EXHIBIT 10.8
THIS INDENTURE dated for reference the 31st day of March, 1998
PURSUANT TO THE LAND TRANSFER FORM ACT
BETWEEN:
VANAC DEVELOPMENT CORP., a company duly incorporated under the laws of
the Province of British Columbia and having its registered office at
305 -1788 West 5th Avenue, in the City of Vancouver, in the Province
of British Columbia; V6J 1P2 (Inc. No.231923)
(hereinafter called the "Landlord")
OF THE FIRST PART
AND:
DELTA PLAY COMPANY, a company duly incorporated under the laws of the
Province of Nova Scotia and having its British Columbia address at
00000-00xx Xxxxxx, Xxxxx 000, in the City of Surrey, in the Province
of British Columbia, V3S 1X7 (Inc. No. 3009539)
(hereinafter called the "Tenant")
OF THE SECOND PART
AND:
KOALA CORPORATION, a company duly incorporated under the laws of the
State of Colorado and having its offices at 1600 East 53rd Avenue,
Unit D, in the City of Denver, in the State of Xxxxxxxx, XX 00000
(hereinafter called the "Guarantor")
OF THE THIRD PART
WITNESSETH that in consideration of the rents, covenants and agreements herein
reserved and contained on the part of the Tenant to be paid, observed and
performed, the Landlord by these presents does demise and lease unto the Tenant
the Premises hereinafter described, all on the terms, conditions and covenants
as hereinafter set forth.
ARTICLE 1 - THE PREMISES
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1.01 The Premises hereby leased are that building or portion of building
described as 0000 Xxxxxxxx Xxx constructed upon those lands and premises
situate, lying and being in the City of Delta, Province of British Columbia, and
more particularly described as:
Xxx 00, Xxxxxxxx Xxx 000, Xxxxx 0, Xxx Xxxxxxxxxxx
Plan 87635 P.I.D.: 000-000-000
(hereinafter called the said "Lands")
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SUBJECT TO:
Permitted encumbrances as described in Schedule "B" hereto.
which building or portion of building for the purposes of this Lease is
understood to have an area of approximately 60,649 square feet of office
and warehouse space and is situate as outlined in red outline on the Plan
annexed hereto as Schedule "A". The Landlord shall, at its sole expense,
have the exact area of the Premises determined by a qualified surveyor or
architect.
(hereinafter referred to as the "Premises")
1.02 The Landlord doth further grant to the Tenant, its employees, customers,
licensees and invitees a non-exclusive right of access, subject to municipal
zoning regulations and by-laws and subject to such reasonable and appropriate
loading and parking regulations (being not inconsistent with any of the terms of
this Lease) as may from time to time be imposed by the Landlord, appurtenant to
and for the benefit of the Premises, for the purpose of ingress and egress,
loading and unloading, over that portion of the said Lands shown on the Plan
attached hereto as Schedule "A" (hereinafter called the "Common Area").
The Landlord doth further grant to the Tenant, its employees, customers,
licensees and invitees an exclusive right of parking over a portion or portions
of the Common Area as shall from time to time be designated by the Landlord.
Notwithstanding the foregoing, the Landlord shall provide the Tenant with not
less than 52 parking spaces for the Tenant's exclusive use. It is understood
and agreed that there shall be no additional rental charge other than costs of
maintenance and repair as herein provided with respect to such exclusive parking
areas.
EXCEPTING AND RESERVING HOWEVER, unto the Landlord the free passage and running
of water, sewage and electrical or other utility service for any other building
or portion of building on the said Lands or which may be constructed on the said
Lands or on land adjoining the said Lands in and through utility lines, sewers
and drains made through or under the Premises and the Common Area together with
the right to construct or lay down upon, under or through other portions of said
Lands driveways, gas and water mains, culverts, sewers and wires and cables with
power at all reasonable times to enter upon the said Lands for the purpose of
constructing and laying the same, or of examining the state of repair thereof,
and to repair or renew the same PROVIDED HOWEVER, that in carrying out any such
operations, the Landlord will not unreasonably disturb the Tenant's business
having due regard to the urgency of such construction or repairs nor cause any
damage to the Premises and will make good or pay reasonable compensation for all
damages caused to the Premises in the exercise of such rights and powers.
ARTICLE 2 - TERM OF LEASE
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2.01 TO HAVE AND TO HOLD the Premises unto the Tenant for and during the term
of five (5) years, from the 1st day of June, 1998, (the "Commencement Date") and
to be fully completed and ended on the 31st day of May, 2003.
ARTICLE 3 - RENT
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3.01 Yielding and paying therefor to the office of the Landlord at No.305 -
1788 West 5th Avenue, in the City of Vancouver, in the Province of British
Columbia, or at such other place as the Landlord may direct in writing, a basic
rent herein called the "Basic Rent" of lawful money of Canada payable in
consecutive monthly instalments in advance on the first day of each and every
month during the term hereof, said Basic Rent to be ascertained as follows:
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(a) For the portion of the term being from June 1, 1998 up to and including May
31, 2001 an annual basic rent of THREE HUNDRED TWENTY-FOUR THOUSAND FOUR
HUNDRED SEVENTY-TWO DOLLARS FIFTEEN CENTS ($324,472.15) payable in equal
consecutive monthly installments of TWENTY-SEVEN THOUSAND THIRTY-NINE
DOLLARS THIRTY-FIVE CENTS ($27,039.35) each, said payments to commence on
the 1st day of July, 1998;
(b) For the portion of the term being from June 1, 2001 up to and including May
31, 2003 an annual basic rent of THREE HUNDRED THIRTY-NINE THOUSAND SIX
HUNDRED THIRTY-FOUR DOLLARS AND FORTY CENTS ($339,634.40) payable in equal
consecutive monthly installments of TWENTY-EIGHT THOUSAND THREE HUNDRED AND
TWO DOLLARS EIGHTY-SEVEN CENTS ($28,302.87) each, said payments to commence
on the 1st day of June, 2001.
(c) Provided always that should the area of the Premises, as calculated and
certified by the Landlord's British Columbia Land Surveyor, by the
Commencement Date be found to vary from the anticipated area of 60,649
square feet, being the area upon which the aforementioned Basic Rents are
calculated, then the Basic Rents as stated in the foregoing subclauses (a)
and (b) shall be varied in direct proportion to the variation in actual
floor area in relation to the anticipated area of 60,649 square feet.
(d) The Landlord acknowledges a deposit from the Tenant in the amount of FIFTY-
EIGHT THOUSAND ONE HUNDRED THIRTY-FOUR DOLLARS SIXTY CENTS ($58,134.60).
Said deposit shall be applied as follows: TWENTY-EIGHT THOUSAND THREE
HUNDRED NINETY-ONE DOLLARS THIRTY-TWO CENTS ($28,391.32) shall be applied
to the Basic Rent payable under this clause for the month of July, 1998.
The balance of the deposit which is TWENTY-NINE THOUSAND SEVEN HUNDRED
FORTY-THREE DOLLARS TWENTY-EIGHT CENTS ($29,743.28) shall be applied to the
Basic Rent payable under this clause for the month of May, 2003; plus any
applicable GST.
Together with all other sums payable as rent or additional rent pursuant to the
terms hereof, and any and all governmental taxes payable by the Tenant by law or
by the terms of this Lease.
3.02 All payments required to be made by the Tenant under or in respect of
this Lease shall be deemed to be rent or additional rent hereunder and shall be
made to the Landlord, or to such agent or agents of the Landlord as the Landlord
shall hereinafter from time to time direct in writing to the Tenant. All rents
to be paid by the Tenant to the Landlord hereunder shall be paid without any
deduction, abatement or set-off whatsoever, it being the intention of this Lease
that all expenses, costs, payments and outgoings incurred in respect of the
Premises, the Common Area or for any other matter or thing affecting the
Premises and the Common Area shall, (unless otherwise expressly stipulated
herein to the contrary), be borne by the Tenant; save and except the Landlord's
specific obligations, pursuant to the terms of this Lease, [and all costs of
construction of the Premises and Common Area including related permits and
hook-up charges (except telephone hook-up charges)]; that the rental being
provided shall be absolutely net to the Landlord and free of all deduction,
abatement, set-off, realty taxes, attributable corporation capital taxes,
charges, rates, assessments, expenses, costs, payments or outgoings of every
nature arising from or related to the Premises and Common Area and that the
Tenant shall pay or reimburse the Landlord for all such taxes, (except
Landlord's income taxes on rents collected hereunder), charges, rates,
assessments, expenses, costs, payments and outgoings during the term hereby
demised and any extensions thereof. When rent or any other amount payable
hereunder by the Tenant to the Landlord shall be in arrears the same shall bear
interest at the rate or rates per annum being THE CANADIAN IMPERIAL BANK OF
COMMERCE prime lending rate as established from time to time plus 2% percentage
points from the due date of such amounts as are in arrears until paid; save and
except for real estate taxes
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payable pursuant to Article 5.20 hereof, which amounts if unpaid by the Tenant
to the Landlord by the due date, shall bear a penalty equal to the penalty
charged by the Governmental authority levying the taxes; and the Landlord shall
have all remedies for the collection of such interest and penalties if unpaid
after demand, as in the case of rent in arrears, but this stipulation for
interest and penalties shall not prejudice or affect any other remedies of the
Landlord under this Lease.
ARTICLE 4 - USE OF THE PREMISES
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4.01 The Tenant shall use and continuously occupy the Premises for the
purpose of manufacturing and assembling playground systems together with such
other lawful uses as are ancillary and appropriate to the normal course of such
use of the Premises and for no other purpose, without the prior written consent
of the Landlord, such consent not to be unreasonably withheld, and subject to
the provisions of Clause 5.07 of this Lease shall not permit any part of the
Premises to be used or occupied by any person other than the Tenant, its
employees, licensees, agents, customers and invitees.
4.02 It is understood and agreed between the parties that the Tenant shall
not be obliged to open for business during hours that are not permitted by
requisite laws, by-laws and regulations.
ARTICLE 5 - TENANT'S COVENANTS
------------------------------
5.01 To pay unto the Landlord the rent hereby reserved, and any other monies
deemed or indicated as additional rent hereunder, in the manner herein mentioned
without any deduction, abatement or set-off whatsoever. All rent in arrears
shall bear interest as provided in clause 3.02 hereof.
5.02 To pay all charges for water, light, electricity, power and gas and all
utilities supplied, delivered, provided to or made available upon the Premises
but not any hook-up or original connection (with the exception of telephone)
charges or other charges associated with the construction of the building in
which the Premises are situate.
5.03 To well and sufficiently maintain, service and repair the Premises,
including landscaped and parking areas included therein, (and if the Premises
forms a part of the building, to pay its proportionate share as determined by
the Landlord of the cost of such works related to the Common Area as may be
undertaken by the Landlord), and to maintain such in good and sufficient repair
and presentable appearance as a careful owner would do, (and, without limiting
the generality of the foregoing, including all building, roof areas, concrete
floors, partitioning, equipment, fixtures, heating, plumbing apparatus, electric
lighting fixtures and equipment, parking areas, driveways, loading areas,
walkways and landscaping located thereon at the commencement date or in the case
of subsequent landscaping after the initial placement thereof) save and except
only for repairs for which the Landlord is responsible as provided in this
Lease, reasonable wear and tear and damage by fires, earthquake or Act of God or
other casualty against which and to the extent which the Premises are insured
excepted; and to permit the Landlord, its agents or employees, to enter and view
the state of repair, to leave the Premises in good repair except as aforesaid,
all repairs to be in accordance with the standard of the specifications of the
Premises and to the approval of the Landlord, such approval not to be
unreasonably withheld;
And to engage at its sole cost a bonafide maintenance contractor to provide
routine preventative maintenance and any necessary repairs to all heating or air
conditioning systems servicing the Premises, such contractor to be subject to
the approval in writing of the Landlord prior to his engagement, however, such
approval is not to be unreasonably withheld.
If the Tenant shall fail to repair in accordance with the provisions hereof, the
Landlord, its agents or employees, may forthwith in emergency situations and
with notice appropriate to the circumstances
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in non-emergency situations enter the Premises and make the required repairs and
for that purpose the Landlord may bring and leave upon the Premises all
necessary tools, materials and equipment and the Landlord shall not be liable to
the Tenant for any inconvenience, annoyance or loss of business or any injury or
damages suffered by the Tenant by reason of the Landlord acting reasonably, such
repairs and the expense of such repairs shall be borne by the Tenant who shall
pay same to the Landlord forthwith upon demand as if such were rent reserved
under this Lease.
5.04 To restore forthwith at the Tenant's expense and with glass of the same
colour and quality any broken or damaged glass on the Premises.
5.05 Not to do or permit anything to be done whereby any policy of insurance
on the Premises or the building of which the Premises forms a part may become
void or voidable, PROVIDED HOWEVER, if the insurance rate shall be increased as
aforesaid, or if at any time hereafter the insurance cost to any other tenant in
respect of the aforesaid building is increased by virtue of the Tenant's use and
occupation of the Premises, the Tenant shall pay to the Landlord the amount by
which the insurance premiums shall be so increased. If notice of cancellation
shall be given respecting any insurance policy or if any insurance policy upon
the aforesaid building or any part thereof shall be cancelled or refused to be
renewed by an insurer by reason of the use or occupation of the Premises or any
part thereof by the Tenant or by any assignee or sub-Leassee of the Tenant or by
anyone permitted by the Tenant to be upon the Premises, the Tenant shall
forthwith remedy or rectify such use or occupation upon being requested to do so
in writing by the Landlord, and if the Tenant shall fail to do so forthwith or
shall fail forthwith to procure equivalent insurance to that cancelled or
refused, the Landlord may, at its option, determine this Lease and the Tenant
shall immediately deliver up possession of the Premises to the Landlord.
5.06 Not to do, suffer or permit any act or neglect which may in any manner
directly or indirectly, cause injury or damage to the Premises or the building
of which the Premises forms a part or to any fixtures or appurtenance thereof or
which may be or become nuisance or interference to any of the occupants of such
building, or which in the reasonable opinion of the Landlord, render the
Premises or any part thereof less desirable or injure the reputation thereof.
5.07 Not to assign, sublet or otherwise part with the Premises or any part
thereof or allow the Premises or any part thereof to become vested in or
occupied by any person other than the Tenant for the whole or any part of the
term herein without first obtaining the written consent of the Landlord, such
consent, subject to the provisions of the following paragraph, not to be
unreasonably withheld, it being understood that such consent will not be
withheld solely on the basis that the intended use of the Premises may vary
(unless substantially in conflict with other tenant's uses) from those uses
included in Article 4 hereto, PROVIDED that the Tenant may assign or sublet the
Premises without the Landlord's prior approval to any company being a company
that is a parent, subsidiary or an associate company of the Tenant without the
consent of the Landlord, PROVIDED that this clause 5.07 shall continue to be
applicable to such assignment or subletting; AND PROVIDED FURTHER that no such
assignment or subletting shall in any manner release the Tenant from any
covenant to be observed or performed by it.
With the exception of an assignment or subletting that forms part of the sale of
all or a portion of the Tenant's business as a going concern, if the Tenant
should wish to assign or sublet all or any portion of the Premises for all or
any portion of the unexpired balance of the term, in a case where the Landlord's
approval is required, the Tenant shall so notify the Landlord in writing and the
Landlord shall thereupon have a right, exercisable within a period of FOURTEEN
(14) days following receipt of the Tenant's notice, to recapture the space
described in the Tenant's notice.
The Landlord's notice of recapture shall terminate the Lease with respect to the
space described in the Tenant's notice as of the date stated in the Tenant's
notice. If the Tenant's notice shall cover all of the Premises, and the
Landlord shall give the recapture notice with respect thereto, the term of this
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Lease shall end on the date stated in Tenant's notice, as if that date had been
fixed for the expiration of the term. If this Lease be so terminated with
respect to less than the entire Premises, the rent shall be proportionately
adjusted on the basis of the number of square feet retained by the Tenant and
the rental rate applicable thereto.
5.08 To abide by and comply with, at its own expenses, all laws, by-laws,
rules and regulations of any Municipal or other Governmental authority which in
any manner relate to or affect the business of the Tenant or the use of the
Premises by the Tenant and save harmless the Landlord from all costs, charges or
damages to which the Landlord may be put or suffer by reason of any breach by
the Tenant of any such law, rule or regulation.
5.09.01 To provide and maintain in full force at the Tenant's sole expense,
for the common benefit of the Landlord and the Tenant, insurance as follows:
(a) Public liability and property damage insurance with respect to the Premises
and the Common Area and the use thereof, such insurance to be in form and
amounts satisfactory from time to time to the Landlord, provided that the
amount thereof shall be to a limit of not less than TWO MILLION DOLLARS
($2,000,000.00) inclusive for each occurrence of bodily injury or death and
property damage;
(b) Tenant's "all risks" legal liability in an amount sufficient to be carried
by a prudent Tenant;
(c) "All risks", including property insurance on the Tenant's improvements to
the replacement cost thereof; and
(d) Glass breakage insurance with respect to any glass on the Tenant's premise
unless the Tenant wishes to self insure, in which case the Tenant will be
responsible for replacement of any broken glass;
which policies of insurance shall name the Landlord as an additional assured
thereunder, such policy or policies to be in a form satisfactory to the
Landlord, and with insurers acceptable to the Landlord, such satisfaction and
acceptance not to be unreasonably withheld, and the Tenant shall deliver to the
Landlord certificates of all such policies of insurance and furnish certificates
or renewal of such insurance not less than FIVE (5) days prior to the expiration
of any such policy or policies; PROVIDED HOWEVER, that the Tenant may, at its
option, bring its obligations to insure pursuant to this clause, within the
coverage of any blanket policy or policies of insurance which it may now or
hereafter carry, by appropriate amendment, rider endorsement, or otherwise, so
long as the interest of the Landlord shall be as fully protected thereby as if
the Tenant had obtained individual policy or policies of insurance; all such
policy or policies of insurance shall contain a clause or endorsement to the
effect that it or they may not be terminated or materially amended or altered
except after TEN (10) days written notice thereof to the Landlord; as often as
any such policy or policies of insurance shall expire or terminate, renewal or
additional policies shall be procured by the Tenant in like manner, to the like
extent.
5.09.02 To pay to the Landlord, as additional rent, forthwith as requested by
the Landlord, the full cost (or if the Premises forms part of a building, its
proportionate share, as determined by the Landlord, of the cost) of insurance
placed by the Landlord from time to time during the term of the Lease and any
extensions thereof, for the common benefit of the Landlord and Tenant to
provide:
(a) "All risks" insurance and earthquake coverage, on the Premises or the
building of which the Premises forms a part, in an amount equal to the full
insurable value thereof, excluding excavating costs, the proceeds of such
policies to be payable to the Landlord and the Tenant as their respective
interests may appear; and
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(b) Rental income insurance in amounts sufficient to cover all loss or
abatement of rentals pursuant to Article 10 hereof, which would otherwise
have become due and payable from time to time hereunder;
and the Landlord shall deliver to the Tenant copies of all such certificates or
policies of insurance and furnish certificates of renewal of such insurance not
less than FIVE (5) days prior to the expiration of any such policy or policies,
PROVIDED HOWEVER, that the Landlord may, at its option, bring its obligations to
provide insurance to be paid for pursuant to this clause, within the coverage of
any blanket policy or policies of insurance of insurance which it may now or
hereafter carry by appropriate amendment, rider endorsement, or otherwise, so
long as the interest of the Tenant shall be as fully protected thereby as if the
Landlord had obtained individual policy or policies of insurance; as often as
any such policy or policies of insurance shall expire or terminate, renewal or
additional policies shall be procured by the Landlord in like manner and to the
like extent.
5.09.03 It is agreed by and between the parties hereunder that the Landlord
may, to the extent it so elects, estimate on an annual basis the costs to the
Landlord of operation, protection and maintenance of the Premises and the access
area as well as the costs of insurance, utilities and management fees that are
chargeable pursuant to the terms of the within lease, and the Tenant agrees that
upon the written request of the Landlord it will pay on a monthly basis on the
dates designated for the payment of Basic Rent its proportionate share, as shall
be reasonably determined by the Landlord of such costs. Landlord acknowledges
that its estimates for the costs set forth in this clause 5.09.03, together with
all other costs comprising additional rent to be paid by the Tenant, to be $1.60
per square foot per annum for the first twelve (12) months of this Lease. The
Landlord agrees to account to the Tenant on an annual basis as of February 28 of
each calendar year during the Term, or such other dates as agreed to in writing
by the parties hereto with respect to the actual amounts of such expenses
payable for a designated period by the Tenant and, taking into account monthly
payments actually paid by the Tenant on account thereof since the date of the
last accounting, will either charge or credit the Tenant for the difference
between the actual amount of expenses and the monies paid by the Tenant on
account thereof.
5.10 If, during the term of this Lease and any extensions thereof, any part
of the Premises including, without limiting the generality of the foregoing, the
Premises, water pipes, drainage pipes, electric equipment, boilers, engines, any
other apparatus or equipment which may be used for the purpose of heating or air
conditioning the said building, roof, stairways, passageways, entrances, inside
or outside walls get out of repair or become damaged or destroyed through the
negligence, or misuse or carelessness of the Tenant, its servants, agents,
employees invitees or anyone permitted by it to be on the Premises, or through
it or them in any way stopping up or injuring any of the aforesaid, to pay to
the Landlord forthwith upon demand to the extent such is not insured pursuant to
the provisions of clause 5.09.02 hereof, the expense of the necessary repairs,
replacements or alterations and if default be made in payment thereof by the
Tenant, such default shall be construed as default in payment of rent hereunder
and the Landlord may distrain therefor.
5.11 To pay the cost (or if the Premises forms part of the building, its
proportionate share as determined by the Landlord) of exterior painting,
decorating and maintenance of the Premises and the Common Area, including
without limiting the generality of the foregoing, landscaping if any, snow and
ice removal, from the roof of the Premises or the building of which the Premises
forms a part and shall not permit the Premises nor the said Lands to become
untidy, unsightly or hazardous or permit unreasonable quantities of waste or
refuse to accumulate thereon and shall comply with all by-laws applicable
thereto, but this paragraph shall not obligate the Tenant in respect of the
initial construction obligations of the Landlord under this Lease and any other
agreement between the parties. Tenant is not responsible for the costs of
exterior painting and decorating during the initial term of this Lease.
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5.12 Not to suffer or permit any builders' liens for work, labour, services
or material ordered by the Tenant or for the cost of which the Tenant may be in
any way obligated, in either case during the term of this Lease or any
extensions thereof, to attach to the Premises and that whenever any such lien
shall attach or claim therefore shall be filed, within TWENTY (20) days after
the Tenant has notice of the claim for liens, to procure the discharge thereof
by payment or by giving security or in such manner as is or may be required or
permitted by law; and further to allow the Landlord to post and keep posted on
the Premises any notice which the Landlord may wish to post under the provisions
of the Builders' Lien Act or any legislation which may replace such Act.
5.13 To waive all claims against the Landlord for damage to goods, wares and
merchandise in, upon or about the Premises and the said Lands and for injuries
to persons in or about the Premises and the said Lands from any cause whatsoever
arising at any time save and except for such action or causes of action as are
caused by the negligence or willful misconduct of the Landlord, its servants or
agents.
5.14 To indemnify and save harmless the Landlord from and against any and all
manner of action or causes of action which the Landlord may sustain, incur or be
put to by reason of or arising out of the use or occupation of the Premises and
the said Lands by the Tenant other than caused by the negligence or willful act
or breach of this Lease or any other agreement between the parties by the
Landlord, its servants or agents.
5.15 Not without the prior written consent of the Landlord (with such consent
not to be unreasonably withheld) to permit any oil or grease, or any
deleterious, environmentally objectionable, dangerous, poisonous or explosive
matter or substance to be brought into the Premises or to be discharged into the
Premises or the Lands upon which they are situate and into water ditches, water
courses, culverts, drains or sewers adjacent to the Premises except in strict
compliance with then current environmental laws, regulations, rules and permits
and will take all reasonable measures for insuring that any effluent discharge
will not be corrosive, poisonous or otherwise harmful or cause obstruction
within the said water ditches, water courses, culverts, drains or sewers to or
within the sewer disposal works or to the bacteriological process of sewage
purification.
5.16 Not to permit or allow any vehicles belonging to the Tenant, its
employees, or invitees unreasonably to cause obstruction on any roads in the
adjacent area, other than in designated parking areas and to use its best
efforts to ensure that persons doing business with the Tenant shall not permit
any vehicles to cause obstruction as aforesaid and to ensure that vehicles
belonging to the Tenant or to persons doing business with the Tenant shall
observe any regulations and instructions made or given by any Municipal
authority with respect to the parking of vehicles on such roads or spaces
reserved for the parking of vehicles.
5.17 To operate every device employed in the working of engines by steam or
other motive power and every other furnace or heating device employed in the
building or the Premises so as substantially to consume or burn the smoke
produced by such furnace or heating device and will not use or suffer to be used
negligently any such furnace or heating device so that the smoke produced
therefrom is not substantially consumed or burned and will not cause or permit
grit, dust or noxious offensive effluvia to be emitted from any engine, furnace
or apparatus on the Premises contrary to any law without using the best
practical means reasonably available for prevention or counteracting such
emission, provided that the Tenant shall not be in breach of this paragraph, if
the equipment in the building does not permit compliance with such laws as
aforesaid.
5.18 That the Tenant will not at any time during the term hereby granted or
any extensions thereof permit any sale by auction to be held upon the Premises
or any part thereof without the consent in writing of the Landlord, not to be
unreasonably withheld.
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5.19 If, after the Landlord has given the Tenant written notice of a breach
of any of the covenants herein contained and a reasonable time within which to
remedy such breach, and it becomes necessary to serve notice of breach, the
Tenant shall pay all reasonable costs, charges and expenses incurred by the
Landlord for the purpose of or incidental to the preparation and service of any
notice hereunder requiring the Tenant to remedy a breach of any of the covenants
herein contained together with such costs as may be incurred by the Landlord in
remedying such breach should the Landlord elect to do.
5.20 To pay and discharge as additional rent as required:
(a) Within TWENTY (20) days after written demand by the Landlord, all the
taxes, rates, duties and assessments whatsoever including without
limitation all that portion of real estate taxes as hereinafter described
that are payable in respect of the Premises, and portions of the said Lands
used or available for use in connection therewith from the date of
commencement of the term herein and including any tax levied in lieu of a
realty tax, that may be levied, charged or assessed on or against the
Premises and Common Area and the use thereof, together with any taxes
levied with respect to any property brought thereon by the Tenant and every
tax or licence fee payable in respect of any business carried on therein,
or in respect of the occupancy of the Premises by the Tenant whether such
taxes, duties, assessments or licence fees are charged by any Municipal,
school, parliamentary or other regulatory body, and whether or not they are
now existing or within the contemplation of the parties hereto and will
indemnify and keep indemnified the Landlord and its property from and
against payment of all loss, costs, charges and expenses occasioned by or
arising from any and every such tax, rate, duty, levy, charge, assessment
or license fee.
The portion of all such taxes payable by the Tenant hereunder shall be as
follows:
Firstly: All such taxes that are directly attributable to the Premises,
Secondly: All such taxes that are directly attributable to the portion of the
said Lands on which the Premises are situate,
Thirdly: All such taxes that are directly attributable to that portion of the
said Lands designed as Common Area which are for the exclusive use of
the Tenant,
Fourthly: The Tenant's proportionate share, as determined by the Landlord, of
all such taxes that are attributable to that portion of the said
Lands which are used in common with the tenants of the other premises
situate thereon.
(b) All rates, duties and assessments now charged or to be charged against
those improvements on the Premises deemed to be fixtures, machinery and
similar things of a commercial or industrial undertaking which may be
removed by the Tenant.
(c) All taxes, rates, duties and assessments now charged or to be charged
against personal property of the Tenant on the Premises.
(d) Upon the written request of the Landlord, the Tenant will pay monthly
payments on account of the Tenant's estimated taxes, rates and duties
payable under clause 5.20, together with its monthly instalment of Basic
Rent. Such payments shall be intended to be sufficient to enable the
Tenant to pay its portion of such estimated taxes by the date or dates when
such taxes are payable to the taxing authority. Annually, on the date as
set forth in clause 5.09.03 herein, on receipt by the Landlord of the
invoice or invoices relating to the charges hereunder, the Landlord will
calculate the actual amount payable and, taking into account any monthly
deposits made since the date of the last annual invoice, will either charge
or
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credit the Tenant for the difference between the actual amount and the
deposits paid, as the case may be.
(e) The Tenant covenants to pay upon demand, as additional rent, all costs
incurred by the Landlord, acting reasonably, in obtaining or attempting to
obtain a reduction in the amount of real estate taxes payable hereunder by
the Tenant. Notwithstanding the foregoing, the Landlord shall consult and
obtain the consent of the Tenant before commencing any attempt to obtain a
reduction in the amount of real estate taxes payable in respect of the
Lands.
(f) In the event that the Tenant shall have paid its portion of real estate
taxes payable hereunder for a particular tax year and the Landlord shall
thereafter receive a refund of any portion of such real estate taxes, the
Landlord shall forthwith make an appropriate refund to the Tenant.
Upon written request of the Landlord, the Tenant will promptly deliver to the
Landlord for inspection, receipts for payment of all Tenant's taxes which are
payable pursuant to this clause.
It is agreed that the Tenant shall have the right to contest at its own expense
the amount or validity of any such taxes, rates, levies and assessments by
appropriate legal proceedings but this shall not be deemed or in any way
construed as relieving, modifying or extending the Tenant's covenant to pay any
such taxes, rates, levies and assessments at the time and in the manner as in
this clause provided. The Landlord agrees to cooperate in such manner as may be
reasonably appropriate with the commencement and conduct of such contest
procedure.
The herein described taxes applicable to the Premises and those portions of the
said Lands on which they are situate shall be paid by the Tenant:
(a) During the first year of the term of this Lease from the date of
commencement of the term as described in clause 2.01 herein; and
(b) During the last year of the term of the Lease or any extension thereof to
the date when this Lease or any extension thereof is terminated.
5.21 If the Landlord is required by lawful authority or considers it
desirable to pay the Tenant's taxes which the Tenant fails or neglects to pay,
the Tenant shall pay the amount thereof to the Landlord forthwith after written
request therefor and if default be made in payment thereof by the Tenant, such
default shall be construed as default in payment of rent hereunder, and the
Landlord may distrain therefor.
5.22 To pay a management fee as additional rent to the Landlord on the amount
of THREE PERCENT (3%) of the basic annual rent. Payment to be made monthly in
advance during the term of this Lease and any extensions thereto.
ARTICLE 6 - LANDLORD'S COVENANTS
--------------------------------
The Landlord covenants with the Tenant:
6.01 For quiet enjoyment.
6.02 To cause to be forwarded forthwith on receipt to the Tenant, a copy of
real property assessment notices with respect to the said Lands and the
Premises.
6.03 To repair and/or replace as follows:
-00-
Xxx Xxxxxxxx, at its sole expense, shall be responsible for necessary
replacement of the roof, (as distinct from the need to repair leaks which may
occur in the roof from time to time), necessary structural repairs to the
exterior walls, structural steel, foundations or actual structure of the
Premises, unless such repairs are occasioned by the negligence of the Tenant and
shall make same forthwith upon receipt of written notice of the need for such
repairs from the Tenant;
6.04 The Landlord, for repairs for which it is not responsible hereunder,
shall make available and hereby assigns to the Tenant the benefit of any
manufacturer's, supplier's or installer's warranties relating to the Premises or
any of its parts by assignment or in such other form as the Tenant may
reasonably require.
6.05 To place and maintain the insurance described in clause 5.09.02 hereof,
it being understood that the cost of such insurance is to be the responsibility
of the Tenant as provided in said clause 5.09.02.
ARTICLE 7 - IMPROVEMENTS AND ALTERATIONS
----------------------------------------
7.01 The Tenant agrees not to make any major alterations, additions or
improvements in or to the Premises, nor to erect, construct or install upon the
Premises alterations or improvements in addition to those now located thereon,
without obtaining the Landlord's prior written consent, such consent not to be
unreasonably withheld, PROVIDED HOWEVER, that in the case of very minor
alterations and improvements such consent will not be required and all such work
shall be done at the Tenant's sole expense and at such times and in such manner
as the Landlord may approve and in accordance with applicable municipal building
by-laws and regulations.
7.02 In the event that any alterations, additions or improvements are made to
the Premises by the Tenant, the Tenant shall, on the written request of the
Landlord, to be delivered to the Tenant not less than three (3) months prior to
the end of the Term or any extensions thereof, restore the Premises to a good
rentable condition not later than FIFTEEN (15) days prior to the end of the Term
or any extension thereof, PROVIDED THAT if the Landlord should prefer that such
alterations, additions and improvements, other than moveable business fixtures,
equipment and chattels, remain, such shall be the case and no compensation shall
be allowed to the Tenant for the same, and the Landlord may require the Tenant
to restore the Premises to such extent as the Landlord may reasonably require
although retaining as far as possible, the alterations, additions and
improvements, without in any case, any compensation to the Tenant therefor.
7.03 All business and trade fixtures, machinery and equipment, furniture and
heating, ventilating and air-conditioning units owned by the Tenant or installed
by the Tenant in the Premises at the Tenant's expense shall remain the property
of the Tenant but may, provided the Tenant is not in default hereunder, and only
with the prior written consent of the Landlord, such consent not to be
unreasonably withheld, and upon such terms and conditions as may reasonably be
imposed by the Landlord, be removed by the Tenant at any time during the Term,
provided always that the Tenant, at its own expense, shall repair any damage to
the Premises caused by such removal or by the original installation. The
Landlord may require the Tenant to remove all or any part of such property at
the expiration of this Lease, or any renewal or renewals thereof, and such
removal shall be done at the Tenant's expense and the Tenant shall, at its own
expense, repair any damage to the Premises caused by such removal. If the
Tenant does not remove its property forthwith after written notice by the
Landlord to that effect, such property shall, if the Landlord elects, be deemed
to become the Landlord's property and the Landlord may remove the same at the
expense of the Tenant and the cost of such removal and any necessary storage
charges shall be paid by the Tenant forthwith to the Landlord on written demand.
The Landlord shall not be responsible for any loss or damage to such property
because of such removal.
ARTICLE 8 - INDEMNIFICATION AND LIMITATION OF LIABILITY
-------------------------------------------------------
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8.01 It is agreed by and between the parties hereto that the Landlord shall
not be liable for any injury or damage to the Tenant, any agent or employee of
the Tenant, any person visiting or doing business with the Tenant or any other
person or to the property belonging to the Tenant or to any agent or employee of
the Tenant, or to the property of any person visiting or doing business with the
Tenant or to that of any other person while such property is on the Premises,
whether such property has been entrusted to any employee or agent of the
Landlord or not and without limiting the generality of the foregoing, for any
loss, injury, damage or expense resulting from fire, explosion, falling plaster,
steam, gas, electricity, water, rain or snow or overflow or leakage of water
from any part of the Premises or any building or buildings located on the said
Lands or from pipes, appliances, drains or plumbing works or from the roof,
street or subsurface or from any other place, or by any accident or misadventure
to or arising from the use and operation of machinery, elevator, heating
apparatus, electrical wiring and appliances, gas or other pipes and appliances
or any other fixtures, whether or not such damage is incurred by the act, or
default of the Landlord, its servants or agents, and in any manner whatsoever,
save and except for damages occasioned by the negligence or wilful misconduct
of the Landlord, its servants or agents.
8.02 The Tenant agrees to indemnify and save harmless the Landlord from and
against any and all manner of actions or causes of action, damages, loss, costs
or expenses which the Landlord may sustain, incur or be put to by reason of any
permitted advertising signs now existing or which may hereafter be erected by
the Tenant, upon, over, projecting from or above the Premises and shall pay the
premiums charged upon any bond of indemnity or liability insurance policy in
respect of such signs issued upon the demand of any Civic, Municipal, Government
or other authority.
ARTICLE 9 - SUBORDINATION
-------------------------
9.01 If required by the Landlord so to do, the Tenant shall subordinate this
Lease to any mortgages, including any deed of trust and mortgage and all
indentures supplemental thereto, or other encumbrance or encumbrances, together
with any renewal, extensions, or replacements thereto, which now or hereafter
during the said term of this Lease, affect or relate to this Lease, the
Premises, or the said Lands or any building or buildings now or hereafter
constructed on the said Lands, or any portion or portions thereof, PROVIDED that
any such subordination shall be on terms whereby the Tenant is entitled to
remain in possession of the Premises while not in default hereunder. The Tenant
agrees to execute promptly, and within a period of FIFTEEN (15) days of being so
requested by the Landlord at any time, and from time to time, any documents or
assurances which the Landlord may require to confirm such subordination,
PROVIDED ALWAYS, that so long as the Tenant is not in default under any of the
terms, covenants or conditions of this Lease, neither this Lease nor any of the
rights of the Tenant hereunder shall be terminated by reason of the bankruptcy
of the Landlord or any action or proceeding for foreclosure.
ARTICLE 10 - DAMAGE TO THE PREMISES
-----------------------------------
10.01 In the event that during the Term the Premises, or any part thereof,
shall be damaged or destroyed by fire, or any of the other perils insured
against under the provisions of this Lease, and the said damage or destruction
is not caused by any failure nor neglect on the part of the Tenant to perform or
observe any covenant or condition hereof, then and in every such event:
(a) If the damage or destruction is such that it does not render the Premises
wholly unfit for the use for which it is hereby demised, then this Lease
shall remain in full force and effect but until such damage or destruction
has been repaired to the extent of enabling the Tenant to use and occupy
the whole of the Premises, the rent shall xxxxx in the proportion that the
portion to the Premises which are rendered unfit for occupancy bears to the
whole of the Premises. The Landlord shall have no obligation or liability
whatsoever to the Tenant, and
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the Tenant shall not be entitled to nor recover any damages whatsoever
against the Landlord for any loss occasioned by the said damage or
destruction, but the Landlord shall, with reasonable diligence after the
occurrence of the event causing said damage, cause the Premises to be
repaired to the same general condition in which it existed at the time of
such damage or destruction;
(b) If the damage or destruction is such that the Premises are rendered wholly
unfit for occupancy or it is impossible or unsafe to use and occupy the
same and if in either event the damage or destruction can be repaired with
reasonable diligence within ONE HUNDRED AND EIGHTY (180) days from the
happening of such damage or destruction, then, if such damage or
destruction can be lawfully repaired and for the amount of the net proceeds
of the said insurance, this Lease shall remain in full force and effect and
the Landlord shall, with reasonable diligence, cause such damage or
destruction to be repaired and the rent hereby reserved shall xxxxx to the
extent that such shall be covered by insurance payable to the Landlord
pursuant to clause 5.09.02(b) hereof from the date of the happening of such
damage or destruction until the date the damage or destruction shall be
made good to the extent of enabling the Tenant to use and occupy the
Premises;
(c) If the damage or destruction is such that the Premises are rendered wholly
unfit for occupancy or it is impossible or unsafe to use and occupy the
same and if in either event the damage or destruction cannot be repaired
with reasonable diligence within ONE HUNDRED AND EIGHTY (180) days from the
happening of such damage or destruction then the Landlord or the Tenant
may, within THIRTY (30) days next succeeding such damage or destruction,
terminate this Lease by giving notice in writing to the other party of such
termination, in which event this Lease and the term hereby demised shall
cease and be at an end as of the date of such damage or destruction and the
rent and all other payments for which the tenant is liable under the terms
of this Lease shall be apportioned and paid in full to the date of such
damage or destruction and any necessary refund shall be made with respect
to payments already made;
(d) In the event that neither party shall exercise its option to terminate the
Lease as in sub-clause 10.01 (c) provided and if the damage or destruction
can be repaired for the amount of the net proceeds of the said insurance,
this Lease shall remain in full force and effect and the Landlord shall,
with reasonable diligence and without avoidable delay, cause such damage or
destruction to be repaired and the rent hereby reserved shall xxxxx from
the date of the happening of such damage or destruction until the date when
the Landlord makes the Premises available to the Tenant to resume
occupancy.
10.02 Provided, however, if such damage or destruction is due to the
negligence or overt acts of the Tenant or its agents and/or servants, then
notwithstanding anything to the contrary hereinbefore contained, and so often as
the same shall occur:
(a) The Landlord may at its option and without prejudice to any rights of
action it may have against the Tenant either:
(i) forthwith rebuild and make the Premises fit for the purposes of the
Tenant; or
(ii) by notice in writing mailed to the Tenant at its last known address
forthwith determine and put an end to this Lease and may accordingly
deal with the Premises as fully and effectually as if these presents
had not been entered into.
(b) If the Landlord shall rebuild and make the Premises fit for the purposes of
the Tenant, the Tenant shall continue to pay rent to the Landlord as
hereinbefore provided notwithstanding such damage or destruction.
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ARTICLE 11 - EXPROPRIATION
--------------------------
11.01 If any part of the Premises shall be taken or expropriated for a public
or quasi-public use, and a part thereof remains which is suitable for the use
for which it is hereby demised, then this Lease shall, as to the part so taken,
terminate as of the date title shall vest in the expropriator and the rent
payable hereunder shall be adjusted so that the Tenant shall be required to pay
for the remainder of the term only such portion of such rent as the value of the
part remaining after the expropriation bears to the value of the entire Premises
at the date of expropriation. If the parties cannot agree on this value, the
matter may be submitted by either party to binding arbitration by a sole
arbitrator conducted pursuant to the Commercial Arbitration Act of British
Columbia. If all of the Premises are to be taken or expropriated, or so much
thereof, that the aforesaid use by the Tenant shall be substantially impaired,
this Lease, at the Tenant's option, shall thereupon terminate. All compensation
awarded or granted upon any such expropriation or taking shall go to the
Landlord and the Tenant as their interests may appear and as provided by the
laws of the Province of British Columbia.
ARTICLE 12 - BANKRUPTCY, INSOLVENCY OR EXECUTION
------------------------------------------------
12.01 In the event that the term hereby granted or any of the goods or
chattels of the Tenant shall be any time seized or taken in execution or in
attachment by any creditor of the Tenant, or if the Tenant shall become
insolvent or bankrupt, or make an assignment for the benefit of creditors, or
take the benefit of any Act for bankrupt or insolvent debtors, or being an
incorporated company, if proceedings be begun to wind up the said company,
whether compulsorily or voluntarily, and an order for winding up or other
termination of its corporate existance is made, or in case the Premises or any
part thereof become vacant or unoccupied for a period of THIRTY (30) days, or be
used by any other person or persons, or for any other purpose than as herein
provided, without the written consent of the Landlord, or, if a Receiver or
Receiver-Manager with respect to the Tenant is appointed, whether privately or
judicially, and whether or not he takes or obtains possession of the assets,
then and in every such case, at the option of the Landlord, the then current
month's rent and the rent for the THREE (3) months next following calculated at
the same rate as would have been payable by the Tenant had no bankruptcy or
other such event taken place, shall immediately become due and payable and this
Lease shall, at the option of the Landlord, cease and be void and the term
hereby created expire and be at an end, anything hereinbefore to the contrary
notwithstanding, and the Landlord may re-enter and take possession of the
Premises as though the Tenant or its servants or other occupant or occupants of
the Premises were holding over after the expiration of the said term, and the
term shall be forfeited and void.
ARTICLE 13 - DEFAULT
--------------------
13.01 It is agreed by and between the parties hereto that if and whenever the
rents payable hereunder or any of them, whether the same are demanded or not,
are not paid when they come due, or in the case of breach or non-observance or
non-performance by the Tenant of any covenant, agreement or stipulation herein
contained on its part to be kept, performed and observed, and any such rental or
other default on the part of the Tenant shall continue for FIFTEEN (15) days
after written notice thereof to the Tenant, or in the case that the Premises
shall be vacated or remain unoccupied for THIRTY (30) days, or if the term shall
be taken in execution or attachment for any cause whatever, then in any such
case the Landlord in addition to other remedies now or hereafter provided by
law, may at its option cancel and annul this Lease forthwith and/or may re-enter
and take possession of the Premises immediately by force, if necessary, without
any previous notice of intention to re-enter, and may re-enter and may remove
all persons and property therefrom and may use such force and assistance in
making such removal as the Landlord may deem advisable and the Tenant hereby
waives all claims for damage to or loss of any of the Tenant's property caused
by the Landlord in re-entering and taking possession of the Premises; and no
action taken by the Landlord
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in pursuance of this clause or the preceding Article 12 whether under what are
generally known as summary proceedings or otherwise shall be deemed to absolve,
relieve or discharge the Tenant from liability hereunder; and this proviso shall
extend and apply to all covenants whether positive or negative; and should the
Landlord terminate this Lease for any breach, in addition to any other remedies
it may have, it may recover from the Tenant all the damages it may incur by
reason of such breach, including the cost of recovering the Premises and
including the worth at the time of such termination of the excess, if any, of
the amount of rent and charges equivalent to the rent herein reserved, for the
remainder of the stated term over the then reasonable rental value of the
Premises for the remainder of the stated term.
ARTICLE 14 - OVERHOLDING
------------------------
14.01 If the Tenant shall continue to occupy the Premises after the
expiration of the term hereby granted or any extensions thereof and the Landlord
shall accept rent, the new tenancy thereby created shall be deemed to be a
monthly tenancy and shall be subject to the covenants and conditions contained
in this Lease insofar as the same are applicable to a tenancy from month to
month, save and except that the rental payable shall be as determined and
advised by the Landlord.
ARTICLE 15 - NON-WAIVER
-----------------------
15.01 The failure of the Landlord to insist upon strict performance of any
covenant or condition contained in this Lease or to exercise any right or option
hereunder shall not be construed nor operate as a waiver or relinquishment for
the future of any such covenant, condition, right or option and no waiver shall
be inferred from or implied by anything done or omitted by the Landlord save
only express waiver in writing. The acceptance of any rent or the performance
of any obligation hereunder by a person other than the Tenant shall not be
construed as an admission by the Landlord of any right, title or interest of
such person as a sub-tenant, assignee, transferee or otherwise in the place and
stead of the Tenant.
ARTICLE 16 - ADVERTISING SIGNS
------------------------------
16.01 The Tenant will not at any time during the Term affix or exhibit or
permit to be affixed or exhibited upon any part of the Premises any sign or
other advertising device or other matter or thing of whatever nature except such
as shall have complied with all by-laws and regulations applicable thereto and
first been approved in writing by the Landlord, such approval not to be
unreasonably withheld, and such shall at all times thereafter be in accordance
with such design and specifications as shall have been so approved, PROVIDED
ALWAYS that the Landlord shall, from time to time, and at all times hereafter be
at liberty to examine the said signs or devices and that the Tenant will repair,
renew, repaint or strengthen the same upon notice from the Landlord, if the same
is required and if the Tenant shall fail to comply with such notice, the
Landlord shall be at liberty to repair, renew, repaint or strengthen such signs
or devices and the cost, charges and expenses of such renewal, repainting and/or
strengthening shall be forthwith paid by the Tenant to the Landlord, but the
giving of such notice and the undertaking of such repairs or strengthening by
the Landlord shall not be deemed an acknowledgment or admission of any liability
or responsibility on the part of the Landlord; PROVIDED HOWEVER, that should the
Tenant at any time fail to pay any of the said costs, charges or expenses then
the Landlord may do so and a sum equal to the amount so paid shall forthwith
become due and payable to the Landlord by the Tenant and be collectable as if
the same were rent reserved under this Lease.
ARTICLE 17 - NOTICE AND DEMANDS
-------------------------------
17.01 Any notice required or contemplated by any provision of this Lease or
which the Landlord or Tenant may desire to give to the other shall be
sufficiently given, if to the Tenant by personal delivery or affixing to the
Premises, and to the Landlord by personal delivery or in the case
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of emergency by fax to such number as shall be supplied each to the other
confirmed by registered letter, and otherwise by registered letter, postage
pre-paid and mailed in one (1) of Her Majesty's Post Offices in Canada and
addressed to:
(a) The Tenant at the Municipal address of the Premises or such other address
as the Tenant may, from time to time in writing advise, or
(b) The Landlord at #305 - 1788 West 5th Avenue, Vancouver, in the Province of
British Columbia, V6J 1P2, or such other address as the Landlord may, from
time to time in writing advise;
and any such notice be effective as of the day of such personal delivery or
affixing of notice to the Tenant upon the Premises or as of the first business
day following delivery of the aforementioned fax; PROVIDED ALWAYS, that the
Landlord, if so requested in writing by a permitted assignee of the Tenant as
provided in clause 5.07 herein, shall forward a copy of any notice sent to the
Tenant to such permitted assignee, such copy to be mailed, faxed or delivered to
the said assignee at the address specified in the said notice.
ARTICLE 18 - MISCELLANEOUS
--------------------------
18.01 The Landlord, if requested by the Tenant, shall provide the Lease in
registrable form with respect to the execution thereof and the necessary proofs
of execution for the Land Titles Office, however, the costs of registration and
the providing of plans satisfactory to the Land Titles Office shall be the sole
responsibility and cost of the Tenant.
18.02 The Tenant covenants and agrees with the Landlord that it will, if and
whenever reasonably required by the Landlord acknowledge or consent to estopple
certificate or other instrument relating to this Lease and rentals payable
hereunder which may be required by or on behalf of any purchaser, bank or
Mortgagee from time to time of the said Premises; PROVIDED ALWAYS that the
rights of the Tenant as hereinbefore set out not be altered or varied by the
terms of such instrument or document in any way whatsoever and further provided
that the Tenant shall not in any way be financially obligated with respect to
any said instrument or document.
18.03 That wherever and whenever the approval or consent of the Landlord is
required to be obtained, such approval or consent may be given by any such
officer, Agent, committee, person or persons as may from time to time, be
nominated or appointed in writing by the Landlord for such purpose, and any such
power of nomination or appointment may be delegated by the Landlord, and such
nominees, appointees or delegatees shall subject to the provisions of this
Lease, have the right to withhold approval or consent to and may reject any
matter or thing submitted for approval or consent, and every such approval or
consent shall be given in writing and may contain such conditions and
stipulations as the Landlord may deem fit, all subject to the terms of this
Lease.
18.04 That all grants, covenants, conditions, provisos, agreements, rights,
powers, privileges and liabilities contained herein shall be read and construed
as granted to, made and reserved by, imposed upon and undertaken by the parties
hereto and their respective successors and assigns, subject to the consent of
the Landlord being obtained as hereinbefore provided to any assignment or sub-
lease by the Tenant, and that wherever the singular is used the same shall be
construed as meaning the plural where the circumstances so require and that the
Landlord may perform any act hereunder in person or by or through an Agent; but
shall remain primarily liable in respect thereof and that in case of more than
ONE (1) Tenant, the said grants, covenants, conditions, provisos, agreements,
rights, powers, privileges and liabilities shall be construed and held to be
several as well as joint.
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18.05 Upon the termination of this Lease, the Tenant may at its option
repaint the Premises in a colour approved by the Landlord, such approval not to
be unreasonably withheld.
18.06 Upon the termination of this Lease the Tenant shall, if required by the
Landlord and otherwise may, at its option remove all signs or other identifying
marks from the Premises PROVIDED that in either case, the Tenant shall repair
any damage resulting therefrom.
18.07 In any action between the Landlord and Tenant seeking enforcement of
any of the terms and provisions of this Lease or in connection with the
Premises, the prevailing party in such action shall be awarded in addition to
damages injunctive or other relief, its reasonable costs and expenses not
limited to taxable costs and a reasonable Solicitor's fee. In the event that
the Landlord is the prevailing party in action to enforce terms and provisions
of this Lease, the foregoing amounts shall be deemed to be rent payable under
this Lease.
18.08 Time is of the essence of this Lease.
18.09 This Lease shall be read and construed in accordance with the laws of
the Province of British Columbia.
18.10 The invalidity or unenforceability of any provision of this Lease or
any covenant herein contained shall not affect the validity or enforceability of
any other provision or covenant herein contained and any invalid provision or
covenant shall be deemed to be severable.
ARTICLE 19 - OPTION TO RENEW
----------------------------
19.01 Provided the Tenant duly and regularly pays the rent and performs all
and every covenant, proviso and agreement herein on the part of the Tenant to be
paid and performed, it shall have an option to renew this Lease for a further
term of five (5) years, said option to be exercised by giving notice thereof to
the Landlord not earlier than NINE (9) months and not later than SIX (6) months
prior to the expiration of the term hereby demised. The renewal term of the
Lease shall be under the same terms and conditions as those contained herein
save and except that there shall be no further option to renew and that the rent
or rents payable during such renewal term shall be the fair market rent or rents
for the Premises determined as follows:
(a) Upon exercise of the option, the parties shall agree upon the fair market
basic annual rent or rents to be paid during such renewal period, such rent
or rents to be in annual amounts not less than the basic annual rent
payable for the period commencing June 1, 2002 to May 31, 2003. If an
agreement is not reached by the Landlord and the Tenant prior to THREE (3)
months before the expiration of the Term, either party may forthwith submit
to arbitration the determination of fair market rental for basic annual
rent or rents to be payable during such renewal term and the basic annual
rent or rents so found by arbitration shall be at rates not less than that
payable for the last year of the expiring term as aforesaid. The
arbitration shall be conducted pursuant to the provisions of British
Columbia Commercial Arbitration Act and unless otherwise agreed by the
parties in writing, the cost of the arbitration shall also be a subject of
the arbitration award.
ARTICLE 20 - GUARANTEE
----------------------
20.01 As a condition of the granting of this Lease by the Landlord to the
Tenant, the Guarantor, in consideration of the sum of $1.00 now paid by the
Landlord and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged by the Guarantor, hereby unconditionally
guarantees all the obligations of the Tenant under this Lease and accordingly
covenants and agrees with the Landlord that all the covenants, agreements and
other
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obligations of the Tenant under this Lease shall be fully performed, that
guarantee being upon the following terms:
(a) the liability of the Guarantor to the Landlord shall be for all purposes as
if the Guarantor was a primary obligor hereunder and not merely a surety
for the obligations of the Tenant and the Landlord shall not be obliged to
resort or exhaust any resource which it may have against the Tenant or any
other person before being entitled to claim against the Guarantor;
(b) no dealings between the Landlord and the Tenant of whatsoever kind, whether
with or without notice to the Guarantor, shall exonerate the Guarantor in
whole or in part, and in particular including, but not limiting the
generality of the foregoing, the Landlord may grant any indulgence,
release, postponement, or extension of time, waive any covenant or
provision of this Lease or any obligations of the Tenant, take or release
any securities of other guarantees for performance by the Tenant, and
otherwise deal with the Tenant or any other persons as the Landlord may see
fit without affecting, lessening, or limiting in any way the liability of
the Guarantor;
(c) any account settled or stated or any other settlement made between the
Landlord and the Tenant, and any determination made under any provision of
this Lease which is expressed to be binding upon the Tenant shall be
binding upon the Guarantor;
(d) the Guarantor shall make payment to the Landlord of any amount properly
payable by the Tenant to the Landlord but unpaid, subject to the provisions
of Article 13 hereof, and shall upon demand perform any other obligations
under this Lease which the Tenant has failed to perform, and any demand
made by the Landlord upon the Guarantor shall be deemed to have been
effectually made if sent as hereinbefore provided;
(e) no assignment of this Lease, sublease, or any other dealings therewith by
the Tenant whether with or without the consent of the Landlord, shall
exonerate the Guarantor;
(f) nothing whatsoever except the performance in full of all the obligations of
the Tenant under this Lease throughout the term of this Lease and any
extension thereof or overholding thereunder shall discharge the Guarantor
of this guarantee;
(g) in the event of the bankruptcy of the Tenant, or in the event of disclaimer
of this Lease under any statute, then at the sole discretion of the
Landlord, the Guarantor shall execute a new Lease of the Leased Premises
between the Landlord, as landlord and the Guarantor, as tenant, for the
term remaining unexpired at the date of that termination or that
disclaimer; and
(h) the Guarantor hereby expressly waives notice of the acceptance of this
guarantee and all notice of nonperformance, nonpayment, or non-observance
on the part of the Tenant of the terms, covenants, conditions and
provisions of the Lease.
ARTICLE 21 - REMOVAL OF COOLER & RENTAL ABATEMENT
-------------------------------------------------
21.01 The Landlord shall xxxxx the xxxxx rental (Basic Rent, operating costs
and taxes) equal to that portion of the Premises which, as of the date first
above written, is occupied by the cooler (approximately 1,763 square feet) until
the cooler is removed from the building which constitutes the Premises. The
Landlord covenants and agrees to cause the cooler to be removed from the
Premises on or before June 30, 1998.
ARTICLE 22 - LANDLORD IMPROVEMENTS
----------------------------------
-19-
22.01 The Landlord will, at its sole cost, provide the improvements to the
Premises as detailed in Schedule "C" hereof.
ARTICLE 23 - LANDLORD'S REPRESENTATIONS AND WARRANTIES
------------------------------------------------------
23.01 The Landlord and the person(s) signing on the Landlord's behalf
represent and warrant that:
(a) the Landlord is duly organized, validly existing and in good standing under
the laws of the jurisdiction which such entity was organized;
(b) the Landlord has the authority to own its property and to carry on its
business as contemplated under this Lease;
(c) to the best of its knowledge, information and belief the Landlord is not in
breach of any law, statute, bylaw, ordinance or lawful requirement of any
governmental authority or any public utility lawfully acting in their
statutory power having jurisdiction over the improvements constricted on
the Lands (excluding compliance which is the responsibility of a tenant or
other occupant of the Lands);
(d) the Landlord has duly executed and delivered this Lease;
(e) the execution, delivery and performance by the Landlord of this Lease (i)
are within the powers of the Landlord, (ii) have been duly authorized by
all requisite action, or (iii) will not violate any provision of law or any
order of any court or agency of government, or any agreement or other
instrument which the Landlord is a party or by which it or any of its
property is bound;
(f) the Lease is a valid and binding obligation of the Landlord; and
(g) the Tenant's permitted use of the Lease Premises, as set out in clause 4.01
hereof, is in compliance with the zoning governing the Lands.
These representations and warranties will survive the termination of the Term.
IN WITNESS WHEREOF the parties hereto have executed this Lease as of the day and
year first above written.
DELTA PLAY COMPANY
By:
_____________________________________
Authorized Signatory
_____________________________________
NAME (PRINT)
_____________________________________
TITLE (PRINT)
-20-
VANAC DEVELOPMENT CORP.
By:
/s/ XXXXXXX XXXXX
_____________________________________
Authorized Signatory
Xxxxxxx Xxxxx
_____________________________________
NAME (PRINT)
President
_____________________________________
TITLE (PRINT)
KOALA CORPORATION
By:
/s/ XXXXXXX X. XXXXX
_____________________________________
Authorized Signatory
Xxxxxxx X. Xxxxx
_____________________________________
NAME (PRINT)
Vice President
_____________________________________
TITLE (PRINT)
DELTA PLAY CORPORATION
By:
/s/ R.M. ADANAC
_____________________________________
Authorized Signatory
R.M. Adanac
_____________________________________
NAME (PRINT)
Vice President of Finance
_____________________________________
TITLE (PRINT)
-21-
SCHEDULE "A"
PLAN SHOWING EXISTING BUILDING ON LOT 11
----------------------------------------
DISTRICT XXX 000 XXXXX 0
------------------------
X.X.X. XXXX 00000
-----------------
SCALE 1:750
-----------
[SCHEDULE "B" TO COME]^^
[SCHEDULE "B" TO COME^^]
SCHEDULE "C"
The Landlord shall provide the following tenant improvements at his sole cost:
1. The Premises shall be in broom clean condition with all heating, lighting,
plumbing, mechanical, electrical and HVAC systems are to be in proper
working conditions, to original building specifications.
2. Landlord to provide clearance from environmental agencies that the Land and
Building are free and clear of any contamination.
MODIFICATION OF LEASE
THIS INDENTURE made the 8th day of June, 1998.
BETWEEN:
405985 B.C. LTD., a company duly incorporated under the laws of the
Province of British Columbia and having its office at 305-1788 West
5th Avenue, in the City of Vancouver in the Province of British
Columbia; V6J 1P2
(hereinafter called the "Landlord")
OF THE FIRST PART
AND:
DELTA PLAY COMPANY, a company duly incorporated under the laws of the
Province of Nova Scotia and having its British Columbia address at
00000-00xx Xxxxxx, Xxxxx 000, in the City of Surrey, in the Province
of British Columbia; V3S 1X7 (Inc. No. 3009539)
(hereinafter called the "Tenant")
OF THE SECOND PART
AND:
KOALA CORPORATION, a company duly incorporated under the laws of the
State of Colorado and having its offices at 1600 East 53rd Avenue,
Unit D, in the City of Denver, in the State of Xxxxxxxx, XX 00000
(hereinafter called the "Guarantor")
OF THE THIRD PART
WHEREAS:
A. By a Lease Agreement dated the 31st day of March, 1998, between the parties
hereto (hereinafter called the "Said Lease"), the Landlord did demise unto the
Tenant and Guarantor that building or portion of building described as 0000
Xxxxxxxx Xxx constructed upon those lands and premises situate, lying and being
in the City of Delta, Province of British Columbia, more particularly known and
described as:
Xxx 00, Xxxxxxxx Xxx 000, Xxxxx 0, Xxx Xxxxxxxxxxx
Plan 87635 P.I.D.: 000-000-000
as designated on the Plan attached to the Said Lease as Schedule "A", which
Premises are to have an area of approximately 60,649 square feet.
X. Xxxxx Development Corp. has assigned its interest under the Said Lease to
405985 B.C. Ltd;
C. Article 3.01(c) of the Said Lease provided that should the area of the
Premises, as calculated and certified by the Landlord's British Columbia Land
Surveyor, by the Commencement Date be found to vary from the anticipated area of
60,649 square feet, the Basic Rents as stated in Article 3.01(a) and (b) shall
be varied in direct proportion to the variation in actual floor area in relation
to the anticipated are of 60,649 square feet;
D. The measurement of the area of the Premises has been determined by the
Landlord's surveyors to be 60,680 square feet;
E. The parties have agreed that the Basic Rents as stated in Article 3.01(a)
and (b) aforesaid shall be varied in direct proportion to the surveyed floor
area of 60,680 square feet.
NOW THEREFORE THIS INDENTURE WITNESSETH that in consideration of the Premises
and the sum of One Dollar ($1.00) (receipt whereof is hereby acknowledged) the
parties hereto hereby agree as follows:
1. The measurement of the area of the Premises is 60,680 square feet.
2. The Basic Rents payable during the term June 1, 1998 to May 31, 2003 as
stated in Article 3.01 (a) and (b) shall be varied in direct proportion to
the floor area of 60,680 square feet.
3. That Article 3.01(a) and (b) of the Said Lease shall be amended to read as
in Schedule "A" annexed hereto.
4. The Said Lease, modified as aforesaid, is hereby confirmed and ratified by
the parties hereto in all other respects.
THIS LEASE MODIFICATION AGREEMENT and everything herein contained shall enure to
and be binding on the parties hereto, their respective heirs, administrators,
executors or assigns.
IN WITNESS WHEREOF the Landlord and Tenant have duly executed these presents on
the day and year first above written.
DELTA PLAY COMPANY
By:
/s/X. X. Xxxxx
-----------------------------
Authorized Signatory
X. X. Xxxxx
-----------------------------
NAME (print)
Vice President Finance
-----------------------------
TITLE (print)
KOALA CORPORATION
BY:
/s/Xxxxxxx X. Xxxxx
-----------------------------
Authorized Signatory
Xxxxxxx X. Xxxxx
-----------------------------
NAME (print)
Vice President
-----------------------------
TITLE (print)
405985 B.C. LTD.
By:
/s/Xxxxxxx Xxxxx
-----------------------------
Authorized Signatory
Xxxxxxx Xxxxx
-----------------------------
NAME (print)
President
-----------------------------
TITLE (print)
Schedule "A"
------------
3.01(a) For the portion of the term being from June 1, 1998 up to and
including May 31, 2001 an annual basic rent of THREE HUNDRED
TWENTY-FOUR THOUSAND SIX HUNDRED THIRTY-EIGHT DOLLARS
($324,638.00) payable in equal consecutive monthly installments of
TWENTY-SEVEN THOUSAND FIFTY-THREE DOLLARS SEVENTEEN CENTS
($27,053.17) each, said payments to commence on the 1st day of
July, 1998;
3.01(b) For the portion of the term being from June 1, 2001 up to and
including May 31, 2003 an annual basic rent of THREE HUNDRED
THIRTY-NINE THOUSAND EIGHT HUNDRED AND EIGHT DOLLARS ($339,808.00)
payable in equal consecutive monthly installments of TWENTY-EIGHT
THOUSAND THREE HUNDRED SEVENTEEN DOLLARS THIRTY-THREE CENTS
($28,317.33) each, said payments to commence on the 1st day of
June, 2001.
