "Normal Business Hours" means the hours on Business Days from 7:30
a.m. to 5:30 p.m. from Monday to Friday inclusive and 8:00 a.m. until
1:00 p.m. on Saturday;
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(g) "Offer to Lease" means the offer to lease made by the Lessee and
accepted by the Lessor dated March 14, 2000;
(h) "Operating Expense" means, without duplication, all expenses
chargeable against income in connection with the operation,
maintenance and repair of the Building, including all common area,
amenity areas, the parking areas, and the Land and, without
restricting the generality of the foregoing, includes;
(i) fuel and operating expenses incurred in cleaning, heating, and
ventilating the Building and providing water, natural gas,
electrical service, telephone service, and sanitary and storm
sewer services;
(ii) operating expenses incurred in cleaning and maintaining,
including rubbish and snow removal, the sidewalks, roads,
street lights, paving, and landscaping on the Land;
(iii) water rates, special taxes and licenses (other than the Taxes
or Lessee's Taxes or taxes on income or profits), Building
insurance, the common areas and other utility expense;
(iv) salaries and wages (including employees' benefits, worker's
compensation and other items of a similar nature) and the cost
of service contracts incurred in the cleaning, maintenance,
repair and operation of the Building and the Land and payments
made for security services;
(v) the cost of building and cleaning supplies;
(vi) the cost of painting interior areas, not normally rented to
tenants and costs of painting and otherwise maintaining the
parking areas and the outside of the Building;
(vii) the cost of an identification sign, if required; and
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(viii) an allowance for management and overhead expenses of the
Lessor not exceeding 5.0% of the gross income of the
Building.
(ix) the Lessor's costs of obtaining and maintaining insurance
for liability, fire and other casualties in respect of the
Building; and
(x) the costs incurred by the Lessor in making capital
improvements to the Building which result in reduction of
these Operating Expenses where such reduction during the
remainder of the Term is greater than the current
depreciated portion of such costs; and
Provided always that Operating Expenses shall not include leasing
commissions, corporation capital tax or other capital taxes,
depreciation, cost of structural repairs to the Building, interest
on debt, or capital retirement of debt or any amounts directly
chargeable by the Lessor to any Lessee or Lessees as otherwise
provided in this Lease.
(i) "Premises" means that portion of the Building described in Section
1.0 and shown outlined on Schedule "A";
(j) "Proportionate Share" means the ratio which the Rentable Area of the
Premises bears to the total Rentable Area of all rentable premises
in the Building;
(k) "Pro Rata Portion" as applied to any amount means the Proportionate
Share for the time for which the calculation is made as a fraction
of whole of the period contemplated in the Lease;
(l) "Rentable Area" in the case of Premises occupying a whole floor,
shall include the area occupied, measured from the glass line of the
exterior glazing and shall include elevator lobbies, washrooms,
electric and telephone closets, janitor's closets, and other closets
within and exclusively serving that floor; in the case of Premises
occupying less than a whole floor, shall include the area occupied
measured from the glass line of exterior glazing to the office side
of corridor walls and to the center of partitions separating the
Premises from adjoining Premises, but in no case shall any rentable
area include mechanical equipment areas, the lobby and entrances on
the ground floor, subsurface areas, stairs (unless installed
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for the exclusive benefit of a tenant), elevator shafts, flues,
stacks, pipe shafts or vertical ducts and the wall enclosing them;
(m) "Research and Development" means the carrying on or application of
scientific or technological research and development as described in
the zoning by-laws of the City of Burnaby applicable to the Lands in
cooperation with governments or business and industry or foundations
or technological institutions or universities or other educational
institutions in the application of science and technology for the
development of industry in British Columbia and shall, subject to the
other terms of this Lease, include the right of the Lessee to develop
and construct prototypes of goods or products, for the purpose of
further research, development and testing as part of the carrying on
of the Research and Development. In the process of developing the
scientific or technological research and development, certain goods
and products may be offered for sale;
(n) "Taxes" mean all taxes, rates and assessments, whether general or
special, levied or assessed by the municipal authority for such
purposes payable by the Lessor in respect of the Building and the Land
and include any other taxes, rates and assessments payable by the
Lessor which are imposed in substitution of the foregoing taxes, rates
and assessments as finally determined for each calendar year as a
result of assessment, appeal or judicial review and include any
reasonable legal fees or appraiser's fees incurred by the Lessor in
respect of such final determination; and
(o) "Term" means the term of this Lease described in Section 2.0.
6.0 COVENANTS OF LESSEE
-------------------
The Lessee covenants with the Lessor:
6.1 To pay rent;
6.2 To pay the cost of electricity, gas and other utilities used within
the Premises, such cost to be paid by the Lessee as and when due.
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6.3 Subject to Section 12.0, to repair the Premises, reasonable wear and
tear, structural repairs, and damage by fire, lightning and other casualties
against which the Lessor is insured only excepted.
6.4 That the Lessor may enter and view the state of repair and that the
Lessee will repair according to notice save as aforesaid.
6.5 That the Lessee will leave the Premises in good repair, save as
aforesaid.
6.6 If the Lessee fails to repair in accordance with the provisions
hereof, the Lessor may on 10 days prior written notice except in the case of an
emergency enter the Premises and make the required repairs and, for that
purpose, the Lessor may bring and leave on the Premises all necessary tools,
material and equipment and the Lessor will not be liable to the Lessee for any
inconvenience, loss, injury or damages suffered by the Lessee thereby, unless
caused by the negligence of the Lessor or those for whom the Lessor is
responsible at law, and the expense of such repairs will be borne by the Lessee
which will pay it to the Lessor forthwith on demand.
6.7 To restore forthwith at its expense broken or damaged plate glass on
the Premises from time to time.
6.8 Not to do, suffer or permit any act or neglect which may in any manner
directly or indirectly cause injury to the Premises or to the Building of which
the Premises form a part or to any fixtures or appurtenances thereof, or which
may be or become a nuisance or interference with the comfort of any of the
occupants of the Building or which may in the opinion of the Lessor render the
Building or any part thereof less desirable or injure the reputation thereof as
a first-class office building.
6.9 Not to exhibit signs of any nature on exterior walls, doors or windows
of the Premises without the prior written approval of the Lessor, such approval
not to be unreasonably withheld or delayed. Notwithstanding the foregoing, the
Lessee will be allowed to display:
(a) a sign bearing its corporate name on top of the Building subject to
prior approval of the Lessor as to size, configuration and type and to
compliance with the by-laws of the City of Burnaby;
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(b) a sign on the standard building directory signage to be provided by
the Lessor; and
(c) one position on a monolith sign provided by the Lessor in front of the
Building.
6.10 Not to do or permit anything to be done whereby any policy of
insurance on the said Building or any part thereof placed by the Lessor or any
other Lessee in the Building may become void or voidable or whereby the premium
thereon may be increased, and if the Lessee is in breach hereof and as a result
of such breach any premium of any such policy is increased, the Lessee will
forthwith pay to the Lessor the amount of the increase in such premium, provided
that nothing herein will limit any other remedy of the Lessor or any other
Lessee provided this Section will not apply to the Lessee's proposed use of the
Premises by the Lessee.
6.11 The Lessee shall not assign or sublet the Premises in whole or in part
without the prior consent in writing of the Lessor, such consent not to be
unreasonably or arbitrarily withheld or delayed where the Lessee wishes to
assign or sublet to a responsible person or body corporate, which covenants to
carry on Research and Development in the Premises, provided that the Lessee, at
the time the Lessee requests the consent of the Lessor, delivers to the Lessor
such information in writing (the "Required Information") as the Lessor may
reasonably require respecting the proposed assignee or subtenant, provided
always that no such assignment or subletting will:
(a) in any manner release the Lessee from any covenant to be observed or
performed by it, and
(b) be made to any person, firm, partnership or corporation carrying on
any business which the Lessor is obliged to restrict by reasons of any
other lease or contract relating to the Building.
A change in control of the Lessee shall be deemed to be an assignment for
purposes of this section.
6.12 To keep the Premises free of rubbish and debris at all times and to
provide proper and sufficient receptacles for waste.
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6.13 Not to bring onto or release from the Premises any harmful or
hazardous wastes or materials as such may be defined under the Waste Management
Act, and to save harmless the Lessor from and against any claims or costs
arising out of a breach of this provision.
6.14 To abide by and comply with all laws, rules and regulations of every
municipal or other authority which in any manner relate to or affect the
business of the Lessee or the use of the Premises by the Lessee.
6.15 To pay the Lessor all charges for maintenance and cleaning of
electrical and lighting fixtures and fittings in the Premises and the same is
included in "Operating Expenses" herein. The Lessor will have the exclusive
right to attend to such maintenance and cleaning and may adopt a system of
periodical renewals on a group basis in accordance with good practice in this
respect.
6.16 To maintain at the Lessee's sole expense but for the common benefit of
the Lessor and the Lessee:
(a) comprehensive general public liability insurance including bodily
injury, death and property damage, on an occurrence basis with respect
to the use of the Premises and the Lessee's use and occupancy thereof
in an amount not less than $2,000,000.00;
(b) fire and extended coverage insurance on the Lessee's improvements to
the replacement cost thereof;
and such insurance to be in form and with insurers acceptable to the Lessor and
the Lessee will deliver promptly to the Lessor a copy of each such policy of
insurance if so required by the Lessor.
6.17 To immediately advise the Lessor and do all things necessary to remove
any dangerous condition from time to time existing on the Premises and arising
as result of the act of or omission of the Lessee, its agents or servants.
6.18 To indemnify and hold harmless the Lessor from and against all
actions, causes of action, suits, claims, demands, damage expense, liens or
rights of lien whatsoever arising out of
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the occupancy of the Premises hereunder save for negligence of the Lessor and
those for whom the Lessor is at law responsible.
6.19 To pay to the Lessor interest at 5% per annum above the rate of
interest declared from time to time by the main branch of HSBC bank Canada as
its `prime rate', compounded annually, on any amount not paid as and when due
hereunder until paid.
6.20 If the Lessee wishes to register this Lease in the appropriate Land
Title Office, the Lessee may do so at the Lessee's sole cost.
7.0 COVENANTS OF LESSOR
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The Lessor covenants with the Lessee:
7.1 For quiet enjoyment.
7.2 To complete the Building, including the special features described in
Schedule "B", to the extent required to allow the Lessee occupancy of the
Premises by the Commencement for purposes of completing it improvements.
7.3 To supply water and other utilities to the Premises for the normal and
reasonable requirements of the Lessee and at the Lessee's expense without, in
any case, being liable for any loss, damage or inconvenience resulting from
failure of the supply of utilities to the Building.
7.4 To provide, maintain and operate during Normal Business Hours an
efficient heating, ventilating and air conditioning system where provided in the
Building.
7.5 The Lessor shall take out or cause to be taken out and keep or cause
to be kept in full force and effect:
(a) "all risk" insurance on the Buildings and improvements in an amount
such as would be carried out by a prudent owner, subject to such
deductions and exceptions as the Lessor may determine, against fire
and such other hazards covered by policies normally in use from time
to time for buildings and improvements of a similar nature similarly
situated;
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(b) comprehensive public liability insurance in respect of the Building of
a kind and in an amount such as would be carried by a prudent owner,
subject to such deductions and exceptions as the Lessor may determine;
(c) loss or rental income insurance not exceeding rent and additional rent
for the Building of which the Premises form a part for a period not
exceeding one (1) year;
provided that nothing herein shall prevent the Lessor from insuring with broader
coverage.
7.6 Each of the Lessor and Lessee hereby waives all claims for recovery
from the other for any loss or damage to any of his, her or its property insured
under valid and collectible insurance policies to the extent of any recovery
collectible under such insurance subject to the limitation that this waiver
shall apply only when permitted by the applicable policy of insurance. The
parties further agree to use all reasonable efforts to have any and all material
damage insurance which may be carried endorsed with the following subrogation
clause:
"Any release from liability entered into by the insured prior to loss
shall not affect the right of the insured to recover."
8.0 ALTERATIONS AND IMPROVEMENTS
----------------------------
8.1 Save for the installation of trade fixtures and furnishings, the
Lessee will make no alterations, installations, removals, additions or
improvements in or about the Premises without the Lessor's prior written
consent, which consent will not be unreasonably withheld or delayed, and in the
event of such consent, all work is done at the Lessee's sole expense and at such
times and such manner as the Lessor may reasonably approve.
8.2 The Lessee will not suffer or permit any builders' liens to be filed
against the interest of the Lessor in the Land or the Premises by reason of
work, labour, services or material supplied or claimed to have been supplied to
the Lessee or for which the Lessee may be in any way obligated, and if any such
builders' lien will at any time be filed against the Land or the Premises
whatsoever, the Lessee will cause the same to be discharged of record within 20
days of the date the Lessee has knowledge of such filing. The Lessor may wish
to post security under the provisions of the Builders Lien Act or any
legislation replacing such Act.
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8.3 All articles of personal property and all business and trade fixtures,
machinery and equipment, cabinet work, furniture and movable or immovable
partitions owned or installed by the Lessee at the expense of the Lessee in the
Premises will remain the property of the Lessee and may be removed by the Lessee
at any time during the Term, provided that the Lessee at its expense will repair
any damage to the premises or the Building caused by such removal of the
original installation.
8.4 The Lessor may elect to require the Lessee to remove all or any part
of the business and trade fixtures, machinery and equipment, cabinet work,
furniture and movable and immovable partitions owned or installed by or on
behalf of the Lessee after the commencement of the Term (other than those which
constitute ordinary and reasonable commercial fixtures and improvements which
would be reasonably useable by other commercial tenants) at the expiration of
this Lease in which event such removal is done at the Lessee's expense and the
Lessee will, at its expense, repair any damage to the Premises or to the
Building caused by such removal.
8.5 If the Lessee does not remove the property set out in Section 8.5
forthwith after written demand by the Lessor, such property will, if the Lessor
elects, be deemed to become the Lessor's property and the Lessor may remove the
same at the same at the expense of the Lessee and the cost of such removal will
be paid by the Lessee forthwith to the Lessor on written demand and the Lessor
will not be responsible for any loss or damage to such property because of such
removal.
9.0 IMPROVEMENT OF PREMISES
-----------------------
9.1 The Lessor shall complete the improvements described in the Offer to
Lease prior to the Commencement Date. Any improvements undertaken by the Lessee
shall be completed in accordance with the terms of the Offer to Lease and its
Schedules.
10.0 SUBORDINATION
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10.1 This Lease will, at the request of the Lessor, be made subject and
subordinate to all mortgages which now or hereafter during the Term is recorded
in the appropriate Land Title Office as a mortgage against the Land and
Premises. The Lessee will execute promptly from time to time any assurance the
Lessor may properly require to confirm this subordination with respect to any
mortgage now or hereafter recorded provided that the Lessor uses reasonable
efforts to obtain a non-disturbance agreement from any Mortgagee in a form
acceptable to the Lessee, acting reasonably.
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10.2 Whenever required by any Mortgagee or a Trustee on behalf of a
Mortgagee of any mortgage as contemplated in Section 10.1, the Lessee will
attorn to and become a Lessee or Licensee of such Mortgagee or Trustee or any
purchaser from the Mortgagee or Trustee in the event of an exercise by the
Mortgagee or Trustee of its power of sale in the mortgage set out, for the then
unexpired residue of the Term upon all of the terms and conditions hereof
subject to the terms of any non-disturbance agreement.
11.0 PROPERTY ETC. DAMAGE
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11.1 The Lessor will not be liable for any injury or damage to persons or
property resulting from fire, explosions, failing plaster, steam gas,
electricity, water, rain, snow or leaks from any part of the Building or from
pipes, appliances or plumbing works or from the roof, street or subsurface or
from any other place unless caused by the negligence of the Lessor, its servants
or agents, or those for whom the Lessor is responsible at law.
11.2 The Lessee will reimburse and indemnify and save harmless the Lessor
for and from all expense, damages, loss or fines incurred or suffered by the
Lessor by reason of any breach, violation or nonperformance by the Lessee of any
covenant or provision of this Lease or by reason of damage which is caused by
the Lessee, its servants or agents.
11.3 The Lessee will give the Lessor immediate notice in case of fire or
accident in the Premises or in the Building of which the Lessee is aware.
12.0 DAMAGE TO OR DESTRUCTION OF PREMISES
------------------------------------
12.1 If the Premises are damaged by fire or other casualty or if the
Building is so damaged thereby restricting the use of the Premises then the rent
will ▇▇▇▇▇ in whole or in part according to the portion of the Premises which is
non-usable by the Lessee until such damage is repaired and the Lessee is able to
operate its business therefrom.
12.2 Except as provided in Section 12.3 if the Premises is damaged by fire or
other casualty, the damages to the Premises will be repaired by the Lessor at
its expense except that repairs to alterations or improvements made by the
Lessee will be performed by the Lessor at the expense of the Lessee and the
Lessee will at its own expense make all repairs and replacements of property
which the Lessee is entitled to remove pursuant to Section 8.3. All repairs
which the Lessor is required to make hereunder will be made with due diligence
provided that the Lessor will not be liable to the Lessee for any loss or damage
suffered by the Lessee as a result of any
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reasonable delay which may arise by reason of adjustment of insurance on the
part of the Lessor on account of labour troubles or any other cause beyond the
Lessor's control.
12.3 If the Premises are rendered untenantable by fire or other casualty
and if the Lessor decides not to restore the same or if the Building is so
damaged that the Lessor will decide not to restore it or it is determined by the
Lessor, acting reasonably, that the Building or the Premises cannot be restored
within 6 months of such damage, then in any of such events, the Lessor will,
within 45 days after such fire or other casualty, give to the Lessee a notice in
writing of such decision and within 30 days thereafter either the Lessor or
Lessee may elect to terminate this Lease by notice in writing, the Term will
expire forthwith, and the Lessee will vacate the Premises and surrender the same
to the Lessor. If the Lessor does not give notice as aforesaid and the Premises
or the Building, as the case may be, are not restored within six months from the
time of the fire or other casualty causing the damage (subject to such time
period being extended by the length of any reasonable delay which may arise by
reason of adjustment of insurance on the part of the Lessor on account of labour
troubles or any other cause beyond the Lessor's control) the Lessee may at its
option, to be exercised within 10 days of the termination of said period of six
months (or the termination of such later period as extended hereby) by notice in
writing, terminate this Lease forthwith. Upon the termination of this Lease
under the conditions provided in this clause the Lessee's liability for rent
will cease as of the day following the fire or casualty.
13.0 ACCESS TO DEMISED PREMISES
--------------------------
13.1 The Lessee will permit the Lessor to erect, build, use and maintain
unexposed pipes, ducts and conduits in and through the Premises. The Lessor its
servants and agents will have the right to enter the Premises at reasonable
times upon 48 hours written notice to examine the same and make such repairs,
alterations, improvements or additions as the Lessor may deem necessary or
desirable in the Premises or as the Lessor may be required to make by law or in
order to repair and maintain the Building, and the Lessor will be allowed to
take all material into the Premises that may be required therefor without the
same constituting eviction of the Lessee in whole or in part and the rent
reserved will in no way ▇▇▇▇▇ while said repairs, alterations, improvements, or
additions are being made by reason of interruption of the business of the
Lessee. The Lessor will exercise reasonable diligence as to minimize the
disturbance or interruptions of the Lessee's operations.
13.2 During the six months prior to the expiration of the Term or any
renewal term, the Lessor may exhibit the Premises during Normal Business Hours
to prospective tenants upon
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reasonable notice to the Lessee and for such purposes the Lessor will have the
right of entry to the Premises at any reasonable time and the Lessee at its
option may have any servant or agent present at the time of such entry. The
Lessor will have the right during the last six months of the Term to place upon
the Premises a notice of reasonable dimensions and reasonably placed so as not
to interfere with the business of the Lessee, stating that the Premises are for
rent and further provided that the Lessee will not remove such notice or permit
the same to be removed.
14.0 OPERATING EXPENSES AND TAXES
----------------------------
14.1 The Lessee will promptly pay the Lessee's Taxes as they become due.
14.2 If the Lessor is required by lawful authority or considers it
desirable to pay the Lessee's Taxes which the Lessee fails or neglects to pay,
the Lessee will pay the amount thereof to the Lessor forthwith after written
request thereof.
14.3 The Lessee will pay to the Lessor its Proportionate Share of Operating
Expenses and Taxes payable in 12 equal installments with the monthly payments of
rent as and when required hereunder. The Lessor will, within 90 days of its
year-end, provide the Lessee with annual statements as to Operating Expenses and
Taxes paid by the Lessee during the year. The Lessor will, at the Lessee's
request by written notice given within 90 days after receipt of such statements,
permit the Lessee to review invoices relating to those Operating Expenses
contained in the annual statements at a time or times convenient to the Lessor,
acting reasonably.
14.4 The Lessor may, at its option from time to time estimate the amount
which may be payable by the Lessee pursuant to Section 14.3 and the Lessee will
pay to the Lessor with the monthly payments of rent as and when required
hereunder its Proportionate Share thereof so that the Lessor will have
sufficient funds on hand to pay the Operating Expenses and Taxes as they become
due and payable. The Lessor will refund to the Lessee any amount of any
overpayment by the Lessee by reason that the estimate aforesaid paid by the
Lessee exceeds the actual amount payable by the Lessee.
14.5 The certificate of an independent certified accountant appointed by
the Lessor will in the event of a dispute be conclusive and binding upon the
Lessor and the Lessee as to any amount payable from time to time under this
Section 14.0 and the cost of obtaining such certificate is borne equally by the
Lessor and the Lessee.
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15.0 ADDITIONAL RENT AND PRO RATA PORTION OF PAYMENTS
------------------------------------------------
15.1 Any money payable by the Lessee to the Lessor hereunder other than the
rent expressed in Section 3.0 is deemed to be rent and is paid as Additional
Rent and is collectible as such and in the absence of any other provisions
hereunder, is payable with the next ensuing monthly installment of rent.
15.2 If the Term will commence or cease on a day other than the
commencement or end of any period contemplated herein or if any money is payable
hereunder for a period less than that contemplated in relation thereto, the
Lessee will pay to the Lessor its Pro Rata Portion of the rent or such payment
for the period.
16.0 DEFAULT
-------
16.1 The Lessee covenants with the Lessor that if the Lessee violates or
neglects any covenant, agreement or stipulation herein contained on its part to
be kept, performed or observed and any such default on the part of the Lessee
continues for 15 days after written notice thereof to the Lessee by the Lessor
(provided that if such default cannot reasonably be remedied within 15 days,
then the Lessee shall not be in default if the Lessee commences to remedy the
default within such 15 day period and proceeds with all reasonable diligence),
or if any payments of rent or any part thereof, whether the same are demanded or
not, are not paid within 5 days after written demand by the Lessor, or in case
the Premises are vacated or become vacated or remain unoccupied for seven days
then and in any such case the Lessor in addition to any other remedy now or
hereafter provided by law may at its option cancel and annul this Lease
forthwith and re-enter and may remove all persons and property and may use such
force and assistance in making such removal as the Lessor may deem advisable to
recover at once full and exclusive possession of the Premises and such re-entry
will not operate as a waiver or satisfaction in whole or in part of any right,
claim or demand arising out of or connected with any breach or violations by the
Lessee of any covenant or agreement on its part to be performed.
16.2 If the Term or any renewal thereof or any of the goods or chattels of
the Lessee are at any time seized or taken in execution or attachment by any
creditor of the Lessee or if the Lessor makes any assignment for the benefit of
creditors or becomes bankrupt or insolvent or takes the benefit of any
bankruptcy or insolvency legislation, the then current month's rent together
with the rent accruing for the next three months will immediately become due and
payable, and the Term or any renewal thereof will at the option of the Lessor
become forfeit and void, and it is lawful for the Lessor at any time thereafter
to re-enter into or upon the Premises or any part thereof in the name of the
whole and the same to have again, repossess and enjoy as of
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its former estate, notwithstanding anything herein contained to the contrary and
neither this Lease nor any interests therein nor any estate hereby created will
pass or enure to the benefit of any trustee in bankruptcy or any receiver or
assignee for the benefit of creditors or otherwise by operation of law.
17.0 DISTRESS
--------
17.1 Whensoever the Lessor is entitled to levy distress against the goods
and chattels of the Lessee it may use such force as it may deem necessary for
the purpose and for gaining admission to the Premises without being liable for
any action in respect thereof or for any loss or damage occasioned thereby and
the Lessee hereby expressly releases the Lessor from all action, proceedings,
claims or demand whatsoever for or on account or in respect of any such forcible
entry or any loss or damage sustained by the Lessee in connection therewith.
18.0 LESSOR'S EXPENSES ENFORCING LEASE
---------------------------------
18.1 If it is necessary for the Lessor to retain the services of a
solicitor or any other proper person for the purpose of assisting the Lessor in
enforcing any of its rights hereunder in the event of default on the part of the
Lessee which is substantiated by a court of law, it is entitled to collect from
the Lessee the cost of all such services including all necessary court
proceedings at trial or on appeal on a solicitor and own client basis as if the
same were rent reserved and in arrears hereunder.
19.0 WAIVER
------
19.1 The failure of either party to insist upon strict performance of any
covenant or condition contained in this Lease or to exercise any right or option
hereunder will not be construed as a waiver or relinquishment for the future of
any such covenant, condition, right or option.
19.2 The acceptance of any rent from or the performance of any obligation
hereunder by a person other than the Lessee will not be construed as an
admission by the Lessor of any right, title or interest of such person as a sub-
Lessee, assignee, transferee or otherwise in the place and stead of the Lessee.
19.3 The acceptance by the Lessor of part payment of any sums required to
be paid hereunder will not constitute waiver or release of the right of the
Lessor to payment in full of such sums.
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20.0 HOLD OVER
---------
20.1 If at the expiration of the Term the Lessee continues occupation with
the consent of the Lessor, the tenancy of the Lessee thereafter will, in the
absence of written agreement to the contrary, be from month-to-month only at a
rental per month equal to one-twelfth of the rental payable for the year
immediately proceeding such expiration, payable monthly in advance on the first
on the first day of each lease month and will be subject to all other terms and
conditions of this Lease.
21.0 INABILITY TO PERFORM
--------------------
21.1 The Lessor does not warrant that any service of facility provided by
it hereunder will be free from interruptions caused or required by maintenance,
repairs, renewals, modifications, strikes riots, insurrections, labour
controversies, force majeure, act of God or other cause or causes beyond the
Lessor's reasonable care and control. No such interruptions will be deemed an
eviction or disturbance of the Lessee's enjoyment of the Premises nor render the
Lessor liable in damages to the Lessee nor relieve the parties from their
obligations under this Lease provided that the Lessor will without delay take
all reasonable steps to remove the cause of such interruption.
22.0 RULES AND REGULATIONS
---------------------
22.1 The Lessee and its servants, employees and agents will observe
faithfully and comply strictly with such rules and regulations as the Lessor may
from time to time adopt, acting reasonably and provided at least 30 days prior
written notice of any such rules and regulations shall be given to the Lessee.
Nothing in this Lease contained will be construed to impose upon the Lessor any
duty or obligation to enforce the rules and regulations or the terms, covenants
or conditions in any other lease against any other tenant of the Building, and
the Lessor will not be liable to the Lessee for violation of the same by any
other tenant, its servants, employees, agents, visitors or licensees.
23.0 LESSOR'S RIGHT TO PERFORM
-------------------------
23.1 If the Lessee fails to perform any of the covenants or obligations of
the Lessee under or in respect of this Lease the Lessor may, upon giving the
notice required hereunder to the Lessee, perform or cause to be performed any of
such covenants or obligations or any part thereof. For such purpose, the Lessor
may do such things as may be requisite and may enter upon the Premises to do
such things and all expenses incurred and expenditures made by or on behalf of
the Lessor will be paid forthwith by the Lessee to the Lessor. If the Lessee
fails to pay the same, the Lessor may add the same to the rent and recover the
same by all remedies available
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to the Lessor for the recovery of rent in arrears provided that if the Lessor
commences or completes either the performance or the causing to be performed of
any of such covenants or obligations or any part thereof, the Lessor will not be
obliged to complete such performance of causing to be performed or be later
obliged to act in like fashion.
24.0 REMEDIES CUMULATIVE
-------------------
24.1 No remedy conferred upon or reserved to the Lessor herein by statute
or otherwise is considered exclusive of any other remedy but the same is
cumulative and is in addition to every other remedy available to the Lessor and
all such remedies and powers of the Lessor may be exercised concurrently and
from time to time and often as may be expedient by the Lessor.
25.0 LESSOR'S LIMIT OF LIABILITY
---------------------------
25.1 The term "Lessor" as used in this Lease so far as covenants or
obligations on the part of the Lessor are concerned is limited to mean the
Lessor as herein before set out, while it retains its interest in the Land and
Premises but upon a transfer of that interest, the Lessor is automatically
relieved after the date of such transfer of all personal liability arising out
of the requirement for performance of any obligations on the part of the Lessor
herein contained (except to the extent incurred prior to such transfer),
provided that this release from liability will become effective only if a
transferee will expressly assume, subject to the limitations of this Section,
all of the terms of this Lease to be performed on the part of the Lessor, it
being intended hereby that the obligations contained in this Lease on the part
of the Lessor is binding upon the Lessor, its successors and assigns, only
during and in respect of the respective successive periods of their interest in
the Land and Premises.
26.0 WHOLE OF AGREEMENT
------------------
26.1 The Lessee agrees that the Premises are leased by the Lessee without
any representations or warranties other than as contained in this Lease and
Offer to Lease and that no representative or Agent of the Lessor is or is
authorized or permitted to make any representations with reference hereto or to
vary or modify this Lease in any way, except in writing under seal, and that
this Lease contains all of the agreements and conditions made between the
parties hereto.
27.0 OPTION TO RENEW
---------------
27.1 If the Lessee duly and regularly pays said rent, plus GST, and
performs each and every of the covenants herein to be performed and observed by
the Lessee, the Lessor shall grant
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to the Lessee upon six (6) months' written notice prior to the expiration of the
term, a renewal lease for a term of five (5) years upon the same terms and
conditions contained herein, save as to rental, free rent, Leasehold Improvement
Allowance and/or any other inducement granted to the Lessor, plus GST, and this
option to renew clause. Rent for said renewal term shall be agreed upon between
the parties and shall be based on the fair market rental for premises of similar
size, quality and location at time of renewal, but shall not be less than the
rent payable during the last year of the term of this Lease. The Lessor and
Lessee shall attempt to agree on the fair market rental for the renewal term
during the three (3) month period immediately preceding the expiry of the
initial term. Failing agreement as to the rental rate, the rate shall be
determined by a single arbitrator under the Commercial Arbitration Act of
British Columbia.
28.0 RIGHT OF FIRST REFUSAL TO LEASE
-------------------------------
28.1 The Lessors hereby grants to the Lessee the right of first refusal to
lease additional premises on the second floor of the Building as such premises
become available during the term or any renewal of the term. As such premises
become available for lease, the Lessor shall give the Lessee written notice of
such availability including particulars of the market rental rate at which the
Lessor is prepared to lease such premises. The right of first refusal may be
exercised by the Lessee only by notice in writing delivered to the Lessor on or
before the date five (5) business days after receipt by the Lessee of the
Lessor's notice.
28.2 If the Lessee exercises its right of first refusal prior to June 20,
2000, the terms and conditions of this Lease shall apply equally to the terms of
lease of the second floor Premises.
29.0 TERMINATION OF LEASE IF NEW PREMISES
------------------------------------
29.1 At any time after the first anniversary of the Commencement Date, the
Lessor and the Lessee agree that this Lease may be surrendered and the Premises
vacated by the Lessee if the Lessor and Lessee execute and deliver a lease upon
mutually agreeable terms for alternative premises, of not less than 50,000
square feet, within any new building delivered by the Lessor within the
development known as "Discovery Park" in Burnaby, B.C.
30. USE OF COMMON AREAS/PARKING
---------------------------
30.1 With respect to the common areas and parking:
(a) The Lessor grants to the Lessee for the Term as an appurtenant part of
this Lease, for use by the Lessee and its agents, invitees, servants,
employees, licensees and
20
customers, in common with the Lessor and other tenants of the Building
and their respective agents, invitees, servants, employees, licensees
and customers, the non-exclusive right and licence to use the Common
Areas of the Building and the Land (the "Development") for the
purposes as provided herein and in accordance with good business
practice, upon and subject to the covenants and conditions hereinafter
expressed and in particular, without limiting the generality of the
foregoing, such right, servitude, right-of-way and licence of use
hereby granted to the Lessee shall include the right to use the
Parking Areas (including the means of pedestrian and vehicular access
and the entrances and exits to and from the Development included
therein, but excluding those portions thereof which constitute any
areas allocated to a tenant or licensee on a seasonal or temporary
basis while used and occupied) for the purposes of pedestrian and
vehicular access to and from the Development and the parking of
vehicles in parking spaces provided therein; and
(b) the Lessee may rent from the Lessor up to three (3) reserved parking
stalls per 1,000 square feet of leased space (in this case up to
seventy-five (75) stalls) at the following rates:
(i) for the whole first year of the Term Forty-five ($45.00) Dollars
per month per stall;
(ii) for the whole second year of the Term Fifty-five ($55.00)
Dollars per month per stall;
(iii) for the whole third year of the Term Sixty-five ($65.00)
Dollars per month per stall; and
thereafter including any renewal term validly in force at such monthly
rate per stall as may be agreed upon between the parties at the time
of entering into such renewal term based upon prevailing market rates.
31.0 TENANT IMPROVEMENT ALLOWANCE
----------------------------
31.1 For greater certainty, the tenant improvement allowance of $25.00 per
square foot described in the Offer to Lease shall be calculated on the Rentable
Area of the Premises as determined in accordance with this lease and shall be
paid by the Lessor firstly to the costs of the
21
leasehold improvements and voice data calling described in the Offer to Lease.
Prior to completing such work, the Lessee shall cause the contracts for the
supply of labour and materials to be tendered on a competitive basis so as to
ensure fair and reasonable pricing. After completion of the work and the Lessee
takes occupancy of the Premises, the Lessor shall credit to the rent payable by
Lessee the amount by which the cost of the work is less than $25.00 per square
foot to a limit of $5.00 per square foot. The Lessee shall have the right to
review the tenders and the accounts for the cost of the work and the Lessor
shall give reasonable consideration to suggestions of the Lessee that may
minimize the costs thereof.
31.2 Payment of the tenant improvement allowance shall be subject to a 10%
holdback until expiry of any applicable builders lien holdback.
32.0 LETTER OF CREDIT
----------------
32.1 The Lessee shall, on or before the commencement of the Term, deliver
to the Lessor an irrevocable unconditional letter of credit issued by a Canadian
chartered bank payable to the Lessor in an amount of $297,000. The letter of
credit shall be for an initial term of 1 year and shall be automatically renewed
for an additional term of 1 year. If the Lessee is in material default of any of
its obligations hereunder during the first 2 years of the Term, the Lessor shall
be entitled to make partial draws under the letter of credit and to apply the
proceeds thereof to the rent and additional rent then due. If any partial
drawdown is made during the first 2 years, the Lessee shall, within 15 days
thereafter, restore the letter of credit to the full amount of $297,000, failing
which the Lessor may convert the entire letter of credit to cash to be applied
on account of rent, additional rent, or to the Lessor's damages arising from the
Lessee's default hereunder.
33.0 NOTICES
-------
33.1 Any notice required or contemplated by any provision of this Lease or
which the Lessor or Lessee may desire to give to the other is sufficiently given
by personal delivery or by registered letter, postage prepaid and mailed in one
of the Canada Post Offices in the City of Vancouver, British Columbia, and
addressed to the party to whom such notice is to be given at the address of such
party as given in this Lease or at such other address as either party may notify
the other of in writing during the Term, if to the Lessee, addressed to the
Premises and any such notice is effective as of the day of such personal
delivery or as of the day four days following the date of such posting as the
case may be.
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34.0 INTERPRETATION
--------------
34.1 This Indenture is construed in accordance with laws of British
Columbia.
34.2 Where required the singular number is deemed to include the plural and
the neuter gender the masculine or feminine and the captions herein are for
convenience only and will not constitute a part of this Lease.
34.3 The definition of any words used in any Section of this lease will
apply to such words when used in any other Section hereof whenever the context
is consistent.
34.4 All measurements required to be carried out herein is in accordance
with the current BOMA Standard Methods of Measurement.
34.5 In case of more than one Lessee the said grants, covenants,
conditions, provisos, agreements, rights, powers, privilege and liabilities is
construed and held to be several as well as joint.
34.6 THIS INDENTURE will enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, successors
and permitted assigns.
IN WITNESS WHEREOF each of the parties hereto has affixed its hand or
corporate seal to these presents on the day and year first above written.
THIS LEASE is not valid unless countersigned by the Lessor.
THE COMMON SEAL of DISCOVERY PARKS
INCORPORATED was hereunto affixed in the
presence of:
C/S
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Authorized Signatory
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------
Authorized Signatory
23
THE COMMON SEAL of ▇▇▇▇▇▇▇▇▇.▇▇▇, INC. was
hereunto affixed in the presence of:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ C/S
--------------------------
Authorized Signatory
/s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------
Authorized Signatory
24
SCHEDULE "A"
Premises
SCHEDULE "B"
Premises
Special Building Features
1. Availability of:
(a) high speed internet access up to 100 Mbps (significant cost
discounts);
(b) Custom advanced internet security (firewall, proxy, NAT, filtering);
(c) Policy based bandwidth management; and
(d) Advanced telecommunication features.
2. Showers and lockers located on the P1 level of the Building;
3. On-site restaurant (subject to leasing);
4. Fourteen (14) bike lockers available. Access by security card;
5. Common meeting/lounge area on main floor with fireplace;
6. Opening windows;
7. Advance building security - card reader access; and
8. Panic pull device in parkade.
26
