OFFICE LEASE RT TWENTY-SIXTH PENSION PROPERTIES LIMITED (Landlord) - and - ULTIMATE SOFTWARE GROUP OF CANADA, INC. (Tenant) - and - ULTIMATE SOFTWARE GROUP, INC. (Indemnifier) Suite 801 277 Wellington Street West Toronto, Ontario Rentable Area:...

OFFICE LEASE

RT TWENTY-SIXTH PENSION PROPERTIES LIMITED

(Landlord)

- and -

ULTIMATE SOFTWARE GROUP OF CANADA, INC.

(Tenant)

- and -

ULTIMATE SOFTWARE GROUP, INC.

(Indemnifier)

Suite 801

000 Xxxxxxxxxx Xxxxxx Xxxx

Toronto, Ontario

Rentable Area:  Approximately two thousand, one hundred and fifteen (2,115) square feet

Date:  September 4, 2009

I N D E X

ARTICLE I - FUNDAMENTAL PROVISIONS

1.1         Landlord ......................................................................................................................................................................................................................................................................................................................................................................................1

1.2         Tenant ..........................................................................................................................................................................................................................................................................................................................................................................................1

1.3         Building .......................................................................................................................................................................................................................................................................................................................................................................................1

1.4         Premises 

1.5         Term .............................................................................................................................................................................................................................................................................................................................................................................................1

1.6         Basic Rent ...................................................................................................................................................................................................................................................................................................................................................................................1

1.7         Additional Rent ...........................................................................................................................................................................................................................................................................................................................................................................2

1.8         Deposit .........................................................................................................................................................................................................................................................................................................................................................................................2

1.9         Rent Commencement Date .......................................................................................................................................................................................................................................................................................................................................................2

1.10       Indemnifier .................................................................................................................................................................................................................................................................................................................................................................................2

1.11       Fundamental Provisions ...........................................................................................................................................................................................................................................................................................................................................................2

ARTICLE II - PREMISES

2.1         Lease ...........................................................................................................................................................................................................................................................................................................................................................................................2

2.2         Use: .............................................................................................................................................................................................................................................................................................................................................................................................2

2.3         Rules and Regulations: ...........................................................................................................................................................................................................................................................................................................................................................2

2.4         Observance of Law:...................................................................................................................................................................................................................................................................................................................................................................2

2.5         No Waste or Nuisance: ...........................................................................................................................................................................................................................................................................................................................................................3

2.6         Common Areas: ........................................................................................................................................................................................................................................................................................................................................................................3

2.7         Easements: ................................................................................................................................................................................................................................................................................................................................................................................3

2.8         Covenants of Landlord and Tenant: ......................................................................................................................................................................................................................................................................................................................................3

ARTICLE III - TERM - POSSESSION

3.1         Term: . ........................................................................................................................................................................................................................................................................................................................................................................................4

3.2         Early Occupancy Period: .......................................................................................................................................................................................................................................................................................................................................................4

3.3         Delay in Possession: ..............................................................................................................................................................................................................................................................................................................................................................4

3.4         Surrender: ...............................................................................................................................................................................................................................................................................................................................................................................4

3.5         Overholding: ............................................................................................................................................................................................................................................................................................................................................................................4

3.6         Effect of Termination: ............................................................................................................................................................................................................................................................................................................................................................4

3.7         Acceptance of Premises: .......................................................................................................................................................................................................................................................................................................................................................4

3.8         Demolition: ..............................................................................................................................................................................................................................................................................................................................................................................4

3.9         Relocation: ...............................................................................................................................................................................................................................................................................................................................................................................5

ARTICLE IV - RENT

4.1         Payment: ...................................................................................................................................................................................................................................................................................................................................................................................5

4.2         Basic Rent: ...............................................................................................................................................................................................................................................................................................................................................................................5

4.3         Deposit: .....................................................................................................................................................................................................................................................................................................................................................................................5

4.4         Proportionate Share of Realty Taxes and Operating Costs: ...........................................................................................................................................................................................................................................................................................6

4.5         Utilities - Light Fixtures: .......................................................................................................................................................................................................................................................................................................................................................7

4.6         Additional Services: ................................................................................................................................................................................................................................................................................................................................................................7

4.7         General Provisions: ................................................................................................................................................................................................................................................................................................................................................................7

ARTICLE V - TAXES

5.1         Taxes Payable by the Landlord: ............................................................................................................................................................................................................................................................................................................................................8

5.2         Business and Other Taxes Payable by the Tenant: ..........................................................................................................................................................................................................................................................................................................8

5.3         Contesting Taxes: ...................................................................................................................................................................................................................................................................................................................................................................8

5.4         Alternate Methods of Taxation: ............................................................................................................................................................................................................................................................................................................................................8

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ARTICLE VI - MAINTENANCE, REPAIRS AND ALTERATIONS

6.1         General Statement: ..................................................................................................................................................................................................................................................................................................................................................................9

6.2         Responsibility of Tenant: ........................................................................................................................................................................................................................................................................................................................................................9

6.3         Tenant Not Responsible: .........................................................................................................................................................................................................................................................................................................................................................9

6.4         Responsibility of Landlord: ....................................................................................................................................................................................................................................................................................................................................................9

6.5         Inspection, Entry and Notice: .................................................................................................................................................................................................................................................................................................................................................9

6.6         Notify the Landlord: ...............................................................................................................................................................................................................................................................................................................................................................10

6.7         Alterations or Improvements: ..............................................................................................................................................................................................................................................................................................................................................10

6.8         Removal and Restoration: .....................................................................................................................................................................................................................................................................................................................................................11

6.9         External Changes: ..................................................................................................................................................................................................................................................................................................................................................................12

6.10       Trade Fixtures: .......................................................................................................................................................................................................................................................................................................................................................................12

6.11       Tenant's Signs: ......................................................................................................................................................................................................................................................................................................................................................................12

6.12       Directory Board:.....................................................................................................................................................................................................................................................................................................................................................................12

6.13       Landlord's Signs: ...................................................................................................................................................................................................................................................................................................................................................................12

6.14       Environmental Provisions: ....................................................................................................................................................................................................................................................................................................................................................13

6.15       Landlord's Alterations: .........................................................................................................................................................................................................................................................................................................................................................14

ARTICLE VII - STANDARD SERVICES

7.1         Heating and Air-Conditioning: .............................................................................................................................................................................................................................................................................................................................................15

7.2         Cleaning: ..................................................................................................................................................................................................................................................................................................................................................................................15

7.3         Elevators: ..................................................................................................................................................................................................................................................................................................................................................................................15

7.4         Security and Information: .....................................................................................................................................................................................................................................................................................................................................................15

7.5         Utilities: ....................................................................................................................................................................................................................................................................................................................................................................................16

7.6         Interruption or Delay of Services: .......................................................................................................................................................................................................................................................................................................................................16

7.7         Public Policy: ...........................................................................................................................................................................................................................................................................................................................................................................16

ARTICLE VIII - ASSIGNMENT AND SUBLETTING

8.1         Assignment, Subletting: .......................................................................................................................................................................................................................................................................................................................................................16

8.2         Landlord's Consent: ..............................................................................................................................................................................................................................................................................................................................................................16

8.3         Requests for Consent: ...........................................................................................................................................................................................................................................................................................................................................................17

8.4         Assignment by Landlord: ......................................................................................................................................................................................................................................................................................................................................................17

8.5         Liability of Tenant after Transfers: ....................................................................................................................................................................................................................................................................................................................................17

ARTICLE IX - INSURANCE AND INDEMNIFICATION

9.1         Tenant's Insurance: ...............................................................................................................................................................................................................................................................................................................................................................17

9.2         Policy Requirements: ............................................................................................................................................................................................................................................................................................................................................................18

9.3         Proof of Insurance: ................................................................................................................................................................................................................................................................................................................................................................18

9.4         Failure to Maintain: ...............................................................................................................................................................................................................................................................................................................................................................18

9.5         Damage to Leasehold Improvements: .................................................................................................................................................................................................................................................................................................................................18

9.6         Increase in Insurance Premiums/Cancellation: ..............................................................................................................................................................................................................................................................................................................19

9.7         Landlord's Insurance: ...........................................................................................................................................................................................................................................................................................................................................................19

9.8         Non-Liability for Loss, Injury or Damage: ........................................................................................................................................................................................................................................................................................................................19

9.9         Indemnification of the Landlord and the Tenant: ..............................................................................................................................................................................................................................................................................................................19

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9.10       Extension of Rights and Remedies: .....................................................................................................................................................................................................................................................................................................................................20

9.11       Release in Favour of the Landlord and the Tenant: ..........................................................................................................................................................................................................................................................................................................20

ARTICLE X - DAMAGE

10.1         Damage to Premises: ............................................................................................................................................................................................................................................................................................................................................................20

10.2         Damage to the Building: .......................................................................................................................................................................................................................................................................................................................................................21

10.3         Architect's Certificate: ........................................................................................................................................................................................................................................................................................................................................................22

ARTICLE XI - UNAVOIDABLE DELAY

11.1         Unavoidable Delay:  ................................................................................................................................................................................................................................................................................................................................................................22

ARTICLE XII - LANDLORD'S REMEDIES

12.1         Landlord May Perform Tenant's Covenants: ....................................................................................................................................................................................................................................................................................................................22

12.2         Re-Entry: ..................................................................................................................................................................................................................................................................................................................................................................................22

12.3         Right to Distrain: ...................................................................................................................................................................................................................................................................................................................................................................23

12.4         Landlord May Follow Chattels: ............................................................................................................................................................................................................................................................................................................................................24

12.5         Rights Cumulative: ................................................................................................................................................................................................................................................................................................................................................................24

12.6         Acceptance of Rent Non-Waiver: ........................................................................................................................................................................................................................................................................................................................................24

ARTICLE XIII - STATUS STATEMENT, ATTORNMENT AND SUBORDINATION

13.1         Certification: ...........................................................................................................................................................................................................................................................................................................................................................................24

13.2         Attornment: .............................................................................................................................................................................................................................................................................................................................................................................24

13.3         Subordination: .........................................................................................................................................................................................................................................................................................................................................................................24

13.3A      Non-disturbance Agreement: ...............................................................................................................................................................................................................................................................................................................................................24

13.4         Rights of Mortgagees: ...........................................................................................................................................................................................................................................................................................................................................................25

ARTICLE XIV - MISCELLANEOUS

14.1         Joint and Several Liability: ..................................................................................................................................................................................................................................................................................................................................................25

14.2         Landlord and Tenant Relationship: .....................................................................................................................................................................................................................................................................................................................................25

14.3         Planning Act: ..........................................................................................................................................................................................................................................................................................................................................................................25

14.4         No Waiver: ...............................................................................................................................................................................................................................................................................................................................................................................25

14.5         Expropriation: ..........................................................................................................................................................................................................................................................................................................................................................................25

14.6         Notice: .......................................................................................................................................................................................................................................................................................................................................................................................26

14.7         Net Lease: .................................................................................................................................................................................................................................................................................................................................................................................26

14.8         Non Merger: ............................................................................................................................................................................................................................................................................................................................................................................26

14.9         Lease Entire Agreement: ......................................................................................................................................................................................................................................................................................................................................................26

14.10       Registration: ...........................................................................................................................................................................................................................................................................................................................................................................27

14.11       Name of Building: ..................................................................................................................................................................................................................................................................................................................................................................27

14.12       Governing Law: ......................................................................................................................................................................................................................................................................................................................................................................27

14.13       Survival of Tenant's Covenants: .........................................................................................................................................................................................................................................................................................................................................27

14.14       Quiet Enjoyment: ...................................................................................................................................................................................................................................................................................................................................................................27

14.15       Binding on Successors: .......................................................................................................................................................................................................................................................................................................................................................27

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14.16       Limitation on Use: .................................................................................................................................................................................................................................................................................................................................................................27

14.17       Corporate Ownership: ..........................................................................................................................................................................................................................................................................................................................................................27

14.18       Assignment and Subletting: ............................................................................................................................................................................................................................................................................................................................................... 27

14.19       Several Liability: ...................................................................................................................................................................................................................................................................................................................................................................28

14.20       Time of the Essence: .............................................................................................................................................................................................................................................................................................................................................................28

ARTICLE XV - DEFINITIONS - INTERPRETATION

15.1         Definitions: ............................................................................................................................................................................................................................................................................................................................................................................28

15.2         Interpretation: .......................................................................................................................................................................................................................................................................................................................................................................34

SCHEDULE  ²A² - LEGAL DESCRIPTION

SCHEDULE  ²B² - FLOOR PLAN

SCHEDULE “B-1” – SPACE PLAN

SCHEDULE  ²C² - LANDLORD’S & TENANT’S WORK

SCHEDULE  ²D² - RULES AND REGULATIONS

SCHEDULE  ²E² - SPECIAL PROVISIONS

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THIS LEASE is made the 4th day of September, 2009

between the Landlord, Tenant and Indemnifier, if any, listed below.

ARTICLE I - FUNDAMENTAL PROVISIONS

1.1               Landlord:

RT TWENTY-SIXTH PENSION PROPERTIES LIMITED, a company incorporated under the laws of the Province of Ontario and having a mailing address for the purposes of this Lease at 00 Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx X0X 0X0.

1.2               Tenant:

ULTIMATE SOFTWARE GROUP OF CANADA, INC.

1.3               Building:

000 Xxxxxxxxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx, situate upon the lands described in Schedule "A" of this Lease.

1.4               Premises:

(Section 2.1)

The space outlined in red on Schedule "B" of this Lease, designated as Suite 801, located on the eighth (8th) floor of the Building and having a Rentable Area of approximately two thousand, one hundred and fifteen (2,115) square feet.

1.5               Term:

(Section 3.1)

Five (5) years commencing on the latter of:  (a) January 1, 2010 and (b) the date on which the Landlord’s Work and the Turnkey (as hereinafter defined) are complete but in no event shall such date be on a date later than February 1, 2010 (the “Term Commencement Date”) and expiring five (5) years from the Term Commencement Date.  

1.6               Basic Rent:

(Section 4.2)

During the first two (2) years of the Term, Thirty-eight Thousand, Five Hundred, Ninety-eight Dollars and Seventy-five Cents ($38,598.75) per annum, computed at the annual rate of Eighteen Dollars and Twenty-five Cents ($18.25) per square foot of Rentable Area of the Premises, and payable monthly in advance in the amount of Three Thousand, Two Hundred, Sixteen Dollars and Fifty-six Cents ($3,216.56) per month commencing on the Term Commencement Date.

During the last three (3) years of the Term, Forty Thousand, Seven Hundred, Thirteen Dollars and Seventy-five Cents ($40,713.75) per annum, computed at the annual rate of Nineteen Dollars and Twenty-five Cents ($19.25) per square foot of Rentable Area of the Premises, and payable monthly in advance in the amount of Three Thousand, Three Hundred, Ninety-two Dollars and Eighty-one Cents ($3,392.81) per month commencing on the 1st day of the third (3rd) year of the Term.

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1.7               Additional Rent:

The following additional payments are due as rent payable as of and from the Rent Commencement Date:

(a)           Proportionate Share of Realty Taxes and Operating Costs                                                                   (Section 4.4)

(b)           Utilities for Premises                                                                                                                                    (Section 4.5)

(c)           Additional Services, if any                                                                                                                         (Section 4.6)

1.8               Deposit:

The Tenant has provided the Landlord with a deposit in the total amount of Fourteen Thousand, Seven Hundred and Eight Dollars and Seventy-seven Cents ($14,708.77), to be applied as provided in Section 4.3 hereof.

1.9               Rent Commencement Date:                                                                                                                     (Section 4.1)

All Rent payments will commence on the Term Commencement Date.

1.10               Indemnifier:                                                                                                                     

Ultimate Software Group, Inc.

To induce the Landlord to enter into this Lease, the Indemnifier hereby agree to jointly and severally indemnify the Landlord with respect to the Tenant’s observance and performance of its obligations under this Lease.  The Indemnifier will execute the indemnity agreement dated the 4th day of September, 2009 (the “Indemnity Agreement”) concurrent with the execution of this Lease.

1.11               Fundamental Provisions:

Each reference in this Lease to any of the Fundamental Provisions listed above shall be read as having the same dates, quantities and other meanings as specified in this Article I.  Certain words and phrases recurring throughout this Lease have defined meanings as set out in Article 15, unless the subject matter or context requires otherwise.

ARTICLE II - PREMISES

2.1               Lease:

In consideration of the Rent to be paid, the Landlord hereby leases to the Tenant the premises outlined in red on Schedule "B" of this Lease, (the "Premises") described in Section 1.4 hereof, together with the rights and privileges as contained in this Lease, and the Tenant hereby leases and accepts the Premises from the Landlord, to have and to hold during the Term, subject to the terms, covenants and conditions set out in this Lease. The Rentable Area of the Premises will be certified by the Landlord’s space planner, by way of a floor plan, in accordance with BOMA and the Rent will be adjusted in accordance with the certified area.  The Landlord will advise the Tenant in writing of the area measurement and provide the Tenant with a copy of such floor plan, and the parties agree to be bound thereby.

2.2               Use:

The Tenant covenants to use the Premises for the purposes of a general business office only (including providing intermittent training with not more than ten (10) trainees at a time) only in accordance with the standards of a first-class office building of similar age and in a similar location, and subject in any event to the limitations on use set forth in Section 14.16 hereof.  The Tenant shall take possession of the Premises no later than the Term Commencement Date, unless the Landlord otherwise consents in writing, which consent shall not be unreasonably withheld.

2.3               Rules and Regulations:

The Tenant covenants to abide by the Rules and Regulations as set out in Schedule "D" annexed hereto, and to cause those for whom it is responsible to observe such Rules and Regulations.  The Landlord, acting reasonably, may make changes to the Rules and Regulations from time to time upon giving notice to the Tenant, provided that the Landlord shall not be liable in any way for either a failure to enforce such observance, or a failure on the part of other tenants to so observe.

2.4   Observance of Law:

The Tenant is responsible at all times to comply with and to keep the Premises, the Leasehold Improvements and Trade Fixtures, and to otherwise conduct its business, in accordance with the requirements of all applicable laws, directions, rules, regulations or codes of the Landlord and every governmental authority having jurisdiction and of any insurer by which the Landlord or the Tenant is insured and affecting the operation, condition, maintenance, use or occupation of the Premises and Trade Fixtures or the making of any repair or alteration including, without limitation, compliance with each Environmental Law and any agreements with adjoining owners and or third parties affecting the Premises and the Building.  The Tenant shall not allow or cause any act or omission to occur in or about the Premises which may result in an illegal use or causes any breach of or non-compliance with such laws, directions, rules, regulations and codes.  If, due to the Tenant's acts, omissions or use of the Premises, repairs, alterations or improvements to the Premises or the Building are necessary to comply with any of the foregoing or with the requirements of insurance carriers, the Tenant will pay the entire cost thereof.

2.5               No Waste or Nuisance:

The Tenant shall not commit or permit any waste or damage to the Premises or the Building, or commit or permit anything which may does disturb the quiet enjoyment of any occupant of the Building or which may does interfere with the operation of the Building.  The Tenant will not cause or permit any nuisance or hazard in or about the Premises and Tenant will not permit the storage of any Contaminant or any Discharge in or about the Premises or the Building and will keep the Premises free of Contaminants, debris, trash, rodents, vermin and anything of a dangerous, noxious or offensive nature or which could create a fire hazard (through undue load on electrical circuits or otherwise) or undue vibration, heat or any noxious or strong noises or odours or anything which may disturb the enjoyment of the Building and the Common Areas by customers and other tenants of the Building.   The Tenant shall ensure that its Leasehold Improvements, Trade Fixtures or other equipment do not disrupt, adversely affect, or interfere with providers of telecommunication services in the Building or with any other tenant’s or occupant’s use or operation of communications, computer or other equipment or facilities in the Building; and should such disruption, adverse affect or interference occur, the Tenant shall immediately cease operation of the relevant facilities or equipment until the problem is corrected.  Without limiting the generality of the foregoing: (a) the Tenant shall not use or permit the use of any equipment or device such as, without limitation, loudspeakers, stereos, public address systems, sound amplifiers, radios, televisions or VCR's which is in any manner audible or visible outside of the Premises; and (b) no noxious or strong odours shall be allowed to permeate outside the Premises; and (c) no boot trays or other items may be placed outside the Premises; in each case without the prior written consent of the Landlord which may be arbitrarily withheld or withdrawn on 24 hours’ notice to the Tenant.

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2.6               Common Areas:

The Landlord agrees that the Tenant, in common with all others entitled thereto including the general public in concourse areas, may use and have access through the Common Areas for their intended purposes during Normal Business Hours and in accordance with the Rules and Regulations only; provided however, that in an emergency or in the case of the Landlord making repairs, the Landlord may temporarily close or restrict the use of any part of the Common Areas, although the Landlord shall, in such instances, endeavour not to prevent access to the Premises.

2.7               Easements:

The Tenant acknowledges that the Landlord and any persons authorized by the Landlord may install, maintain and repair pipes, wires and other conduits or facilities through the Common Areas and the Premises.  Any such installing, maintaining and repairing shall be done as quickly as possible and in a manner that will minimize inconvenience to the Tenant.

2.8               Covenants of Landlord and Tenant:

The Landlord covenants to observe and perform all of the terms and conditions to be observed and performed by the Landlord under this Lease.   The Tenant covenants to promptly pay the Rent when due under this Lease, and to observe and perform all of the terms and conditions to be observed and performed by the Tenant under this Lease.

ARTICLE III - TERM - POSSESSION

3.1               Term:

This Lease shall be for the Term set out in Section 1.5 unless earlier terminated as provided in this Lease., and nothing hereafter contained in this Article III shall postpone the Term Commencement Date, or extend the Term.

3.2               Early Occupancy Period:

Provided this Lease has been executed by the Tenant in a form acceptable to the Landlord and the Landlord’s Work and the Turnkey are complete on or before December 31, 2009, the Tenant will be given access to the Premises for the purpose of conducting the Tenant’s business operation in the Premises from the date on which the Landlord’s Work and the Turnkey are complete to and including December 31, 2009.  During the Early Occupancy Period, the Tenant shall not be responsible for the payment of Basic Rent, its Proportionate Share of Operating Costs, or Realty Taxes but shall be bound by all other terms of this Lease including the requirement to pay for any utilities consumed in the Premises.

3.3               Delay in Possession:

Should the Tenant be delayed by fault of the Landlord in taking possession of the Premises on the Term Commencement Date, then and only then shall the payment of Rent be postponed for the same number of days that the Tenant is so delayed in taking possession of the Premises.  The Tenant hereby acknowledges and agrees that such postponement of the payment of Rent shall be in full settlement for any claims it might have against the Landlord for being delayed in its taking possession of the Premises.

3.4               Surrender:

The Tenant shall surrender possession of the Premises upon termination of this Lease by expiration of the Term or operation of the terms hereof.

3.5               Overholding:

If the Tenant remains in possession of the Premises following termination of this Lease by expiration of the Term or operation of the terms hereof, with or without objection by the Landlord, and without any written agreement otherwise providing, the Tenant shall be deemed to be a monthly tenant upon the same terms and conditions as are contained in this Lease except as to the Term, and except as to Basic Rent which shall be equal to the greater of:  (a) twice one hundred and fifty percent (150%) of the Basic Rent payable in the last year of the Term or any renewal term, or  (b) the then prevailing rate charged by the Landlord in the Building.  This provision shall not authorize the Tenant to so overhold where the Landlord has objected.

3.6               Effect of Termination:

The expiry or termination of this Lease whether by elapse of time or by the exercise of any right of either the Landlord or the Tenant pursuant to this Lease shall be without prejudice to the right of the Landlord to recover arrears of rent and the right of each party to recover damages for an antecedent default by the other.

3.7               Acceptance of Premises:

Taking possession of all or any portion of the Premises by the Tenant will be conclusive evidence as against the Tenant that the Premises or such portion thereof are in satisfactory condition on the date of taking possession, subject only to latent defects and to those deficiencies (if any) listed in writing in a notice delivered by the Tenant to the Landlord not more than ten (10) days after the later of the date of taking possession and or the Term Commencement Date. In such event, the Landlord shall diligently repair/remedy such latent defects and/or deficiencies in a timely manner.

3.8               Demolition:

Notwithstanding any other provision of this Lease, the Landlord may terminate the Lease at any time during the Term or any extension thereof if the Landlord decides to demolish, alter or renovate the Building.  The Landlord will give the Tenant not less than six months notice of termination of the Lease pursuant to this provision.  The six months' notice specified above need not expire at the end of any year or at the end of any month, and if the day fixed for termination of the Lease expires on some day other than the last day of a month, the Rent for such month shall be apportioned on a per diem basis for the broken period.

3.9 Relocation:

The Landlord shall have the right, at any time during the Term or any extension thereof, to relocate the Tenant (including any permitted subtenants and/or any permitted occupants), upon giving the Tenant not less than six (6) months’ prior written notice, to other premises within the Building (the “Relocated Premises”) and the following terms and conditions shall be applicable:

(a) the Relocated Premises shall be reasonably comparable to the Premises in terms of rentable area but the Landlord may elect to relocate the Tenant to premises which have a greater rentable area than the Premises provided that in such event, the Basic Rent, the Tenant’s Proportionate Share of Operating Costs, Realty Taxes and Premises hydro will be calculated as if the Relocated Premises contained the same rentable area as the Premises;

(b) the Landlord shall provide, at its own cost and expense, Leasehold Improvements comparable to the standards of the Leasehold Improvements which exist in the Premises at the time of the relocation;

(c) the Relocated Premises shall be on a floor no lower than the seventh (7th) floor of the Building and shall have comparable elevator exposure to the Premises;

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(d) the Landlord shall pay for the reasonable direct moving costs of the Tenant’s Trade Fixtures and furnishings from the Premises to the Relocated Premises;

(e) the Landlord agrees to use its reasonable efforts to effect the relocation with a minimum of disruption to the Tenant’s business; and

(f) all other terms and conditions of this Lease shall apply to the Relocated Premises except as are inconsistent with the terms and conditions of this Section 3.9.

ARTICLE IV - RENT

4.1               Payment:

From and after the Rent Commencement Date, the Tenant shall pay to the Landlord the Basic Rent and the Additional Rent  as set out in this Lease.

4.2               Basic Rent:

The Tenant shall pay Basic Rent in the amount set out in Section 1.6, which shall be payable without demand in advance in equal consecutive monthly instalments on the first of each month commencing on the Rent Commencement Date.  Rent is subject to adjustment upon certification of the Rentable Area of the Premises.

4.3               Deposit:

(a) Seven Thousand, Two Hundred and Sixty-one Dollars and Eighty-five Cents ($7,261.85) of the Deposit shall be applied on account of the payment of Rent first due and payable by the Tenant pursuant to this Lease.  The breakdown is as follows:

Basic Rent $3,216.56

Estimated Operating Costs $1,952.85

Estimated Realty Taxes $1,464.64

Estimated Premises Hydro $   282.00

GST $   345.80

Total: $7,261.85

and

(b) The balance of Seven Thousand, Four Hundred and Forty-six Dollars and Ninety-two Cents ($7,446.92) of the Deposit shall be held by the Landlord, without interest, as security against the Tenant’s faithful performance of its obligations under this Lease, and if not applied to remedy a default, returned to the Tenant within ten (10) days after the expiry of this Lease or any extension or earlier termination thereof.

4.4               Proportionate Share of Realty Taxes and Operating Costs:

(a) The Tenant shall pay to the Landlord its Proportionate Share of Realty Taxes and Operating Costs commencing on the Rent Commencement Date.  The Tenant will also pay a share of all Realty Taxes levied, assessed or allocated by the Landlord in respect to the Common Areas, if applicable.  On or before the Term Commencement Date and the commencement of any Fiscal Period in which the Term falls, the Landlord shall estimate the Realty Taxes and Operating Costs and the Tenant's Proportionate Share thereof, acting reasonably.  The Tenant shall pay to the Landlord in equal monthly instalments in advance on the first day of each month a sum on account of its Proportionate Share of Realty Taxes and Operating Costs based on the Landlord's estimates.

(b) The Landlord may from time to time re-estimate the amount of projected Realty Taxes and Operating Costs for the then current Fiscal Period and re-estimate the Tenant's Proportionate Share thereof for the remainder of the Fiscal Period and the Tenant shall change its monthly instalments to conform with the revised estimates.

(c) After the end of each Fiscal Period the Landlord shall determine the actual Tenant's Proportionate Share of Realty Taxes and Operating Costs and the difference between such actual determination and the amount already billed to the Tenant in instalments.  If the aggregate of the Tenant's instalments for the Fiscal Period in question was less than the actual determination, then the Tenant shall pay the difference to the Landlord forthwith, or if the aggregate of such instalments was more than the actual determination, the Landlord shall forthwith credit the difference to the Tenant's rental account.

(d) The Landlord's estimate of the Tenant's Proportionate Share of Operating Costs, Realty Taxes and Premises hydro payable pursuant to this Lease for the calendar year 2009 per square foot of the Rentable Area of the Premises are as follows:

Operating Costs		$	11.08
Realty Taxes		$	8.31
Premises Hydro		$	1.60 $20.99

but this is only a bona fide estimate made by the Landlord and it is not intended to be binding nor shall it affect or limit the Tenant's liability for its Proportionate Share of Operating Costs, Realty Taxes and Premises hydro payable under this Lease.

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4.5   Utilities - Light Fixtures:

(a)        Except where the Tenant is purchasing Utilities directly from a supplier, the Tenant shall pay to the Landlord the cost of Utilities supplied to the Premises commencing on the Rent Commencement Date, as reasonably determined by the Landlord, and billed monthly, in advance.  The amount of such cost shall be based on the Landlord's reasonable estimates for the quantities of Utilities supplied multiplied by the average unit costs to the Landlord for such utilities.  From time to time, but not less than once annually, the Landlord will determine the Tenant’s actual cost of Utilities supplied to the Premises and the difference between such actual determination and the amount already billed to the Tenant in instalments.  If the aggregate of the Tenant’s instalments for the period in question was less than the actual determination, then the Tenant shall pay the difference to the Landlord forthwith, or if the aggregate of such instalments are more than the actual determination, the Landlord shall credit the difference to the Tenant’s rental account or, if the Term has ended, reimburse the Tenant forthwith.  The Tenant shall if requested by the Landlord or may, if it desires, install at the Tenant's own expense meters to measure the amount of any utilities supplied, and the Landlord shall employ the resulting metered quantities in lieu of estimated consumption.  The Tenant shall also pay to the Landlord the cost of cleaning, maintaining and servicing all electric light fixtures in the Premises, including the cost of replacing light bulbs, tubes, starters and ballasts.

(b)              Where the Tenant   is purchasing utilities directly from a supplier, it shall only deal with such suppliers that have obtained a license or other form of approval from the Landlord to run service for such utility through the Building.

4.6               Additional Services:

(a) The Tenant may from time to time request Additional Services from the Landlord and the Tenant shall pay to the Landlord, the Landlord's charge for such Additional Services, payable forthwith upon receipt of the Landlord's invoice therefor.

(b) The Tenant shall not install in the Premises, without the Landlord's prior written consent, equipment (including telephone equipment) which generates sufficient heat to affect the temperature otherwise maintained in the Premises by the air conditioning system as normally operated.  The Landlord may install supplementary air conditioning units, facilities or services in the Premises, or modify its air conditioning system, as may in the Landlord's reasonable opinion be required to maintain proper temperature levels, and  the Tenant shall pay the Landlord within ten (10) days of receipt of any invoice for the cost thereof, including, without limitation, installation, operation and maintenance expenses, plus 15% of such cost to cover the Landlord's costs of administration.

(c) If the Landlord shall from time to time reasonably determine that the use of electricity or any other utility or service in the Premises is disproportionate to the use of other tenants in the Building the Landlord may adjust the Tenant's share of the cost thereof from a date reasonably determined by the Landlord to take equitable account of the disproportionate use and may separately charge the Tenant for such excess cost, plus 15% of such excess cost to cover the Landlord's costs of administration.  At the Landlord's request, the Tenant shall install and maintain at the Tenant's expense metering devices for checking the use of any such utility or service in the Premises.  In all cases the Tenant shall reimburse the Landlord in the same manner in which the Landlord is charged including any demand or energy charges.

4.7               General Provisions:

(a) No Delay in Payment of Rent:  Nothing contained in this Lease shall suspend or delay the payment of any money at the time it becomes due and payable.  The Tenant agrees that the Landlord may, at its option, apply any sums received against any amounts due and payable under this Lease in such manner as the Landlord sees fit.

(b) Interest on Arrears:  If any amount of Rent is in arrears it shall bear interest at the Interest Rate.

(c) Partial Periods:  If the Rent Commencement Date is any day other than the first day of a calendar month, or if the Term ends on a day other than the last day of a calendar month, then Basic Rent and Additional Rent, as the case may be, will be adjusted for the months affected, pro rata based on a 365 day year.

(d) Estimated Amounts:  Where the Landlord estimates or re-estimates the costs of Realty Taxes, Operating Costs and the amount of Utilities supplied, it shall do so acting reasonably and shall provide the Tenant with statements of such estimates in reasonable detail.

(e) Audited Statement:  Invoices for the actual determination of the Tenant's Proportionate Share of Operating Costs shall be accompanied by an audited statement of such Operating Costs.  .

(f) General:  All amounts payable by the Tenant to the Landlord pursuant to this Lease shall be deemed to be Rent. The Tenant agrees to pay all Rent together with Rental Taxes, if applicable, in advance on the first day of each month without deduction or abatement, except as expressly provided in this Lease, and without set-off, and where payments due have been invoiced, such amounts shall be paid within ten (10) days of delivery of such invoice.  All Rent shall be paid in lawful money of Canada.

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ARTICLE V - TAXES

5.1               Taxes Payable by the Landlord:

The Landlord shall pay before delinquency all Realty Taxes.  The Landlord covenants that at all appropriate times it shall declare itself a public school supporter for purposes of determining the amounts of any Realty Taxes payable.

5.2               Business and Other Taxes Payable by the Tenant:

The Tenant shall pay before delinquency all business taxes, and any other taxes, charges, rates, duties and assessments levied, rated, imposed, charged or assessed against or in respect of any use or occupancy of the Premises or in respect of the personal property, Leasehold Improvements, Trade Fixtures, fixtures and facilities of the Tenant or the business or income of the Tenant on or from the Premises.  The Tenant shall pay to the Landlord any increase or incremental amount of Realty Taxes or other taxes which the Landlord, acting reasonably, has determined to be attributable to an act by the Tenant (for example declaring itself a separate school supporter) or attributable to the Leasehold Improvements and Trade Fixtures.

5.3               Contesting Taxes:

(a) The Tenant may, at its expense, appeal or contest the taxes, assessments and other amounts payable as described in Section 5.2 hereof, but such appeal or contest shall be limited to the assessment of the Premises alone and not to any other part of the Building or the Lands provided it first gives the Landlord written notice of its intention to do so, and consults with the Landlord, and obtains the Landlord's prior written approval.

(b) The Landlord reserves the right to appeal or contest any taxes payable by the Landlord.

5.4               Alternate Methods of Taxation:

If, during the Term, the method of taxation shall be altered, so that the whole or any part of the Realty Taxes now levied, on real estate and improvements are levied wholly or partially as a capital levy or on the rents received or reserved or otherwise, or if any new or other tax, assessment, levy, imposition or charge in lieu thereof, shall be imposed upon the Landlord, related in any way to the Building, the Lands or the income therefrom, then all such taxes, assessments, levies, impositions and charges shall be included when determining the Realty Taxes.  If, during the Term, the method of taxation shall be altered, so that the whole or any part of the business taxes formerly payable in respect of any use or occupancy of the Premises is merged into a comprehensive realty tax, the Landlord shall have the right to allocate and collect such component of the comprehensive realty tax (as would have been formerly business taxes) in the manner or on the same basis as would have been employed.

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ARTICLE VI - MAINTENANCE, REPAIRS AND ALTERATIONS

6.1               General Statement:

The Landlord and Tenant agree to carry out their respective responsibilities for maintenance and repair as detailed in this Lease in accordance with general standards for comparable office buildings in the City of Toronto, of similar age and in a similar location.

6.2               Responsibility of Tenant:

Without notice or demand from the Landlord, the Tenant shall:

(a) Maintain and keep in a good state of repair and in good appearance compatible with the Building, the Premises including the interior faces of any demising walls and permanent building walls, columns and covers for heating units along the exterior walls.

(b) Maintain and keep in a good state of repair, the Leasehold Improvements, the Trade Fixtures and any signage, or other fixtures, attachments or installations in any part of the Building permitted by this Lease to be installed by or on behalf of the Tenant, whether or not located in the Premises.

(c) Keep the Premises in a clean and tidy condition, and not permit wastepaper, garbage, ashes, waste or objectionable material to accumulate thereon or in or about the Building, other than in areas designated by the Landlord.

(d) Repair all damage in the Premises resulting from any misuse, excessive use or installation, alteration, or removal of Leasehold Improvements, Trade Fixtures, fixtures, furnishings or equipment.

6.3               Tenant Not Responsible:

Notwithstanding Section 6.2 hereof, the Tenant shall not be responsible for:

(a) Reasonable wear and tear which does not affect the proper use and enjoyment of the Premises.

(b) The obligations of the Landlord as set out in Section 6.4 hereof.

6.4               Responsibility of Landlord:

The Landlord shall maintain and keep in a good state of repair:

(a) The Building structure, roof, and permanent building walls (except for interior faces facing into the Premises).

(b) Equipment installed by the Landlord to heat, ventilate, and air-condition the Building.

(c) Systems installed by the Landlord for the distribution of Utilities.

(d) The Common Areas including the elevators.

(e) The Landlord's Improvements in the Premises.

6.5               Inspection, Entry and Notice:

(a) The Landlord, or its agents, may, from time to time, acting reasonably and where practical in a manner that will not substantially disrupt the Tenant's business, enter the Premises and inspect the state of maintenance, repair and decoration, and upon reasonable prior notice to the Tenant, show the Premises to prospective purchasers, tenants and existing or prospective Mortgagees.

(b) The Landlord may give notice to the Tenant requiring it to perform in accordance with Section 6.2 hereof, and the Tenant shall rectify any failure to perform within the time period set out in Section 12.1 hereof.  Should the Tenant fail to commence such remedy within the allotted time, or having so commenced, fail to diligently continue such remedy to conclusion, the Landlord may carry out such remedy without further notice to the Tenant, and charge the Tenant for such remedy as if it were an Additional Service requested by the Tenant.

(c) If the Tenant is not present to open and permit any entry into the Premises when for any reason an entry shall be necessary in the case of emergency, the Landlord or its agents may, using reasonable force, enter the same without rendering the Landlord or such agents liable therefor, and without affecting the obligations and covenants of Tenant under this Lease.

(d) Nothing in this Lease shall make the Landlord liable for any actions, notices or inspections as described in this Section 6.5, nor is the Landlord required to inspect the Premises, give notice to the Tenant or carry out remedies on the Tenant's behalf, nor is the Landlord under any obligation for the care, maintenance or repair of the Premises, except as specifically provided in this Lease.

6.6               Notify the Landlord:

The Tenant covenants to immediately notify the Landlord of any defect, damage or malfunction affecting the Premises or other parts of the Building of which the Tenant is aware.

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6.7               Alterations or Improvements:

(a) Following approval by the Landlord, the Tenant shall install its initial Leasehold Improvements and Trade Fixtures in accordance with the provisions of Schedule "C" annexed hereto and the "Design Criteria Manual" (if applicable) prepared by the Landlord and provided to the Tenant.

(b) Following installation of such initial Leasehold Improvements, and Trade Fixtures the Tenant shall not make any alterations, repairs, changes, replacements, additions, installations or improvements (the "Alterations") to any part of the Premises or Leasehold Improvements and Trade Fixtures without the Landlord's prior written approval, which approval shall not be unreasonably withheld or delayed, unless the Alteration may affect a structural part of the Building or may affect the mechanical, electrical, communications, air control or other basic systems of the Building or the capacities thereof, in which instance the Landlord's approval may be arbitrarily withheld.  The Tenant shall submit to the Landlord details of any proposed work, including complete working drawings and specifications prepared by qualified designers and conforming to good engineering practice.

Notwithstanding the foregoing, the Tenant shall be entitled to make minor cosmetic decorative changes to the Premises (such as new paint and carpet) without the requirement of obtaining the Landlord’s prior written consent but upon prior written notice to the general manager of the Building.

(c) The installation of all Leasehold Improvements shall:

- be performed expeditiously and at the sole risk and expense of the Tenant;

- be performed by competent workmen whose labour union affiliations, if any, are compatible with others employed by the Landlord and its contractors, and who will not interfere with work being performed by the Landlord;

- be performed in a good and workmanlike manner and only in accordance with the drawings and specifications which the Landlord has approved; and

- be performed in compliance with the applicable requirements of all Authorities, evidence of which shall be provided to the Landlord, and be subject to the supervision and direction of the Landlord.

(d) Any Leasehold Improvements made by the Tenant without the prior written consent of the Landlord or which are not in accordance with the drawings and specifications approved by the Landlord shall, if requested by the Landlord, be promptly removed by the Tenant at the Tenant's expense, and the Premises shall be restored to their previous condition.

(e) The Tenant shall reimburse the Landlord for the cost of technical evaluation of the Tenant's plans and specifications and shall revise such plans and specifications, as the Landlord deems necessary.

(f) In carrying out any Alterations or Leasehold Improvements in the Premises, the Tenant, at its expense, shall pay to the Landlord with respect to such work the cost to the Landlord of all Utilities supplied to the Premises with respect to such work and the cost of any Additional Services including the cost of any necessary cutting or patching or repairing of any damage to the Building or the Premises, any cost to the Landlord of removing refuse, cleaning, hoisting of materials and any other costs of the Landlord which can be reasonably allocated as a direct expense relating to the conduct of such work.

(g) If a request is made by the Tenant with respect to Alterations which may affect the structure or matters which affect the mechanical, electrical, communications, air control or other basic systems of the Building or the capacities thereof, which is approved by the Landlord, the Landlord may require that such work be designed by consultants designated by it and that it be performed by the Landlord or its contractors.  If the Landlord or its contractors perform such work, it shall be at the Tenant's expense in an amount equal to the Landlord's total cost of such work or the contract price therefor plus the Tenant Coordination Fee (as defined in Schedule “C” hereof) ten (10%) percent, payable following completion upon demand.  Notwithstanding the foregoing, if the Tenant requests the Landlord to alter or install any Leasehold Improvements or Trade Fixtures such work will be considered as an Additional Service.

(h) No Leasehold Improvements by or on behalf of the Tenant shall be permitted which may adversely affect the condition or operation of the Building or any of its systems or the Premises or diminish the value thereof or restrict or reduce the Landlord's coverage for municipal zoning purposes.

(i) During the construction and installation of Leasehold Improvements the Tenant shall keep the Building clean from any debris related thereto, and in any event after construction is completed the Tenant shall do an adequate "first clean" to the Premises.

(j) The Tenant shall promptly pay all its contractors and suppliers and shall do all things necessary to prevent a lien attaching to the Lands or Building and should any such lien be made or filed, the Tenant shall discharge or vacate such lien immediately.  If the Tenant shall fail to discharge or vacate any lien, then in addition to any other right or remedy of the Landlord, the Landlord may discharge or vacate the lien by paying into Court the amount required by statute to be paid to obtain a discharge, and the amount so paid by the Landlord together with all costs and expenses including solicitor's fees (on a solicitor and his client basis) incurred in connection therewith shall be due and payable by the Tenant to the Landlord on demand together with interest at the Interest Rate, calculated from the date of payment by the Landlord until all of such amounts have been paid by the Tenant to the Landlord.

6.8               Removal and Restoration:

(a) The Leasehold Improvements shall immediately upon installation become the property of the Landlord without compensation to the Tenant.

(b) Unless the Landlord by notice in writing requests otherwise, the Tenant shall at its expense, at the end of the Term or earlier termination of this Lease, remove all (or part, as designated by the Landlord) of the Leasehold Improvements, and, subject only to reasonable wear and tear, restore the Premises to the base building standard with the basic systems of the Building, including the reconstruction necessary to reinstate the Premises original structure in the event structural changes were undertaken.   At the expiry or earlier termination of the Term or any extension thereof, the Tenant shall not be required to remove any Leasehold Improvements or to restore the Premises to base Building standard.  However, the Tenant shall be required to, at its own cost and expense, remove any installations which have required changes to base Building systems, installations of any uninterrupted power source, computer/telecommunications cabling and/or any other improvements not typical of a general office use, and make good any damage to the Premises or to the Building caused by such installation/removal.

(c) Any damage to the Premises or to the Building caused by the installation or removal by the Tenant or by others on its behalf of Leasehold Improvements or trade fixtures shall be repaired forthwith by the Tenant at its expense (except that in the case of damage to areas outside of the Premises or to any structural or base building system or component, such repairs shall be made by the Landlord at the Tenant’s expense).

6.9               External Changes:

The Tenant agrees that it shall not erect, affix or attach to any roof, exterior walls or surfaces of the Building any antennae, sign or fixture of any kind, nor shall it make any opening in or alteration to the roof, walls, or structure of the Premises, or install in the Premises or Building free standing air-conditioning units, without the prior written consent of the Landlord which may be arbitrarily withheld.

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6.10               Trade Fixtures:

The Tenant may, at the end of the Term, if not in default, remove its Trade Fixtures, and the Tenant shall, in the case of every installation or removal of Trade Fixtures, make good any damage caused to the Premises or the Building by such installation or removal.  Any Trade Fixtures removed during the Term will be contemporaneously replaced with Trade Fixtures of equal or better similar quality.  Any Trade Fixtures and equipment belonging to the Tenant, if not removed at the termination or expiry of this Lease, shall, if the Landlord so elects, be deemed abandoned and become the property of the Landlord without compensation to the Tenant.  If the Landlord shall not so elect, the Landlord may remove such Trade Fixtures from the Premises and store them at the Tenant's risk and expense and the Tenant shall save the Landlord harmless from all damage to the Premises caused by such removal, whether by the Tenant or by the Landlord.

6.11               Tenant's Signs:

The Tenant shall not at any time cause or permit any sign, picture, advertisement, notice, lettering, flag, decoration or direction (hereinafter collectively called "Signs") to be painted, displayed, inscribed, placed, affixed or maintained within the Premises and visible outside the Premises or in or on any windows or the exterior of the Premises (including glass demising walls facing onto Common Areas), nor anywhere else on or in the Building, without the prior and continuous consent of the Landlord which consent may, with respect to proposed signage on the main floor of the Building, or which can be seen from outside the Premises, be arbitrarily withheld, but otherwise shall not be unreasonably withheld, provided that the copy and style of any Signs shall be consistent with the first-class nature of the Building and in accordance with the Landlord's sign criteria.  No hand-written signs will be permitted.  The Landlord may at any time prescribe a uniform pattern of identification signs for tenants to be placed on the outside of the Premises and other premises.  Any breach by the Tenant of this provision may be immediately rectified by the Landlord at the Tenant's expense and in this connection, the Landlord shall be entitled to enter the Premises and remove any Signs contravening this provision and charge the Tenant the costs thereof, and same shall not constitute a re-entry under this Lease and the Landlord shall not be liable for any damages caused thereby, whether or not arising from its own negligence.  Notwithstanding anything to the contrary as herein contained, the Landlord will, at its own cost and expense, supply and install:  (i) one (1) Building standard signage at the entrance of the Premises; (ii) directional signage in the elevator lobby on the floor on which the Premises are located; and (iii) one (1) entry bearing the name of the Tenant on all directory boards in the Building, each in accordance with the Landlord’s uniform scheme for identification signage.

6.12               Directory Board:

The Landlord may erect and maintain (as an Operating Cost) a directory board in the main lobby of the Building which shall indicate the name of the Tenant and the location of the Premises within the Building.  The Tenant shall pay the Landlord's cost of changes thereto, and any other signage with respect to the Premises.  Should sufficient space exist on the directory board, the Landlord may provide to the Tenant, at the Tenant's expense, additional entries as requested.  The directory board shall be for identification only and not for advertising.  The Landlord's acceptance of any name for listing on the directory board will not be deemed, nor will it substitute for, the Landlord's consent, as required by this Lease, to any sublease, assignment or other occupancy of the Premises.

6.13               Landlord's Signs:

In addition to the Landlord's right to install general information and direction signs in and about the Building as would be customary for comparable office building in the City of Toronto, the Landlord shall have the right at any time to place upon the Building a notice of reasonable dimensions, reasonably placed so as not to interfere with the Tenant's business, stating that the Building is for sale, or that areas of the Building are for lease, as the case may be, and at any time during the last six (6) months of the Term, that the Premises are for rent and the Tenant shall not remove such notices or signs.

6.14               Environmental Provisions:

(a) Notwithstanding any other provision of this Lease, the Tenant will fully comply with all Environmental Laws applicable to the Premises and the Tenant's use and occupation thereof.

(b) If the Tenant is convicted of an offence under an Environmental Law which relates to the Premises or the Building, the Landlord will have the option, at its sole discretion, to terminate this Lease forthwith by notice in writing, and the Landlord will not be liable for any losses or damages of any kind however caused arising out of such termination.

(c) The Tenant will obtain and comply with the terms of all licenses, certificates of approval, permits and other requirements under applicable Environmental Law for the safe and lawful conduct of its business at or from the Premises.

(d) The Tenant will not use pesticides in the Premises or the Building unless the Tenant has first obtained written consent from the Landlord to do so and has obtained all necessary permits or approvals required under applicable Environmental Law.

(e) The Tenant shall not cause or allow any Contaminant to be used, generated, stored, or disposed of on, under or about, or transported to or from, the Building, the Common Areas or the Premises (collectively the " Contaminant Activities") except in strict compliance, at the Tenant's expense, with all applicable Environmental Laws, and using all necessary and appropriate precautions which a cautious and prudent operator would exercise.

(f) The Landlord shall not be liable to the Tenant for any Contaminant Activities conducted or permitted by the Tenant in or about the Building, the Common Areas or the Premises during the Term, however caused, whether or not consented to by the Landlord.  The Tenant shall indemnify, defend with counsel, and hold the Landlord harmless from and against any claims, damages, costs and liabilities arising out of any and all such Contaminant Activities conducted or permitted by the Tenant.

(g) The Tenant shall immediately notify the Landlord both by telephone and in writing of any Discharge and the Landlord, its representatives and employees may enter the Premises at any time during the Term to inspect the Tenant's compliance herewith.

(h) The Tenant shall also be responsible for proper disposal of all Contaminants and other materials which require special disposal measures, including oil, kitchen waste and grease.  The Tenant shall also, if required by the Landlord, refrigerate all garbage, such that it does not constitute a nuisance or health hazard. The Tenant will store and dispose of all of its waste in a lawful manner.  In particular, the Tenant will use the garbage collection service provided by the Landlord only to dispose of solid waste (which is not Hazardous Waste) which can lawfully be transported to, and dumped at, a landfill site without requiring payment of surcharges or penalties, and will use the sewers only to dispose of liquid waste (which is not Hazardous Waste) which may be lawfully discharged into the municipal sewer.  All other wastes will be disposed of by the Tenant, at its expense, at least once every month, using a properly licensed waste hauler retained by the Landlord, subject to the Landlord's right to require the Tenant, by giving the Tenant notice thereof, to retain a properly licensed waste hauler to take away all or part (as designated by the Landlord) of the Tenant's waste.  Regardless of whether the waste hauler is retained by the Landlord or the Tenant, the Tenant, and not the Landlord, shall be deemed to be the generator of the Tenant's waste.

(i) Where the Landlord provides separate waste collection facilities for different types of waste, the Tenant will separate its waste and will deliver each waste to the appropriate facility.  If contamination of separated waste occurs as a result of Tenant's failure to comply with the foregoing sentence, the Tenant will indemnify the Landlord for all damages and costs incurred by the Landlord with respect to such contamination, together with an administration fee equal to twenty per cent (20%) of such costs.  The Tenant will comply with any waste reduction workplan prepared by Landlord from time to time (if any), at Xxxxxx's cost.  The Tenant will comply with all reasonable requirements imposed by Landlord with respect to the implementation of a system for the storage, disposal, and separation of waste at the Building as contemplated by this Section 6.14.

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(j) Neither the Landlord nor the Tenant will not authorize, cause or permit a Discharge except in accordance with Environmental Law.

(k) The Tenant will fully comply with all orders of an Authority which may be directed to the Landlord or the Tenant and which relate to the Premises or the Building in relation to the Premises, including orders to provide financial assurance, to perform studies, to improve pollution control, to remove waste, to conduct investigations or to prepare or perform an environmental cleanup of the Premises or the Building.  Should an order or direction of an Authority be issued to the Landlord or the Tenant, requiring the Landlord or the Tenant to do anything in relation to an environmental problem caused or contributed to by the Tenant, the Tenant will, upon receipt of written notice from the Landlord, satisfy the requirements of the order or direction at the Tenant's expense.

(l) If the Tenant fails or refuses to promptly and fully satisfy the requirements of an order or direction referred to in this Section, or if, in the Landlord's opinion the Tenant is not competent to satisfy the requirements of the order or direction, the Landlord may elect in writing (but is not obligated) to satisfy the whole or any part of the requirements of the order or direction at the Tenant's expense.

(m) If the Tenant fails or refuses to promptly and fully satisfy the requirements of any such order or direction the Landlord will have the option, at its sole discretion, to terminate this Lease forthwith by notice in writing, and Landlord will not be liable for any losses or damages of any kind however caused arising out of such termination.

6.15   Landlord's Alterations:

Notwithstanding any other provision of this Lease, the Landlord shall have the right, at any time, to add buildings, additions and parking structures on the Lands or to make additions to, or subtractions from, or to change, rearrange or relocate any part of the Common Areas, the Lands or the Building including the Premises (as more particularly set out in Section 3.9 hereof). provided that in the case of the Premises, the premises, as rearranged or relocated shall in all material respects be comparable to the Premises and the Landlord shall give the Tenant at least sixty (60) days prior written notice of such rearrangement or relocation and shall pay all reasonable direct costs of construction and moving expenses in connection therewith.  The Landlord shall also have the right to enclose any open area, and to grant, modify or terminate easements and other agreements pertaining to the use and maintenance of all or any part of the Building, Common Areas or the Lands, and to close all or any part of the Lands, Common Areas or the Building to such extent as the Landlord considers reasonably necessary to prevent accrual of any rights therein to any persons at any time.  The Landlord is entitled to make changes to the parking areas and to make any changes or additions to the systems, pipes, conduits, Utilities or other building services within or serving the Premises or any other premises in the Building; provided that access to the Premises will at all times be available from the elevator lobby of the Building.

In doing any of the foregoing, the Landlord shall have the right to enter upon the Premises and same shall not constitute a re-entry hereunder.  In connection with the Landlord’s re-entry to the Premises, the Landlord shall not be liable for any damage caused to the Tenant's property, whether or not except to the extent due to the gross negligence or wilful misconduct of the Landlord or those for whom the Landlord is in law responsible.  No claim for compensation shall be made by the Tenant by reason of inconvenience, nuisance or discomfort arising from such changes or the Landlord's entry.  The Landlord shall make such changes as expeditiously as is reasonably possible.  All Common Areas shall at all times be subject to the exclusive control and management of the Landlord or as the Landlord may direct from time to time.  The Tenant shall cooperate with the Landlord in any of its programmes to improve or make more efficient the operation of the Lands and Building.

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ARTICLE VII - STANDARD SERVICES

7.1               Heating and Air-Conditioning:

(a) The Landlord shall provide heat to the Premises and the interior Common Areas (excluding any areas below the main floor and in the penthouse) sufficient to maintain reasonable temperatures during Normal Business Hours.  It is understood and accepted by the Tenant that the Landlord may reduce the degree of heating provided after Normal Business Hours in a manner comparable to other comparable office buildings in the City of Toronto of a similar age and in a similar location.  The Landlord may enter the Premises to inspect, control or regulate the operation of any heating, ventilating and air-conditioning facilities and equipment.

(b) The Landlord shall provide ventilation and air-conditioning to the Premises and interior Common Areas (excluding any areas below the main floor and in the penthouse) during Normal Business Hours.  The systems furnished and operated by the Landlord for air conditioning and ventilation to the Premises are designed for a reasonable density of persons and for general office purposes based on window shading being fully closed where windows are exposed to direct sunlight.  Arrangement of partitions, equipment or special purpose areas, or the installation of equipment with high levels of heat production by the Tenant may require alteration of the portion of the air-conditioning and ventilation systems located within the Premises.  Any alterations that can be accommodated by the Landlord's equipment shall be made at the Tenant's expense and in accordance with Section 6.7 hereof.  Balancing of the system within the Premises shall be at the Tenant's expense.  The Tenant acknowledges that the heating, air-conditioning and ventilation system serving the Premises or the Building may require initial balancing or that alterations made from time to time whether inside the Premises or in other areas of the Building, may temporarily cause imbalance of the heating, air-conditioning and ventilation system, and the Tenant shall allow a reasonable amount of time for such readjustment and rebalancing.

(c) Should the Landlord fail to provide sufficient heat or air-conditioning or chilled water at any time it shall not be liable for direct, indirect, or consequential damages, or for personal discomfort or illness.

7.2               Cleaning:

The Landlord shall provide janitorial services to the Premises at such times and in such manner as is consistent with prevailing practices in comparable office buildings in the City of Toronto of similar age and in a similar location.  The Landlord shall periodically clean both sides of exterior windows so as to maintain the Building to the standard of a comparable office building in the City of Toronto of similar age and in a similar location.  The Tenant acknowledges that the Landlord may clean the windows during Normal Business Hours and the Tenant agrees to allow the Landlord and its contractors entry into the Premises for this purpose.  The Landlord shall keep those portions of the Common Areas accessible to the public in a clean and orderly fashion, and keep the sidewalks and driveways located on the Lands reasonably clear of excessive build-up of snow.

7.3               Elevators:

The Landlord shall provide operatorless elevator passenger service during Normal Business Hours.  The Landlord may reduce the number of elevators in service after Normal Business Hours. The Landlord retains the right to regulate the use of elevators for the purpose of carrying freight.

7.4               Security and Information:

The Landlord may provide a security guard or receptionist in the main lobby of the Building to provide general information to visitors and to control traffic in and out of the Building.  The Landlord may from time to time elect to substitute such services with automated systems and other devices that may from time to time seem appropriate for a comparable office building in the City of Toronto.  It is acknowledged by the Tenant that such services are intended for the general benefit of the Building and are not intended to specifically protect or otherwise serve the Tenant or the Premises.

7.5               Utilities:

(a) Electrical Power:  The Landlord will supply to the Premises sufficient electrical power to operate the standard lighting fixtures supplied by the Landlord plus circuits sufficient to deliver power to the Premises as set out in Schedule "C" of this Lease.  If the Tenant requires electrical power at a different voltage or at a greater capacity than the Landlord's system can deliver, then any additional systems required, if available, shall be installed operated and maintained at the Tenant's cost.

(b) Water and Sewage Connections:  The Landlord shall provide to the floor(s) on which the Premises is located water for drinking fountains, hot and cold or tempered water for washroom facilities and the necessary sewer connections.  Any connections made to Leasehold Improvements or special facilities by the Tenant shall be made at the Tenant's cost and in accordance with Section 6.7.

(c) The obligation of the Landlord to furnish Utilities as set out in this Section 7.5 shall be subject to the rules and regulations of the supplier of such utility and/or municipal or other governmental authority regulating the business or providing any of these Utilities.

7.6               Interruption or Delay of Services:

The Landlord may slow down, interrupt, delay, or shut down any of the services outlined in this Article VII on account of repairs, maintenance or alterations to any equipment or other parts of the Building and where practical,  the Landlord shall schedule such interruptions, delays, slow downs, or stoppage so as to minimize any inconvenience to the Tenant.  The Landlord shall not be held responsible for any direct, indirect or consequential damages, losses, or injuries caused.

7.7               Public Policy:

The Landlord shall be deemed to have observed and performed the terms and conditions to be performed by the Landlord under this Lease, including those relating to the provision of Utilities, if in so doing it acts in accordance with a directive, policy or request of a governmental or quasi-governmental authority acting in the fields of energy, communications, conservation, waste management and disposal, security or other area of public interest.

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ARTICLE VIII - ASSIGNMENT AND SUBLETTING

8.1               Assignment, Subletting:

The Tenant shall not assign this Lease, nor sublet all or any part of the Premises (together a “Transfer”) without the prior consent in writing of the Landlord, which consent shall, subject to Section 8.2 hereof, not be unreasonably withheld or delayed; provided however, that such consent to any assignment or subletting, shall not relieve the Tenant from its obligation to pay Rent and to perform all of the covenants, terms and conditions herein contained.  If this Lease is assigned or any part of the Premises is occupied by any person other than the Tenant, the Landlord may collect Rent or sums on account of Rent from the assignee, subtenant or transferee, and apply the net amount collected to the Rent payable hereunder but no such assignment, subletting, transfer of possession or collection or the acceptance of the assignee, subtenant or transferee as tenant shall be deemed a waiver of this covenant.

8.2               Landlord's Consent:

If the Tenant desires to assign this Lease, or to sublet the Premises, then and so often as such event shall occur, the Tenant shall make its request to the Landlord in writing, and the Landlord shall, within ten (10) business days after receipt of all information requested by the Landlord, notify the Tenant in writing either that;  (a) the Landlord consents or does not consent, as the case may be, or (b) the Landlord elects to cancel and terminate this Lease if the request is to assign this Lease or to sublet all of the Premises, or if the request is to sublet a portion of the Premises only, to cancel and terminate this Lease with respect to such portion.  If the Landlord elects to cancel this Lease as aforesaid, and so advises the Tenant in writing, the Tenant shall then notify the Landlord in writing within fifteen (15) days thereafter of the Tenant's intention either to refrain from such assigning or subletting or to accept the cancellation of this Lease (in whole, or in part).  Failure of the Tenant to deliver notice to the Landlord within such fifteen (15) day period advising of the Tenant's intention to refrain from such assigning or subletting, shall be deemed to be an acceptance by the Tenant of the Landlord's cancellation of this Lease (in whole, or in part, as the case may be). Any cancellation of this Lease pursuant to this Section 8.2 shall be effective on the later of the date originally proposed by the Tenant as being the effective date of transfer or the last day of the month which is not less than sixty (60) days following the date of the Landlord's notice to cancel this Lease.

8.3               Requests for Consent:

Requests by the Tenant to assign this Lease or sublet all, or part of the Premises shall be in writing to the Landlord accompanied with such information as the Landlord may reasonably require and shall include an original copy of the proposed assignment or sublease, as the case may be.  Prior to any consent being given by the Landlord to the Tenant's request, the Landlord must be satisfied as to the following, inter alia:  (a) that the liability of the Tenant in fulfilling the terms, covenants and conditions of this Lease shall remain; (b) the financial ability, good credit rating and business reputation and standing of the proposed assignee, subtenant or transferee, as the case may be; (c) that the Tenant has regularly and duly paid Rent and performed all of the covenants contained in this Lease; (d) that any Mortgagee will consent to such request; and (e) that the proposed assignee or subtenant has, or will enter into an agreement with the Landlord agreeing to be bound by all of the terms, covenants and conditions of this Lease.  Prior to receiving any consent pursuant to this Section 8.3, the Tenant will pay the Landlord's administrative fee of $1,000.00 plus G.S.T.  in connection with the review by the Landlord and/or its solicitors of the Tenant's request, and the preparation and review of any documentation in respect thereof.  If the Tenant receives consent pursuant to this Section 8.3, it shall be conditional on the Tenant paying to the Landlord as Additional Rent, any profit (net of all reasonable costs incurred by the Tenant in connection therewith) earned by the Tenant in assigning this Lease or subletting all or any part of the Premises.

8.4               Assignment by Landlord:

In the event of the sale or lease by the Landlord of its interest in the Lands or Building or any part or parts thereof and in conjunction therewith the assignment by the Landlord of this Lease or any interest of the Landlord herein, the Landlord shall be relieved of all liability under this Lease accruing from and after the effective date of any such assignment.

8.5               Liability of Tenant after Transfers:

No Transfer or other disposition by the Tenant of this Lease or of any interest under this Lease shall release the Tenant from the performance of any of its covenants under this Lease and the Tenant shall continue to be bound by and liable under this Lease.  The Tenant's liability under this Lease after any Transfer of the Tenant's interest will continue notwithstanding the bankruptcy, insolvency, dissolution or liquidation of any transferee of this Lease or the termination of this Lease for default or the termination, disclaimer, surrender or repudiation of this Lease pursuant to any statute or rule of law.  Furthermore, if after any Transfer of the Tenant's interest, this Lease is terminated for default or is terminated, disclaimed, surrendered or repudiated pursuant to any statute or rule of law, then, in addition to and without limiting the Tenant's liability under this Lease, the Tenant, upon notice from the Landlord given within ninety (90) days after any such termination, disclaimer, surrender or repudiation, shall enter into a new lease with the Landlord for a term commencing on the effective date of such termination, disclaimer, surrender or repudiation and expiring on the date this Lease would have expired but for such termination, disclaimer, surrender or repudiation and otherwise upon the same terms and conditions as are contained in this Lease with respect to the period after such termination, disclaimer, surrender or repudiation.

ARTICLE IX - INSURANCE AND INDEMNIFICATION

9.1               Tenant's Insurance:

The Tenant shall, at its sole cost and expense, take out and maintain in full force and effect at all times throughout the Term the following insurance:

(a) "All Risks" insurance (including flood, earthquake, sewer back-up and collapse) upon property of every description and kind owned by the Tenant, or for which the Tenant is legally liable, or which is installed by or on behalf of the Tenant, within the Premises or on the Lands or Building, including, without limitation, stock in trade, furniture, equipment, partitions, Trade Fixtures and Leasehold Improvements in an amount not less than the full replacement cost thereof from time to time.  In the event that there shall be a dispute as to the amount of full replacement cost, the decision of the Landlord or the Mortgagee shall be conclusive;

(b) General liability and property damage insurance, including personal injury liability, contractual liability, tenants' legal liability, non-owned automobile liability and owners' and contractors' protective insurance coverage with respect to the Premises and the Common Areas, which coverage shall include the business operations conducted by the Tenant and any other person on the Premises.  Such policies shall be written on a comprehensive basis with coverage for any one occurrence or claim of not less than Five Million Dollars ($5,000,000.00) or such higher limits as the Landlord or the Mortgagee may require from time to time;

(c) Business interruption insurance including loss of profits; and

(d) Any form of insurance as the Tenant, the Landlord or the Mortgagee may reasonably require from time to time in amounts and for insurance risks against which a prudent tenant would protect itself.

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9.2               Policy Requirements:

Each policy of insurance taken out by the Tenant in accordance with this Lease shall be taken out with insurers, and shall be in such form and on such terms as are satisfactory to the Landlord, and each such policy shall name the Landlord and any others designated by the Landlord as additional named insureds, as their respective interests may appear, and each of such policies shall contain, in form satisfactory to the Landlord:

(a) the standard mortgage clause as required by the Mortgagee;

(b) a waiver by the insurer of any rights of subrogation or indemnity or any other claim over, to which such insurer might otherwise be entitled against the Landlord, the Manager, the Mortgagee, any owner of the freehold interest to the Building or Lands (if different from the Landlord) and those for whom all and any of them are or is in law responsible, whether or not the damage is caused by their act, omission or negligence;

(c) an undertaking by the insurer to notify the Landlord and the Mortgagee in writing not less than thirty (30) days prior to any proposed material change adverse to the Landlord or the Mortgagee, cancellation or other termination thereof;

(d) a provision that the Tenant's insurance is primary and shall not call into contribution any other insurance available to the Landlord; and

(e) a severability of interests clause and a cross-liability clause, where applicable.

9.3               Proof of Insurance:

The Tenant shall provide to the Landlord and the Mortgagee on demand, and from time to time, satisfactory evidence that the policies of insurance required to be maintained by the Tenant in accordance with this Lease are in fact being maintained, which evidence shall be in the form of certificates of insurance, or if required by the Landlord or the Mortgagee, certified copies of each such insurance policy.

9.4               Failure to Maintain:

If the Tenant fails to take out or keep in force any insurance referred to in this Article IX, or should any such insurance not be approved by either the Landlord or the Mortgagee and should the Tenant not rectify the situation within forty-eight (48) hours following receipt by the Tenant of written notice from the Landlord (stating, if the Landlord or the Mortgagee do not approve of such insurance, the reasons therefor), the Landlord shall have the right, without assuming any obligation in connection therewith, to effect such insurance at the sole cost of the Tenant and all outlays by the Landlord shall be payable by the Tenant to the Landlord and shall be due on the first day of the next month following said payment by the Landlord without prejudice to any other rights and remedies of the Landlord under this Lease.

9.5               Damage to Leasehold Improvements:

In case of damage to the Leasehold Improvements, or any material part thereof, the proceeds of insurance in respect thereto shall be payable to the Landlord, and such proceeds shall be released to the Tenant (provided that the Tenant is not in default hereunder) upon the Tenant's written request for progress payments, at stages determined by a certificate of the Architect stating that repairs to each such stage have been satisfactorily completed free of liens by the Tenant or by the Tenant's contractors.  In the event the Tenant defaults in making such repairs, the Landlord may, but shall not be obliged to, perform the repairs and the proceeds may be applied by the Landlord to the cost thereof. If this Lease expires or is terminated at a time when the Premises or Leasehold Improvements are damaged or destroyed as a result of a peril required to be insured against by the Tenant, the Tenant shall pay or assign to the Landlord, free of any encumbrance, an amount equal to the proceeds or the proceeds of insurance required to be maintained by the Tenant with respect to such damage or destruction.

9.6               Increase in Insurance Premiums/Cancellation:

The Tenant shall not do or permit anything to be done upon the Premises which shall cause the premium rate of insurance on the Building to be increased.  If the premium rate of insurance on the Building shall be increased by reason of any use made of the Premises, the Tenant shall pay to the Landlord on demand the amount of such premium increase.  In the event of an actual or threatened cancellation of any insurance on the Building or any adverse change thereto by the insurer by reason of the use or occupation of the Premises, and if the Tenant has failed to remedy the situation, use, condition, occupancy or other factor giving rise to such actual or threatened cancellation or adverse change within twenty-four (24) hours after notice thereof by the Landlord, then the Landlord may terminate this Lease by notice in writing to the Tenant or remedy the situation, use, condition, occupancy or other factor giving rise to such actual or threatened cancellation or change, all at the cost of the Tenant to be paid forthwith on demand, and for such purposes the Landlord shall have the right to enter upon the Premises without further notice.

9.7               Landlord's Insurance:

The Landlord agrees to insure the Building and the machinery, boilers and equipment therein owned by the Landlord (specifically excluding any property which the Tenant is obliged to insure under this Article IX) against damage by fire and extended perils coverage in such reasonable amounts as would be carried by a prudent owner of an office building in the City of Toronto of similar age and in a similar location.  The Landlord will also carry public liability and property damage insurance with respect to the operation of the Building in such reasonable amounts as would be carried by a prudent owner, and any other forms of insurance as it or the Mortgagee may reasonably determine advisable.  Notwithstanding that the Tenant shall be contributing to the Landlord's costs and premiums respecting such insurance, the Tenant shall not have any insurable or other interest in any of the Landlord's insurance other than the rights, if any, expressly set forth in this Lease, and in any event, the Tenant shall not have any interest in, nor any right to recover any proceeds under any of the Landlord's insurance policies.

9.8               Non-Liability for Loss, Injury or Damage:

The Tenant acknowledges and agrees that the Landlord and the Landlord Beneficiaries referred to in Section 9.10 below shall not be liable for any indirect or consequential loss or damage or for any loss or damage to books, records, files, money, securities, negotiable instruments or papers or computer disks or other electronic files or other valuables of the Tenant or its agents, employees, customers, contractors or of any person or entity for whom the Tenant is in law responsible that is situated or stored in the Premises or elsewhere on the Building or Lands, whether or not caused by any act, omission or negligence of the Landlord or any of the Landlord Beneficiaries and notwithstanding anything in this Lease or at law.  Additionally, the Tenant acknowledges and agrees that the Landlord and the Landlord Beneficiaries referred to in Section 9.10 below shall not be liable for any death or injury arising from or out of any occurrence in, upon, at or relating to the Lands or Building or for any loss of, or damage to, or loss of use of, property of the Tenant or of others that is located on or in the Premises or on or in any other part of the Building or Lands (whether or not such property has been entrusted to the Landlord or any of the Landlord Beneficiaries) or for any indirect or consequential loss or damage, whether or not the death, injury, loss or damage results from the act, omission, negligence or misconduct of the Landlord or of any of the Landlord Beneficiaries.  Without limiting the general intent of the preceding sentence, the Landlord and the Landlord Beneficiaries will not be liable for death, injury or damage to persons or property resulting from (a) fire, explosion, steam, water, rain, snow or gas which may leak into or issue or flow from any part of the Building or from the water, steam or drainage pipes or plumbing works of the Building or from any other place or quarter, (b) that arises in connection with (a) the operation, faulty operation, interruption, breakdown, condition or arrangement of any base building systems or other services provided by the Landlord under this Lease (including, without limitation, the electrical, mechanical, telecommunications and all utility systems and security services), or (b) the act, omission, negligence or misconduct of any tenant or occupant of space in the Building or Lands or on property adjacent to the Building or the Lands, or of the public or any person in or on the Building or the Lands.  Without limiting the foregoing in any way, the Tenant hereby releases the Landlord and the Landlord Beneficiaries from all losses, damages and claims of any kind in respect of which the Tenant is required to maintain insurance under this Lease or is otherwise insured (including that part of any such loss, damage or claim below the level of the Tenant’s insurance deductibles).

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9.9               Indemnification of the Landlord and Tenant:

Indemnity in Favour of the Landlord – Subject to Section 9.11 below, the Tenant shall indemnify the Landlord and the Landlord Beneficiaries referred to in Section 9.10 below and save them harmless from all losses, liabilities, damages, claims, demands , expenses and actions of any kind or nature (including loss of Rent payable by the Tenant under this Lease and all claims for loss of life, personal injury, damage to property or any other loss or injury or claims but excluding consequential loss or damage) arising from any occurrence on the Premises or arising from the occupancy or use by the Tenant or any of its agents, contractors, employees, servants, licensees, concessionaires or invitees of the Premises, the Lands or the Building or of anyone permitted to be on the Premises by the Tenant, and against and from all reasonable costs, expenses and claim or action or proceeding brought thereon.   In case the Landlord or any of the Landlord Beneficiaries, without fault on their part, is made a party to any litigation commenced by or against the Tenant, the Tenant shall hold the Landlord and the Landlord Beneficiaries harmless in connection with such litigation.

Indemnity in Favour of the Tenant - Subject to Section 9.11 below, the Landlord will indemnify the Tenant and save it harmless from and against all loss, liabilities, damages, claims, demands, expenses and actions (including, without limitation, all claims for loss of life, personal injury, damage to property or any other loss, injury or claim under this Lease but excluding consequential loss or damage) in each case arising from the negligence or misconduct of the Landlord or the negligence or misconduct of those for whom the Landlord is in law responsible and against and from all reasonable costs, expenses and liabilities (including legal fees) incurred in or arising or resulting from any such claim or action or proceeding brought thereon. In case the Tenant, without fault on its part, is made a party to any litigation commenced against the Landlord, the Landlord shall protect, indemnify and hold the Tenant harmless in connection with such litigation.

9.10   Extension of Rights and Remedies:

It is agreed that every indemnity, exclusion or release of liability and waiver of subrogation contained in this Lease or in any of the Tenant's insurance policies shall extend to and benefit each and every of the Landlord, any Mortgagee, the Manager  and all of their respective servants, agents, directors, officers, employees and those for whom the Landlord and such other entities or persons are in law responsible (collectively, the "Landlord Beneficiaries"), it being understood and agreed that the Landlord is the agent or trustee of the Landlord Beneficiaries solely to the extent necessary for the Landlord Beneficiaries to take the benefit of this Section.  The Landlord shall be under no obligation whatsoever to take any steps or actions on behalf of the Landlord Beneficiaries to enable them to obtain the benefits of this Section unless it chooses to do so in its sole and absolute discretion.

9.11               Release in Favour of the Landlord and the Tenant

Release in Favour of the Landlord – The Tenant hereby releases and waives any and all claims against the Landlord and the Landlord Beneficiaries referred to above in Section 9.10 with respect to loss of or damage to personal and/or real property and loss of use thereof required to be insured against by the Tenant under this Lease or otherwise insured against by the Tenant, whether or not any such claim arises as a result of the act, omission or negligence of the Landlord or any of the Landlord Beneficiaries.

Release in Favour of the Tenant – The Landlord hereby releases and waives any and all claims against the Tenant and its employees, agents, directors, officers, shareholders and those for whom the Tenant is in law responsible with respect to loss of or damage personal and/or real property and loss of use thereof required to be insured against by the Landlord under this Lease or otherwise insured against by the Landlord, whether or not any such claim arises as a result of the act, omission or negligence of the Tenant or any of the persons or entities referred to herein in whose favour the within release by the Landlord has been given.

ARTICLE X - DAMAGE

10.1               Damage to Premises:

It is understood and agreed that, notwithstanding any other provision of this Lease, should the Premises at any time be partially or wholly destroyed or damaged by any cause whatsoever or should demolition of the Premises be necessitated thereby or should the Premises become unfit for occupancy by the Tenant:

(a) Subject as hereinafter provided in this Section 10.1, the Landlord shall, to the extent of the insurance proceeds available for reconstruction and actually received by the Landlord from its insurers following an election by the Mortgagee to apply all or any portion of such insurance proceeds against the debt owing to the Mortgagee, expeditiously reconstruct the Premises in accordance with the Landlord's obligations to repair under the provisions of Section 6.4 hereof.  Upon substantial completion of the Landlord's work, the Landlord shall notify the Tenant, and the Tenant shall forthwith commence and expeditiously complete reconstruction and repair of the Premises, Leasehold Improvements and Trade Fixtures in accordance with the Tenant's obligations to repair under the provisions of Section 6.2 hereof;

(b) Rent shall not xxxxx unless the Premises are rendered wholly or partially unfit for occupancy by such occurrence and in such event Rent, as of the date of such occurrence shall xxxxx proportionately as to the portion of the Premises rendered unfit for occupancy, until thirty (30) days following receipt by the Tenant of the Landlord's notice given to the Tenant as provided in Subsection 10.1(a) hereof, at which time Rent shall recommence;

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(c) If, in the opinion of the Architect, such opinion to be given to the Landlord and the Tenant within thirty (30) days of the date of such damage, the Premises cannot be repaired and made fit for occupancy within one hundred and eighty (180) days next following any occurrence, or if thirty per cent (30%) or more of the Premises are damaged or destroyed, the Landlord may, by written notice to the Tenant within thirty (30) days of receipt of such opinion of the Architect, terminate this Lease and Rent shall cease and be adjusted as of the date of such occurrence, and the Tenant shall immediately vacate the Premises and surrender same to the Landlord; and

(d) In no event, including termination of this Lease in accordance with the provisions of Subsection 10.1(c) hereof, shall the Landlord be liable to reimburse the Tenant for damage to, or replacement or repair of any Leasehold Improvements, Trade Fixtures or any of the Tenant's property.

10.2               Damage to the Building:

It is understood and agreed that, notwithstanding the other provisions of this Lease, should the Building at any time be partially or wholly destroyed or damaged by any cause whatsoever, or should demolition of the Building, or any part thereof, be necessitated thereby:

(a) Subject as hereinafter provided in this Section 10.2, the Landlord shall, to the extent of the insurance proceeds available for reconstruction and actually received by the Landlord from its insurers following any election by the Mortgagee to apply all or any portion of such insurance proceeds against the debt owing to the Mortgagee as the case may be, expeditiously reconstruct and repair the Building, and to the extent necessary, the Premises, in accordance with the Landlord's obligations to repair under the provisions of Section 6.4 hereof.  Upon substantial completion of the Landlord's work as it relates to the Premises the Landlord shall notify the Tenant, and the Tenant shall forthwith commence and expeditiously complete reconstruction and repair of the Premises, Leasehold Improvements and Trade Fixtures to the extent they are so affected, in accordance with the Tenant's obligations to repair under the provisions of Section 6.2 hereof;

(b) Rent shall not xxxxx unless the Premises are rendered wholly or partially unfit for occupancy by such occurrence, and in such event, Rent, as of the date of such occurrence shall xxxxx proportionately as to the portion of the Premises rendered unfit for occupancy until thirty (30) days following receipt by the Tenant of the Landlord's notice given to the Tenant as provided in Subsection 10.2(a) hereof, at which time Rent shall recommence;

(c) If in the opinion of the Architect, such opinion to be given to the Landlord and the Tenant within thirty (30) days of the date of such damage, thirty percent (30%) or more of the Total Rentable Area of the Building is at any time destroyed or damaged in whole or in part by any cause whatsoever, or by demolition caused or necessitated thereby, notwithstanding that the Premises may be unaffected by such occurrence, the Landlord may, at its option, by written notice to the Tenant, within thirty (30) days of receipt of such opinion of the Architect, elect to terminate this Lease and the Tenant shall within thirty (30) days vacate the Premises and Rent will xxxxx as of the thirtieth (30th) day after the Landlord's notice so long as Tenant has vacated the Premises;

(d) In repairing, reconstructing or rebuilding the Building or any part thereof, the Landlord may use designs, plans and specifications, other than those used in the original construction of the Building, and the Landlord may alter or relocate, or both, any or all buildings, facilities and improvements, including the Premises, provided that the Premises as altered or relocated shall be substantially the same size and shall be in all material respects reasonably comparable to the Premises; and

(e) In no event, including termination of this Lease in accordance with the provisions of Subsection 10.2(c) hereof, shall the Landlord be liable to reimburse the Tenant for damage to, or replacement or repair of any Leasehold Improvements, Trade Fixtures or of any of the Tenant's property.

10.3               Architect's Certificate:

It is understood and agreed by the Tenant that wherever a certificate of the Architect is required or deemed appropriate by the Landlord, the certificate of the Architect shall bind the parties hereto as to completion of construction of the Premises and the availability of services, the percentage of the Premises or Building destroyed or damaged and the number of days required to make repairs or reconstruct the state of tenantability of the Premises, and the state of completion of any work or repair of either the Landlord or the Tenant.

ARTICLE XI - UNAVOIDABLE DELAY

11.1               Unavoidable Delay:

Whenever and to the extent that the Landlord or Tenant shall be unable to fulfil or shall be delayed or restricted in the fulfilment of any obligation hereunder in respect of the supply or provision of any service or utility or the doing of any work or the making of any repairs by reason of being unable to obtain the material, goods, equipment, service, utility or labour required to enable it to fulfil such obligation or by reason of any strike, work stoppage, statute, law or order in council or any regulation or order passed or made pursuant thereto or by reason of the order or direction of any administrator, controller or board, or any governmental department or officer or other authority, or by reason of not being able to obtain any permission or authority required thereby, or by reason of any other cause beyond its control whether of the foregoing character or not, the Landlord or Tenant shall be entitled to extend the time for fulfilment of such obligation by a time equal to the duration of such delay or restriction and the Landlord or Tenant shall not be entitled to any compensation for any inconvenience, nuisance or discomfort thereby occasioned.  The provisions of this Section 11.1 shall not operate to excuse the Tenant from prompt payment of all sums required to be paid pursuant to the terms of this Lease.

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ARTICLE XII - LANDLORD'S REMEDIES

12.1               Landlord May Perform Tenant's Covenants:

If the Tenant is in default of any of its covenants, obligations or agreements under this Lease (other than its covenant to pay Rent) and such default shall have continued for a period of ten (10) consecutive days after notice by the Landlord to the Tenant specifying with reasonable particularity the nature of such default and requiring the same to be remedied (or, if by reason of the nature thereof, such default cannot be cured by the payment of money and cannot with due diligence be wholly cured within such ten (10) day period, if the Tenant shall fail to proceed promptly to cure the same or shall thereafter fail to prosecute the curing of such default with due diligence), the Landlord, without prejudice to any other rights which it may have with respect to such default, may remedy such default and the cost thereof to the Landlord together with Interest thereon from the date such cost was incurred by the Landlord until repaid by the Tenant shall be treated as Additional Rent and added to the Rent due on the next succeeding date on which Basic Rent is payable.  Notwithstanding the above, if the nature of the default is such that it can be wholly cured in less than ten (10) days, then the Landlord's notice shall stipulate such reasonable lesser period, and if the default is not remedied within the time period set out, the Landlord may remedy the default as set out above.

12.2               Re-Entry:

When:

(a) the Tenant fails to pay when due any Rent, whether lawfully demanded or not; after five (5) days’ prior written notice from the Landlord;

(b) the Tenant is in default of any of its covenants, obligations or agreements under this Lease (other than its covenant to pay Rent) and such default has continued for a period of ten (10) consecutive days (or such shorter period set out in the Landlord's notice as may be reasonable in the circumstances) after notice by the Landlord to the Tenant specifying with reasonable particularity the nature of such default and requiring the same to be remedied, or, if by reason of the nature thereof, such default cannot be cured by the payment of money and cannot with due diligence be wholly cured within such ten (10) day period, if the Tenant has failed to proceed promptly to cure the same or has thereafter failed to prosecute the curing of such failure with due diligence;

(c) an execution issues against any property of the Tenant or any guarantor or indemnifier of this Lease and remains outstanding for more than ten (10) days, or any receiver of any property of the Tenant or any guarantor or indemnifier of this Lease is appointed, or the Tenant or any guarantor or indemnifier of this Lease becomes insolvent or makes application for relief from creditors under the provisions of any statute now or hereafter in force or, under the Bankruptcy and Insolvency Act, files a notice of intention or a proposal, makes an assignment in bankruptcy, has a receiving order made against it or otherwise becomes bankrupt, or any action, steps or proceedings whatever, are taken with a view to the winding up, dissolution or liquidation of the Tenant or any guarantor or indemnifier of this Lease, or with a view to the restructuring or compromise of any debt or other obligation of the Tenant or any guarantor or indemnifier of this Lease;

(d) any insurance policy is cancelled or not renewed by any insurer by reason of any particular use or occupation of the Premises; or

(e) the Premises have been abandoned, or have become vacant or have remained unoccupied for a period of five (5) consecutive days without the consent of the Landlord (which consent shall not be unreasonably withheld), or the Premises have been used by any other person or persons other than the Tenant or any person permitted by Article VIII hereof.

(f) the Tenant or any company with which the Tenant is affiliated or associated (as those terms are defined in the Business Corporations Act, 1990 of Ontario, or any successor legislation thereto) is in default of any of its covenants, obligations or agreements under any lease or other written agreement between it and the Landlord (as owner or as manager) or any company with which the Landlord is affiliated or associated (as those terms are defined in the Business Corporations Act, 1990 of Ontario, or any successor legislation thereto), and such default shall have continued for such period of time that the Landlord's (or such affiliated or associated company's) remedies have become exercisable thereunder;

then, and in any of such cases, the then current month's Rent together with the Rent for the three (3) months next ensuing shall immediately become due and payable, and at the option of the Landlord the Term shall become forfeited and void, and the Landlord without notice or any form of legal process whatever may forthwith re-enter the Premises or any part thereof in the name of the whole and repossess the same as of its former estate, anything contained in any statute or law to the contrary notwithstanding.  The Landlord may expel all persons and remove all property from the Premises and such property may be removed and sold or disposed of by the Landlord as it deems advisable or may be stored in a public warehouse or elsewhere at the cost and for the account of  the Tenant without the Landlord being considered guilty of trespass or conversion or becoming liable for any loss or damage which may be occasioned thereby, provided, however, that such forfeiture shall be wholly without prejudice to the right of  the Landlord to recover arrears of rent and damages for any antecedent default by the Tenant of its covenants under this Lease. Should the Landlord at any time terminate this Lease by reason of any such event, then, in addition to any other remedies it may have, it may recover from the Tenant all damages it may incur as a result of such termination.

12.3               Right to Distrain:

The Tenant agrees that the Landlord shall have the right to distrain for any arrears of Rent without notice to the Tenant, in addition to the other rights reserved to it.  For such purpose the Landlord shall have the right to enter the Premises as agent of the Tenant either by force or otherwise without being liable for any prosecution therefor and to take possession of any goods and chattels whatever on the Premises, and to sell the same at public or private sale and apply the proceeds of such sale on account of the Rent or in satisfaction of the breach of any covenant, obligation or agreement of the Tenant under this Lease and the Tenant shall remain liable for the deficiency, if any.  Notwithstanding anything contained in the Commercial Tenancies Act (Ontario), or any successor legislation or other statute which may hereafter be passed to take the place of the said act or to amend the same, none of the goods and chattels of the Tenant at any time during the continuance of the Term shall be exempt from levy by distress for Rent and the Tenant hereby waives all and every benefit that it could or might have under such act.  Upon any claim being made for such exemption by the Tenant, or on distress being made by the Landlord, this provision may be pleaded as an estoppel against the Tenant in any action brought to test the right to the levying of distress upon any such goods.

12.4               Landlord May Follow Chattels:

In case of removal by the Tenant of the goods or chattels of the Tenant from the Premises, the Landlord may follow the same for thirty (30) days in the same manner as is provided for in the Commercial Tenancies Act, or any successor legislation or other statute which may hereafter be passed to take the place of the said act or to amend the same.

12.5               Rights Cumulative:

The rights and remedies given to the Landlord in this Lease are distinct, separate and cumulative, and no one of them, whether or not exercised by the Landlord shall be deemed to be in exclusion of any other rights or remedies provided in this Lease or by law or in equity.

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12.6               Acceptance of Rent Non-Waiver:

No receipt of monies by the Landlord from the Tenant after the termination of this Lease shall reinstate, continue or extend the Term, or affect any notice previously given to enforce the payment of Rent then due or thereafter falling due or operate as a waiver of the right of the Landlord to recover possession of the Premises by proper action, proceeding or other remedy; it being agreed that, after the service of a notice to cancel this Lease and after the commencement of any action, proceeding or other remedy, or after a final order or judgment for possession of the Premises, the Landlord may demand, receive and collect any monies due, or thereafter falling due without in any manner affecting such notice, action, proceeding, order or judgment; and any and all such monies so collected shall be deemed payments on account of the use and occupation of the Premises or at the election of the Landlord on account of the Tenant's liability hereunder.

ARTICLE XIII - STATUS STATEMENT, ATTORNMENT AND SUBORDINATION

13.1               Certification:

The Landlord and Tenant respectively agree that within ten (10) days after a written request therefor, they shall execute and deliver to the other or to such person as may be identified in the written request (but in no event more than twice in any year) a written statement certifying that this Lease is unmodified and is in full force and effect (or if modified stating the modifications and that this Lease is in full force and effect as modified), the amount of the Basic Rent and the date to which it as well as all other charges under this Lease have been paid, whether or not there is any existing default on the part of the Landlord or the Tenant of which the person signing the certificate has notice and giving as well such further information as the person requesting the certificate shall reasonably require.

13.2               Attornment:

If proceedings are brought for foreclosure, or if there is exercise of the power of sale or if there is an entry into possession of the Building or any part thereof pursuant to any mortgage, charge, deed of trust or any lien resulting from any other method of financing or refinancing made by the Landlord covering the Premises and the Building, the Tenant shall attorn to the mortgagee, chargee, lessee, trustee, other encumbrancer or the purchaser upon any such foreclosure or sale and recognize such mortgagee, chargee, lessee, trustee, other encumbrancer or the purchaser as the Landlord under this Lease.

13.3               Subordination:

Subject to the Landlord obtaining a non-disturbance agreement in favour of the Tenant pursuant to Section 13.3A hereof, the Tenant shall postpone and subordinate its rights under this Lease to the Mortgagee, and any mortgage or mortgages, or any lien resulting from any other method of financing or refinancing, now or hereafter in force against the Lands and Building or any part or parts thereof as it exists from time to time, and to all advances made or hereafter to be made upon the security thereof.

13.3A               Non-disturbance Agreement:

Provided the Tenant is Ultimate Software Group of Canada, Inc., upon the written request of the Tenant, the Landlord shall use its reasonable efforts to obtain, at the Tenant’s sole cost and expense, an agreement from any existing mortgagee of the Building, in a form acceptable to such mortgagee, to the effect that so long as the Tenant performs and observes all of the terms and conditions of this Lease and is not in default under this Lease and provided the Tenant shall attorn to such mortgagee, the Tenant shall be permitted to remain in possession of the Premises without interruption or disturbance from such mortgagee; or at the option of such mortgagee, shall be entitled to obtain a new lease for the unexpired Term of this Lease, on the same terms and conditions as contained in this Lease.  The Tenant shall (i) promptly execute such documents as may be required by the Landlord to give effect to the foregoing, and (ii) indemnify the Landlord from and against all reasonable costs including legal costs incurred by the Landlord in connection with obtaining and preparing any such agreement.

13.4               Rights of Mortgagees:

If at any time during the currency of a mortgage of the interest of the Landlord in the Premises or Building, notice of which has been given to the Tenant, the Landlord shall be in default under this Lease and such default would give rise to a right in the Tenant to terminate this Lease, the Tenant, before becoming entitled as against the holder of such mortgage to exercise any right to terminate this Lease, shall give to such Mortgagee notice in writing of such default.  Such Mortgagee shall have sixty (60) days after the giving of such notice, or such longer period as may be reasonable in the circumstances, within which to remedy such default, and if such default is remedied within such time the Tenant shall not by reason thereof terminate this Lease.  The rights and privileges granted to any such Mortgagee by virtue of this Section shall not be deemed to alter, affect or prejudice any of the rights and remedies available to the Tenant as against the Landlord.  Any notice to be given to such Mortgagee shall be deemed to have been properly given if mailed by registered mail to its most recent address of which the Tenant has notice.

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ARTICLE XIV - MISCELLANEOUS

14.1               Joint and Several Liability:

If two or more individuals, corporations, partnerships or other business associations (or any combination of two or more thereof) sign this Lease as the Tenant, the liability of each such individual, corporation, partnership or other business association to pay Rent and to perform all other obligations hereunder shall be deemed to be joint and several.  In like manner, if the Tenant is a partnership or other business association, the members of which are, by virtue of statute or general law, subject to personal liability, the liability of each such member shall be joint and several.  The Tenant warrants and represents that it is duly formed and in good standing, and has full corporate or partnership authority, as the case may be, to enter into this Lease, and has taken all corporate or partnership action, as the case may be, necessary to make this Lease a valid and binding obligation, enforceable in accordance with its terms.

14.2               Landlord and Tenant Relationship:

No provision of this Lease is intended to nor creates a joint venture or partnership or any other similar relationship between the Landlord and Tenant, it being agreed that the only relationship created by this Lease is that of landlord and tenant.

14.3               Planning Act:

It is an express condition of this Lease that the provisions of the Planning Act, R.S.O 1990 c.P.13 and amendments thereto be complied with.

14.4               No Waiver:

No condoning or waiver by either the Landlord or Tenant of any default or breach by the other at any time or times in respect of any of the terms, covenants and conditions contained in this Lease to be performed or observed by the other shall be deemed to operate as a waiver of the Landlord's or Tenant's rights under this Lease, as the case may be, in respect of any continuing or subsequent default or breach nor so as to defeat or affect in any way the rights or remedies of the Landlord or the Tenant under this Lease, as the case may be, in respect of any such continuing or subsequent default or breach.  Unless expressly waived in writing, the failure of the Landlord or the Tenant to insist in any case upon the strict performance of any of the terms, covenants or conditions contained in this Lease to be performed or observed by the other shall not be deemed to operate as a waiver of the future strict performance or observance of such terms, covenants and conditions.

14.5               Expropriation:

The Landlord and the Tenant shall co-operate in respect of any expropriation of all or any part of the Premises or the Lands and Building so that each party may receive the maximum award to which it is entitled in law.  If the whole or any part of the Premises or of the Lands and Building are expropriated, as between the parties hereto, their respective rights and obligations under this Lease shall continue until the day on which the expropriating authority takes possession thereof.  If, in the case of partial expropriation of the Premises this Lease is not frustrated by operation of governing law and such expropriation does not render the remaining part of the Premises untenantable for the purposes of this Lease, the Tenant and the Landlord shall restore the part not so taken in accordance with their respective repair obligations under the provisions of Article VI of this Lease.  In this Section the word "expropriation" shall include a sale by the Landlord to any authority with powers of expropriation, in lieu of or under threat of expropriation.

14.6               Notice:

Any notice required or contemplated by any provision of this Lease shall be given in writing and shall be signed by the party giving the notice, addressed, in the case of the Landlord to its Manager:

Redcliff Realty Management Inc.

00 Xxxxxxxxxx Xxxxxx, Xxxxx 0000,

Toronto, Ontario

M5J 1T1

Attention:  The President

in the case of notice to the Tenant:  the Premises

and in the case of notice to the Indemnifier:                                                                              2000 Ultimate Way

Weston, Florida 33326

U.S.A.

Attention:  General Counsel

delivered or sent by facsimile or by registered mail, postage prepaid, return receipt requested.  The time of giving of such notice if mailed shall be conclusively deemed to be the fifth (5th) business day after the day of such mailing unless regular mail service is interrupted by strikes or other irregularities.  Such notice, if delivered or sent by facsimile, shall be conclusively deemed to have been given and received at the time of such delivery or the time of sending by facsimile unless received after 5:00 p.m. in which event such notice shall be deemed to have been given and received on the next business day.  If in this Lease two or more persons are named as Tenant, such notice shall be delivered personally to any one of such persons.  Either party may, by notice to the other, from time to time designate another address in Canada to which notices mailed more than ten (10) days thereafter shall be addressed. Any notice to be given by the Landlord may be signed and given by the Landlord or by the Manager.

14.7               Net Lease:

It is the purpose and intent of the Landlord and the Tenant that the Basic Rent shall be absolutely net and carefree to the Landlord, so that this Lease shall yield, the Basic Rent specified in each year during the Term without notice or demand, and free of any charges, assessments, impositions or deductions of any kind and without abatement, deduction or set-off and under no circumstances or conditions whether now existing or hereafter arising whether beyond the present contemplation of the parties is the Landlord to be expected or required to make any payment of any kind whatsoever or to be subject to any other obligation or liability hereunder.  All expenses and obligations of every kind and nature whatsoever relating to the Premises which may arise or become due during the Term of this Lease shall be paid by the Tenant and the Tenant shall indemnify and save harmless the Landlord from all costs of same.

14.8               Non Merger:

There shall be no merger of this Lease nor of the leasehold estate created hereby with the fee estate in the Lands or any part thereof by reason of the fact that the same person, firm, corporation or entity may acquire or own or hold directly or indirectly: (a) this Lease or the leasehold estate created hereby or any interest in this Lease or any such leasehold estate; and (b) the fee estate in the Lands or any part thereof or any interest in such fee estate.  No such merger shall occur unless and until the Landlord, the Tenant and the Mortgagees (including a trustee for bondholders) shall join in a written instrument effecting such merger and shall duly record the same.

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14.9               Lease Entire Agreement:

There are no covenants, representations, warranties, agreements or conditions expressed or implied, collateral or otherwise forming part of or in any way affecting or relating to this Lease or the Premises save as expressly set out in this Lease and this Lease constitutes the entire agreement between the Landlord and the Tenant and may not be amended or modified except by subsequent agreement in writing of equal formality executed by the Landlord and the Tenant.  The submission of this Lease for examination does not constitute a reservation of or option for the Premises, and this Lease becomes effective as a lease only upon execution and delivery thereof by both the Landlord and the Tenant.

14.10               Registration:

The Tenant shall not register this Lease on the title to the Lands.  However, the Tenant may register a Notice of Lease on title to the Lands, at its sole cost, provided such Notice of Lease shall describe only the parties, the Premises and the Term.  Such Notice of Lease shall be prepared by the Tenant's solicitors, and shall be subject to the prior written approval of Landlord and its solicitors, and shall be registered at the Tenant's expense.  Upon expiry or termination of this Lease, the Tenant shall forthwith remove or discharge from title to the Lands any such Notice of Lease.

14.11               Name of Building:

The Tenant shall not refer to the Building by any name other than that, if any, designated from time to time by the Landlord, and the Tenant may use such designated name of the Building for the business address of the Tenant but for no other purpose.

14.12               Governing Law:

This Lease shall be governed by and construed in accordance with the laws of the Province of Ontario.

14.13               Survival of Tenant's Covenants:

All agreements, covenants and indemnifications in this Lease made by the Tenant shall survive the expiration or earlier termination of this Lease, anything to the contrary in this Lease notwithstanding.

14.14               Quiet Enjoyment:

The Landlord agrees that upon the Tenant duly paying the Rent hereby reserved and duly observing and performing the agreements, terms and conditions herein on its part to be observed and performed, the Tenant shall and may peaceably possess and enjoy the Premises for the Term without any hindrance, interruption or disturbance from the Landlord. If the Landlord is in default, the Tenant shall not have or exercise any right or remedy with respect thereto unless such default continues for 10 days or such longer period as may be reasonably required in the circumstances to cure such default after notice by the Tenant to the Landlord specifying reasonable details of the default and requiring it to be remedied but in no event may the Tenant withhold, delay, offset or deduct from payments of Rent due under this Lease.

14.15               Binding on Successors:

This Lease and everything herein contained shall enure to the benefit of and be binding upon the respective heirs, executors, administrators, successors, assigns and other legal representatives, as the case may be, of each and every one of the parties hereto, subject to the granting of consent by the Landlord to any Transfer.

14.16               Limitation on Use:

The Tenant acknowledges and agrees that it will not, nor will it permit the Premises (or any part thereof) to be used for any purpose except the use specifically provided for in this Lease and for no purpose which is not permitted in the Building by any Authority or the Landlord.

14.17               Corporate Ownership:

 The transfer or issue by sale, assignment, bequest, inheritance, operation of law, or other disposition, or by subscription, of any part or all of the corporate shares of the Tenant, so as to result in any change in the present effective voting control of the Tenant by the party or parties holding such voting control at the date of commencement of this Lease shall be deemed to be an assignment of this Lease, and the provision of Article VIII hereof shall apply mutatis mutandis. The Tenant shall make available to the Landlord, such books and records of the Tenant for inspection at all reasonable times, in order to ascertain whether there has, in effect, been a change in control.

14.18               Assignment and Subletting:

The terms "assignment", "subletting" and “Transfer” in this Lease shall include the mortgaging or encumbering of this Lease, the Tenant's interest herein or the Premises or any part thereof and the occupation or parting with or sharing possession of all or any part of the Premises by any person, firm, partnership, or corporation, or any group or combination thereof.  An assignment or transfer shall be construed so as to include an assignment or transfer by operation of law. "Sublease" means any transaction other than an assignment whereby any right of use, occupancy or possession (whether exclusive, non-exclusive, permanent or temporary) relating to the whole or any part of the Premises is conferred upon anyone (whether immediately, conditionally or contingently) and includes but is not limited to any sublease, sub-sublease, concession, franchise, licence agreement or any other arrangement (such as but not limited to a management agreement) conferring any such right of use, occupancy or possession and whether or not Tenant is a party thereto.

14.19               Several Liability:

If two or more corporations, partnerships or other business associations (or any combination of two or more thereof) constitute the Landlord in this Lease, the liability of each such corporation, partnership or other business association hereunder is several.  In the event of default by the Landlord under this Lease, the Tenant agrees that should it proceed against such corporations, partnerships or other business associations, it shall do so only in accordance with their several interests, as they may be from time to time.

14.20               Time of the Essence:

Time shall be of the essence for this Lease and for every part hereof.

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ARTICLE XV - DEFINITIONS - INTERPRETATION

15.1               Definitions:

In this Lease, unless there is something in the subject matter or context inconsistent therewith:

"Additional Rent" means the Proportionate Share of Realty Taxes and Operating Costs, payments for Utilities and light fixtures, and all other payments for Additional Services, and such other sums, excluding Basic Rent, otherwise payable by the Tenant in accordance with the terms of this Lease.

"Additional Services" means any service and/or supervision provided to the Tenant and supplied by the Landlord or by anyone authorized by the Landlord and not otherwise expressly provided for as a standard service under this Lease, including by way of example, steam cleaning of carpets, moving furniture, alterations to Leasehold Improvements, or providing air-conditioning or ventilation for periods in excess of Normal Business Hours are each Additional Services.

"Architect" means the independent architect, surveyor or engineer from time to time appointed by the Landlord.

"Authority" means the federal, provincial, and municipal governments, the courts, administrative and quasi-judicial boards and tribunals and any other organizations or entities with the lawful authority to regulate, or having a power or right conferred at law or by or under a statute over, the Landlord, the Tenant, the Building, the Lands or the Premises including the businesses carried on therein;

"Basic Rent" means the basic rent payable by the Tenant pursuant to this Lease.

“BOMA” means the Standard Method for Measuring Floor Area in Office Buildings - American National Standard, as approved June 7, 1996 and known as BOMA ANSI Z65.1-1996.

"Building" means the buildings, structures, and improvements from time to time during the Term erected on the Lands together with all fixtures, sprinklers, elevators, escalators, heating, ventilating, air-conditioning and mechanical and electrical equipment and machinery and water, gas, sewage, telephone and other communication facilities and electrical power services and Utilities comprised therein, belonging thereto, connected therewith or used in the operation thereof, and now or hereafter constructed, erected and installed therein and thereon, and all alterations, additions, and replacements thereto, and includes the Common Areas but excludes all Leasehold Improvements made, constructed, erected or installed therein by or on behalf of any tenant of premises therein.  The municipal address of the Building is 000 Xxxxxxxxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx.

"Capital Tax" means any tax or taxes payable by the Landlord to any taxing authority based upon or computed by reference to the value of the Building, or the capital or place of business of the Landlord and includes, without limitation, provincial capital tax and federal large corporations tax as now existing and as modified or supplemented from time to time.  If the system of capital taxation shall be altered such that any new capital tax shall be levied or imposed in substitution for or in addition to Capital Tax from time to time levied or imposed, then any such new tax or levy shall be deemed to be Capital Tax or included in Capital Tax.

"Capital Tax for the Building" for any fiscal period means the amount calculated by multiplying the aggregate book value to the Landlord of the Lands and Building (and all equipment used in connection therewith) by the applicable Capital Tax rate imposed, from time to time, by the taxing authority having jurisdiction.  Aggregate book value shall be net of depreciation and amortization, for financial statement purposes and determined as at the end of such fiscal period.  The parties acknowledge that Capital Tax for the Building is an approximation based upon the concept of Capital Tax, and is not necessarily the actual Capital Tax paid or payable by the Landlord in respect of the Building.  If the calculation of Capital Tax changes, then the Landlord may adjust its calculation of such amount to reasonably reflect such change.

"Common Areas" means:

(i)   all common areas and facilities within the Building from time to time furnished or designated (and which may be changed) by the Landlord for the use in common, in such manner as the Landlord may permit, by tenants of premises in the Building and all others entitled thereto including, without restricting the generality of the foregoing, lobbies, corridors, together with washrooms, fan rooms, janitors' closets, electrical closets and other closets not situate within the demising line of any premises in the Building, and excluding parking spaces, pipes, wires, ducts, conduits and other elements of Building Systems; and

(ii) all of the Lands described in Schedule "A" hereto, not for the time being demised by the Landlord and not covered by any building (other than service buildings) available for the general benefit of all tenants of the Building and including without restricting the generality of the foregoing, parking areas, access roads, driveways, sidewalks and landscaped areas.

"Contaminant" means any solid, liquid, or gaseous substance, any Hazardous Waste, any Toxic Substances, any odour, heat, sound vibration, radiation or combination of any of them that may, if Discharged, have an adverse effect on the environment or on people, property or the normal conduct of business;

"Discharge" means any spill release, escape, leak or movement of a Contaminant into the environment, the indoor or outdoor air, into or onto the ground, into the surface water or ground water, into the sewers or any watercourse, or into, onto or from the Premises or the Building.

"Environmental Law" means the statutes, regulations, policies, directives, orders, approvals and other legal requirements of an Authority or of the common law which affect the Premises, the Landlord's or the Tenant's business, and which impose any obligations relating to the protection, conservation or restoration of the environment, the Premises or the Building;

"Fiscal Period" means the period designated as such from time to time by the Landlord.

"Hazardous Waste" means any hazardous waste, hazardous product, deleterious substance, special waste, liquid industrial waste, dangerous goods or substance which is controlled or regulated under Environmental Law.  For ease of reference, this includes, but is not limited to, any waste which is composed in whole or in part of substances which are:  (i) corrosive, (ii) ignitable, (iii) pathological, (iv) radioactive, (v) reactive, or (vi) toxic; and liquid waste, whether or not from a commercial or industrial process, that cannot lawfully be disposed of through the municipal sewers.

"Interest" or "Interest Rate" means interest at a rate equivalent to three (3%) per cent per annum in excess of the prime lending rate of The Canadian Imperial Bank of Commerce, Main Branch, Toronto Ontario (or its successors) where the prime lending rate of such bank means the rate of interest (now commonly known as that Bank's "prime rate"), expressed as a rate per annum, charged by such bank in Toronto on demand loans made by it in Canadian dollars at such time.

"Lands" means the lands described in Schedule "A" annexed hereto as supplemented or diminished from time to time by the Landlord.

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"Landlord's Improvements" means improvements to be constructed or installed in or to the Premises by the Landlord in accordance with the Landlord's working drawings prepared for the construction of the Building.  By way of example, and without limiting the generality of the foregoing, Landlord's Improvements include ceilings, lighting, and window covering systems originally installed by the Landlord and standard to the Building.  Any Landlord's Improvements from time to time modified by or on behalf of the Tenant so as to no longer be standard to the Building shall be considered Leasehold Improvements.  Landlord's Improvements shall not include any Leasehold Improvements installed by the Landlord on behalf of the Tenant or a previous occupant of the Premises.

"Lease" means this document as originally signed, sealed and delivered and as amended, from time to time, which amendments shall be in writing, signed, sealed and delivered by the Landlord and Tenant.

"Leasehold Improvements" means all items generally considered to be leasehold improvements, including, without limitation, all fixtures, equipment, improvements, installations, alterations and additions from time to time made, erected or installed by or on behalf of the Tenant, or any previous occupant of the Premises, including, without limitation, any stairways for the exclusive use of the Tenant, all fixed partitions, light fixtures, plumbing fixtures, however affixed and whether or not movable, and all wall-to-wall carpeting other than carpeting laid over finished floors and affixed so as to be readily removable without damage, and all water, electrical, gas and sewage facilities, all heating, ventilating and air-conditioning equipment and facilities exclusively serving the Premises all telephone and other communication wiring and cabling leading from the base building distribution panel to facilities located in the Premises, all cabinets, cupboards, shelving and all other items which cannot be removed without damage to the Premises; but excluding Trade Fixtures, furniture, unattached or free-standing partitions and equipment not in the nature of fixtures.

"Manager" means Xxxxxxxx's authorized manager for the Building who may be changed from time to time and who is Redcliff Realty Management Inc. at the date of signing this Lease.

"Mortgagee" means the Landlord's mortgagee(s) from time to time with respect to the Lands, the Building and/or this Lease, and includes a trustee for bondholders.

"Normal Business Hours" means the hours from 8:00 a.m. to 6:00 p.m. on Monday to Friday of each week except any statutory holiday or civic holiday in the City of Toronto, or the Province of Ontario.

"Operating Costs" means the total direct and indirect cost and expense, incurred, or accrued, whether by the Landlord, or by others on behalf of the Landlord, and allocated by the Landlord to the discharge of its obligations under this Lease, or incurred or accrued with respect to the ownership, supervision, maintenance, operation, cleaning, insuring, improvement, repair and replacement to the Lands and the Building, including without limiting the generality of the foregoing the total annual cost and expense of:

(i) insurance maintained by the Landlord with respect to the ownership and operation of the Lands and the Building including without limitation the cost of insuring the Building and the Lands with such forms of coverage and in such amounts as the Landlord, or its Mortgagees may, from time to time determine, including, without limitation, costs and premiums paid for insurance against any risks of physical loss or damage to property of the Landlord on a replacement cost basis, boiler, pressure vessels, air-conditioning equipment and miscellaneous electrical apparatus insurance on a broad form blanket coverage repair and replacement basis, loss of insurable gross profits and loss of rental income attributable to all perils reasonably insured against by the Landlord or commonly insured against by prudent landlords, third party liability hazards including exposure to personal injury, bodily injury and property damage on an occurrence basis including insurance for all contractual obligations and covering also actions of all authorized employees, subcontractors and agents while working on behalf of the Landlord, and any other forms of insurance as the Landlord or its Mortgagees may reasonably require from time to time for insurable risks and in amounts against which a prudent owner of a first-class office building in the City of Toronto would protect himself;

(ii) warranties and guarantees;

(iii) complete maintenance and janitorial service for the Building and Lands, including snow removal, window cleaning, garbage and waste collection and disposal, the cost of operating and maintaining any merchandise holding and receiving areas and truck docks, and the cost of interior and exterior landscaping;

(iv) elevator maintenance, lighting, public and private Utilities (net of the amounts chargeable under Section 4.5 hereof), together with the cost of energy management programmes and the cost of maintaining any signs considered by the Landlord to be part of the Common Areas;

(v) policing and supervision;

(vi) salaries, termination and severance costs of all personnel employed to carry out supervision, maintenance and service operations, (including contributions towards usual fringe benefits, unemployment insurance, pension plan contributions and similar contributions), and to the extent such personnel are not engaged full time to perform such supervision, maintenance and service operations, then only such portion of their salaries as is attributable to such on-site performance;

(vii) the rental of any equipment and signs, and the cost of building supplies, used by the Landlord in the maintenance and operation of the Lands and the Building;

(viii) heating, air-conditioning and ventilation of the Building;

(ix) repair, maintenance and operation of the Lands and the Building and the repair, replacement, maintenance and operation of the mechanical, electrical, plumbing, heating, air-conditioning and any communications equipment appurtenant thereto;

(x) operation of parking garages;

(xi) all business taxes, if any, from time to time payable by the Landlord, on account of its ownership or operation of the Lands and Building but excluding income tax of the Landlord;

(xii) legal fees as reasonably attributable to the daily operation of the Lands and Building but excluding legal fees for lease enforcement and leasing of the Lands and Building;

(xiii) all fees and expenses incurred by the Landlord in connection with actions taken by the Landlord to appeal property assessments for the Lands and Building;

(xiv) accounting and computing services and audit fees in connection with the calculations and tabulations of amounts referred to in this Lease;

(xv) security services, if any, undertaken by or on behalf of the Landlord;

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(xvi) depreciation and amortization of capital costs as determined in accordance with generally accepted accounting principles for:

A. the costs of all maintenance and cleaning equipment and Landlord's utility meters;

B. the costs incurred for all other fixtures, furniture, replacement of finishes in the Common Areas, equipment, and facilities serving the Building;

C. the costs, together with Interest, of equipment modification or improvements of the Building, amortized over their useful life, as determined by the Landlord; and

D. the costs incurred by the Landlord in complying with any laws including Environmental Laws pertaining to the operation of the Lands and Building, and all costs incurred pursuant to Section 6.4(b) to (e) inclusive hereof together with Interest;

(xvii) Capital Tax including Capital Tax for the Building;

(xviii) a management fee which shall be an amount equal to fifteen per cent (15%) of the aggregate of all Operating Costs other than this management fee; and

(xix) actual costs related to the staffing and operation of a regional or on-site administrative office serving the Building, including the fair rental value (having regard to rentals prevailing from time to time for similar space) of space occupied by the Landlord's employees for day to day administrative and supervisory purposes relating to the Building.  In the case of a regional office, the costs will be apportioned among the buildings served by it on a pro rata basis.

If the Landlord decides not to charge the full amount of any one or more of the foregoing costs and expenses in the year in which it is incurred, then any such uncharged portions may be charged in any subsequent years and there shall be included, interest at the Interest Rate on the uncharged portion of such costs and expenses from time to time outstanding. Indirect and offsite costs shall be determined and allocated by the Landlord to Operating Costs in accordance with the provisions of this Lease.  Where any amount, cost or expense is to be determined, allocated, apportioned or attributed under any provision of this Lease, the Landlord shall do so and shall act reasonably in determining and applying criteria which are relevant to doing so and the Landlord may retain engineering, accounting, legal and other professional consultants to assist and advise in doing so.  If the Lands and Buildings contain office, retail or residential components then Landlord shall allocate Operating Costs between the various components depending upon the Landlord's determination of the amounts attributable to each component.

Provided that if the Building is not fully occupied for any period within the Term, the Operating Costs which vary with the level of occupancy of the Building (for example, the cost of janitorial services) may be adjusted to reflect full occupancy.

And provided further, Operating Costs shall not include and shall deduct the following, except to the extent set out above:

(1) commissions, advertising costs, or legal expenses, in connection with leasing the Lands and Building or any part thereof;

(2) the cost of painting, repainting, decorating, or redecorating, or of providing special cleaning services for any occupant of any space in the Building, other than the Premises;

(3) the cost of any insurance premiums for plate glass insurance;

(4) the cost of any insurance premiums to the extent that the Tenant is obliged to reimburse the Landlord for the cost of such premiums pursuant to any provision of this Lease and/or to the extent that any other tenant of the Building would be obligated to reimburse the Landlord for the cost of such premiums pursuant to any provision of such tenant's lease other than, in each case, pursuant to provisions similar to Section 4.4 of this Lease;

(5) expenses incurred by the Landlord in respect of charges directly chargeable to other tenants of the Building including for electricity used by other tenants of the Building for lighting or for the operation of business equipment and machinery within such tenants' premises, or expenses incurred with respect to the repair of damage to the Building and Lands, all to the extent that the Landlord received direct and specific reimbursement therefor by other tenants of the Building or from the proceeds of insurance;

(6) the expenses incurred by the Landlord in respect of installation of other tenants' improvements;

(7) interest and principal on mortgages and capital cost allowance on the Building;

(8) any costs relating to aerials, antennae, cables, machinery, equipment, installations, or other forms of communications equipment not part of the operation of the Building as a first-class office building, or installed at the request of and for the limited or specific use of any person whether occupying space in the Building or not;

(9) any amounts directly and specifically chargeable to other tenants for services, costs and expenses solely attributable to the accounts of such tenants;

(10) the costs of  structural repairs or replacements made necessary due to defects or weaknesses in the design, construction, materials or workmanship in the original construction of the Building and any portions thereof;

(11) any amounts as a result of the Landlord’s violation or failure to comply with any governmental regulations or rules or any court order, decree or judgment; and

(12) net recoveries by the Landlord in respect of warranties or guarantees relating to the construction of the Building to the extent (but only to the extent) that the repair costs in respect of the work covered by such warranties or guarantees have been charged as Operating Costs (the Landlord hereby agreeing to diligently pursue any entitlement to such proceeds).

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"Premises" means and shall be deemed to include (except where such meaning would be clearly repugnant to the context) the space demised and all Leasehold Improvements and Alterations therein.  The space demised shall consist of the area shown outlined in red on Schedule "B" attached hereto and shall be bounded by the unfinished interior surfaces of the perimeter walls and windows, the unfinished surfaces of interior load-bearing walls, the unfinished top of the floor slab and the unfinished bottom of the floor slab of the floor above excluding, however, any stairs and other areas within said boundaries which are not included in the calculation of Rentable Area and excluding pipes, wires, ducts, conduits and other elements of the Building systems constructed and installed by or for the Landlord including, without limitation, the HVAC system.

"Proportionate Share" shall be determined by dividing the Realty Taxes and the Operating Costs by the Total Rentable Area of the Building and multiplying the quotient by the Rentable Area of the Premises.  If the Landlord determines that any component of Operating Costs is attributable to only part of the Building, then those costs may be divided only by the Rentable Area to which those costs are so determined to be attributable.  Should Landlord determine that any component of Operating Costs is not attributable to the Premises, the Tenant shall remain responsible for payment of its Proportionate Share of that component of Operating Costs, as it relates to Common Areas.

"Realty Taxes" means all real estate, municipal or property taxes (including local improvement rates), levies, rates, duties, and assessments whatsoever imposed upon or in respect of any real property from time to time by any Authority, which may be levied or assessed against the Lands and Building, or the Landlord, or the owners of the Lands and Building, and any and all taxes which may, in the future, be levied on the Lands, the Building or the Landlord due to its ownership thereof in lieu of realty taxes or in addition thereto and the cost to Landlord or the owners of appealing such levies, rates, duties and assessments.  Should the Lands and Building not be fully occupied or assessed as a commercial property for determination of Realty Taxes in any calendar year, then the Landlord shall adjust the Realty Taxes to an amount that would have been determined if the Building and Lands were fully occupied and assessed as a commercial property.

"Rent Commencement Date" is as defined in Section 1.9 hereof.

"Rent, rent, Rental or rental" means all payments and charges payable by the Tenant pursuant to this Lease, including without limitation the Basic Rent and the Additional Rent.

"Rentable Area" of any portion of the Building means the rentable area of floor areas determined in accordance with BOMA and adjusted from time to time to take account of any structural, functional or other change affecting same.

"Rental Taxes" means any tax or duty imposed upon the Landlord or the Tenant which is measured by or based in whole or in part upon the Rent payable under this Lease, whether existing at the date hereof or hereinafter imposed by any governmental authority, including without limitation goods and services tax, value added tax, business transfer tax, retail sales tax, federal sales tax, excise taxes or duties, or any tax similar to any of the foregoing.

“Rules and Regulations” means the Rules and Regulations referred to in Section 2.3 of this Lease.

"Schedules" means the schedules appended to this Lease comprising:

Schedule A  -                                Legal Description

                  Schedule B  -                           Floor Plan

                 Schedule B-  1  -                          Space Plan

Schedule C  -                                Landlord's and Xxxxxx's Work

Schedule D  -                                Rules and Regulations

   Schedule E -                                 Special Provisions

"Tenant" includes the tenant named in this Lease and its respective successors and assigns, as the case may be.

"Term" means the initial term of this Lease as set out in Section 1.5 hereof, any renewal or extension term and any overholding period.

"Term Commencement Date" is defined in Section 1.5 hereof.

"Total Rentable Area of the Building" means the aggregate of the Rentable Areas of each floor in each of the Buildings determined in accordance with BOMA and adjusted from time to time to take account of any structural, functional or other change affecting the same.

"Toxic Substances" means any substance which is listed on the List of Toxic Substances prescribed under the Environmental Protection Act (Canada) (as amended from time to time, or any replacement legislation), or is designated to be toxic or hazardous by an Authority.

"Trade Fixtures" means all items generally considered to be trade fixtures, including, without limitation, computers, and business equipment, built-in fridges, stoves, walk-in coolers, counters, bars, chairs, stools, tables, banquettes, racks, or any other equipment or fixtures used by the Tenant in its business, any of which have been installed in the Premises by or on behalf of the Tenant , but notwithstanding the foregoing, Trade Fixtures shall not include any Leasehold Improvements, any part of the electrical, plumbing, mechanical, sprinkler, heating, ventilating or air-conditioning equipment or systems, or any floor coverings, wall coverings or any part of the ceiling, whether or not installed by the Tenant or Landlord.

“Usable Area” means, in the case of premises consisting of part of a floor other than the ground floor of the Buildings, the floor area determined in accordance with BOMA and adjusted from time to time to take account of any structural, functional or other change affecting same.

"Utilities" means water, gas, fuel, electricity, telephone, waste disposal and other utilities or services or any combination thereof other than HVAC.

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15.2               Interpretation:

(a) In this Lease "herein", "hereof", "hereunder", "hereinafter" and similar expressions refer to this Lease and not to any particular paragraph, section or other portion thereof, unless there is something in the subject matter or context inconsistent therewith;

(b) All of the provisions of this Lease are to be construed as covenants and agreements as though the words importing such covenants and agreements were used in each separate paragraph hereof;

(c) Should any provision of this Lease be illegal or unenforceable, it shall be considered separate and severable from this Lease, and the remaining provisions shall remain in force and be binding upon the parties hereto as though the said provision had never been included;

(d) The captions appearing in this Lease have been inserted for convenience and reference only and in no way define, limit or enlarge the scope or meaning of this Lease or of any provision hereof.

(e) The Schedules are an integral part of this Lease.

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IN WITNESS WHEREOF the parties hereto have executed this Lease.

LANDLORD:

RT TWENTY-SIXTH PENSION PROPERTIES LIMITED

Per:                                                                    

Name:

Title:

Per:                                                                    

Name:

Title:

I/We have authority to bind the corporation

TENANT:

ULTIMATE SOFTWARE GROUP OF CANADA, INC.

Per:                                                                    

Name:

Title:

Per:                                                                    

Name:

Title:

I/We have authority to bind the corporation

INDEMNIFIER:

ULTIMATE SOFTWARE GROUP, INC.

Per:                                                                    

Name:

Title:

Per:                                                                    

Name:

Title:

I/We have authority to bind the corporation

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SCHEDULE “A”

LEGAL DESCRIPTION

Part of Lot 12, on the south side of Wellington Street, Town of York Plan, being more particularly described as Parts 1, 3, 5 and 8 on Plan 63R-4397 in the City of Toronto, in the Municipality of Metropolitan Toronto.

Together with the right-of-way for access purposes in favour of the owners, its successors and assigns, of that part of said Lot 12 designated as Parts 1, 3, 5 and 8 on said Plan 63R-4397, in, over, along and upon Parts 2, 4, 6 and 7 on said Plan 63R-4397 until such time as the said Parts 2, 4, 6 and 7 have been laid out and dedicated for public lane purposes.

The southerly limit of Wellington Street West and the easterly limit of Xxxxx Street as confirmed under the Boundaries Act by Plan BA-445 registered on August 1, 1973, as CT12047.

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SCHEDULE “B”

FLOOR PLAN

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SCHEDULE “B-1”

SPACE PLAN

(for illustrative purposes only)

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SCHEDULE "C"

XXXXXXXX'S AND TENANT'S WORK

XXXXXXXX'S WORK

The Tenant shall lease the Premises on an “as is” basis, save and except that provided this Lease has been executed by the Tenant in a form acceptable to the Landlord on or before September 23, 2009, the Landlord shall, at its own cost and expense, provide and complete the following work (the “Landlord’s Work”) to the Premises:

(i) Erect a demising wall in the approximate location indicated as #1 on the floor plan attached hereto as Schedule “B”, in order to separate the Premises from the Temporary Premises (as hereinafter defined);

(ii) Ensure that the existing HVAC system serving the Premises is in good working order and condition and ensure that the existing electrical service supplied to the Premises is in good working order;

(iii) Remove the existing cabling throughout the Premises (if required by the Tenant);

(iv) Replace any chipped or stained ceiling tiles with new base Building ceiling tiles;

(v) Replace any chipped or stained light covers with Building standard light covers;

(vi) Replace any existing burnt light bulbs with new Building standard light bulbs;

(vii) Ensure that the Building standard window blinds are in place throughout the Premises and are in good working order; and

(viii) Ensure that all areas within the Premises are cleared of debris and vacuumed.

TENANT'S WORK

All Tenant work is subject to the requirements of the attached "Tenant Construction Regulations". Subject to the Turnkey as set out in Schedule “E” hereof, the Tenant shall, at its expense, complete the Premises in accordance with the standards of a first-class office building using new materials, including but not limited to the installation of:

1. Flooring Finish:

The flooring must be approved by the Landlord.

2. Ceiling Tiles:

Any installation or relocation of ceiling tiles is at Tenant's expense.

3. Interior Partitions:

All interior partitioning including the finishing thereof complete with millwork and fixtures.

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4. Elevator Lobbies:

Where a tenant leases the whole office floor, the finishing of the lobby floor, walls and ceiling, mechanical, electrical, and lighting services shall be at the tenant's expense, including floor finishes to washrooms if required.

5. Signs:

Tenant signage proposals must be presented to the Landlord for written approval.  Only those signs which are compatible with the Building and are tasteful in size, colour and logo will be approved.

6. HVAC & Plumbing:

Any modification to the Landlord's mechanical or electrical system required by the Tenant at the Tenant's expense, including an air balancing report as performed by the Landlord's designated contractor and reviewed and approved by the base building mechanical consultant.

7. Sprinklers &Fire Hose Cabinets:

Any modification to the Landlord's fire safety systems as may be required by those authorities having jurisdiction, shall be performed by the Landlord's base building contractor at the Tenant's expense.

8. Power:

All power distribution within the Premises distributed through partitions to be carried out at the Tenant's expense.  The Landlord will supply and install in the meter socket provided, a kilowatt hour demand meter at the Tenant's expense.

9. Light Fixtures:

All additional light fixtures, of any type, and relocation of base building light fixtures as required by the Tenant are at the Tenant's expense.

10.Telephone:

Telephone conduit, wiring and equipment required to serve the Premises distributed through partitions to be carried at the Tenant's expense.

00.Xxxx Alarm System:

Any modification to the Landlord's fire alarm and life safety system as may be required by those authorities having jurisdiction, shall be performed by the Landlord's base building contractor at the Tenant's expense.

12.Building Automation System:

Any modifications to Building controls required as a result of Tenant modifications shall be carried out exclusively by the Landlord's base building contractor at the Tenant's expense.

13.Washroom Fixtures:

Any additions to the number of washroom fixtures required by code and the Tenant's staff population.

14.Additional Requirements:

Any additional requirements of the Tenant over those specified in the Schedule "C" are at the Tenant's expense.

TENANT CONSTRUCTION REGULATIONS

Based on the Landlord's experience and in order to incur the least amount of inconvenience to all concerned, the following rules and regulations are applicable to all tenants upon starting their construction work.  These regulations will be enforced to ensure no interruption by tenant contractors to other businesses or public movement.

COMMENCEMENT OF TENANT'S WORK

Unless otherwise expressly permitted or required by the Landlord, no Tenant's Work may commence and the Tenant may not have possession of the Premises until the following conditions are satisfied:

·   The Landlord has approved the Tenant’s Plans and Specifications;

·   The Tenant has submitted a construction schedule to the Landlord outlining key dates for the design, construction and move-in activities;

·   All necessary approvals and permits of municipal and other governmental authorities having jurisdiction over Tenant's Work (or any other person whose approval is required) have been obtained;

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·   The Tenant has provided the Landlord with proof of its placement of fire, liability, and other insurance with insurers, to limits and on terms as the Landlord reasonably requires;

·   The Landlord has approved the Tenant's contractors and subcontractors;

·   The Landlord has notified the Tenant in writing of the date the Premises are ready for commencement of Tenant's Work and upon which the Tenant is to take possession;

·   The Lease has been fully executed.

Working

Drawings: The Landlord shall submit an outline plan of the Premises to the Tenant and the Tenant shall within sufficient time so as not to delay the commencement of the Term of the Lease, prepare and submit to the Landlord for approval one set of sepias and six complete sets of working drawings and specifications for the Tenant's Improvements, as prepared by a qualified interior designer and engineer, both to be approved by the Landlord.  The Tenant's submission shall include:

1. Floor Plan(s) - showing location and construction of all partitions and fixed elements relative to demising partitions, including floor finishes.

Scale:  1/8" = 1'-0".

2. Reflected Ceiling Plan - indicating any modification or relocation to Landlord's base building's equipment and fixtures as well as installation of new lights, sprinkler heads, HVAC diffusers, ceiling finishes, exit and emergency lights and access panels as required.

Scale:  1/8" = 1'0".

3. Interior Elevations and Details - including interior finish schedule, wall assemblies, floor finishes, millwork and fixtures.

Scale:  1/8" = 1'0".

4. Electrical and Telephone Plan - including specifications and performance characteristics of all fixtures, HVAC wiring and controls and/or any modification and additions to Landlord's base building equipment and fixtures.  They should also indicate total connected electrical loads schematic of services and panels.

Scale:  1/8" = 1'-0".

5. Plumbing and Mechanical Plan - including specification and performance characteristics of all equipment and connections to the base building services, duct and diffuser layout and/or any modifications or additions to Landlord's base building equipment and services.  They should also indicate existing, relocated and new sprinkler head locations, plumbing layouts, ventilation and air conditioning requirements and heat gain/loss calculations.

6. Sample Board of Finishes - indicating material and colour sample for finishes for walls, floors, ceilings and millwork etc.  Sample board size to be 8-1/2" x 14" maximum.

7. Specifications and Details - as required if not included on the appropriate drawings.

Approvals: No work for which drawings and specifications are required shall be commenced by the Tenant until said drawings and specifications have been approved in advance in writing by the Landlord and until the Tenant has secured approval thereof from every governmental Authority having jurisdiction and submitted proof of such approval to the Landlord.  Under no circumstances shall the Tenant, its employees, its contractors, or its contractors' employees make any opening in the floors or walls of the Building (other than the Tenant's interior partitions) without the prior written approval of the Landlord.

Permits: The Tenant is responsible for obtaining, at its own expense, all approvals and/or permits pertaining to its space from all authorities having jurisdiction prior to commencement of construction.  Building permits are obtained from the City of Toronto.

A copy of the Tenant’s Plans and Specifications which the Landlord has approved, along with the building permit, must be kept on the site for the duration of the work and be available for viewing by the Landlord's representative at all times.

All approvals and permits should be posted in a visible location.

The Tenant must immediately correct any work which does not meet with the approval of the Building Inspector, notwithstanding the fact that the Tenant's Plans and Specifications have been approved previously by the appropriate governmental authorities and the Landlord.  Any revisions to the Plans and Specifications requested by such authorities must be brought to the attention of the Landlord immediately.  Should the Tenant unduly delay the required correction, the Landlord may make the correction at the Tenant's cost.

Contractor's

Insurance: Prior to the commencement of the Tenant's Work, the Tenant shall submit to the Landlord a fire and liability insurance certificate and any other insurance requirements from the Tenant's general contractor or from each of the Tenant's independent sub-contractors, as the case may be, in an amount not less than FIVE MILLION DOLLARS ($5,000,000.00) per occurrence, which liability insurance shall be on a comprehensive form and shall cover all hazards related to any work performed by any such general contractor or independent contractor, as the case may be, in or on the Premises.

Such policy or policies shall include the Landlord as an additional named insured and shall contain a cross-liability clause.

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Damage to Premises or Building:

Any damage to the Premises or the Building caused by the Tenant or any of its employees, contractors, or workers shall be repaired forthwith by the Landlord at the Tenant's expense or by the Tenant with the Landlord's approval.

Any base building items such as lights, air diffusers, etc. that are removed by the Tenant's contractors shall be turned over to the Landlord and stored in the location designated by the Landlord.

Tenant's

Workers: All of the Tenant's Work will be performed by competent workers whose labour affiliations or non-affiliations, as the case may be, will not be incompatible with those of the Landlord's workers or the workers of any of the Landlord's contractors.  If any of the labour affiliations or non-affiliations, as the case may be, of the workers performing the Tenant's Work are incompatible in the Landlord's sole opinion, with those of the Landlord's workers or the workers of any of the Landlord's contractors, the Tenant shall remove from the work-site immediately upon the Landlord's request, all its workers whose labour affiliation or non-affiliations are so incompatible.

Contractor's

Approval: The Tenant shall prepare and submit to the Landlord for approval, a list of all contractors to be engaged in the construction of the Tenant's Work together with written evidence that each is in good standing with the Worker's Compensation Board.  The Landlord maintains the right to determine the acceptability of any trade or supplier to undertake work upon, or supply goods or materials to, the Premises.

Unless the Landlord otherwise consents in writing, the Tenant shall employ the Landlord's interior contractor in the completion of the Tenant's Work, except for all modifications required to the Landlord's mechanical and electrical systems.

Such mechanical and electrical modifications to the base building shall be carried out by the Landlord at the Tenant's expense.  Should the Tenant choose to engage an interior contractor other than the Landlord's interior contractor, the Tenant shall pay to the Landlord with respect to the conduct of the Tenant's Improvements all direct costs incurred by the Landlord including, but not limited to, power consumption, hoisting, security and supervision, said costs to be payable upon demand.

Public

Safety: It is the responsibility of the Tenant to ensure that its contractors exercise all caution in matters relating to public and construction safety and to comply with the standards established by authorities having jurisdiction.  From time to time, the Landlord or the Landlord's general contractor may issue to a Tenant's contractor safety instructions which must be strictly adhered to.  All work is governed by the latest Construction Safety Act and the Tenant's contractor must abide by the Landlord's representative in these areas when required.

Security: Security of the Premises during construction and the fixturing period is the sole responsibility of the Tenant.  The Landlord assumes no liability for any loss or damage including the theft of building materials, equipment or supplies.

Working

Hours: The Tenant's contractors and suppliers will be subject to restrictions which may be imposed by the Landlord's contractor and/or the Landlord in regard to the hours of work, scheduling and coordination of work.

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Temporary Electrical

Service: The Landlord, through its contractor when active on site, may provide, at the Tenant's expense, temporary electrical service required during the Tenant's construction phase.

Fire

Ratings: During construction and/or demolition, care must be taken by the Tenant and its contractor to maintain existing fire walls, fire proofing and fire dampers in duct work, notwithstanding any other work that may affect the fire rating requirements of authorities having jurisdiction.  If any damage to the fire rating is caused by the Tenant, the Landlord will advise the Tenant to perform the necessary repairs or the Landlord will repair such damage at the Tenant's expense.

Building

Codes: It is the Tenant's responsibility to fully comply with all applicable governing codes and ordinances for their occupancy type.

Additional

Work: Any additional work (whether as hereinbefore set out, or otherwise) performed by the Landlord specifically for Tenant and any excess or additional cost in the Landlord's Work occasioned by the Tenant's requirements shall be paid for by the Tenant on demand, which may be prior to the commencement of such work.  The amount so payable by the Tenant shall be the total cost to the Landlord including architectural and engineering fees plus a further ten percent (10%) of that total cost for the Landlord's overhead and supervision.

Landlord's

Right: The Landlord reserves the right to prohibit the Tenant, its contractors, employees and workmen from working on any part or parts of the Premises, and to have such work carried out by a party or parties designated by the Landlord at the Tenant's expense, providing that it is understood that the Landlord will only exercise its said right in order to:

(a) maintain its rights to enforce the warranties, guarantees and similar covenants given to it by parties constructing the Building or installing items therein; or

(b) ensure that such work is compatible with existing systems, structures or work.

Deficiencies:

The Tenant shall make good any deficiencies discovered by the Landlord's Tenant Coordinator or by the Building inspectors whether in its own Premises or in adjacent premises affected by the Tenant's construction.  Failure to comply to a written request within thirty (30) days will cause the Landlord to correct Tenant deficiencies at the Tenant's expense.

Clean-Up: The Tenant should ensure proper clean-up of all areas related to its work to the satisfaction of the Landlord prior to opening for business.

Any damage or construction staining should be repaired or removed immediately by the Tenant.

As-Built

Drawings: The Tenant is required to carry out its construction work in strict accordance with the approved drawings.  Changes must be approved by the Landlord and recorded in "as-built" drawings and provided to the Tenant Coordinator at the conclusion of construction.  The "as-built" drawings must be submitted to the Landlord on a standard 3 1/2" inch disc in AutoCad format or compatible software.  The CADD layering standards must be the same as the ARIDO CADD Graphic Standards Item 3.4 Drawing Group, Release 2.0, dated March, 1993.

The Tenant must provide the Landlord with one (1) set of good quality sepia prints of all drawings, documenting as-built conditions within four (4) weeks of construction completion.

Statement Of Completion:

Prior to any final payments by the Landlord, a "signing-off" by the Tenant Coordinator that the Tenant’s Work has been carried out in an acceptable manner to the Landlord must be obtained.  Failure to obtain this approval may result in the Landlord having to complete or re-construct some components of the Tenant’s Work in order to achieve the standards of the Building, with the costs being charged to the Tenant.

  Statutory Declaration:

On completion of Tenant's Work, the Tenant shall forthwith furnish to the Landlord two (2) statutory declarations, one from itself and one from its general contractor, each declaration stating that there are no construction liens outstanding against the Premises or the Building on account of  the Tenant's Work and that all accounts for work, service and materials have been paid in full with respect to all of the Tenant's Work, together with evidence in writing (from both the Tenant and the general contractor) satisfactory to the Landlord that all assessments under the Worker's Compensation Act have been paid.

Discharge Of

Liens: In accordance with this Lease, the Tenant shall promptly pay all charges incurred by or on behalf of the Tenant for any work, materials or services which may be done, supplied or performed at any time in respect of the Premises and shall, within five (5) days after notice thereof is given to the Tenant, discharge any liens arising therefrom at any time filed against the Premises or the Building or any part thereof.

Coordination

Fees: The Tenant shall pay to the Landlord a tenant coordination fee (the “Tenant Coordination Fee”) of One Dollar ($1.00) per square foot of the Rentable Area of the Premises.  Such payment is in consideration of the Landlord's supervision and/or coordination of any Alterations performed by or on behalf of the Tenant in the Premises during the Term or any extension thereof (but in no event shall the Tenant be required to pay such Tenant Coordination Fee for any minor work which does not require a building permit, such as, by way of example, painting and carpeting).   The Tenant Coordination Fee shall be payable by the Tenant to the Landlord upon demand.  For clarity, the Tenant Coordination Fee shall not apply to the Turnkey or any work performed by or on behalf of the Tenant prior to the Term Commencement Date.

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SCHEDULE "D"

RULES AND REGULATIONS

The Tenant shall observe the following Rules and Regulations (as amended, modified or supplemented from time to time by the Landlord as provided in this Lease):

1.   The Tenant shall not permit in the Premises any cooking or the use of any apparatus for the preparation of food or beverages (except for the use of coffee makers, kettles, microwave ovens or refrigerators or where the Landlord has approved of the installation of cooking facilities as part of the Tenant's Leasehold Improvements) nor the use of any electrical apparatus likely to cause an overloading of electrical circuits.

2.   The sidewalks, entries, passages, corridors, lobbies, elevators and staircase shall not be obstructed or used by the Tenant, his agents, servants, contractors, invitees or employees for any purpose other than ingress to and egress from the offices.  The Landlord reserves entire control of the Common Areas and all parts of the Building and the Land employed for the common benefit of the tenants.

3.   The Tenant, his agents, servants, contractors, invitees or employees, shall not bring in or take out, position, construct, install or move any safe, business machine or other heavy office equipment without first obtaining the consent in writing of the Landlord.  In giving such consent, the Landlord shall have the right in its sole discretion, to prescribe the weight permitted and the position thereof, and the use and design of planks, skids or platforms to distribute the weight thereof.  All damage done to the Building by moving or using any such heavy equipment or other office equipment or furniture shall be repaid at the expense of the Tenant. The moving of all heavy equipment or other office equipment or furniture shall occur between 6:00 p.m. and 8:00 a.m. or any other time consented to by the Landlord and the persons employed to move the same in and out of the Building must be acceptable to the Landlord.  Safes and other heavy office equipment will be moved through the halls and corridors only upon steel bearing plates.  No deliveries requiring the use of an elevator for freight purposes will be received into the Building or carried in the elevators, except during hours approved by and scheduled through the Landlord.  Only elevators so designated by the Landlord shall be used for deliveries of workmen and materials, furniture and other freight. The Tenant shall pay, as Additional Rent, any costs incurred by the Landlord in connection with the moving of the Tenant's equipment, furniture, etc.

4.   All persons entering and leaving the Building at any time other than during Normal Business Hours shall register in the books kept by the Landlord at or near the entrance or entrances and the Landlord will have the right to prevent any person from entering or leaving the Building unless provided with a key to the premises to which such person seeks entrance and a pass in a form to be approved by the Landlord and provided at the Tenant's expense. Any persons found in the Building at such times without such keys or passes will be subject to the surveillance of the employees and agents of the Landlord.  The Landlord shall be under no responsibility for failure to enforce this rule.

5.   Any persons requiring access to telephone rooms or closets may be required to show proof that they have authority to access such space.

6.   The Tenant shall not place or cause to be placed any additional locks upon any doors of the Premises without the approval of the Landlord, which approval shall not be unreasonably withheld, and subject to any conditions imposed by the Landlord.  Additional keys may be obtained from the Landlord at the cost of the Tenant.

7.   The water closets and other water apparatus shall not be used for any purpose other than those for which they were constructed, and no sweepings, rubbish, rags, ashes or other substances shall be thrown therein.  Any damage resulting from misuse shall be repaired at the cost of the Tenant by whom or by whose agents, servants or employees the same is caused.  Tenants shall not let the water run unless it is in actual use, and shall not deface or mark any part of the Building, or drive nails, spikes, hooks or screws into the walls or woodwork of the Building.

8. No one shall use the Premises for sleeping apartments or residential purposes, or for any illegal purpose, or for the storage of personal effects or articles other than those required for business purposes.

9. Canvassing, soliciting and peddling in the Building or Common Areas are prohibited.

10. Any hand trucks, carry-alls, or similar appliances used in the Building shall be equipped with rubber tires, side guards and such other safeguards as the Landlord shall require.

11.           No animals or birds shall be brought into the Building.

12. The Tenant shall not install or permit the installation or use of any machine dispensing goods for sale in the Premises or the Building or permit the delivery of any food or beverages to the Premises without the approval of the Landlord or in contravention of any regulations made by the Landlord.  Only persons authorized by the Landlord shall be permitted to deliver or to use the elevators in the Building for the purpose of delivering food or beverages to the Premises. The Landlord acknowledges that the Tenant, acting reasonably, will be permitted to have small quantities of food and beverages delivered to the Premises provided such delivery does not interfere with traffic flow to the Building and with Building operations.

13. The Tenant shall not perform any acts or carry on any practice which may damage the Building or the Common Areas or be a nuisance to any tenant in the Building.

14. The Tenant shall keep all mechanical apparatus free of vibration and noise which may be transmitted beyond the Premises.

15. The Tenant shall not use or permit the use of any objectionable advertising medium such as without limitation, loud speakers, stereos, public address systems, sound amplifiers, radio broadcast or television apparatus within the Building which is in any manner audible or visible outside of the Premises.

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16. The Tenant shall not mark, drill into, bore or cut or in any way damage or deface the walls, ceilings, or floors of the Premises.  No wires, pipes, conduits, telephonic, telegraphic, electronic wire service or other connections shall be installed in the Premises without the prior written approval of the Landlord.

17. The Tenant shall not, except with the prior written consent of the Landlord, install any blinds, drapes, curtains or other window coverings in the Building and shall not remove, add to or change the blinds, curtains, drapes or other window coverings installed by the Landlord from time to time.  So that the Building may have a uniform appearance from the outside, the Tenant shall co-operate with the Landlord in keeping window coverings open or closed at various times as the Landlord may reasonably, from time to time, direct.

18. The Tenant shall not use any janitor, telephone or electrical closets for anything other than their originally intended purposes nor shall it install any of its equipment in such spaces.

19. The Tenant shall abide and be bound by the Security Services in force in the Building from time to time.  For the purpose of this clause, the term "Security Services" shall mean all aspects of security for the Building and the Lands, including equipment, procedures, rules and regulations pertaining to such security.

20. No public or private auction or other similar type of sale of any goods, wares or merchandise shall be conducted in or from the Premises.

21. Nothing shall be placed on the outside of window xxxxx or projections of the Premises, nor shall the Tenant place any air-conditioning unit or any other equipment or projection so that it will project out from the Premises.  The Tenant may not install air-conditioning equipment of any kind in any part of the Premises without the prior written consent of the Landlord.

22. All glass and trimmings in, upon or about the doors and windows of the Premises shall be kept whole, and whenever any part thereof shall become broken, the same shall be immediately replaced or repaired under the direction and to the satisfaction of the Landlord and shall be paid for by the Tenant as Additional Rent.

23. No bicycles or other vehicles shall be brought within the Building except as specifically designated by the Landlord.

24. No inflammable oils or other inflammable, dangerous or explosive materials shall be brought into the Building or kept or permitted to be kept in the Premises.

25.           In the event the Premises are used for restaurant or food handling purposes, the Tenant shall, at its expense:

(a) carry out at least monthly a xxxxx spraying program, and provide evidence thereof to the Landlord, and

(b)   clean all exhaust ducts at least twice yearly, and provide evidence thereof to the Landlord.

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SCHEDULE “E”

SPECIAL PROVISIONS

1.   Option to Extend

Provided the Tenant is Ultimate Software Group of Canada, Inc., is in physical occupancy of the whole of the Premises, is not and has not been in default of the terms under this Lease, and has given the Landlord not less than six (6) months’ and not more than nine (9) months’ prior written notice (the “Extension Notice”), the Tenant will have an option to extend the Term for a period of five (5) years (the “Extended Term”), on the same terms and conditions as this Lease, except that:

(a) there will be no Turnkey, Landlord’s Work, or any other tenant inducement;

(b) there will be no further option to extend; and

(c)   the Basic Rent payable during the Extended Term shall be the fair market rent for comparable premises in comparable buildings in the downtown Toronto west area, as agreed to between the parties, and failing such agreement within three (3) months after the delivery of the Extension Notice, this matter shall be referred to and determined by arbitration in accordance with the Arbitration Act, Ontario.

2.   Right of Second Refusal

Subject to an existing right of first refusal and provided the Tenant is not and has not been in material default of this Lease, the Landlord hereby grants to the Tenant a one-time, non-assignable right of second refusal to lease, during the Term or any extension thereof, the adjacent office space, identified as Suite 802, being approximately 2,159 square feet, as outlined in green on the floor plan attached hereto as Schedule “B” (the “Second Refusal Space”) (also known as the “Temporary Premises” in this Lease), on the same net effective rent the Landlord is willing to lease such space to a bona fide third party for a term coterminous with the Term.  During the Term or any extension thereof, in the event the Landlord receives a bona fide third party offer to lease (a “Third Party Offer”) the Second Refusal Space that it is willing to accept, the Landlord agrees to provide written notice to the Tenant along with the business terms of the Third Party Offer (the “Notice”) and deliver a truce copy to the Tenant of any such terms and conditions which the Landlord is willing to offer such space to a bona fide third party.  The Tenant shall have four (4) business days from the delivery of the Notice within which to exercise the right of second refusal to lease the Second Refusal Space on the same business terms as the Third Party Offer.  Failing which, this right of second refusal will be terminated and the Landlord shall be at liberty to proceed with the Third Party Offer.

It is understood and agreed by the Tenant that any space offered to the Tenant pursuant to this second right of refusal must be taken as a whole.

3.         Tenant’s Right to Terminate

The Tenant shall have a one-time right to terminate this Lease, effective on the expiration of the third (3rd ) anniversary of the Term (the “Tenant Termination Date”), by giving the Landlord not less than six (6) months’ prior written notice (the “Tenant Termination Notice”) of its intention to terminate this Lease, under the following terms and conditions:

(a)         the term and the tenancy hereby created shall expire on the Tenant Termination Date;

(b) (i) if the Tenant has not exercised its right of second refusal in accordance with the terms and conditions as set out in Section 2 of this Schedule “E”, concurrent with the submission of the Tenant Termination Notice, the Tenant shall submit to the Landlord a surrender fee (by way of a certified cheque) in an amount equal to Seventy-one Thousand, Nine Hundred and Ten Dollars ($71,910.00) plus applicable taxes; or

(ii) if the Tenant has exercised its right of second refusal in accordance with the terms and conditions as set out in Section 2 of this Schedule “E”, concurrent with the submission of the Tenant Termination Notice, the Tenant shall submit to the Landlord a surrender fee (by way of a certified cheque) in an aggregate amount equal to:  (I) Seventy-one Thousand, Nine Hundred and Ten Dollars ($71,910.00) plus applicable taxes; and (II) the then unamortized portion of any tenant inducements, such as, by way of example, improvement allowance and free rent, in respect of the Second Refusal Space;

(c) the Tenant shall, on or prior to the Tenant’s Termination Date, vacate the Premises and surrender them to the Landlord in accordance with the provisions of the Lease; and

(d) Rent shall be due and payable without reduction or abatement until the Tenant Termination Date.

4.         Turnkey

Provided this Lease has been executed by both the Tenant and the Landlord on or before September 23, 2009, the Landlord will, at its sole cost and expense, construct the Tenant’s Leasehold Improvements (the “Turnkey”) in accordance with a space plan and a leasehold finishes plan detailing the layout, quality and colour of the finishes.  Such plans will be approved by the Tenant no later than the date on which this Lease is executed by the Tenant in a form acceptable by the Landlord, provided the Tenant is given a minimum of three (3) business days to review and approve such plans.

The Landlord will secure a fixed price contract for the Turnkey in an amount (the “Turnkey Price”) equal to not more than Thirty Dollars ($30.00) per square foot of the Rentable Area of the Premises.  The Turnkey Price will include all costs associated with completing the Turnkey, including but not limited to, the cost of constructing the Leasehold Improvements, the associated design, engineering, consulting and permit fees, and the Landlord’s project management fee in an amount equal to five percent (5%) of the cost of the Turnkey.

In the event the Turnkey can be completed by the Landlord in an amount for less than the Turnkey Price, the Landlord will credit the Tenant with the difference to the Tenant’s account against Rent first due and payable by the Tenant pursuant to this Lease.

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The Landlord will obtain quotations from three (3) general contractors for the Turnkey within seven (7) days following the completion of the final architectural, mechanical and engineering drawings.  The Landlord will select the contractor within three (3) days following the receipt of such quotations, subject to the approval of the Tenant, acting reasonably.  The Turnkey will be substantially complete on or before January 31, 2010, subject to delays caused by the Tenant and/or delays resulting from events that are beyond the reasonable control of the Landlord.

The scope of the work for the Turnkey shall include, but not limited to, the following:

(a) demolish the existing improvements and construct new improvements in the Premises as per the space plan attached hereto as Schedule “B-1”;

(b) install new carpet in the Premises, in a colour to be selected by the Tenant from the Landlord’s standard samples for the Building, to all areas without hardwood floors;

(c) repair any damage to the existing ceiling, walls or floors resulting from demolition as specified in subsection (a) above;

(d) ensure that the HVAC will be distributed and balanced as per the space plan attached hereto as Schedule “B-1”;

(e) ensure that the electrical outlets and service will be sufficient for standard office requirement given the layout as per the electrical schedule attached hereto as Schedule “B-1”; and

(f) ensure that all new partitioning and ceilings are taped/finished and ready to receive paint and paint the Premises in a colour to be selected by the Tenant from the Landlord’s standard samples for the Building.

5.         Temporary Premises

Provided this Lease has been executed by both the Tenant and the Landlord on or before September 23, 2009, the Tenant shall be permitted to occupy certain premises (the “Temporary Premises”) comprising a Rentable Area of approximately two thousand, one hundred and fifty-nine (2,159) square feet, designated as 802, as shown outlined in green on the floor plan attached hereto as Schedule “B”, located on the eighth (8th) floor of the Building, for a term (the “Temporary Premises Term”) commencing on September 23, 2009 and expiring on the date on which the Landlord’s Work and the Turnkey are complete but in no event shall such date be on a date later than January 31, 2010.

During the Temporary Premises Term, the Tenant shall not be responsible for the payment of Basic Rent, the Tenant’s Proportionate Share of Operating Costs or Realty Taxes, in respect of the Temporary Premises, but shall be bound by all other terms of this Lease, including the requirement to pay for any utilities consumed in the Temporary Premises.  For clarity, the Tenant shall occupy the Temporary Premises on an “as is” basis and agrees that there will be no Landlord’s work for the Temporary Premises.  At the expiry of the Temporary Premises Term, the Tenant shall vacate the Temporary Premises and deliver them to the Landlord in a broom-swept condition.

6. Parking

Throughout the Term or any extension thereof, the Tenant will be provided with one (1) reserved parking permit for the parking facility at the Building, available 24 hours a day and 7 days a week (subject to Building emergencies and other events beyond the Landlord the Landlord’s control), at the then prevailing monthly unreserved parking rate, subject to change from time to time.  The monthly rate payable by the Tenant, as the date of this Lease, is Two Hundred and Ninety-five Dollars ($295.00) plus applicable taxes.

Subject to availability, the Landlord will make one (1) additional reserved parking stall available to the Tenant at any time throughout the Term, upon receipt of the Tenant’s request, in writing, on the same terms and conditions as set out in the preceding paragraph.

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