EXHIBIT 10
LEASE
THIS INDENTURE MADE THE 14TH DAY OF NOVEMBER 1996
IN PURSUANCE OF THE SHORT FORM OF LEASES ACT
BETWEEN
SPANTER DEVELOPMENTS INC.
a corporation incorporated under the laws of Canada
hereinafter called the "Lessor"
OF THE FIRST PART
- and -
MIAD SYSTEMS LTD.
a corporation incorporated under the laws of the Province
of Ontario
hereinafter called the "Lessee"
OF THE SECOND PART
WITNESSETH that in consideration of the rents, covenants and
agreements hereinafter reserved and contained on the part of the Lessee to be
respectively paid, observed and performed, the Lessor hath demised and leased
and by these presents doth demise and lease unto the Lessee Unit 7 containing an
area of 5,295.10 square feet more or less as outlined in red on Schedule "A"
hereto annexed (hereinafter referred to as the "Premises") in a multiple
occupancy industrial building municipally known as Xx. 00 Xxxxxxx Xxxxx
constructed on Part of Block 4, Registered Plan 65M-2l35 and Part of Lot 5,
Concession 4, in the Town of Markham, in the Regional Municipality of York
designated as Parts 3, 5, 7, 10 and 11 on Reference Plan 65R-8848 and Part 10 on
Reference Plan 65R-5592 and Parts 12 and 32 on Reference Plan 65R-5567
(hereinafter referred to as the "Lands"), together with all necessary ingress
and egress therefrom.
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TO HAVE AND TO HOLD the Premises for and during the term
of two (2) years computed from the 1st day of December 1996 and ending on the
30th day of November 1998 (hereinafter referred to as the "Term").
YIELDING AND PAYING THEREFOR unto the Lessor at such place or
places in the Country of Canada as the Lessor shall designate from time to time
in writing:
(a) During the first twelve months of the Term the sum of TWENTY-ONE
THOUSAND ONE HUNDRED EIGHTY DOLLARS AND FORTY CENTS ($21,180.40)
per annum, (calculated at the rate of $4.00 per square foot per
annum based on an area of 5,295.10 Square feet) payable in
lawful money of Canada in advance on the first day of each and
every month during the first twelve months of the Term, the
first of such payments to be made on the 1st day of December
1996.
(b) During the last twelve months of the Term the sum of TWENTY-TWO
THOUSAND FIVE HUNDRED FOUR DOLLARS AND EIGHTEEN CENTS
($22,504.18) per annum, (calculated at the rate of $4.25 per
square feet) payable in lawful money of Canada in advance on the
first day of each and every month during the last twelve months
of the Term, the first of such payments to be made on the 1st
day of December 1997.
The Additional Rent for the calendar year 1996 is estimated at
$2.00 per square foot per annum subject to readjustment, if necessary.
The Lessor acknowledges receipt by its agent of cheque from the
Lessee in the amount of FIVE THOUSAND SEVEN HUNDRED FOURTEEN DOLLARS AND
THIRTEEN CENTS ($5,714.13) as a deposit to be applied as follows:
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(a) The sum of TWO THOUSAND SEVEN HUNDRED NINETY-EIGHT DOLLARS AND
FIVE CENTS ($2,798.05) on account of the rent payable for the
first (1st) month of the Term.
(b) The sum of TWO THOUSAND NINE HUNDRED SIXTEEN DOLLARS AND EIGHT
CENTS ($2,916.08) on account of the rent payable for the last
month of the Term.
The Lessor and Lessee acknowledge that there are located on the
Lands two multiple occupancy industrial buildings municipally known as Nos. 43
and 45 Riviera L3rive, and that the said two industrial buildings together with
the Lands will be treated as a single property for realty tax purposes,
insurance purposes and allocation of common expenses, and accordingly the said
two industrial buildings will be hereinafter collectively referred to as "the
Building".
1. LESSEE'S COVENANTS
(a) Rent
----
To pay the rent hereby reserved on the days and in the manner
aforesaid.
(b) Repair
------
To repair, maintain and keep the Premises in good and
substantial repair (reasonable wear and tear and damage by fire, lightning and
tempest and structural defects only being excepted, unless caused by the
negligent acts or omission of the Lessee, its employees, agents, invitees,
suppliers or sub-tenants, or agents and servants of suppliers, licencees or
sub-tenants).
(c) Use of Premises
---------------
That the Premises will during the Term be used for storage and
warehouse purposes only, provided such use shall not contravene any by-law
regulation or statute of the Town of Markham or other relevant governmental
authority.
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(d) Removal and Restoration by the Lessee
-------------------------------------
(i) All alterations, decorations, additions and improvements
made by the Lessee, or made by the Lessor on the
Lessee's behalf (other than the Lessee's trade fixtures)
shall immediately upon installation or affixation become
the property of the Lessor without compensation therefor
to the Lessee. Such alterations, decorations, additions
or improvements shall not be removed from the Leased
Premises either during or at the expiration or earlier
termination of the Term except that:
(1) The Lessee may during the Term in the usual or
normal course of its business and with the prior
written consent of the Lessor remove its trade
fixtures, provided such trade fixtures have
become excess for the Lessee's purpose or the
Lessee is substituting new and similar trade
fixtures therefor, and provided that in each
case, (1) the Lessee is not in default under
this Lease; and (2) such removal is done at the
Lessee's sole cost and expense; and
(2) The Lessee shall, at the expiration of the Term,
at its own cost, remove all its trade fixtures
and such of its leasehold improvements and
fixtures installed in the Leased Premises as the
Lessor requires to be removed.
(ii) If the Lessee does not remove its trade fixtures at the
expiration or earlier termination of the Term, the trade
fixtures shall, at the option of the Lessor, become the
property of the Lessor and may be removed from the
Leased Premises and sold or disposed of by the Lessor in
such manner as it deems advisable.
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(iii) The Lessee shall, in the case of every such installation
or removal either during or at the expiration of the
Term effect the same at times designated by the Lessor
and promptly make good any damage caused to the Leased
Premises or the Building by the installation or removal
of any such alteration, decoration, addition or
improvement.
(e) Lessee Not to Alter Partitions
------------------------------
That the Lessee will not erect, affix, remove or change the
location or style of any partitions or fixtures or make any alterations of or
additions to the Premises without the written consent of the Lessor being first
had and obtained, such consent not to be unreasonably withheld.
(f) Lessee to Give Notice of Accidents or Defects
---------------------------------------------
That the Lessee will give the Lessor prompt written notice of
any accident or defect in the sprinkler system, water pipes, drains, heating or
air-conditioning apparatus, telephone, electric or any other wires in any part
of the said Building.
(g) Insolvency of Lessee
--------------------
That, if the term hereby granted or the goods and chattels of
the Lessee or any Assignee or sub--tenant shall be at any time seized or taken
in execution or attachment, or if the Lessee or any Assignee or sub--tenant
shall make an assignment for the benefit of creditors or shall become bankrupt
or insolvent, or shall make a sale under the Bulk Sales Act (Ontario) in respect
of goods in the Premises, without the consent of the Lessor, such consent not to
be unreasonably withheld or being a company shall become subject to any
legislative enactment relating to liquidation or winding-up, either voluntary or
compulsory, the Term shall immediately become forfeited and void, and an amount
equivalent too
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the next ensuring three months' rent shall be at once due and payable.
(h) Waiver of Exemptions
--------------------
That the Lessee waives and renounces the benefit of any present
or future Act, of the Legislature of this Province in which the Premises are
situate, taking away or limiting the Lessor's right of distress and agrees with
the Lessor that notwithstanding any such enactment the Lessee's goods and
chattels on the Premises from time to time shall be subject to distress for
rent; and that the Lessee shall maintain on the Premises at all times, goods and
chattels of sufficient value, that if seized and sold under a Distress Warrant a
sum will be realized equivalent to three months' rent; the Lessor to have the
right to distrain at any time of the day or night, whether or not the Premises
are occupied by any person at the time, and for the purpose of so distraining to
make forcible entry if necessary, and to have the right to distrain the said
goods, chattels and effects, either on the Premises or at any other place to
which they have been removed, within thirty days after removal and to have the
right after distress has been effected to remove any goods, chattels or effects
or any part thereof, to any other premises.
(i) Damage and Destruction
----------------------
That if during the Term or any renewal thereof, the Building
shall be destroyed or damaged by fire or the elements then the following
provisions shall have effect:
(i) If the damage or destruction is such that the Building
is rendered wholly unfit for occupancy or it is
impossible or unsafe to use and occupy the Premises and
if in either event the damage, in the reasonable opinion
of the Lessor, to be given to the Lessee within ten days
of the happening of such damage or destruction, cannot
be repaired with reasonable diligence within one hundred
and twenty
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(120) days from the happening of such damage or
destruction, then either the Lessor or the Lessee may
within five (5) days next succeeding the giving of the
Lessor's opinion as aforesaid terminate this Lease by
giving to the other notice in writing of such
termination, in which event this Lease and the term
hereby demised shall cease and be at an end as of the
date of such destruction or damage and the rent and all
other payments for which the Lessee is liable under the
terms of th4s Lease shall be apportioned and paid in
full to the date of such destruction or damage; in the
event that neither Lessor nor Lessee so terminate this
Lease, then the Lessor shall repair the said Premises
with all reasonable speed, and notwithstanding such
damage or destruction, the term of this Lease and the
Lessee's obligations to pay rent and observe the other
covenants contained in this Lease shall continue without
abatement, provided rent shall xxxxx to the extend that
the lessor recovers loss of rental from its insurance
coverage.
(ii) If in the reasonably opinion of the Lessor, to be given
to the Lessee within ten (10) days of the happening of
such damage or destruction, the said damage or
destruction can be repaired with reasonable diligence
within one hundred and twenty (120) days from the
happening of such damage or destruction, then the Lessor
shall repair the said Premises with all reasonable
speed, and notwithstanding such damage or destruction,
the term of this Lease and the Lessee's obligations to
pay rent and observe the other covenants contained in
this Lease shall continue without abatement, provided
rent shall xxxxx to the extent that the
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Lessor recovers loss of rental from its insurance
coverage. In the event that the repair of the damage and
destruction is not completed within the said period of
one hundred and twenty (120) days, the rent hereby
reserved shall xxxxx from the day following the end of
the said period of one hundred and twenty (120) days
until the day upon which the Lessee is able to occupy
and use the Premises; provided that the Lessee may
terminate this Lease by giving the Lessor written
~notice on the day following the said period of one
hundred and twenty (120) days or within thirty (30) days
thereafter of its intention to terminate this Lease and
this Lease shall cease and be void and the Term expire
and be at an end.
(j) No safes, or anything liable to injure or destroy any part of
the Premises shall be taken into it without the consent of the Lessor, and the
Lessor shall in all cases retain, the power to prescribe the weight and proper
position of iron safes; and the cost of repairing any and all damage done to the
Premises by taking in or putting out a safe, or by any safe during the term it
is in or on the Premises, shall be paid for on demand by the Lessee.
2. LESSOR'S COVENANTS
------------------
The Lessor covenants with the Lessee for quiet enjoyment.
PROVISO
-------
Proviso for re-entry by the Lessor on non-payment of rent or
non-performance of covenants.
3. COVENANTS OF LESSOR AND LESSEE
------------------------------
(a) Taxes, etc.
-----------
(i) The Lessee shall pay its proportionate share of all
taxes and rates, municipal, parliamentary or otherwise
assessed against the Building and the Land and the
foregoing shall
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include capital tax being an inputed amount presently
against the Lessor on account of its interest in the
Building and Land or any part thereof, or capital
employed in the Building and Land, as the case may be,
and such capital tax shall be inputed as if the amount
of such tax were that amount due if the Building and
Land were the only real property of the Lessor and
includes the amount of any capital or place of business
tax levied by the Provincial Government or other
applicable taxing authority against the Lessor with
respect to the Building and Land whether known as
capital tax or by any other name described herein of the
Lessor or Lessee on account thereof, and all charges for
gas and electric current and telephone and water used by
the Lessee, and any business taxes, taxes on personal
property or income or license fees, or other taxes
(whether or not presently contemplated by the Lessor or
the Lessee) including the Goods and Services Tax
(Canada) or other similar value-added taxes or other
taxes imposed upon the rents, property, business or
income of the Lessee which the Lessee shall pay,
provided that when and so often as the Lessee neglects
or omits to pay the said taxes, charges and fees the
Lessor may pay them and may thereupon charge them to the
Lessee who shall pay them forthwith and the Lessor shall
have the same remedies and may take the same steps for
recovery therefor as the Lessor may take for the
recovery of rents in arrears under the terms of this
Lease. The share to be paid by the Lessee shall be in
the proportion that the floor area of the Premises bears
to the total leasable floor area of the Building.
(ii) The Lessee shall have the right to contest by
appropriate legal proceedings the validity of any tax,
rate, including local improvement rates, assessment or
other charges referred to in this paragraph; and if the
payment of any such tax, rate, local improvement rates,
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assessments or other charges may legally be held in
abeyance without subjecting Lessor or Lessee to any
liability of whatsoever nature for failure to so pay,
Lessee may postpone such payment until the final
determination of any such proceedings, provided that all
such proceedings shall be prosecuted with all due
diligence and dispatch;
(b) Rights of Re-Entry
------------------
That in the event that the Premises or any part thereof become
and remain vacant and unoccupied for a period of fifteen days, or to be used by
any other person or persons or for any other purpose than as above provided,
without the written consent of the Lessor, this Lease shall at the option of the
Lessor cease and be void, and the Term expire and be at an end, anything herein
to the contrary notwithstanding, and the proportionate part of the current rent
shall thereupon become immediately due and payable, and the Lessor may re-enter
and take possession using such force as may be necessary for this purpose, of
the Premises as though the Lessee or other occupant or occupants of the Premises
was or were holding over after the expiration of the Term, or in such case
instead of determining this Lease as aforesaid and re-entering upon the
Premises, the Lessor may take possession of the Premises, or any part or parts
thereof, and let and manage the same and grant any lease or leases thereof upon
such terms as to the Lessor may appear to be reasonable, and demand, collect,
receive and distrain for all rental which shall become payable in respect
thereof, and apply the said rentals after deducting all expenses incurred in
connection with the Premises and in the collection of the said rent including
reasonable commission for the collection thereof and the management of the
Premises, upon the rent hereby reserved, and the Lessor and every such agent
acting as aforesaid from time to time, shall in so acting be the agent of the
Lessee, who alone shall be responsible for its acts, and the Lessor shall not be
accountable for any moneys except those actually received, notwithstanding any
act,
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neglect, omission, or default of any such agent acting as aforesaid.
(c) Force Majeure
-------------
Notwithstanding anything to the contrary contained in this
Lease, if either party hereto is bona fide delayed or hindered in or prevented
from the performance of any term, covenant or act required hereunder by reason
of strikes, labour troubles: inability to procure materials or services; power
failure, restrictive governmental laws or regulations; riots, insurrection;
sabotage; rebellion; war; act of God; or other reason whether of a like nature
or not which is not the fault of the party delayed in performing work or doing
acts required under the terms of this Lease, then performance of such term,
covenant or act is excused for the period of the delay and the party so delayed
shall be entitled to perform such term, covenant or act within the appropriate
time period after the expiration of the period of such delay. However, the
provisions of this subparagraph do not operate to excuse the Lessee from the
prompt payment of Rent, Additional Rent or any other payments required by this
Lease.
(d) Obstructions
------------
The floors, skylights and windows that reflect or emit light
into passageways or into any place in the Premises shall not be covered or
obstructed by the Lessee, and no awning shall be put up over any window without
the written sanction of the Lessor. The water closets and other water apparatus
shall not be used for any purposes other than those for which they are
constructed and no sweeping, rubbish, rags, ashes or other substances shall be
thrown therein; and damage resulting to them from misuse shall be borne by the
Lessee; windows in the plant and warehousing area are to be excepted and may be
covered appropriately by the Lessee.
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(e) Erection of Sign by Lessee
--------------------------
The Lessee shall have the right, subject to compliance with all
relevant municipal by-laws and regulations, and in accordance with the sign
standards in the project and subject to the consent of the Lessor, such consent
not to be unreasonably withheld or delayed, to erect a suitable sign or signs at
its sole expense on the exterior of the Premises identifying it and the nature
of its business.
(f) Nuisance
--------
The Lessee shall not do or permit anything to be done in the
Building that shall be deemed by the Lessor as a nuisance, or do or permit
anything to be done which will conflict with the laws relating to fires or with
the regulations of the Fire Department, or with any insurance policy upon said
building or any part thereof, or with any of the rules and ordinances of the
Board of Health, or with any statute or any municipal by-law. The Lessee
covenants and agrees to pay as additional rent any increase in insurance
premiums resulting from its use and occupation of the Premises, including,
without limiting the generality of the foregoing, any increase in insurance
premiums resulting from the nature of the materials and supplies kept in the
Premises by the Lessee.
(g) Outside Storage
---------------
The Lessee shall not use any outside garbage or other containers
unless approved by the Landlord or to allow any ashes, refuse, waste material,
debris, rubbish, garbage or other loose materials or other objectionable
material to accumulate in or about the Premises and not to store or cause to be
stored outside of the Building any of its inventory or stock-in-trade or raw
materials and at all times to keep the Premises (including the exterior loading
dock area, if applicable) in a neat and broom-clean condition.
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(h) Right of Lessor to Enter Premises
---------------------------------
The agents of the Lessor shall have the right to enter the
Premises at reasonable hours in the day to examine the same, or to make such
repairs or alterations as they shall deem necessary for the safety and
preservation of the Building, and shall also have the right during the three
months previous to the expiration of the lease of the Premises to exhibit the
Premises to be let, and to put upon them their usual notice "For Rent", which
notice shall not be removed by the Lessee.
(i) Connections For Telephone Or Telegraph
--------------------------------------
If the Lessee desires telegraphic or telephonic connection, the
Lessor reserves the right to direct the electricians as to where and how the
wires are to be introduced, and without such directions no boring or cutting for
wires shall take place. No other wires or pipes of any kind shall be introduced
without the consent of the Lessor.
(j) Deliver Up Premises In Good Condition
-------------------------------------
The Lessee upon giving up possession shall leave the Premises in
a clean condition and shall return to the Lessor all keys and lock combinations
belonging to the Premises or Building.
(k) Lessor's Work
-------------
The Lessor shall complete the Premises prior to the Lease
commencement date, at its own cost and expense, in accordance with the
specifications as set out in Schedule "B" attached hereto. No minor changes or
variations from the plans and specifications that have been agreed upon by and
between the parties hereto which may have been necessary during the preparation
of the Premises for the Lessee or during construction will affect or change this
Lease or invalidate same, nor shall the Lessor be liable for any delay in the
completion of such installations resulting from circumstances beyond its
control.
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(1) Lessee's Work
-------------
The Lessee shall complete, at its own cost and expense, the
Premises in accordance with the specifications as set out in Schedule "C"
attached hereto, in a good and workmanlike manner.
(m) Lessor's Obligations To Repair Limited To Structural Defects
------------------------------------------------------------
Save and except with respect to repairs resulting from fire
damage as hereinbefore set forth, the Lessor's obligations to repair shall be
limited solely to structural defects. If, however, the Lessor is required to
maintain or repair the structural portion of the Premises by reason of the
negligent acts or omissions of the Lessee, its employees, agents, invitees,
suppliers, agents and servants of suppliers, licencees or sub-tenants, the
Lessor may add the cost of such maintenance and repair to the rent which shall
thereafter become due. The structural portion of the Premises shall be deemed to
include the foundations, roof, load bearing walls, water mains and sewer lines.
The Lessee shall be solely responsible for repair of minor roof leaks.
(n) Heating of Premises
-------------------
The Lessee covenants to heat the Premises at its own expense
using the heating equipment supplied and installed by the Lessor, it being
understood and agreed that the maintenance and repair of the said heating
equipment required to keep same in operating condition shall be the sole
responsibility of the Lessee.
(o) Insurance
---------
The Lessee shall during the entire term hereof and during any
renewal or extension thereof keep in full force and effect a policy of public
liability and property damage insurance in companies qualified to do business in
the Province of Ontario with respect to the demised Premises, and the sidewalks
in front of the demised Premises in joint names of the Lessor and Lessee. Such
policy shall be written on a comprehensive basis with inclusive
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limits of not less than TWO MILLION DOLLARS ($2,000,000.00) for bodily injury to
any one or more persons, or property damage, and shall not be invalidated as
respects the interest of the Lessor and of any mortgagee by reason of any breach
or violation of any warranties, representations, declarations or conditions
contained in the policy. Any such policy must contain a severability of
interests clause, a cross-liability clause and shall be primary and shall not
call into contribution any other insurance available to the Lessor or any
mortgagee.
The Lessee shall pay, as Additional Rent, its proportionate
share of the premiums for fire insurance and all risks coverage including public
liability and loss of rental income, boiler and machinery, earthquake, flood and
plate glass insurance on the Building to be paid within ten (10) days after
notice thereof by the Lessor to the Lessee, in the ratio that the total floor
area of the demised Premises bears to the total leasable floor area of the
Building.
The Lessee covenants that nothing will be done or omitted to be
done whereby any policy of insurance shall be cancelled or the premises rendered
uninsurable. The Lessee shall pay to the Lessor forthwith upon request any
increase in insurance premiums for the building in which the demised Premises
are located resulting from the Lessee's use of the demised Premises.
(p) Maintenance Expenses Of Common Area Appurtenant To The Building
---------------------------------------------------------------
The Lessee further covenants and agrees to reimburse the Lessor
and to pay to the Lessor, as Additional Rent, within ten (10) days after notice
thereof from the Lessor to the Lessee, a proportionate share of the Lessor's
costs of operating, maintaining and repairing all common areas (including
parking area) appurtenant to the Building including, without limiting the
generality of the foregoing, the cost of maintaining, cleaning, snow removal,
gardening, policing, painting of dividing lines, repair of
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pavements, insuring against casualties, injury and damages which may occur
appurtenant to the said Building in the ratio that the total floor area of the
demised Premises bears to the total leasable floor area of the Building. For
purposes of this paragraph the term "common area" includes all entrances and
exits, pedestrian walkways, sidewalks, roads and road service area (if any)
located on the Lands, municipally known as Nos. 43 and 00 Xxxxxxx Xxxxx, in the
Town of Markham.
At the request of the Lessee, the Lessor shall produce such
reasonable evidence as may be required describing in sufficient detail the
maintenance and repairs effected on the common areas by the Lessor and the costs
thereof.
(q) Assignment And Sub-Letting
--------------------------
(1) The Lessee shall not assign, sublet or part with possession of the
Premises or any part thereof, or share the occupation of the Premises or any
part thereof without the consent of the Lessor in writing first had and
obtained, which consent may not be unreasonably or arbitrarily withheld,
provided however, and it is made a condition to the giving of such consent that:
(i) the Lessee be not in default in the performance of any
of its covenants, provisos or obligations contained in
the within lease;
(ii) the proposed Lessee, Assignee or sub--lessee of this
Lease shall agree in writing to assume and perform all
of the terms, covenants, conditions and agreements by
this Lease imposed upon the Lessee herein in the form to
be approved by the solicitor for the Lessor;
(2) At the time that such consent for assignment, subletting or parting with
possession of the Premises is requested by the Lessee as contemplated by
sub--paragraph (1) hereof, the Lessee shall furnish to the Lessor copies of all
proposed agreements relating to the assignment, subletting or parting with
possession and such information required by the Lessor relating to the
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financial integrity of the proposed lessee or sub-lessee. In the event that the
proposed Assignee, sub-lessee or occupant is unsatisfactory to the Lessor, the
Lessor shall have the option, to be exercised within five (5) days from the date
upon which such consent is requested (provided the Lessor has received the
documentation set forth herein) to terminate this Lease upon the date on which
such assignment, subletting or parting with possession was to become effective,
unless within five (5) days from the date upon which the Lessor notifies the
Lessee of its intention to terminate this Lease, the Lessee by notice in writing
to the Lessor withdraws its request for such consent and indicates that it will
continue to occupy the Premises under the provisions hereof whereupon this Lease
shall continue as if such consent had not been requested.
4. FURTHER COVENANTS OF LESSEE
---------------------------
The Lessee covenants and agrees as follows:
(a) Without limiting the generality of anything herein contained,
the Lessee covenants and agrees to have any heating, air-conditioning and
sprinkler equipment and systems provided by the Lessor and located within the
demised Premises inspected regularly and at least annually during the term of
the Lease and any renewal or extension thereof, at Lessee's expense, it being
understood and agreed that the maintenance and repair of the said equipment and
systems required to keep same in operating condition shall be the sole
responsibility of the Lessee.
(b) Default
-------
If the Lessee fails to pay, `when due, any amounts or charges
required to be paid pursuant to this Lease, the Lessor after giving five (5)
days notice in writing to the Lessee may, but shall not be obligated to, pay all
or any part of the same. If the
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Lessee is in default in the performance of any of its covenants or obligations
hereunder (other than the payment of rent or other sums required to be paid
pursuant to this Lease), the Lessor may from time to time after giving such
notice as it considers sufficient (or without notice in the case of any
emergency) having regard to the circumstances applicable, perform or cause to be
performed any of such covenants or obligations, or any part thereof, and for
such purpose may do such things as may be required, including, without
limitations, entering upon the demised Premises and doing such things upon or in
respect of the demised Premises or any part thereof as the Lessor reasonably
considers requisite or necessary. All expenses incurred and expenditures made
pursuant to this paragraph shall be paid by the Lessee as Additional Rent or
otherwise as may be the case forthwith upon demand. The Lessor shall have no
liability to the Lessee for any loss or damages resulting from any such action
or entry by the Lessor upon the demised Premises under this paragraph and same
is not a re-entry or a breach of any covenant for quiet enjoyment contained in
this Lease.
In the event that the Lessee fails to pay, when the same is due
and payable, any rent, Additional Rent or other amount (including, without
limiting the generality of the foregoing, taxes, insurance premiums and common
area maintenance expenses) payable by the Lessee pursuant to the terms of this
Lease, such unpaid amount shall bear interest at an annual rate equal to the
prime lending rate in effect from time to time charged by The Toronto-Dominion
Bank to its best commercial customers in Toronto plus 5% per annum calculated
from the due date thereof to the date of payment, subject to monthly
compounding; and the Lessor, in addition to any other right, shall have the same
remedies and may take the same steps for the recovery of all such amounts and
such interest thereon as it might take for the recovery of rent in arrears under
the terms of this Lease.
(c) To comply with the requirements of every applicable statute, law and
ordinance, arid with every applicable lawful
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regulation or order, with respect to the removal of any encroachment, or to the
condition, equipment, maintenance, use or occupation of the demised Premises.
(d) Lessor Not Responsible
----------------------
The Lessor shall not be liable nor responsible in any way for
any personal injury that may be suffered or sustained by the Lessee or any
customer or employee of the Lessee or any other person who may be upon the
Premises and/or entrances and/or common areas appurtenant thereto; for any loss
of or damage or injury to any property belonging to the Lessee or to any
customers or employees of the Lessee or to any other person while such property
is on the Premises and/or entrances and/or common areas appurtenant thereto; and
in particular (but without limiting the generality of the foregoing) the Lessor
shall not be liable for any damage to any such property caused by steam, water,
gas, rain or snow which may leak into, issue or flow from any part of the
Building, or from the water, steam, sprinkler, gas or drainage pipes or plumbing
works of the same or from any other places or quarters or for any damage caused
by anything done or omitted to be done by the Lessor. All risks of any such
injury being assumed by the Lessee who shall save harmless and indemnify the
Lessor in connection therewith.
(e) Lessee to Indemnify Lessor
--------------------------
That the Lessee will indemnify and save harmless the Lessor of
and from all fines, suits, claims, demands and actions of any kind and nature to
which the Lessor shall or may become liable for or suffer by reason of any
breach, violation or non-performance by the Lessee of any covenant, term or
provision hereof, or by reason of any injury occasioned to or suffered by any
person or persons or any property by reason of any act, neglect or default on
the part of the Lessee or any of its employees.
19
(f) Failure of Lessee To Pay Taxes, etc.
-----------------------------------
That in the event of the Lessee failing to pay any tax, rate,
insurance premiums or charges which it has herein covenanted to pay, the Lessor
may pay the same and shall be entitled to charge the same so paid to the Lessee,
who shall pay them forthwith on demand; and the Lessor in addition to any other
right shall have the same remedies and may take the same steps for the recovery
of all such sums as it might take for the recovery of rent in arrears under the
terms of this Lease.
(g) Condonation No Waiver of Subsequent Default
-------------------------------------------
That any condonement, excusing or overlooking by the Lessor of
any default or breach or non-observance by the Lessee at any time in respect of
any covenant, proviso or condition herein contained shall not operate as a
waiver of the Lessor's rights hereunder in respect of any subsequent default,
breach or non-observance nor so as to defeat or affect in any way the rights of
the Lessor hereunder in respect of any subsequent default, breach or
non-observance.
(h) Net Lease
---------
It is the intention of the parties hereto that the rental paid
hereunder shall be net to the Lessor with respect to the Premises and clear of
all taxes, costs and charges arising from or related to the Premises and without
limiting the generality of the foregoing, the Lessee shall pay all taxes,
liability insurance premiums, and all charges and expenses of every nature and
kind relating to the Premises (save and except repair of structural defects as
aforesaid) including, without limiting the generality of the foregoing, all
heating expenses and public utility charges for the Premises.
(i) No Abatement of Rent
--------------------
Save as otherwise expressly provided in this Lease, there shall
be no abatement from or reduction of the rent due hereunder,
20
nor shall the Lessee be entitled to damages, losses, costs or disbursements from
the Lessor during the Term hereby created, caused by or on account of fire,
water, sprinkler systems, partial or temporary failure or stoppage of heat,
light, elevator, live steam or plumbing service in or to the Premises or
Building, whether due to acts of God, strikes, accidents, the making of
alterations, repairs, renewals, improvements, structural changes to the Premises
or Building or the equipment or systems supplying the said services, or from any
cause whatsoever.
(j) Attornment and Postponement to Mortgage
---------------------------------------
The Lessee covenants and agrees at any time upon notice from the
Lessor to attorn to and become a tenant of any mortgagee of the lands and
premises herein upon the same terms and conditions as are herein set forth and
in confirmation of such agreement to attorn the Lessee shall execute promptly
upon request by the Lessor all instruments or documents which may from time to
time be requested to give effect thereto; PROVIDED that such mortgage shall
permit the Lessee to continue in quiet possession of the Premises in accordance
with the terms and conditions of this Lease so long as the Lessee is not in
default hereunder.
(k) Holding Over
------------
Provided that it is understood that if the Lessee shall continue
to occupy the Premises after the expiration of the Term hereby granted or any
renewal or extension thereof with the consent of the Lessor, then unless there
shall be some written agreement to the contrary, the tenancy herein shall be
construed to be a tenancy from month to month at the rents herein specified
(pro-rated on a monthly basis) and shall otherwise be on the terms and
conditions herein specified, so far as applicable.
5. FURTHER COVENANTS OF LESSOR AND LESSEE
--------------------------------------
(a) (i) Additional Rent
---------------
The Lessor may, at its option, require the Lessee
21
to pay to it in advance on the 1st day of each
month during the term hereof, an amount estimated from
time to time by the Lessor to reimburse the Lessor for
the Lessee's share of realty taxes, utility charges,
insurance premiums, common area maintenance charges, and
other items of Additional Rent as hereinbefore set
forth, subject to readjustment between the Lessor and
Lessee within ninety (90) days after the end of each
lease year.
(ii) The Lessee shall pay to the Lessor annually, which is
included in Additional Rent, a management fee in an
amount equal to 5% of the gross rental paid by the
Lessee to the Lessor in such year, the term "gross
rental" being deemed to include all rent installments
and common expenses required to be paid by the Lessee
including, without limiting the generality of the
foregoing, realty tax and insurance premium
contributions, share of utility charges, and common area
maintenance charges.
(b) Arbitration
-----------
In the event that the parties are unable to agree as to the
rental during any renewal period, or if any time during the currency of this
Lease or any renewal thereof or after the termination thereof, any dispute,
difference or question shall arise between the parties hereto or any of their
representatives arising out of the interpretation, performance, or observance
hereof or of any portion hereof, or the construction, meaning or effect of these
presents, or anything herein contained, then every such disagreement, dispute,
difference or question shall be submitted to arbitration by giving of notice by
either party to the other party. In the event of arbitration, the arbitrator
shall be such that the parties may agree to on or before thirty (30) days from
the submission by either party of the dispute to arbitration; in default of
agreement on or before the expiration of such thirty
22
(30) days, then within ten days thereafter, the Lessor shall appoint an
arbitrator, the Lessee shall appoint an arbitrator, and the two so chosen shall
appoint a third arbitrator within then (10) days thereafter. If either party
defaults in such appointment within the said ten (10) day period, the arbitrator
appointed by the other party shall act as sole arbitrator as if appointed by
both parties. In the event that the two arbitrators so chosen by the parties
fail to appoint a third arbitrator within the ten (10) day period hereinbefore
limited, then either party may apply to a judge of the Ontario Court (General
Division) at Toronto to appoint such third arbitrator. The arbitrator or
arbitrators, as the case may be, shall have all the powers given by The
Arbitrations Act (Ontario) to arbitrators and may at any time and from time to
time proceed in such manner as he or they may think fit on such notice as he or
they may deem reasonable and after notice in the absence of either party. The
award and determination of the arbitrator or a majority of the arbitrators shall
be final and binding and each party agrees not to appeal from any such award or
determination. The cost of such arbitration shall be in the discretion of the
arbitrator. In all other respects such arbitration shall be governed by The
Arbitration Act, R.S.O. 1980 as amended.
(c) Right to Renew
--------------
NIL
(d) Lessor's Warranties
-------------------
The Lessor warrants and represents to the Lessee that to
the best of its knowledge and belief the structure and the roof of the Building
are in good repair, and the HVAC, electrical and mechanical systems serving the
Premises are fully operational and free from potential defect, normal wear and
tear excepted, as of the date set for occupancy.
The Lessor further warrants that to the best of its
knowledge, the Lands do not contain nor have they ever contained lead, asbestos,
PCB's or any other hazardous substance as defined
23
by the Environmental Protection Act of Ontario.
(e) Measurement of Rentable Area
----------------------------
Prior to the Lease commencement date, the Lessor shall provide
to the Tenant confirmation of the measurement of the rentable area of the
Premises from its architect, engineer or designer, and the net rent and
Additional Rent shall be adjusted accordingly, if necessary. It is understood
and agreed that the rentable area of the Premises shall be measured from the
outside of all exterior walls and the centre line of all demising walls.
(f) Expropriation
-------------
If at any time during the Term hereby granted any public body or
paramount authority shall take or expropriate the whole or a portion of the
Premises, then the following provisions shall apply:
(a) Not Materially Affecting Premises
---------------------------------
If such expropriation or compulsory taking does not
materially affect the Lessee's use or enjoyment of the
Premises, then the whole of the compensation awarded for
settlement for the lands, or portion of the Premises so
taken or expropriated, whether fixed by agreement or
otherwise, shall be paid or received by the Lessor, and
the Lessee hereby assigns transfers and sets over unto
the Lessor all the right, title and interest of the
Lessee therein and thereto, and this Lease shall
thereafter continue in effect with respect to the
Premises or such portion thereof as then remains,
without abatement of rent.
(b) Premises Materially Affected
----------------------------
If such expropriation or compulsory taking does
materially affect the Lessee's use or enjoyment of the
Premises, then this Lease shall be deemed to
24
terminate and the Term hereof shall terminate on
the date upon which the expropriating or taking
authority requires possession of the lands so
expropriated or taken, and in such event the Lessor
shall be entitled to receive the entire compensation
awarded or settlement for the land and/or building so
taken or expropriated, whether fixed by agreement or
otherwise, save and except for that portion thereof as
is specifically awarded or allocated in respect of
leasehold improvements or other interests, made by the
Lessee.
(g) Environmental Audit
(i) The Lessor shall have the right to conduct an
Environmental Audit of the Premises at any time and from
time to time throughout the Term.
"Environmental Audit" means a complete review of the
Premises and the environmental practices of the Lessee thereon by the Lessor,
its employees or agents and shall include such visual inspections, interviews
with the Lessee, its employees, servants, or agents, and such soil, air, or
other tests as the Lessor shall, in its sole discretion, deem to be necessary.
"Hazardous Substance" means any substance that requires
special precautions in its storage, collection, transportation, treatment or
disposal to prevent damage to persons or property and includes explosive,
flammable, volatile, radioactive, toxic and pathological waste.
(ii) In the event that the Environmental Audit reveals that
the Lessee is handling any Hazardous Substance in a
manner unsatisfactory to the Lessor in accordance with
first class environmental protection practices, the
Lessor shall give the
25
Lessee ninety (90) days within which to amend its manner
of handling such Hazardous Substances to comply with
first class environmental protection practices and the
manner in which the Lessor indicates such substances
must be handled. The Lessee shall further forthwith
carry out such procedures as are, in the sole opinion of
the Lessor, necessary to correct any damage which may
have been done to any of the Lands and/or Building of
the Lessor or to forestall any damage to any of the
Lands and/or Building of the Lessor which in the opinion
of the Lessor may be created by the unsatisfactory
handling with such Hazardous Substances.
(iii) In the event that the Lessee shall be in default of the
provisions hereof and shall fail to amend its practices
or take such corrective measures as are required
pursuant to subparagraph (ii) hereof within the
aforesaid ninety (90) day period, the Lessor shall have
the right to enter upon the Premises and carry out such
procedures as are, in the sole opinion of the Lessor,
necessary to correct any damage which may have been done
to any of the Lands and/or Building of the Lessor, or to
forestall any damage to any of the Lands and/or Building
of the Lessor which in the opinion of the Lessor may be
created by the unsatisfactory handling of such Hazardous
Substances and the Lessee shall pay to the Lessor on
demand, as Additional Rent, all costs and expenses of
carrying out such procedures. Further, in addition to
and without limiting any other remedies available to the
Lessor, the Lessor may, on seven (7) days notice,
terminate the Lease.
(iv) The Lessee shall pay to the Lessor as Additional
26
Rent, forthwith upon demand, the cost of any
Environmental Audit conducted by the Lessor together
with the costs, if any, to carry out such procedures
required to correct any damage, or forestall any
potential damage to the Lands and/or Building of the
Lessor due to the unsatisfactory handling such Hazardous
Substances by the Lessee.
(v) The Lessee promptly complies with and conforms to the
requirements of all applicable statutes, laws, by-laws,
regulations, ordinances and orders of any governmental
or quasi governmental body having jurisdiction thereover
with respect to the production or odours or other
emissions into the air in or surrounding the Premises,
the Building, or any part thereof.
(vi) If the Lessor shall notify the Lessee that an Obnoxious
Odour is emitting from the Premises, the Lessee shall
forthwith take all necessary actions to eliminate the
Obnoxious Odours or to reduce the level thereof as
aforesaid, then, in addition to and without limiting any
other rights or remedies of the Lessor hereunder, the
Lessor may, upon two (2) days notice to the Lessee,
itself take such actions as it deems necessary to
eliminate the Obnoxious Odours or to reduce the level
thereof. If the Lessor shall have taken such actions,
the Lessee shall forthwith pay to the Lessor, as
Additional Rent, upon demand all costs incurred by the
Landlord together with an amount equal to fifteen
percent (15%) thereof as an administrative and
supervisory fee.
"Obnoxious Odour" means any odour which the Lessor,
acting reasonably shall deem to be an offensive and obnoxious odour.
27
(vii) In the event that any of the actions required to
eliminate the Obnoxious Odours or to reduce level
thereof shall require alterations to the Demised
Premises the provisions of Paragraph 4(b) hereof shall
apply.
(h) Only Agreement
--------------
This Lease constitutes the entire agreement between the Lessor
and Lessee and neither party is bound by any representation, warranty, promise,
agreements or inducement not embodied herein.
(i) Time of the Essence
-------------------
Time shall be of the essence of this agreement save as
herein otherwise specified.
(j) Amendment of Lease
------------------
This Lease may not be modified or amended except by an
instrument in writing signed by the parties hereto or by their successors or
assigns.
(k) Notice
------
Any notice which either of the parties is required or permitted
to give pursuant to any provisions of this Lease may, if intended for the
Lessee, be given by a writing left at the Premises or mailed by prepaid
registered mail addressed to the Lessee at the Premises and if intended for the
Lessor by a writing left at the premises of the Lessor at 0000 Xxxx Xxxxxx,
Xxxxx 0000, Xxxxxxxx, Xxxxxx, X0X xX0, Attention: Xx. Xxx Xxxxxxx or mailed by
prepaid registered mail addressed to the Lessor at the Lessor's said Premises,
and such notice shall be deemed to have been given at the time it was delivered
or on the third business day (excluding Saturday) following the date of mailing
as the case may be. Either party may by notice as aforesaid, from time to time,
change the address for delivery of notice. During any period of
28
interruption of postal service, any notices aforesaid shall be delivered by
hand.
(1) Captions
--------
The captions appearing in this Lease are inserted only as a
matter of convenience and in no way define, limit, construe or describe the
scope or intent of the sections or articles of this Lease nor in any way affect
this Lease or the interpretation or construction of this Lease.
(m) Interpretation
--------------
The words importing the singular number only shall include the
plural and vice versa, and words importing the masculine gender shall include
the feminine gender and words importing persons shall include firms and
corporations and vice versa.
Unless the context otherwise requires, the word "Lessor" and the
"Lessee" wherever used herein shall be construed to include and shall mean
heirs, executors, administrators, successors and/or assigns of the said Lessor
and Lessee respectively.
29
IN WITNESS WHEREOF the parties hereto have hereunto affixed their
respective corporate seals under the hands of their proper signing officers duly
authorized in that behalf.
SIGNED, SEALED AND DELIVERED SPANTER DEVELOPMENTS INC.
In the presence of:
Per: /s/ Xxxxxx Xxxxxxx
------------------
Xxxxxx Xxxxxxx
MIAD SYSTEMS LTD.
Per: /s/ Xxxxxxx Xxxxx
-------------------
Xxxxxxx Xxxxx
30
