1
DATED: June 23, 2000
--------------------------------------
B E T W E E N:
ORLANDO CORPORATION
- and -
HYDROGENICS CORPORATION
------------------------------------------------------------
LEASE
REGARDING 0000 XXXXXXXXXX XXXX, XXXXXXXXXXX, XXXXXXX X0X 0X0
------------------------------------------------------------
FRASER XXXXXX CASGRAIN
Barristers and Solicitors
1 First Canadian Place
000 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
2
TABLE OF CONTENTS
SECTION
ARTICLE I - DEMISE AND TERM
Premises .............................................................. 1.01
Term .................................................................. 1.02
Acceptance of Premises ................................................ 1.03
Early Access .......................................................... 1.04
Option to Renew ....................................................... 1.05
Letter of Credit ...................................................... 1.06
Quiet Enjoyment ....................................................... 1.07
ARTICLE II - RENT
Intent of Lease ....................................................... 2.01
Basic Rent ............................................................ 2.02
Calculation of Basic Rent ............................................. 2.03
Additional Rent ....................................................... 2.04
Deposit ............................................................... 2.05
Payments to Landlord .................................................. 2.06
Overdue Rent .......................................................... 2.07
Set-Off ............................................................... 2.08
Review of Tenant's Financial Statements ............................... 2.09
ARTICLE II - TAXES
Taxes Payable by Landlord ............................................. 3.01
Taxes Payable by Tenant ............................................... 3.02
Tenant's Business and Other Taxes ..................................... 3.03
Payment of Taxes ...................................................... 3.04
ARTICLE IV - HEATING AND UTILITIES
Utility Charges ....................................................... 4.01
Heating ............................................................... 4.02
Service Contracts ..................................................... 4.03
ARTICLE V - MAINTENANCE AND REPAIR
Repairs and Replacements .............................................. 5.01
Maintenance ........................................................... 5.02
View and Repair ....................................................... 5.03
Alterations ........................................................... 5.04
Removal of Fixtures and Improvements .................................. 5.05
Construction Liens .................................................... 5.06
Exterior Maintenance .................................................. 5.07
Landlord's Repairs .................................................... 5.08
Repairs on Termination ................................................ 5.09
ARTICLE VI - ASSIGNING AND SUBLETTING
Assigning or Subletting ............................................... 6.01
Change of Control ..................................................... 6.02
Sublet of Part of Premises ............................................ 6.03
Excess Rent ........................................................... 6.04
3
ii.
SECTION
Mortgage of Leasehold. ................................................ 6.05
Advertising Premises .................................................. 6.06
Disposition by Landlord ............................................... 6.07
ARTICLE VII - USE
Use of Leased Premises ................................................ 7.01
Observance of Law ..................................................... 7.02
Waste and Nuisance .................................................... 7.03
Signs ................................................................. 7.04
Outside Storage ....................................................... 7.05
Overloading Floors .................................................... 7.06
Parking ............................................................... 7.07
ARTICLE VIII - INSURANCE AND INDEMNITY
Tenant's Insurance .................................................... 8.01
Landlord's Insurance .................................................. 8.02
Limit of Landlord's Liability ......................................... 8.03
Limit of Tenant's Liability ........................................... 8.04
Indemnity ............................................................. 8.05
ARTICLE IX - DAMAGE AND DESTRUCTION
Abatement of Rent ..................................................... 9.01
Termination ........................................................... 9.02
ARTICLE X - DEFAULT
Events of Default ..................................................... 10.01
Right of Re-entry ..................................................... 10.02
Reletting ............................................................. 10.03
Distress .............................................................. 10.04
Right of Landlord to Cure Defaults .................................... 10.05
Remedies Not Exclusive ................................................ 10.06
Non-Waiver ............................................................ 10.07
Recovery of Adjustments ............................................... 10.08
ARTICLE XI - SUBORDINATION AND ACKNOWLEDGEMENTS
Mortgages ............................................................. 11.01
Certificates .......................................................... 11.02
ARTICLE XII - ACCESS BY LANDLORD
Entry by Landlord ..................................................... 12.01
Exhibiting Leased Premises ............................................ 12.02
ARTICLE XIII - MISCELLANEOUS
Notice ................................................................ 13.01
Registration .......................................................... 13.02
Planning Act .......................................................... 13.03
Obligations as Covenants .............................................. 13.04
Severability .......................................................... 13.05
Overholding ........................................................... 13.06
4
iii.
SECTION
Unavoidable Delays .......................................................................... 13.07
Evidence of Payments ........................................................................ 13.08
Lien ........................................................................................ 13.09
Goods and Services Tax ...................................................................... 13.10
Time of Essence ............................................................................. 13.11
Law ......................................................................................... 13.12
Captions/Headings ........................................................................... 13.13
Joint and Several Liability ................................................................. 13.14
Tenant Partnership .......................................................................... 13.15
Environmental Assessments ................................................................... 13.16
Easements ................................................................................... 13.17
Landlord's Warranties ....................................................................... 13.18
Expansion Premises .......................................................................... 13.19
Entire Agreement ............................................................................ 13.20
Effect of Lease ............................................................................. 13.21
SCHEDULES
Schedule "A" - Description of Lands
Schedule "B" - Definitions
Schedule "C" - Exterior Maintenance/Repair Work
Schedule "D" - Landlord's Work
Schedule "E" - Letter of Credit
Schedule "F" - Site Plan re Complex
Schedule "G" - Site Plan re Leased Premises
Schedule "H" - Outside Storage Area
5
THIS INDENTURE made as of the 23rd day of June, 2000
BETWEEN:
ORLANDO CORPORATION
a corporation incorporated under the
laws of the Province of Ontario
(Hereinafter called the "LANDLORD")
OF THE FIRST PART;
- and -
HYDROGENICS CORPORATION
a corporation incorporated under the
federal laws of Canada
(Hereinafter called the "TENANT")
OF THE SECOND PART;
ARTICLE I - DEMISE AND TERM
1.01 PREMISES
WITNESSETH that in consideration of the rents, covenants and agreements
hereinafter reserved and contained on the part of the Tenant to be paid,
observed and performed, the Landlord does demise and lease unto the Tenant and
the Tenant leases from the Landlord, the Leased Premises.
1.02 TERM
To have and to hold the Leased Premises for and during the term of five (5)
years commencing on the 1st day of September, 2000 (the "Commencement Date") and
ending on the 31st day of August, 2005.
If the Leased Premises are not ready for occupation by the Tenant on the
Commencement Date by reason of a delay or delays not caused or contributed to by
the Tenant or anyone acting for or on behalf of the Tenant, then Rent shall
xxxxx and shall not accrue or be payable until the Leased Premises are ready for
occupation by the Tenant. Any such abatement of Rent shall be accepted by the
Tenant as full and final settlement of any and all claims which the Tenant may
have by reason of the Leased Premises not being ready for occupancy on the
Commencement Date. A certificate by the Landlord's Architect certifying that the
Leased Premises are ready for occupation shall be conclusive and binding upon
the Tenant.
1.03 ACCEPTANCE OF PREMISES
The Tenant shall examine the Leased Premises before taking possession thereof
and such taking of possession shall be conclusive evidence as against the Tenant
that at the time thereof the Leased Premises were in good order and satisfactory
condition and that all promises, representations and undertakings by or binding
upon the Landlord with respect to any alteration, remodelling or decorating of
or installation of fixtures in the Leased Premises, have been fully satisfied
and performed by the Landlord. The Tenant acknowledges that the existing
leasehold improvements, if any, are acceptable and that the Tenant is taking
possession of the Leased Premises "as is", save and except only for (i)
completion of the Landlord's Work, and (ii) such items that the Tenant has
notified the Landlord in writing, prior to the Delivery Date, that are not in
good order and satisfactory condition.
6
-2-
1.04 EARLY ACCESS
If all of the following conditions are fulfilled:
(a) this Lease has been duly executed by the Tenant and delivered to
the Landlord by no later than August 4, 2000, together with the
Letter of Credit and the Deposit Monies; and
(b) the Building is available for access by the Tenant,
then the Tenant shall have the right to have access to the Building during
normal business hours prior to the Commencement Date for purposes of commencing
to set up its business operations (but without interfering with the completion
of the Landlord's Work). During such period of access prior to the Commencement
Date, the Tenant shall be bound by and comply with all of its obligations under
this Lease, save and except only for the payment of Basic Rent, Taxes and
charges under Section 5.07 hereof.
1.05 OPTION TO RENEW
If (i) the Tenant is not then in default under the Lease and (ii) there has not
been at any time any default by the Tenant under the Lease, then the Tenant
shall have the option (exercisable on one (1) occasion only) to extend the Term
for a further consecutive period of five (5) years commencing on September 1,
2005 and ending on August 31, 2010 (the "Extended Period") on the same terms and
conditions contained in the Lease except and provided that:
(a) Sections 1.04, 5.08(b), 13.18, this Section 1.05 and Schedule "D"
hereto shall not apply;
(b) there shall be no option to further extend the Term; and
(c) the Basic Rent payable by the Tenant during the Extended Period
shall be the fair market base rent for the Leased Premises during
the Extended Period based on similar term, premises and location
as for the Leased Premises. If the Landlord and the Tenant cannot
agree in writing on the Basic Rent for the Extended Period at
least three (3) months prior to the aforesaid commencement date of
the Extended Period, then it shall be determined by arbitration as
hereinafter set out in this paragraph. In the case of dispute
between the Landlord and the Tenant in the determination of the
amount of the Basic Rent for the Extended Period, each of the
Landlord and Tenant shall at once agree upon the appointment of an
arbitrator and shall submit such dispute to the arbitrator for
determination in accordance with the provisions of the Arbitration
Act (Ontario), as amended. The decision of the arbitrator so
appointed shall be final and binding upon the Landlord and the
Tenant who covenant one with the other that such dispute shall be
decided by arbitration alone and not by recourse to any court by
action at law. If within a reasonable time, the Landlord and
Tenant do not agree upon an arbitrator, the arbitrator may, upon
petition of either the Landlord or the Tenant, be appointed by a
judge of the Ontario Court (General Division). The cost of
arbitration shall be apportioned between the Landlord and the
Tenant as the arbitrator may decide.
In order to exercise the aforesaid option to extend the Term, the Tenant shall
be required to give notice thereof in writing to the Landlord at least nine (9)
months (but not more than twelve (12) months) prior to the aforesaid
commencement date of the Extended Period, failing which the Tenant's option to
extend the Term and the Tenant's rights under this Section shall automatically
become null and void.
1.06 LETTER OF CREDIT
In order to induce the Landlord to enter into this Lease the Tenant agrees with
the Landlord to deliver to the Landlord by no later than August 4, 2000, an
irrevocable clear standby letter of credit from a Canadian Chartered Bank
acceptable to the Landlord, acting reasonably, in the form annexed hereto as
Schedule "E" and drawn in favour of the Landlord in the amount of
7
-3-
$650,000.00 (the "Letter of Credit") for an initial term of one (1) year
commencing August 4, 2000 and thereafter to be automatically renewed each year
until the 31st day of August, 2005.
The Landlord shall be entitled to draw on the Letter of Credit in full if:
(i) the Letter of Credit has not been renewed or replaced not
less than thirty (30) days before the expiry date of the
initial term of the Letter of Credit or, thereafter, not
less than thirty (30) days before the expiry of each
renewal term;
(ii) the Lease has been terminated by the Landlord in accordance
with its terms;
(iii) the Lease is disclaimed or surrendered by a trustee, or
repudiated by a receiver or liquidator in the event of a
bankruptcy, receivership, liquidation, dissolution or
winding-up of or in respect of the Tenant; or
(iv) the Lease is otherwise terminated by operation of law.
Each event in clauses (ii) to (iv) inclusive is hereinafter referred to as an
Event of Termination. All proceeds drawn down due to an Event of Termination
shall be the sole property of the Landlord with no obligation to account
therefor to the Tenant.
If the Letter of Credit is drawn down by the Landlord pursuant to clause (i)
above, the drawn down cash shall be held by the Landlord pending (a) delivery to
it of a replacement letter of credit or (b) an Event of Termination. The
Landlord shall pay to the issuing bank the drawn down cash if, at any time, the
Tenant provides the Landlord with a replacement letter of credit on the terms
outlined above. Upon the occurrence of an Event of Termination, the drawn down
cash shall become the property of the Landlord without obligation to account
therefor to the Tenant.
If at any time during the Term after December 31, 2000, the Net Worth of
Hydrogenics Corporation ("Hydrogenics") exceeds $20,000,000.00, as established
by the audited financial statements of Hydrogenics, then the Landlord shall
authorize the Tenant to cancel the Letter of Credit provided that all of the
following conditions are fulfilled:
(i) the Tenant is not then in default under the Lease;
(ii) there has not been any default by the Tenant under the
Lease; and
(iii) Hydrogenics is in occupancy of the whole of the Building.
1.07 QUIET ENJOYMENT
If the Tenant pays the Rent hereby reserved and observes and performs the
covenants on its part contained in this Lease, then the Tenant may peaceably
possess and enjoy the Leased Premises for the Term hereby granted without
disturbance from the Landlord or any other party lawfully claiming by, from or
under the Landlord.
ARTICLE II- RENT
2.01 INTENT OF LEASE
The Tenant acknowledges that it is intended and agreed that this is a completely
carefree net lease for the Landlord and that the Landlord is not responsible
during the Term for any taxes, impositions, costs, charges, expenses or outlays
of any nature or kind relating to the Leased Premises, save only as specifically
set out in this Lease, and that the Tenant shall be responsible for and shall
promptly pay all such taxes, costs, impositions, charges, expenses and outlays,
save and except only as specifically set out otherwise in this Lease.
8
-4-
2.02 BASIC RENT
Yielding and paying therefor in lawful money of Canada unto the Landlord as
Basic Rent for the Leased Premises during the Term the following amounts,
without any deduction, set-off or abatement whatsoever:
(a) during the first two (2) years of the Term, being September 1,
2000 to and including August 31, 2002, the sum of $667,038.07 per
annum to be paid in advance in equal consecutive monthly
instalments of $55,586.51 on the first day of each and every month
during such period; and
(b) during the next three (3) years of the Term, being September 1,
2002 to and including August 31, 2005, the sum of $715,026.42 per
annum to be paid in advance in equal consecutive monthly
instalments of $59,585.54 on the first day of each and every month
during such period.
2.03 CALCULATION OF BASIC RENT
The Basic Rent is calculated on the basis of the area of the Building (95,976.7
square feet) multiplied by:
(a) $6.95 per square foot per annum during the first two (2) years of
the Term (being September 1, 2000 to and including August 31,
2002); and
(b) $7.45 per square foot per annum during the next three (3) years of
the Term (being September 1, 2002 to and including August
31,2005).
The certificate of the Landlord's Architect regarding the measurement of the
area of the Building shall be conclusive and binding upon the Tenant.
2.04 ADDITIONAL RENT
The Tenant shall pay Additional Rent due and owing to the Landlord within ten
(10) days of written demand therefor or as otherwise hereinafter expressly set
out and all other Additional Rent on the due date thereof.
2.05 DEPOSIT
The Tenant shall deliver $106,985.52 to the Landlord, by no later than August 4,
2000, such monies to be held by the Landlord and applied as follows:
(a) $55,586.51 to be held by the Landlord and applied without interest
on account of the Basic Rent for the first month of the Term; and
(b) $51,399.01 to be held by the Landlord as security for the full and
faithful performance by the Tenant of all the agreements, terms,
covenants and conditions herein set forth and applied without
interest against expenses or other costs or damages incurred by
the Landlord and to be payable as liquidated damages and not as
penalty, upon forfeiture, default or early termination, without
prejudice to any further claims by the Landlord for damages and/or
any remedy for recovery thereof. If the Tenant duly observes and
performs all of the terms, provisions, conditions and obligations
on its part under the Lease, then such monies shall be applied
without interest on account of Basic Rent as full satisfaction
thereof for the last month of the Term.
2.06 PAYMENTS TO LANDLORD
All payments to be made by the Tenant to the Landlord under this Lease shall be
made at the address hereinafter designated or, at such other place or places as
the Landlord may designate in writing, or to such agent of the Landlord as the
Landlord may from time to time direct.
9
-5-
2.07 OVERDUE RENT
The Tenant covenants to pay the Basic Rent and all other charges provided for in
this Lease on their respective due dates in full. The Tenant shall pay the
Landlord interest on all overdue Rent, all such interest to be calculated from
the date upon which the amount is first due hereunder until actual payment
thereof and at a rate being the lesser of (1) five percent (5%) per annum in
excess of the minimum lending rate charged to prime commercial borrowers by the
Landlord's bank from time to time; and (ii) the maximum rate permitted by law.
2.08 SET-OFF
All Rent payable by the Tenant to the Landlord shall be paid without any
deduction, set-off or abatement whatsoever except as expressly hereinafter
provided.
2.09 REVIEW OF TENANT'S FINANCIAL STATEMENTS
If the Tenant is late in the payment of any Rent (or any part thereof) in any
two (2) consecutive months or more than twice in any twelve (12) month period,
then the Tenant shall, at its own cost and expense, forthwith provide the
Landlord upon demand with audited current financial statements and such other
financial records and books of account of the Tenant as may be required by the
Landlord so as to adequately enable it to determine to its satisfaction the
financial status of the Tenant.
ARTICLE III- TAXES
3.01 TAXES PAYABLE BY LANDLORD
The Landlord shall pay the Taxes charged on the Complex to the applicable taxing
authority, subject to reimbursement by the Tenant as hereinafter set out. The
Landlord shall have no obligation to contest or litigate the imposition of any
Taxes. The Landlord may defer payment of Taxes to the extent permitted by law if
it diligently pursues or causes to be pursued the contest or appeal of the
Taxes.
3.02 TAXES PAYABLE BY TENANT
(a) If there is no separate assessment for Taxes with respect to the
Leased Premises, or if there is a separate assessment, but such
separate assessment, together with all other separate assessments
relating to the Complex, do not aggregate the total assessment for
Taxes for the Complex, then until such time as there is a separate
assessment for Taxes with respect to the Leased Premises which,
together with all other such separate assessments, aggregate the
total assessment for Taxes for the Complex, and the Landlord so
directs as set out in paragraph (b) of this Section, the Tenant
shall pay as Additional Rent its Proportionate Share of the Taxes
for the Complex, adjusting the occupied tax rate for the Tenant's
specific use of the Leased Premises, provided that the Landlord,
at its option, may apportion the total assessment for Taxes for
the Complex amongst the leaseable premises of the Complex,
including the Leased Premises, based on generally accepted real
estate appraisal practices and adjusting the assessment based on
the use of each portion of the Complex, as if such premises are
actually separately assessed. If there is no separate assessment
for Taxes as herein provided and the Complex is not fully assessed
as a commercial or industrial property for determination of Taxes
in any Year, then the Landlord shall adjust the Taxes to an amount
that would have been determined if the Complex were fully assessed
as an occupied commercial or industrial property. If the Leased
Premises are at any time during the Term assessed for the support
of Separate Schools or if the Taxes are increased by reason of any
installations made in or upon or any alterations made in or to the
Leased Premises by the Tenant or by the Landlord on behalf of the
Tenant, then the Tenant shall pay the amount of such increase
forthwith to the Landlord upon receipt of notice thereof. If any
lands or building in the Complex (other than the Leased Premises)
are assessed during the Term for the support of Separate Schools
or if the Taxes are increased by reason of any alterations made
during the
10
-6-
Term to any building (other than the Building) in the Complex,
then the amount of such increase in the Taxes shall be deducted
from the Taxes for the Complex for purposes of determining the
Tenant's Proportionate Share thereof.
(b) If there is a separate assessment of Taxes with respect to the
Leased Premises, which separate assessment shall be deemed to
include the valuation of the Leased Premises as determined, from
time to time, by the assessor for realty taxation purposes of the
Complex, as evidenced by such documentation (including, without
limitation, the assessor's valuation and/or working papers) that
may be made available to the Landlord, from time to time, and if
such separate assessment together with all other separate
assessments for the Complex aggregate the total assessment for
Taxes for the Complex, and if the Landlord so directs, then the
Tenant shall pay as Additional Rent the amount calculated by
multiplying the assessment for the Leased Premises by the
applicable tax rate pertaining to the Tenant's use of the Leased
Premises on an occupied basis, which amount shall, for the
purposes of this paragraph only and notwithstanding anything else
herein contained, be the Tenant's "Proportionate Share" of Taxes
for the Complex.
3.03 TENANT'S BUSINESS AND OTHER TAXES
In addition to the Taxes payable by the Tenant pursuant to Section 3.02 hereof,
the Tenant shall pay to the lawful taxing authorities or to the Landlord if the
Landlord so directs:
(a) all taxes, rates, duties, assessments and other charges that are
levied, rated, charged or assessed against or in respect of all
improvements, equipment and facilities of the Tenant on or in the
Leased Premises or the Complex or any part thereof;
(b) every tax and license fee which is levied, rated, charged or
assessed against or in respect of and every business carried on in
the Leased Premises or in respect of the use or occupancy thereof
or any part of the Lands or the Building by the Tenant and every
subtenant or licensee of the Tenant or against the Landlord on
account of its interest in the Complex, and whether in any case,
any such taxes, rates, duties, assessments or license fees are
rated, charged or assessed by any federal, provincial, municipal,
school or other body during the Term;
(c) Capital Tax; and
(d) the full amount of any taxes in the nature of a business transfer
tax, value added tax, sales tax or any other tax levied, rated,
charged or assessed in respect of the Rent payable by the Tenant
under this Lease or in respect of the rental of space under this
Lease, whether characterized as a goods and services tax, sales
tax, value added tax, business transfer tax or otherwise.
3.04 PAYMENT OF TAXES
(a) The Landlord shall be entitled at any time or times in any Year,
upon at least fifteen (15) days' notice to the Tenant to require
the Tenant to pay to the Landlord the Tenant's Proportionate Share
of the Taxes for such Year in equal monthly installments. Such
monthly amount shall be determined by dividing the Tenant's
Proportionate Share of Taxes by the number of months for the
period from January 1st in each Year of the Term until the due
date of the final installment of Taxes as established by the
applicable taxing authority from time to time in each Year
("Installment Period") and shall be paid by the Tenant to the
Landlord, monthly as Additional Rent, on the date for payment of
monthly rental payments during the Installment Period. The
Landlord shall be entitled subsequently during such Year, upon at
least fifteen (15) days' notice to the Tenant, to revise its
estimate of the amount of increase of such Taxes and the said
monthly installment shall be revised accordingly. All amounts
received under this provision in any Year on account of the
estimated amount of such Taxes shall be applied in
11
-7-
reduction of the actual amount of such Taxes for such Year. If the
amount received is less than the Tenant's Proportionate Share of
the actual Taxes, the Tenant shall pay any deficiency to the
Landlord as Additional Rent within fifteen (15) days following
receipt by the Tenant of notice of the amount of such deficiency.
If the amount received is greater than the Tenant's Proportionate
Share of the actual Taxes, the Landlord shall either refund the
excess to the Tenant as soon as possible after the end of the Year
in respect of which such payments were made or, at the Landlord's
option, shall apply such excess against any amounts owing or
becoming due to the Landlord by the Tenant.
(b) Taxes payable pursuant to paragraphs (a) and (b) of Section 3.03
shall be paid by the Tenant when due if separate tax bills are
issued and otherwise shall be paid to the Landlord within ten (10)
days' written demand therefor.
(c) Taxes payable pursuant to paragraphs (c) and (d) of Section 3.03
shall be paid to the Landlord within ten (10) days' written demand
therefor or at such time or times as the Landlord from time to
time determines by notice in writing to the Tenant.
(d) If the Term of this Lease commences or ends on any day other than
the first or last day, respectively, of a Year, the Tenant shall
be liable only for the portion of the Taxes for such Year as falls
within the Term, determined on a per diem basis.
ARTICLE IV - HEATING AND UTILITIES
4.01 UTILITY CHARGES
The Tenant shall pay to the suppliers thereof on the due dates, all charges for
electric current and all other utilities supplied to or used in connection with
the Leased Premises.
4.02 HEATING
The Tenant shall maintain the temperature in the Building at a reasonable level
to avoid damage occurring in or to the Building.
4.03 SERVICE CONTRACTS
The Tenant covenants and agrees to take out a standard servicing contract with a
capable and reputable company for the service and maintenance of the heating
units and furnaces and air conditioning equipment serving the Building, such
contract to include the monthly cleaning of exchangers and the replacement of
filters, and to keep such contract in force at its own cost throughout the Term.
The Tenant agrees to provide the Landlord with a copy of such servicing
contract.
ARTICLE V - MAINTENANCE AND REPAIR
5.01 REPAIRS AND REPLACEMENTS
Subject only to Sections 5.07 and 5.08 hereof, the Tenant shall at its own cost
repair, replace, maintain and keep the Leased Premises and every part thereof,
including without limitation the Leasehold Improvements and the heating,
ventilating and air conditioning equipment serving the Building, fixtures and
furnishings (whether or not installed or furnished by the Tenant), in good and
substantial repair and condition as a prudent owner would do, damage by fire and
any other perils against which the Landlord is required under this Lease to
insure, only excepted. The Tenant agrees that the Landlord may enter and view
the state of repair and condition and that the Tenant shall repair in accordance
with notice in writing from the Landlord; provided that if the Tenant neglects
to so maintain or to make such repairs or replacements promptly after notice,
the Landlord may, at its option, do such maintenance or make such repairs or
replacements at the expense of the Tenant, and in any and every such case the
Tenant covenants with the Landlord to pay to the Landlord forthwith as
Additional Rent all sums which the Landlord may have expended in doing such
maintenance and making such repairs and/or replacements; provided
12
-8-
further that the doing of such maintenance or the making of any such repairs or
replacements by the Landlord shall not relieve the Tenant from its obligation to
maintain, repair and replace.
5.02 MAINTENANCE
The Tenant shall at all times during the Term at its own expense keep or cause
to be kept, the Leased Premises well maintained, clean and tidy, including
without limiting the generality of the foregoing, keeping the Building properly
painted and decorated and otherwise presentable and of good appearance, the
driveways and parking areas free and clear of snow and ice, and the lawn, trees
and shrubs in good order and condition, all in accordance with all the
requirements of this Lease and the reasonable requirements of the Landlord, its
insurers and governmental authorities having jurisdiction.
5.03 VIEW AND REPAIR
The Tenant shall allow the Landlord or its duly appointed agent and work people
at reasonable times on request to enter the Leased Premises and view the state
of repair and the Tenant shall repair as aforesaid according to notice in
writing, provided always that if the Tenant shall not within fifteen (15) days
of such notice, commence and proceed diligently with the execution of the
repairs and works mentioned in such notice, it shall be lawful for the Landlord
to enter upon the Leased Premises and execute such repairs and works and to
charge the cost thereof to the Tenant.
5.04 ALTERATIONS
The Tenant shall not, without the prior written approval of the Landlord, make
any installations, alterations, additions, partitions, repairs or improvements
in or to the Leased Premises, including, without limitation, doing anything
which might affect the roof or any structural portion or portions of the
Building (the "Structure") or the electrical, mechanical, lighting, heating,
ventilating, air-conditioning, sprinkler, fire protection or other systems
therein (the "Systems"). The Tenant's request for approval shall be in writing
and accompanied by an adequate description of the contemplated work, and where
appropriate, working drawings and specifications therefor; the Landlord's costs
of having its architects, engineers or others examine such drawings and
specifications shall be payable by the Tenant upon demand as Additional Rent.
All such work shall be done at the Tenant's cost by competent, reputable and
duly licensed contractors/workmen. All such work shall be subject to inspection
by and the reasonable supervision of the Landlord and shall be performed in
accordance with all applicable laws and any reasonable conditions (including but
not limited to a reasonable supervision fee of the Landlord to be paid by the
Tenant) and regulations imposed by the Landlord, and shall be completed in a
good and workmanlike manner and with reasonable diligence in accordance with the
approvals given by the Landlord. The Landlord may require that any work which
might affect the roof or the Structure (or any part thereof) or the Systems (or
any part thereof) be done, at the Landlord's option, by (i) the Landlord's
contractors or workmen or (ii) contractors or workmen engaged by the Tenant but
first approved by the Landlord. Any connections of apparatus to the base
electrical, plumbing, heating, ventilating or air-conditioning systems shall be
deemed to be an alteration within the meaning of this Section. The Tenant shall,
at its own cost and before commencement of any work, obtain all necessary
building or other permits and keep same in force.
The Tenant shall not be required by the foregoing provisions of this Section to
obtain the prior written consent of the Landlord for minor, non-structural
alterations and installations (collectively the "Work") by the Tenant to the
Building if all of the following conditions apply:
(a) the Work does not cost more than $20,000.00 in total to complete;
(b) the Work does not require a building permit, work permit or other
permit from any governmental authority;
(c) the Work does not affect the roof, the Structure or the Systems,
or any part thereof; and
13
-9-
(d) the Work does not result in a diminution in the value of the
Building.
5.05 REMOVAL OF FIXTURES AND IMPROVEMENTS
Leasehold Improvements shall immediately become the property of the Landlord
upon affixation or installation without compensation therefor to the Tenant but
the Landlord is under no obligation to repair, maintain or insure Leasehold
Improvements. Leasehold Improvements shall not be removed from the Leased
Premises either during or at the expiration or earlier termination of the Term,
except that the Tenant shall, at the end of the Term, remove such Leasehold
Improvements installed or constructed by or on behalf of the Tenant, as the
Landlord may require to be removed. The Tenant may, during the Term, remove its
trade fixtures provided that the Tenant is not in default under this Lease and
such trade fixtures are immediately replaced by trade fixtures of equal or
better value. The Tenant shall at the expiration or earlier termination of the
Term remove its trade fixtures as the Landlord may require. Any removal of
Leasehold Improvements and/or the Tenant's trade fixtures shall be done at the
Tenant's sole cost and expense and the Tenant shall forthwith repair at its own
cost any damage caused to the Leased Premises or any part thereof by the
installation or removal of Leasehold Improvements and/or trade fixtures. If the
Tenant does not remove its trade fixtures at the expiration or earlier
termination of the Term, then the trade fixtures shall, at the option of the
Landlord, become the property of the Landlord and may be removed from the Leased
Premises and/or sold or otherwise disposed of by the Landlord in such manner as
it deems advisable. For greater certainty, the Tenant's trade fixtures shall not
include any heating, ventilating or air-conditioning equipment or other building
services or floor covering affixed to the floor of the Leased Premises. The
obligations of the Tenant set forth in this Section shall survive the expiry or
other termination of the Term.
5.06 CONSTRUCTION LIENS
The Tenant covenants to pay promptly all its contractors and material men and do
any and all things necessary to minimize the possibility of a lien attaching to
the Leased Premises or to any part of the Building or the Lands and, should any
such lien be made or filed, the Tenant shall discharge the same forthwith (after
notice thereof is given to the Tenant) at the Tenant's expense. In the event the
Tenant shall fail to cause any such lien to be discharged as aforesaid, then, in
addition to any other right or remedy of the Landlord, the Landlord may, but it
shall not be so obligated, discharge same by paying the amount claimed to be due
into Court or directly to any such lien claimant and the amount so paid by the
Landlord and all costs and expenses including but not limited to solicitor's
fees (on a solicitor and client basis), incurred for the discharge of such lien
shall be due and payable by the Tenant to the Landlord as Additional Rent on
demand.
5.07 EXTERIOR MAINTENANCE
The Landlord shall perform, at the Tenant's cost and expense, the maintenance
and repair work listed in Schedule "C" hereto (the "Exterior Maintenance/Repair
Work"). The Tenant shall, forthwith upon demand, pay to the Landlord the costs
and expenses incurred by the Landlord from time to time in connection with the
Exterior Maintenance/Repair Work, plus a management fee of fifteen percent (15%)
of such costs and expenses, save and except only as may otherwise be applicable
pursuant to Section 5.08 hereof.
5.08 LANDLORD'S REPAIRS
(a) The Landlord shall be responsible at its own cost for any required
repairs to the footings, foundation, bearing walls, structural
steel and metal roof deck (excluding, in particular, but without
limitation, the roof membrane) of the Building, unless caused by
or arising from the negligence, willful acts or omissions of the
Tenant, its employees, agents, contractors, invitees,
representatives or those for whom at law the Tenant is responsible
(in which case the cost of such repairs shall be the
responsibility of the Tenant).
(b) The Landlord shall be responsible during the period September 1,
2000 to August 31, 2001 for any required replacements (but not the
required maintenance and/or repairs) to the existing heating,
ventilation and air-conditioning system serving
14
-10-
the Building, provided that (i) the Tenant enters into and
maintains at its own cost a maintenance service contract approved
in advance by the Landlord for such system during the said period,
and (ii) the said system is duly and properly maintained and
repaired at the Tenant's sole cost throughout the said period. The
Tenant acknowledges that any and all replacements arising from any
failure to properly maintain and repair the said system (or any
part thereof) or from the willful acts or omissions of the Tenant,
its employees, agents, contractors, invitees, representatives or
others for whom at law it is responsible, shall be the
responsibility of the Tenant.
5.09 REPAIRS ON TERMINATION
At the expiration or sooner termination of the Term the Tenant shall, at its own
expense:
(a) deliver up possession of the Leased Premises to the Landlord in
the same condition in which the Tenant is required tinder this
Lease to repair and maintain the Leased Premises, together with
all Leasehold Improvements which the Tenant is required or
permitted to leave therein or thereon free and clear of all
encumbrances and in a clean and tidy condition and free of all
rubbish and to deliver to the Landlord all keys and security
devices;
(b) remove from the Leased Premises, at the option of and to the
satisfaction of the Landlord, all machine bases, cabling
(electrical or otherwise), piping (pneumatic, water or otherwise)
and wiring (electrical, computer or otherwise) installed by or on
behalf of the Tenant;
(c) remove any and all materials which may be deemed by any applicable
legislation as contaminated or hazardous (and which have been
brought onto the Leased Premises by or on behalf of the Tenant or
which are a result of the Tenant's use or occupation of the Leased
Premises), and clean up any and all resultant contamination in
compliance with all applicable laws and regulations; and
(d) remove from the Leased Premises at the option of the Landlord, in
compliance with all applicable laws and regulations, any and all
storage and/or holding tanks (whether above or below ground)
installed by or on behalf of the Tenant and all pits and trenches
created by or on behalf of the Tenant.
The covenants contained in this Section shall survive the expiry or other
termination of the Term.
ARTICLE VI - ASSIGNING AND SUBLETTING
6.01 ASSIGNING OR SUBLETTING
(a) The Tenant shall not assign this Lease or sublet or franchise,
license, grant concessions in, or otherwise part with or share
possession of the Leased Premises or any part thereof (hereinafter
referred to as a "Transfer") without the prior written consent of
the Landlord. If the Tenant is not in default under the Lease,
then the Landlord shall not unreasonably withhold its consent to
the Tenant's written request to assign the Lease or sublease the
Building. At the time the Tenant requests such consent the Tenant
shall deliver to the Landlord such information in writing as the
Landlord may reasonably require, including, without limitation, a
copy of the proposed offer or agreement, if any, to Transfer and
the name, address and nature of business and evidence as to the
financial strength of the proposed assignee or subtenant or other
user (hereinafter referred to as a "Transferee"). Notwithstanding
anything else herein contained, in no event shall any Transfer
release or relieve the Tenant in any regard whatsoever from any of
its obligations or liabilities under or in respect of the Lease.
15
-11-
PROVIDED however, and it is made a condition to any Transfer that:
(i) The proposed Transferee shall agree in writing to assume
and perform all of the terms, covenants, conditions and
agreements by this Lease imposed upon the Tenant herein in
a form to be approved by the solicitor for the Landlord;
(ii) The Tenant shall pay to the Landlord all reasonable legal
fees incurred by the Landlord in connection with the
Transfer;
(iii) The consent of the Landlord is not a waiver of the
requirement upon the Tenant for the Landlord's consent for
any subsequent Transfer,
(iv) The acceptance by the Landlord of Rent from a Transferee
without the Landlord's consent to such Transfer shall not
constitute a waiver of the requirement of such consent nor
shall it constitute an acceptance of such party as the
Tenant;
(v) The Landlord may, at its option, cancel (i) any options to
renew the Lease or extend the Term and/or (ii) any rights
of first refusal or first opportunity regarding additional
space;
(vi) If the Transfer does not take place within sixty (60) days
of the giving of consent by the Landlord, then the
Landlord's consent to such Transfer shall, at the
Landlord's option, expire and become null and void; and
(vii) If the Lease is disaffirmed, disclaimed or terminated by
any trustee in bankruptcy of a Transferee, then the
original Tenant named in this Lease will be deemed on
notice from the Landlord given within sixty (60) days from
the date of such disaffirmation, disclaimer or termination
to have entered into a Lease with the Landlord containing
the same terms and conditions as in this Lease.
(b) If a Transfer occurs without the consent of the Landlord when
required, then the Landlord may collect Rent from the party in
whose favour the Transfer was made and apply the net amount
collected to the Rent herein reserved but no such Transfer will be
considered a waiver of this covenant or the acceptance of the
party in whose favour the Transfer was made as a tenant hereunder.
(C) The Landlord shall not be liable for any claims or actions by or
for any damages, liabilities, losses or expenses of the Tenant
arising out of the Landlord unreasonably withholding its consent
to any Transfer and the Tenant's only recourse shall be to bring
an application for a declaration that the Landlord shall grant its
consent to such Transfer.
6.02 CHANGE OF CONTROL
If the Tenant is a private corporation and any part or all of the corporate
shares shall be transferred by sale, assignment, amalgamation, bequest,
inheritance, operation of law or other disposition or dispositions so as to
result in a change in the control of the corporation, such change of control
shall be considered a Transfer and shall be subject to the provisions of Section
6.01 hereof. The Tenant shall make available to the Landlord upon its request
for inspection and copying, all books and records of the Tenant, any assignee or
subtenant and their respective shareholders which, alone or with other data, may
show the applicability or inapplicability of this Section.
6.03 SUBLET OF PART OF PREMISES
Notwithstanding anything else to the contrary provided in this Lease and/or any
act or rule of law or regulation now or hereafter in force to the contrary, the
Landlord may in its sole and
16
-12-
unfettered discretion refuse to give its consent to any Transfer by the Tenant
of less than the whole of the Building resulting in more than two (2) separate
premises therein.
6.04 EXCESS RENT
In the event that the Basic Rent payable under any Transfer is in excess of the
Basic Rent reserved hereunder or is in excess of the proportionate Rent reserved
in the event of a sublease of part of the Leased Premises, whether the excess be
in the form of cash, goods or services from the Transferee or anyone acting on
its behalf, the Tenant shall pay all of such excess to the Landlord immediately
upon receipt thereof; in the event that such excess is represented by goods or
services rendered to the Tenant or its nominee, the value of those goods or
services shall be determined by the Landlord and Tenant and that value shall be
paid in cash to the Landlord immediately upon such determination.
6.05 MORTGAGE OF LEASEHOLD
The Tenant shall not mortgage, pledge, hypothecate or otherwise encumber all or
any portion of the Tenant's interest in this Lease or the Leasehold
Improvements.
6.06 ADVERTISING PREMISES
The Tenant shall not advertise or allow the Leased Premises or a portion thereof
to be advertised as being available for assignment, sublease or otherwise
without the prior written approval of the Landlord as to the form, size, content
and location of such advertisement, which approval shall not be unreasonably
withheld, provided that (i) no such advertising shall contain any reference to
the Rent for the Leased Premises and (ii) any such advertising shall be on a
standard ground-mounted real estate sign.
6.07 DISPOSITION BY LANDLORD
If the Landlord sells or leases the Leased Premises or any part thereof, or
assigns this Lease, and to the extent that the covenants and obligations of the
Landlord under this Lease are assumed by the purchaser, lessee or assignee, the
Landlord, without further written agreement, will be discharged and relieved of
liability under the said covenants and obligations.
ARTICLE VII - USE
7.01 USE OF LEASED PREMISES
(a) Subject to paragraph (b) of this Section, the Tenant shall not use
the Leased Premises nor allow the Leased Premises to be used for
any purpose other than the manufacture, testing, assembly,
warehousing and distribution of fuel cell systems (and ancillary
office) and outside storage as set out in paragraph (b) of Section
7.05 hereof, but only to the extent (i) all in compliance with the
provisions of this Lease and (ii) permitted by all applicable
laws, by-laws and other governmental regulations, directions and
orders from time to time in force.
(b) The Tenant covenants to not use or permit the Leased Premises to
be used for any retail sales whatsoever.
7.02 OBSERVANCE OF LAW
The Tenant shall comply promptly with and conform to the requirements of all
applicable statutes, by-laws, laws, regulations, ordinances and orders from time
to time or at any time in force during the Term and affecting the condition,
maintenance, repair, use or occupation of the Leased Premises (or equipment
therein) and with every applicable regulation, order and requirement of the
Insurance Advisory Organization or any body having similar functions or of any
liability or fire insurance company by which the Landlord and the Tenant or
either of them may be insured at any time during the Term, and, in the event of
the default of the Tenant under the provisions of this Section, the Landlord may
itself comply with any such requirements as aforesaid and the Tenant will
forthwith pay all costs and expenses incurred by the Landlord in
17
- 13 -
this regard and the Tenant agrees that all such costs and expenses shall be
recoverable by the Landlord as if the same were Additional Rent reserved and in
arrears under this Lease.
7.03 WASTE AND NUISANCE
(a) The Tenant shall not do or suffer any waste, damage, disfiguration
or injury to the Leased Premises or the fixtures and equipment
thereof and shall not use or permit to be used any part of the
Leased Premises for any dangerous, noxious or offensive trade or
business nor use the Leased Premises in any manner which, in the
opinion of the Landlord acting reasonably, is detrimental to the
Leased Premises or any part thereof.
(b) The Tenant shall not keep, sell, use, handle or dispose of any
goods or things which may be objectionable nor cause or maintain
any nuisance in, at or on the Leased Premises nor cause any
annoyance, nuisance or disturbance to the occupiers or owners of
any adjoining lands and/or premises and shall keep the Leased
Premises free of hazardous waste and contamination.
(c) The Tenant covenants and agrees to utilize the Leased Premises
and operate its business in a manner so that no part of the Leased
Premises or surrounding lands are used to generate, manufacture,
refine, treat, transport, store, handle, dispose of, transfer,
produce or process any Hazardous Substances, except in strict
compliance with all applicable federal, provincial and municipal
statutes, by-laws and regulations, including without limitation,
environmental, land use and occupational and health and safety
laws, regulations, requirements, permits, statutes, by-laws and
regulations. The Tenant hereby further covenants and agrees to
indemnify and save harmless the Landlord and those for whom the
Landlord is in law responsible from and against any and all
losses, costs, claims, damages, liabilities, expenses or injuries
caused or contributed to by any Hazardous Substances which are at
any time located, handled, placed, stored or incorporated in any
part of the Leased Premises. The Tenant hereby agrees that the
Landlord or its authorized representatives shall have the right at
the Tenant's expense, payable as Additional Rent within fifteen
(15) days of receipt of an invoice therefor, to conduct such
environmental site reviews and investigations as it may deem
necessary for the purposes of ensuring the Tenant's compliance
with the foregoing provisions of this Section. The Tenant's
obligations pursuant to this Section shall survive the expiration
or earlier termination of the Term.
7.04 SIGNS
The Tenant covenants and agrees not to affix or display or cause to be affixed
or displayed any sign or signs on any part of the exterior of the Building
(including, without limitation, the windows), without the prior written approval
of the Landlord and subject to applicable municipal and other governmental
regulations. The Tenant shall at its own cost remove all such signage at the
expiration of the Term, or other sooner termination thereof, and forthwith
repair all damage which may be caused or occasioned by such affixing and/or
removal and this covenant shall survive the expiry or other termination of the
Term.
7.05 OUTSIDE STORAGE
(a) Subject only to paragraph (b) of this Section, the Tenant shall
not store any goods or matter of any kind outside the Building
without the express written consent of the Landlord first had and
obtained.
(b) Subject to Sections 7.02 and 7.03 hereof, the Tenant may store
outdoor storage tanks in the Storage Area, provided that:
(i) such storage is approved (as to the manner and
configuration of such storage, including but not limited to
any contemplated stacking) in advance by the Landlord in
writing;
18
-14-
(ii) all items being stored in the Storage Area are concealed
from view at all times in decorative, protective fencing
approved in advance by the Landlord, in its sole and
unfettered discretion, in writing (as to dimensions
(including but not limited to height), design,
construction, layout and materials); and
(iii) such storage is permitted by and in compliance with all
Applicable Laws from time to time in force.
(c) In the event that there has been any breach of any part of
paragraphs (a) or (b) of this Section and such breach remains
unremedied for more than seven (7) days after notice to the
Tenant, then the Landlord may, without prejudice to any of the
Landlord's other rights and/or remedies under the Lease, remove
any or all items stored on the Lands outside the Building and
dispose of such items as the Landlord, in its sole and unfettered
discretion, may deem appropriate under the circumstances. Any and
all costs incurred by the Landlord in respect of such removal
and/or disposal (including but not limited to the Landlord's legal
fees on a solicitor-and-client basis) shall be payable by the
Tenant to the Landlord forthwith upon demand therefor as
Additional Rent.
7.06 OVERLOADING FLOORS
The Tenant covenants that it will not bring upon the Leased Premises or any part
thereof any machinery, equipment, article or thing that, by reason of its
weight, size, configuration, operation or otherwise, might damage the Leased
Premises and will not at any time overload or damage the floors of the Leased
Premises. The Tenant shall remove any such machinery, equipment (including but
not limited to mobile equipment such as a forklift), article or thing within
five (5) days' written notice thereof and if any damage is caused to the Leased
Premises by any machinery, equipment, article or thing or by overloading, the
Tenant shall forthwith repair such damage at its own expense to the satisfaction
of the Landlord.
7.07 PARKING
The Tenant shall not park or permit to be parked any vehicles (cars, trucks,
trailers or otherwise) anywhere on the Lands at any time other than in such
areas so designated by the Landlord. The Tenant may park cars in the area of the
Lands outlined in blue (and trucks in the area of the Lands outlined in red) on
Schedule "G" hereto.
ARTICLE VIII - INSURANCE AND INDEMNITY
8.01 TENANT'S INSURANCE
The Tenant shall, at its expense, maintain in force during the Term in the name
of the Tenant (with the Landlord and the Landlord's mortgagee, if any, as
additional insureds) the following insurance:
(a) comprehensive general liability insurance against claims for
personal injury, death or property damage (including but not
limited to tenants' legal liability, personal injury liability,
products liability, property damage and contractual liability to
cover all indemnities) with respect to the business or operations
earned on in and from the Leased Premises, in amounts required by
the Landlord and any mortgagee of the Building or any part thereof
from time to time but in no event less than Five Million Dollars
($5,000,000.00) per occurrence;
(b) insurance covering all contents of the Leased Premises and all
other property for which the Tenant is responsible pursuant to
this Lease and/or which has been installed by or on behalf of the
Tenant (including without limitation all chattels, equipment,
machinery, furniture, inventory, fixtures and all Leasehold
Improvements) in an amount equal to the full replacement value
thereof; and
19
-15-
(c) such other forms of insurance as may be reasonably required by the
Landlord and its mortgagee from time to time.
Any policy written pursuant to paragraph (a) of this Section shall contain a
severability of interest clause and a cross liability clause. All policies shall
contain an undertaking by the insurers to notify the Landlord and its mortgagee,
if any, in writing not less than thirty (30) days prior to any material change,
cancellation or termination thereof and shall be subject only to such
deductibles and exclusions as the Landlord may approve, acting reasonably. The
Tenant shall promptly furnish upon request from the Landlord verification of
compliance with the provisions of this Section.
8.02 LANDLORD'S INSURANCE
The Landlord shall, throughout the Term, keep at the sole cost and expense of
the Tenant, the Building and appurtenances thereto, insured to the following
extent:
(a) against such loss or damage as are customarily insured against
under a policy of insurance commonly known as a Multi-Peril or
All-Risk policy;
(b) blanket broad boiler and pressure vessel insurance including
repair or replacement;
(c) loss of rental income insurance with respect to fire and other
usual perils for which such insurance is customarily issued for a
period (as selected by the Landlord) of not less than six (6)
months and not more than twelve (12) months for the Basic Rent and
other sums payable as Additional Rent under this Lease; and
(d) other casualties as are customarily insured against under
insurance contracts normally entered into from time to time during
the Term by owners of buildings in the area of a character similar
to the Leased Premises in such amounts as in the reasonable
opinion of the Landlord is necessary to protect the Landlord
against loss or damage.
Notwithstanding anything contained in this Lease, including but not limited to
the covenant of the Landlord to take out the aforesaid insurance or the
contribution of the Tenant to the cost of such insurance, nothing in this Lease
shall confer any insurable interest upon the Tenant in respect of such insurance
and the Tenant acknowledges that it has no right to receive the proceeds or any
part thereof from such insurance policies.
8.03 LIMIT OF LANDLORD'S LIABILITY
The Landlord shall not be responsible in any way for any injury to any person
(including but not limited to death) or for any loss of or damage to any
property belonging to the Tenant or to other occupants of the Leased Premises or
to their respective employees, agents, invitees, licensees or other persons from
time to time attending at the Leased Premises while such person or property is
in or about the Leased Premises, including without limiting the foregoing, any
loss of or damage to any property caused by theft or breakage, or by steam,
water, rain or snow or for any loss or damage caused by or attributable to the
condition or arrangements of any electrical or other wiring or for any damage
caused by smoke or for any other loss whatsoever with respect to the Leased
Premises, goods placed therein or any business carried on therein, save and
except only to the extent all of the following conditions are applicable:
(i) such loss or damage is caused by the grossly negligent
misconduct of the Landlord at the Leased Premises during
the Term;
(ii) the Tenant is not required by the terms of the Lease to
insure against such loss or damage;
(iii) the Tenant has not breached its obligations under Section
8.01 hereof; and
20
-16-
(iv) the Tenant cannot recover for such loss or damage under its
insurance.
8.04 LIMIT OF TENANT'S LIABILITY
The Tenant shall not be liable to the Landlord for any direct injury, loss or
damage required to be insured by the Landlord pursuant to paragraphs (a) or (b)
of Section 8.02 hereof to the extent of the proceeds that are actually recovered
by the Landlord under such policies of insurance or that would have been
recovered if the Landlord had insured as required under paragraphs (a) and (b)
of Section 8.02 hereof.
8.05 INDEMNITY
The Tenant shall promptly indemnify and save the Landlord harmless from any and
all liabilities, damages, costs, expenses, claims, suits or actions arising out
of any breach, violation or non-observance by the Tenant of any of its
obligations under the Lease; from any damage to property while such property
shall be in or about the Leased Premises including but not limited to the
systems, furnishings and amenities thereof, as a result of the willful or
negligent act or omission of the Tenant, its employees, agents, invitees or
licensees; and from any injury to any employee, agent, invitee or licensee, of
the Tenant, including but not limited to death resulting at any time therefrom,
occurring on or about the Leased Premises or any part thereof, save and except
only in the case of such injury where all of the following conditions are
applicable:
(i) such injury is caused by the grossly negligent misconduct
of the Landlord at the Leased Premises during the Term;
(ii) the Tenant is not required by the terms of the Lease to
insure against such injury;
(iii) the Tenant has not breached its obligations under Section
8.01 hereof; and
(iv) the Tenant cannot recover for such injury under its
insurance.
Notwithstanding anything else herein contained, this indemnity shall survive the
expiry or earlier termination of the Term.
ARTICLE IX - DAMAGE AND DESTRUCTION
9.01 ABATEMENT OF RENT
If the Building or any portion thereof is damaged or destroyed by fire or by
other casualty against which the Landlord is required to insure under this
Lease, Rent shall xxxxx in proportion to the area of that portion of the
Building which, in the reasonable opinion of the Landlord, is thereby rendered
unfit for the purposes of the Tenant bears to the area of the entire Building
(but only to the extent to which the Landlord actually receives proceeds under
its loss of rental income insurance, provided that the Landlord makes timely and
reasonable efforts to claim such loss of rental income from the insurer) until
the Building is repaired and rebuilt as certified by the Landlord's Architect
and the Landlord agrees that it will, with reasonable diligence, repair and
rebuild the Building, subject to Section 9.02. The Landlord's obligation to
rebuild and restore the Building shall not include the obligation to rebuild,
restore, replace or repair any chattel, fixture, Leasehold Improvements, or any
other thing that is the property of the Tenant and/or for which the Tenant is to
maintain insurance under paragraph (b) of Section 8.01 (in this Section
collectively called "Tenant's Improvements"); the Building shall be deemed
repaired and rebuilt when the Landlord's Architect certifies that the Building
has been substantially repaired and rebuilt to the state where the Tenant could
occupy it for the purpose of rebuilding, restoring, replacing or repairing the
Tenant's Improvements. The issuance of the certificate of the Landlord's
Architect shall not relieve the Landlord of its obligation to complete the
repairing and rebuilding as aforesaid, but the Tenant shall forthwith after
issuance of such certificate proceed to rebuild, restore, replace and repair the
Tenant's Improvements, and the provisions of Section 5.04 shall apply to such
work, mutatis mutandis.
21
-17-
9.02 TERMINATION
(a) Notwithstanding the provisions of Section 9.01 hereof, if the
Building or any portion thereof is:
(i) damaged or destroyed by an insured peril and cannot in the
reasonable opinion of the Landlord's Architect be rebuilt
or made fit for the purposes of the Tenant as aforesaid
within one hundred and eighty (180) days of the date of
such damage or destruction; or
(ii) damaged or destroyed by an uninsured peril,
then either the Landlord (in either of the cases of subparagraphs
(1) or (ii) above) or the Tenant (in the case of subparagraph (i)
above only) may, at its option, terminate this Lease by giving to
the other, within sixty (60) days after the Landlord's delivery to
the Tenant of the certificate referenced in paragraph (b) of this
Section, notice of termination and thereupon Rent shall be
apportioned and paid to the date of such damage or destruction and
the Tenant shall immediately deliver up possession of the Leased
Premises to the Landlord.
(b) The Landlord shall deliver to the Tenant within forty-five (45)
days of the date of damage or destruction referred to in paragraph
(a) of this Section, a certificate of the Landlord's Architect
setting out whether the Building can be repaired within one
hundred and eighty (180) days from the date of such damage or
destruction and/or whether the Building has been damaged or
destroyed by an uninsured peril.
(c) If neither the Landlord nor the Tenant elects to terminate the
Lease pursuant to paragraph (a) of this Section, as applicable,
then the Landlord shall, with reasonable diligence, repair and
rebuild the Building in accordance with the provisions of Section
9.01 hereof.
ARTICLE X - DEFAULT
10.01 EVENTS OF DEFAULT
An "Event of Default" shall occur whenever:
(a) the Tenant fails to pay the Rent hereby reserved or any part
thereof on the day appointed for payment thereof, whether lawfully
demanded or not;
(b) the Tenant shall have breached or failed to comply with any of its
covenants and agreements contained in this Lease (save for
non-payment of Rent) and shall have failed to remedy such breach
or non-compliance within fifteen (15) days (or such longer period
as the Landlord may reasonably determine, having regard to the
nature of the default) after written notice thereof given by the
Landlord to the Tenant;
(c) the Tenant shall make any assignment for the benefit of creditors
or become bankrupt or insolvent or take the benefit of any Act now
or hereinafter in force for bankrupt or insolvent debtors;
(d) the Tenant is a corporation and any order shall be made for the
winding-up of the Tenant or other termination of the corporate
existence of the Tenant;
(e) the Tenant makes or attempts to make a bulk sale of assets not in
the ordinary course of the Tenant's business;
(f) a trustee, receiver, interim receiver, receiver and manager,
custodian or liquidator is appointed for the business, property,
affairs or revenue of the Tenant;
22
-18-
(g) this Lease or any of the Tenant's assets on the Leased Premises
are taken or seized under writ of execution, an assignment,
pledge, charge, debenture or other security instrument;
(h) the Tenant abandons or attempts to abandon the Leased Premises;
(i) the Leased Premises shall be used by any person other than the
Tenant or the Tenant's permitted assignees or sublessees or for
any purpose other than as set out in Section 7.01;
(j) any insurance policy on the Building or any part thereof shall be
cancelled or shall be threatened by the insurer to be cancelled or
the coverage thereunder reduced in any way by the insurer by
reason of the use or occupation of the Leased Premises or any part
thereof by the Tenant and the Tenant shall have failed to remedy
the condition giving rise to such cancellation, threatened
cancellation or reduction of coverage within forty-eight (48)
hours' written notice given by the Landlord to the Tenant;
(k) the Tenant shall at any time during the Term use the Leased
Premises, whether within the use permitted by Section 7.01 or not,
in a manner which imposes upon the Landlord any obligation to
modify, extend, alter or replace any part of the Leased Premises
or any of the machinery, equipment or other facilities used in
connection with the Leased Premises, which obligation is not
fulfilled by the Tenant at its own cost in a timely manner; or
(l) the Leased Premises are vacant for any period in excess of fifteen
(15) days other than during repairs or renovations.
Notwithstanding the Bankruptcy and Insolvency Act (Canada) or otherwise, upon
the occurrence of an Event of Default, the then current month's Rent and next
ensuing three (3) months' Rent shall immediately become due and be paid by the
Tenant to the Landlord as accelerated Rent and the Landlord may immediately
distrain for the same together with any Rent arrears then unpaid.
10.02 RIGHT OF RE-ENTRY
(a) Upon the occurrence of an Event of Default, the Landlord may at
any time thereafter, without notice to the Tenant, re-enter the
Leased Premises or any part thereof in the name of the whole and
terminate this Lease and all the rights of the Tenant thereunder.
(b) If and whenever the Landlord exercises its option to re-enter the
Leased Premises and terminate this Lease pursuant to paragraph (a)
of this Section:
(i) the Tenant shall immediately vacate the Leased Premises and
the Landlord may remove or cause to be removed from the
Leased Premises the Tenant and/or any other occupant or
occupants thereof and may remove all property therefrom and
sell or dispose of such property as the Landlord considers
appropriate without liability for loss or damage and
without prejudice to the rights of the Landlord to recover
arrears of Rent or damages incurred by the Landlord;
(ii) the Landlord shall be immediately entitled to the payment
of Rent up to the date of termination together with all
expenses incurred by the Landlord in respect of such
termination and the value of the Rent, calculated at the
date of termination, for the unexpired portion of the Term.
10.03 RELETTING
At any time when the Landlord is entitled to re-enter the Leased Premises or
terminate this Lease, the Landlord may without notice to the Tenant and without
terminating the Lease enter upon and take custody of the Leased Premises in the
name of and as agent of the Tenant,
23
-19-
together with all of the Tenant's improvements, fixtures and furnishings, and
sublet the Leased Premises in the name of and as the agent of the Tenant on
whatever terms the Landlord may deem appropriate but no such action by the
Landlord shall waive any of the obligations of the Tenant or limit the
subsequent exercise of any of the Landlord's remedies for default. If the
Landlord shall sublet the Leased Premises as aforesaid, the Landlord shall be
entitled to receive all sublease rent and apply the same in its discretion to
any indebtedness of the Tenant to the Landlord under this Lease and/or to the
payment of any costs and expenses of reletting, and the Landlord shall be liable
to account to the Tenant only for the excess, if any, of monies actually
received by it. If the sublease rent is less than is necessary to pay and
discharge all the then existing and continuing obligations of the Tenant
hereunder, the Tenant shall pay such deficiency to the Landlord upon demand from
time to time. Notwithstanding any such re-entry and subletting without
termination, the Landlord may at any time thereafter terminate this Lease by
reason of the previous or any other default under the Lease and the provisions
of Section 10.02 shall apply.
10.04 DISTRESS
The Tenant waives and renounces the benefit of any present or future statute
taking away or limiting the Landlord's right of distress, and covenants and
agrees that notwithstanding any such statute, none of the goods and/or chattels
of the Tenant on the Leased Premises at any time during the Term shall be exempt
from levy by distress for rent in arrears.
10.05 RIGHT OF LANDLORD TO CURE DEFAULTS
If the Tenant fails to perform or cause to be performed any of the covenants or
obligations of the Tenant herein, the Landlord shall have the right (but shall
not be so obligated) to perform or cause to be performed and to do or cause to
be done such things as may be necessary or incidental thereto (including without
limiting the foregoing, the right to make repairs, installations, erections and
expend monies), and all payments, expenses, charges, fees and disbursements
incurred or paid by or on behalf of the Landlord in respect thereof shall be
paid by the Tenant to the Landlord within ten (10) days' written demand therefor
together with all reasonable legal and administrative costs of the Landlord in
respect thereof.
10.06 REMEDIES NOT EXCLUSIVE
Mention in this Lease of any particular remedy or remedies in respect of any
default or threatened default by the Tenant in the performance of its
obligations shall not preclude the Landlord from exercising, or limit the extent
of, any other remedy in respect thereof, whether at law, in equity or pursuant
to any express provision hereof. No remedy shall be interpreted as exclusive or
dependent upon any other remedy, and the Landlord may from time to time exercise
any one or more of such remedies independently or in combination.
10.07 NON-WAIVER
No condoning, excusing or overlooking by the Landlord of any default, breach or
non-observance by the Tenant at any time or times in respect of any covenant,
proviso or condition herein contained shall operate as a waiver of the
Landlord's rights hereunder in respect of any continuing or subsequent default,
breach or non-observance, or so as to defeat or affect in any way the rights of
the Landlord herein in respect of any such continuing or subsequent default or
breach, and no waiver shall be inferred from or implied by anything done or
omitted by the Landlord, save only an express waiver by the Landlord in writing.
10.08 RECOVERY OF ADJUSTMENTS
The Landlord shall have (in addition to any other right or remedy of the
Landlord) the same rights and remedies in the event of default by the Tenant in
payment of any amount payable by the Tenant hereunder as the Landlord would have
in the case of default in payment of Rent.
24
-20-
ARTICLE XI - SUBORDINATION AND ACKNOWLEDGEMENTS
11.01 MORTGAGES
At the option of the Landlord, this Lease shall be subject and subordinate to
any and all mortgages, charges and deeds of trust, which may now or at any time
hereafter affect the Leased Premises in whole or in part, or the Lands, or the
Building whether or not any such mortgage, charge or deed of trust affects only
the Leased Premises or the Lands or the Building or affects other premises as
well. On request at any time and from time to time of the Landlord or of the
mortgagee, chargee or trustee under any such mortgage, charge or deed of trust,
the Tenant shall promptly, at no cost to the Landlord or mortgagee, chargee or
trustee:
(a) attorn to such mortgagee, chargee or trustee and become its tenant
of the Leased Premises or the tenant of the Leased Premises of any
purchaser from such mortgagee, chargee or trustee in the event of
an exercise of any permitted power of sale contained in any such
mortgage, charge or deed of trust for the then unexpired residue
of the Term on the terms herein contained; and/or
(b) postpone and subordinate this Lease to such mortgage, charge or
deed of trust to the intent that this Lease and all right, title
and interest of the Tenant in the Leased Premises shall be subject
to the rights of such mortgagee, chargee or trustee as fully as if
such mortgage, charge or deed of trust had been executed and
registered and the money thereby secured had been advanced before
the execution of this Lease (and notwithstanding any authority or
consent of such mortgagee, or trustee, express or implied, to the
making of this Lease), provided that the applicable mortgagee,
chargee or trustee thereunder has agreed in writing with the
Tenant that the Tenant shall have undisturbed possession of the
Leased Premises as long as it is not in default under the Lease.
Any such attornment or postponement and subordination shall extend to all
renewals, modifications, consolidations, replacements and extension of any such
mortgage, charge or deed of trust and every instrument supplemental or ancillary
thereto or in implementation thereof. The Tenant shall forthwith execute any
instruments of attornment or postponement and subordination which may be so
requested to give effect to this Section.
11.02 CERTIFICATES
The Tenant and the Landlord shall, within not more than ten (10) days' written
request therefor, execute and return to the other party from time to time and
without cost to the Landlord, a statement in writing certifying that this Lease
is unmodified and in full force and effect (or if modified, stating the
modifications and that the Lease is in full force and effect as modified), the
amount of the annual Basic Rent then being paid hereunder, the dates to which
the same, by instalment or otherwise, and other charges hereunder have been
paid, whether or not there is any existing default on the part of the Landlord
or the Tenant, of which the other party has notice, and any other information
reasonably required.
ARTICLE XII - ACCESS BY LANDLORD
12.01 ENTRY BY LANDLORD
The Tenant shall permit the Landlord and its agents, employees and workmen to
enter upon the Leased Premises at any time and from time to time for the purpose
of inspecting and making repairs, alterations or improvements to the Leased
Premises and the Tenant shall not be entitled to any compensation for any
inconvenience, nuisance or discomfort occasioned thereby.
12.02 EXHIBITING LEASED PREMISES
The Tenant shall permit the Landlord or its agents to exhibit the Leased
Premises to prospective tenants during the last six (6) months of the Term
during normal business hours upon at least 24 hours advance notice.
25
- 21 -
ARTICLE XIII - MISCELLANEOUS
13.01 NOTICE
(a) Any notice, request, statement or other writing pursuant to this
Lease shall be deemed to have been given if mailed by registered
prepaid post or by facsimile transmission as follows:
In the case of the Landlord, to:
ORLANDO CORPORATION
0000 Xxxxxxx Xxxx
0xx Xxxxx
Xxxxxxxxxxx, Xxxxxxx
X0X 0X0
Attention: President
Facsimile No.: (000) 000-0000
And in the case of the Tenant, to:
HYDROGENICS CORPORATION
at the Leased Premises
Attention: Director of Engineering Operations
Facsimile No.: (000) 000-0000
and such notice shall be deemed to have been received by the
Landlord or the Tenant (as applicable) on the third business day
after the date on which it shall have been so mailed (provided
that in the event that there is an interruption of postal service,
the aforesaid period shall be extended for a period equivalent to
the period of such interruption) or on the date of the facsimile
transmission.
(b) Notice shall also be sufficiently given if and when the same shall
be delivered, in the case of notice to the Landlord, to an
executive officer of the Landlord, and in the case of notice to
the Tenant, to him personally or to an officer or manager of the
Tenant if the Tenant is a corporation. Such notice, if delivered,
shall be conclusively deemed to have been given and received at
the time of such delivery. If in this Lease two or more persons
are named as Tenant, such notice shall also be sufficiently given
if and when the same shall be delivered personally to any one of
such persons.
Either the Landlord or the Tenant may from time to time, by notice to the
other as aforesaid, designate another address in Canada and/or facsimile
number to which notices issued more than ten (10) days' thereafter shall
be addressed.
13.02 REGISTRATION
The Tenant covenants and agrees with the Landlord that the Tenant will not
register or record this Lease or any part thereof against the title to the Lands
or any part thereof except by way of notice which shall be subject to the prior
written approval of the Landlord and which shall only describe the parties, the
Leased Premises and the Term and any options to renew or extend the Term (as
applicable). The Tenant covenants to execute and return to the Landlord such
notice, prepared by the Landlord in registrable form setting out the aforesaid
details, within ten (10) days' written request therefor.
26
- 22 -
13.03 PLANNING ACT
Where applicable, this Lease shall be subject to the condition that it is
effective only if the Planning Act (Ontario) is complied with. Pending such
compliance, the Term and any extension periods shall be deemed to be for a total
period of one (1) day less than the maximum lease term permitted by law without
such compliance.
13.04 OBLIGATIONS AS COVENANTS
Each obligation or agreement of the Landlord or the Tenant expressed in this
Lease, even though not expressed as a covenant, is considered to be a covenant
for all purposes.
13.05 SEVERABILITY
Any provision of this Lease that is determined to be illegal or unenforceable at
law shall be considered separate and severable from the remaining provisions
which shall remain in force and be binding upon the Landlord and the Tenant.
13.06 OVERHOLDING
If the Tenant shall continue to occupy all or part of the Leased Premises after
the expiration of the Term with the consent of the Landlord, and without any
further written agreement, the Tenant shall be a monthly tenant at one hundred
and fifty percent (150%) of the monthly Basic Rent payable during the last year
of this Lease and otherwise on the terms and conditions herein set out except as
to length of tenancy.
13.07 UNAVOIDABLE DELAYS
Whenever and to the extent the Landlord is unable to fulfil or shall be delayed
or restricted in the fulfilment of any obligation hereunder by reason of being
unable to obtain the material, goods, equipment, service, utility or labour
required to enable it to fulfil such obligation or by reason of any statute,
law, regulation, by-law or order or by reason of any other cause beyond its
reasonable control, whether of the same nature as the foregoing or not, the
Landlord shall be relieved from the fulfilment of such obligation for so long as
such cause continues and the Tenant shall not be entitled to compensation for
any inconvenience, nuisance or discomfort thereby occasioned. There shall be no
deduction from the Rent or other monies payable under this Lease by reason of
any such failure or cause.
13.08 EVIDENCE OF PAYMENTS
The Tenant shall produce to the Landlord upon request, satisfactory evidence of
due payment by the Tenant of all payments required to be made by the Tenant
under this Lease.
13.09 LIEN
As security for the due payment by the Tenant of the Rent reserved hereunder and
the performance by the Tenant of all covenants, agreements, provisos and
conditions of the Tenant to be performed hereunder, the Tenant hereby grants to
the Landlord a first lien and charge on all goods, chattels, trade fixtures,
furniture, equipment and inventory of the Tenant situate on, in or about the
Leased Premises or elsewhere. Such lien and charge shall constitute a security
agreement within the meaning of the Personal Property Security Act (Ontario) and
on default of the Tenant hereunder the Landlord shall have, in addition to any
other rights and remedies it may be entitled to under this Lease or otherwise,
all the rights and remedies of a secured party under such Act.
13.10 GOODS AND SERVICES TAX
Any amount which is, by the terms of the Lease payable by the Tenant to the
Landlord and which is subject to Goods and Services Tax ("GST") pursuant to the
Excise Tax Act (Canada) shall be deemed to be exclusive of GST with the intent
that GST shall be calculated thereon and
27
- 23 -
paid by the Tenant to the Landlord at the time such amount is payable pursuant
to the terms of the Lease.
13.11 TIME OF ESSENCE
Time shall be of the essence of this Lease and every part thereof.
13.12 LAW
This Lease shall be governed by and construed in accordance with the laws of the
Province of Ontario.
13.13 CAPTIONS/HEADINGS
The captions appearing in the margin of this Lease and in the headings to the
Articles of this Lease have been inserted as a matter of convenience of
reference only and do not in any way whatsoever define, limit or enlarge the
scope or meaning of this Lease or any part thereof.
13.14 JOINT AND SEVERAL LIABILITY
If the Tenant shall be comprised of more than one (1) party, the liability of
each such party under this Lease shall be joint and several.
13.15 TENANT PARTNERSHIP
If the Tenant shall be a partnership, each person who shall be a member of such
partnership or successor thereof shall be and continue to be jointly and
severally liable for the performance and observance of all covenants,
obligations and agreements of the Tenant under this Lease even if such person
ceases to be a member of such partnership or successor thereof.
13.16 ENVIRONMENTAL ASSESSMENTS
(a) The Landlord or its agent shall have the right to enter upon the
Leased Premises and conduct environmental assessment audits from
time to time during the Term.
(b) The Tenant covenants and agrees to execute, forthwith upon demand
therefor, at its own cost and expense, the complete
remediation/clean-up of any and all contamination of the Leased
Premises arising after the date that the Tenant takes occupancy of
the Building or any part thereof. The aforesaid covenant contained
in this paragraph (b) shall survive the expiry or other
termination of the Term.
13.17 EASEMENTS
The Tenant agrees to postpone the Lease, upon request by the Landlord, to:
(i) such easements in favour of adjoining lands for purposes of
ingress and egress as may be reasonably requested by the
Landlord from time to time; and
(ii) such easements regarding utilities and/or other services as
may be required from time to time,
provided in each case that any such contemplated easement does not materially
interfere with the Tenant's use of the Leased Premises.
13.18 LANDLORD'S WARRANTIES
(a) The Landlord warrants that, to its knowledge and belief (but
without having conducted any enquiry, study or investigation), the
Leased Premises comply, as at June 23, 2000, with all applicable
municipal requirements or regulations, or recommendations or
orders of the Canadian Fire Underwriters Association or any
28
-24-
governmental body having similar functions, or any liability or
fire insurance company by which the Landlord may be insured.
(b) The Landlord warrants that, to its knowledge and belief (but
without having conducted any enquiry, study or investigation), (i)
there is no contamination or any other environmental hazard or
non-compliance at the Lands as at June 23, 2000 above the Ontario
Ministry of the Environment clean-up guidelines as at the said
date, and (ii) there are no underground tanks or piping (other
than utility piping) on or under the Lands as at the said date.
The Landlord agrees that any cost in regard to any environmental
issues that precede the Delivery Date and adversely affect the
Lands shall not be the Tenant's responsibility.
(c) The Landlord warrants that it is not aware of any structural or
major repairs required to be effected to the Building and parking
area and that it has not received any notice of non-compliance in
respect of the condition of the Leased Premises, which has not
been remedied.
(d) The Landlord warrants that the heating, ventilation and
air-conditioning system serving the Building and the electrical,
mechanical (including dock levellers, overhead doors, shipping
doors), plumbing, roof membrane and sprinkler systems of the
Building will be in good working condition as at the Delivery
Date.
(e) The Landlord warrants that the mechanical, heating and
air-conditioning system serving the Building is currently capable
of maintaining (i) an indoor air temperature of 23 degrees C when
the outdoor air temperature is -20 degrees C, and (ii) an indoor
air temperature of 24 degrees C in the office area of the Building
when the outdoor air temperature is 30 degrees C.
(f) The Landlord warrants that the Building shall, as at the
Commencement Date, have a minimum electrical service of 600 volts,
1200 amps.
13.19 EXPANSION PREMISES
(a) Should the Tenant wish to relocate from the Leased Premises into
and lease from the Landlord larger premises owned by the Landlord
having an area measuring at least approximately 145,000 square
feet (the "Replacement Premises"), then the Term of the Lease
shall, subject to paragraphs (b) and (c) of this Section, end as
at the date of the commencement of the term of the Tenant's lease
from the Landlord regarding the Replacement Premises (the
"Replacement Lease"), provided that all of the following
conditions are fulfilled:
(i) the Replacement Lease is a formal written lease in form
fully satisfactory to the Landlord, as determined by the
Landlord in its sole and unfettered discretion;
(ii) there has not been any default by the Tenant under the
Lease; and
(iii) at the time of the Tenant's negotiation with the Landlord
regarding the Replacement Premises (but in any event, PRIOR
TO the negotiation of the base rental rate for the
Replacement Premises), the Tenant notifies the Landlord in
writing of the Tenant's intention that the Term of the
Lease end as at the commencement of the term of the
Replacement Lease.
(b) The Tenant acknowledges that upon the occurrence of a default by
the Tenant under the Lease, paragraph (a) of this Section shall
automatically become null and void and of no further force and
effect.
(c) Upon the assignment of the Lease by the Tenant, paragraph (a) of
this Section shall automatically become null and void and of no
further force and effect.
29
-25-
13.20 ENTIRE AGREEMENT
The Tenant acknowledges that there have been no representations made by the
Landlord to the Tenant which are not set out in this Lease and that this Lease
constitutes the entire agreement between the Landlord and Tenant regarding the
Leased Premises. For greater certainty, but without limiting the foregoing
provisions of this Section, the Tenant acknowledges that Offer to Lease dated
June 6, 2000 is null and void for all purposes and is of no further force and
effect. The Tenant further acknowledges that the Lease may not be modified
except as herein explicitly provided or by subsequent agreement in writing duly
signed by the Landlord and the Tenant.
13.21 EFFECT OF LEASE
This Indenture and everything herein contained shall extend to and bind and may
be taken advantage of by the respective heirs, executors, administrators,
successors and assigns, as the case may be, of each of the parties hereto,
subject to the granting of consent by the Landlord asprovided herein to any
assignment or sublease, and where there is more than one tenant or there is a
female party or a corporation, the provisions hereof shall be read with all
grammatical changes thereby rendered necessary and all covenants shall be deemed
joint and several.
IN WITNESS WHEREOF the parties hereto have duly executed this Lease.
LANDLORD: ORLANDO CORPORATION
Per: /S/ XXXX XXXXXX
----------------------------
Authorized Signing Officer
Name: XXXX XXXXXX
Title: PRESIDENT
Per: /S/ XXXXXXX X'XXXXXX
----------------------------
Authorized Signing Officer
Name: XXXXXXX X'XXXXXX
Title: VICE PRESIDENT, FINANCE
We have the authority to bind the Corporation
TENANT: HYDROGENICS CORPORATION
Per: /S/ XXXXXX XXXXXX
----------------------------
Authorized Signing Officer
Name: XXXXXX XXXXXX
Title: PRESIDENT
Per: /S/ XXXXXX XXXXXXX
----------------------------
Authorized Signing Officer
Name: XXXXXX XXXXXXX
Title: VP FINANCE
I/We have the authority to bind the Corporation
30
SCHEDULE "A"
DESCRIPTION OF LANDS
Part of Blocks 1 and 2, Plan 43M-900, in the City of Mississauga, Regional
Municipality of Peel, designated as Parts 1, 2, 3, 4 and 5 on Plan 43R-l7625.
31
SCHEDULE "B"
DEFINITIONS
For the purposes of this Lease:
(a) "APPLICABLE LAWS" means any and all statutes, laws, by-laws, regulations,
ordinances, and requirements of governmental and other public authorities
having jurisdiction over or in respect of the Lands or the Building, or
any portion thereof, at any time and from time to time, and including but
not limited to the Environmental Protection Act, R.S.O.1990, c.E.19, as
amended, and the Canadian Environmental Protection Act, R.S.C. 1985, as
amended.
(b) "ADDITIONAL RENT" means all amounts payable by the Tenant under the
provisions of this Lease, whether payable to the Landlord or otherwise,
over and above Basic Rent.
(c) "BASIC RENT" means those amounts set out as Basic Rent in Section 2.02 of
this Lease.
(d) "BUILDING" means the building erected on the Lands and municipally known
as 0000 XxXxxxxxxx Xxxx, in the City of Mississauga, Regional
Municipality of Peel.
(e) "BUILDINGS" means the buildings in the City of Mississauga municipally
known as 0000 XxXxxxxxxx Xxxx, 0000 XxXxxxxxxx Xxxx and 0000 Xxxxxxxxx
Xxx.
(f) "CAPITAL TAX" means the taxes or excises, imposed by any and all taxing
authorities having jurisdiction, upon the Landlord and/or the owners of
the Building based upon or computed by reference to the capital employed
or invested by the Landlord and/or the owners of the Building in the
Lands, the Building and improvements thereto.
(g) "COMMENCEMENT DATE" has the meaning ascribed thereto in Section 1.02
hereof.
(h) "COMPLEX" means the lands described as Parts of Blocks 1, 2 and 8, Plan
43M-900, in the City of Mississauga, designated as Parts 1, 2, 3, 4 and 5
on Plan 43R-17625; Parts 1, 2, 3, 4, 8,9, 10, 11 and 12 on Plan
43R-17840; and Parts 6, 7 and 8 on Plan 43R-19512, together with all
buildings and improvements located thereon, municipally known as 0000
XxXxxxxxxx Xxxx, 0000 XxXxxxxxxx Xxxx and 0000 Xxxxxxxxx Xxx.
(i) "DELIVERY DATE" means such date being the earlier to occur of (i) such
date that the Tenant takes occupancy of the Building or any part thereof;
and (ii) the Commencement Date.
(j) "DEPOSIT MONIES" means the monies referenced in Section 2.05 of this
Lease.
(k) "HAZARDOUS SUBSTANCES" means, without limitation, any and all hazardous
substances, hazardous waste, dangerous goods, toxic waste, toxic
substances, contaminants, pollutants or related materials, including
without limitation, heavy oil, pesticides, flammables, explosives,
radioactive materials, asbestoses, urea formaldehyde foam insulation,
radon gas, PCB, any products of waste, or any other contaminants,
pollutants, substances or products declared to be hazardous or toxic
under the Applicable Laws.
(l) "LANDLORD'S ARCHITECT" means a qualified architect, engineer or Ontario
Land Surveyor from time to time chosen by the Landlord.
(m) "LANDLORD'S WORK" has the meaning ascribed thereto in Schedule "D"
hereto.
(n) "LANDS" means the parcel of land described in Schedule "A" hereto.
(o) "LEASE" means this Lease and any schedules attached hereto and any
amendments from time to time made to this Lease in accordance with the
provisions herein set out.
32
Page 2 of Schedule "B"
(p) "LEASED PREMISES" means the Lands and the Building.
(q) "LEASEHOLD IMPROVEMENTS" means all fixtures (save for trade fixtures),
installations, additions, improvements and alterations made, erected or
installed in or on the Leased Premises by or on behalf of the Tenant.
(r) "NET WORTH" means the amount of the Tenant's net shareholders equity
(being the dollar amount of the Tenant's total assets in excess of the
amount of the Tenant's total liabilities) less the Tenant's goodwill and
other intangible assets, as confirmed by the Tenant's audited financial
statements.
(s) "PROPORTIONATE SHARE" means such share as determined by the Landlord in
accordance with Section 3.02 of this Lease.
(t) "RENT" means Basic Rent and Additional Rent.
(u) "STORAGE AREA" means such area of the Lands outlined in blue on
Schedule "H" hereto (measuring approximately 1,000 square feet).
(v) "TAXES" means all taxes, rates, duties, levies and assessments whatsoever
(imposed by any and all taxing authorities having jurisdiction) levied,
charged or assessed upon the Complex or upon any part or parts thereof
and all improvements now or hereafter erected or placed thereon, or
charged against the Landlord on account thereof, including but not
limited to local improvement charges (but excluding profit and excess
profit taxes and taxes assessed upon the income of the Landlord). In
addition to the foregoing, Taxes shall include any and all taxes,
charges, levies or assessments which may in the future be levied, charged
or assessed in lieu thereof or in addition thereto. Taxes shall also
include all costs and expenses incurred by the Landlord in obtaining or
attempting to obtain a reduction or prevent an increase in the amount
thereof and the cost of all consultants, solicitors and accountants
retained by the Landlord with respect thereto.
(w) "TERM" means that period of time set out in Section 1.02 of this Lease
(and any and all extensions or renewals thereof, as may be applicable).
(x) "TRANSFER" has the meaning ascribed thereto in paragraph (a) of Section
6.01 of this Lease.
(y) "TRANSFEREE" has the meaning ascribed thereto in paragraph (a) of Section
6.01 of this Lease.
(z) "YEAR" means each calendar year, the whole or part of which is included
within the Term.
33
SCHEDULE "C"
EXTERIOR MAINTENANCE/REPAIR WORK
Building Repairs -- General: Minor exterior caulking, clean-up and repairs of a
general nature.
Roof Repairs: Maintain and repair roof as required to keep the roof
in a well-maintained condition.
Painting: Paint outside doors and frames, bollards, roof flashing
and rooftop units as required.
Electrical Repairs: Maintain and repair outside lights, replace ballasts and
lamps as required.
Paved Areas: Maintain and repair all asphalt and paved areas (including
but not limited to pavement surface, curbs, sidewalks,
catchbasins and concrete dolley pads).
Parking Lot Sweeping: Sweep entire parking lot.
Parking Lot Striping: Line paint parking areas.
Landscaping: Fertilizing, weed spraying, lawn cutting, till and
edge all beds and tree pits, pruning all shrubs as
required, spraying of insects on trees and shrubs.
Pruning and root feeding all trees and replacing
dead plant material as required.
Lawn Sprinklers: Start-up and winterize irrigation system, replace
sprinkler heads as required and maintain system.
Spring Clean-Up: General spring clean-up of debris accumulated over the
winter months.
Window Cleaning: Clean exterior windows six (6) times per year.
Snow Removal: Snow ploughing and removal, and salting of parking areas,
loading docks and driveways.
34
SCHEDULE "D"
LANDLORD'S WORK
The Landlord will perform at its own expense the following work to
the Leased Premises (the "Landlord's Work") in a good and workmanlike manner:
1. Repair and repaint all office walls and interior doors (in colour
chosen by Tenant from the Landlord's samples).
2. Replace all coloured and/or stained ceiling tiles.
3. Replace all office floor coverings with either carpet or vinyl
composition tiles (in colour chosen by Tenant from Landlord's
samples).
4. Repair parking lot and driveways.
5. Ensure that all window coverings are in good working order.
6. Ensure that all interior and exterior lights throughout the
Building are in good working order, including the replacement of
all burned-out bulbs, tubes and ballasts.
7. Ensure that the offices, washrooms and warehouse areas of the
Building are in a clean and/or broom-swept condition and that the
grounds are clear and free of debris and garbage.
8. Coat plant floor with a clear sealer.
The Landlord shall complete the Landlord's Work within four (4)
weeks of the Tenant's delivery to the Landlord of the following:
(i) this Lease duly executed by the Tenant;
(ii) the Deposit Monies; and
(iii) the Letter of Credit referenced in Section 1.06 of this
Lease.
The Tenant shall not interfere with the Landlord's completion of
the Landlord's Work.
The certificate of the Landlord's Architect regarding the
completion of the Landlord's Work shall be conclusive and binding upon the
Tenant.
35
SCHEDULE "E"
IRREVOCABLE STANDBY LETTER OF CREDIT
(NAME OF BANK)
APPLICANT: (Name and Address of Tenant)
BENEFICIARY: (Name and Address of Beneficiary)
Attention: Vice President, Finance
AMOUNT: $650,000.00
DATE OF EXPIRY:
PLACE OF EXPIRY: at our counters in Toronto
We hereby authorize you to draw on the __________________________ ("Bank") for
account of the Applicant the sum of $650,000.00 Canadian Dollars which may be
drawn by you at any time upon written demand for payment made upon the Bank and
which demand we shall honour without inquiring whether you have a right as
between yourself and the Applicant to make such demand and without recognizing
any claim of the Applicant.
You shall deliver to the Bank at such time as written demand for payment is made
upon us, a sight draft drawn on the Bank, the original of this Letter of Credit
and a certificate signed by an officer of Orlando Corporation in the form
annexed as Appendix I hereto confirming that monies drawn under this Letter of
Credit are pursuant to an agreement between the Applicant and Orlando
Corporation.
This Letter of Credit is payable notwithstanding any bankruptcy, receivership,
liquidation, winding-up or other form of insolvency proceedings by or against
the Applicant.
This Letter of Credit shall continue up to the close of business on the 31st day
of August, 2005, and will expire on that date and you may call for payment of
the full amount outstanding under this Letter of Credit at any time up to the
close of business on that date. It is a condition of this Letter of Credit that
it shall be deemed to be automatically extended in accordance with Section 1.06
of the Lease from the present or any future expiration date hereof unless thirty
(30) days prior to such date we shall notify you in writing by registered mail
that we elect not to consider this Letter of Credit renewed for any such
additional period. The Beneficiary may request the Bank to confirm in writing,
during the thirty (30) day period prior to any expiry of this Letter of Credit,
that this Letter of Credit has been renewed for such additional period and the
Bank shall so confirm in writing within five (5) business days from receipt of
such request from the Beneficiary but in any event no later than one (1)
business day prior to the expiry of this Letter of Credit. The Beneficiary may
also request the Bank, at any time, to confirm in writing that this Letter of
Credit has not expired and is in good standing provided such is the case.
Thereafter the Bank will confirm in writing to the Beneficiary within five
business days from receipt of such request from the Landlord, that this Letter
of Credit has not expired and is in good standing provided such is the case. Any
failure by the Bank to so confirm in writing within the applicable period shall
be deemed to be a confirmation that this Letter of Credit has not been so
renewed or is expired and is not then in good standing.
This standby Letter of Credit is subject to the uniform customs and practice for
Documentary Credits as most recently published by the International Chamber of
Commerce and engages us in accordance with the terms thereof.
(Signature of an Authorized Signing Officer of the Bank)
36
Page 2 of Schedule "E"
APPENDIX I
TO: (Name and Address of Bank)
We refer you to your Irrevocable Standby Letter of Credit No. _______________
which accompanies this Certificate and which was issued by you at the request of
(Name of Applicant).
We hereby certify, intending that the same may be relied upon by you without
further inquiry, that we are entitled to draw under the Letter of Credit in
accordance with an agreement between Orlando Corporation and the Applicant and
we hereby request that you honour the accompanying draft in accordance with the
Letter of Credit.
Yours very truly
ORLANDO CORPORATION
Per:
-------------------------
Authorized Signing Officer
37
SCHEDULE "F"
SITE PLAN RE COMPLEX
[DIAGRAM]
38
SCHEDULE "G"
SITE PLAN RE LEASED PREMISES
[DIAGRAM]
39
SCHEDULE "H"
OUTSIDE STORAGE AREA
[DIAGRAM]