1
EXHIBIT 10.24
INDUSTRIAL
LEASE AGREEMENT
0000 XXXXXXX XXXXXX
XXXXXXXXXXX, XXXXXXX
BETWEEN
2725312 CANADA INC.
(THE LANDLORD)
AND
NEW ENGLAND COMPUTER GRAPHICS INC.
(THE TENANT)
LEASE COMMENCEMENT: AUGUST 1, 1997
1
2
TABLE OF CONTENTS
DEFINITIONS.....................................................................1
ADDITIONAL RENT...........................................................1
ALTERATIONS...............................................................1
ARCHITECT.................................................................1
BUILDING..................................................................1
BUSINESS TAX..............................................................2
CAPITAL TAX...............................................................2
CHANGE OF CONTROL.........................................................2
COMMENCEMENT DATE.........................................................2
COMMON AREAS..............................................................2
GROSS RENTABLE AREA.......................................................2
GROSS RENTABLE AREA OF THE BUILDING.......................................2
INCLUDING" AND "INCLUDES".................................................2
INDEMNIFIER...............................................................2
LANDS 3
LEASEHOLD IMPROVEMENTS....................................................3
MORTGAGE..................................................................3
MORTGAGEE.................................................................3
NET RENT..................................................................3
OFFER TO LEASE............................................................3
OPERATING COSTS...........................................................3
PERSON....................................................................4
PREMISES..................................................................4
PROPERTY..................................................................5
PROPORTIONATE SHARE.......................................................5
RENT......................................................................5
RENTAL YEAR...............................................................5
RULES AND REGULATIONS.....................................................5
SALES TAX.................................................................5
STRUCTURAL REPAIRS........................................................5
TAXES 5
TENANT....................................................................5
TERM 5
TRANSFER..................................................................6
TRANSFEREE................................................................6
TERM AND USE....................................................................6
GRANT AND PREMISES........................................................6
TERM......................................................................6
CONSTRUCTION OF PREMISES..................................................6
USE.......................................................................6
TENANT'S COVENANTS AS TO USE AND OCCUPANCY................................6
ENVIRONMENTAL.............................................................7
RENT 7
COVENANT TO PAY...........................................................7
NET RENT..................................................................7
ADDITIONAL RENT...........................................................8
RENTAL DEPOSIT............................................................8
-i-
3
-i-
4
SECURITY DEPOSIT....................................................... 8
PAYMENT OF TAXES AND OPERATING COSTS................................... 8
RENT & ADDITIONAL RENT PAST DUE........................................ 9
NET LEASE.............................................................. 9
UTILITIES.............................................................. 9
HEATING, VENTILATING AND (IF APPLICABLE) AIR-CONDITIONING UNITS........10
MAINTENANCE, REPAIRS AND COMMON AREAS...........................................10
TENANT'S OBLIGATIONS...................................................10
LANDLORD'S OBLIGATIONS.................................................10
APPROVAL OF TENANT'S ALTERATIONS.......................................11
REPAIR WHERE TENANT AT FAULT...........................................11
REMOVAL OF IMPROVEMENTS AND FIXTURES...................................11
LIENS..................................................................12
NOTICE BY TENANT.......................................................12
NO LANDLORD'S LIABILITY................................................12
CONTROL OF PROPERTY BY LANDLORD.................................................12
ALTERATIONS BY LANDLORD................................................12
RIGHT OF EXAMINATION...................................................13
RIGHT TO SHOW PREMISES.................................................13
ENTRY NOT FORFEITURE...................................................13
INSURANCE AND INDEMNITY.........................................................13
TENANT'S INSURANCE.....................................................13
LANDLORD'S INSURANCE...................................................14
INDEMNIFICATION OF THE LANDLORD........................................15
LOSS OR DAMAGE.........................................................15
INCREASE IN INSURANCE PREMIUMS.........................................15
CANCELLATION OF INSURANCE..............................................15
ASSIGNMENT AND SUBLETTING.......................................................16
TRANSFERS..............................................................16
LANDLORD'S RIGHT TO TERMINATE..........................................16
CONDITIONS OF TRANSFER.................................................17
CHANGE OF CONTROL......................................................17
NO ADVERTISING.........................................................17
ASSIGNMENT BY THE LANDLORD.............................................17
DAMAGE, DESTRUCTION AND EXPROPRIATION...........................................17
LANDLORD'S OPTION......................................................17
DAMAGE TO PREMISES.....................................................18
LANDLORD'S PLANS.......................................................18
ARCHITECT'S CERTIFICATE................................................18
DEFAULT................................................................19
DEFAULT AND REMEDIES...................................................19
DISTRESS...............................................................20
-ii-
5
COSTS 20
ALLOCATION OF PAYMENTS.................................................20
SURVIVAL OF OBLIGATIONS................................................20
ADDITIONAL RENT DEEMED RENT............................................20
LANDLORD'S RIGHT TO PERFORM............................................20
STATUS STATEMENT; ATTORNMENT AND SUBORDINATION..................................21
STATUS STATEMENT.......................................................21
SUBORDINATION..........................................................21
ATTORNMENT.............................................................21
EXECUTION OF DOCUMENTS.................................................21
GENERAL PROVISIONS..............................................................21
QUIET ENJOYMENT........................................................21
RULES AND REGULATIONS..................................................21
DELAY 22
OVERHOLDING............................................................22
WAIVER ................................................................22
REGISTRATION...........................................................22
NOTICES................................................................22
SUCCESSORS & ASSIGNS...................................................22
JOINT AND SEVERAL LIABILITY............................................23
CONSENT................................................................23
SIGNS..................................................................23
ACCORD AND SATISFACTION................................................23
OCCUPANCY PERMIT.......................................................23
SCHEDULES..............................................................23
ENTIRE AGREEMENT.......................................................23
SCHEDULE "A" LEGAL DESCRIPTION AND SITE PLAN
SCHEDULE "B" RULES AND REGULATIONS
SCHEDULE "C" SPECIAL PROVISIONS (IF ANY)
-iii-
6
INDUSTRIAL
LEASE AGREEMENT
0000 XXXXXXX XXXXXX
THIS LEASE is dated the 25th day of July, 1997.
BETWEEN: 2725312 CANADA INC. (HEREINAFTER CALLED
THE "LANDLORD")
Xxxxx 000
00 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxx
X0X 0X0
OF THE FIRST PART
AND: NEW ENGLAND COMPUTER (HEREINAFTER CALLED
GRAPHICS, INC. THE "TENANT")
0000 Xxxxxxx Xxxxxx
Xxxx 0
Xxxxxxxxxxx, Xxxxxxx
X0X 0X0
OF THE SECOND PART
1. DEFINITIONS
In this lease and in the schedules attached to this lease:
ADDITIONAL RENT
"Additional Rent" means all sums of money required to be paid by the
Tenant under this lease (except Net Rent).
ALTERATIONS
"Alterations" means all repairs, replacements, alterations or
additions to the Premises by or on behalf of the Tenant.
ARCHITECT
"Architect" means the architect from time to time named by the
Landlord.
BUILDING
"Building" means the industrial building located on the Lands and
municipally known as:
7
0000 XXXXXXX XXXXXX (HEREINAFTER CALLED
THE "BUILDING")
Mississauga, Ontario
BUSINESS TAX
"Business Tax" means all business taxes attributable to the business
of the Tenant or any other occupant of the Premises.
CAPITAL TAX
"Capital Tax" means the amount imputed by the Landlord to the Property
for taxes, rates, duties and assessments imposed from time to time
upon the Landlord and payable by the Landlord on account of the
capital invested in the Property.
CHANGE OF CONTROL
"Change of Control" means, in the case of any corporation or
partnership, the change in the effective control of such corporation
or partnership unless such change occurs as a result of trading in the
shares of a corporation listed on a recognized stock exchange in
Canada or the United States.
COMMENCEMENT DATE
"Commencement Date" means the commencement of the Term under Section
2.2.
COMMON AREAS
"Common Areas" means those areas, facilities, and improvements
designated from time to time by the Landlord for the common use of all
tenants.
GROSS RENTABLE AREA
"Gross Rentable Area" means, with respect to rentable premises in the
Building, the area in square feet of all space in such premises, and
measured from the exterior face of all exterior walls, doors and
windows, to the centre line of partitions separating rentable premises
from each other and to the outside of partitions separating rentable
premises from interior enclosed corridors in the Building (if any).
Such area of rentable premises shall include all areas such as
enclosed vestibules and enclosed or roofed shipping and receiving
areas, whether or not recessed within the boundary line of exterior
walls and a proportionate share of any interior Common Areas, as well
as any mezzanine or second floor space.
GROSS RENTABLE AREA OF THE BUILDING
"Gross Rentable Area of the Building" means the sum of the aggregate
Gross Rentable Area of all premises in the Building which are leased
or designated for lease.
"INCLUDING" AND "INCLUDES"
"Including" and "includes" means, where the context permits,
"including, without limitation" and "includes, without limitation",
respectively.
INDEMNIFIER
"Indemnifier" means the Person, if any, who has executed or agreed to
execute an Indemnity Agreement.
-2-
8
LANDS
"Lands" means the lands situated in the City of Mississauga, Regional
Municipality of Peel in the Province of Ontario, on which the Building
is located, as more particularly described in Schedule "A", as such
lands may be expanded or reduced from time to time.
LEASEHOLD IMPROVEMENTS
"Leasehold Improvements" means leasehold improvements in the Premises
determined according to common law.
MORTGAGE
"Mortgage" means an encumbrance given by the Landlord against the
Landlord's interest in the Lands or Property.
MORTGAGEE
"Mortgagee" means the holder of, or secured party under, any Mortgage.
NET RENT
"Net Rent" means the annual rent payable by the Tenant under Section
3.2.
OFFER TO LEASE
"Offer to Lease" means the agreement between the Landlord and Tenant
with respect to the Premises, dated the 22nd day of July, 1997.
OPERATING COSTS
"Operating Costs" means the total of all costs paid or payable by the
Landlord or by others in maintaining, operating and managing the
Property, calculated as if the Building were 100% occupied by tenants
during the Term including, without limitation and without duplication,
the aggregate of:
the total annual costs of insurance carried in respect of the
Property;
cleaning, snow removal, garbage and waste collection and disposal,
landscaping and parking areas,
lighting, electricity and public utilities servicing the Common Areas
and all utilities not separately metered to tenants;
policing, security and supervision, accounting and auditing, a
reasonable rental value for office space used by on-site
employees, and related expenses;
amounts paid to third parties and salaries of personnel employed to
maintain the Lands and operate and maintain the Building,
including contributions and premiums for fringe benefits,
unemployment insurance, and workers' compensation insurance,
pension plan contributions and uniforms;
the cost of equipment and signs, including Building directory board
and identification and the repair and maintenance thereof;
the cost of building supplies and materials used by the Landlord in
the maintenance and repair of the Common Areas;
-3-
9
all repairs and replacements to and maintenance and operation of the
Building and Common Areas, including the Heating, Ventilating and
Air-Conditioning System ("HVAC"), where applicable, preventative
maintenance and inspection, engineering, service contracts, legal
and consulting services and all repairs and/or replacements
relating to the elevators, if any, located in the Building;
depreciation or amortization of the costs, including repair and
replacement, of the maintenance, cleaning and operating equipment
and facilities, roof, HVAC, master utility meters and all other
fixtures, equipment and facilities that are part of Common Areas
unless they are charged fully in the Rental Year in which they
are incurred, all in accordance with generally accepted
accounting principles;
interest calculated at 2% above the prime rate, announced by the
Landlord's bank, upon the undepreciated or unamortized part of
the costs referred to in (i) above;
Capital Tax;
all costs incurred in contesting or appealing Taxes or related
assessments, including legal, appraisal and other professional
fees, administration and overhead costs; and
a management fee equal to 4% of the net rent and additional rent to
the Landlord, or at the Landlord's option 15% of additional Rent
(Realty Taxes plus Operating Costs)
To the extent that any Operating Costs should be allocated, in the
reasonable opinion of the Landlord, to a particular tenant or group of
tenants, the Landlord may so allocate and the Tenant will pay those
costs, as so allocated.
Operating Costs shall not include:
(a) All amounts which otherwise would be included in Operating
Costs which are recovered by the Landlord from tenants as a
result of any act, omission, default or negligence of such
tenants;
(b) Such of the Operating Costs as are recovered from insurance
proceeds;
(c) Interest on debt and capital retirement of debt;
(d) Tenant inducement payments, leasehold improvement allowances
and rent-free periods, if any, granted to the tenants of the
Building; and
(e) Brokerage fees and commissions and other similar costs
incurred by the Landlord in leasing premises in the Building.
1.2. PERSON
"Person" means any person, firm, partnership or corporation, or any
group or combination of persons, firms, partnerships or corporations.
1.3. PREMISES
"Premises" means the premises leased to the Tenant under Section 2. 1.
1.4. PROPERTY
"Property" means the Lands and Building.
-4-
10
1.5. PROPORTIONATE SHARE
"Proportionate Share" means a fraction which has as its numerator the
Gross Rentable Area of the Premises and as its denominator the Gross
Rentable Area of the Building.
1.6. RENT
"Rent" means the aggregate of Net Rent and Additional Rent.
1.7. RENTAL YEAR
"Rental Year" means a period of 12 consecutive full calendar months,
the first Rental Year beginning on the Commencement Date if such date
is the first day of a calendar month; if not, then the first Rental
Year shall commence upon the first day of the calendar month next
following the month in which the Commencement Date occurs. Each
succeeding Rental Year shall commence upon the anniversary date of the
first Rental Year.
1.8. RULES AND REGULATIONS
"Rules and Regulations" means the rules and regulations under Section
11.2.
1.9. SALES TAX
"Sales Tax" means any sales tax, goods and services tax, value added
tax, or any other tax imposed on the Landlord with respect to Rent, or
in respect of the rental of the Premises, whether characterized as a
sales tax, goods and services tax, value added tax, business transfer
tax or otherwise.
1.10. STRUCTURAL REPAIRS
"Structural Repairs" means repairs to the foundation, wall and roof
support columns, roof joists and the roof deck of the Building.
1.11. TAXES
"Taxes" means all taxes, levies, charges, school and local improvement
rates and assessments whatsoever (including municipal and other
property taxes) assessed or charged against the Property or any part
of it (including Common Areas) or against the Landlord on account of
its ownership of the Property by any lawful taxing authority and
including any amounts assessed or charged in substitution for or in
lieu of any such taxes, but excluding only such taxes as capital gains
taxes, corporate, income, profit or excess profit taxes to the extent
such taxes are not levied in lieu of any of the foregoing against the
Property or the Landlord in respect thereof. Taxes shall in every
instance be calculated on the basis of the Building being assessed as
fully leased and operational.
1.12. TENANT
"Tenant" includes every Person mentioned as Tenant in this lease.
1.13. TERM
"Term" means the term of this lease under Section 2.2 and all renewals
and extensions.
-5-
11
1.14. TRANSFER
"Transfer" means an assignment of this lease or a sublease of any part
of the Premises; any transaction whereby the rights of the Tenant are
transferred or by which any right of use of any part of the Premises
is conferred upon anyone; any encumbrance of this lease or other
arrangement under which either this lease or the Premises become
security; and includes any transaction whatsoever (including
expropriation, receivership proceedings, seizure by legal process and
transfer by operation of law), which has changed the identity of the
Person having lawful use of any part of the Premises.
1.15. TRANSFEREE
"Transferee" means the Person to whom a Transfer is or is to be made.
ARTICLE 2
2. TERM AND USE
2.1. GRANT AND PREMISES
The Landlord leases the Premises to the Tenant for the Term. The
Premises are shown outlined on the site plan attached as Schedule "A"
and are presently known as 0000 XXXXXXX XXXXXX Unit No. 1 of the
Building. The Gross Rentable Area of the Premises is approximately Two
Thousand Nine Hundred and Sixty-Three (2,963) square feet.
2.2. TERM
The Term of this lease is Three (3) years commencing on August 1, 1997
and expiring on July 31, 2000.
2.3. CONSTRUCTION OF PREMISES
(Deleted intentionally)
2.4. USE
The Tenant shall use and occupy the Premises only for the operation of
sales and distribution of computer graphics hardware, software and
related products and for no other purpose. The Tenant, shall comply
with all laws, rules and regulations of authorities and with any
certificate of occupancy. The Tenant shall not use or permit to be
used any part of the Premises for any dangerous, noxious, or offensive
business and will not cause or maintain any nuisance in the Premises
and no machinery shall be used on the Premises which shall cause any
undue vibration in the Premises, and if the Landlord shall complain
that any machinery or operation thereof in the Premises is a nuisance,
the Tenant will immediately cease such nuisance. The Tenant has
satisfied itself that the contemplated use of the Premises complies
with all relevant governmental authorities.
2.5. TENANT'S COVENANTS AS TO USE AND OCCUPANCY
The Tenant shall, at its cost, comply with all provisions of law
including, without limiting the generality of the foregoing, the
requirements of all governmental laws, by-laws or regulations now or
hereafter in force (whether or not same shall require alterations).
The Tenant will further comply with all police, fire, health and
sanitary regulations imposed by any governmental authorities or made
by any insurers.
-6-
12
2.6. ENVIRONMENTAL
(a) The Tenant will not bring upon, permit or use any substance,
defined or designated as a hazardous or toxic waste,
hazardous or toxic material, a hazardous, toxic or
radioactive substance or other similar term, by any
applicable governmental law, regulation, by-law or ordinance
now or hereafter in effect, or any substance or material, the
use or disposition of which is regulated by any such law,
regulation, by-law or ordinance (hereinafter called "Toxic
Materials") in, on or under the Premises or the Lands and the
Tenant will promptly comply with all laws, by-laws and
ordinances, and with all orders, decrees or judgments of
governmental authorities or courts having jurisdiction,
relating to the use, collection, storage, treatment, control,
removal or clean up of Toxic Materials in, on, under the
Premises or the Lands if the Premises or the Lands become
contaminated with Toxic Materials as a result of operations
or activities on the Premises or the Lands or incorporated in
any Leasehold Improvements. The Landlord may, enter upon the
Premises and take such actions and incur such costs to effect
such compliance as it deems advisable and the Tenant shall
reimburse the Landlord on demand for the full amount of all
costs incurred in connection with such compliance.
(b) Indemnity: The Tenant shall indemnify and save harmless the
Landlord, its directors, employees, officers, shareholders
and any other Person for whom it is or they are in law
responsible, from and against all losses, costs, damages,
liabilities, expenses, fees, fines, penalties and charges
whatsoever incurred with respect to or as a result of any
breach by the Tenant of its covenant aforesaid or otherwise
arising out of the use made of the Premises by the Tenant or
any other occupant thereof. The liability of the Tenant shall
not be affected by or limited to contaminants within the
knowledge or control of the Tenant and the Tenant's liability
shall extend to all contaminants on or in the Premises,
Building or Lands created during the Term, no matter how
caused, except those created or caused by the Landlord or
those for whom it is in law responsible. The foregoing
obligations of indemnification and all of the other
obligations of the Tenant under this Section 2.6 shall
survive the expiration or early termination of this lease and
shall remain in full force and effect until complied with.
Failure by the Tenant to comply with its obligations under
this Section 2.6 shall constitute a default under this lease.
If the Tenant fails to comply with any of its obligations
under this Section 2.6, the Landlord may (but shall not be
obliged to) comply with same at the Tenant's sole cost and
the Tenant shall pay such cost, together with an additional
sum of 15% of such cost for the Landlord's overhead, to the
Landlord forthwith on demand.
ARTICLE 3
3. RENT
3.1. COVENANT TO PAY
The Tenant shall pay Rent from the Commencement Date without prior
demand and without any deduction, abatement, set-off or compensation.
If the first or last Rental Year of the Term comprises less than 12
calendar months, then Net Rent and Additional Rent for such Rental
Years shall be pro-rated on a per diem basis, based upon a period of
365 days. The Tenant shall deliver post-dated cheques to the Landlord.
prior to each Rental Year for Net Rent and estimated Additional Rent
as required by the Landlord.
3.2. NET RENT
The Tenant shall pay Net Rent for each year of the Term as set out
below, which shall be payable in each year of the Term in equal
monthly instalments in advance on the first day of each calendar month
of each year of the Term:
-7-
13
RENTAL ANNUAL MONTHLY RATE PER
PERIOD RENTAL RENTAL SQ. FT.
August 1, 1997 to $16,296.50 $1,358,04 $5.50
July 31, 2000
The Landlord may, at its option, re-measure the Gross Rentable Area of
the Premises, with appropriate adjustments being made if necessary, in
which case the Landlord and Tenant shall sign an acknowledgement as to
the revised Gross Rentable Area of the Premises, as well as the
revised Net Rent payable. The decision of the Landlord as to such
re-measurements shall be final and binding.
3.3. ADDITIONAL RENT
Except as otherwise provided in this lease, all Additional Rent shall
be payable by the Tenant to the Landlord within 5 business days after
demand.
3.4. RENTAL DEPOSIT
The Landlord acknowledges receipt of a cheque in the amount of Two
Thousand Two Hundred and Eleven Dollars and Thirty-Six Cents
($2,211.36) from the Tenant, to be applied as a deposit against Rent
accruing due in the first month of the Term.
3.5. SECURITY DEPOSIT
The Landlord acknowledges receipt of a cheque in the amount of Two
Thousand Two Hundred and Eleven Dollars and Thirty-Six Cents
($2,211.36), to be held by the Landlord, without interest, as security
deposit (the "Security") for the performance by the Tenant of the
terms of this lease. In the event of default by the Tenant under this
lease, the Landlord may at its option, without prejudice to any of its
other rights, apply all or part of the Security to compensate it for
any loss as a result of such default. If all or any part of the
Security is so applied, the Tenant shall, on demand, restore the
Security to its original amount. On termination of this lease, if the
Tenant is not then in default, the Security will be returned to the
Tenant. If the Landlord sells its interest in the Premises, it may
deliver the Security to the purchaser, and the Landlord will be
released from any further liability with respect to the Security or
its return to the Tenant.
3.6. PAYMENT OF TAXES AND OPERATING COSTS
(a) The Tenant shall pay to the Landlord the Tenant's
Proportionate Share of Operating Costs.
(b) The Tenant shall pay to the Landlord, when due, all Taxes in
respect of the Premises, including any Taxes charged in
respect of any Common Areas. In addition, the Tenant shall
pay its Proportionate Share of Taxes, if any, separately
charged against Common Areas. The Tenant's obligation to pay
Taxes in respect of the Premises shall be determined on the
basis of a separate xxxx, if available. If the relevant
taxing authority does not issue a separate xxxx for Taxes in
connection with the Premises, then the Tenant's obligation in
respect of Taxes shall be computed by applying the relevant
tax rate to a separate assessment of the Premises, if any. If
there is neither a separate xxxx for Taxes for the Premises
nor a separate assessment of the Premises, then Taxes charged
in respect of the Premises shall be determined by the
Landlord, acting reasonably, on the basis of then current
established principles of assessment used by the relevant
assessing authorities.
(c) Notwithstanding any other provision of this lease, if Taxes
in respect of the Building, Lands or Premises shall be
increased by reason of any installations made in or
alterations made to the Premises, the Tenant shall pay the
entire amount of such increase. If the Tenant designates that
Taxes shall go to support separate schools, the Tenant shall
pay to the Landlord the difference
-8-
14
between the rate for separate and public schools as
Additional Rent, forthwith upon presentation of an invoice
therefor, in addition to the amounts otherwise payable by the
Tenant hereunder.
(d) The Tenant shall pay when due all Business Tax and Sales Tax.
Sales Tax shall be deemed to be a tax and not Additional
Rent, but the Landlord shall have the same remedies as it has
in respect of a default in the payment of Additional Rent.
(e) The Landlord may, at the Tenant's cost, contest any Taxes and
appeal any Tax assessments; withdraw any such contest or
appeal; and agree with the taxing authorities on any
settlement or compromise with respect to Taxes. The Tenant
will co-operate with the Landlord in respect of any such
contest or appeal and will provide the Landlord with all
relevant information, documents and consents required. The
Tenant will not contest any Taxes.
(f) The amount of Taxes and Operating Costs payable to the
Landlord may be estimated by the Landlord for such period
(not to exceed 12 months) as the Landlord determines from
time to time, and the Tenant agrees to pay to the Landlord
the amounts so estimated in equal instalments in advance on
the first day of each month during such period.
Notwithstanding the foregoing, the Landlord may charge the
Tenant for Taxes over 9 months and when bills for all or any
portion of such amounts are received, the Landlord may xxxx
the Tenant for the Tenant's Proportionate Share thereof and
the Tenant shall pay the Landlord such amounts so billed
after crediting against such amount any monthly payments of
estimated Taxes and Operating Costs previously made by the
Tenant.
(g) Within a reasonable period of time after the end of the
period for which estimated payments have been made, the
Landlord shall submit to the Tenant a statement setting forth
the actual amounts payable by the Tenant on account of Taxes
and Operating Costs, with adjustments (if any) to be made
forthwith.
3.7. RENT & ADDITIONAL RENT PAST DUE
If the Tenant fails to pay, when the same is due and payable, any
Rent, such unpaid amount shall bear interest from the due date thereof
to the date of payment at 18% per annum.
3.8. NET LEASE
This lease is a completely carefree net lease to the Landlord, except
as expressly set out in this lease. The Landlord is not responsible
for any expenses of any nature arising from or relating to the
Premises or their use or occupancy, or their contents or the business
carried on therein. The Tenant shall pay all charges of every nature
and kind relating to the Premises except as expressly set out in this
lease.
3.9. UTILITIES
The Tenant shall pay to the Landlord, or as it directs, all gas,
electricity, water, steam and other utility charges applicable to the
Premises as separately metered (which meters the Tenant shall pay for)
or on the basis of the Tenant's Proportionate Share. The Landlord
shall be entitled to allocate to the Premises an additional charge, as
determined by the Landlord's engineer, for any excess supply of
utilities to the Premises. Charges for utilities shall be payable in
equal instalments in advance on the first day of each month.
3.10. HEATING, VENTILATING AND (IF APPLICABLE) AIR-CONDITIONING UNITS
The Landlord warrants that the heating and air-conditioning (if any)
units located in the Premises (the "Units") will be in good working
order on the Commencement Date. The Tenant shall 30 days prior to the
expiration of the Term provide the Landlord with a certificate from a
recognized, reputable heating and air-
-9-
15
conditioning contractor approved by the Landlord, stating that the
Units are in good working order, reasonable wear and tear only
excepted. If such certificate is not provided, the Landlord may use
the Security towards payment for any repairs necessary to put the
Units into good working order. The Tenant shall, throughout the Term,
at its cost, keep in force a maintenance contract for the Units with a
heating and air-conditioning contractor acceptable to the Landlord and
the Tenant shall produce a copy of such contract to the Landlord
within 30 days of the Commencement Date. Notwithstanding the foregoing
the Landlord may, at its option, take out any such preventative
maintenance contract, in which case the Tenant shall pay, as
Additional Rent all costs incurred by the Landlord. The Landlord
acknowledges that, as of the Commencement Date, it will keep in force
the preventative maintenance contract for the Units.
ARTICLE 4
4. MAINTENANCE, REPAIRS AND COMMON AREAS
4.1. TENANT'S OBLIGATIONS
The Tenant covenants that at its cost:
(a) it shall repair, maintain and keep the Premises (including,
without limitation Leasehold Improvements, the Units and all
plate glass) in good condition and repair and in accordance
with all laws, directions, rules and regulations of all
governmental agencies having jurisdiction and without
limitation, will make all repairs and replacements to all of
the Premises, including replacement to all equipment and base
building facilities and all Structural Repairs unless
specifically excepted herein. The Tenant covenants to heat
the Promises to a temperature sufficient to prevent all
pipes, plumbing fixtures and equipment from bursting or
suffering damage;
(b) it shall keep all entrance-ways and all steps and platforms
leading thereto and the Lands clear of all snow, ice and
debris;
(c) it shall repair the Premises according to notice in writing
from the Landlord; and
(d) upon the expiration or earlier termination of the Term, the
Tenant will peaceably surrender and deliver up the Premises
to the Landlord in a good state of repair and maintenance,
excepting only reasonable wear and tear not inconsistent with
the maintenance of the Building.
4.2. LANDLORD'S OBLIGATIONS
The Landlord covenants that it will at its cost make:
(a) structural repairs to the Premises caused by or resulting
from inherent structural defects or weaknesses; and
(b) repairs to be performed by the Landlord pursuant to Section
8.2 to the extent of the insurance proceeds available.
4.3. APPROVAL OF TENANT'S ALTERATIONS
(a) No Alterations shall be made to the Premises without the
Landlord's prior written approval. All Alterations shall be
performed:
(i) by contractors and workmen approved by the Landlord;
(ii) in a good and workmanlike manner;
-10-
16
(iii) in accordance with drawings and specifications
approved by the Landlord;
(iv) in accordance with all applicable laws and
regulations; and
(v) subject to such indemnification against liens as the
Landlord reasonably requires.
The Landlord's reasonable cost of supervising all such work
and to have such plans and specifications reviewed by the
Architect shall be paid by the Tenant.
(b) If any Alterations affect the structure of the Building or
any of the base building systems, such work shall at the
option of the Landlord be performed by the Landlord at the
Tenant's cost as per (a) above, together with a sum equal to
15% of said cost representing the Landlord's overhead.
(c) The Tenant shall not place anything on or make any openings
in the roof without the prior written consent of the
Landlord, which consent may be withheld or given on such
terms as the Landlord may determine. On termination of this
lease, the Tenant shall repair any damage caused to the
Building as a result of having placed anything on or having
made openings in or having attached anything to the roof and
shall restore the roof to its former condition, all to the
satisfaction of the Landlord.
4.4. REPAIR WHERE TENANT AT FAULT
Notwithstanding any other provisions of this lease, if the Building or
any part thereof is damaged as a result of the act or omission of the
Tenant or those for whom it is in law responsible, the cost of the
resulting repairs, plus a sum equal to 15% of such cost representing
the Landlord's overhead, shall be paid by the Tenant to the Landlord.
4.5. REMOVAL OF IMPROVEMENTS AND FIXTURES
All Leasehold Improvements shall immediately upon their placement
become the Landlord's property without compensation to the Tenant.
Except as otherwise agreed by the Landlord in writing, no Leasehold
Improvements or trade fixtures of the Tenant shall be removed from the
Premises either during or at the expiration or sooner termination of
the Term except that:
(a) the Tenant may, during the Term, in the usual course of its
business, remove its trade fixtures in order to replace or
upgrade them, provided that the Tenant is not in default
under this lease; and
(b) the Tenant shall, at the expiration or earlier termination of
the Term, at its cost, remove all of its trade fixtures and
such of the Leasehold Improvements as the Landlord shall
require to be removed, and to restore the Premises to the
Landlord's then current standards for the Building to the
extent required by the Landlord. The Tenant shall at its cost
repair any damage caused to the Building by such removal. If
the Tenant does not remove its trade fixtures as aforesaid,
they shall, at the option of the Landlord, become its
property and may be removed and disposed of by the Landlord
in such manner as it deems advisable.
4.6. LIENS
The Tenant shall promptly pay for all materials supplied and work done
in respect of the Premises so as to ensure that no lien is registered
against the Lands. The Tenant shall discharge any lien within 5
business days from the Landlord's notice, failing which the Landlord
may at its option discharge the same, with all costs, including
solicitor's fees (on a solicitor/client basis) incurred by the
Landlord to be paid by the Tenant to the Landlord within 5 business
days after demand.
-11-
17
4.7. NOTICE BY TENANT
The Tenant shall notify the Landlord of any damage in any part of the
Premises or the Property, which comes to the attention of the Tenant.
4.8. NO LANDLORD'S LIABILITY
The Landlord is not liable for any damage caused to the Tenant by
reason of failure of any equipment or facilities serving the Building
or the Property, interruption or discontinuance of any utility
services or delays in the performance of any work for which the
Landlord is responsible. The Landlord may stop, interrupt or reduce
any services, systems or utilities provided to, or serving, the
Building or the Premises, for the purpose of performing repairs,
alterations or maintenance or to comply with laws or regulations or
binding requirements of its insurers or for causes beyond the
Landlord's reasonable control or as a result of the Landlord
exercising any rights reserved to it pursuant to this lease. The
Landlord shall not be in breach of its covenant for quiet enjoyment or
liable for any loss, costs or damages, whether direct or indirect,
incurred by the Tenant due to any of the foregoing, but the Landlord
shall use reasonable efforts to restore the services, utilities or
systems so stopped, interrupted or reduced.
ARTICLE 5
5. CONTROL OF PROPERTY BY LANDLORD
5.1. ALTERATIONS BY LANDLORD
The Landlord may:
(a) alter, add to, subtract from, construct improvements to,
re-arrange, build additional storeys on and construct
additional facilities in, adjoining or proximate to the
Property;
(b) relocate the facilities and improvements in or comprising the
Property or erected on the Lands;
(c) do such things on or in the Property as required to comply
with any laws, by-laws, regulations, orders or directives
affecting the Lands or any part of the Property; and
(d) do such other things on or in the Property as the Landlord,
in the use of good business judgment determines to be
advisable, provided that notwithstanding anything contained
in this Section 5.1 access to the Premises shall be available
at all times. The Landlord shall not be in breach of its
covenant for quiet enjoyment or liable for any loss, costs or
damages, whether direct or indirect, incurred by the Tenant
due to any of the foregoing.
5.2. RIGHT OF EXAMINATION
The Landlord may at all reasonable times enter the Premises to examine
them and to make such repairs, alterations or improvements thereto as
the Landlord considers necessary. The Landlord reserves to itself the
right to use the exterior walls, the roof, and the right to install,
maintain, use and repair pipes, ducts, conduits, vents, wires and
other installations leading in, through, over, or under the Premises
and for this purpose, the Landlord may take all material into and upon
the Premises which is required therefor. The Tenant shall not unduly
obstruct any pipes, conduits or mechanical or other electrical
equipment so as to prevent reasonable access thereto. The Landlord
shall exercise its rights under this Section 5.2, to the extent
possible in the circumstances, in such manner so as to minimize
interference with the Tenant's use and enjoyment of the Premises.
-12-
18
5.3. RIGHT TO SHOW PREMISES
The Landlord and its agents have the right to enter the Premises at
all reasonable times to show the Premises to prospective purchasers or
Mortgagees and, during the last six months of the Term (or the last
six months of any renewal term if this lease is renewed), to show them
to prospective tenants.
5.4. ENTRY NOT FORFEITURE
No entry into the Premises by the Landlord pursuant to a right granted
by this lease shall constitute a breach of any covenant for quiet
enjoyment, or (except where expressed by the Landlord in writing or
otherwise intended) shall constitute a re-entry or forfeiture.
ARTICLE 6
6. INSURANCE AND INDEMNITY
6.1. TENANT'S INSURANCE
(a) The Tenant will, throughout the Term, at its cost take out
and maintain, in the names of the Tenant, the Landlord, and
the Mortgagee, when applicable, as their respective interests
may appear, the following insurance, which will contain the
Mortgagee's standard mortgage clause and will contain a
waiver of any subrogation rights which the Tenant's insurers
may have against the Landlord and against those for whom it
is in law responsible:
(i) insurance upon all property owned by the Tenant or
for which the Tenant is legally liable, and which is
located in the Premises including, without
limitation, alterations, trade fixtures, and
Leasehold Improvements, as well as inventory in an
amount of at least 90% of the full replacement cost;
with coverage against at least the perils of fire
and standard extended coverage, including sprinkler
leakages (where applicable), flood and collapse;
(ii) broad form boiler and machinery insurance on a
blanket repair and replacement basis with limits for
each accident in an amount of at least 90% of the
full replacement cost of all boilers, pressure
vessels, heating and air-conditioning equipment and
miscellaneous electrical apparatus owned or operated
by the Tenant or by others (other than the Landlord)
on behalf of the Tenant;
(iii) standard business interruption insurance;
(iv) comprehensive general liability insurance, including
personal injury liability, contractual liability,
non-owned automobile liability, employers' liability
and owners' and contractors' protective insurance
coverage with respect to the Premises and the
Tenant's use of the Common Areas. Such policies
shall (1) be written on a comprehensive basis with
inclusive limits of not less than S2,000,000.00 for
bodily injury to any one or more Persons, or
property damage, and such higher limits as the
Landlord, acting reasonably, requires from time to
time; and (2) contain a severability of interests
clause and a cross-liability clause;
(v) Tenant's legal liability insurance for the actual
cash value of the Premises, including loss of use
thereof;
(vi) standard owner's form automobile policy providing
third party liability insurance with $2,000,000.00
inclusive limits, and accident benefits insurance,
covering all licensed vehicles owned or operated by
or on behalf of the Tenant; and
-13-
19
(vii) any other of insurance as the Tenant or the
Landlord, acting reasonably, requires from time to
time in form, in amounts and for insurance risks
against which a prudent tenant would insure.
(b) All policies:
(i) will be taken out with insurers acceptable to the
Landlord, acting reasonably;
(ii) will be in a form satisfactory from time to time to
the Landlord, acting reasonably;
(iii) will be non-contributing with, and will apply only
as primary and not as excess to any other insurance
available to the Landlord or the Mortgagee; and
(iv) will not be invalidated as respects the interests of
the Landlord and of the Mortgagee by reason of any
breach or violation of any warranties,
representations, declarations or conditions
contained in the policies. All policies will contain
an undertaking by the insurers to notify the
Landlord and the Mortgagee in writing by registered
mail at least thirty (30) days before any material
change, cancellation or termination of them.
(c) Certificates of insurance will be delivered to the Landlord
before the Tenant obtains possession of the Premises for any
purpose. Each certificate will contain an acknowledgment, to
be signed by the Tenant's insurers, that the insurers have
read this lease and that they agree to the terms of this
lease. No review or approval of any insurance certificate by
the Landlord diminishes its rights or the Tenant's
obligations in this lease.
(d) If the Tenant fails to take out or keep in force any required
insurance or should any of that insurance not be approved by
the Landlord, and should the Tenant not commence to
diligently rectify (and afterwards to proceed diligently to
rectify) the situation within 48 hours after notice by the
Landlord, the Landlord may, without obligation, effect such
insurance at the Tenant's cost and all costs of the Landlord
will be immediately paid by the Tenant to the Landlord as
Additional Rent, together with a fee of 15% representing the
Landlord's overhead. This right is without prejudice to the
other rights and remedies of the Landlord under this lease.
6.2. LANDLORD'S INSURANCE
The Landlord will carry the following:
(a) insurance on the Building (excluding foundations and
excavations) and the machinery, boilers, and equipment
contained in it and owned by the Landlord (excluding any
property with respect to which the Tenant or other occupants
are required to insure under Section 6.1 or similar Sections)
against damage by fire and extended perils coverage in those
reasonable amounts and with those reasonable reductions that
would be carried by a prudent owner of a reasonably similar
project, having regard to size, age and location, but shall
be insured for the full replacement cost;
(b) comprehensive public liability and property damage insurance
with respect to the Landlord's operations in the Premises, in
the Building and on the Lands, in those reasonable amounts
for personal and bodily injury or death and damage to
property of others; and
(c) those other forms of insurance which the Landlord considers
advisable.
Despite this Section 6.2, and regardless of any contribution by the
Tenant to the costs of insurance premiums, (i) the Tenant is not
relieved of any liability arising from or contributed to by its
negligence or its willful act or omissions, and (ii) no insurable
interest is conferred upon the Tenant under any policies of
-14-
20
insurance carried by the Landlord and the Tenant has no right to
receive any proceeds of any such insurance policies.
6.3. INDEMNIFICATION OF THE LANDLORD
Notwithstanding any other provision of this lease, the Tenant shall
indemnify the Landlord and save it harmless from and against any and
all loss (including loss of Rent), claims, actions, damages, liability
and expense in connection with loss of life, personal injury, damage
to property or any other loss or injury whatsoever arising from or out
of this lease, or any occurrence in, upon or at the Premises, or the
occupancy or use by the Tenant of the Premises or any part thereof, or
occasioned wholly or in part by any act or omission of the Tenant or
by anyone permitted to be on the Premises by the Tenant. If the
Landlord shall, without fault on its part, be made a party to any
litigation commenced by or against the Tenant, then the Tenant shall
protect, indemnify and hold the Landlord harmless and shall pay all
expenses and reasonable legal fees incurred (on a solicitor/client)
basis or paid by the Landlord in connection with such litigation. The
Tenant shall also pay all expenses and legal fees (on a
solicitor/client basis) that may be incurred or paid by the Landlord
in enforcing the terms of this lease, unless a court shall decide
otherwise.
6.4. LOSS OR DAMAGE
The Landlord shall not be liable for any death or injury arising from
or out of any occurrence in, upon, at or relating to the Property or
damage to property of the Tenant or of others located on the Premises
or elsewhere in the Property, nor shall it be responsible for any loss
of or damage to any property of the tenant or others from any cause,
whether or not any such death, injury, loss or damage results from the
negligence of the Landlord, its agents, employees, contractors, or
others for whom it may, in law, be responsible. Without limitation,
the Landlord shall not be liable for any injury or damage to Persons
or property resulting from any cause whatsoever. All property of the
Tenant shall be so kept at the risk of the Tenant only and the Tenant
releases and agrees to indemnify the Landlord and save it harmless
from any claims arising out of any damage to the same, including any
subrogation claims by the Tenant's insurers.
6.5. INCREASE IN INSURANCE PREMIUMS
No article shall be kept in the Premises which is prohibited by any
insurance policy against the Building. If anything is done in the
Building which increased the insurance with respect to the Building,
the Tenant shall pay any such increase in premium. In determining
whether increased premiums result from the use of the Premises, a
schedule issued by the Landlord's insurer shall be final and binding.
6.6. CANCELLATION OF INSURANCE
If any insurance policy upon the Building or any part thereof shall be
cancelled or threatened to be cancelled or the coverage thereunder
reduced by reason of the use of the Premises, and if the Tenant fails
to remedy such condition within 48 hours after notice, the Landlord
may, at its option, at the Tenant's cost, either:
(a) re-enter the Premises forthwith; or
(b) enter upon the Premises and remedy the condition giving rise
to such cancellation, threatened cancellation or reduction.
The Landlord shall not be liable for any damage or injury caused to
any property located on the Premises as a result of any such entry.
-15-
21
ARTICLE 7
7. ASSIGNMENT AND SUBLETTING
7.1. TRANSFERS
The Tenant shall not permit any Transfer without the prior written
consent of the Landlord, which consent shall not be unreasonably
withheld, but shall be subject to the Landlord's rights under Section
7.2. Notwithstanding any statutory provision to the contrary, the
Landlord may take into account the following factors in deciding
whether to grant or withhold its consent:
(a) whether such Transfer is breach of any covenants or
restrictions made or granted by the Landlord;
(b) whether in the Landlord's opinion, the financial background,
business history and capability of the proposed Transferee is
satisfactory; and
(c) if the Transfer is to an existing tenant of the Landlord.
Consent by the Landlord to any Transfer if granted shall not
constitute a waiver of the necessity for such consent to any
subsequent Transfer. This prohibition against Transfer shall include a
prohibition against any Transfer by operation of law and no Transfer
shall take place by reason of the failure of the Landlord to give
notice as required by Section 7.2.
7.2. LANDLORD'S RIGHT TO TERMINATE
If the Tenant intends to effect a Transfer, the Tenant shall give
written notice to the Landlord specifying the identity of the proposed
Transferee and provide such financial, business or other information
relating to the Transferee and its principals as the Landlord
requires, together with copies of any Transfer documents. The Landlord
shall, within 30 days after having received such notice and all
requested information, notify the Tenant either that:
(a) it consents or does not consent to the Transfer; or
(b) it elects to cancel this lease as to the whole or part, as
the case may be, of the Premises affected by the proposed
Transfer, in preference to giving such consent.
If the Landlord elects to terminate this lease, it shall stipulate in
its notice the termination date, which date shall be no less than 30
days nor more than 90 days following the giving of such notice of
termination. If the Landlord elects to cancel this lease, the Tenant
may notify the Landlord within 10 days thereafter of the Tenant's
intention either to refrain from such Transfer or to accept the
cancellation. If the Tenant fails to deliver such notice within such
period of 10 days or notifies the Landlord that it accepts the
Landlord's termination, this lease will as to the whole or affected
part of the Premises, as the case may be, be terminated on the date of
termination stipulated by the Landlord in its notice. If the Tenant
advises the Landlord it intends to refrain from such Transfer, then
the Landlord's election to terminate this lease shall become void in
such instance.
7.3. CONDITIONS OF TRANSFER
(a) Any consent by the Landlord shall be subject to the Tenant
and Transferee executing an agreement with the Landlord
agreeing that the Transferee will be bound by all of the
terms of this lease as if such Transferee had originally
executed this lease as tenant.
(b) Notwithstanding any Transfer, the Tenant shall be jointly and
severally liable with the Transferee under this lease and
shall not be released from performing any of the terms of
this lease.
-16-
22
(c) If the net rent and additional rent to be paid by the
Transferee exceeds the Net Rent and Additional Rent, such
excess shall be paid to the Landlord. If the Tenant receives
from any Transferee, either directly or indirectly, any
consideration other than rent or additional rent for such
Transfer, the Tenant shall forthwith pay to the Landlord such
consideration.
(d) The Tenant will pay all legal costs and the Landlord's
administration fee to review or prepare any Transfer
documents.
(e) The Landlord's consent to any Transfer shall be subject to
the condition that if the net rent and additional rent
payable by the Transferee shall not be less than the Net Rent
and Additional Rent payable by the Tenant under this lease as
at the effective date of the Transfer.
7.4. CHANGE OF CONTROL
If the Tenant is at any time a corporation or partnership, any actual
or proposed Change of Control in such corporation or partnership shall
be deemed to be a Transfer and subject to all of the provisions of
this Article 7. The Tenant shall make available to the Landlord or its
representatives all of its corporate or partnership records, as the
case may be, for inspection at all reasonable times, in order to
ascertain whether there has been any Change of Control.
7.5. NO ADVERTISING
The Tenant shall not advertise or permit to be advertised that the
Premises are available for Transfer unless the complete text of any
such advertisement is first approved in writing by the Landlord. No
such advertisement shall contain any reference to the rental rate of
the Premises.
7.6. ASSIGNMENT BY THE LANDLORD
The Landlord shall have the unrestricted right to sell, lease, convey
or otherwise dispose of the Property or any part thereof and this
lease, including the right to mortgage this lease. To the extent that
the purchaser or assignee from the Landlord assumes the obligations of
the Landlord under this lease, the Landlord shall thereupon and
without further agreement be released of all liability under this
lease.
ARTICLE 8
8. DAMAGE, DESTRUCTION AND EXPROPRIATION
8.1. LANDLORD'S OPTION
If the Premises are at any time damaged or destroyed as a result of
fire or other perils in respect of which the Landlord is required to
insure against, and if as a result of such occurrences:
(a) 50% or more of the Premises are rendered wholly unfit for
occupancy;
(b) the cost of repairing or rebuilding the Premises exceeds 25%
or more of the replacement cost thereof; and
(c) in the opinion of the Architect the Premises cannot be
repaired with reasonable diligence within 180 days of the
happening of such damage or destruction.
Then, in each case, the Landlord may, at its option and upon notice to
the Tenant, terminate this lease. In such event, this lease shall
terminate as of the date of such damage or destruction and the Rent
shall be apportioned and paid in full to the date of termination. The
Tenant will execute whatever documents may
-17-
23
be required by the Landlord in order that all proceeds of insurance
relating to the Leasehold Improvements shall be released to the
Landlord.
8.2. DAMAGE TO PREMISES
If the Landlord does not elect to terminate this lease in accordance
with Section 8.1, then the Landlord shall commence with all reasonable
diligence to repair the Premises to the extent only of its obligations
under this lease and exclusive of any work performed in and to the
Premises by or on behalf of the Tenant (the "Landlord's Work of
Reconstruction"). The Tenant will execute whatever documents may be
required by the Landlord in order that all proceeds of insurance
relating to the Leasehold Improvements shall be released to the
Landlord. From the date of the happening of such damage or destruction
and until the completion of the Landlord's Work of Reconstruction, the
Net Rent shall xxxxx:
(a) in its entirety if, in the opinion of the Architect, the
Premises are rendered wholly untenantable, or
(b) proportionately (to the portion of the Premises rendered
untenantable), if in the opinion of the Architect, the
Premises are rendered untenantable only in part, subject, in
either case, to the extent of the insurance proceeds actually
received by the Landlord.
8.3. LANDLORD'S PLANS
If the Landlord elects to repair the Premises, the Landlord shall be
entitled to use plans and specifications and working drawings in
connection therewith other than, but similar to those used in the
original construction of the Premises.
8.4. ARCHITECT'S CERTIFICATE
The decision of the Architect as to:
(a) the time within which the Premises can or cannot be repaired;
(b) the extent of the damage or destruction to the Premises;
(c) the cost of repairing the Premises; and
(d) the date on which the Landlord's Work of Reconstruction is
completed;
shall, in each case, be final and binding upon the parties hereto.
ARTICLE 9
9. DEFAULT
9.1. DEFAULT AND REMEDIES
If and whenever:
(a) any Net Rent is in arrears whether or not any demand for
payment has been made by the Landlord;
(b) any Additional Rent is in arrears and is not paid within 5
days after written demand by the Landlord;
-18-
24
(c) the Tenant has breached any of its obligations in this lease
(other than the payment of Rent) and the Tenant fails to
remedy such breach within 15 days (or such shorter period as
may be provided in this lease) or if such breach cannot
reasonably be remedied within 15 days or such shorter period,
the Tenant fails to commence to remedy and thereafter proceed
diligently to remedy such breach, in each case after notice
in writing from the Landlord;
(d) the Tenant or any Indemnifier becomes bankrupt or insolvent
or takes the benefit of any statute for bankrupt or insolvent
debtors or makes any proposal, assignment or arrangement with
its creditors, or any steps are taken or proceedings
commenced by any Person for the dissolution, winding-up or
other termination of the Tenant's existence or the
liquidation of its assets;
(e) a trustee, receiver, receiver/manager or like Person is
appointed with respect to the business or assets of the
Tenant or any Indemnifier;
(f) the Tenant makes a sale in bulk of all or a substantial
portion of its assets other than in conjunction with a
Transfer approved by the Landlord;
(g) this lease or any of the Tenant's assets are taken under a
writ of execution;
(h) the Tenant purports to make a Transfer not in compliance with
this lease;
(i) the Tenant abandons or attempts to abandon the Premises or
disposes of its goods so that there would not after such
disposal be sufficient goods of the Tenant on the Premises
subject to distress to satisfy Rent for at least 3 months, or
the Premises become vacant and unoccupied for a period of 5
consecutive days or more without the consent of the Landlord;
or
(j) any of the Landlord's policies of insurance with respect to
the Building or any part thereof are actually or threatened
to be cancelled or adversely changed as a result of any use
or occupancy of the Premises;
then without prejudice to any other rights which it has pursuant to
this lease or at law, the Landlord shall have the following rights and
remedies, which are cumulative and not alternative:
(i) to terminate this lease;
(ii) to enter the Premises as agent of the Tenant and to
relet the Premises for whatever term, and on such
terms as the Landlord in its discretion may
determine and to receive the Rent therefor and as
agent of the Tenant to take possession of any
property of the Tenant on the Premises, to store
such property at the expense and risk of the Tenant
or to sell or otherwise dispose of such property in
such manner as the Landlord may see fit without
notice to the Tenant;
(iii) to remedy or attempt to remedy any default of the
Tenant under this lease for the account of the
Tenant and to enter upon the Premises for such
purposes;
(iv) to recover from the Tenant all damages and expenses
incurred by the Landlord as a result of any breach
by the Tenant including, if the Landlord terminates
this lease, any deficiency between those amounts
which would have been payable by the Tenant for the
portion of the Term following such termination and
the net amounts actually received by the Landlord
during such period of time with respect to the
Premises; and
(v) to recover from the Tenant the full amount of the
current month's Rent together with the next 3
months' instalments of Rent; all of which shall
accrue on a day-to-day basis and shall immediately
become due and payable as accelerated Rent.
-19-
25
9.2. DISTRESS
Notwithstanding any provision of this lease or any provision of
applicable legislation, none of the goods of the Tenant on the
Premises at any time during the Term shall be exempt from levy by
distress for Rent in arrears, and the Tenant waives any such
exemption. If the Landlord makes any claim against the goods and
chattels of the Tenant by way of distress, this provision may be
pleaded as an estoppel against the Tenant in any action brought to
test the right of the Landlord to levy such distress.
9.3. COSTS
The Tenant shall pay to the Landlord on demand all costs incurred by
the Landlord, including lawyers' fees, on a solicitor/client basis,
incurred by the Landlord in enforcing any of the obligations of the
Tenant under this lease.
9.4. ALLOCATION OF PAYMENTS
The Landlord may at its option apply sums received from the Tenant
against any amounts due and payable by the Tenant under this lease in
such manner as the Landlord sees fit.
9.5. SURVIVAL OF OBLIGATIONS
All obligations of the Tenant under this lease which remain
unfulfilled at the determination of this lease and the Landlord's
rights in respect of any failure by the Tenant to perform any of its
obligations under this lease shall survive and remain in full force
and effect notwithstanding the expiration or earlier termination of
the Term.
9.6. ADDITIONAL RENT DEEMED RENT
All Additional Rent shall be deemed to be rent and the Landlord shall
have all rights against the Tenant for default in the payment of
Additional Rent as for default in the payment of Net Rent, except as
otherwise herein provided.
9.7. LANDLORD'S RIGHT TO PERFORM
In additional to all other remedies the Landlord may have by this
lease, at law or in equity, if the Tenant does not perform any of its
obligations hereunder, the Landlord may, at its option, but without
any obligation, perform any of such obligations of the Tenant, after 5
days' notice to the Tenant or in the event of an emergency, without
notice, and in such event, the cost of performing any of such
obligations, plus an administrative charge of 15% of such cost, shall
be payable by the Tenant to the Landlord forthwith on demand.
ARTICLE 10
10. STATUS STATEMENT; ATTORNMENT AND SUBORDINATION
10.1. STATUS STATEMENT
Within 10 days after written request by the Landlord, the Tenant shall
deliver to the Landlord, in a form supplied by the Landlord, a
certificate as to the status of this lease, the amount of Rent then
being paid and the dates to which it has been paid and any other
matters pertaining to this lease as to which the Landlord shall
request such certificate.
-20-
26
10.2. SUBORDINATION
This lease and all rights of the Tenant shall be subject and
subordinate to any and all Mortgages from time to time in existence
against the Property or any part thereof. On request, the Tenant shall
subordinate this lease and its rights under the lease to any and all
Mortgages and to all advances made under such Mortgages. The form of
such subordination shall be made as required by the Landlord or any
Mortgagee.
10.3. ATTORNMENT
The Tenant shall promptly on request attorn to any Mortgagee, or to
the registered owners of the Property, or the lessee under any lease
of all or substantially all of the Property made by the Landlord or
otherwise affecting the Property, or the purchaser on any foreclosure
or sale under proceedings taken under any Mortgage, and shall
recognize such Mortgagee, owner, lessee or purchaser as the Landlord
under this lease.
10.4. EXECUTION OF DOCUMENTS
The Tenant irrevocably constitutes the Landlord the agent and attorney
of the Tenant for the purposes of executing any agreement,
certificate, attornment or subordination required by this lease and
for registering postponements in favour of any Mortgagee if the Tenant
fails to execute such documents within 10 days after request by the
Landlord.
ARTICLE 11
11. GENERAL PROVISIONS
11.1. QUIET ENJOYMENT
If the Tenant pays Rent and fully observes and performs all of its
obligations under this lease, the Tenant shall, subject to the
provisions of this lease, be entitled to peaceful and quiet enjoyment
of the Premises for the Term without interruption or interference by
the Landlord or any Person claiming through the Landlord.
11.2. RULES AND REGULATIONS
The Tenant shall comply with all Rules and Regulations, and amendments
to them, adopted by the Landlord - from time to time including those
set out in Schedule "B", so long as such Rules and Regulations are not
inconsistent with and do not contradict this lease. The Rules and
Regulations may differentiate between different types of businesses in
or other tenants or users of the Building and the Landlord shall not
be responsible to the Tenant for any non-observance of such Rules or
Regulations by any other tenant of the Building.
11.3. DELAY
Except as expressly provided in this lease, whenever the Landlord or
Tenant is delayed in the fulfillment of any obligation under this
lease, other than the payment of Rent, by an unavoidable occurrence
which is not the fault of the party delayed in performing such
obligation, then the time for fulfillment of such obligation shall be
extended during the period in which such circumstances operate to
delay the fulfillment of such obligation.
11.4. OVERHOLDING
If the Tenant remains in possession of the Premises without the
Landlord's consent after the end of the Term, there shall be no tacit
renewal of this lease or the Term, and the Tenant shall be deemed to
be occupying the Premises as a Tenant from month to month at a monthly
net rent equal to twice the monthly
-21-
27
amount of Net Rent payable during the last month of the Term, and
otherwise upon the same terms as set out in this lease, if applicable
to a monthly tenancy.
11.5. WAIVER
If either the Landlord or Tenant excuses or condones any default by
the other of any obligation under this lease, this shall not be a
waiver of such obligation in respect of any continuing or subsequent
default and no such waiver shall be implied.
11.6. REGISTRATION
Neither the Tenant nor anyone claiming under the Tenant shall register
this lease or any Transfer without the prior written consent of the
Landlord. If the Tenant or any permitted Transferee wishes to register
a document, then the Landlord shall at the request and expense of the
Tenant execute a notice lease in such form as approved by the Landlord
and without disclosure of any terms which the Landlord does not desire
to have disclosed. If the Lands comprise more than one parcel of land,
the Landlord may direct the Tenant or Transferee as to the parcel or
parcels against which registration may be effected.
11.7. NOTICE
Any notice, consent or other instrument which may be or is required to
be given under this lease shall be in writing and shall be delivered
in person or sent by registered mail postage prepaid addressed, if to
the Landlord, at 00 Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxx, X0X
0X0; and if to the Tenant, at the Premises. Any such notice or other
instrument shall be deemed to have been given and received on the day
upon which personal delivery is made or, if mailed, 3 business days
following the date of mailing. Either party may give notice to the
other of any change of address and, after the giving of such notice,
the address so specified shall be used for the giving of notices. If
postal service is interrupted or substantially delayed, all notices or
other instruments shall be delivered in person.
11.8. SUCCESSORS & ASSIGNS
The rights and liabilities created by this lease extend to and bind
the successors and assigns of the Landlord and the permitted
successors and assigns of the Tenant. No rights, however, shall enure
to the benefit of any Transferee unless the provisions of Article 7
are complied with.
11.9. JOINT AND SEVERAL LIABILITY
If there is at any time more than one Tenant or more than one Person
constituting the Tenant, their covenants shall be considered to be
joint and several and shall apply to each and every one of them. If
the Tenant is or becomes a partnership, each Person who is a member,
or shall become a member, of such partnership or its successors shall
be and continue to be jointly and severally liable for the performance
of all covenants of the Tenant pursuant to this lease, whether or not
such Person ceases to be a member of such partnership or its
successor.
11.10. CONSENT
Whenever in this lease the consent or approval of the Landlord is
required, such consent or approval will not be unreasonably withheld
or delayed unless specifically stated to the contrary.
11.11. SIGNS
The Tenant will not paint, fix, display, or cause to be painted, fixed
or displayed, any sign, picture, advertisement notice, lettering or
decoration on any part of the exterior or the interior of the
Premises, except with the written permission of the Landlord,
consistent with the Landlord's sign criteria. The
-22-
28
Tenant shall cause such sign to be installed: (i) in compliance with
all requirements of all governmental -authorities having jurisdiction
with respect thereto; (ii) at the sole cost of the Tenant; (iii) in a
good and workmanlike manner, and (iv) in accordance with plans and
specifications that comply with the Landlord's reasonable regulations.
The sign shall be maintained by the Tenant at its sole cost and
expense and the Tenant shall pay for any electricity consumed by such
sign.
At the expiration or earlier termination of the Term, the Tenant shall
remove any such signs or other advertising material, as aforesaid,
from the Premises at the Tenant's expense and shall promptly repair
all damage caused by any such installation or removal.
11.12. ACCORD AND SATISFACTION
No payment by the Tenant or receipt by the Landlord of a lesser amount
than the monthly Rent herein stipulated shall be deemed to be other
than on account of the earliest stipulated rent, nor shall any
endorsement or statement on any cheque or any letter accompanying any
cheque or payment as rent be deemed an accord and satisfaction, and
the Landlord may accept such cheque or payment without prejudice to
the Landlord's right to recover the balance of such rent or pursue any
other remedy provided for in this lease.
11.13. OCCUPANCY PERMIT
The Tenant shall, at its own cost, be responsible to apply to the City
in which the Lands are located for an Occupancy Permit, upon
possession of the Premises, if required by such City.
11.14. SCHEDULES
The parties agree that Schedules "A", "B", "C" annexed hereto form
part of this Lease and any provisions thereof shall be enforceable in
the same manner as the provisions of this Lease.
11.15. ENTIRE AGREEMENT
This lease and the schedules and riders, if any, attached set forth
the entire agreement between the Landlord and Tenant concerning the
Premises. There are no agreements or understandings between them other
than as set out in this lease. This lease and its schedules and
riders, if any, may not be modified except by agreement in writing
executed by the Landlord and Tenant.
IN WITNESS WHEREOF the Landlord and Tenant have signed this lease.
The Landlord:
2725312 CANADA INC.
Per:/s/ [Illegible]
-------------------------
(Authorized Signatory)
Per:/s/ [Illegible] c/s
-------------------------
(Authorized Signatory)
-23-
29
The Tenant:
NEW ENGLAND COMPUTER GRAPHICS INC.
Per:/s/ Xxxxx X. Boston, President
-----------------------------------------------
(Authorized Signatory)
Per:
----------------------------------------------- c/s
(Authorized Signatory)
I/We have authority to bind the Corporation.
-24-
30
SCHEDULE "A"
LEGAL DESCRIPTION AND SITE PLAN
Legal Description:
ALL AND SINGULAR that certain tract of land and premises situate, lying and
being in the City of Mississauga, in the Regional Municipality of Peel and
being composed of the whole of Lot 1 according to a Plan registered in the Land
Registry Office for the Land Titles Division of Peel as Number 43M-720.
The Tenant acknowledges that the purpose of this Schedule is solely to show the
approximate location of the Premises and it is not intended to be a
representation or warranty as to the exact location thereof.
[Graphic depiction of 0000 Xxxxxxx Xxxxxx omitted]
31
SCHEDULE "B"
RULES AND REGULATIONS
1. The Tenant shall not do or permit anything to be done in the Premises,
or bring or keep anything therein which will in any way increase the
risk of fire or the rate of fire insurance on the Premises or on
property kept therein, or obstruct- or interfere with the rights of
other tenants or in any way injure or annoy them, or violate or act at
variance with the laws relating to fires or with the regulations of
the Fire Department or any governmental authority, or with any
insurance upon the Premises, or violate or act in conflict with any
statutes, rules and ordinances governing health standards or with any
other statute or municipal bylaw.
2. No inflammable oils or other inflammable, dangerous or explosive
materials save those approved in writing by the Landlord's insurers
shall be kept or permitted to be kept in the Premises.
3. The Tenant shall not place or maintain any supplies, inventory,
equipment or other articles or things of any kind whatsoever anywhere
exterior to the Building and shall not use any portion of the Lands
for outside storage.
4. The Tenant shall not allow any accumulation of debris, garbage, trash
or refuse either in or outside of the Premises or Building or on the
Lands and all of same shall be kept in appropriate vermin-proof
containers until removed. All garbage, trash, rubbish and refuse shall
be removed by the Tenant at its expense on a regular basis. If the
Tenant uses perishable articles or generates wet garbage, the Tenant
shall provide refrigerated storage facilities suitable to the
Landlord.
5. The Tenant shall maintain the Premises free of insects, rodents,
vermin and other pests and shall, if required at any time by the
Landlord, take out and maintain at its expense an appropriate pest and
vermin control contract with respect to the Premises with a person or
corporation duly qualified to perform such services.
6. The Tenant shall not cause or permit: any waste or damage to the
Premises; any overloading of the floors or the utility, electrical or
mechanical facilities of the Building; any nuisance in the Premises;
or any use or manner of use causing a hazard.
7. Except for the proper use of blinds and drapes, the Tenant shall not
cover, obstruct or affix any object or material to any of the
skylights or windows of the Premises which will either reflect or
admit light into any part of the Building including, but without
limitation, the application of solar films.
8. The Tenant shall not use or permit the use of any objectionable
advertising medium such as, but without limitation, loudspeakers,
phonographs, public address systems, sound amplifiers, radio broadcast
or television apparatus on the Premises which is in any manner audible
or visible outside of the Building.
9. The Tenant shall not permit or allow any odours, vapour, steam, water,
vibrations, noises or other undesirable effects to emanate from the
Premises or any equipment or any installation in the Premises which in
the Landlord's opinion are objectionable or cause any interference
with the safety, comfort or convenience of the Building to the
Landlord or the occupants or tenants thereof or their agents,
servants, invitees or employees.
10. The Tenant shall not mount or place an antenna of any nature on the
exterior of the Building or on the Lands.
11. The Tenant shall not deface or xxxx any part of the Building and shall
not make unreasonable use of nails, spikes, hooks or screws in the
walls, floors, ceilings or woodwork of any part of the Building or
bore, drill or cut into the walls, floors, ceilings or woodwork of any
part of the Building in any manner.
32
12. If the Tenant requires telegraphic or telephonic connections the
Landlord, in its discretion, may direct the electricians as to where
and how wires are to be introduced into the Building. No gas pipes or
electric wiring will be permitted which has not been ordered or
authorized by the Landlord.
13. The water closets and other apparatus shall not be used for any
purpose other than those for which they were intended and no
sweepings, rubbish, rags, ashes or other substances shall be thrown
into them. Any damage resulting from misuse shall be borne by the
Tenant.
14. No-one shall use the Premises for sleeping apartments or residential
purposes or for the storage of personal effects or articles other than
those required for business purposes.
15. No cooking or heating of foods or liquids (other than the heating of
water or coffee in coffee makers or kettles or the heating of food in
a microwave oven) shall be permitted in the Premises without the
written consent of the Landlord.
16. No animals or birds shall be brought into any part of the Building
without the consent of the Landlord.
17. When required by any governmental authority having jurisdiction the
Tenant will provide facilities or accommodation for garbage and waste
and its disposal and pick up in accordance with such requirements.
18. The Tenant shall have the right to use designated portions of the
parking areas on the Lands for the parking of passenger vehicles. Such
parking areas shall be used only for the parking of passenger vehicles
and no part of the parking areas, driveway, shipping areas or other
parts of the Lands except as designated by the Landlord, shall be used
for the storage, repair and washing of trucks, trailers, vans or
similar vehicles. The Landlord shall have no obligation to supervise
police and control the use of the parking areas. The Tenant shall not
park any vehicle or permit any vehicle to be parked overnight at the
Premises unless the occupant of the vehicle is working in the Premises
overnight.
19. All tenants must observe strict care not to allow their windows or
doors to remain open so as to admit rain or snow or so as to interfere
with the heating of the Building. Any injury or damage caused to the
Building or its appointments, furnishing heating and other appliances
or to any other tenant by reason of windows or doors being left open
so as to admit rain or snow or by interferences with or neglect of the
heating appliances or by reason of the tenant or other person or
servant, subject to it, shall be made good by the tenant in whose
premises the neglect, interference or misconduct occurred.
33
SCHEDULE "C"
SPECIAL PROVISIONS
OPTION TO EXTEND
Provided the Tenant has not been in default and is not then in default under
the terms of the lease; New England Computer Graphics Inc. is itself in
occupation of the whole of the Premises; the Tenant has provided written notice
to the Landlord no earlier than 12 months and no later than 5 months prior to
the expiry of the initial Term of its intention to exercise the within option
to extend, then the Tenant shall have a one time only option to extend the
initial Term of the lease for a further period of three (3) years, such
extension to begin upon the expiration of the initial Term and the lease and
all of its terms shall continue in force during such extension except that:
(a) the Tenant shall not be entitled to any further rent-free
period, Landlord's work, or financial inducement;
(b) the Tenant shall not have any further option to extend the Term
following the exercise, if any of the foregoing option to
extend; and
during the extension, the Tenant shall pay a net rent to be agreed upon by the
Landlord and the Tenant prior to the commencement of such extension, based on
the fair market rental rate for comparable premises, calculated in a comparable
manner on a comparable net lease basis for comparable buildings in the vicinity
of the Building. In the event that such rental rate has not been agreed upon by
the parties 3 months prior to the commencement of the extension then the net
rental rate shall be determined by arbitration under the Arbitration Act, 1991
of Ontario, as amended or replaced but, in any event, such net rental rate
shall not be less than the Net Rent payable by the Tenant during the last month
of the initial Term.
Failing written notification to the Landlord in accordance with paragraph 1
above, the foregoing option to extend shall be null and void.
The Landlord may require the Tenant to execute a lease amending agreement or,
at its option, its then standard net industrial lease in effect for the
Building, in order to confirm the terms of the foregoing option to extend.
LANDLORD'S WORK
The Landlord agrees to perform the following work in the Premises:
1. Existing carpet to be steamcleaned.
2. Wall coverings to be spotcleaned where necessary.
3. Any damaged ceiling tiles, missing light lenses and burnt-out lights to
be replaced.
4. Missing or damaged window coverings to be replaced.
NET RENT FREE PERIOD
Notwithstanding anything contained in this Lease to the contrary, the Tenant
shall not be responsible for the payment of Net Rent from August 1, 1997 to
September 30, 1997. For clarity, the Tenant shall be responsible for payment of
Additional Rent during this period. The Net Rent otherwise payable during this
period shall become immediately due and payable upon termination of the lease
pursuant to the terms of Article 9 - Default - of the lease.
34
CONDITIONAL UPON VACANT POSSESSION
This Lease is conditional upon the Landlord obtaining vacant possession of the
Premises on or before 11:59 p.m., July 31, 1997, failing which, this Lease
shall become null and void and the Landlord shall return all deposit monies to
the Tenant without interest or penalty.