EXHIBIT 10.5
------------
Page 3
TERMS OF INSTRUMENT - PART 2
THIS LEASE is made as of the 13th day of December, 1994.
BETWEEN:
BCR PROPERTIES LTD., X.X. Xxx 0000, Xxxxxxxxx, Xxxxxxx
Xxxxxxxx, X0X 0X0
(the "Landlord")
AND:
RIVERSIDE FOREST PRODUCTS (XXXXXXXX LAKE) LIMITED, X.X. Xxx
0000, Xxxxxxxx Xxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(the "Tenant")
This Lease witnesses that in consideration of the rents and covenants herein
contained, the parties covenant and agree as follows:
BASIC TERMS
1. The following constitute the basic terms of this Lease:
(a) Landlord: BCR PROPERTIES LTD.
(b) Tenant: RIVERSIDE FOREST PRODUCTS (XXXXXXXX
LAKE) LIMITED
(c) Address of Tenant: X.X. Xxx 0000 Xxxxxxxx Xxxx, Xxxxxxx
Xxxxxxxx X0X 0X0
(d) Civic Address 110.Xxxxxxx Road
of Premises: Xxxxxxxx Lake, British Columbia
(e) Plan of Copy of Plan PGP38208 attached hereto as
the Premises Schedule "A"
(f) Legal Description of Parcel Identifier No: 000-000-000 Xxx 0,
Xxxxxxxx: Xxxxxxxx Xxx 00, Cariboo District, Plan
PGP38208 (the "Premises") comprising
26.85 hectares (66.35 acres) of which
25.67 hectares (63.43 acres) comprise
the main portion of the Premises and
1.18 hectares (2.92 acres) comprise the
access road portion of the Premises (the
"Access Road")
Page 4
(g) Permitted Use Forest Products Manufacturing Plant
of Premises:
(h) Term of Lease: Twenty (20) years
(i) Commencement September 1, 1994
of Term:
(j) Expiry of Term: August 31, 2014
(k) Rental: (i) Annual rent during initial two (2)
year period for the 25.67 hectare
(63.43 acres) Portion of the
Premises:
$40,500.00
(ii) Annual Rent during the initial two
(2) year period for the Access
Road, comprising an Area of 1.18
hectares (2.92 acres):
$300.00
(l) Frequency of (i) Every two (2) years commencing
Rent Adjustment: September 1, 1996 for the 25.67
hectares (63.43 acres) portion of
the Premises
(ii) Every two (2) years for the Access
Road commencing September 1, 1996
(m) Amount of Security [Deleted]
Deposit:
(n) Use of Access Road See Schedule "B" - Paragraph #7 and Road
by Lignum Ltd.: Licence attached hereto as Schedule "C"
(o) Renewal Term(s): See paragraph 10 of Schedule B
Any reference to the "Basic Terms" shall mean all or the appropriate
subparagraph of this paragraph.
DEMISE 2. The Landlord hereby demises and leases the
Premises comprising 26.85 hectares (66.35 acres) of
which 25.67 hectares (63.43 acres) comprise the main
portion of the Premises and the 1.18 hectare (2.92
acre) portion of the Premises comprise the access
road (as described in the Basic Terms) to the Tenant.
Unless otherwise agreed in writing, the term
"Premises" includes all buildings and improvements
now existing or constructed from time to time and
which are affixed to the land.
ADDITIONAL 3. This demise of the Premises reserves to the
RIGHTS OF THE Landlord:
4
Page 5
LANDLORD (a) the right to permit BC Rail Ltd. to
construct, maintain and operate a
track or tracks of railway over any
part of the Premises not actually
covered by permanent buildings or
improvements, or otherwise
disruptive to the Tenant;
(b) the right to construct, maintain
and use a road across any portion
of the Premises not actually
covered by permanent buildings or
improvements, or otherwise
disruptive to the Tenant, for use
by the Landlord, its employees,
agents, contractors and licensees,
including any tenant of the
Landlord and its employees, agents,
contractors and licensees; and
(c) the right to enter the Premises for
such purposes.
TERM 4. The Tenant shall have and hold the
Premises-for the Term (as specified-in the Basic
Terms) unless earlier terminated as hereinafter
provided.
BASIC RENT 5. The Tenant shall yield-and pay each year to
the Landlord during the Term the rent specified in
the Basic Terms or such other rent as may be
determined under this Lease, or by agreement of the
parties. The Tenant shall pay rent to the Landlord
annually, in advance, at the Commencement of Term (as
described in the Basic Terms) and continuing on each
anniversary date thereafter, without set-off,
deduction or abatement, subject to paragraph 6. As
recited under paragraph 1(k) of the Basic Terms, the
rental for the 25.67 hectares (63.43 acre) portion of
the Premises is.-payable pursuant to paragraph
1(k)(i) and the rental for the 1.18 hectares (2.92
acres) comprising the Access Road. is payable
pursuant to paragraph 1(k)(ii).
ADJUSTED RENT 6. The annual rent shall be subject to review
and adjustment by the Landlord on those dates
specified in the Basic Terms (under Frequency of Rent
Adjustment). The revised rent shall reflect: (A) a
fair market rent for the 25.67 hectares (63.43 acres)
portion of the Premises (excluding buildings and
improvements constructed by the Tenant) and such fair
market rent is to be based on the market value of the
land for comparably zoned land in Xxxxxxxx Lake and
region; and (B) the yearly rental for the 1.18
hectare (2.92 acres) comprising the Access Road shall
be based upon the minimum annual rental charged by
the Landlord for road accesses in effect at the time
of each review on the effective date of each
adjustment. In the event that Lignum Ltd. no longer
requires the use of the access road and the Tenant
has sole use of the access road, the Tenant shall pay
a rental for the access road area based upon the
market value of the land for comparably zoned land in
Xxxxxxxx Lake and region.
5
Page 6
ARBITRATION OF
ADJUSTED RENT 7. If the Tenant notifies the Landlord in
writing that it disputes the rent adjusted pursuant
to paragraph 6, the dispute shall, unless otherwise
agreed within thirty (30) days, be submitted to
arbitration before a single arbitrator under the
provisions of the COMMERCIAL ARBITRATION ACT of
British Columbia, as amended or replaced from time to
time. The arbitrator shall determine the rent by
comparing the Premises, improved to the extent
existing at the commencement of the Term, to other
similar lands in comparable locations. Where the
rental determined by the arbitrator differs from the
rental amount last offered in writing by a party by
more than 25%, the arbitrator shall require that
party to pay the full cost of the arbitration unless
the other party's offer also differs by more than
25%, in which case the cost of the arbitration shall
be divided equally. In no event shall the revised
rental be less than during the immediately preceding
rental period.
DEVELOPMENT 8. The Tenant shall obtain, at its own expense,
all necessary permits, licences, consents and
approvals before constructing any buildings or
improvements on the Premises, all in accordance with
plans and specifications approved in writing by the
Landlord, which approval shall not be unreasonably
withheld.
UTILITIES AND TAXES 9. The Tenant shall pay promptly, as and when
due:
(a) for all water, gas, electric light,
power and other utilities used on
or provided to the Premises; and
(b) for all taxes, rates, levies and
assessments of whatsoever kind and
by whatsoever authority and whether
on land, fixtures, machinery,
equipment or in respect of any
business carried on in the
Premises.
The Landlord reserves the right, at its sole
option, to require the Tenant to prepay annually,
bi-annually, or monthly in advance, the Landlord's
estimate of property taxes for the Premises. The
Tenant shall promptly on written demand pay any
shortfall between its payments and the actual
amount of the property taxes, and the Landlord
shall promptly remit to the Tenant any
overpayment.
TRIPLE NET LEASE 10. The Tenant acknowledges and agrees that this
Lease shall be a completely care-free net lease for
the Landlord, who shall have no obligation to
maintain or repair or reconstruct any building,
structure or equipment on the Premises. The Tenant
accepts the premises on an "as is" basis.
ENTRY 11. Without limiting the provisions of paragraph
BY THE 3(a) and (b), the
6
Page 7
LANDLORD Tenant shall permit the Landlord, its agents or
workmen to enter and view the state of repair of the
Premises at all reasonable times and:
(a) to construct, examine, repair or
rebuild any adjoining premises
belonging to the Landlord,
(b) to clean, empty or repair any of
the ditches, water courses,
culverts, sewers, drains or
gutters,
(c) to maintain, repair or rebuild
any sidings, or
(d) for any other reasonable purpose;
and the Landlord shall make good any damage
occasioned by the exercise of such rights.
USE 12. The Tenant shall not use the Premises nor
allow the Premises to be used for any purpose other
than that specified in the Basic Terms unless
consented to in writing by the Landlord, such consent
not to be unreasonably withheld.
The Tenant shall not carry on or permit in the
Premises, without the consent of the Landlord,
such consent not to be unreasonably withheld, any
merchandise, goods or things which are
objectionable or by which the premises may be
damaged.
NUISANCE 13. The Tenant shall not, except in accordance
with applicable laws, carry on or permit in the
Premises, any act, matter, or thing which may be
an annoyance, nuisance, grievance, damage or
disturbance to the occupiers or owners of the
adjoining lands and premises or of any easement of
the whole or any part of the premises.
REPAIR 14. The Tenant shall at its expense:
(a) repair and maintain the Premises,
including water courses,
culverts, sewers, drains and
gutters, in good. and substantial
repair;
(b) keep the Premises clean, tidy and
free of debris; and
(c) screen any unsightly area at the
request of the Landlord.
DAMAGE 15. If any building on the Premises which has been
constructed by the Tenant is destroyed by fire or
otherwise, the Tenant has the option
7
Page 8
to apply all available proceeds of insurance towards
the repair or reconstruction of such building. If the
Tenant elects to repair of reconstruct such building
it shall be painted and fixtured to the satisfaction
of the Landlord acting reasonably.
INSURANCE 16.
(a) PUBLIC LIABILITY INSURANCE
The Tenant shall insure and keep the Landlord and
the Tenant insured against all legal liability for
damage to persons (including death) or property
caused by the ownership, maintenance, use or
occupancy of the Premises, or by any business
conducted in the Premises, with an insurance
company or companies approved in writing by the
Landlord, which approval shall not be unreasonably
withheld, and in the minimum amount of FIVE
MILLION DOLLARS ($5,000,000.00) or such other
minimum amount as the Landlord may from time to
time reasonably require in writing. The Landlord
shall be named as an additional insured. The
Tenant shall pay all premiums necessary for such
insurance and on each anniversary date of the
Lease shall deliver to the Landlord a copy of each
policy of insurance and evidence that premiums
have been paid.
(b) INSURANCE VALIDATION
The Tenant shall not do or permit anything to be
done upon the Premises whereby any policy of
insurance required under this Lease may be
invalidated. The Tenant will comply with any
notice in writing from any insurer of the Premises
requiring the construction of works or
discontinuance of any operations.
(c) INSURANCE OF BUILDINGS
The Tenant shall insure and keep insured
throughout the Term, at its sole cost and expense,
all risks direct: damage insurance on all
buildings and improvements forming part of the
Premises with responsible insurance companies and
in an amount such as would be carried out-by a
prudent owner. The Tenant shall provide the
Landlord, on request, with a copy of such
insurance. The amount of such insurance shall be
no less than the replacement value of all
buildings and improvements of the Premises. The
Tenant shall include the Tenant's Mortgagee as an
additional named insured.
COMPLY WITH LAWS 17. The Tenant shall perform all of its
obligations under and by virtue of any law, statute,
bylaw, ordinance, regulation or lawful requirement of
any governmental authority, or any public utility or
railway company lawfully acting under statutory
powers, whether notice is served upon
8
Page 9
the Landlord or Tenant.
NOTICES FROM GOVERNMENT 18. If the Tenant receives any statutory notice
lawfully requiring the execution of works, the
following shall apply:
(a) if such notice is served upon
the Tenant, the Tenant shall
forward a copy to the Landlord
and shall (unless a certificate
of exemption is obtained), at
its own expense, execute to the
satisfaction of the Landlord
such works as are required to
comply with the notice; and
(b) if such notice is served upon
the Landlord, the Landlord shall
notify the Tenant and thereupon
the Tenant shall, at its own
expense, forthwith execute to
the satisfaction of the Landlord
such works as are required to
comply with the notice.
RELEASE AND 19. The Landlord shall not be liable directly or
INDEMNITY indirectly for:
(a) any loss of or damage to any
building, chattel or property of
any kind to whomsoever belonging
at any time on or used in
connection with the Premises;
and
(b) any loss of life or injury to
persons' in or upon the
Premises,
unless caused by the negligence of the Landlord
and those for whom it is responsible at law. The
Tenant shall indemnify and save harmless the
Landlord from all liabilities, claims and costs in
respect of any such loss, damage or injury,
including legal fees on a solicitor and own client
basis, and in respect of any breach by the Tenant
of its obligations under this Lease. If the
Landlord, without actual fault on its part, is
made a party to litigation begun by or against the
Tenant, the Tenant will indemnify and hold
harmless the Landlord and pay all costs, expenses
and legal fees incurred or paid by the Landlord in
connection with the litigation. The provisions of
this paragraph 20 shall survive the expiry or
earlier termination of this Lease.
ASSIGNMENT 20. Subject to Clause 4 of Schedule B of this
Lease, the Tenant may assign or sublet all or any
portion of the Premises, provided:
(a) the Tenant is not released from
its obligations under this
Lease;
(b) the Tenant obtains the prior
written consent of the
9
Page 10
Landlord such consent not to be
unreasonably withheld;
(c) the Landlord is provided with a
true copy of the proposed
assignment of sublease
agreement;
(d) the Landlord is satisfied,
acting reasonably, with the
financial covenant,
creditworthiness and business
reputation and history of the
proposed assignee or subtenant;
and
(e) the use of the Premises shall
not change, without the prior
written consent of the Landlord,
such consent not to be
unreasonably withheld.
REGISTERED CHARGES 21. The Tenant shall pay all sums owed by it
under any conditional sale agreement or other charge
registered against the Premises. When all payments
have been made, the Tenant shall promptly register a
discharge at its own expense in the proper Land Title
Office. The Tenant shall not permit any encumbrances
against title to the Premises without the consent of
the Landlord, such consent not to be unreasonably
withheld.
LIENS 22. The Tenant shall permit the Landlord to
post, and the Tenant shall keep posted in at least
two (2) conspicuous places on the Premises, any
notices under the provisions of the BUILDERS LIEN ACT
of British Columbia, as amended or replaced. The
Tenant shall use its best efforts to ensure that no
claim of lien shall be filed in respect of any work
which may be carried out by it or on its behalf on
the Premises. If a claim of lien is filed in respect
of any such work, the Tenant shall take all necessary
steps to have the claim of lien cancelled and
discharged from the Premises within fifteen (15) days
of the date the Tenant has knowledge of such filing.
The Landlord, in addition to any other right or
remedy under this Lease or at law, shall have the
right, but shall not be obliged to discharge any
claim of lien from the Premises by paying the amount
claimed to be due or by procuring a discharge of such
lien by deposit in the appropriate court- In such
event the Landlord shall be entitled, if it so
elects, to expedite the prosecution of any action for
the enforcement of such claim of lien by the lien
claimant and to pay the amount of the judgment, if
any, in favour of the lien claimant with interest and
costs. In any such event the Tenant shall reimburse
the Landlord for all costs and expenses incurred and
monies paid by the Landlord.
Notwithstanding anything to the contrary set out
in this Lease, if the Tenant gives the Landlord
notice that it wants to contest in good faith any
lien and if the Tenant deposits with the Landlord
or pays into court
10
Page 11
the amount of the lien claim plus an amount for costs
satisfactory to the Landlord or the court, as the
case maybe, then the Tenant may defer paying the lien
claim while it contests the claim with due diligence
except that if the Tenant's leasehold interest or the
Land thereby becomes liable, in the Landlord's
reasonable judgement, to forfeiture or sale the
Landlord may discharge any such lien. In that case
the Tenant will reimburse the Landlord for the amount
of the lien and its cost of so discharging.
END OF TERM 23. On or immediately before the expiry or
earlier termination of this Lease, the Tenant shall
remove from the Premises all buildings, machinery,
materials and things not affixed to the land, and
restore the Premises to the satisfaction of the
Landlord, acting reasonably, leaving the Premises in
a clean and neat condition. If the Tenant does not so
remove such buildings, machinery, materials and
things, the same shall, without prejudice to the
Landlord's right to enforce such removal, become the
sole property of the Landlord without any right of
the Tenant to compensation. The Landlord shall be
entitled to sell such property free and clear of any
lien, claim or obligation in favour of the Tenant.
The Landlord shall have no obligation to the Tenant
with respect to the care, custody and control of such
property. The Landlord may sell, move, destroy, lease
or abandon such property without notice to the Tenant
and without accounting to the Tenant.
QUIET ENJOYMENT 24. The Landlord covenants with the Tenant for
quiet enjoyment.
WAIVER 25. No waiver of or neglect by the Landlord to
enforce any right to forfeiture of this Lease or
right of re-entry upon a breach of any term of this
Lease shall be deemed a waiver of such rights upon
any subsequent breach.
LANDLORD NOT RESPONSIBLE 26. The Landlord shall not be responsible, and
FOR DAMAGE BY WATER the Tenant shall be solely responsible for any loss,
damage or expense caused by overflow or leakage of
water from any part of any building on the Premises
or to or from any adjoining lands or buildings unless
caused by the negligence of the Landlord and those
for whom it is responsible in law.
TENANT TO 27. If, at any time before or after the expiry
REPAY LANDLORD or earlier termination of this Lease, the Landlord
FOR CERTAIN suffers or incurs any damage, loss or expense or
EXPENSES makes any payment for which the Tenant is liable
hereunder by reason of any failure of the Tenant to
observe or comply with any of the covenants of the
Tenant contained in this Lease, even if such expense
is incurred at the option of the Landlord, then, in
every such case, the
11
Page 12
amount of damage, loss, expense or payment shall be
payable by the Tenant to the Landlord on demand. The
Landlord shall have the right, at its option, to add
the cost or amount of such damage, loss, expense or
payment to the rent. Any such amount shall thereupon
immediately be due and payable as rent recoverable in
the manner provided by law for the recovery of rent
in arrears. The Landlord shall be entitled to collect
the full amount in damages without any claim of
offset from the Tenant based on the value of property
left on the Premises by the Tenant, which property
shall be forfeited absolutely to the Landlord
pursuant to paragraph 24 without recourse by the
Tenant.
WASTE AND EARTH MOVING 28. The Tenant shall not:
(a) commit, allow disposal of or
treat waste upon the Premises
without the prior written consent
of the Landlord; or
(b) materially alter or damage the
surface or subsurface of the
Premises, either by unloading
fill, moving the earth, dumping
or grading, without the prior
written consent of the Landlord,
such consent not to be
unreasonably withheld.
TIMBER AND GRAVEL 29. The Tenant shall not:
(a) cut down timber or allow timber to
be cut down on the Premises; or
(b) remove or allow gravel, rock or soil
to be removed from the Prems,
(c) without the prior written consent of
the Landlord.
DEFINITION OF HAZARDOUS 30. "Hazardous Substances" means any substance
SUBSTANCES which is hazardous to persons or property and
includes, without limiting the generality of the
foregoing, any contaminant, pollutant, dangerous
substance, noxious substance, hazardous waste,
special waste, flammable, explosive, radioactive
material, urea formaldehyde foam insulation,
asbestos, PCBs and any other substance or materials
declared or defined to be hazardous or toxic
contaminants, in or pursuant to any applicable
federal, provincial or municipal statute or by-law.
TENANT'S ENVIRONMENTAL 31. The Tenant shall, at its own cost and
COVENANT expense:
(a) comply with all laws and
regulations from time to time in
force regulating the
manufacture, use, storage,
12
Page 13
transportation, treatment,
removal or disposal of waste and
Hazardous Substances; and
(b) not bring onto the Premises or
permit the presence of any Hazardous
Substances except in accordance with
applicable law and without the prior
written consent of the Landlord,
such consent not to be unreasonably
withheld if the Hazardous Substance
is used in the Tenant's normal
conduct of business. The Tenant
shall, at its own expense promptly
and diligently remove the
unauthorized Hazardous Substances
from the Premises. The Tenant shall,
at its own expense, remedy any
damage to the Premises caused by
such event or breach.
INQUIRIES BY THE LANDLORD 32. The Tenant hereby authorizes the Landlord to
make enquiries from time to time with respect to the
Tenant's compliance with any laws and regulations
pertaining to the Tenant, the Tenant's business and
the Premises, including without limitation, laws and
regulations pertaining to Hazardous Substances and
the protection of the environment. The Tenant shall
provide such written authorization as the Landlord
may reasonably require in order to facilitate the
obtaining of such information.
INSPECTION OF GOODS 33. The Landlord may at any time and from
time to time inspect the Tenant's goods upon the
Premises and the Tenant's records for purpose of
identifying the nature of goods and the existence
of any Hazardous Substances. The Tenant shall
assist the Landlord in such inspections.
OWNERSHIP OF HAZARDOUS 34. If the Tenant brings or creates upon the
SUBSTANCES Premises any hazardous Substances then,
notwithstanding any rule of law to the contrary, such
Hazardous Substances shall be and remain the sole and
exclusive property of the Tenant and shall not become
the property of the Landlord notwithstanding the
degree of affixation to the land and notwithstanding
the expiry or earlier termination of this Lease.
SURVIVAL OF COVENANTS 35. The obligations of the Tenant relating to
Hazardous substances shall survive the expiry or
earlier termination of this Lease. If the performance
of those obligations requires access to the Premises,
the Tenant shall have such access only at such times
and upon such terms and conditions as the Landlord
may specify. The Landlord may, at the Tenant's cost
and expense, undertake the performance of any
necessary work in order to complete such obligations
of the Tenant. Having commenced such work, the
Landlord shall have no obligation to the Tenant to
complete such work.
13
Page 14
DEFAULT 36. If any one of the following occurs:
(a) the Tenant fails-to-.pay rent as
required after ten (10) days'
notice in writing from the
Landlord;
(b) the Tenant fails to remedy any
breach or non-performance of its
obligations under the Lease after
thirty (30) days' notice in writing
from the Landlord, or in the case
of any such default which would
reasonably require more than thirty
(30) days notice period if the
Tenant does not thereafter promptly
and diligently proceeds with the
rectification of any such default
other than in respect of the
matters referred to in
subparagraphs (c) to (j) for which
no notice is required;
(c) any of the goods and chattels of
the Tenant on the Premises at
any time during the Term are
seized or taken in execution or
attachment by a creditor of the
Tenant;
(d) the Tenant makes an assignment
for the benefit of creditors;
(e) a receiver-manager is appointed
to control the conduct of the
business on or from the
Premises;
(f) The Tenant becomes bankrupt or
insolvent or takes the benefit
of an Act now or hereafter in
force for bankrupt or insolvent
debtors;
(g) an order is made for the
winding-up of the Tenant;
(h) the Premises, without the
written consent of the Landlord,
such consent not to be
unreasonably withheld, remain
vacant for a period of thirty
(30) days;
(i) the Premises are used by any
other persons than those
entitled to use them under the
terms of this Lease; or
(j) the Tenant, without the written
consent of the Landlord,
abandons or attempts to abandon
the Premises or sells or
disposes of its goods or
chattels or removes any of them
from the Premises so that there
would not in the event of their
abandonment, sale or disposal be
sufficient goods on the Premises
subject to distress to satisfy
all rent due or accruing due
hereunder;
14
Page 15
the then current month's rent and the next ensuing
three (3) months rent, if not yet paid, shall
immediately become due and payable as accelerated
rent and the Landlord may re-enter and take
possession of the Premises as though the Tenant
were holding over after the expiration of the Term
and the Lease, at the option of the Landlord, will
immediately be forfeited and ended. In every one
of the cases above mentioned the accelerated rent
may be recovered by the Landlord in the same
manner as rent reserved and in arrears and the
option will be considered to have been exercised
if the Landlord or its agents give notice to that
effect to the Tenant.
RIGHT TO RELET 37. If the Landlord re-enters, as provided in
paragraph 37, it may either terminate this Lease or
it may from time to time without terminating the
Tenant's obligation under this Lease, make
alterations and repairs considered by the Landlord
necessary to facilitate a reletting, and relet the
Premises or any part thereof as agent of the Tenant
for such term or terms and at such rental or rentals
and upon such other terms and conditions as the
Landlord in its reasonable discretion considers
advisable. Upon each reletting all rent and other
monies received by the Landlord-from the reletting
will be applied, first to the payment of indebtedness
other than rent due hereunder from the Tenant to the
Landlord, second to the payment of costs and expenses
of the reletting including brokerage fees and
solicitor's fees and costs of the alterations and
repairs, and third to the payment of rent due and
unpaid hereunder. The residue, if any, will be held
by the landlord and applied in payment of future rent
as it becomes due and payable. If the rent received
from the reletting during a month is less than the
rent to be paid during that month by the Tenant, the
Tenant will pay the deficiency to the Landlord. The
deficiency will be calculated and paid monthly. No
re-entry by the Landlord will be construed as an
election on its part to terminate this Lease unless a
written notice of that intention is given to the
Tenant.
TERMINATION FOR BREACH 38. Despite a reletting without termination, the
Landlord may elect at any time to terminate this
Lease for a previous breach. In addition to other
remedies, the Landlord may recover from the Tenant.
(a) all damages it incurs by reason
of the breach;
(b) the cost of recovering the
Premises; and
(c) the worth at the time of
termination of the excess, if
any, of the amount of rent and
charges equivalent to rent
reserved in this Lease for the
remainder of the Term over the
then reasonable rental value of
the Premises for the
15
Page 16
remainder of the Term,
all of which amounts, together with related legal
fees on*a solicitor and own client basis,
immediately will be due and payable by the Tenant
to the Landlord.
MEANING OF RENT 39. Any monetary amount owing under this
Lease to the Landlord, including any amount owing
to the Landlord under paragraph 28, shall be
deemed to be rent and shall be collectible as
rent.
ENUREMENT 40. This Agreement shall enure to the benefit of
and be binding upon the parties hereto and their
successors and permitted assigns.
SEVERABILITY 41. Should any part of this Agreement be
declared or held invalid for any reason, such
invalidity shall not affect the validity of the
remainder which shall continue in full force and
effect and be construed as if this Agreement had been
executed without the invalid portion. It is hereby
declared the intention of the parties that this
Agreement would have been executed without reference
to any portion which may, for any reason, be
hereafter-declared or held invalid.
NUMBER AND GENDER 42. All references to any party to this
Lease shall be read with such changes in number
and gender as the context off this Lease or
reference to the parties may require.
NOTICE 43. Any notice to be served hereunder shall be
deemed to be sufficiently served on the Tenant or
the Landlord if delivered or sent by registered
prepaid mail addressed and sent to the Tenant at
its address given in the Basic Terms or to the
Landlord at its address at:
X.X. Xxx 0000
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Attention: Manager, Income Properties
or at such other address as either party shall
designate from time to time in writing to the
other party. Any notice so served by registered
prepaid mail shall be deemed to have been served
at the expiration of three (3) days after it is
posted in any post office in the Province of
British Columbia except that if there is an actual
or reasonably anticipated mail strike, slow down
or labour dispute, which might affect delivery
then the notice will be effective if actually
delivered by hand, by courier or by facsimile
transmission.
16
Page 17
TIME 44. Time shall be of the essence of this Lease.
MARGINAL NOTES 45. The marginal notes in this Lease are solely
for the purpose of more convenient reference and not
for construction or interpretation.
REGISTRATION 46. This Agreement shall be submitted for
registration under the Land Title Act-of British
Columbia.
ADDITIONAL TERMS 47. The additional terms set forth in Schedule
"B", if any, are incorporated into and form part of
this Lease.
EFFECTIVE DATE 48. Notwithstanding the provisions of this
Lease, the Landlord and the Tenant agree that the
original Lease-dated November 13, 1967 made between
Xxxxxxxx Bros. Forest Products Ltd. (now Riverside
Forest Products (Xxxxxxxx Lake) Limited) and BCR
Properties Ltd. shall remain in full force and effect
until such time as this Lease has been fully executed
and delivered by each of the Landlord and Tenant to
the other (the Effective Date and the Original Lease
shall, from and after the Effective Date, be
superceded and replaced by this Lease, without any
further written agreement and all of the obligations
of the Landlord and the Tenant to one another in
respect to the Premises (save and except any
liability or obligation owing by either party to the
other made under the Original Lease in respect of any
matter-arising prior to the Effective Date, which
shall be governed by the original Lease) shall be
governed by this Lease).
IN WITNESS WHEREOF the parties have executed this Lease as of date first above
written on Form C attached hereto which forms a part hereof.
17
Page 18
SCHEDULE "B"
ADDITIONAL TERMS
(1) REMOVAL OF IMPROVEMENTS
The Landlord acknowledges and agrees that the Tenant may remove on or before the
end of the Term any building, structure of improvement which the Tenant has
constructed or installed provided:
(a) such building, structure or improvement is removed at the
expense of the Tenant;
(b) the Tenant is not in default of its obligation to pay rent
under the Lease;
(c) if such building, structure or improvement is not removed by
the expiry or earlier termination of the Term then, at the
Landlord's sole election, either title to that improvement
shall vest absolutely in the Landlord or the Landlord, without
further notice to the Tenant, shall be entitled to demolish or
remove, in whole or in part, or sell such improvement all at
the Tenant's expense, which expense shall immediately be paid
by the Tenant to the Landlord;
(d) the Tenant agrees not to lien, charge or encumber such
building, structure or improvement at any time during the Term
without the prior written consent of the Landlord, such
consent not to be unreasonably withheld; and
(e) The Tenant acknowledges and agrees that it may not remove,
before the end of the Term, any building, structure of
improvement which the Tenant has constructed or installed
without the Tenant's Mortgagee's consent, such consent not to
be unreasonably withheld.
(2) ADDITIONAL DEFINITIONS
In Schedule B of this Lease the following terms have the following meanings:
"MORTGAGE"- means a-mortgage or mortgages of the leasehold interest-of
the Tenant in the Premises or any part thereof and includes a deed of
trust and mortgage to secure any bonds or debentures issued thereunder;
"TENANT'S MORTGAGEE" - means a Person who holds a charge by way of
assignment or sublease against the Lease and the Tenant's leasehold
interest in the Premises pursuant to a mortgage, debenture, deed of
trust and mortgage, or other security instrument evidencing the
Tenant's indebtedness or liability to such person; and
Page 19
"PERSON" - means any association, society, corporation, individual,
joint stock company, joint venture, partnership, trust, unincorporated
organization or government authority which has statutory jurisdiction
with respect to any matter referred to in this Lease.
(3) ASSIGNMENT AND SUBLETTING
Notwithstanding any other provisions in this Lease and provided the Tenant is
not in default of its obligations under this Lease the Tenant may assign or
sublet all or any portion of the Premises without the consent of the Landlord:
(a) to an affiliate of the Tenant as defined in the COMPANY ACT of
British Columbia;
(b) to a successor of the Tenant by amalgamation, merger or other
corporate organization;
(c) to a Person who is acquiring a majority of the Tenant's
operations in the Province of British Columbia; and
(d) to a Person who will become the Tenant's Mortgagee by way of
assignment under this Section 3 as security for a bona fide
borrowing by the Tenant;
provided in each case, except for subparagraph (d) above, the proposed assignee
or subtenant executes and delivers to the Landlord a binding agreement whereby
the assignee or subtenant agrees with the Landlord to assume the Tenant's
obligations under this Lease from and after the effective date of such
assignment or sublease. In any other case, the Tenant will not assign or sublet
the whole or any part of the premises other than in accordance with paragraph 21
of this lease. For greater certainty, it is understood and agreed that in the
event of any assignment or sublease the Tenant shall not be released from its
obligations under this Lease.
(4) NOTICE TO AND REMEDIES OF TENANT'S MORTGAGEE
No re-entry, forfeiture or termination of this Lease or any other action by the
Landlord whatsoever in respect of a default by the Tenant will be valid against
the Tenant's Mortgagee who has filed with the Landlord a notice of mortgage and
who has specified an address for notice unless:
(a) the Landlord has first given to the Tenant's Mortgagee notice
of the default or contingency which notice shall specify the
nature of the default or contingency and state the Landlord's
intention to take proceedings in respect thereof; and
(b) the Tenant's Mortgagee fails to:
(i) cure the default, with respect to any non-payment of
rent or additional rent or any other sums required to
be paid to the Landlord by a provision of this Lease,
within a period of ten (10) days from the date of the
receipt of that notice by the Tenant's Mortgagee; or
19
Page 20
(ii) in the case of any breach or non-performance by the
Tenant under this Lease, remedy same within a
period-after the receiving of such written notice
from the Landlord, which period is the greater of:
(1) 60 days; and
(2) such longer time as is reasonable for. the
remedying of such default or
non-performance, provided the Tenant's
Mortgagee has commenced to remedy same
within a period of ten (10) days from the
date of the receipt of such notice and
thereafter proceeds to remedy same with
reasonable diligence.
The Landlord and the Tenant hereby grant the Tenant's Mortgagee access to the
Premises for-the aforesaid purpose.
Notwithstanding the provisions hereof or the provisions of any Mortgage, unless
and until. the Tenant's Mortgagee has foreclosed or taken possession of the
Lease, nothing herein or therein contained shall render the Tenant's Mortgagee a
mortgagee in possession or liable to the Landlord under the Lease for the
fulfillment or nonfulfillment of any or the obligations of the Tenant
thereunder.
(5) BANKRUPTCY OR INSOLVENCY OF TENANT
Notwithstanding any other provisions in this Lease, the bankruptcy, insolvency
or re-organization of the Tenant under any laws then applicable or the
appointment of a trustee for the benefit of creditors, receiver, interim
receiver, receiver-manager or custodian or liquidator of all or any portion of
the property of the Tenant will not be a breach of this Lease so long as this
Lease is otherwise complied with and so long as any liquidator, custodian,
trustee, receiver, interim receiver or other such person agrees to be bound by
the Tenant's obligations under this Lease as if it were the Tenant.
(6) REALIZATION BY THE MORTGAGEE
At any time during the Term of this Lease and after the Tenant's Mortgagee makes
a demand for payment under the Mortgage, the Tenant's Mortgagee, upon giving
notice to the Tenant and the Landlord, shall, notwithstanding any provision to
the contrary in this Lease, be entitled to:
(a) exercise any and all of the rights, privileges, benefits. and
remedies of-the Tenant under this Lease all in accordance with
and subject to the provisions of this Lease and, in such case,
the Landlord and the Tenant's Mortgagee shall comply with and
be bound by all the terms and conditions of the Lease as if
the Tenant's Mortgagee had been an original party thereto and
as if the Lease had been executed on and as of the date of
such notice (but without extending the term of the Lease
beyond its original expiry date) and from the date of receipt
by the Landlord of the notice contemplated herein, the
Landlord shall make all
20
Page 21
payment contemplated thereunder in accordance with directions
given by the Tenant's Mortgagee and no directions relating to
the Lease shall be given by the Tenant or acted upon by the
Landlord unless. and until the Landlord is otherwise directed
by further notice in writing from the Tenant's Mortgagee;
(b) require the Landlord to enter into a replacement lease
("Replacement Lease") on the same conditions and provisions ad
are contained in this Lease for the balance of the Term
provided that the Landlord's obligations to grant such
Replacement Lease shall be conditional upon the Landlord being
paid any monies lawfully due and owing under the Lease prior
to-the date of the Replacement Lease with:
(i) the Tenant's Mortgagee; or
(ii) any Person to whom the Tenant's Mortgagee has
assigned the right, title and interest of the Tenant
under the Lease, provided such assignment has
otherwise occurred in accordance with the provisions
of this Lease, including without limitation, the
provision requiring the Landlord's prior consent to
such assignment, if applicable;
if the Tenant's Mortgagee so elects within 30 days after:
(1) the receipt of notice from the Landlord that the
Landlord is entitled to and elects to terminate the
Lease by re-entry, forfeiture or otherwise; or
(2) the Tenant has filed or there is filed against the
Tenant a petition in bankruptcy or insolvency or for
any reorganization of for the appointment of a
receiver, receiver-manager, interim receiver,
liquidator, custodian or trustee of all or a portion
of the property of the Tenant or the Tenant makes an
assignment for the benefit of creditors or is
otherwise liquidated, wound-up or dissolved.
(7) USE OF ACCESS ROAD BY LIGNUM LTD.
The Tenant covenants and agrees to grant to Lignum Ltd. a licence to use the
Access Road. Such license shall be on substantially the same terms and
conditions as those contained in the existing licence agreement, a copy of which
is attached hereto as Schedule "C", and otherwise on such terms and conditions
as are acceptable to Lignum Ltd. and the Landlord. The Tenant covenants and
agrees to finalize the terms of such licence within 30 business days of the
execution of this Lease by the Landlord.
(8) SALE BY LANDLORD
The Landlord shall not sell, transfer, assign or otherwise dispose of (for value
or otherwise) all or any part of its right, title or interest in the Lease
unless the assignee thereof agrees to assume the obligations of the Landlord
hereunder.
21
Page 22
(9) NO SURRENDER OR AMENDMENT
The Landlord will not accept the surrender of, modify, amend or agree to accept
the surrender of, modify or amend this lease without giving the Tenant's
Mortgagee thirty.(30) days prior written notice.
(10) AUTOMATIC RENEWAL
At the expiration of this Term, this lease shall be automatically renewed for
one (1) year and from year to year thereafter as a year to year lease, until the
year 2023, such that the last automatic renewal date will be September 1, 2023
and such renewal term shall expire August 31, 2024, terminable by either party
on ninety (90) days notice in writing, upon and subject to all the terms and
conditions herein contained except as to annual rent which shall be reviewed and
adjusted every two (2) years in accordance with Paragraph 6 - Adjusted Rent. The
Tenant acknowledges and agrees that 90 days written notice is adequate and
reasonable notice for the Tenant to remove its fixtures and vacate the Premises.
22
Page 23
ACCESS ROAD AGREEMENT
THIS AGREEMENT is deemed to be in effect. March 1, 1988.
BETWEEN:
BCR PROPERTIES LTD.
("BCR")
AND:
LIGNUM LIMITED
0000 - 000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
and
XXXXXXXX BROS. FOREST PRODUCTS
000 Xxxxxxx Xxxx
Xxxxxxxx Xxxx, Xxxxxxx Xxxxxxxx
("X & J")
WHEREAS:
A. BCR is the registered owner of the following lands in the Cariboo
District, Province of British Columbia, described as:
An unsubdivided portion of
Xxxxxxxx Xxx 00,
Xxxxxxx Xxxxxxxx,
as shown in the drawing attached as Schedule
("Lands").
B. L & J desire to use the Access Loa& which traverses Lands as outlined
in red ink on the drawing attached as A" ("Access Road").
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual
covenants in this Agreement and other good and valuable consideration the
parties agree as follows:
1. BCR grants to L & J and their employees, servants, agents,
representatives, invitees, visitors and licensees ("L & J's Invitees") the
exclusive right to pass over the Access Road with
Page 24
its vehicles and machinery for the purpose of ingress and egress ("Use") for a
term of five years commencing April, 1987 ("Term").
2. L & J shall pay to `SCR as rent for the term, the sum of $75.00 payable
in advance.
3. BCR may increase the rental rate at the commencement of each extended
term provided BCR gives L & J written notice of such increase no less than six
(6) months prior to the commencement of that extended term.
4. L & J shall take all reasonable precautions in line with their
authorized use to prevent fires on the Lands.
5. L & J shall repair and maintain the Access Road, shall apply for and
obtain all necessary permits, licences, consents and approvals required for the
maintenance of the Access Road.
6. Upon request by BCR, L & J shall supply and post a substantial notice
immediately adjoining the Access Road in the close proximity of the entrance
from the Bella Coola/Chilcotin Highway to restrict the Access Road to the Use
described in paragraph 1 herein.
7. BCR reserves the right of access over and along the Access Road for use
by its employees, agents and invitees and for the use of vehicles thereon
provided BCR does not interfere with L & J's use of the Access Road.
8. L & J shall not assign, transfer or dispose of the rights or privileges
hereby granted, without the consent in writing, first obtained, of BCR.
9. L & J shall institute and maintain at is sole expense insurance for
comprehensive general public liability and property damage including personal
liability, indemnifying and protecting BCR and Lignum against any casualty or
claim resulting from the Use of the Access Road in an amount not less than Two
Million ($2,000,000.00) Dollars in respect of occurrences in or upon the Access
Road. L & J, on request by BCR, will deliver to BCR the Certificate of Insurance
showing evidence of each insurance policy under which such insurance has been
effected and evidence that premiums have been paid. If L & J shall at any time
fail to insure or keep insured as required by this clause, BCR may at its
option, do all things necessary to effect or maintain such insurance and any and
all costs incurred by BCR in so doing shall be collectible from L & J as rent.
10. L & J shall indemnify BCR and save it harmless from all costs and
expenses caused to or Incurred by BCR and from all claims and demands, looses,
costs, damages, actions, suits or other proceedings by whomsoever made, brought
or prosecuted, in any manner based upon, arising out of or connected with, the
Access Road.
11. This Agreement shall remain in force until terminated by either party,
which either party may do at any time by giving to the other party a written
notice naming therein a date at least three (3) months from the giving of such
notice upon which this Agreement shall terminate, and on the day so named in
such notice this Agreement and all rights and privileges thereunder
Page 25
shall come to an end, provided that notwithstanding such termination, L & J
shall continue to be liable to SCR for all payments due and obligations incurred
thereunder prior to the date of such termination.
12. Lignum Limited or Xxxxxxxx Bros. Forest Products may each terminate its
obligations under the Agreement, and the remaining party may either continue its
obligations under the Agreement, or terminate the Agreement. In the event that
the remaining party decides to continue the Agreement, it shall undertake all
the rights and obligations of L & J and the terminating party shall continue to
be liable to BCR for all payments due and obligations incurred thereunder prior
to the date of such termination.
13. Upon exercise, of termination, or cancellation thereof, whichever is
the sooner, the Access Road and all improvements thereon shall revert to BCR,
and L & J shall have no claim upon the Lands to which this Agreement applied,
nor shall BCR be entitled to any claims for compensation in respect of same.
14. Notice required to be given under this Agreement shall be in writing
and deemed to be sufficiently delivered if mailed by prepaid registered mail to
the addresses set out above (or such other addresses as the parties-may from
time to time advise in writing) and such notice shall be deemed to have been
received within forty-eight (48) hours of-the mailing thereof.
15. This Agreement shall enure to the benefit of and be binding upon the
parties hereto, their successors and assigns.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly
executed the day and year first above written.
BCR PROPERTIES LTD.
Per: ________________________
LIGNUM LIMITED
Per: ________________________
XXXXXXXX BROS. FOREST PRODUCTS
Per: ________________________
