ON-Mississauga-5055 Satellite Drive Lease - CIBC Development Corp. and Loyalty Management Group Canada Inc.
OCTOBER 19, 1998
DATED: October 19, 1998.
BETWEEN:
CIBC DEVELOPMENT CORPORATION
- AND -
LOYALTY MANAGEMENT GROUP CANADA INC.
5055 SATELLITE DRIVE
INDUSTRIAL LEASE AGREEMENT
Mississauga, Ontario
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5055 SATELLITE DRIVE, MISSISSAUGA, ONTARIO
INDUSTRIAL LEASE
TABLE OF CONTENTS
ARTICLE I - BASIC LEASE TERMS
Section 1.01 Variable Defined Terms
Section 1.02 Standard Definitions
ARTICLE II - LEASED PREMISES - TERM - RENT
Section 2.01 Leased Premises and Term
Section 2.02 Use of Additional Areas
Section 2.03 Construction of the Leased Premises
Section 2.04 Adjustment of Areas
Section 2.05 Agreement to Pay
Section 2.06 Basic Rent
Section 2.07 Late Payment Charge
Section 2.08 Net Lease
Section 2.09 Acknowledgement of Commencement Date
ARTICLE III - TAXES AND OPERATING COSTS
Section 3.01 Taxes Payable by Landlord
Section 3.02 Tenant's Share of Taxes
Section 3.03 Tenant's Proportionate Share of Operating Costs
Section 3.04 Management Fee
Section 3.05 Tenant's Taxes
Section 3.06 Tenant's Responsibility
Section 3.07 Payment of Estimated Taxes, Operating Costs & Management Fee
ARTICLE IV - COMPLEX - CONTROL AND SERVICES
Section 4.01 Control of the Complex by the Landlord
Section 4.02 Substitution
ARTICLE V - UTILITIES AND ADDITIONAL SERVICES
Section 5.01 Charges for Utilities
Section 5.02 Additional Services of the Landlord
Section 5.03 Third Party Services
ARTICLE VI - USE OF LEASED PREMISES
Section 6.01 Use of the Leased Premises
Section 6.02 Observance of Law
Section 6.03 Energy Conservation
Section 6.04 Odours, Dust or Noise
Section 6.05 Obstructions
Section 6.06 Outside Areas
Section 6.07 Environmental Law
ARTICLE VII - INSURANCE AND INDEMNITY
Section 7.01 Tenant's Insurance
Section 7.02 Increase in Insurance Premiums
Section 7.03 Cancellation of Insurance
Section 7.04 Loss or Damage
Section 7.05 Landlord's Insurance
Section 7.06 Indemnification of the Landlord
Section 7.07 Limitations of Liability
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ARTICLE VIII - MAINTENANCE, REPAIRS AND ALTERATIONS
Section 8.01 Maintenance and Repairs by the Tenant
Section 8.02 Landlord's Approval of the Tenant's Repairs
Section 8.03 Maintenance and Repairs by the Landlord
Section 8.04 Surrender of the Leased Premises
Section 8.05 Repair Where the Tenant is at Fault
Section 8.06 Tenant Not to Overload Facilities
Section 8.07 Tenant Not to Overload Floors
Section 8.08 Removal and Restoration by Tenant
Section 8.09 Notice by the Tenant
Section 8.10 Tenant to Discharge All Liens
Section 8.11 Signs and Advertising
ARTICLE IX - DAMAGE AND DESTRUCTION
Section 9.01 Destruction of the Leased Premises
Section 9.02 Destruction of the Complex
Section 9.03 Abrogation
ARTICLE X - TRANSFER AND SALE
Section 10.01 Assigning and Subletting
Section 10.02 Landlord's Right to Terminate
Section 10.03 Conditions of Transfer
Section 10.04 No Advertising of the Leased Premises
Section 10.05 Corporate Ownership
Section 10.06 Assignment by the Landlord
Section 10.07 Transfer Without Consent
ARTICLE XI - ACCESS AND ALTERATIONS
Section 11.01 Right of Entry
Section 11.02 Right to Show Leased Premises
Section 11.03 Entry Not Forfeiture
Section 11.04 Landlord's Covenant For Quiet Enjoyment
Section 11.05 Inspection
ARTICLE XII - STATUS STATEMENT, ATTORNMENT AND SUBORDINATION
Section 12.01 Status Statement
Section 12.02 Subordination and Attornment
Section 12.03 Attorney
Section 12.04 Financial information
Section 12.05 Acknowledgment of Title
ARTICLE XIII - DEFAULT
Section 13.01 Right to Re-Enter
Section 13.02 Right to Re-Let
Section 13.03 Termination
Section 13.04 Accelerated Rent
section 13.05 Expenses
Section 13.06 Waiver of Exemption from Distress
Section 13.07 Landlord May Cure Tenant's Default or Perform Tenant's
Covenants
Section 13.08 Additional Rent
Section 13.09 Remedies Generally
Section 13.10 Holding Over
Section 13.11 No Waiver
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ARTICLE XIV - MISCELLANEOUS
Section 14.01 Rules and Regulations
Section 14.02 Security Deposit
Section 14.03 Pest Control
Section 14.04 Obligations as Covenants
Section 14.05 Amendments and Supplementary Lease Provisions
Section 14.06 Certificates
Section 14.07 Time
Section 14.08 Successors and Assigns
Section 14.09 Governing Law
Section 14.10 Headings
Section 14.11 Entire Agreement
Section 14.12 Severability
Section 14.13 No Option
Section 14.14 Occupancy Permit
Section 14.15 Place for Payments
Section 14.16 Extended Meanings
Section 14.17 No Partnership or Agency
Section 14.18 Unavoidable Delay
Section 14.19 Registration
Section 14.20 Joint & Several Liability
Section 14.21 Name of Complex
Section 14.22 Changes in Complex
Section 14.23 Compliance with the Planning Act
ARTICLE XV - INDEMNITY AGREEMENT - INTENTIONALLY DELETED
Section 15.01 Indemnity - Intentionally Deleted
Section 15.02 Further Assurances - Intentionally Deleted
SCHEDULES
Schedule "A" - Legal Description of Lands
Schedule "B" - Plan Showing Location of Leased Premises
Schedule "C" - Rules and Regulations
Schedule "D" - Acknowledgement of Commencement Date
Schedule "E" - Supplementary Lease Provisions
1. Tenant's Option to Terminate
2. Tenant's Option to Renew
3. Tenant's First Right to Lease
4. Parking
5. Communications Equipment
6. Access to the Leased Premises
7. Business Days
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5055 SATELLITE DRIVE, MISSISSAUGA
INDUSTRIAL LEASE
ARTICLE 1
BASIC LEASE TERMS
SECTION 1.01 - VARIABLE DEFINED TERMS
In this Lease the following terms will have the following meanings:
(1) "LEASE" means this lease dated the 19TH DAY OF OCTOBER, 1998, and
includes all schedules annexed hereto, as from time to time amended in
writing.
(2) "LANDLORD" - CIBC DEVELOPMENT CORPORATION and its successors and
assigns.
(3) "LANDLORD'S ADDRESS" - Suite 2800, 145 King Street West, Toronto,
Ontario, M5H 3T7 or such other address as is designated by the Landlord
in Canada.
(4) "TENANT" - LOYALTY MANAGEMENT GROUP CANADA INC. and its successors and
permitted assigns.
(5) "TENANT'S ADDRESS" - 4110 YONGE STREET, SUITE 200, TORONTO, ONTARIO,
M2P 2B7, ATTENTION: VICE PRESIDENT, LEGAL SERVICES or such other
address as is designated by the Tenant in Canada.
(6) "INDEMNIFIER" - INTENTIONALLY DELETED.
(7) "INDEMNIFIER'S ADDRESS" - INTENTIONALLY DELETED.
(8) "LEASED PREMISES" - Those premises leased to the Tenant pursuant to
Section 2.01 hereof, cross-hatched on Schedule "B" hereto, being the
part of the building known as 5055 Satellite Drive, Mississauga,
Ontario.
(9) "RENTABLE AREA OF THE LEASED PREMISES" - The Rentable Area of the
Leased Premises being approximately 40,000 square feet of area
determined in accordance with Section 1.02 (21) hereof, and subject to
adjustment in accordance with Section 2.04 hereof.
(10) "BASIC RENT" - Basic Rent per square foot of Rentable Area of the
Leased Premises per annum payable pursuant to Section 2.06 hereof shall
be as follows:
(a) TWELVE DOLLARS AND SEVENTY-FIVE CENTS ($12.75) IN THE FIRST
(1ST) AND SECOND (2ND) YEARS OF THE TERM;
(b) THIRTEEN DOLLARS AND FIFTY CENTS ($13.50) IN THE THIRD (3RD),
FOURTH (4TH) AND FIFTH (5TH) YEARS OF THE TERM;
(c) FOURTEEN DOLLARS AND EIGHTY-FIVE CENTS ($14.85) IN THE SIXTH
(6TH), SEVENTH (7TH) EIGHTH (8TH), NINTH (9TH) AND TENTH
(10TH) YEARS OF THE TERM.
(11) "COMMENCEMENT DATE" - AUGUST 1, 1999 (SUBJECT TO DELAYS AS DESCRIBED
IN PARAGRAPH 27 OF THE AGREEMENT TO LEASE).
(12) "TERM" - TEN (10) YEARS (SUBJECT TO THE PROVISIONS OF PARAGRAPH 1 OF
SCHEDULE "E" OF THIS LEASE), COMMENCING ON THE COMMENCEMENT DATE.
(13) "AGREEMENT TO LEASE" means, COLLECTIVELY, the written agreement to
lease between the Landlord and the Tenant with respect to the Leased
Premises ACCEPTED BY THE LANDLORD AND THE TENANT ON THE 11TH DAY OF
AUGUST, 1998 (THE "OFFER TO LEASE"), AS AMENDED BY AN AMENDING LETTER
DATED THE 2ND DAY OF SEPTEMBER, 1998 (THE "AMENDING LETTER").
(14) "SECURITY DEPOSIT" means the sum of ONE HUNDRED AND FORTY-FIVE THOUSAND
DOLLARS ($145,000.00) + GST (WITH ALL INTEREST ACCRUED THEREON) applied
in accordance with Section 14.02.
(15) "TYPE OF BUSINESS OF THE TENANT" means for the purpose OF GENERAL
BUSINESS OFFICES, INCLUDING AN OUT-BOUND AND IN-BOUND CALL CENTRE AND
EMPLOYEE CAFETERIA, PROVIDED THAT SUCH USE COMPLIES WITH ALL APPLICABLE
BY-LAWS.
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SECTION 1.02 - STANDARD DEFINITIONS
(1) "ADDITIONAL RENT" means all sums of money, other than Basic Rent, which
are required to be paid by the Tenant TO THE LANDLORD pursuant to any
provision of this Lease.
(2) "ADDITIONAL SERVICE" means any service which is requested or required
by or for a tenant (including the Tenant) in addition to those supplied
by the Landlord as part of the normal services provided in the Complex,
and which the Landlord is prepared or elects to supply at an additional
cost to the tenant in question and includes, without limitation,
janitor and cleaning services, the provision of labour and supervision
in connection with deliveries, supervision in connection with the
moving of any furniture or equipment of any tenant, the making of any
repairs or alterations by any tenant and the cost of replacing building
standard electric light fixtures, ballasts, tubes, starters, lamps and
light bulbs not located within Common Facilities.
(3) "ADDITIONAL SERVICE COST" means the additional cost payable by the
Tenant to the Landlord for any Additional Service in accordance with
Section 5.02 hereof.
(4) "ARCHITECT" means the architect, professional engineer or surveyor
named by the Landlord from time to time.
(5) "BANK RATE" means the interest rate per annum as announced by the
chartered bank of the Landlord at the principal office of such bank in
Toronto and reported by it to the Bank of Canada as its prime rate.
(6) "CAPITAL TAX IN RESPECT OF THE COMPLEX" means the aggregate of:
(a) an amount of the tax or excise imposed by the Province of
Ontario upon the Landlord or the owners of the Complex which
is measured by or based in whole or in part upon the capital,
surplus, reserves or indebtedness of such Landlord or owners,
and which is at present based upon the application of the
prescribed rate of 0.3 % to the amount of such Landlord's or
owner's "taxable paid-up capital" as defined in the
Corporations Tax Act (Ontario); the amount of the tax or
excise for the purposes hereof shall be calculated in any year
as if the Complex was the only establishment in the Province
of Ontario owned by such Landlord or owners in the year and
such Landlord or owners had no establishment other than in the
Province of Ontario; and
(b) an amount of the tax or excise imposed by the Government of
Canada upon the Landlord or the owners of the Complex which is
measured by or based in whole or in part upon the capital,
surplus, reserves or indebtedness of the Landlord or the
owners, and which tax is at present based upon the application
of the prescribed rate of .2% to the amount by which the
"taxable capital employed in Canada" by such Landlord or
owners as defined in the Income Tax Act (Canada) exceeds its
capital deduction for the year; the amount of the tax or
excise for the purposes hereof shall be calculated in any year
as if the Complex was the only asset owned by such Landlord or
owners in the year and the capital deduction of such Landlord
or owners for the year was nil.
(7) "COMMON FACILITIES" means those areas and facilities of or for the
Complex which serve or benefit the Complex including, without
limitation, roadways, landscaped areas, sidewalks, public entrance
doors, halls, public lobbies, lavatories, stairways, passageways,
service ramps and Common Use Equipment, and which are designated from
time to time by the Landlord for the common use or enjoyment of the
tenants in the Complex and users of adjacent properties, and their
agents, invitees, servants, employees and licensees, or for use by the
public, but excluding rentable premises in the Complex and other
portions of the Complex which are from time to time designated by the
Landlord ACTING REASONABLY for private use by one or a limited group of
tenants.
(8) "COMMON USE EQUIPMENT " means all mechanical, plumbing, electrical and
heating, ventilating, and air-conditioning equipment, pipes, ducts,
wiring, machinery and equipment and other integral services, utility
connections and the like providing services to the Complex, including
such services to and within rentable premises (it being understood that
any changes to such services made by or on behalf of the Tenant shall
be considered to be Leasehold Improvements).
(9) "COMPLEX" means the Lands and the buildings and other fixed
improvements located thereon and includes all structures and
improvements from time to time thereunder or associated therewith.
(10) "INSURANCE COST" means, for any fiscal period, the total cost to the
Landlord calculated in accordance with generally accepted accounting
principles, for insuring the Complex.
(11) "INSURED DAMAGE" means that part of any damage occurring to the
Complex, including the Leased Premises, of which the entire cost of
repair (except as to any deductible amount provided for in the
applicable policy or policies of insurance) is actually recovered by
the Landlord under a policy or policies of insurance from time to time
effected by the Landlord pursuant hereto, OR WOULD HAVE BEEN
RECOVERABLE BY THE LANDLORD OR ANY ASSIGNEE TO WHOM THE LANDLORD HAS
ASSIGNED
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THE INSURANCE PROCEEDS, ACTING REASONABLY, HAD THE LANDLORD INSURED AS
IT IS REQUIRED BY THIS LEASE.
(12) "LANDS" means the lands described in Schedule "A" attached hereto and
includes other lands designated by the Landlord as part of 5055
Satellite Drive in which the Landlord from time to time has an
interest.
(13) "LEASEHOLD IMPROVEMENTS" means all items generally considered as
leasehold improvements, including, without limitation, all fixtures,
equipment, improvements, installations, alterations and additions from
time to time made, erected or installed by or on behalf of the Tenant,
or any previous occupant of the Leased Premises in the Leased Premises,
and by or on behalf of other tenants in other premises in the Complex,
including all partitions, however affixed and whether or not movable,
and all wall-to-wall carpeting other than carpeting laid over finished
floors and affixed so as to be readily removable without damage and
changes to services which are part of Common Use Equipment; but
excluding trade fixtures, furniture or free-standing partitions and
equipment not of the nature of trade fixtures.
(14) "MANAGEMENT FEE" means a reasonable fee for the administration and
management of the Complex applied to the aggregate of all revenues
received or receivable from the Tenant, which fee shall be comparable
to fees charged by management companies for managing and administering
developments similar to the Complex;
(15) "MORTGAGE" means any instrument hypothec, deed of trust, document or
security interest (resulting from any method of financing or
refinancing) or blanket mortgage pledge or charge (affecting the
Complex as well as other property) now or hereafter secured upon the
Complex or any part thereof, and includes all renewals, modifications,
consolidations, replacements and extensions thereof.
(16) "MORTGAGEE" means the mortgagee, hypothecary or other creditor or
trustee for bondholders or others named in any Mortgage.
(17) "NOTICE" means any notice, statement, consent, approval, demand or
request herein required or permitted to be given by any party to
another pursuant to this Lease and shall be in writing and, if to the
Landlord, addressed to the Landlord at the Landlord's Address, if to
the Tenant, addressed to the Tenant at the Tenant's Address, and if to
the Indemnifier, addressed to the Indemnifier at the Indemnifier's
Address. All Notices shall be hand-delivered and the effective date of
such Notices shall be the date of delivery.
(18) "OPERATING COSTS" means, the total of all expenses, costs, fees,
rentals, disbursements and outlays of every kind paid, payable or
incurred by or on behalf of the Landlord in the complete maintenance,
repair, operation, supervision, replacement and administration of the
Complex, ON A REASONABLE, FAIR AND EQUITABLE BASIS, ACTING AS A
REASONABLE AND PRUDENT ADMINISTRATOR OF A FIRST CLASS INDUSTRIAL
BUILDING LOCATED IN MISSISSAUGA, ONTARIO AND CONFORMING WITH GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES, CONSISTENTLY APPLIED, and a reasonable
amount, as determined by the Landlord from time to time, for all
expenses incurred by or on behalf of tenants in the Complex with whom
the Landlord may from time to time have agreements whereby, in respect
of their premises, those tenants perform any cleaning, maintenance or
other work, utilities or services usually performed or provided by the
Landlord which, if directly incurred by the Landlord, would have been
included in Operating Costs. Without limiting the generality of the
foregoing, Operating Costs shall include, without duplication:
(A) (i) the Insurance Cost;
(ii) the cost of providing security, supervision, life safety
systems, traffic control, landscaping, exterior cleaning and
snow removal services;
(iii) the cost of repairs and replacements to and maintenance of the
Complex in each case in respect of the Common Facilities but
excluding the original capital cost of same AND NET OF AMOUNTS
IN 1.02)(18)(B)(v) AND (vi);
(iv) the cost of hot and cold water, electric light and power,
telephone, steam, gas, sewage disposal and other utilities and
services;
(v) the cost of maintaining and replacing general signs and
directory boards;
(vi) accounting costs incurred in connection with the maintenance,
repair, replacement, operation, administration or management
of the Complex, including computations required for the
imposition of charges to tenants, the cost of preparing
statements and opinions for tenants and banking fees and
expenses and audit fees;
(vii) the cost of performing its obligations under Section 8.03;
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(viii) the fair rental value (HAVING REGARD TO THE RENTALS PREVAILING
AT THE TIME THE SPACE IS ESTABLISHED FOR USE BY THE LANDLORD
FOR A TERM OF FIVE (5) YEARS AND THEREAFTER RENTALS PREVAILING
ON THE BASIS OF TERMS NOT LESS THAN FIVE (5) YEARS) of space
in the Complex used by the Landlord, acting reasonably, in
connection with the maintenance, repair, replacement,
operation, administration or management of the Complex;
(ix) all other indirect expenses to the extent allocable to the
maintenance, repair, replacement, operation, administration or
management of the Complex;
(x) all costs and expenses (including legal and other professional
fees and interest and penalties on deferred payments) incurred
by the Landlord in contesting, resisting or appealing any
Taxes;
(xi) the amount of all salaries, wages and fringe benefits paid to
or for personnel, managers, and superintendents, wherever
located, to the extent that they are employed or retained by
or on behalf of the Landlord in connection with the
maintenance, repair, replacement, operation, administration or
management of the Complex and all amounts paid to independent
contractors for any services in connection with the
maintenance, repair, replacement, operation, administration or
management of the Complex or any part of it;
(xii) fees and expenses of architects, engineers, quantity surveyors
and other consultants retained by the Landlord EXCLUDING FEES
AND EXPENSES RELATING TO THE MEASUREMENT OF THE RENTABLE AREA
OF THE LEASED PREMISES;
(xiii) the costs of uniforms for personnel, and of supplies, tools,
equipment and materials used in connection with the
maintenance, repair, replacement, operation, administration,
management or caretaking of the Complex;
(xiv) amortization of the costs OTHER THAN THE COSTS OF LANDLORD'S
WORK (AS DEFINED IN THE AGREEMENT TO LEASE) incurred to make
alterations, replacements or additions to the Complex intended
to reduce the cost of other items included in Operating Costs,
improve the operation of the Complex or maintain its operation
as a quality industrial complex; costs being amortized will
include, without limitation, costs incurred in respect of
alterations, replacements or additions to the roof and other
machinery, equipment, facilities, decorating, flooring,
systems, and property installed in or used in connection with
the Complex (except to the extent that the costs are charged
fully to income account in the accounting period in which they
are incurred) and interest on the unamortized portion of the
original cost of such items being amortized, payable monthly,
from or after the date on which the relevant cost was incurred
at an annual rate of interest that is one percentage (1%)
point above the Bank Rate in effect from time to time; the
amortization costs and interest charged under this clause
shall be calculated by the Landlord, acting reasonably, in
accordance with sound and generally accepted accounting
principles, but no amortization or interest will be charged in
respect of any such items installed in conjunction with the
original construction of the Complex;
(xv) goods and services taxes, business transfer taxes, value-added
taxes, multi-stage sales taxes, sales, use or consumption
taxes and any like taxes on property and services provided by
or on behalf of the Landlord except to the extent recoverable
by the Landlord;
(xvi) Capital Tax in respect of the Complex, any Ontario commercial
concentration tax and any business or similar taxes or licence
fees in respect of the business of the Landlord which pertains
to the management, operation and maintenance of the Complex;
(xvii) all other direct and indirect costs and expenses of every
kind, to the extent incurred in or allocable to the
maintenance, repair, replacement, operation, supervision or
administration of all or any part of the Complex, or any of
its appurtenances including expenses incurred or contributions
made by the Landlord in respect of off-site facilities which
are utilized by or benefit the Complex or for which the
Landlord is required to contribute;
(B) except to the extent otherwise provided in Part (A) of this definition,
Operating Costs shall exclude or shall have deducted therefrom:
(i) Taxes and Management Fee;
(ii) THE COST OF ARRANGING, AND debt service in respect of
financing secured by or related to the Complex AND THE CAPITAL
RETIREMENT OF DEBT and interest on debt save for interest
payable if as and when costs and expenses in respect of
Operating Costs and Taxes and goods and services taxes
temporarily exceed recoveries from time to time in respect
thereof;
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(iii) depreciation of the initial cost of the Complex;
(iv) the cost of replacing building standard electric fixtures,
ballasts, tubes, starters, lamps and light bulbs in each case
not located within Common Facilities;
(v) an amount equal to the net proceeds of insurance actually
recovered by the Landlord OR ANY ASSIGNEE TO WHOM THE LANDLORD
HAS ASSIGNED THE INSURANCE PROCEEDS (OR WHICH WOULD HAVE BEEN
RECOVERED BY THE LANDLORD HAD THE LANDLORD INSURED AS IT IS
REQUIRED) for damage to the Complex to the extent that the
cost to repair such damage is included in Operating Costs;
(vi) an amount equal to recoveries by the Landlord in respect of
warranties or guarantees relating to repairs or alterations to
the Complex or any part of it, to the extent that the repair
or alteration costs in respect of the work covered by warranty
or guarantee is included in Operating Costs;
(vii) all Additional Service Costs chargeable to specific tenants of
the Complex for Additional Service to the extent that those
amounts are included in Operating Costs, including any
administrative or overhead charges;
(viii) an amount equal to the contribution made by owners or
occupants of adjacent buildings who are, by agreement,
entitled to use any facilities of and for the Complex;
(ix) THE COST OF COMMISSIONS, ADVERTISING AND LEGAL EXPENSES IN
CONNECTION WITH THE LEASING OF THE COMPLEX;
(x) BAD DEBTS AND ANY COSTS INCURRED IN THE COLLECTION OF SUCH BAD
DEBTS, INCLUDING LEGAL COSTS ASSOCIATED WITH THE SAME;
(xi) ANY AMOUNT DUE TO THE LANDLORD'S NON-COMPLIANCE WITH ANY LAW,
BY-LAW, REGULATION, OR ACT;
(xii) THE COST OF SERVICES, INCLUDING WITHOUT LIMITATION, JANITORIAL
SERVICES, THAT THE TENANT ITSELF SUPPLIES OR CONTRACTS FOR
WITH A SUPPLIER OTHER THAN THE LANDLORD AND WHICH WOULD
OTHERWISE BE INCLUDING IN OPERATING COSTS; AND
(xiii) THE COST OF JANITORIAL SERVICES SUPPLIED BY THE LANDLORD TO
TENANTS IN THE COMPLEX;
(C) any costs that are not directly incurred by the Landlord but are
chargeable as Operating Costs may be estimated by the Landlord on a
reasonable basis to the extent that the Landlord cannot ascertain the
exact amount; and
(D) the taxes enumerated in Section 1.02(18)(A)(xv) above are included
amongst Operating Costs upon the understanding that the Landlord will
look first for reimbursement of such taxes to its input tax credits in
the case of the goods and services tax in force at the date hereof, and
to corresponding credits, if any, in the case of subsequent taxes from
time to time in force, the intent being that so long as such credits
are available to the Landlord the taxes referred to in Section
1.02(18)(A)(xv) will not be included in Operating Costs.
(19) "PROPORTIONATE SHARE" means, for any period, the fraction which has as
its numerator the Rentable Area of the Leased Premises and as its
denominator the Total Rentable Area.
(20) "RENT" means Basic Rent and Additional Rent.
(21) "RENTABLE AREA" of any portion of the Complex means the floor area
THEREOF MEASURED IN ACCORDANCE WITH THE BOMA STANDARD METHOD FOR
MEASURING FLOOR SPACE IN INDUSTRIAL BUILDINGS expressed in square feet
of all floor space (including the floor space of mezzanines, if any)
measured from the exterior face of all exterior walls (and across the
extension of the planes thereof over the openings for doors and
windows) comprising the boundaries of such premises and, in the case of
walls separating any rentable premises from adjoining rentable
premises, measured from the centre line of such walls but ignoring the
finished treatment thereof; any such area shall be adjusted from time
to time to reflect any addition, reduction, rearrangement or relocation
of space.
(22) "TAXES" means all taxes, rates, duties, levies, fees, charges, sewer
levies, local improvement rates, and assessments whatsoever imposed,
assessed, levied or charged, now or in the future, by any school,
municipal, regional, provincial, federal, parliamentary or other
governmental body, corporate authority, agency or commission
(including, without limitation, school boards and utility commissions),
against the Complex or any part thereof, and/or the Landlord and/or the
owners of the Complex in connection therewith, calculated on the basis
of the Complex being assessed as a fully leased and operational
building, but excluding (unless specifically referred to above):
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(a) income or profit taxes upon the income of the Landlord to the
extent such taxes are not levied in substitution or in lieu of
any of the foregoing;
(b) business or similar taxes or licence fees in respect of the
business of the Landlord which pertains to the management,
operation and maintenance of the Complex (and which are
included in Operating Costs);
(c) goods and services taxes or similar taxes (and which are
payable pursuant to other provisions of this Lease);
(d) business or similar taxes or licence fees in respect of any
business carried on by, and imposed upon, tenants and
occupants (including the Tenant) of the Complex; and
(e) Capital Tax in respect of the Complex and any Ontario
commercial concentration tax (and which are included in
Operating Costs).
(23) "TENANT'S TAXES" means all taxes, rates, duties, levies or license fees
imposed upon the Tenant which are attributable to the business, income
or occupancy of the Tenant or any other occupant of the Leased
Premises, and to the use of any of the Common Facilities by the Tenant
or other occupant of the Leased Premises, including any taxes, rates,
duties, levies or license fees which are imposed in lieu of or in
addition to any such Tenant's Taxes; and if any such Tenant's Taxes are
levied against the Landlord or any owner on account of its ownership in
the Complex or its interest therein, they shall be included in Taxes.
(24) "TOTAL RENTABLE AREA" means the aggregate of all Rentable Area
(including the Leased Premises) in the Complex determined in accordance
with Section 1.02(21) hereof and adjusted from time to time to reflect
any addition, reduction, rearrangement or relocation of space.
(25) "TRANSFER" means an assignment of this Lease, a sublease of all or any
part of the Leased Premises, any transaction whereby the rights of the
Tenant under this Lease to the Leased Premises are transferred to
another, any transaction by which any right of use or occupancy of all
or any part of the Leased Premises is conferred upon anyone, any
mortgage, charge or encumbrance of this Lease or the Leased Premises or
any part thereof, or other arrangement under which either this Lease or
the Leased Premises becomes security for any indebtedness or other
obligations, and includes any transaction or occurrence whatsoever
which has changed or might change the identity of the person or persons
having lawful use or occupancy of any part of the Leased Premises.
(26) "UNAVOIDABLE DELAY" means any delay by a party in the performance of
its obligation under this Lease caused in whole or in part by any acts
of God, strikes, lockouts or other industrial disturbances, acts of
public enemies, sabotage, war, blockades, insurrections, riots,
epidemics, washouts, nuclear and radiation activity or fallout,
arrests, civil disturbances, explosions, breakage of or accident to
machinery, any legislative, administrative or judicial action which has
been resisted in good faith by all reasonable legal means, any act,
omission or event, whether of the kind herein enumerated or otherwise,
not within the control of such party, and which, by the exercise of
control of such party, could not have been prevented, but lack of funds
on the part of such party shall not constitute an Unavoidable Delay.
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ARTICLE II
LEASED PREMISES - TERM - RENT
SECTION 2.01 - LEASED PREMISES AND TERM
In consideration of the rents, covenants and agreements herein
contained on the part of the Tenant to be paid, observed and performed, the
Landlord leases to the Tenant, and the Tenant leases from the Landlord, the
Leased Premises for the Term.
SECTION 2.02 - USE OF ADDITIONAL AREAS
The use and occupation by the Tenant of the Leased Premises includes
for the purposes of carrying on its business, the non-exclusive right of the
Tenant, the Tenant's employees, agents, invitees, suppliers (subject to the
Rules and Regulations) and persons having business with the Tenant in common
with the Landlord, its other tenants, sub-tenants and all others entitled or
permitted to the use of the Common Facilities.
SECTION 2.03 - CONSTRUCTION OF THE LEASED PREMISES
The provisions THE LAST PARAGRAPH OF PARAGRAPH 2 (TERM) AND PARAGRAPHS
9 (LANDLORD'S WORK), 10 (TENANT'S WORK), 11 (LEASEHOLD IMPROVEMENT ALLOWANCE),
11A (WORKING DRAWINGS), 11B (PERMITS AND APPROVALS), 11C (EARLY ACCESS), 27
(UNAVOIDABLE DELAY) AND SCHEDULE "C" (LANDLORD'S WORK) OF THE OFFER TO LEASE AND
PARAGRAPHS 1, 2, 3, AND 4 OF THE AMENDING LETTER relating to construction of the
Leased Premises and delay in availability of the Leased Premises for occupancy
by the Tenant shall remain in effect and shall not merge upon the execution of
this Lease. The Tenant shall abide by the provisions of Section 8.02 in respect
of the construction of Leasehold Improvements and fixtures in the Leased
Premises following the commencement of the Term.
SECTION 2.04 - ADJUSTMENT OF AREAS
The Landlord may from time to time re-measure or re-calculate the
Rentable Area of the Leased Premises and may re-adjust the Basic Rent or the
amount of Additional Rent accordingly. The effective date of any such
re-adjustment shall:
(a) in the case of an adjustment to the Rentable Area resulting
from a change in the aggregate of all rentable premises on the
floor on which the Leased Premises are situated, be the date
on which such change occurred; and
(b) in the case of a correction to any measurement or calculation
error, be the first date as of which such error was discovered
in the calculation of Basic Rent or Additional Rent.
THE LANDLORD, AT ITS COST, SHALL WITHIN TWENTY (20) BUSINESS DAYS OF
THE COMMENCEMENT DATE, PROVIDE TO THE TENANT A COPY OF THE CERTIFICATE OF THE
LANDLORD'S ARCHITECT AS TO THE RENTABLE AREA OF THE LEASED PREMISES CALCULATED
IN ACCORDANCE WITH THE TERMS OF THIS LEASE CALCULATED IN ACCORDANCE WITH THE
TERMS OF THIS LEASE, AND THE PARTIES AGREE TO BE BOUND THEREBY, AND THE
PROVISIONS OF SECTION 2.04 SHALL HAVE NO FURTHER FORCE OR EFFECT WITH RESPECT TO
THE LEASED PREMISES LEASED TO THE TENANT AS AT THE COMMENCEMENT DATE.
SECTION 2.05 - AGREEMENT TO PAY
The Tenant shall pay Basic Rent and Additional Rent as herein provided
in lawful money of Canada, without any prior demand therefor and without any
deduction, abatement, set-off or compensation whatsoever save as provided in
Section 9.01. The Tenant agrees to pay to the Landlord in addition to Basic Rent
and Additional Rent, any goods and services tax, business transfer tax,
value-added tax, multi-stage sales tax, sales, use or consumption tax, or any
like tax imposed by any governmental authority in respect of this Lease or in
respect of any property or services provided hereunder, including, without
limitation, such taxes calculated on or in respect of any Rent (whether Basic
Rent or Additional Rent) payable under this Lease; any such tax shall be deemed
not to be Rent, but the Landlord shall have the same remedies for and rights of
recovery of such amount as it has for recovery of Rent under this Lease. The
obligation to pay Additional Rent (and adjustments thereto) shall survive the
expiration or sooner termination of this Lease. All amounts payable under this
Lease, unless otherwise provided, become due with the next instalment of Basic
Rent. The Landlord may, at its option, upon Notice to the Tenant direct that the
Tenant pay any or all Rent by way of pre-authorized bank debit and/or to any
other party specified by the Landlord.
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SECTION 2.06 - BASIC RENT
The Tenant shall pay from and after the Commencement Date to the
Landlord the Basic Rent, such Basic Rent to be computed in accordance with
Section 1.01(10) hereof and payable in equal monthly instalments in advance on
the first day of each and every month. WITHIN 20 BUSINESS DAYS AFTER THE
COMMENCEMENT DATE, the Landlord shall PROVIDE THE TENANT WITH A CERTIFICATE OF
THE LANDLORD'S ARCHITECT AS TO the Rentable Area of the Leased Premises and only
at such time shall any necessary adjustments in the Basic Rent and Additional
Rent be made.
If the Commencement Date is not the first day of a calendar month, then
the Basic Rent for the first and last months of the Term shall be appropriately
adjusted, on a per diem basis, based upon a period of three hundred and
sixty-five (365) days, and the Tenant shall pay upon the Commencement Date, the
portion of the Basic Rent so adjusted from the Commencement Date to the end of
the month in which the Commencement Date occurs.
SECTION 2.07 - LATE PAYMENT CHARGE
The Tenant hereby acknowledges that late payment by the Tenant to the
Landlord of Basic Rent or Additional Rent due hereunder will cause the Landlord
to incur costs not contemplated by this Lease, the exact amount of which will be
difficult or impracticable to ascertain. Such costs include, but are not limited
to, processing and accounting charges and late charges which may be imposed on
the Landlord by the terms of any Mortgage. Accordingly, if any Basic Rent or
Additional Rent shall not be received by the Landlord or the Landlord's designee
within five (5) days after such amount shall be due, AND, IF, IN THE OPINION OF
THE LANDLORD, ACTING REASONABLY, THE TENANT HAS BEEN HABITUALLY LATE IN THE
PAYMENT OF BASIC RENT AND/OR ADDITIONAL RENT HEREUNDER, the Tenant shall pay to
the Landlord a late charge equal to five per cent (5%) of such overdue amount.
The parties hereby agree that such late charge represents a fair and reasonable
estimate of the costs the Landlord will incur by reason of late payment by the
Tenant. Acceptance of such late charge by the Landlord shall in no event
constitute a waiver of the Tenant's default with respect to such overdue amount,
nor prevent the Landlord from exercising any of the other rights and remedies
granted hereunder. The foregoing shall be without prejudice to any other right
or remedy available to the Landlord under or pursuant to this Lease by reason of
a monetary default by the Tenant. The Tenant agrees that if any of the Tenant's
cheques are returned for lack of sufficient funds the Tenant shall pay to the
Landlord upon demand a minimum administrative fee of not less than Twenty-five
Dollars ($25.00).
SECTION 2.08 - NET LEASE
The Basic Rent payable under this Lease is intended to be an absolutely
net return to the Landlord, except as expressly herein set out to the contrary.
The Landlord is not responsible for any expenses or outlays of any nature
arising from or relating to the Leased Premises, or the use or occupancy
thereof, or the contents thereof or the business carried on therein. The Tenant
shall pay all charges, impositions and outlays of every nature and kind relating
to the Leased Premises except as expressly herein set out to the contrary.
SECTION 2.09 - ACKNOWLEDGMENT OF COMMENCEMENT DATE
The Tenant agrees to execute and return to the Landlord, within fifteen
(15) days of written demand from the Landlord, an acknowledgment of the
Commencement Date in the form set forth in Schedule "C" annexed hereto, subject
to such variations as the facts require.
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ARTICLE III
TAXES, OPERATING COSTS & MANAGEMENT FEE
SECTION 3.01 - TAXES PAYABLE BY LANDLORD
The Landlord shall pay directly to the appropriate and lawful taxing
authorities all Taxes subject to Sections 3.02 and 3.05 hereof. The Landlord may
contest any Taxes and appeal any assessments with respect thereto; withdraw any
such contest or appeal; and agree with the taxing authorities on any settlement
or compromise with respect to Taxes.
SECTION 3.02 - TENANT'S SHARE OF TAXES
The Tenant shall pay to the Landlord as Additional Rent a share of all
Taxes which share shall be the amount which is the aggregate, without
duplication, of either:
(1) (a) the amount obtained by multiplying the appropriate
commercial mill rate or rates for the year by the
assessed value of the Leased Premises as determined
by the lawful authority; provided that if for any
year such assessed value of the Leased Premises is
not available, then the Landlord may determine the
assessed value on an equitable basis using such
information and data as is available; and
(b) the Tenant's Proportionate Share of Taxes, if any,
allocated to any part of the Complex that is not
charged to the Tenant and other tenants pursuant to
Section 3.02(1)(a) and similar provisions in the
leases of such other tenants; or
(2) the Tenant's Proportionate Share of the Taxes assessed against
the Complex, including a portion of the Taxes attributable to
the Common Facilities and allocated to the Complex by the
Landlord. The amounts of such assessment and allocation, if
not determined by allocation or apportionment and identified
as such to the Landlord by the appropriate and lawful taxing
authority in question, shall be determined by allocation or
apportionment by the Landlord from time to time on an
equitable basis having regard, amongst other things, to
general principles of assessment.
If the Tenant elects to be assessed as a separate school supporter, the
Tenant will pay to the Landlord, in addition to any other amounts owing pursuant
to this Section 3.02, the excess, if any, of the separate school taxes over
public school taxes resulting from such election.
SECTION 3.03 - TENANT'S PROPORTIONATE SHARE OF OPERATING COSTS
The Tenant shall pay to the Landlord as Additional Rent in accordance
with Section 3.07 the Proportionate Share of Operating Costs.
SECTION 3.04 - MANAGEMENT FEE
The Tenant shall pay to the Landlord as Additional Rent in accordance
with Section 3.07 the Management Fee.
SECTION 3.05 - TENANT'S TAXES
The Tenant shall pay to the appropriate and lawful taxing authorities,
or to the Landlord, as appropriate, and shall discharge when the same become due
and payable, all Tenant's Taxes.
SECTION 3.06 - TENANT'S RESPONSIBILITY
The Tenant shall promptly deliver to the Landlord copies of assessment
notices, tax bills and other documents received by the Tenant relating to Taxes
and Tenant's Taxes and receipts for payment of Taxes and Tenant's Taxes. The
Tenant shall not contest any Taxes or Tenant's Taxes or appeal any assessments
relating thereto without the Landlord's prior written approval, NOT TO BE
UNREASONABLY WITHHELD. If the Tenant obtains such approval, the Tenant shall
deliver to the Landlord such security for the payment of such Taxes or Tenant's
Taxes as the Landlord REQUIRES, ACTING REASONABLY, and the Tenant shall
diligently prosecute any such appeal or contestation to a speedy resolution and
shall keep the Landlord informed of its progress in that regard from time to
time.
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SECTION 3.07 - PAYMENT OF ESTIMATED TAXES, OPERATING COSTS & MANAGEMENT FEE
(a) The amounts payable by the Tenant pursuant to Sections 3.02,
3.03, 3.04 and 3.05 hereof may be estimated by the Landlord
for such period as the Landlord determines from time to time,
NOT EXCEEDING 12 MONTHS and the Tenant agrees to pay to the
Landlord the amounts so estimated in monthly instalments in
advance during such period as Additional Rent. Notwithstanding
the foregoing, as soon as bills for all or any portion of the
said amounts so estimated are received, the Landlord may bill
the Tenant for the Proportionate Share thereof and the Tenant
shall pay the Landlord such amounts so billed (less all
amounts previously paid on account by the Tenant on the basis
of the Landlord's estimate as aforesaid) as Additional Rent on
demand.
(b) Within ONE HUNDRED AND EIGHTY (180) DAYS after the end of the
period for which such estimated payments have been made, the
Landlord shall deliver to the Tenant a statement, CONTAINING
REASONABLE DETAIL, AND, CERTIFIED BY A SENIOR FINANCIAL
OFFICER OF THE LANDLORD AS HAVING BEEN CALCULATED IN
ACCORDANCE WITH THE LEASE, from the Landlord of the Operating
Costs, Taxes and Management Fee together with a calculation of
the Tenant's share of the costs and expenses payable to the
Landlord pursuant to Sections 3.02, 3.03, 3.04 and 3.05 and,
if necessary, an adjustment shall be made between the parties
in the following manner. If the Tenant has paid in excess of
the amounts due, the excess shall be refunded by the Landlord
within THIRTY (30) DAYS after the delivery of the said
statement. If the amount the Tenant has paid is less than the
amounts due, the Tenant agrees to pay such additional amounts
due WITHIN THIRTY (30) DAYS AFTER demand. If any fiscal year
during the Term is greater or less than any such period
determined by the Landlord as aforesaid, the Tenant's share of
the costs and expenses payable to the Landlord, pursuant to
Sections 3.02, 3.03, 3.04 and 3.05 shall be subjected to a per
diem, pro rata adjustment based upon a period of three hundred
and sixty-five (365) days. The obligations set out herein
shall survive the expiration of the Term or earlier
termination of this Lease. Failure of the Landlord to render
any statement of Taxes, Operating Costs and Management Fee
shall not prejudice the Landlord's right to render such
statement thereafter or with respect to any other period. The
rendering of any such statement shall also not affect the
Landlord's right to subsequently render an amended or
corrected statement WITHIN TWELVE (12) MONTHS THEREAFTER.
(c) THE AMOUNT PAYABLE BY THE TENANT PURSUANT TO SECTIONS 3.02,
3.03 AND 3.04 HEREOF HAVE BEEN ESTIMATED BY THE LANDLORD,
WITHOUT PREJUDICE, TO BE FIVE DOLLARS AND FORTY CENTS ($5.40)
PER SQUARE FOOT OF RENTABLE AREA OF THE LEASED PREMISES FOR
THE FIRST PERIOD ENDING OCTOBER 31, 1999, CALCULATED AS
FOLLOWS:
TAXES: $3.95 PER SQUARE FOOT OF RENTABLE AREA OF
THE LEASED PREMISES
OPERATING COSTS: $1.00 PER SQUARE FOOT OF RENTABLE AREA OF
THE LEASED PREMISES
MANAGEMENT FEE: $0.45 PER SQUARE FOOT OF RENTABLE AREA OF
THE LEASED PREMISES
TOTAL: $5.40 PER SQUARE FOOT OF RENTABLE AREA OF
THE LEASED PREMISES
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ARTICLE IV
COMPLEX - CONTROL AND SERVICES
SECTION 4.01 - CONTROL OF THE COMPLEX BY THE LANDLORD
The Landlord shall operate and maintain the Complex in a reasonable
and reputable manner as would a prudent landlord of a similar FIRST CLASS
industrial building LOCATED IN MISSISSAUGA, ONTARIO, having regard to size,
age and location.
The Complex is at all times subject to the exclusive control,
management and operation of the Landlord. Without limiting the generality of
the preceding sentence, the Landlord has the right, in its control,
management and operation of the Complex and by the establishment of Rules and
Regulations and general policies with respect to the operation of the Complex
or any part thereof at all times during the period when the Tenant is given
possession of the Leased Premises and throughout the Term to:
(a) construct improvements in or to the Complex and make
alterations and additions thereto, subtractions therefrom,
rearrangements thereof (including parking areas and all
entrances and exits to the Complex), build additional storeys
on the Complex and construct additional facilities adjoining
or proximate to the Complex;
(b) relocate or re-arrange the various facilities and improvements
comprising the Complex or erected on the Lands from those
existing at the Commencement Date;
(c) do and perform such other acts in and to the Complex as in the
use of good business judgment the Landlord determines to be
advisable for the more efficient and proper operations of the
Complex.
Notwithstanding anything contained in this Lease, it is understood
and agreed that if as a result of the exercise by the Landlord of its right
set out in this Section 4.01, the facilities in or improvements to the
Complex are diminished or altered in any manner whatsoever, the Landlord is
not subject to any liability, nor is the Tenant entitled to any compensation,
nor shall any such diminution or alteration of the facilities or improvements
in or to the Complex be deemed constructive or actual eviction, or a breach
of any covenant for quiet enjoyment contained in this Lease or implied by law
provided that the Landlord shall not materially impede access to the Leased
Premises OR MATERIALLY ADVERSELY AFFECT THE TENANT'S USE AND ENJOYMENT OF THE
LEASED PREMISES during the completion of any such work and provided further
that the Landlord shall complete all such work diligently and with due speed.
SECTION 4.02 - SUBSTITUTION
At any time, the Landlord may substitute for the Leased Premises or
any portion thereof other premises in the Complex (the "New Premises"), in
which event the New Premises shall be deemed to be the Leased Premises or
such portion for all purposes hereunder, provided that the New Premises shall
be similar in area and utility for the Tenant's purposes. If the Tenant is
occupying the Leased Premises at the time of such substitution, the Landlord
shall pay the reasonable expense of moving the Tenant, its property and
equipment to the New Premises and shall, at its sole cost, improve the New
Premises (or the new portion, as the case may be) with Leasehold Improvements
substantially similar to those located in the Leased Premises.
NOTWITHSTANDING ANYTHING CONTAINED IN THIS SECTION 4.02, PROVIDED
THE TENANT IN OCCUPATION OF THE WHOLE OF THE LEASED PREMISES IS LOYALTY
MANAGEMENT GROUP CANADA INC., OR A PERMITTED TRANSFEREE PURSUANT TO SECTION
10.07A, THE LANDLORD SHALL HAVE NO RIGHT TO RELOCATE ALL OR PART OF THE
LEASED PREMISES DURING THE TERM OF THIS LEASE.
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ARTICLE V
UTILITIES AND ADDITIONAL SERVICES
SECTION 5.01 - CHARGES FOR UTILITIES
The Tenant shall be solely responsible for and shall promptly pay
for the cost of operating, repairing, maintaining, replacing and inspecting
the machinery and other facilities required for the heating, ventilating and
cooling of the Leased Premises and costs of electricity, water, steam, fuel,
power, telephone, sewer and other utilities applicable to the Leased Premises
on the basis of separate meters and otherwise on the basis of the Rentable
Area of the Leased Premises or estimated consumption within the Leased
Premises. The Landlord shall be entitled, acting equitably, to allocate to
the Leased Premises an Additional Service Cost (BUT WITHOUT MARK-UP BEYOND
THE COST THEREOF) for any Additional Service in respect of usage of ANY SUCH
UTILITY THAT IS NOT SEPARATELY METERED in the Leased Premises WHICH IS in
excess of AMOUNTS ALLOCATED ON THE BASIS OF AREA OR ESTIMATED CONSUMPTION.
The Tenant further covenants to heat the Leased Premises to a sufficient
temperature to prevent at all times, any damage to the Leased Premises and/or
building containing the Leased Premises and without limiting the generality
of the foregoing, to heat the Leased Premises so as to comply with any law,
order, requirement and/or regulations which from time to time govern the
heating thereof. Upon the request of the Landlord, the Tenant shall install
its own separate meter(s) for the Leased Premises at its own expense if so
requested by the Landlord.
SECTION 5.02 - ADDITIONAL SERVICES OF THE LANDLORD
Subject to Article 4 hereof, and excluding services supplied by the
Landlord and charged to the Tenant as Operating Costs, one hundred and
fifteen per cent (115 %) of the cost to the Landlord of all Additional
Services provided by the Landlord or its agent to the Tenant shall be payable
forthwith by the Tenant, upon demand by the Landlord, as an Additional
Service Cost. Such services shall include any services performed at the
Tenant's request including, without limitation, maintenance, repair,
janitorial or cleaning services, construction of additional Leasehold
Improvements and replacement of bulbs (including non-standard bulbs), tubes
and ballasts. Such services shall also include any services provided at the
Landlord's reasonable discretion including, without limitation, supervising
the movement of furniture, equipment, freight and supplies for the Tenant.
Additional Services provided by the Landlord or its agent on behalf of the
Tenant in respect of any of the Tenant's obligations set out in the Lease
which the Tenant fails to perform shall be ONE HUNDRED AND FIFTEEN PER CENT
(115%) of the cost to the Landlord.
SECTION 5.03 - THIRD PARTY SERVICES
Excluding services supplied by the Landlord and charged to the
Tenant as Operating Costs or as an Additional Service Cost, the Tenant shall
be solely responsible for, and promptly pay to the appropriate third party,
all charges for services used or consumed in or provided to the Leased
Premises, including, without limitation, rug shampooing, TELECOMMUNICATIONS
SERVICES, JANITORIAL SERVICES, pest control and other services not available
through the Landlord. In no event will the Landlord be liable to the Tenant
in damages or otherwise for any failure to supply any third-party services to
the Leased Premises.
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ARTICLE VI
USE OF LEASED PREMISES
SECTION 6.01 - USE OF THE LEASED PREMISES
The Leased Premises shall be used for the Type of Business of the
Tenant specified in Section 1.01(15), provided such purpose complies with all
applicable laws, by-laws, regulations or other governmental ordinances from
time to time in existence. The Leased Premises may not be used for any other
purposes. AS AT THE DATE OF EXECUTION OF THIS LEASE, THE LANDLORD REPRESENTS
THAT THE TYPE OF BUSINESS OF THE TENANT IS A PERMITTED USE UNDER EXISTING
MUNICIPAL LAND USE BY-LAWS THAT APPLY TO THE COMPLEX.
SECTION 6.02 - OBSERVANCE OF LAW
The Tenant shall at its sole cost and expense and, where applicable
in compliance with Sections 8.01 and 8.02 hereof promptly observe and comply
with all laws or requirements of all governmental authorities, including
federal, provincial and municipal legislative enactments, by-laws and other
regulations and all other authorities having jurisdiction, including fire
insurance underwriters, now or hereafter in force which pertain to or affect
the Leased Premises, the Tenant's use of the Leased Premises or the conduct
of any business in the Leased Premises, or the making of any repairs,
replacements, alterations, additions, changes, substitutions or improvements
of or to the Leased Premises. The Tenant shall carry out all modifications,
alterations or changes of or to the Leased Premises and the Tenant's conduct
of business in or use of the Leased Premises which are required by any such
authorities.
SECTION 6.03 - ENERGY CONSERVATION
Consistent with its obligations to keep the Leased Premises in good
repair, order and condition hereunder, the Tenant will at its cost comply
with all laws, by-laws, regulations and orders relating to the conservation
of energy affecting the Leased Premises and the conduct of business therein,
including compliance with all reasonable requests and demands of the Landlord
intended to achieve the conservation of energy.
SECTION 6.04 - ODOURS, DUST OR NOISE
The Tenant warrants that no noxious odours, dust or unreasonable
noise will emanate from the Leased Premises as a result of the operations
conducted by the Tenant therein and the Tenant further covenants that it will
not cause or maintain any nuisance in, at or on the Leased Premises and/or
the Lands. Accordingly, the Tenant agrees that should such noxious odours,
dust or noise conditions exist, the Tenant will, at its own expense, take
such steps as may be necessary to rectify the same, provided further that if
the Tenant shall fail to commence to do so within forty-eight (48) hours and
complete the same within a reasonable time after Notice is received by the
Tenant from the Landlord, then the Landlord may, at its option and without
prejudice to its other rights or recourses:
(i) notify Tenant by Notice that it must shut down all its
operations in the Leased Premises; and
(ii) the Landlord may proceed forthwith to take reasonable measures
to correct the situation and the Landlord shall be entitled to
cover the cost thereof from the Tenant forthwith upon demand
as an Additional Service Cost.
The LANDLORD AGREES TO USE REASONABLE EFFORTS TO OBTAIN SIMILAR
COVENANTS REGARDING ODOURS, DUST, NOISE AND NUISANCE FROM OTHER TENANTS OF
THE COMPLEX AND TO USE REASONABLE EFFORTS TO ENFORCE SUCH COVENANTS.
SECTION 6.05 - OBSTRUCTIONS
The sidewalks, entries, passage corridors and stairways shall not be
obstructed by the Tenant, its officers, agents, servants, employees or
customers or used for any other purposes than for ingress and egress to or
from the Leased Premises, and the Tenant shall save the Landlord harmless
from damages to persons or property because of any nuisance or other act
which shall obstruct the free movements of persons to, in and from the
building and Lands.
SECTION 6.06 - OUTSIDE AREAS
The Tenant shall not use any part of the exterior parking and
loading areas or any other areas outside the Leased Premises for any purpose
other than parking, shipping or receiving in the areas designated by the
Landlord from time to time for same. The Tenant shall not allow any type of
storage and/or transportation trailer belonging to or being used by or on
behalf of the Tenant to remain in such parking, shipping or receiving
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areas for any period of time longer than shall be necessary for the Tenant's
purposes and if any such vehicle has remained in any parking, shipping or
receiving areas for a period in excess of that required for the Tenant's
purposes, as determined by the Landlord acting reasonably, the Landlord shall
be entitled to have such trailer removed at the Tenant's sole cost as an
Additional Service. In addition, any damage caused to such parking, shipping
or receiving areas as a result of the presence of such trailer shall be
forthwith repaired by the Tenant, at the Tenant's sole cost or, at the
Landlord's option, shall be repaired by the Landlord and the costs thereof
shall be payable forthwith by the Tenant, upon demand by the Landlord, as an
Additional Service Cost.
SECTION 6.07 - ENVIRONMENTAL LAW
For the purposes of this Lease:
(a) "Environmental Law" means any law, by-law, order, ordinance,
ruling, regulation, certificate, approval, consent or
directive of any applicable federal, provincial or municipal
government, governmental department, agency or regulatory
authority or any court of competent jurisdiction, relating to
environmental matters and/or regulating the import, storage,
distribution, labelling, sale, use, handling, transport or
disposal of Hazardous Substances, including but not limited
to, the Environmental Protection Act (Ontario), as amended
from time to time;
(b) "Hazardous Substance" means any contaminant, pollutant,
dangerous substance, noxious substance, toxic substance,
hazardous waste, flammable or explosive material, radioactive
material, urea formaldehyde foam insulation, asbestos,
polychlorinated byphenyls, polychlorinated biphenyl waste,
polychlorinated biphenyl related waste, and any other
substance or material now or hereafter declared, defined or
deemed to be regulated or controlled in or pursuant to the
Environmental Law; and
(c) "Release" means any release, spill, emission, leakage,
pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration.
During the Term of this Lease:
(i) THE LANDLORD AND THE TENANT SHALL comply with all requirements
of the Environmental Law, and all other applicable laws,
by-laws, rules, regulations, orders, ordinances, whether
federal, provincial or municipal; and
(ii) THE TENANT SHALL conduct its business operation in the Leased
Premises in such a manner as to prevent the Release of any
Hazardous Substance in, on, under, over or at the Leased
Premises.
If the Tenant creates or brings to the Lands, Complex or the Leased
Premises any Hazardous Substances or if the conduct of the Tenant's business
shall cause there to be any Hazardous Substance at the Lands, the Complex or
the Leased Premises then, notwithstanding any rule of law to the contrary,
such Hazardous Substance shall be and remain the sole and exclusive property
of the Tenant and shall not become the property of the Landlord
notwithstanding the degree of affixation to the Leased Premises, Complex or
the Lands of the Hazardous Substance, and notwithstanding the expiry or
earlier termination of this Lease.
During the Term, and at the expiration of the Term of this Lease,
the Tenant shall, at the Tenant's sole cost and expense in accordance with
all requirements of the Environmental Law, remove any Hazardous Substance
CREATED OR BROUGHT TO THE LANDS, COMPLEX OR THE LEASED PREMISES BY THE TENANT.
IF THE LANDLORD CREATES OR BRINGS TO THE LANDS, COMPLEX OR THE
LEASED PREMISES ANY HAZARDOUS SUBSTANCE OR IF THE PERFORMANCE OF THE
LANDLORD'S OBLIGATIONS AS REQUIRED UNDER THIS LEASE SHALL CAUSE THERE TO BE
ANY HAZARDOUS SUBSTANCE AT THE LANDS, THE COMPLEX OR THE LEASED PREMISES
THEN, OR IF THERE IS ANY HAZARDOUS SUBSTANCE EXISTING IN, ON, UNDER, OVER OR
AT THE COMPLEX AS AT THE DATE HEREOF, IN EACH CASE SUCH HAZARDOUS SUBSTANCE
SHALL BE REMOVED AT THE EXPENSE OF THE LANDLORD IN ACCORDANCE WITH ALL
REQUIREMENTS OF ENVIRONMENTAL LAW.
THE LANDLORD WARRANTS THAT TO THE BEST OF ITS KNOWLEDGE AND BELIEF, THE
COMPLEX AND LEASED PREMISES CONTAINS NO HAZARDOUS SUBSTANCE AS AT THE
COMMENCEMENT DATE.
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ARTICLE VII
INSURANCE AND INDEMNITY
SECTION 7.01 - TENANT'S INSURANCE
(a) The Tenant shall throughout the period that the Tenant is
given possession of the Leased Premises and during the entire
Term, at its sole cost and expense, take out and keep in full
force and effect, the following insurance:
(i) all-risk property insurance (including but not
limited to sprinkler leakage, flood, earthquake and
collapse coverage) in an amount equal to the full
replacement cost thereof upon property of every
description and kind owned by the Tenant or for which
the Tenant is liable, or installed by or on behalf of
the Tenant and which is located within the Complex
including, without limitation, Leasehold
Improvements, tenant's fixtures, the Tenant's
stock-in-trade, furniture and personal property
provided that if there is a dispute as to the amount
which comprises full replacement cost, the decision
of the TENANT'S INSURER shall be conclusive;
(ii) business interruption insurance in such amount as
will reimburse the Tenant for direct or indirect loss
of earnings attributable to all perils insured
against in Section 7.01(a)(i) and other perils
commonly insured against by prudent tenants or
attributable to prevention of access to the Leased
Premises or the Complex as a result of such perils.
PROVIDED HOWEVER, THAT SO LONG AS THE TENANT IS
LOYALTY MANAGEMENT GROUP CANADA INC. OR A PERMITTED
TRANSFEREE PURSUANT TO SECTION 10.07A AND IS IN
OCCUPATION OF THE WHOLE OF THE LEASED PREMISES, THE
LANDLORD HEREBY AGREES THAT THE TENANT SHALL BE
PERMITTED AT ITS OPTION, TO SELF-INSURE WITH RESPECT
TO THE COVERAGE FOR THE INTERRUPTION OF ITS BUSINESS
REFERRED TO IN THIS SECTION 7.01(a)(ii), BUT IN THE
EVENT THAT IT DOES SO, THE TENANT SHALL BE DEEMED FOR
ALL PURPOSES UNDER THIS LEASE TO HAVE PLACED SUCH
INSURANCE AND BE MAINTAINING THE SAME;
(iii) comprehensive general and legal liability insurance,
including bodily injury, property damage and personal
injury liability, tenant's legal liability,
contractual liability and owners' and contractors'
protective insurance coverage with respect to the
Leased Premises and the Tenant's use of the Complex,
coverage to include the activities and operations
conducted by the Tenant and any other person for whom
the Tenant is in law responsible. Such policies shall
be written on a comprehensive basis with inclusive
limits of not less than FIVE MILLION DOLLARS
($5,000,000) for bodily injury to any one or more
persons or property damage, and such higher limits as
the Landlord OR THE MORTGAGEE, acting reasonably,
requires from time to time, and shall contain a
severability of interests clause and a
cross-liability clause;
(iv) if appropriate, broad form comprehensive boiler and
machinery insurance on a blanket repair and
replacement basis with limits for each accident in an
amount not less than the full replacement cost of all
Leasehold Improvements and of all boilers, pressure
vessels, 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 in or serving the Leased Premises;
(v) insurance required by reason of the introduction by
or on behalf of the Tenant or any occupant of the
Leased Premises, or any part thereof, of any
radioactive material or substance, into or on or
about the Leased Premises or on the Lands, or for any
other reason requiring special coverage; and
(vi) any other form of insurance which the Landlord,
acting reasonably, requires from time to time in
form, in amounts and for risks against which a
prudent tenant would insure.
(b) All policies shall:
(i) be taken out with insurers acceptable to the
Landlord, ACTING REASONABLY;
(ii) be in a form satisfactory from time to time to the
Landlord which form may include a reasonable
deductible, the amount of THAT A PRUDENT TENANT WOULD
ARRANGE;
(iii) be non-contributing with and shall apply only as
primary and not as excess to any other insurance
available to the Landlord or the Mortgagee;
(iv) 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 or
conditions contained in the policies;
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(v) contain an undertaking by the insurers to notify the
Landlord and the Mortgagee in writing not less than
thirty (30) days prior to any material change,
cancellation or termination thereof; and
(vi) name the Landlord and the Mortgagee as insured
parties, AS THEIR RESPECTIVE INTERESTS APPEAR and, in
respect of property damage insurance, incorporate the
Mortgagee's standard mortgage clause.
(c) Certificates of insurance on the Landlord's standard form or
if required by the Landlord or the Mortgagee certified copies
of each such insurance policy will be delivered to the
Landlord as soon as practicable after the placing of the
required insurance and in any event at least ten (10) days
prior to the effective date of coverage. Provided that no
review or approval of any such insurance certificate by the
Landlord shall derogate from or diminish the Landlord's rights
or the Tenant's obligations contained in this Article.
(d) If the Tenant fails to take out or keep in force any insurance
referred to in this Section 7.01, or should any such insurance
not be approved by either the Landlord or the Mortgagee and
should the Tenant not commence to diligently rectify (and
thereafter proceed to diligently rectify) the situation within
twenty-four (24) hours after written notice by the Landlord to
the Tenant (stating, if the Landlord or the Mortgagee does not
approve of such insurance, the reasons therefor), the Landlord
has the right without assuming any obligation in connection
therewith to effect such insurance at the sole cost of the
Tenant and all outlays by the Landlord shall be paid by the
Tenant to the Landlord on demand as Additional Rent without
prejudice to any other rights and remedies of the Landlord
under this Lease.
(e) The Tenant agrees that in the event of damage or destruction
to the Leasehold Improvements in the Leased Premises covered
by insurance pursuant to Section 7.01(a)(i), the Tenant shall
use the proceeds of such insurance for the purpose of
repairing or restoring such Leasehold Improvements. In the
event of damage to or destruction of the Complex entitling the
Landlord to terminate the Lease pursuant to Section 9.01(b) or
9.02, then if the Leased Premises have also been damaged or
destroyed and the Lease is terminated, the Tenant shall
forthwith pay to the Landlord all of its insurance proceeds
relating to the Leasehold Improvements in the Leased Premises
and if the Leased Premises have not been damaged or destroyed,
the Tenant shall upon demand deliver to the Landlord in
accordance with the provisions of this Lease the Leasehold
Improvements and the Leased Premises.
SECTION 7.02 - INCREASE IN INSURANCE PREMIUMS
The Tenant shall not keep, use, sell or offer to sell in or upon the
Leased Premises any article which may be prohibited by any fire insurance policy
in force from time to time covering the Leased Premises or the Complex. If:
(a) the occupation of the Leased Premises;
(b) the conduct of business in the Leased Premises; or
(c) any act or omission of the Tenant in the Complex or any part
thereof;
causes or results in any increase in premiums for the insurance carried from
time to time by the Landlord with respect to the Complex, the Tenant shall
pay any such increase in premiums as Additional Rent forthwith upon demand by
the Landlord. In determining whether increased premiums are caused by or
result from the use or occupancy of the Leased Premises, a schedule issued by
the organization computing the insurance rate on the Complex showing the
various components of such rate shall be conclusive evidence of the several
items and charges which make up such rate. The Tenant shall comply promptly
with all requirements of any insurer now or hereafter in effect pertaining to
or affecting the Leased Premises or the Complex.
SECTION 7.03 - CANCELLATION OF INSURANCE
If any insurance policy upon the Complex or any part thereof shall be
cancelled or shall be threatened by the insurer to be cancelled or the coverage
thereunder reduced in any way by the insurer by reason of the use or occupation
of the Leased Premises or any part thereof by the Tenant or by any assigns or
sub-tenant of the Tenant, or by anyone permitted by the Tenant to be upon the
Leased Premises, the Tenant shall remedy the condition giving rise to
cancellation, threatened cancellation or reduction of coverage within
twenty-four (24) hours after Notice thereof by the Landlord.
SECTION 7.04 - 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 Complex, or damage to
property of the Tenant or of others located on the Leased
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Premises or elsewhere in the Complex, nor shall it be responsible for any
loss of or damage to any property of the Tenant or others from any cause
whatsoever, except for any such death, injury, loss or damage which results
from the negligence of the Landlord, its agents, servants or employees or
other persons for whom it may in law be responsible and provided that in no
event shall the Landlord be responsible for any loss, injury or damage
contemplated by Section 7.07(b), or for any indirect or consequential damages
sustained by the Tenant or others. Without limiting the generality of the
foregoing but subject to the exceptions to the limitation of the liability of
the Landlord set out herein, the Landlord shall not be liable for any injury
or damage to persons or property resulting from fire, explosion, dampness,
falling plaster, falling ceiling tile, failing ceiling fixtures (including
part or all of the ceiling T grid system) and diffuser coverings, or from
steam, gas, electricity, water, rain, flood, snow or leaks from any rentable
premises or from the pipes, sprinklers, appliances, plumbing works, roof,
windows or subsurface of any floor or ceiling of the Complex or from the
street or any other place or by any other cause whatsoever. The Landlord
shall not be liable for any such damage caused by other tenants or persons in
the Complex or by occupants of adjacent property thereto, or the public, or
caused by construction or by any private, public or quasi-public work. All
property of the Tenant kept or stored on the Leased Premises shall be so kept
or stored at the risk of the Tenant only and the Tenant shall indemnify the
Landlord and save it harmless from any claims arising out of any damage to
the same including, without limitation, any subrogation claims by the
Tenant's insurers.
SECTION 7.05 - LANDLORD'S INSURANCE
The Landlord shall at all times throughout the Term carry:
(a) insurance on the Complex (excluding the foundations and
excavations) and the machinery, boilers and equipment
contained therein or servicing the Complex and owned by the
Landlord or the owners of the Complex (specifically excluding
any property with respect to which the Tenant and other
tenants are obliged to insure pursuant to Section 7.01 or
similar sections of their respective leases) against damage by
fire and extended perils or all-risks coverage IN AN AMOUNT
EQUAL TO THE FULL REPLACEMENT COST OF THE SUBJECT MATTER
THEREOF;
(b) public liability and property damage insurance with respect to
the Landlord's operations in the Complex;
(c) loss of rental income insurance, or loss of insurable gross
profits commonly insured against by prudent landlords FOR A
PERIOD OF NOT LESS THAN TWELVE (12) MONTHS, including loss of
all rentals receivable from tenants in the Complex in
accordance with the provisions of their leases, including
basic and additional rentals; and
(d) such other form or forms of insurance as the Landlord or the
Mortgagee reasonably considers advisable.
Such insurance shall be in such reasonable amounts and with such
reasonable deductibles as would be carried by a prudent owner of a reasonably
similar industrial building, having regard to size, age and location WITH A
FINANCIALLY SOLVENT INSURER. Notwithstanding the Landlord's covenant
contained in this Section 7.05, and notwithstanding any contribution by the
Tenant to the cost of insurance premiums provided herein, the Tenant
acknowledges and agrees that no insurable interest is conferred upon the
Tenant under any policies of insurance carried by the Landlord, and the
Tenant has no right to receive any proceeds of any such insurance policies
carried by the Landlord.
SECTION 7.06A - INDEMNIFICATION OF THE LANDLORD
Except as provided in Section 7.07(a) but notwithstanding any other
provision of this Lease, the Tenant agrees to protect, indemnify and save
each of the Landlord and its officers, employees and agents completely
harmless from and against:
(i) any loss (including loss of Basic Rent and Additional Rent),
claims, actions, damages, liability and expenses in connection
with loss of life, personal injury, damage to property or any
other loss or injury whatsoever arising out of this Lease, or
any occurrence in, upon or at the Leased Premises, or the
occupancy or use by the Tenant of the Leased 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
Leased Premises by the Tenant; and
(ii) any Environmental Claim, directly or indirectly incurred,
sustained or suffered by or asserted against the Landlord
and/or its officers, employees and agents caused by or
attributable to, either directly or indirectly, any act or
omission of the Tenant and/or any other person for which the
Tenant is in law responsible prior to or during the Term of
this Lease.
For the purposes of this Lease, "Environmental Claim" means any claims,
losses, costs, expenses, fines, penalties, payments and/or damages (including
without limitation, all reasonable solicitors' fees on a solicitor and his own
client basis) relating to, arising out of, resulting from or in any way
connected with the Release (as such term is defined in Section 6.07 of this
Lease) in, on, over, upon or from the Leased Premises of
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any Hazardous Substance (as such term is defined in Section 6.07 of this
Lease) including, without limitation, all costs and expenses of any
remediation or restoration of the Leased Premises and/or the Lands required
or mandated by the Environmental Law (as such term is defined in Section 6.07
of this Lease).
If the Landlord shall, without fault on its part, be made a party of
any litigation commenced by or against the Tenant, then the Tenant shall
protect, indemnify and hold the Landlord harmless and shall pay all costs,
expenses and reasonable legal fees incurred or paid by the Landlord in
connection with such litigation. The Tenant shall also pay all costs,
expenses and legal fees that may be incurred or paid by the Landlord in
reasonably enforcing the terms, covenants and conditions in this Lease unless
a court of law having jurisdiction shall decide otherwise.
SECTION 7.06B - INDEMNIFICATION OF THE TENANT
NOTWITHSTANDING ANY OTHER TERMS, COVENANTS AND CONDITIONS CONTAINED
IN THIS LEASE EXCEPT SECTION 7.07(b), THE LANDLORD SHALL INDEMNIFY THE TENANT
AND SAVE IT HARMLESS FROM AND AGAINST ANY AND ALL LOSS, CLAIMS, ACTIONS,
DAMAGES, LIABILITIES AND EXPENSES 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 COMPLEX
(EXCLUDING THE LEASED PREMISES SUBJECT TO SECTION 7.04) OCCASIONED WHOLLY OR
IN PART BY ANY ACT OR OMISSION OF THE LANDLORD OR BY ANYONE FOR WHOM THE
LANDLORD IS IN LAW RESPONSIBLE. IF THE TENANT SHALL, WITHOUT FAULT ON ITS
PART, BE MADE A PARTY TO ANY LITIGATION COMMENCED BY OR AGAINST THE LANDLORD,
THEN THE LANDLORD SHALL PROTECT, INDEMNIFY AND HOLD THE TENANT HARMLESS AND
SHALL PAY ALL COSTS, EXPENSES AND REASONABLE LEGAL FEES INCURRED OR PAID BY
THE TENANT IN CONNECTION WITH SUCH LITIGATION. THE LANDLORD SHALL ALSO PAY
ALL REASONABLE COSTS, EXPENSES AND LEGAL FEES (ON A SOLICITOR AND HIS CLIENT
BASIS) THAT MAY BE INCURRED OR PAID BY THE TENANT IN REASONABLY ENFORCING THE
TERMS, COVENANTS AND CONDITIONS IN THIS LEASE.
SECTION 7.07 - LIMITATIONS OF LIABILITY
(a) The Tenant shall not be liable to the Landlord in respect of
any loss, injury or damage insured by the Landlord under
Sections 7.05(a) and (c); and
(b) The Landlord shall not be liable to the Tenant in respect of
any loss, injury or damage to property insured or required to
be insured by the Tenant under Sections 7.01(a)(i), (ii) and
(iv).
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ARTICLE VIII
MAINTENANCE, REPAIRS AND ALTERATIONS
SECTION 8.01 - MAINTENANCE AND REPAIRS BY THE TENANT
(a) Subject to Sections 9.01 and 9.02, the Tenant shall at all
times at its sole cost, keep and maintain the Leased Premises
and every part thereof, including all facilities, equipment
and services, in a clean and tidy condition and will not
permit waste paper, garbage, ashes, waste, debris or other
objectionable material to accumulate thereon or therein and
the Tenant will not use any outside garbage or other
containers (other than those approved or designated by the
Landlord) and the Tenant shall arrange for removal and
disposal of waste and garbage at its sole expense. The Tenant,
at its sole cost and expense, shall renew, rebuild, replace,
operate, maintain, paint and keep the Leased Premises and
every part thereof, INCLUDING BUT NOT LIMITED TO all
equipment, fixtures, appurtenances used in or about the Leased
Premises, including plumbing, electrical, heating, cooling,
and other facilities and systems during the Term of this
Lease, in good repair and first class condition, as a careful
and prudent owner would do. Subject to Section 8.03 and in
accordance with Section 8.02, the Tenant shall promptly make
all necessary repairs, structural and non-structural, capital
and non-capital, ordinary and extraordinary, foreseen as well
as unforeseen (excluding only such reasonable wear and tear as
would not be repaired by a careful and prudent owner and
except for repairs to the roof and bearing walls of the Leased
Premises except if caused by the negligent act or negligence
of the Tenant or those for whom the Tenant is in law
responsible).
(b) The Tenant shall examine the Leased Premises before taking
possession thereof and unless the Tenant furnishes the
Landlord with a notice in writing specifying any defect in the
construction of the Leased Premises within THIRTY (30) days
after such taking of possession, the Tenant shall conclusively
be deemed to have examined the Leased Premises, to have agreed
that they are in order, and such taking of possession without
the giving of such notice as aforesaid within such THIRTY (30)
day period is conclusive evidence against the Tenant that at
the time thereof the Leased Premises were in good order and
satisfactory condition, subject to latent defects, if any. The
Tenant agrees that there is no promise, representation or
undertaking by or binding upon the Landlord with respect to
the use of the Leased Premises or any alteration, remodelling
or redecorating of or installation of equipment or fixtures in
the Leased Premises, except such, if any, as are expressly set
forth in this Lease or the Agreement to Lease.
(c) The Tenant acknowledges that it will not enter, nor permit or
suffer any person to enter upon the roof of the building
containing the Leased Premises or make any opening in the roof
without the prior written consent of the Landlord.
(d) The Tenant covenants and agrees that it shall, at its sole
cost and expense, at all times during the Term of the Lease,
obtain and maintain an inspection and maintenance service
contract or contracts in relation to the mechanical systems in
the Leased Premises including, without limitation, the
heating, ventilation and cooling systems, as a prudent owner
would obtain and maintain. Copies of such inspection and
maintenance service contract or contracts will be delivered to
the Landlord as soon as practicable after the obtaining of the
required contract or contracts.
(e) The Tenant covenants and agrees that it shall not allow,
without the prior written consent of the Landlord, first had
and obtained, in the Landlord's sole discretion, any
protrusions from the Leased Premises for any reason
whatsoever, such control to the Landlord to protect the
aesthetics thereof and for the benefit of its own interest and
the interest of other tenants of the Lands and other persons
in or about the Lands. Should, however, such protrusion exist,
the Tenant shall indemnify the Landlord against any loss or
damage caused to any person, firm, corporation or thing as a
result of the same and the Tenant covenants and agrees that it
shall, at the request of the Landlord, remove the same or if
not removed within ten (10) days of request, then the Landlord
shall have the right to remove same and all costs and expenses
incurred shall be immediately payable by the Tenant to the
Landlord as an Additional Service Cost.
(f) In addition to the specific obligations elsewhere in this
Lease reserved and contained on the part of the Tenant to be
observed and performed and without in any way limiting the
generality thereof, the condition, maintenance, operation and
management of the Leased Premises, and other improvements
thereon or therein from time to time, including without
limitation all machinery, equipment and other facilities
therein or thereon, shall be the sole responsibility of the
Tenant, throughout the Term hereof and the Tenant shall make
all payments, foreseen, unforeseen, ordinary and/or
extraordinary, required to be made not only with respect to
the observance and performance of such specific obligations
but also with respect to the general obligation in this clause
contained.
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SECTION 8.02 - LANDLORD'S APPROVAL OF THE TENANT'S REPAIRS
(a) During the Term of this Lease or any renewal or extension
hereof, the Tenant shall not make any repairs, replacements,
Leasehold Improvements or install trade fixtures in any part
of the Leased Premises without first obtaining the Landlord's
written approval, such approval not to be unreasonably
withheld, and in connection therewith the Tenant shall, prior
to commencing any such work, submit to the Landlord:
(i) for its prior approval (NOT TO BE UNREASONABLY
WITHHELD OR DELAYED) details of the proposed work,
including drawings and specifications prepared by
qualified architects or engineers and conforming to
good engineering practice;
(ii) such indemnification against liens, costs, damages
and expenses (including its OUT-OF POCKET costs and
expenses REASONABLY incurred, or which may be
incurred, in reviewing the proposed work and
supervising its completion) and such insurance
coverages as the Landlord REASONABLY requires; and
(iii) evidence satisfactory to the Landlord that the Tenant
has obtained at its expense all necessary consents,
permits, licences and inspections from all
governmental and regulatory authorities having
jurisdiction.
(b) All such repairs, replacements, Leasehold Improvements or
trade fixtures made or installed by the Tenant in the Leased
Premises and approved by the Landlord shall be performed:
(i) with first class materials owned by the Tenant at the
sole cost of the Tenant;
(ii) by competent workmen whose labour union affiliations
are compatible with others employed by the Landlord
and its contractors;
(iii) in a good and workmanlike manner;
(iv) in accordance with the drawings and specifications
approved by the Landlord; and
(v) subject to the reasonable regulations, supervision,
controls and inspection of the Landlord.
(c) If any such repairs, replacements, Leasehold Improvements or
trade fixtures would affect the structure of the Complex, or
any of the electrical, mechanical or other base building
systems or their warranties, such work shall, at the option of
the Landlord, be performed by the Landlord as an Additional
Service. If such would affect such warranties, the LANDLORD
may reasonably refuse to allow such work to be done. Upon
completion thereof, and thereafter, to the extent requiring
ongoing maintenance, repair or replacement, the Tenant shall
pay to the Landlord the Additional Service Cost in respect
thereof. THE COST OF WORK PERFORMED FOR THE TENANT BY OR ON
BEHALF OF THE LANDLORD IN THIS SUB-SECTION (c) SHALL BE
COMPETITIVE WITH COSTS CHARGED FOR SIMILAR OR COMPARABLE WORK
CARRIED OUT BY COMPARABLE BUILDINGS IN THE CITY OF
MISSISSAUGA.
(d) In respect of repairs, alterations or replacements of or to
the Leased Premises thereafter during the Term, the Tenant
shall pay to the Landlord, as Additional Rent, THE
OUT-OF-POCKET ARCHITECTS' AND ENGINEERS' FEES AND COSTS AND
ALL OTHER OUT-OF-POCKET FEES AND COSTS INCURRED BY THE
LANDLORD WITH RESPECT TO SUCH REPAIRS, ALTERATIONS OR
REPLACEMENT OF OR TO THE LEASED PREMISES. In addition, any
cost or expense of the Landlord in providing garbage removal
to the Complex and, if the Landlord's architects and engineers
responsible for the Complex are not retained by the Tenant to
complete any improvements in the Leased Premises affecting the
structure of the Complex or any of the electrical, mechanical
or other base building systems or their warranties, any cost
or expense of the Landlord's architects and engineers in
respect of approval of plans, and supervision and/or
inspection of such work, will each be payable by the Tenant as
Additional Rent upon being invoiced by the Landlord.
SECTION 8.03 - MAINTENANCE AND REPAIRS BY THE LANDLORD
(a) The Landlord agrees with the Tenant to MAINTAIN AND keep in a
good and reasonable state of repair, and consistent with the
general standards of FIRST CLASS industrial buildings of
comparable age in the immediate area of the Complex, but
subject to Sections 9.01 and 9.02, and with the exception of
reasonable wear and tear:
(i) those portions of the Complex consisting of the
courts, concourses, lobbies, landscaped areas,
entrances, PARKING AREAS and other facilities from
time to time provided for common use and enjoyment,
and the exterior portions of all buildings and
structures from time to time forming part of the
Complex and affecting its general appearance;
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(ii) those portions of the Complex (other than the Leased
Premises and premises of other tenants) comprising
the Common Use Equipment, the entrances, stairways,
corridors and lobbies; and
(iii) the structural members or elements of the Leased
Premises, including its foundations, roof and
structural portions of exterior walls, except for
repairs caused by the negligent act or negligence of
the Tenant or those for whom the Tenant is in law
responsible.
(b) Subject to Sections 9.01 and 9.02, the Landlord agrees with
the Tenant to repair Insured Damage.
(c) The Tenant acknowledges and agrees that the Landlord is not
liable for any damages, direct, indirect or consequential, or
for damages for personal discomfort, illness or inconvenience
of the Tenant or the Tenant's servants, clerks, employees,
invitees or other persons by reason of failure of any
equipment, facilities or systems servicing the Complex or of
reasonable delays in the performance of any repairs,
replacements and maintenance for which the Landlord is
responsible pursuant to this Lease and no such delay shall
entitle the Tenant to any compensation or abatement whatsoever
SO LONG AS THE LANDLORD MAKES ALL NECESSARY REPAIRS AND
REPLACEMENTS DILIGENTLY AFTER BECOMING AWARE OF THE NEED FOR
SAME.
(d) If the Tenant refuses or neglects to carry out any repairs
properly required to be carried out by it under this Lease
and to the reasonable satisfaction of the Landlord, the
Landlord may, but shall not be obliged to, make such repairs
without being liable for any loss or damage that may result to
the Tenant's merchandise, fixtures or other property or to the
Tenant's business by reason thereof and upon completion
thereof, the Tenant shall pay to the Landlord the Additional
Service Cost in respect thereof.
SECTION 8.04 - SURRENDER OF THE LEASED PREMISES
At the expiration of the Term or earlier termination of this Lease, the
Tenant shall peaceably surrender and yield up the Leased Premises to the
Landlord in as good condition and repair as the Tenant is required to maintain
the Leased Premises throughout the Term, REASONABLE WEAR AND TEAR EXCEPTED and
the Tenant shall surrender all keys for the Leased Premises to the Landlord at
the place then fixed for the payment of rent and shall inform the Landlord of
all combinations of locks, safes and vaults, if any, in the Leased Premises. The
Tenant shall, however, remove all of its trade fixtures if requested by the
Landlord as provided in Section 8.08 hereof before surrendering the Leased
Premises as aforesaid. The Tenant's obligation under this covenant shall survive
the expiration of the Term or earlier termination of this Lease.
SECTION 8.05 - REPAIR WHERE THE TENANT IS AT FAULT
Save for the limitation of liability contained in Section 7.07(a) but
notwithstanding any other provision of this Lease, if the Complex or any part
thereof, or any equipment, machinery, facilities or improvements contained
therein or made thereto, or the roof or outside walls of the Complex or any
other structural portions thereof require repair or replacement or become
damaged or destroyed by reason of any act, omission to act, neglect or default
of the Tenant or those for whom the Tenant is in law responsible or through any
of them in any way stopping up or damaging the climate control, heating
apparatus, water pipes, drainage pipes or other equipment or facilities or parts
of the Complex, the cost of the resulting repairs, replacements or alterations
shall be an Additional Service Cost to the Tenant.
SECTION 8.06 - TENANT NOT TO OVERLOAD FACILITIES
The Tenant shall not install any equipment which will alter, exceed or
overload the capacity of any utility, electrical or mechanical facilities in the
Leased Premises, and the Tenant will not bring into the Leased Premises or
install any utility, electrical or mechanical facility or service which the
Landlord does not approve. The Tenant agrees that if any changes proposed or
used by the Tenant requires additional utility, electrical or mechanical
facilities, the Landlord may, in its sole discretion, if they are available,
elect to install them in accordance with plans and specifications to be approved
in advance in writing by the Landlord and the cost thereof shall be an
Additional Service Cost to the Tenant.
SECTION 8.07 - TENANT NOT TO OVERLOAD FLOORS
The Tenant shall not bring upon the Complex or the Leased Premises or
any part thereof any machinery, equipment, article or thing that by reason of
its weight, size or use might in the opinion of the Landlord damage the Complex
or the Leased Premises and shall not at any time overload the floors of the
Leased Premises.
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SECTION 8.08 - REMOVAL AND RESTORATION BY TENANT
(a) All Leasehold Improvements shall immediately become the
property of the Landlord upon affixation or installation
without compensation therefor to the Tenant, but the Landlord
is under no obligation to repair, maintain or insure any
Leasehold Improvements. Leasehold Improvements and trade
fixtures shall not be removed from the Leased Premises either
during or at the expiration or earlier termination of the Term
except that:
(i) the Tenant may during the Term in the usual or normal
course of its business and without the prior written
consent of the Landlord remove its trade fixtures,
and provided that the Tenant is not THEN in default
under this Lease; and
(ii) the Tenant shall, immediately prior to the expiration
of the Term and at its own cost, remove all trade
fixtures and repair any damage to the Leased Premises
caused by their installation and removal, failing
which such may be completed by the Landlord as an
Additional Service to the Tenant. THE TENANT SHALL
NOT BE RESPONSIBLE FOR RESTORATION OF THE LEASED
PREMISES OR REMOVAL OF ITS LEASEHOLD IMPROVEMENTS IN
THE LEASED PREMISES AT THE EXPIRY OR EARLIER
TERMINATION OF THIS LEASE OR ANY EXTENSIONS; HOWEVER,
THIS DOES NOT ABSOLVE THE TENANT FROM ITS
RESPONSIBILITY TO REPAIR DAMAGE AND MAINTAIN THE
LEASED PREMISES IN GOOD REPAIR, SUBJECT TO REASONABLE
WEAR AND TEAR, AS REQUIRED BY THE TERMS OF THIS
LEASE.
(b) If the Tenant does not remove its trade fixtures at the
expiration or earlier termination of the Term, the trade
fixtures shall, at the option of the Landlord, become the
property of the Landlord and, as an Additional Service to the
Tenant, may be removed from the Leased Premises and sold or
disposed of by the Landlord in such manner as it deems
advisable.
All property of the Tenant remaining on the Leased Premises THIRTY (30) DAYS
after the termination of the tenancy shall be deemed to have been abandoned by
the Tenant in favour of the Landlord and may be disposed of by the Landlord at
its discretion without prejudice to the rights of the Landlord to claim damages
from the Tenant for failure to remove the same.
SECTION 8.09 - NOTICE BY THE TENANT
The Tenant shall when it becomes aware of same notify the Landlord by
Notice of any damage to or deficiency or defect in any part of the Complex,
including the Leased Premises, any equipment or utility systems or any
installations located therein notwithstanding the fact that the Landlord may
have no obligations with respect to same.
SECTION 8.10 - TENANT TO DISCHARGE ALL LIENS
The Tenant shall at all times during the period that the Tenant is
engaged in the construction or installation of its improvements or has been
given possession of the Leased Premises and throughout the Term promptly pay all
its architects, engineers, contractors, materialmen, suppliers and workmen and
all charges incurred by or on behalf of the Tenant for any work, materials or
services which may be done, supplied or performed at any time in respect of the
Leased Premises and the Tenant shall do any and all things necessary so as to
ensure that no lien is registered against the Complex or any part thereof or
against the Landlord's interest in the Leased Premises and if any lien is made,
filed or registered, the Tenant shall discharge OR VACATE it or cause it to be
discharged forthwith at the Tenant's expense.
If the Tenant fails to discharge or cause any such lien to be
discharged as aforesaid, then in addition to any other right or remedy of the
Landlord, the Landlord may but it shall not be obligated to discharge OR VACATE
the same by paying the amount claimed to be due into Court and the amount so
paid by the Landlord and all costs and expenses, including reasonable legal fees
(on a solicitor and his client basis) incurred as a result of the registration
of any such lien shall be immediately due and payable by the Tenant to the
Landlord as Additional Rent on demand.
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SECTION 8.11 - SIGNS AND ADVERTISING
THE LANDLORD SHALL PERMIT THE TENANT TO INSTALL PROMINENT FASCIA
SIGNAGE ON THE NORTH AND SOUTH SIDES OF THE COMPLEX (AT THE TENANT'S SOLE
EXPENSE) AND SHALL WORK WITH THE TENANT TO ASSIST THE TENANT IN OBTAINING ANY
AND ALL REQUIRED PERMITS FOR SUCH SIGNAGE. THE DESIGN OF THE TENANT'S SIGNAGE
SHALL BE IN ACCORDANCE WITH THE LANDLORD'S SIGN CRITERIA FOR THE COMPLEX AND THE
TENANT'S SPECIFICATIONS AND THE PRECISE LOCATION SHALL BE SUBJECT TO THE
LANDLORD'S APPROVAL, NOT TO BE UNREASONABLY WITHHELD OR DELAYED. ALL SIGNAGE
SHALL BE SUBJECT TO THE APPROVAL OF THE CITY OF MISSISSAUGA. Other than such
identification signs, the Tenant shall not paint, affix or display any sign,
picture, advertisement, notice, lettering or decoration on any part of the
Complex or the Leased Premises for exterior view without the prior written
consent of the Landlord which consent may be unreasonably withheld. Any such
signs shall remain the property of the Tenant and shall be maintained at the
Tenant's sole cost and expense. At the expiration of the Term or earlier
termination of this Lease, the Tenant shall remove any such sign, picture,
advertisement, notice, lettering or decoration from the Leased Premises at the
Tenant's expense and shall promptly repair all damage caused by any such
installation and removal failing which such may be performed by the Landlord as
an Additional Service to the Tenant. The Tenant's obligation to observe and
perform this covenant shall survive the expiration of the Term or earlier
termination of this Lease. In the event that the Landlord provides and installs
a pylon board for the Complex, the Tenant shall be entitled at its expense as an
Additional Service to have its name shown upon such pylon board. The Landlord
shall design the style of such pylon board and shall in its own discretion
determine the location of the same.
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ARTICLE IX
DAMAGE AND DESTRUCTION
SECTION 9.01 - DESTRUCTION OF THE LEASED PREMISES
(a) If the Leased Premises are at any time destroyed or damaged
(including, without limitation, smoke and water damage) as a
result of fire, the elements, accident or other casualty
required to be insured against by the Landlord pursuant to
Section 7.05 hereof or otherwise insured against by the
Landlord, and if as a result of such occurrence:
(i) the Leased Premises are rendered untenantable only in
part, this Lease shall continue in full force and
effect and the Landlord shall, subject to Sections
9.01(b) and 9.02(a) hereof, commence diligently to
reconstruct, rebuild or repair the Leased Premises to
the extent only of its obligations under Section
8.03, and if the damage is such that the portion of
the Leased Premises rendered untenantable is not
reasonably capable of use and occupancy by the Tenant
for the purposes of its business, Rent shall abate
proportionately to the portion of the Leased Premises
rendered untenantable from and after THE DATE OF THE
DAMAGE AND DESTRUCTION and until the Landlord's
repairs have been completed;
(ii) the Leased Premises are rendered wholly untenantable,
this Lease shall continue in full force and effect
and the Landlord shall, subject to Sections 9.01(b)
and 9.02(a) hereof, commence diligently to
reconstruct, rebuild or repair the Leased Premises to
the extent only of its obligations under Section 8.03
and Rent shall abate entirely from and after THE DATE
OF SUCH DAMAGE AND DESTRUCTION and until the
Landlord's repairs have been completed;
(iii) the Leased Premises are not rendered untenantable in
whole or in part, this Lease shall continue in full
force and effect, the Rent and other amounts payable
by the Tenant shall not terminate, be reduced or
abate and the Landlord shall, subject to Sections
9.01(b) and 9.02(a) hereof, commence diligently to
reconstruct, rebuild or repair the Leased Premises to
the extent only of its obligations under Section
8.03.
(b) Notwithstanding anything contained in Section 9.01(a), if the
Leased Premises are damaged or destroyed by any cause
whatsoever, and if, in the opinion of the Landlord reasonably
arrived at, the Leased Premises cannot be reconstructed,
rebuilt or repaired and made fit for the purposes of the
Tenant within one hundred and eighty (180) days of the
happening of the damage or destruction, the Landlord, instead
of reconstructing, rebuilding or repairing the Leased Premises
in accordance with Section 9.01(a), OR THE TENANT may at its
option elect to terminate this Lease by giving to the OTHER
PARTY Notice of termination within forty-five (45) days after
such damage or destruction, and thereupon Rent and other
payments for which the Tenant is liable under this Lease shall
be apportioned and paid to the date of such damage or
destruction, and the Tenant shall immediately deliver up
vacant possession of the Leased Premises to the Landlord in
accordance with the terms of this Lease.
(c) Upon the Tenant being given Notice by the Landlord that the
Landlord's reconstruction, rebuilding or repairs have been
substantially completed, the Tenant shall forthwith complete
all repairs to the Leased Premises which are the Tenant's
responsibility under Section 8.01 and all other work required
to fully restore the Leased Premises for business in every
case at the Tenant's cost and without any contribution to such
cost by the Landlord, whether or not the Landlord has at any
time made any contribution to the cost of supply, installation
or construction of Leasehold Improvements in the Leased
Premises. The Tenant shall diligently complete the Tenant's
repairs within sixty (60) days after notice that the
Landlord's reconstructing, rebuilding or repairs have been
substantially completed.
(d) Nothing in this Section 9.01 requires the Landlord to rebuild
the Leased Premises in the condition and state that existed
before any such occurrence, provided that the Leased Premises
as rebuilt will have reasonably similar facilities and
services to those in the Leased Premises prior to the damage
or destruction having regard, however, to the age of the
Complex at such time.
SECTION 9.02 - DESTRUCTION OF THE COMPLEX
(a) Notwithstanding anything contained in this Lease and
specifically notwithstanding the provisions of Section 9.01
hereof, if all or any part of the Complex is damaged or
destroyed by any cause whatsoever (irrespective of whether the
Leased Premises are damaged or destroyed) and if, in the
opinion of the Landlord reasonably arrived at, such area of
the Complex so damaged or destroyed cannot be rebuilt or made
fit for the purposes of such space within ninety (90) days of
the happening of the damage or destruction; then and so often
as any of such events occur, the Landlord may, at its option
(to be exercised by Notice to the Tenant within forty-five
(45) days
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following any such occurrence), elect to terminate this Lease.
In the case of such election, the Term and the tenancy hereby
created shall expire upon the forty-fifty (45th) day after
such notice is given, without indemnity or penalty payable by,
or any other recourse against the Landlord, and the Tenant
shall, within such forty-five (45) day period, vacate the
Leased Premises and surrender them to the Landlord, with the
Landlord having the right to re-enter and repossess the Leased
Premises discharged of this Lease and to expel all persons and
remove all property therefrom. Rent shall be due and payable
without deduction or abatement subsequent to the destruction
or damage and until the date of termination, unless the Leased
Premises shall have been destroyed or damaged as well, in
which event Section 9.01 shall apply.
(b) If all or any part of the Complex is at any time destroyed or
damaged as set out in Section 9.02(a), and the Landlord does
not elect to terminate this Lease in accordance with the
rights hereinbefore granted, the Landlord shall, following
such destruction or damage, commence diligently to
reconstruct, rebuild or repair, if necessary, that part of the
Complex which was damaged or destroyed, but only to the extent
of the Landlord's responsibilities pursuant to the terms of
the various leases for the premises in the Complex and
exclusive of any tenant's responsibilities set out therein. If
the Landlord elects to repair, reconstruct or rebuild the
Complex or any part thereof, the Landlord may repair,
reconstruct or rebuild according to plans and specifications
and working drawings other than those used in the original
construction of the Complex or any part thereof.
SECTION 9.03 - ABROGATION - INTENTIONALLY DELETED
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ARTICLE X
TRANSFER AND SALE
SECTION 10.01 - ASSIGNING AND SUBLETTING
The Tenant will not enter into, consent to or permit a Transfer without
the prior written consent of the Landlord in each instance, which consent shall
not be unreasonably withheld, but shall be subject to the Landlord's rights
under Section 10.02. Notwithstanding any statutory provision to the contrary, it
shall not be considered unreasonable for the Landlord to take into account the
following factors in deciding whether to grant or withhold its consent:
(a) whether any such Transfer is in violation or breach of any
covenants or restrictions granted by the Landlord to its
Mortgagee, other tenants or occupants or prospective tenants
or occupants in the Complex;
(b) whether in the Landlord's opinion the financial background,
business history and capability of the proposed transferee is
satisfactory;
(c) whether the Landlord has other premises in the Complex which
might be suitable for the needs of the proposed person or
entity to whom the Transfer is being made;
(d) whether the proposed person or entity to whom the Transfer is
being made is an existing tenant in the Complex (i) THAT
REQUIRES EXPANSION PREMISES IN THE COMPLEX AND THE LANDLORD
HAS OTHER PREMISES IN THE COMPLEX SUITABLE FOR THE NEEDS OF
THE PROPOSED TRANSFEREE, AND (ii) WHOSE LEASE OF SPACE IN THE
COMPLEX IS EXPIRING AND THE TENANT HAS THE LEASED PREMISES OR
A PORTION THEREOF AVAILABLE FOR SUBLEASE OR ASSIGNMENT THAT
WOULD BE SUITABLE FOR THE NEEDS OF THE PROPOSED TRANSFEREE;
and
(e) whether any such Transfer provides for Rent which is less than
the Rent payable under this Lease, OR, IF A SUBLETTING, THE
RENT PAYABLE UNDER THE SUBLEASE IS LESS THAN FAIR MARKET RENT
FOR SUBLET PREMISES.
The consent by the Landlord to any Transfer, if granted, shall not
constitute a waiver of the necessity for such consent to any subsequent
Transfer, whether by the Tenant or any sublessee of the Tenant. This prohibition
against a Transfer is construed so as to include a prohibition against any
Transfer by operation of law and no Transfer shall take place or be deemed to
have been consented to or approved by reason of a failure by the Landlord to
give notice to the Tenant within FIFTEEN (15) days as required by Section 10.02.
SECTION 10.02 - LANDLORD'S RIGHT TO TERMINATE
The Tenant shall not effect a Transfer unless:
(a) it shall have received or procured a bona fide written offer
to effect a Transfer which is not inconsistent with, and the
acceptance of which would not breach any provision of this
Lease if this Section 10.02 is complied with and which the
Tenant has accepted subject only to compliance with this
Section 10.02, and
(b) it shall have first requested and obtained the consent in
writing of the Landlord thereto.
Any request for such consent shall be in writing and accompanied by
a true copy of such offer, and the Tenant shall furnish to the Landlord all
information available to the Tenant and requested by the Landlord as to the
responsibility, reputation, financial standing and business of the proposed
person or entity to whom the Transfer is being made. The Landlord shall
within FIFTEEN (15) days after having received such notice and all such
necessary information, notify the Tenant in writing either that:
(i) it consents or does not consent to the Transfer in accordance
with the provisions and qualifications in this Article X, or
(ii) it elects to terminate this Lease in preference to giving such
consent.
If the Landlord elects to terminate this Lease it shall stipulate in
its notice the date of termination of this Lease, which date shall be no less
than thirty (30) days nor more than ninety (90) days following the giving of
such notice of termination. If the Landlord elects to terminate this Lease as
aforesaid, the Tenant shall notify the Landlord in writing within five (5)
days thereafter of the Tenant's intention either to refrain from such
Transfer or to accept the termination of this Lease. If the Tenant fails to
deliver such notice within such period of five (5) days or notifies the
Landlord that it accepts the Landlord's termination, this Lease will thereby
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, the Landlord's election to terminate this Lease as aforesaid shall
become null and void in such instance.
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SECTION 10.03 - CONDITIONS OF TRANSFER
(a) If there is a permitted Transfer WHICH IS AN ASSIGNMENT, the
Landlord may collect rent from the transferee and apply the
net amount collected to the Rent required to be paid pursuant
to this Lease, but no acceptance by the Landlord of any
payments by the transferee shall be deemed a waiver of the
provisions of Article X hereof or the acceptance of the
transferee as tenant or a release of the Tenant from the
further performance by the tenant of the covenants or
obligations on the part of the Tenant herein contained. Any
consent by the Landlord shall be subject to the Tenant
executing and causing any such transferee to promptly execute
an agreement directly with the Landlord agreeing SAVE AND
EXCEPT FOR PAYMENT OF BASIC RENT IN THE CASE OF A SUBLETTING,
to be bound by all of the terms, covenants and conditions
contained in this Lease as if such transferee had originally
executed this Lease as tenant.
(b) Notwithstanding any such Transfer permitted or consented to by
the Landlord, 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, covenants and conditions of
this Lease.
(c) The Tenant agrees that if this Lease is ever disclaimed or
terminated in a bankruptcy proceeding relating to a
transferee, or if the Landlord terminates this Lease as a
result of any act or default of any transferee, the Tenant
shall, at the Landlord's option exercised by Notice to the
Tenant, enter into a new lease of the Leased Premises on terms
identical to this Lease for a term commencing on the date
which the Landlord exercises its right to require the Tenant
to enter into such new lease and expiring upon the date of
expiry of this Lease; in such event, the Tenant will accept
the Leased Premises in an "as is" condition.
(d) The Landlord's consent to any Transfer shall be subject to the
condition that the Basic Rent payable by the transferee
thereafter shall be the greater of (i) the Basic Rent payable
hereunder or (ii) the Basic Rent payable under the Transfer
agreement.
(e) Any document evidencing CONSENT TO any Transfer permitted by
the Landlord or setting out any terms applicable to such
Transfer or the rights and obligations of the Tenant or the
transferee thereunder, shall be prepared by the Landlord or
its solicitors, and all reasonable legal and other costs with
respect thereto shall be paid by the Tenant to the Landlord or
its solicitors forthwith upon demand as Additional Rent,
together with an administrative fee payable to the Landlord in
the amount of Three Hundred Dollars ($300).
SECTION 10.04 - NO ADVERTISING OF THE LEASED PREMISES
The Tenant shall not print, publish, post, display or broadcast any
notice or advertisement or otherwise advertise the whole or any part of the
Leased Premises for the purpose of any Transfer and it shall not permit any
broker or other person to do any of the foregoing, unless the complete text and
format of any such notice or advertisement is first approved in writing by the
Landlord WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD. Without in any way
restricting or limiting the Landlord's right to refuse any text or format on
other grounds, any text or format proposed by the Tenant shall not contain any
reference to the Rent of and for the Leased Premises.
SECTION 10.05 - CORPORATE OWNERSHIP
If the Tenant is a corporation or partnership or if the Landlord has
consented to a Transfer to a corporation or a partnership, any actual or
proposed Change of Control in such corporation (other than that occurring as the
result of trading in shares listed upon a recognized stock exchange where such
trading is not for the purpose of acquiring effective control) or partnership
shall be deemed to be a Transfer and subject to all of the provisions of this
Article X.
The Tenant shall make available to the Landlord, or its
representatives, all of its corporate or partnership books and records, as the
case may be, for inspection at all reasonable times, to enable the Landlord to
ascertain whether there has been any Change of Control of the Tenant from time
to time. Similarly, any Indemnifier shall make the same information available to
the Landlord in respect of its records and, if there shall be a Change of
Control of the Indemnifier the Landlord may terminate this Lease upon notice to
the Tenant unless it consents to such Change of Control.
For the purposes of this Section, "Change of Control" means the
transfer or issue by sale, assignment, transmission on death, encumbrance,
issuance from treasury, operation of law or otherwise, of any shares, voting
rights or interest which would result in any change in the identity of the
person or entity exercising, or who might exercise, effective control of the
corporation or partnership and, in the case of a partnership, includes a change
in any of its partners.
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NOTWITHSTANDING THE FOREGOING, THE PROVISIONS OF THIS SECTION 10.05
SHALL NOT APPLY PROVIDED THAT:
(a) THE TENANT IN OCCUPANCY OF THE WHOLE OF THE LEASED PREMISES IS
LOYALTY MANAGEMENT GROUP CANADA INC. OR A PERMITTED TRANSFEREE
PURSUANT TO SECTION 10.07A;
(b) THE TENANT IS NOT IN DEFAULT UNDER THE LEASE; AND
(c) LOYALTY MANAGEMENT GROUP CANADA INC. IS NOT RELEASED FROM ITS
OBLIGATIONS UNDER THE LEASE.
SECTION 10.06 - ASSIGNMENT BY THE LANDLORD
The Landlord, at any time and from time to time, may sell, transfer,
lease, assign or otherwise dispose of the whole or any part of its interest in
the Complex, and at any time and from time to time may enter into any Mortgage
of the whole or any part of its interest in the Complex. If the party acquiring
such interest shall have agreed, so long as it holds such interest, to assume
and to perform each of the covenants, obligations and agreements of the Landlord
under this Lease in the same manner and to the same extent as if originally
named as the Landlord in this Lease, the Landlord shall thereupon be released
from all of its covenants and obligations under this Lease.
SECTION 10.07 - TRANSFER WITHOUT CONSENT
A. NOTWITHSTANDING ANYTHING CONTAINED IN THIS ARTICLE X AND
PROVIDED THAT:
(a) THE TENANT IS LOYALTY MANAGEMENT GROUP CANADA INC.;
(b) THE TENANT IS NOT IN DEFAULT UNDER THE LEASE;
(c) ANY PROPOSED TRANSFEREE DIRECTLY COVENANTS WITH THE LANDLORD
TO BE BOUND BY THE TERMS OF THE LEASE SAVE AND EXCEPT FOR THE
PAYMENT OF BASIC RENT IN THE CASE OF A SUBLETTING;
(d) LOYALTY MANAGEMENT GROUP CANADA INC. IS NOT RELEASED FROM ITS
OBLIGATIONS UNDER THE LEASE;
(e) THE LANDLORD RECEIVES PRIOR NOTICE OF SUCH TRANSFER; AND
(f) THE LANDLORD AND THE TENANT SHALL HAVE EXECUTED THE LEASE
THE TENANT SHALL NOT REQUIRE THE CONSENT OF THE LANDLORD PURSUANT TO
SECTION 10.02 HEREOF WITH RESPECT TO A TRANSFER PROVIDED THE TRANSFEREE
IS AN AFFILIATE (AS SUCH TERM IS DEFINED IN THE ONTARIO BUSINESS
CORPORATIONS ACT) OF THE TENANT. IN THE CASE OF ANY SUCH ASSIGNMENT OR
SUBLETTING UNDER THIS SECTION 10.07A, IF, AS AND WHEN THE TRANSFEREE
CEASES TO BE AN AFFILIATE OF LOYALTY MANAGEMENT GROUP CANADA INC., THE
TENANT SHALL BE DEEMED TO HAVE EFFECTED A TRANSFER AT THAT TIME TO
WHICH THE PROVISIONS OF THIS ARTICLE X SHALL APPLY.
B. NOTWITHSTANDING ANYTHING CONTAINED IN THIS ARTICLE X AND
PROVIDED THAT:
a) THE TENANT IS LOYALTY MANAGEMENT GROUP CANADA INC. OR A
PERMITTED TRANSFEREE PURSUANT TO SECTION 10.07A;
b) THE TENANT IS NOT IN DEFAULT UNDER THE LEASE;
c) LOYALTY MANAGEMENT GROUP CANADA INC. IS NOT RELEASED FROM ITS
OBLIGATIONS UNDER THE LEASE; AND
d) THE LANDLORD AND THE TENANT SHALL HAVE EXECUTED THE LEASE
THE TENANT SHALL NOT REQUIRE THE CONSENT OF THE LANDLORD PURSUANT TO
SECTION 10.02 HEREOF WITH RESPECT TO A TRANSFER PROVIDED THAT THE
TRANSFEREE IS A LENDER ENCUMBERING ALL OR SUBSTANTIALLY ALL OF THE
TENANT'S LEASEHOLD INTERESTS IN CANADA, PROVIDED THAT THE RIGHTS OF
SUCH LENDER TO TRANSFER THIS LEASE SHALL BE SUBJECT TO THE PROVISIONS
OF THIS ARTICLE X.
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ARTICLE XI
ACCESS AND ALTERATIONS
SECTION 11.01 - RIGHT OF ENTRY
The Landlord and its agents have the right to enter the Leased Premises
at all times to examine the same and to make such repairs, alterations, changes,
checks, adjustments, calibrations, improvements or additions to the Leased
Premises or the Complex or any part thereof or systems therein or any adjacent
to the Leased Premises. The Tenant shall not obstruct any pipes, conduits,
ducts, mechanical shafts or electrical equipment so as to prevent reasonable
access thereto.
SECTION 11.02 - RIGHT TO SHOW LEASED PREMISES
The Landlord and its agents have the right to enter the Leased Premises
at all times during Business Hours to show them to prospective purchasers,
lessees or Mortgagees and during the twelve (12) months prior to the expiration
of the Term, the Landlord may place upon the Leased Premises the usual "For
Rent" notices which the Tenant shall permit to remain thereon without
molestation or complaint.
SECTION 11.03 - ENTRY NOT FORFEITURE
No entry into the Leased Premises or anything done therein 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) shall constitute a re-entry or forfeiture, or any actual or
constructive eviction. The Tenant shall have no claim for injury, damages or
loss suffered as a result of any such entry or thing done by the Landlord. The
Rent required to be paid pursuant to this Lease shall not abate or be reduced
due to loss or interruption of business of the Tenant or otherwise while any
repairs, alterations, changes, adjustments, improvements or additions permitted
by this Lease are being made by the Landlord.
SECTION 11.04 - LANDLORD'S COVENANT FOR QUIET ENJOYMENT
The Landlord hereby agrees to perform or cause to be performed all of
the obligations of the Landlord under this Lease, and further agrees that if the
Tenant pays the Basic Rent and Additional Rent and continuously performs all its
obligations under this Lease, the Tenant shall, subject to the terms and
conditions of this Lease, peaceably possess and enjoy the Leased Premises
throughout the Term without any interruption or disturbance from the Landlord or
any other person or persons lawfully claiming by, through or under the Landlord.
SECTION 11.05 - INSPECTION
The Landlord and its agents have the right to enter the Leased Premises
ON REASONABLE PRIOR NOTICE TO THE TENANT to inspect the condition thereof and
where an inspection reveals repairs are necessary that are the obligation of the
Tenant under this Lease, the Landlord may give the Tenant Notice and thereupon
the Tenant will, at the Tenant's sole expense and within THIRTY (30) days of the
giving of such Notice, complete the necessary repairs and replacements, in a
good and workmanlike manner to the satisfaction of the Landlord, acting
reasonably. Provided always that if the Tenant shall not within the TEN (10)
days after the giving of such Notice OR SUCH GREATER LENGTH OF TIME AS MAY BE
REASONABLY NECESSARY IN THE CIRCUMSTANCES, be proceeding diligently with the
execution of the repairs and replacements mentioned in such Notice, it shall be
lawful for the Landlord to enter upon the Leased Premises and execute such
repairs and replacements and the cost thereof shall immediately be due and be
paid by the Tenant to the Landlord as an Additional Service Cost.
Notwithstanding what is hereinbefore set out, should such inspection reveal
repairs which are the obligation of the Tenant and which in the reasonable
exercise of the Landlord's judgment result in an emergency then the Landlord, at
its option, shall immediately and without Notice have the right to enter on and
into the Leased Premises and the Tenant shall pay the reasonable costs involved
immediately upon demand as an Additional Service Cost.
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ARTICLE XII
STATUS STATEMENT, ATTORNMENT AND SUBORDINATION
SECTION 12.01 - STATUS STATEMENT
(1) Within ten (10) days after request by Notice therefor by the Landlord,
the Tenant shall deliver, in a form supplied by the Landlord, a status statement
or a certificate to the Landlord, or to the Mortgagee, or to any proposed
Mortgagee or purchaser, or as the Landlord may otherwise direct stating (if such
is the case):
(a) that this Lease is unmodified and in full force and effect (or
if there have been modifications, that this Lease is in full
force and effect as modified and identifying the modification
agreements);
(b) the Commencement Date;
(c) the date to which Basic Rent and Additional Rent have been
paid under this Lease;
(d) TO THE BEST OF THE KNOWLEDGE OF THE TENANT (OR THE LANDLORD AS
THE CASE MAY BE) whether there is any other existing or
alleged default by either party under this Lease with respect
to which a notice of default has been served and if there is
any such default, specifying the nature and extent thereof;
(e) whether there are any defences or counterclaims against
enforcement of the obligations to be performed by the Tenant
under this Lease; and
(f) INTENTIONALLY DELETED.
(2) WITHIN TEN (10) BUSINESS DAYS AFTER REQUEST THEREFOR BY NOTICE BY THE
TENANT, THE LANDLORD SHALL DELIVER A STATUS STATEMENT OR CERTIFICATE TO THE
TENANT, OR TO ANY PROPOSED TRANSFEREE, OR AS THE TENANT MAY DIRECT, STATING (IF
SUCH IS THE CASE) THOSE MATTERS SET OUT IN SECTION 12.01 (1) (a) TO (e),
inclusive.
SECTION 12.02 - SUBORDINATION AND ATTORNMENT
SUBJECT TO THE PROVISIONS OF THE FOLLOWING PARAGRAPH OF THIS SECTION
12.02, it is a condition of this Lease and the Tenant's rights granted hereunder
that this Lease and all of the rights hereunder are and shall at all times be
subject and subordinate to any and all Mortgages from time to time in existence
against the Lands. Upon request, the Tenant shall subordinate the Lease and all
of its rights hereunder in such form as the Landlord reasonably requires to any
and all Mortgages, and to all advances made or hereafter to be made upon the
security thereof and, if requested, the Tenant shall attorn to the holder
thereof. Any subordination will provide that the rights of the Tenant under this
Lease shall not be interfered with so long as the Tenant is not in default
hereunder. The form of such subordination shall be as required by the Landlord
or any Mortgagee.
The Landlord shall use reasonable efforts to obtain a non-disturbance
agreement in writing from any Mortgagee. such non-disturbance agreement shall be
provided to the Tenant, provided the Tenant is not then in material default, the
Tenant having been provided sufficient Notice of such default with an adequate
opportunity to rectify same, as provided in the Lease, and shall entitle the
Tenant to remain undisturbed in its possession of the Leased Premises subject to
the terms and conditions of this Lease, notwithstanding the exercise of any and
all of the rights of any such Mortgagee and the Tenant shall not be bound to
subordinate or postpone to any future Mortgage unless a non-disturbance
agreement is provided.
SECTION 12.03 - ATTORNEY - INTENTIONALLY DELETED
SECTION 12.04 - FINANCIAL INFORMATION
ONLY IN THE EVENT OF ARREARS OF RENT, the Tenant shall, upon
request, provide the Landlord with such information as to the Tenant's or any
Indemnifier's financial standing and corporate organization as the Landlord
or the Mortgagee requires. Failure by the Tenant to comply with the
Landlord's request herein shall constitute a default under the terms of this
Lease and the Landlord shall be entitled to exercise all of its rights and
remedies provided for in this Lease.
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SECTION 12.05 - ACKNOWLEDGEMENT OF TITLE
The Tenant acknowledges that its interest under this Lease is
subject to:
(a) covenants, restrictions, easements, agreements and
reservations of record, and any easements, licences,
rights-of-way and cost sharing arrangements and agreements
respecting the same hereafter made in connection with the
provision of access or services to the Complex or otherwise in
connection with the Common Facilities and which may affect the
Landlord's title;
(b) all laws, by-laws, ordinances, regulations and orders of the
City of Mississauga, Province of Ontario and Government of
Canada, and of all statutory commissions, boards and bodies
having jurisdiction over the Leased Premises;
(c) the condition of the Landlord's tide existing at the date
hereof; and
(d) municipal realty taxes, local improvement rates, duties,
assessments, water and sewer rates and other impositions
accrued or unaccrued.
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ARTICLE XIII
DEFAULT
SECTION 13.01 - RIGHT TO RE-ENTER
If and whenever:
(a) the Tenant fails to pay any Basic Rent or Additional Rent or
other sums due hereunder on the day or dates appointed for the
payment thereof (providing the Landlord first gives five (5)
days' Notice to the Tenant of any such failure); or
(b) the Tenant fails to observe or perform any other of the terms,
covenants or conditions of this Lease to be observed or
performed by the Tenant (other than the terms, covenants or
conditions set out below in subparagraphs (c) to (1),
inclusive, for which no Notice shall be required), provided
the Landlord first gives the Tenant ten (10) BUSINESS days'
(or such shorter period of time as is otherwise provided
herein) Notice of any such failure to perform and the Tenant
within such period of ten (10) BUSINESS days (or such shorter
period, as aforesaid) fails to commence diligently and,
thereafter, to proceed diligently to cure any such failure to
perform; or
(c) the Tenant or any agent of the Tenant FRAUDULENTLY falsifies
any report or statement required to be furnished to the
Landlord pursuant to this Lease PROVIDED THE LANDLORD FIRST
GIVES THE TENANT TEN (10) BUSINESS DAYS NOTICE OF ANY SUCH
FAILURE AND THE TENANT WITHIN SUCH TEN (10) BUSINESS DAYS
FAILS TO CURE SUCH REPORT OR STATEMENTS; or
(d) the Tenant or any Indemnifier of this Lease or any person
occupying the Leased Premises or any part thereof or any
licensee, concessionaire or franchisee operating any business
in the Leased Premises becomes bankrupt or insolvent or takes
the benefit of any act now or hereafter in force for bankrupt
or insolvent debtors or files any proposal or makes any
assignment for the benefit of creditors or any arrangement or
compromise; or
(e) a receiver or a receiver and manager is appointed for all or a
portion of the property of the Tenant, any Indemnifier or any
such occupant, licensee, concessionaire or franchisee AND SUCH
APPOINTMENT IS NOT CONTESTED IN GOOD FAITH or a material
adverse change in the financial status of the Indemnifier
occurs; or
(f) any steps are taken or any action or proceedings are
instituted by the Tenant or by any other party including,
without limitation, any court or governmental body of
competent jurisdiction for the dissolution, winding-up or
liquidation of the Tenant or its assets OTHER THAN IN
CONNECTION WITH A BONA FIDE CORPORATE REORGANIZATION OF THE
TENANT; or
(g) the Tenant makes a sale in bulk of any of its assets wherever
situate (other than a bulk sale made pursuant to a permitted
Transfer hereunder and pursuant to the Bulk Sales Act of
Ontario); or
(h) the Tenant abandons or attempts to abandon the Leased
Premises; or
(i) the Leased Premises become and remain vacant for a period of
five (5) consecutive days or are used by any persons other
than such as are entitled to use them hereunder PROVIDED THAT
IF THE TENANT GIVES NO LESS THAN THIRTY (30) DAYS' PRIOR
NOTICE TO THE LANDLORD, SUCH NOTICE STATING THE TENANT'S
BUSINESS REASONS FOR VACATING THE LEASED PREMISES AND
CONTAINING AN ACKNOWLEDGEMENT THAT THE TENANT IS NOT RELEASED
FROM ITS OBLIGATIONS UNDER THE LEASE, THE TENANT MAY SO
VACATE; or
(j) the Tenant purports to make a Transfer, except in a manner
permitted by this Lease; or
(k) this Lease or any of the Tenant's assets IN THE LEASED
PREMISES are taken under any writ of execution AND SUCH TAKING
IS NOT CONTESTED IN GOOD FAITH; or
(l) re-entry is permitted under any other terms of this Lease
then and in every such case, the Landlord, in addition to any other rights or
remedies it has pursuant to this Lease or by law, has the immediate right of
re-entry upon the Leased Premises and it may repossess the Leased Premises and
enjoy them as of its former estate and may expel all persons and remove all
property from the Leased Premises and such property may be removed and sold or
disposed of by the Landlord as it deems advisable or may be stored in a public
warehouse or elsewhere at the cost and for the account of the Tenant, all
without service of notice or resort to legal process and without the Landlord
being considered guilty of trespass or becoming liable for any loss or damage
which may be occasioned thereby.
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SECTION 13.02 - RIGHT TO RE-LET
If the Landlord elects to re-enter the Leased Premises as herein
provided or it takes possession pursuant to legal proceedings or pursuant to any
notice provided for by law, it may either terminate this Lease or it may from
time to time without terminating this Lease, make such alterations and repairs
as are necessary to re-let the Leased Premises or any part thereof for such term
or terms (which may be for a term extending beyond the Term) and at such rent
and upon such other terms, covenants and conditions as the Landlord in its sole
discretion, acting reasonably, considers advisable. Upon each such reletting,
all rent received by the Landlord from such re-letting shall be applied, first,
to the payment of any indebtedness other than Basic Rent or Additional Rent due
hereunder from the Tenant to the Landlord; second, to the payment of any
brokerage fees and legal fees and of costs of such alterations, repairs and
re-letting (including tenant inducements); third, to the payment of Basic Rent
and Additional Rent due and unpaid hereunder; and the residue, if any, to the
extent applicable to any period of time within the Term, shall be held by the
Landlord and applied in payment of future rent as the same becomes due and
payable hereunder. If such rent to be received from such re-letting during any
month is less than that to be paid during that month by the Tenant hereunder,
the Tenant shall pay any such deficiency which shall be calculated and paid
monthly in advance on or before the first day of each and every month. No such
re-entry or taking possession of the Leased Premises by the Landlord shall be
construed as an election on its part to terminate this Lease unless a Notice of
such intention is given to the Tenant. Notwithstanding any such re-letting
without termination, the Landlord may at any time thereafter elect to terminate
this Lease for such previous breach.
SECTION 13.03 - TERMINATION
If the Landlord at any time terminates this Lease for any breach, in
addition to any other remedies it may have, it may recover from the Tenant all
damages it incurs by reason of such breach, including the cost of recovering the
Leased Premises, legal fees (on a solicitor and his client basis) and including
the worth at the time of such termination of the excess, if any, of the amount
of Basic Rent, Additional Rent and charges equivalent to the Basic Rent,
Additional Rent and other charges required to be paid pursuant to this Lease for
the remainder of the stated Term over the then reasonable rental value of the
Leased Premises for the remainder of the stated Term, all of which amounts shall
be immediately due and payable by the Tenant to the Landlord. THE LANDLORD SHALL
USE ALL REASONABLE EFFORTS TO MITIGATE ITS DAMAGES.
SECTION 13.04 - ACCELERATED RENT
In any of the events referred to in Section 13.01, in addition to any
and all other rights available to the Landlord, the full amount of the current
month's instalment of Basic Rent and of all Additional Rent for the current
month, together with the next three (3) months' instalments of Basic Rent and of
all Additional Rent for the next three (3) months, all of which shall be deemed
to be accruing due on a day-to-day basis, shall immediately become due and
payable as accelerated rent, and the Landlord may immediately distrain for the
same, together with any arrears then unpaid.
SECTION 13.05 - EXPENSES
If legal action is brought for recovery of possession of the Leased
Premises, for the recovery of Basic Rent or Additional Rent or any other amount
due under the Lease, or because of the breach of any other terms, covenants or
conditions herein contained on the part of the Tenant to be kept or performed,
and such breach is established, the Tenant shall pay to the Landlord all
expenses incurred therefor, including legal fees (on a solicitor and client
basis).
SECTION 13.06 - WAIVER OF EXEMPTION FROM DISTRESS
The Tenant hereby agrees with the Landlord that notwithstanding
anything contained in Section 30 of R.S.O. 1990, c. L. 7, or any Statute
subsequently passed to take the place of or amend the said Act, none of the
goods and chattels of the Tenant at any time during the continuance of the Term
on the Leased Premises shall be exempt from levy by distress for Basic Rent or
Additional Rent in arrears and the Tenant waives any such exemption. If any
claim is made for such exemption by the Tenant or if a distress is made by the
Landlord, 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.
SECTION 13.07 - LANDLORD MAY CURE TENANT'S DEFAULT OR
PERFORM TENANT'S COVENANTS
If the Tenant fails to pay when due any amounts or charges required to
be paid pursuant to this Lease, the Landlord after giving five (5) days' Notice
to the Tenant may, but shall not be obligated to, pay all or any part of the
same. If the Tenant is in default in the performance of any of its covenants or
obligations hereunder (other than the payment of Basic Rent, Additional Rent or
other sums required to be paid pursuant to this Lease), the Landlord may, but
shall not be obligated to, from time to time after giving such Notice as is
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REQUIRED BY THIS LEASE (or without notice in the case of an 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 limitation, entering upon the
Leased Premises and doing such things upon or in respect of the Leased Premises
or any part thereof as the Landlord reasonably considers requisite or necessary.
All OUT-OF-POCKET expenses incurred and expenditures made pursuant to this
Section 13.07 including the Landlord's overhead in connection therewith plus a
sum equal to FIFTEEN (15%) thereof shall be paid by the Tenant as Additional
Rent forthwith upon demand.
SECTION 13.08 - ADDITIONAL RENT
If the Tenant is in default in the payment of any amounts or charges
required to be paid pursuant to this Lease, they shall, if not paid when due, be
collectible as Additional Rent forthwith on demand, but nothing herein contained
is deemed to suspend or delay the payment of any amount of money at the time it
becomes due and payable hereunder, or limit any other remedy of the Landlord.
The Tenant agrees that the Landlord may, at its option, apply or allocate any
sums received from or due to the Tenant against any amounts due and payable
hereunder in such manner as the Landlord sees fit. All such monies payable to
the Landlord hereunder shall bear interest at a rate per annum which is THREE
(3) percentage points in excess of the Bank Rate calculated on a daily basis
from the time such sums become due until paid by the Tenant.
SECTION 13.09 - REMEDIES GENERALLY
Mention in this Lease of any particular remedy of the Landlord in
respect of the default by the Tenant does not preclude the Landlord from any
other remedy in respect thereof, whether available at law or in equity or by
statute or expressly provided in this Lease. No remedy shall be exclusive or
dependant upon any other remedy, but the Landlord may from time to time exercise
any one or more of such remedies generally or in combination, such remedies
being cumulative and not alternative. In the event of a breach or threatened
breach by THE LANDLORD or the Tenant of any of the covenants, provisions or
terms hereof, the Landlord OR THE TENANT shall have the right to invoke any
remedy allowed at law or in equity (including injunction).
SECTION 13.10 - HOLDING OVER
If the Tenant shall hold over after the original Term or any
extended term hereof WITHOUT the consent of the Landlord, such holding over
shall be construed to be a tenancy from month to month only and shall have no
greater effect, any custom, statute, law or ordinance to the contrary
notwithstanding. Such month-to-month tenancy shall be governed by the terms
and conditions hereof, notwithstanding any statutory provision or rule of law
to the contrary. During any such period of holding over, the Tenant shall be
required to pay the monthly Basic Rent payable during the month immediately
preceding the expiration or termination of this Lease times ONE HUNDRED AND
FIFTY PERCENT (150%), plus all Additional Rent payable hereunder. The rights
of the Landlord under this section shall be in addition to all other remedies
available to the Landlord under this Lease or otherwise at law or in equity
arising as a result of such holding over.
SECTION 13.11 - NO WAIVER
The failure of the Landlord to insist upon a strict performance of any
of the covenants and provisions herein contained shall not be deemed a waiver of
any rights or remedies that the Landlord may have and shall not be deemed a
waiver of any subsequent breach or default in the covenants and provisoes herein
contained.
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ARTICLE XIV
MISCELLANEOUS
SECTION 14.01 - RULES AND REGULATIONS
The Landlord shall have the right at its discretion to make reasonable
rules and regulations (the "Rules and Regulations"), including without
limitation, those set out in Schedule "C" attached not contrary to the spirit
and intent of this Lease which may from time to time be needful for the safety,
care, cleanliness and proper administration of the Complex including the Leased
Premises, and for the preservation of good order therein. The Rules and
Regulations are hereby made a part of this Lease as if they were embodied
herein, and the Tenant, its agents, invitees, servants, employees and licensees
shall comply with and observe the same. Failure by the Tenant to keep and
observe any of the Rules and Regulations now or from time to time in force
constitutes a default under this Lease in such manner as if the same were
contained herein as covenants. The Landlord reserves the right from time to time
to amend or supplement the Rules and Regulations and Notice of the Rules and
Regulations and amendments and supplements, if any, shall be given to the Tenant
and the Tenant shall thereupon comply with and observe all such Rules and
Regulations, provided that no Rule or Regulation shall contradict any terms,
covenants and conditions of this Lease.
The Landlord is not responsible to the Tenant in the event of
non-observance or violation of any of such Rules and Regulations or of the
terms, covenants or conditions of any other lease of the premises in the Complex
BUT SHALL USE REASONABLE EFFORTS TO enforce any such Rules and Regulations or
terms, covenants or conditions AGAINST ALL TENANTS OF THE COMPLEX.
SECTION 14.02 - SECURITY DEPOSIT
The Landlord acknowledges receipt from the Tenant of the Security
Deposit which shall BE HELD BY THE LANDLORD IN AN INTEREST BEARING ACCOUNT (WITH
INTEREST ACCRUING TO THE BENEFIT OF THE TENANT) AS SECURITY FOR THE FAITHFUL
PERFORMANCE BY THE TENANT OF ALL OF THE TERMS, COVENANTS, CONDITIONS AND
OBLIGATIONS OF THE LEASE BY THE TENANT TO BE KEPT, OBSERVED AND PERFORMED FOR
THE FIRST TWO (2) YEARS OF THE TERM. IF AT ANY TIME DURING THE FIRST TWO (2)
YEARS OF THE TERM, THE BASIC RENT OR ADDITIONAL RENT OR ANY OTHER SUMS PAYABLE
BY THE TENANT TO THE LANDLORD UNDER THE LEASE ARE OVERDUE AND UNPAID, OR IF THE
TENANT FAILS TO KEEP AND PERFORM ANY OF THE TERMS, COVENANTS, CONDITIONS AND
OBLIGATIONS OF THIS LEASE TO BE KEPT, OBSERVED AND PERFORMED BY THE TENANT, THEN
THE LANDLORD AT ITS OPTION MAY APPROPRIATE AND APPLY THE SECURITY DEPOSIT, OR SO
MUCH THEREOF AS IS NECESSARY TO COMPENSATE THE LANDLORD FOR LOSS OR DAMAGE
SUSTAINED OR SUFFERED BY THE LANDLORD DUE TO SUCH BREACH ON THE PART OF THE
TENANT. IF THE SECURITY DEPOSIT, OR ANY PORTION THEREOF, IS APPROPRIATED AND
APPLIED BY THE LANDLORD FOR THE PAYMENT OF OVERDUE BASIC RENT OR ADDITIONAL RENT
OR OTHER SUMS DUE AND PAYABLE TO THE LANDLORD BY THE TENANT UNDER THE LEASE,
THEN THE TENANT SHALL FORTHWITH REMIT TO THE LANDLORD A SUFFICIENT AMOUNT IN
CASH TO RESTORE THE SECURITY DEPOSIT TO THE ORIGINAL AMOUNT OF THE SECURITY
DEPOSIT AND THE TENANT'S FAILURE TO DO SO WITHIN FIVE (5) DAYS AFTER RECEIPT OF
SUCH DEMAND CONSTITUTES A BREACH OF THE LEASE. AT THE EXPIRY OF THE SECOND YEAR
OF THE TERM, AT THE LANDLORD'S OPTION, THE SECURITY DEPOSIT SHALL EITHER BE
APPLIED TO RENT DUE BY THE TENANT IMMEDIATELY FOLLOWING THE EXPIRY OF THE SECOND
YEAR OF THE TERM OR RETURNED TO THE TENANT, PROVIDED THAT IF, AT THE EXPIRY OF
THE SECOND YEAR OF THE TERM, THE TENANT IS IN DEFAULT UNDER THE TERMS OF THE
LEASE, THE LANDLORD SHALL BE ENTITLED TO RETAIN THE SECURITY DEPOSIT UNTIL SUCH
TIME AS THE TENANT IS NO LONGER IN DEFAULT UNDER THE TERMS OF THE LEASE.
SECTION 14.03 - PEST CONTROL
In accordance with Section 5.03, the Tenant shall enter into a service
contract for the control and extermination of pests and vermin providing for
regular inspections and spraying of the Leased Premises in order to control
pests and vermin in accordance with all applicable laws, by-laws, ordinances and
regulations of any governmental or other authority having jurisdiction. All
amounts incurred under such service contract shall be for the Tenant's sole
cost.
SECTION 14.04 - OBLIGATIONS AS COVENANTS
Each obligation or agreement of the Landlord or the Tenant expressed in
this Lease, even though not expressed as a covenant, is considered to be a
covenant for all purposes.
SECTION 14.05 - AMENDMENTS AND SUPPLEMENTARY LEASE PROVISIONS
This Lease shall not be modified or amended except by an instrument in
writing of equal formality herewith and signed by the parties hereto or by their
permitted successors or assigns. Each of the Landlord and Tenant agrees that, if
a Schedule "E" is annexed to this Lease, the terms and provisions thereof shall
be binding upon the parties hereto as part of the Lease.
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SECTION 14.06 - CERTIFICATES
The following certificates shall be conclusive and binding upon the
parties to this Lease in respect of any question of fact or opinion in dispute
with respect to the matters stipulated UNLESS SHOWN TO BE ERRONEOUS IN SOME
MATERIAL RESPECT:
(a) a certificate procured by the Landlord from an INDEPENDENT
architect, professional engineer, quantity surveyor or other
individual qualified in the Landlord's sole opinion, as to the
Rentable Area of the Leased Premises, or the Total Rentable
Area, any question of fact concerning the completion of any
construction or other work either by the Landlord or the
Tenant, the extent to which the completion of any such work
has been delayed by Unavoidable Delay, the time necessary to
complete repairs, the allocation of insurance proceeds,
whether the Complex or any part thereof is being kept in good
repair, order and condition as required by this Lease, the
appropriateness of costs and expenses included in Operating
Costs, the allocation of Taxes to the Leased Premises, the
aggregate of the cost of the Complex and the costs of
additional improvements of a capital nature, the cause of any
destruction or damage, the extent to which rentable premises
in the Complex are incapable of being used for their intended
purposes by reason of any destruction or damage; and
(b) a certificate procured by the Landlord from AN INDEPENDENT
licensed public accountant, who may be the Landlord's auditor,
as to any question of fact or opinion concerning the
computation of Taxes and Operating Costs and the proper amount
of any payment to the Landlord or the Tenant under this Lease.
Any certificate procured by the Landlord shall be prepared using
generally accepted practices and procedures appropriate to such certificate.
SECTION 14.07 - TIME
Time shall in all respects be of the essence of this Lease.
SECTION 14.08 - SUCCESSORS AND ASSIGNS
This Lease and everything contained shall extend to and bind and enure
to the benefit of the Landlord and its successors and assigns and the Tenant and
the Indemnifier, if any, and their respective heirs, executors, administrators
and permitted successors and assigns. No rights shall enure to the benefit of
any transferee unless the provisions of Article X hereof are complied with.
SECTION 14.09 - GOVERNING LAW
This Lease shall be construed and governed by the laws of the Province
of Ontario.
SECTION 14.10 - HEADINGS
The Section numbers, article numbers, headings and table of contents
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 such paragraphs
or articles of this Lease nor in any way affect this Lease.
SECTION 14.11 - ENTIRE AGREEMENT
This Lease and the schedules attached hereto and forming a part hereof
and THOSE PROVISIONS OF THE AGREEMENT TO LEASE SET FORTH IN SECTION 2.03 OF THIS
LEASE set forth all the covenants, promises, agreements, conditions and
understandings between the Landlord and the Tenant concerning the Leased
Premises and there are no covenants, promises, agreements, conditions or
understandings, either oral or written, between them, other than as are herein
and therein set forth; for greater certainty, the Tenant acknowledges that it
has not entered into the Agreement to Lease or this Lease on the basis of any
information contained in the promotional brochure for the Complex. In the event
of a conflict between the provisions of this Lease and the provisions of THOSE
PARAGRAPHS OF THE AGREEMENT TO LEASE SET OUT IN SECTION 2.03, THOSE PARAGRAPHS
OF THE AGREEMENT TO LEASE SET OUT IN SECTION 2.03 SHALL PREVAIL, EXCEPT AS
AFORESAID, THE PROVISIONS OF THE AGREEMENT TO LEASE SHALL MERGE UPON EXECUTION
OF THE LEASE.
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SECTION 14.12 - SEVERABILITY
If any term, covenant or condition of this Lease or the application
thereof to any person or circumstances shall to any extent be invalid or
unenforceable, the remainder of this Lease or the application of such term,
covenant or condition to persons or circumstances other than those as to which
it is held invalid or unenforceable shall not be affected thereby and each term,
covenant or condition of this Lease shall be valid and enforced to the fullest
extent permitted by law.
SECTION 14.13 - NO OPTION
The submission of this Lease for examination does not constitute a
reservation of or option for the Leased Premises and this Lease becomes
effective as a lease only upon execution and delivery thereof by Landlord and
Tenant.
SECTION 14.14 - OCCUPANCY PERMIT
Provided further that notwithstanding the Commencement Date of the
Lease as hereinbefore set out, the Tenant shall not be permitted to enter into
possession of the Leased Premises until the Tenant has obtained, at its sole
expense, any required occupancy permit from the proper governmental authority.
The Landlord in its sole discretion may waive this provision, provided further
the Tenant agrees to use its best efforts to obtain same prior to occupancy.
SECTION 14.15 - PLACE FOR PAYMENTS
All payments required to be made by the Tenant herein shall be made to
the Landlord at the Landlord's Address or to such agent or agents of the
Landlord or at such other place IN CANADA as the Landlord shall hereafter from
time to time direct by Notice.
SECTION 14.16 - EXTENDED MEANINGS
The words "hereof", "herein", "hereunder" and similar expressions used
in any section or subsection of this Lease relate to the whole of this Lease and
not to that section or subsection only, unless otherwise expressly provided. The
use of the neuter singular pronoun to refer to the Landlord or the Tenant is
deemed a proper reference, even though the Landlord or the Tenant is an
individual, a partnership, a corporation or a group of two or more individuals,
partnerships or corporations. The necessary grammatical changes required to make
the provisions of this Lease apply in the plural sense where there is more than
one Landlord or Tenant and to either corporations, associations, partnerships or
individuals, males or females, shall in all instances be assumed as though in
each case fully expressed.
SECTION 14.17 - NO PARTNERSHIP OR AGENCY
The Landlord does not in any way or for any purpose become a partner of
the Tenant in the conduct of its business or otherwise or a joint venture or a
member of a joint enterprise with the Tenant, nor is the relationship of
principal and agent created.
SECTION 14.18 - UNAVOIDABLE DELAY
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
Unavoidable Delay, then performance of such term, covenant or act is excused for
the period of the delay and the party so delayed, hindered or prevented 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 Section do not operate to excuse the Tenant from the prompt payment of
Basic Rent, Additional Rent or any other payments required by this Lease.
SECTION 14.19 - REGISTRATION
(a) The Tenant hereby covenants and agrees that neither the Tenant
nor anyone on the Tenant's behalf or claiming under the Tenant
shall register this Lease or any assignment or sublease of
this Lease or any document evidencing any interest of the
Tenant in the Lease or the Leased Premises. If the covenant
contained in this Section 14.19(a) is breached, this Lease and
the Term shall, at the option of the Landlord upon Notice to
the Tenant, forthwith become forfeited and terminated and the
Landlord may thereupon re-enter and repossess the Leased
Premises. The Tenant acknowledges that any breach of such
covenant may occasion substantial costs to the Landlord. The
Tenant shall indemnify the Landlord and save it harmless from
and against any loss, claim,
37
<PAGE>
action, damages, liability and expenses arising in connection
with any breach by the Tenant of such covenant.
(b) Notwithstanding Section 14.19(a), if either party intends to
register a document for the purpose only of giving notice of
this Lease or of any permitted Transfer, then upon request of
such party the Landlord shall cause to be executed a short
form of this Lease ("Short Form"), and the Tenant shall join
therein, solely for the purpose of supporting an application
for registration of notice of this Lease or of any permitted
Transfers. The form of the Short Form and of the application
to register notice of this Lease or of any permitted Transfer
shall:
(i) be prepared by the Landlord or its solicitors at the
Tenant's expense; and
(ii) only describe the registered owner of the Lands, the
Tenant, the Leased Premises, the Commencement Date
and the expiration of the Term, RENEWAL RIGHTS, RIGHT
TO LEASE ADDITIONAL SPACE AND ANY OTHER ESSENTIAL
TERMS A DESCRIPTION OF WHICH MUST BE REGISTERED IN
ORDER FOR PROPER NOTICE THEREOF TO BE PROVIDED AT
LAW.
(c) All costs, expenses and taxes necessary to register or file
the application to register notice of this Lease or of any
permitted Transfer shall be the sole responsibility of the
Tenant, and the Tenant will complete any necessary affidavits
required for registration purposes, as may be required to give
effect to this Section.
(d) Notwithstanding that the Short Form may be executed and
delivered after the execution and delivery of this Lease, none
of the terms of this Lease shall be considered to have been
superseded thereby or no longer in effect, but rather this
Lease shall continue in full force and effect and continue to
enure to the benefit of and be binding upon the parties to
this Lease. To the extent that the terms of the Short Form are
inconsistent with the terms of this Lease, the terms of this
Lease shall govern.
SECTION 14.20 - JOINT AND SEVERAL LIABILITY
The liability to pay Rent and perform all other obligations under this
Lease of each individual, corporation, group, partnership or business
association signing this Lease or otherwise agreeing to be bound by the terms
hereof and of each partner or member of any such group, partnership or business
association, the partners or members of which are by law subject to personal
liability, shall be deemed to be joint and several (including, in any event, any
person who ceases to be a partner or member or any person who becomes a partner
or member, in each case following the execution of this Lease).
SECTION 14.21 - NAME OF COMPLEX
The Landlord may designate, change, alter or remove the name of the
Complex or any part thereof at any time without requiring the Tenant's consent
thereto or incurring any liability to the Tenant thereby.
Any trade name or mark adopted by the Landlord for the Complex shall be
used by the Tenant only in association with its business conducted in or from
the Leased Premises and subject to such limitations, regulations and
restrictions as the Landlord may from time to time impose on its use. The Tenant
will not acquire any rights to or interest in any such trade name or mark and
shall cease all use thereof upon ceasing to be a permitted occupant of the
Leased Premises.
SECTION 14.22 - CHANGES IN THE COMPLEX
This Lease shall affect only the Lands from time to time comprising the
Complex as designated by the Landlord and as such Lands may from time to time be
altered, varied, diminished, enlarged or supplemented by the Landlord. The
Tenant shall, at the request of the Landlord, enter into such further
assurances, releases or other documents as may reasonably be required by the
Landlord to give effect to such alteration, variation, diminution, enlargement
or supplementation, provided such does not unreasonably affect access to the
Leased Premises.
SECTION 14.23 - COMPLIANCE WITH THE PLANNING ACT
It is an expressed condition of this Lease and the Landlord and the
Tenant so agree and declare that the provisions of Section 50(3), R.S.O. 1990,
c. P. 13, and amendments thereto, be complied with if applicable in law. Until
any necessary consent to the Lease is obtained, the term of this Lease and the
Tenant's rights and entitlement granted by this Lease are deemed to extend for a
period not exceeding twenty-one (21) years less one (1) day. The Tenant shall
apply diligently to prosecute such application for such consent forthwith upon
the execution of the Lease by both the Landlord and the Tenant and the Tenant
shall be responsible for all costs, expenses, taxes and levies imposed, charged
or levied as a result of such application and in order to obtain such consent.
The Tenant shall keep the Landlord informed, from time to time, of its progress
in obtaining such
38
<PAGE>
consent and the Landlord shall co-operate with the Tenant in regard to such
application. Notwithstanding the foregoing provisions of this Section 14.23, the
Landlord reserves the right at any time, to apply for such consent in lieu of
the Tenant (on behalf and at the expense of the Tenant) and the Tenant's
application is hereby expressly made subject to any application which the
Landlord intends to make.
39
<PAGE>
ARTICLE XV
IDEMNITY AGREEMENT - INTENTIONALLY DELETED
SECTION 15.01 - INDEMNITY - INTENTIONALLY DELETED
SECTION 15.02 - FURTHER ASSURANCES - INTENTIONALLY DELETED
IN WITNESS WHEREOF the Landlord and the Tenant have executed this Lease.
LANDLORD:- CIBC DEVELOPMENT CORPORATION
By: /s/ Jane McGuire
--------------------------------
Jane McGuire
VP, Finance & Corporate Services
And: /s/ Don Harrison
--------------------------------
Don Harrison
VP Leasing & Business Development
TENANT:- LOYALTY MANAGEMENT
GROUP CANADA INC.
By: /s/ John Scullion
--------------------------------
John Scullion
Chief Operating Officer
And: /s/ Michael Kline
-------------------------------
Michael Kline
Vice President, Legal Services
40
<PAGE>
SCHEDULE "A"
5055 SATELLITE DRIVE, MISSISSAUGA
ALL AND SINGULAR that certain parcel or 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 part of Block 8 according to a
Plan registered in the Land Registry Office for the Land Titles Division of Peel
Region as Plan 43M-793 being parts 1 to 12 on Plan 43R-23160, part of PIN
13297-0243.
<PAGE>
SCHEDULE "B"
The Floor Plan is for identification purposes only and is not to be
interpreted as being a representation or warranty on the part of the Landlord
as to the exact location, configuration and layout.
[MAP]
INITIALLED FOR IDENTIFICATION:
CIBC DEVELOPMENT CORPORATION LOYALTY MANAGEMENT GROUP CANADA INC.
[ILLEGIBLE] [ILLEGIBLE]
_________________________________ ____________________________________
[ILLEGIBLE] [ILLEGIBLE]
_________________________________ ____________________________________
<PAGE>
SCHEDULE "C"
RULES AND REGULATIONS
1. The sidewalks, driveways, parking areas, entry passages, fire escapes
and stairways, if any, shall not be obstructed by any of the tenants,
or used by them for any purpose other than ingress and egress to and
from their respective premises. Tenants shall not place or allow to be
placed in the Complex or Common Facilities any waste paper, dust,
garbage, refuse or anything whatever that would tend to make them
unclean or untidy.
2. The water closets or other water apparatus shall not be used for any
purpose other than those for which they were constructed, and no
sweepings, rubbish, rags, ashes or other substances shall be thrown
therein. Any damage resulting from misuse shall be borne by the Tenant
by whom or by whose agents, servants or employees the same is caused.
Tenants shall not let the water run unless it is in actual use, nor
shall they deface any part of the Complex.
3. No tenant shall do or permit anything to be done in their respective
premises or bring or keep anything therein which will in any way
increase the risk of fire or obstruct or interfere with the rights of
other tenants or violate or act at variance with the laws relating to
fires or with the regulations of any fire department or any board of
health.
4. Tenant, their clerks or servants shall not interfere with other tenants
or those having business with them.
5. Nothing shall be thrown by the tenants, their clerks or servants out of
the windows or doors or down the passages of the Complex.
6. No birds or animals shall be kept in or about the Complex nor shall the
tenants operate or permit to be operated any musical or sound producing
instrument or device inside or outside their respective premises which
may be heard outside their premises, or which may be deemed to be a
nuisance to other tenants of the Complex.
7. No one shall use the Complex or any part thereof for sleeping
apartments or residential purposes or for the storage of personal
effects or articles other than those required for business purposes.
8. 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 Complex. Any injury or damage caused to the
Complex or its appointments, furnishings, 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.
9. It shall be the duty of the respective tenants to assist and co-operate
with the Landlord in preventing injury to the premises demised to them
respectively.
10. No inflammable oils or other inflammable, dangerous or explosive
materials shall be kept or permitted to be kept in any tenant's
premises. Nothing shall be placed on the outside of window sills or
projections.
11. No bicycles or other vehicles shall be brought within the Complex
except in the parking garage, if any.
12. The parking of cars, shall be subject to the reasonable regulations of
the Landlord.
13. Tenants shall not mark, paint, drill into or in any way deface the
walls, ceilings, partitions, floors or other parts of their respective
premises or the Complex except with the prior written consent of the
Landlord as it may direct, OTHER THAN IN CONNECTION WITH SUCH
DECORATION AS IS USUAL IN THE OCCUPATION OF PREMISES LIKE THE LEASED
PREMISES, OR OTHERWISE IN ACCORDANCE WITH THIS LEASE.
14. The Tenant agrees to surrender to the Landlord on the termination of
the Lease all keys to the said premises.
15. SUBJECT TO PARAGRAPH 5 OF SCHEDULE "E, if the Tenant desires telegraph
or telephone, it shall be the Tenant's responsibility to call Bell or
other private signal connectors and the Landlord reserves the right to
direct the electricians or other workmen 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 of any kind shall be
introduced without the written consent of the Landlord.
16. Nothing shall be placed on the outside of windows or projections of the
Leased Premises. No airconditioning equipment shall be placed at the
windows of the Leased Premises without the prior written consent of the
Landlord.
17. All glass, locks and trimmings in or upon the doors or windows of the
Leased Premises shall be kept whole and whenever any part thereof shall
become broken, the same shall be immediately replaced or repaired under
the direction and to the satisfaction of the Landlord, and such
replacements and repairs shall be paid for by the Tenant.
18. No heavy equipment of any kind shall be moved within the Complex
without skids being placed under the same, and without the consent of
the Landlord in writing.
19. Any person entering upon the roof of the Complex does so at his own
risk.
20. No tenant shall be permitted to do cooking or to operate cooking
apparatus except in a portion of the Complex leased for that purpose.
21. The Tenant shall leave the Leased Premises in a condition suitable for
the performance by the Landlord or its janitorial services, if any.
22. The Tenant shall not install or cause to be installed any vending
machines in the Leased Premises SAVE AND EXCEPT ANY VENDING MACHINES
FOR THE EXCLUSIVE USE OF THE TENANT IN THE LEASED PREMISES.
23. THE LANDLORD SHALL PROVIDE THE TENANT ACCESS TO THE LEASED PREMISES
DURING HOURS OUTSIDE THE NORMAL HOURS OF BUSINESS SUBJECT TO THE
LANDLORD'S REASONABLE SECURITY REQUIREMENTS FOR THE COMPLEX.
24. The Landlord reserves the right to close or otherwise restrict the use
of the parking areas after the normal hours of business PROVIDED THAT
THE LANDLORD SHALL NOT MATERIALLY IMPEDE THE TENANT'S ACCESS TO THE
LEASED PREMISES AND ITS USE OF THE PARKING AREAS.
25. The Landlord shall have the right to make such other and further
reasonable rules and regulations as in its judgement may from time to
time be needful for the safety, care, cleanliness and appearance of the
Complex and premises therein, and for the preservation of good order
therein and the same shall be kept and observed by the tenants, their
clerks and servants. The Landlord is not liable to the Tenant for
breaches thereof by other tenants.
<PAGE>
SCHEDULE "D"
ACKNOWLEDGMENT OF COMMENCEMENT DATE
TO: CIBC DEVELOPMENT CORPORATION
(THE "LANDLORD").
AND TO:
-------------------------------------
The undersigned Tenant under a certain lease between the undersigned
and the Landlord dated (the "Lease"), hereby acknowledges and certifies to you
that:
1. The Commencement Date of the Lease was _________________, 19__.
2. We have accepted possession of the Leased Premises pursuant to the
terms of the Lease and are now in possession thereof.
3. The Leased Premises have been erected and delivered in accordance with
the terms of the Lease.
4. The Leased Premises have been fixtured and our normal business
operations are being conducted therein.
5. There has been no violation of any of the terms of the Lease, there is
no set-off of Rent or any other payment under the Lease, and none of
the Rent reserved under the Lease has been prepaid.
6. There is no violation of any of the terms of the Lease either on the
part of the Landlord or the Tenant.
7. The Lease is now in full force and effect in accordance with the terms,
and there are no oral or written modifications, violations or
alterations thereof.
8. We have no knowledge of any assignment of the Lease.
DATED at ___________________ this _____ day of _______________, 19__.
Tenant:
Per:
Title:
(c/s)
Per:
Title:
<PAGE>
SCHEDULE "E"
SUPPLEMENTARY LEASE PROVISIONS
With reference to the Lease dated the 19th day of October, 1998 made
between CIBC Development Corporation, as Landlord, and Loyalty Management Group
Canada Inc., as Tenant, pertaining to Leased Premises at 5055 Satellite Drive,
and with specific reference to Section 14.05 therein, the following
supplementary provisions shall be a part of the Lease:
1. TENANT'S OPTION TO TERMINATE:
The Landlord hereby agrees to grant to the Tenant the one time option
to terminate the Lease with respect to the whole of the Leased Premises (the
"Termination Option") effective the last day of the fifth (5th) year of the Term
(the "Termination Date") provided the Tenant has fulfilled the following
provisions:
(a) the Tenant has provided the Landlord with at least twelve (12)
months' Notice prior to the Termination Date of its intention
to exercise its Termination Option failing which this
Termination Option shall be deemed to be of no further force
or effect; and
(b) the Tenant shall pay to the Landlord an amount equal to $40.00
per square foot of Rentable Area of the Leased Premises, such
amount to be paid to the Landlord by certified cheque on the
Termination Date; and
(c) the Tenant is not THEN in default under the Lease;
(d) the Termination Option as contemplated herein shall apply only
so long as the Tenant is Loyalty Management Group Canada Inc.
or a permitted assignee pursuant to Section 10.07A of this
Lease, it being understood that such Termination Option is
personal to Loyalty Management Group Canada Inc. or a
permitted assignee pursuant to Section 10.07A of this Lease
and may not be transferred to any other assignee, subtenant or
other transferee; and
(e) the Landlord and the Tenant shall execute a surrender of
lease, and any other documents reasonably required by the
Tenant's or Landlord's solicitor upon the Termination Date
provided payment has been made by the Tenant to the Landlord
pursuant to sub-section (b) above; and
(f) the Termination Option as contemplated in this Paragraph 1 of
Schedule "E" is only exercisable once and as detailed herein.
2. TENANT'S OPTION TO RENEW:
(1) The Landlord hereby agrees to extend the Term for a period of
five (5) years (the "Renewal Term") beginning on the expiry of
the Term of the Lease, with respect to the Leased Premises,
subject to the following:
(a) such option shall be exercisable by Notice by the
Tenant delivered to the Landlord not more than twelve
(12) months and not less than nine (9) months prior
to the expiry of the Lease (and failing such timely
exercise by the Tenant such option shall expire and
be of no further force or effect) and shall only be
exercisable if the Tenant is not then in default of
the provisions of this Lease; and
(b) the extension of the Term upon the exercise of such
option shall be upon and subject to the terms of this
Lease except:
(i) there shall be no further renewal option of
the Tenant to extend the Term beyond the
expiration of the Renewal Term;
(ii) the annual amount of Basic Rent per square
foot of Rentable Area payable under Section
2.06 of this Lease throughout the Renewal
Term shall be the then Fair Market Rent for
the Leased Premises; and
(iii) there shall not exist during the Renewal
Term, and no renewal or extension lease
shall contain any reference to any rights to
Landlord's work or leasehold improvement
allowances such as those contained in
Paragraphs 9 and 11 of the Agreement to
Lease or options to acquire further space
such as that contained in Paragraph 3 of
this Schedule "E", such rights being deemed
to have expired with the expiry of the
original Term of this Lease, or as otherwise
therein expressly set out.
<PAGE>
(2) In this Paragraph 2 of Schedule "E", the "then Fair Market
Rent for the Leased Premises" means that annual amount of
basic rent which the Landlord and the Tenant agree to be the
fair market rent then prevailing for the Leased Premises as at
the Renewal Term commencement date, having regard to leasing
commissions, tenant inducements and improved office premises
similar to the Leased Premises which are comparable in size,
location, type and condition and leased for a similar term as
at the Renewal Term commencement date.
(3) If, by the date four (4) months prior to the date upon which
the Renewal Term is to begin, the Landlord and the Tenant have
been unable to agree in writing upon the then Fair Market Rent
for the Leased Premises, the then Fair Market Rent for the
Leased Premises (the "Issue") shall be determined by
arbitration and the following shall apply:
(a) upon Notice by either party to the other, the parties
shall meet and attempt to appoint a single
arbitrator. If either party shall fail to name an
arbitrator, then the arbitrator shall be appointed by
a Judge of the Ontario Court of Justice, General
Division, pursuant to Section 8 of the ARBITRATIONS
ACT (ONTARIO) upon application of the parties. The
provisions of the ARBITRATIONS ACT (ONTARIO) shall
apply to any such application;
(b) the arbitrator shall forthwith hear and determine the
Issue. The decision of the arbitrator, shall be made
within thirty (30) days after the appointment of the
arbitrator, subject to any reasonable delay due to
unforeseen circumstances;
(c) the decision of the arbitrator shall be signed and
shall be final and binding upon the parties hereto;
(d) the arbitrator will have the power to obtain the
assistance of any expert and to act upon such
assistance;
(e) the compensation and expenses of the arbitrator shall
be paid in equal proportions by the parties hereto
unless the arbitrator determines otherwise, except
that each party shall be responsible for its
respective solicitor's fee and witnesses; and
(f) in no event may the award of the arbitrator be lower
than the amount offered by the Tenant to resolve the
Issue nor higher than the amount offered by the
Landlord to resolve the Issue.
(4) If the Issue has not been determined by the commencement date
of the Renewal Term, pending such determination the Tenant
shall pay Basic Rent at the rate specified for the last year
of the Term, and the parties shall readjust as of such date
from such commencement date promptly upon such determination
having been made with interest at the Bank Rate.
(5) This Option to Renew contemplated herein shall apply only so
long as Loyalty Management Group Canada Inc. or a permitted
transferee pursuant to Section 10.07A herein, is in occupation
of the whole of the Leased Premises, it being understood that
such option is personal to Loyalty Management Group Canada
Inc. or a permitted transferee pursuant to Section 10.07A
herein and may not be OTHERWISE transferred to any assignee,
subtenant or other transferee.
3. TENANT'S FIRST RIGHT TO LEASE:
(1) Provided that the Tenant is not THEN in default of the
provisions of the Lease and has not been in default hereunder
on a consistent basis the Landlord hereby grants to the Tenant
a one time right during the Term to lease the premises
immediately adjacent to the Leased Premises (the "Additional
Premises") as identified on Schedule "B" of this Lease as Area
"A" and Area "B" and outlined in blue.
(2) PROVIDED THAT THE TENANT IS NOT THEN IN DEFAULT OF THE
PROVISIONS OF THE LEASE, the Landlord will notify the Tenant
in writing as to the availability of the Additional Premises,
the proposed basic rent (which shall be the then Fair Market
Rent (as defined in Paragraph 2 (2) above) for the Additional
Premises as at the commencement date of the Additional
Premises and the Tenant will have five (5) business days
following receipt of notification from the Landlord within
which to exercise such first right to lease. The term shall be
coterminous with the Term of this Lease.
(3) If, by the date four (4) months prior to the commencement date
for the Additional Premises the Landlord and the Tenant have
been unable to agree in writing upon the then Fair Market Rent
for the Additional Premises, the then Fair Market Rent for the
Additional Premises, shall be determined by arbitration in
accordance with the terms of Paragraph 2 (3) of this Schedule
"E".
(4) If the Fair Market Rent for the Additional Premises has not
been determined by the commencement date of the Additional
Premises pending such determination the Tenant shall pay Basic
Rent in the amount setout in Section 1.01 (10) of this Lease
beginning with that prevailing for the year of the Term during
which the Additional Premises commencement date occurs and
the parties shall readjust
<PAGE>
as of such date from such commencement date promptly upon such
determination having been made with interest at the Bank Rate.
(5) If the Tenant advises the Landlord that it does not wish to
lease the Additional Premises pursuant to this first right to
lease, then the Tenant's first right to lease shall be null
and void and of no further force or effect and the Landlord
shall be entitled to lease any or all of the Additional
Premises without further obligation to the Tenant.
(6) Save as set out in this Paragraph 3 of Schedule "E", the terms
and conditions for such Additional Premises shall be on the
same terms and conditions as the Leased Premises, and the
Landlord shall prepare an addendum to the Lease in respect of
such Additional Premises for signature by the Tenant and the
Landlord if the Tenant does so exercise its first right to
lease.
4. PARKING:
(1) The Landlord grants to the Tenant during the Term and any
renewal thereof a license to park in AT LEAST 200 unreserved
parking spaces IN THE COMPLEX based on the Tenant occupying
40,000 square feet of Rentable Area. It is understood that the
Landlord shall be entitled at any time during the Term or any
renewal thereof to re-allocate not more than 40 of the
above-noted spaces to other tenants of the Complex if so
required in the Landlord's opinion. If during the Term or any
renewal thereof the Tenant leases additional space in the
Complex the Landlord shall make available to the Tenant
additional unreserved parking on a ratio of 1.75 spaces per
1,000 square feet of Rentable Area.
(2) The Tenant agrees to comply with such reasonable parking rules
as may be established from time to time by the Landlord
governing the use of the parking area (the "Parking Rules").
(3) SUBJECT TO SECTION 7.07(a), the Tenant agrees to indemnify the
Landlord against all liabilities, claims, damages or expenses
due to or arising out of any act, omission or neglect by the
Tenant or those form whom it is at law responsible in or about
the parking area or due to or arising out of any breach by
either or any of them of the provisions of the Parking Rules.
The Landlord shall not be liable for any loss, injury or
damage caused to persons using the parking area or to
automobiles, their accessories or their contents or any other
property therein or thereon and the Tenant agrees that such
vehicles as are parked under rights derived from this
Paragraph 4 of Schedule "E", their accessories, contents and
property shall be in the parking area at the sole risk of the
Tenant and agrees to indemnify the Landlord against all
claims, damages and expenses due to or arising out of the
foregoing.
(4) All parking spares allocated to the Tenant pursuant to
Paragraph 4 (1) of this Schedule "E" shall be free of charge
during the Term.
(5) The Tenant acknowledges the existence of an easement in favour
of the City of Mississauga that runs through a portion of the
Lands that is designated by the Landlord for approximately 55
parking spaces. In the event that the City of Mississauga
elects to utilize such portion of the Lands as may be
permitted pursuant to the easement agreement, then the Tenant
acknowledges and agrees that the Landlord shall have the right
to reduce the parking area serving the Complex by up to 55
parking spaces from those existing as at the completion of the
initial construction of the Complex. The Tenant further
acknowledges and agrees that, as a result of the exercise by
the Landlord of its right to reduce the parking areas serving
the Complex, the number of parking spaces made available to
the Tenant may be reduced by up to 20 spaces, being the
Tenant's proportionate share of the 55 parking spaces based
upon the Tenant leasing 40,000 square feet. In the event the
Tenant leases an area of greater than 40,000 square feet (and
has proportionately more parking than outlined above), the
Tenant's proportionate share of the 55 parking spaces shall be
greater than 20 stalls. The Landlord shall not be liable for,
nor shall the Tenant be entitled to, any compensation nor
shall any such reduction be deemed to be a breach of any
covenant for quiet enjoyment contained in this Lease, provided
however, that in not event shall the Landlord reduce the
number of parking spaces allocated to the Tenant to less than
the number required by the zoning bylaws or regulations
governing parking requirement for the Complex.
5. COMMUNICATIONS EQUIPMENT:
The Landlord agrees to grant to the Tenant for and during the Term of
the Lease the non-exclusive license to install Communications equipment (the
"Equipment") in an area on the roof of the Complex to be approved by the
Landlord, for the Tenant's own use only. The Tenant's installation of the
Equipment is subject to the following provisions:
(1) The installation of the Equipment shall be conducted solely at
the expense, risk and option of the Tenant and shall be in
accordance with all requirements of regulatory agencies
(including municipal zoning, building, height control and
other applicable by-laws). The Tenant shall furnish
particulars of the Equipment to be installed to the Landlord,
including drawings which shall be reviewed and approved by the
Landlord. The Landlord shall have rights of approval with
respect to the size, location and method of installation of
the Equipment, such approval not to be unreasonably withheld
or
<PAGE>
delayed. During installation, the Tenant shall take all
reasonable precautions to minimize interference with the
Landlord and other tenants of the Complex and to avoid damage
to any portions of the Complex and shall comply with the
Landlord's directions as to the means by which and times at
which equipment and supplies are to be moved.
(2) It shall be the sole obligation of the Tenant and at the
Tenant's sole expense, to maintain and repair the Equipment in
accordance with the best standards so that it shall be at all
time in good, safe and sound condition, of good appearance,
properly grounded and in compliance with all required
desirable standards of good maintenance. Further, it shall be
the sole obligation and at the Tenant's sole expense, to
repair any and all damage to the Complex caused by the
installation, replacement, repair and removal of the Equipment
failing which such may be completed by the Landlord as an
Additional Service to the Tenant.
(3) The Tenant shall indemnify the Landlord and save it harmless
from all actions, proceedings, costs, claims, demands, losses
and damages of any nature whatsoever for which the Landlord
may become liable or suffer, by reason of or arising directly
or indirectly out of the installation, maintenance, repair,
alteration, removal, use or condition from time to time of the
Equipment or in consequence of damage or interference to
property or injury to or death of persons occasioned thereby.
(4) The Tenant shall ensure that its use and operation of the
Equipment shall not cause or contribute to any interference
with or damage to the effective use or normal operation of any
other existing electrical equipment or apparatus installed or
used in or on the Complex by the Landlord, its tenants or any
other person, firm or corporation whatsoever and that if and
whenever such interference or damage is caused by the Tenant's
Equipment to any such use or operation of such equipment or
apparatus the Tenant shall be responsible for and will
forthwith carry out at its own expense all acts, matters and
things that may be necessary to establish the cause, and if
deemed responsible therefor, to take expedient action to
remedy such situation or condition and thereafter prevent a
recurrence of any such damage or interference as aforesaid.
The Tenant agrees that if it is unable to remedy or prevent a
recurrence of any such damage or interference for which the
Tenant is responsible as aforesaid, the Tenant shall, upon
Notice from the Landlord forthwith remove the Equipment in
accordance with the provisions of this Paragraph 5 of Schedule
"E".
(5) The Tenant shall, immediately prior to the expiration or
sooner termination of the Term and at its own cost, remove the
Equipment and repair any damage to the Complex caused by such
removal, failing which such repairs may be completed by the
Landlord as an Additional Service to the Tenant.
(6) The Tenant shall at its cost and expense insure and keep
insured the Equipment during the Term and any renewal hereof
and during the removal thereof in accordance with Article VII
of this Lease.
(7) The Tenant covenants that it shall comply with the provisions
of Section 8.02 of this Lease with respect to the
installation, replacement, repair and removal of the
Equipment.
(8) There shall be no license fee or other charges associated with
the grant of this license in favour of the Tenant. However,
the Tenant shall pay to the Landlord any taxes, utility costs
or other costs as may be directly attributable to the
Equipment and its erection, installation, operation and
maintenance upon receipt of invoice(s) therefor.
(9) The granting of this license shall apply only so long as
Loyalty Management Group Canada Inc. or a permitted transferee
pursuant to Section 10.07A herein is THE TENANT, it being
understood that the granting of this license is personal to
Loyalty Management Group Canada Inc. or a permitted transferee
pursuant to Section 10.07A and may not be transferred to any
assignee, subtenant or other transferee.
6. ACCESS TO THE LEASED PREMISES:
From and after the ACCESS DATE (AS SUCH TERM IS DEFINED IN PARAGRAPH
11C OF THE AGREEMENT TO LEASE), the Landlord shall permit the Tenant, its
agents, clerks, servants, employees and other persons transacting business with
it to have access to the Leased Premises by the main entrance or entrances to
the Complex and the Leased Premises and to use passages therefrom at all times,
365 days a year, on a 24 hour basis, subject to the Rules and Regulations, and
subject to emergencies.
7. BUSINESS DAYS:
For the purposes of this Lease, "business day" means any day which is
not a Saturday, Sunday or a statutory holiday.