ON-Toronto-78 Mowat Avenue Lease - 707932 Ontario Ltd. and Tucows International Corp.
LEASE
TABLE OF CONTENTS
ARTICLE 1
Leased Premises, Term and Acceptance of the Leased Premises
Section 1.1 LEASED PREMISES.......................................................1
Section 1.2 USE OF ADDITIONAL AREAS...............................................2
Section 1.3 GRANT AND TERM........................................................2
Section 1.4 CONSTRUCTION OF LEASED PREMISES.......................................2
ARTICLE 2
Rent
Section 2.1 COVENANT TO PAY.......................................................3
Section 2.2 BASIC RENT............................................................4
Section 2.3 ADVANCE RENT..........................................................4
Section 2.4 SECURITY DEPOSIT......................................................4
Section 2.5 FREE RENT.............................................................5
Section 2.6 RENT PAST DUE.........................................................5
ARTICLE 3
Taxes and Operating Costs
Section 3.1 TAXES PAYABLE BY LANDLORD.............................................5
Section 3.2 TAXES PAYABLE BY TENANT...............................................6
Section 3.3 BUSINESS TAXES AND OTHER TAXES OF THE TENANT..........................6
Section 3.4 TENANT'S PROPORTIONATE SHARE OF OPERATING COSTS.......................6
Section 3.5 PAYMENT OF TAXES AND OPERATING COSTS..................................6
ARTICLE 4
Building - Control and Services
Section 4.1 CONTROL OF THE BUILDING...............................................7
Section 4.2 LANDLORD'S SERVICES...................................................7
Section 4.3 PARKING...............................................................8
ARTICLE 5
Utilities and Heating, Ventilating and Air Conditioning
Section 5.1 CHARGES FOR UTILITIES.................................................9
Section 5.2 HEATING, VENTILATING AND AIR CONDITIONING.............................10
ARTICLE 6
Use of the Leased Premises
Section 6.1 USE OF THE LEASED PREMISES............................................11
Section 6.2 OBSERVANCE OF LAW.....................................................11
ARTICLE 7
Insurance and Indemnity
Section 7.1 TENANT'S INSURANCE....................................................12
<PAGE>
Section 7.2 INCREASE IN INSURANCE PREMIUMS........................................14
Section 7.3 CANCELLATION OF INSURANCE.............................................15
Section 7.4 LOSS OR DAMAGE........................................................15
Section 7.5 LANDLORD'S INSURANCE..................................................16
Section 7.6 INDEMNIFICATION OF THE LANDLORD.......................................16
ARTICLE 8
Maintenance, Repairs and Alterations
Section 8.1 MAINTENANCE AND REPAIRS BY THE LANDLORD...............................17
Section 8.2 MAINTENANCE AND REPAIRS BY THE TENANT.................................17
Section 8.3 LANDLORD'S APPROVAL OF THE TENANT'S REPAIRS...........................18
Section 8.4 REMOVAL AND RESTORATION BY THE TENANT.................................19
Section 8.5 TENANT TO DISCHARGE ALL LIENS.........................................19
Section 8.6 SIGNS AND ADVERTISING.................................................20
Section 8.7 MEZZANINE.............................................................20
ARTICLE 9
Damage and Destruction
Section 9.1 DESTRUCTION OF THE LEASED PREMISES....................................21
Section 9.2 DESTRUCTION OF THE BUILDING...........................................22
Section 9.3 EXPROPRIATION.........................................................22
ARTICLE 10
Transfer and Sale
Section 10.1 TRANSFER..............................................................23
Section 10.2 ASSIGNMENT BY LANDLORD................................................25
Section 10.3 OPTION TO RENEW.......................................................25
Section 10.4 RIGHT OF REFUSAL......................................................26
ARTICLE II
Access and Alterations
Section 11.1 RIGHT OF ENTRY........................................................27
ARTICLE 12
Status Statement, Attornment and Subordination
Section 12.1 STATUS STATEMENT......................................................27
Section 12.2 SUBORDINATION AND ATTORNMENT..........................................28
ARTICLE 13
Default
Section 13.1 RIGHT TO RE-ENTER.....................................................29
Section 13.2 RIGHT TO RELET........................................................32
Section 13.3 EXPENSES..............................................................32
Section 13.4 WAIVER OF EXEMPTION FROM DISTRESS.....................................32
Section 13.5 LANDLORD'S RIGHTS.....................................................33
Section 13.6 REJECTION OF TENANT'S REPUDIATION.....................................34
Section 13.7 NO CONDONING OF DEFAULT...............................................34
ARTICLE 14
Miscellaneous
Section 14.1 RULES AND REGULATIONS.................................................35
<PAGE>
Section 14.2 INTENT AND INTERPRETATION.............................................35
Section 14.3 OVERHOLDING--NO TACIT RENEWAL.........................................36
Section 14.4 TENANT PARTNERSHIP....................................................37
Section 14.5 WAIVER................................................................37
Section 14.6 ACCORD AND SATISFACTION...............................................37
Section 14.7 FORCE MAJEURE.........................................................38
Section 14.8 NOTICES...............................................................38
Section 14.9 REGISTRATION..........................................................38
Section 14.10 ACCRUAL OF BASIC RENT AND ADDITIONAL RENT.............................39
Section 14.11 QUIET ENJOYMENT.......................................................39
SCHEDULE "A"
LEGAL DESCRIPTION...................................................................40
SCHEDULE "B"
FLOORPLAN...........................................................................41
SCHEDULE "C"
LANDLORD'S WORK.....................................................................45
SCHEDULE "D"
DEFINITIONS.........................................................................49
<PAGE>
THIS LEASE is dated the 10th day of December, 1999.
B E T W E E N:
707932 ONTARIO LIMITED
("Landlord")
OF THE FIRST PART,
-and-
TUCOWS INTERNATIONAL CORPORATION
("Tenant")
OF THE SECOND PART.
ARTICLE I
LEASED PREMISES, TERM AND ACCEPTANCE
OF THE LEASED PREMISES
Section 1.1 LEASED PREMISES
The Landlord leases to the Tenant, and the Tenant leases from the Landlord,
premises located on the ground floor of the Building municipally known as 78
Mowat Avenue, Toronto, Ontario, and shown in the approximate location outlined
in red on the plan attached as Schedule "B". It is acknowledged and agreed that
as of the date of this Lease, the Usable Area of the Leased Premises is
Seventeen Thousand Three Hundred and Eighty-Three (17,383) square feet and the
Rentable Area of the Leased Premises is Eighteen Thousand Four Hundred and
Twenty-Six (18,426) square feet. The Tenant acknowledges that the municipal
address of the Building may be changed and agrees to adjust all of the relevant
agreements between the parties to reflect this change. If the Leased Premises
are entirely self-enclosed, their boundaries extend (a) to the limits from which
the Rentable Area of the Leased Premises is measured, and (b) from the top
surface of the structural subfloor to the
1
<PAGE>
bottom surface of the structural ceiling. If the Leased Premises have no
structural ceiling abutting the demising walls and are open to the ceiling or
the bottom surface of the structural ceiling of the Building, the boundaries of
the Leased Premises extend from the top surface of the structural subfloor to
the height of the demising walls. Common Areas and Facilities (including, but
not limited to, columns and walls that form part of the Common Areas and
Facilities) that are within the space enclosed by the boundaries of the Leased
Premises, do not form part of the Leased Premises, although any floor space
occupied by them is included in the Rentable Area of the Leased Premises.
Section 1.2 USE OF ADDITIONAL AREAS
The Tenant's use of the Leased Premises includes the non-exclusive right of
the Tenant and persons having business with the Tenant in common with the
Landlord and all others entitled, to the use of the Common Areas and Facilities.
Section 1.3 GRANT AND TERM
The Tenant shall, subject to the terms of this Lease, have and hold the
Leased Premises during the Term, which is the period of five (5) years beginning
on the date (the "Commencement Date") which is the earlier of:
(a) January 1, 2000; or
(b) the date on which the Tenant first begins to carry on business in the
Leased Premises;
and shall extend to and include the last day of the month preceding the month in
which occurs the fifth (5th) year anniversary of the Commencement Date. The
Landlord acknowledges and agrees that the Tenant shall have access and use of
the Leased Premises twenty-four (24) hours a day, seven(7) days a week
throughout the Term of the Lease and any renewals thereof.
Section 1.4 CONSTRUCTION OF LEASED PREMISES
(a) The Landlord will complete the work designated as "Landlord's Work" in
Schedule "C" attached to this Lease no later than January 1, 2000. The Tenant
shall be granted joint access to the Leased Premises together with the
Landlord's contractors prior to
2
<PAGE>
the Commencement Date beginning October 1, 1999 for the purpose of constructing
the Tenant's Leasehold Improvements in conjunction with the Landlord's Work
being performed, as defined herein and preparing the Leased Premises for its
intended use, and without material interruption from the Landlord or its
contractor, free from Basic and Additional Rent until the Commencement Date.
Notwithstanding the foregoing, the Tenant shall be responsible for all parking
and utility charges during this Fixturing Period.
(b) The Tenant will examine the Leased Premises before taking possession
and unless the Tenant furnishes the Landlord with written notice specifying any
deficiencies or defects within ten (10) days after taking possession and ten
(10) days after completion of the Landlord's Work, the Tenant will be deemed to
have examined the Leased Premises and to have agreed that they are in good
order. There is no promise, representation or undertaking by or binding upon the
Landlord with respect to any alteration, remodelling or redecorating of, or
installation of equipment or fixtures in, the Leased Premises, unless expressly
set forth in this Lease.
(c) If there is a delay which results in the Building or the Landlord's
Work not being completed by January 1, 2000, the Commencement Date will be
postponed by the number of days of the delay and this postponement will be the
Tenant's sole remedy and further the Tenant shall and does hereby release the
Landlord from all costs, expenses, claims, losses or damages suffered or
incurred as a result of such delay whether or not caused, or to the extent
contributed to, by the acts, omissions or negligence of the Landlord or those
for whom it is at law responsible.
ARTICLE 2
RENT
Section 2.1 COVENANT TO PAY
The Tenant will pay Basic Rent and Additional Rent when due and payable as
set out in this Lease and without any set-off, deduction, abatement or demand.
3
<PAGE>
Section 2.2 BASIC RENT
The Tenant covenants and agrees to pay in equal consecutive monthly
instalments, in advance on the first day of each calendar month of each Rental
Year, to the Landlord, or as the Landlord may in writing direct, in lawful money
of Canada, without any set off, compensation or deduction whatsoever, Basic Rent
in each Lease Year comprised as follows:
Basic Rent Per Square Foot of
Year Rentable Area of Leased Premises
---- --------------------------------
1 $10.00
2 $11.00
3 $12.00
4 $13.00
5 $14.00
The Tenant shall deliver to the Landlord at the beginning of each year of
the Term, a series of monthly post-dated cheques for such year of the Term for
the aggregate of the monthly payments of Basic Rent and of any payments of
Additional Rent established by the Landlord pursuant to this Lease and any other
payments required by this Lease to be paid monthly in advance.
Section 2.3 ADVANCE RENT
The Landlord acknowledges receipt of Twenty-Five Thousand One Hundred and
Forty-Seven Dollars ($25,147.00) (the "Advance Rent"), to be held without
interest by the Landlord and applied on account of the Basic Rent and Additional
Rent first falling due under this Lease.
Section 2.4 SECURITY DEPOSIT
The Landlord acknowledges receipt of Thirty-One Thousand Seven Hundred and
Fifty-Three Dollars ($31,753.00) (the "Security Deposit"), to be held without
interest by the Landlord throughout the Term, as security for the faithful
performance by the Tenant of all of the terms, covenants and conditions of this
Lease. The Security Deposit, or any part
4
<PAGE>
thereof, may be applied by the Landlord to remedy any default of the Tenant
pursuant to this Lease and, if the Tenant is not in default or in breach of any
of the terms, covenants and conditions of this Lease, and provided the Leased
Premises are left in the condition required pursuant to this Lease, then the
balance of the Security Deposit, if any, shall be applied on account of the
Basic Rent and Additional Rent payable during the last month of the Term. If at
any time during the Term, the Security Deposit or any part thereof is applied by
the Landlord to remedy any default pursuant to the Lease, then the Tenant shall,
upon written demand of the Landlord, forthwith remit to the Landlord a
sufficient amount to restore the Security Deposit to the original sum deposited.
Section 2.5 FREE RENT
The Tenant shall not be responsible for the payment of any Basic and
Additional Rent for the first three (3) months of the original Term. The Tenant
shall, however, be responsible for the payment of parking and utility charges as
defined herein and shall abide by all other terms and conditions of the Lease.
Section 2.6 RENT PAST DUE
If the Tenant fails to pay any Rent when due, the unpaid amounts will bear
interest from the due date to the date of payment at an annual rate of five (5)
percentage points above the minimum lending rate charged to prime commercial
borrowers current at that time charged by the Landlord's chartered bank,
calculated per diem and compounded monthly.
ARTICLE 3
TAXES AND OPERATING COSTS
Section 3.1 TAXES PAYABLE BY LANDLORD
The Landlord will, subject to Sections 3.2 and 3.4 pay directly to the
taxing authority all Taxes. The Landlord may, nevertheless, defer payment of
Taxes to the fullest extent permitted by law, so long as it diligently
prosecutes any contest or appeal of Taxes.
5
<PAGE>
Section 3.2 TAXES PAYABLE BY TENANT
(a) The Tenant will pay to the Landlord, in accordance with Section 3.5,
its Proportionate Share of all Taxes allocated by the Landlord, acting
reasonably and equitably to the Building. If there is a separate tax bill and
assessment for taxes for the Leased Premises, the Tenant will, if the Landlord
requests, pay all taxes specified by that separate tax bill and assessment
directly to the taxing authority and its Proportionate Share of Taxes allocated
by the Landlord to the Common Areas and Facilities.
Section 3.3 BUSINESS TAXES AND OTHER TAXES OF THE TENANT
The Tenant will pay to the lawful taxing authorities or to the Landlord, as
required by the relevant legislation, all business taxes, personal property
taxes, licence fees or other similar rates and assessments levied or assessed
against or in relation to the Tenant's business, assets, and improvements in the
Leased Premises.
Section 3.4 TENANT'S PROPORTIONATE SHARE OF OPERATING COSTS
The Tenant will pay, in accordance with Section 3.5, the Tenant's
Proportionate Share of Operating Costs as defined in Schedule "D".
Section 3.5 PAYMENT OF TAXES AND OPERATING COSTS
(a) The amounts payable by the Tenant under Sections 3.2 and 3.4 may be
estimated (and estimates may be revised) by the Landlord and the Tenant agrees
to pay the Landlord the Tenant's Proportionate Share as estimated, in monthly
instalments in advance, together with Basic Rent. Any amounts received by the
Landlord during any Rental Year after the Tenant has paid its full share of
Taxes for such Rental Year shall be credited against the Tenant's share of Taxes
for the subsequent Rental Year.
(b) Within ninety (90) days after the end of the period for which the
estimated payments have been made, the Landlord will determine and advise the
Tenant of the exact amount of the Tenant's Proportionate Share of Taxes and
Operating Costs and if necessary, an adjustment will be made between the parties
within fifteen (15) days after the Tenant has been advised of the actual
amounts.
6
<PAGE>
(c) It is acknowledged and agreed that the 1999 Taxes and Operating Costs
shall not exceed Three Dollars and Ninety-Eight Cents ($3.98) per square foot.
ARTICLE 4
BUILDING - CONTROL AND SERVICES
Section 4.1 CONTROL OF THE BUILDING
(a) The Landlord will operate and maintain the Building as would a prudent
landlord of a similar building having regard to size, age and location.
(b) The Building is at all times subject to the exclusive control,
management and operation of the Landlord. The Landlord, acting reasonably, has
the right with respect to such control, management and operation to: (i)
obstruct or close off all or any part of the Property for the purpose of
maintenance, repair or construction; (ii) employ all personnel necessary for the
operation and management of the Building; (iii) construct other improvements or
buildings and make alterations, additions, subtractions or re-arrangements,
build additional storeys and construct facilities adjoining or proximate to the
Building. The Landlord will use its best efforts to provide the Tenant with
reasonable prior notice of any exercise of such rights to the extent that it is
in the Landlord's reasonable control.
(c) The Landlord is not subject to any liability, nor is the Tenant
entitled to any compensation or abatement of Rent as a result of the Landlord's
exercise of its rights conferred under Section 4.1 so long as the Landlord
proceeds as expeditiously as possible to minimize interference with the Tenant's
business.
Section 4.2 LANDLORD'S SERVICES
The Landlord will make water and electricity available in the normal
quantities. If the Tenant's equipment requires utilities in excess of normal
quantities, facilities to supply the excess quantities will, if available, be
provided by the Landlord at the expense of the Tenant, with this expense payable
as Additional Rent. Notwithstanding the
7
<PAGE>
foregoing, the Landlord shall, at the Landlord's expense and subject to Schedule
"C", furnish, install and maintain in good repair as of the Commencement Date
and during the Term to the boundary line of the Leased Premises, all gas, water,
telephone, electrical facilities, transformer and other utilities of such size
and type as may be reasonably required to provide adequate service for the
Leased Premises and only to the extent that the Landlord is required under
Schedule "C". The Landlord shall advise the Tenant whenever reasonably possible
to provide the Tenant an opportunity to have a representative present with the
Landlord or its representatives or the utility representative at such time as
the Landlord or its representatives or the utility representative may be
accessing any locations where any utilities serving the Leased Premises may be
connected. Regular meter readings to be excluded.
Section 4.3 PARKING
The Landlord shall provide fifteen (15) parking spaces at the rate of Fifty
Dollars ($50.00) per space per month plus GST in Year One of the Term. The
Tenant shall have the right to at least fifteen (15) parking spaces during each
subsequent year of the Term and renewals thereof upon written notice to the
Landlord. The parking rental rate throughout the remainder of the Term shall be
determined by the Landlord, acting reasonably, and shall be based upon the costs
of operating the parking facilities. Additional spaces shall be on an
"availability basis". The location of the parking spaces shall be determined
from time to time by the Landlord but shall be within the area bounded by King
Street West, Mowat Avenue, Liberty Street and Dufferin Street. The Tenant
acknowledges that all cars parked may be required to display parking permits
provided by the Landlord and that the indemnification of the Landlord pursuant
to this Lease shall extend to the parking areas and surrounding walkways. Should
the Landlord implement a parking control card access system, the Tenant may be
required to provide a deposit (plus GST) for each parking space; said deposit to
be determined by the Landlord acting reasonably and to be returned to the
Tenant, without interest, upon the surrender of the parking control card. The
Landlord shall not be responsible for policing the parking areas and shall not
be liable for any failure to provide parking if the spaces are occupied by
persons not authorized to park there but shall respond to the Tenant's
complaints, if any, and attempt to alleviate any problems that may exist. In
addition to parking as described above, the Landlord shall provide for the
Tenant's use ten (10) parking spaces on a month-to-month basis subject to
availability at the initial rate of
8
<PAGE>
Fifty Dollars ($50.00) per space per month plus GST for a minimum period of one
(1) year following the Commencement Date and thereafter, subject to
availability.
ARTICLE 5
UTILITIES AND HEATING,
VENTILATING AND AIR CONDITIONING
Section 5.1 CHARGES FOR UTILITIES
(a) If there are separate meters (other than check meters installed
pursuant to Section 5.1(d) for the Leased Premises), the Tenant will pay the
cost of Utilities (as defined below) and all related charges directly to the
Utility suppliers on the basis of the separate meters in a timely manner.
(b) If there are no separate meters for the Leased Premises, the Tenant
will pay to the Landlord, or as the Landlord otherwise directs, as Additional
Rent, the aggregate, without duplication, of all electricity, water, steam
charges and other utility charges applicable to the Leased Premises on the basis
of the Tenant's Proportionate Share of such utility charges together with an
administration fee of fifteen percent (15%) of the cost of such Utilities (the
"Utilities").
Charges for Utilities will be paid in equal monthly instalments in advance
on the basis of an initial rate determined by the Landlord or its engineers.
Upon receipt of any specific invoices from the Landlord, the Tenant shall remit
the invoiced amount to the Landlord within five (5) business days of receipt of
such invoice. If the public utility rate is increased or decreased during the
Term, the charges will be equitably adjusted and the decision of the Landlord,
acting reasonably, will be final. The Tenant will in addition pay for all costs
of supplying Utilities to the Leased Premises after Normal Business Hours as
determined by the Landlord or its engineers.
9
<PAGE>
(c) The Tenant will have the obligation, at its sole expense, to attend to
the replacement of electric light bulbs, tubes and ballasts in the Leased
Premises throughout the Term.
(d) The Tenant shall pay for the cost of any metering which the Tenant
requests the Landlord to install in the Leased Premises or the Building, or
which the Landlord wishes to install in the Building, for the purpose of
assisting in determining the consumption of any Utility (including electricity
and water) in the Leased Premises.
Section 5.2 HEATING, VENTILATING AND AIR CONDITIONING
The Tenant will operate and regulate those portions of the heating,
ventilating, and air conditioning equipment within and serving the Leased
Premises so as to maintain such reasonable conditions of temperature and
humidity within the Leased Premises as are determined by the Landlord and its
Architect and engineers so that no direct or indirect appropriation of the
heating, ventilating and air conditioning from the other portions of the
Building occurs. The Tenant shall comply with such stipulations and with all
Rules and Regulations of the Landlord pertaining to the operation and regulation
of such equipment. The Tenant shall immediately notify the Landlord in the event
that any repairs are required to the heating, ventilating and air conditioning
equipment serving the Leased Premises and shall reimburse the Landlord as part
of its Proportionate Share of Operating Costs for the cost of any maintenance,
repairs or replacements made by the Landlord in respect of the heating,
ventilating and air conditioning equipment serving the Leased Premises. The
Landlord acknowledges that the Tenant shall not be responsible for the cost of
capital repairs and capital replacements in respect of the heating, ventilating
and air conditioning equipment serving the Leased Premises provided that such
capital repairs and capital replacements are not necessitated by the Tenant's
incorrect or negligent use of equipment. The Tenant shall not under any
circumstances go onto the roof of the Building or make any maintenance repairs
or replacements to the heating, ventilating and air conditioning systems in the
Building without the prior written consent of the Landlord. If the Tenant fails
to comply with such stipulations and Rules and Regulations, the Landlord shall
be entitled to take such steps as it deems advisable to correct such defaults
(including, without limitation, entering upon the Leased Premises and assuming
control of such equipment) without liability to the
10
<PAGE>
Tenant, and the Tenant will pay to the Landlord forthwith upon demand as
Additional Rent all costs and expenses incurred by the Landlord in so doing. The
Landlord represents and warrants to the Tenant that the heating, ventilating and
air conditioning equipment serving the Leased Premises and required to be
installed by the Landlord pursuant to Schedule "C" is and will be at the
Commencement Date in good working order and condition.
ARTICLE 6
USE OF THE LEASED PREMISES
Section 6.1 USE OF THE LEASED PREMISES
The Leased Premises will be used solely for general office space from which
the Tenant will carry on the business of digital distribution and commerce and
for no other purpose. The Tenant covenants that the use set out herein shall, on
the date possession of the Leased Premises is delivered to the Tenant, comply
with all applicable zoning and building by-laws.
Section 6.2 OBSERVANCE OF LAW
The Tenant will, at its expense, and subject to Section 8.3:
(a) except with respect to anything contemplated under the Landlord's
Work, comply with all provisions of law and other requirements of all
governmental bodies which pertain to or affect the Leased Premises or
require or govern the making of any repairs, alterations or other
changes of or to the Leased Premises or the Tenant's use of it;
(b) obtain all necessary permits, licences and approvals relating to the
use of the Leased Premises and the conduct of business therein,
including, without limitation, those required under the Business
Corporations Act (Ontario) and the Investment Canada Act; and
11
<PAGE>
(c) co-operate with the Landlord in, and comply with the Landlord's
request and with all laws and orders relating to the conservation
energy serving the Building.
ARTICLE 7
INSURANCE AND INDEMNITY
Section 7.1 TENANT'S INSURANCE
(a) The Tenant will, at its expense, maintain in the names of the Tenant,
the Landlord and the Mortgagee as their respective interests may appear, the
following insurance:
(i) "All Risks of Direct Physical Loss or Damage" insurance including
flood and earthquake coverage, sprinkler leakages and water
damages of any kind, in an amount equal to the full replacement
cost of property of every description and kind owned by the
Tenant, or for which the Tenant is legally liable, or installed
by or on behalf of the Tenant, and which is located within or on
the Building or the Real Property, including, without limitation,
the Tenant's inventory and stock-in-trade, leasehold
improvements, furniture and fixtures, plate glass, store front
and such other property either forming part of the Leased
Premises (not being property which the Landlord is bound to
insure) and including additional perils supplementary contract
including sprinkler leakages and water damage of any kind;
(ii) Business interruption insurance including rental income coverage
in such amount and for such risks as would be carried by prudent
tenants, but at least against the perils set out in Section
7.1(a)(i) above;
12
<PAGE>
(iii) Comprehensive General Liability Insurance, to include personal
injury liability, contractual liability, employers' liability,
non-owned automobile liability and owners' and contractors'
protective insurance coverage. The policies will (1) be written
on a comprehensive basis with inclusive limits of not less than
$5,000,000.00 for bodily injury to any one or more Persons, or
property damage, and such higher limits as the Landlord, acting
reasonably, or the Mortgagee requires from time to time; and (2)
contain a severability of interests and cross-liability clauses;
(iv) Tenant's "all risks" legal liability insurance for the full
replacement cost value of the Leased Premises;
(v) any other forms of insurance as the Landlord, acting reasonably,
or the Mortgagee requires from time to time.
(b) The Tenant's policies will:
(i) where applicable, contain the Mortgagee's standard mortgage
clause and contain a waiver of subrogation rights which the
Tenant's insurers may have against the Landlord and those for
whom the Landlord is in law responsible, whether the damage is
caused by the act, omission or negligence of the Landlord or
those for whom the Landlord is in law responsible;
(ii) be taken out with insurers reasonably acceptable to the Landlord
and in a form reasonably satisfactory to the Landlord;
(iii) be non-contributing with and apply only as primary and not as
excess to any other insurance available to the Landlord;
13
<PAGE>
(iv) not be invalidated as respects the interests of the Landlord and
the Mortgagee by reason of any breach or violation of any
warranties, representations, declarations or conditions contained
in the policies; and
(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.
The Tenant agrees that certificates of insurance in a form acceptable to
the Landlord or copies of its policies, if requested, will be delivered to the
Landlord within thirty (30) days after the placing of the required insurance.
(c) If there is damage or destruction to the leasehold improvements in the
Leased Premises, the Tenant will use the insurance proceeds for the sole purpose
of repairing or restoring them. If there is damage to or destruction of the
Building entitling the Landlord to terminate this Lease under Section 9.2, then,
if the Leased Premises have also been damaged or destroyed, the Tenant will pay
the Landlord all of its insurance proceeds relating to the leasehold
improvements (other than furniture, equipment and similar items) less the
unamortized value of any leasehold improvements which have been installed at the
Tenant's sole expense.
Section 7.2 INCREASE IN INSURANCE PREMIUMS
If, other than the permitted use of the Leased Premises as set forth in
this Lease, (a) the occupancy of the Leased Premises; (b) the conduct of
business in the Leased Premises; or (c) any acts or omissions of the Tenant in
the Leased Premises or in any other part of the Building, results in any
increase in premiums for the insurance carried by the Landlord with respect to
any part of the Building, the Tenant will pay the increase in premiums within
five (5) days after invoices for additional premiums are rendered by the
Landlord.
14
<PAGE>
Section 7.3 CANCELLATION OF INSURANCE
If any insurance policy in respect of any part of the Building is cancelled
or threatened by the insurer to be cancelled, or the coverage reduced by the
insurer by reason of the use and occupation of the Leased Premises except for
the permitted use as set forth in this Lease and if the Tenant fails to remedy
the condition giving rise to cancellation, threatened cancellation or reduction
of coverage within seventy-two (72) hours after notice by the Landlord, the
Landlord may, at its option, either (a) exercise its rights of re-entry
including termination under Article 13, or (b) at the Tenant's expense, enter
upon the Leased Premises and remedy the condition giving rise to the
cancellation, threatened cancellation or reduction.
Section 7.4 LOSS OR DAMAGE
The Landlord is not liable for any death or personal or consequential
injury of any nature whatsoever that may be suffered or sustained by the Tenant
or any employee, agent or customer of the Tenant or any other person who may be
upon the Leased Premises or for any loss of or damage or injury to any property
belonging to the Tenant or to its employees or to any other person which such
property is on the Leased Premises, unless any such death, injury, loss or
damage results from the wilful negligence of the Landlord, its agents, servants
or employees or others for whom the Landlord may be in law responsible and, in
particular (but subject to and without limiting the generality of the foregoing)
the Landlord shall not be liable for any damage or damages of any nature
whatsoever to any such property caused by reason of a breakdown or other failure
to supply adequate drainage, snow or ice removal, or by reason of the
interruption of any public utility or service or in the event of steam, water,
rain or snow which may leak into, issue, or flow from any part of the Real
Property or from the water, steam, sprinkler, or drainage pipes or plumbing
works of the same, or from any other place or for any damage caused by anything
done or omitted by any tenant, nor shall the Tenant be entitled to any abatement
of Rent in respect of any such condition, failure or interruption of service.
The Landlord shall use all reasonable diligence to remedy such condition,
failure or interruption of service, after notice of same, when it is within its
power and obligation so to do. The Landlord acknowledges that the uninterrupted
supply of utilities to the Leased Premises is critical for the Tenant's business
and that the Landlord will also use all reasonable efforts to avoid causing any
interruption of such supply to the Leased Premises.
15
<PAGE>
Section 7.5 LANDLORD'S INSURANCE
The Landlord shall at all times throughout the Term carry insurance on the
Building considered advisable by the Landlord and its Mortgagee and as would be
carried by a prudent owner of a similar building. Notwithstanding the Landlord's
covenant and the Tenant's contribution to the cost of the Landlord's insurance
premiums, the Tenant has no right to receive proceeds from the Landlord's
insurance policies. The Landlord agrees that all insurance carried by it on the
Building or any part thereof shall contain a waiver of subrogation, if available
from the Landlord's insurer, by the insurer against the Tenant and against those
for whom the Tenant is in law responsible. The Tenant agrees that it shall be
responsible for the additional cost, if any, of obtaining the waiver of
subrogation subject to the Tenant's right to decline to pay such amount within
five (5) days following notice from the Landlord in which case the Landlord
shall not be obliged to obtain such waiver in respect of such insurance policy.
Section 7.6 INDEMNIFICATION OF THE LANDLORD
The Tenant will indemnify the Landlord and save it harmless from and
against all loss (including loss of rentals), claims, actions, damages, costs,
liability and expense in connection with loss of life, personal injury, damage
to property (including and improvements) or any other loss or injury arising
from or out of this Lease, or any occurrence in the Building, or the Tenant's
occupancy of the Leased Premises or the Building, or occasioned wholly or in
part by any act or omission of the Tenant or by anyone permitted to be on the
Leased Premises or the Building by the Tenant unless due to the wilful
negligence of the Landlord or those for whom in law it is responsible. If the
Landlord is, without fault on its part, made a party to any litigation commenced
by or against the Tenant, then the Tenant will protect, indemnify and hold the
Landlord harmless and pay all expenses and reasonable legal fees incurred or
paid by the Landlord in connection with the litigation. The Tenant will also pay
all costs and legal fees (on a solicitor and his client basis) that may be
incurred or paid by the Landlord in enforcing the terms, covenants and
conditions in this Lease.
16
<PAGE>
ARTICLE 8
MAINTENANCE, REPAIRS AND ALTERATIONS
Section 8.1 MAINTENANCE AND REPAIRS BY THE LANDLORD
The Landlord will maintain and repair the structure of the Building,
including, without limitation, the foundations, exterior wall assemblies
including weather walls, subfloor, roof, bearing walls, and structural columns
and beams of the Building and the mechanical, electrical, heating, ventilating
and air conditioning systems and other base building systems of the Building, as
would a prudent owner of a similar building. The cost of this (except for
repairs or maintenance of inherent structural defects or weaknesses and except
for the Landlord's Work and costs of a capital nature) will be included in
Operating Costs. However, if the Landlord is required, due to the business
carried on by the Tenant, to make structural repairs or replacements by reason
of the application of laws, ordinances or other regulations of any governmental
body after the Commencement Date, or by reason of any act, omission or default
of the Tenant or those for whom the Tenant is in law responsible, then the
Tenant will be liable for the total cost of those repairs or replacements plus
fifteen percent (15%) of the total cost representing the Landlord's overhead.
Section 8.2 MAINTENANCE AND REPAIRS BY THE TENANT
(a) The Tenant will at all times, at its expense, maintain the whole of the
Leased Premises including without limitation, electrical, lighting, wiring,
plumbing fixtures and equipment within or exclusively serving the Leased
Premises as would a prudent owner of similar Leased Premises having regard to
size, age and location of the building, and the Tenant will make all needed
repairs and replacements with due diligence and dispatch. The Tenant will
provide its own janitorial services within the Leased Premises, at its sole cost
and expense. Notwithstanding anything contained in this Lease, if any such
repairs or replacements to the Leased Premises or to any Leasehold Improvements
installed by or on behalf of the Tenant in the Leased Premises, affect the
Structure of the Building, such work shall be performed only by the Landlord at
the Tenant's sole cost and expense. Upon completion thereof, the Tenant shall
pay to the Landlord, as Additional Rent within five (5) days after demand, both
the Landlord's costs relating to such repairs or replacements including the fees
of any architectural and engineering consultants plus a sum equal to fifteen
17
<PAGE>
percent (15%) of the total cost hereof representing the Landlord's overhead and
administrative costs.
(b) The Tenant will pay for the cost of replacement of glass broken on the
Leased Premises including outside windows and doors of the perimeter of the
Leased Premises.
(c) At the expiration or earlier end of the Term, the Tenant will surrender
the Leased Premises to the Landlord in as good a condition as the Tenant is
required to maintain them throughout the Term.
Section 8.3 LANDLORD'S APPROVAL OF THE TENANT'S REPAIRS
The Tenant will not make any repairs, alterations, replacements,
decorations or improvements ("Alterations") to any part of the Leased Premises
without first obtaining the Landlord's written approval. Subject to the
foregoing, the Tenant may at any time and from time to time, at its sole
expense, paint and decorate the interior of the Leased Premises as will, in the
judgement of the Tenant, better adapt the Leased Premises for the purpose of its
business; provided, however, that no changes, alterations, additions or
improvements to the structure, any perimeter wall, the windows, the sprinkler
system, the heating, ventilating, air conditioning, plumbing, electrical or
mechanical equipment or the floor or the ceiling shall be made without the prior
written consent of the Landlord and also provided that the Tenant will not,
under any circumstance whatsoever, paint or cover any "sandblasted" wood or
brick surfaces. All changes, alterations, additions and improvements, whether
structural or otherwise, shall comply with all applicable statutes, regulations
or by-laws of any municipal, provincial or other governmental authority. The
Tenant shall pay to the Landlord the amount of the increase for any insurance
coverage and/or municipal realty taxes to the extent that such increase is
directly attributable to any action by the Tenant under this Article, and the
Tenant covenants that such insurance shall not thereby be made liable to
avoidance or cancellation by the insurer by reason of such changes, alterations,
additions or improvements.
Any Alterations made by the Tenant without the prior consent of the
Landlord or not made in accordance with the specifications approved by the
Landlord will, if requested by the Landlord, be promptly removed by the Tenant
at the Tenant's expense.
18
<PAGE>
If, however, the proposed Alterations or any of them affect the structure
or any of the electrical, mechanical or other base building systems of any part
of the Building, the Alterations (or the appropriate portion of them) will be
performed only by the Landlord, at the Tenant's expense, plus fifteen percent
(15%) of the total cost representing the Landlord's overhead.
Section 8.4 REMOVAL AND RESTORATION BY THE TENANT
(a) All alterations, decorations, additions and improvements made by the
Tenant, or made by the Landlord on the Tenant's behalf (other than the Tenant's
trade fixtures) immediately become the property of the Landlord upon affixation
or installation and will not be removed from the Leased Premises at any time
unless permitted by the Landlord. Without limiting the generality of the
foregoing, the Tenant acknowledges that all leasehold improvements including
flooring, electrical fixtures, cupboards, hardware and any other fixture or
improvement which the Landlord may provide with the Leased Premises, is the
exclusive property of the Landlord and shall be maintained by the Tenant in the
same manner as would a careful owner and shall be preserved and left intact by
the Tenant at the expiration or earlier termination of the Term. The Tenant
will, at the expiration, at its cost, remove all of its trade fixtures , and
leave the Leased Premises in a broomswept and tidy condition.
(b) If the Tenant does not remove its trade fixtures at the end of the
Term, the trade fixtures will, at the Landlord's option become the property of
the Landlord and may be removed from the Leased Premises and sold or disposed of
any the Landlord in such manner as it deems advisable.
Section 8.5 TENANT TO DISCHARGE ALL LIENS
If any construction or similar lien or encumbrances is made, filed or
registered against title to the Building (or part of it) or against the Tenant's
leasehold interest, as a result of any work, materials or services supplied or
performed by or on behalf of the Tenant or otherwise in respect of the Leased
Premises, the Tenant will immediately discharge it at the Tenant's expense. If
the Tenant fails to discharge the lien within ten (10) business days after it is
registered, then, in addition to any other right or remedy of the Landlord, the
19
<PAGE>
Landlord may elect to discharge the lien by paying the amount claimed to be due,
and any additional amounts as may be required at law or otherwise, into Court or
directly to the lien claimant and the amount paid by the Landlord and all costs
and expenses including all solicitor's fees incurred as a result of the lien
including without limitation procuring its discharge plus interest at the rate
of three (3) percentage points will be immediately paid by the Tenant to the
Landlord.
Section 8.6 SIGNS AND ADVERTISING
The Tenant will not place or permit any notice, lettering or other signage
on any part of the outside of the Building or in the interior of the Leased
Premises which is visible from the outside of the Building or the Leased
Premises without the Landlord's prior written consent, which consent may be
unreasonably withheld. Notwithstanding the foregoing, subject to approval which
may not be unreasonably withheld in respect of the first sign affixed pursuant
to this Section 8.6, the Tenant may affix a single sign on the exterior of the
Building with maximum dimensions of ten (10) feet by ten (10) feet or a single
sign with a maximum diameter of ten (10) feet above the entrance of the Leased
Premises. The modifications or replacements of the first sign. At the expiration
of this Lease, the Tenant will remove all signs, pictures, advertisements,
notices, or letterings from the Leased Premises at the Tenant ' s expense and
will promptly repair all damages caused by its installation and removal.
Section 8.7 MEZZANINE
The Tenant acknowledges that if it elects to erect a mezzanine at any time
during the Term or the renewal hereof within the Leased Premises, the Rentable
Area of the Leased Premises shall be amended to include the area of the
mezzanine. The Tenant further acknowledges that the Landlord shall have the
option, but will not be obligated, to construct a mezzanine at the Tenant's sole
cost plus administration fees.
20
<PAGE>
ARTICLE 9
DAMAGE AND DESTRUCTION
Section 9.1 DESTRUCTION OF THE LEASED PREMISES
(a) If the Leased Premises are destroyed or damaged as a result of fire or
other casualty, then if:
(i) the Leased Premises are rendered wholly or partially
untenantable, this Lease will continue in effect and the Landlord
will commence diligently to restore the Leased Premises to the
extent only of the Landlord's Work set out in the Schedule
attached as Schedule "C", and only Basic Rent (but not Additional
Rent) will abate entirely or proportionately, as the case may be,
to the portion of the Leased Premises rendered untenantable from
the date of the destruction or damage until the Landlord has
completed its restoration work; or
(ii) the Leased Premises are not rendered untenantable in whole or in
part, this Lease will continue in effect, the Rent and other
amounts payable by the Tenant will not abate and the Landlord
will commence diligently to restore the Leased Premises to the
extent required by this Section 9.1(a).
(b) Notwithstanding Section 9.1(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 rebuilt or made fit for the
purposes of the Tenant within ninety (90) days of the damage or destruction, the
Landlord, instead of rebuilding or making the Leased Premises fit for the Tenant
in accordance with Section 9.1(a) may, at its option, or the Tenant at its
option may, elect to terminate this Lease by giving the Tenant or the Landlord,
as the case may be, within thirty (30) days after the damage or destruction,
notice of termination, and thereupon Rent will be apportioned and paid to the
date of damage or destruction.
(c) Once the Landlord has substantially completed its restoration work the
Landlord will forthwith notify the Tenant to that effect and, the Tenant will
complete all
21
<PAGE>
work required to fully restore the Leased Premises for business. Nothing in this
Section 9.1 requires the Landlord to rebuild the Leased Premises in the
condition and state that existed before the damage, but the Leased Premises, as
rebuilt, will have reasonably similar facilities and services to those in the
Leased Premises prior to the damage.
Section 9.2 DESTRUCTION OF THE BUILDING
(a) Notwithstanding Section 9.1, if twenty-five percent (25%) or more of
the total Rentable Area of the Building is damaged or destroyed (irrespective of
whether the Leased Premises are damaged or destroyed) and if, in the opinion of
the Landlord reasonably arrived at, the damaged or destroyed parts of the
Building cannot be rebuilt or made fit for the purposes of the respective
tenants of the space within ninety (90) days of the damage or destruction, then,
the Landlord or the Tenant may, at its option (to be exercised by written notice
to the Tenant or the Landlord, as the case may be, within sixty (60) days
following the occurrence), elect to terminate this Lease sixty (60) days
following such notice. All Rent will be payable without reduction or abatement
subsequent to the destruction or damage and until the date of termination,
unless the Leased Premises has been destroyed or damaged as well, in which event
Section 9.1 will apply.
(b) If any part of the Building is destroyed or damaged and the Landlord
does not elect to terminate this Lease, the Landlord will commence diligently to
restore the Building, but only to the extent of the Landlord's responsibilities
pursuant to the terms of the various leases for the premises in the Building,
and exclusive of any tenant's responsibilities set out therein. If the Landlord
elects to restore the Building, the Landlord may restore according to plans and
specifications and working drawings other than those used in the original
construction of the Building.
Section 9.3 EXPROPRIATION
Both the Landlord and the Tenant agree to co-operate with the other
regarding an expropriation of the Leased Premises or the Building or any part
thereof, so that each may receive the maximum award to which they are
respectively entitled at law. To the extent that any portion of the Building
other than the Leased Premises is expropriated, then, the full proceeds accruing
or awarded as a result will belong to the Landlord and the Tenant
22
<PAGE>
will abandon or assign to the Landlord any rights which the Tenant may have or
acquire by operation of law to those proceeds or awards and will execute all
such documents as in the opinion of the Landlord are necessary to give effect to
this intention.
ARTICLE 10
TRANSFER AND SALE
Section 10.1 TRANSFER
Despite any statutory provisions to the contrary, the Tenant shall have the
right at any time or times during the Term to sublet or assign the Leased
Premises or the Lease, as the case may be, in whole or in part subject to the
Landlord's consent in writing which consent shall not be unreasonably withheld
or delayed; provided, however, such consent to sublet or assign shall not
relieve the Tenant from its obligations to pay rent and to fully observe and
perform the Tenant's covenants according to the terms of this Lease unless it
is specifically so agreed by the Landlord who shall be under no obligation
whatsoever to agree to any request by the Tenant for release from its covenants
and obligations. It will not be deemed unreasonable for the Landlord to consider
any or all of the following factors before granting or withholding its consent:
(a) any covenants made by the Landlord with other tenants or proposed
tenants of the Building;
(b) the financial background, status and business history of the
proposed subtenant or assignee;
(c) whether the subtenant or assignee is at that time a tenant or
occupant in the Building; (d) whether the subtenant or assignee
is proposing to change in any way the use to which the Leased
Premises will be put. No such consent to an
23
<PAGE>
assignment or sublease shall be valid unless within ten (10) days
after the execution thereof, the Tenant shall deliver to the
Landlord:
i) a true copy of such assignment duly executed by the
Tenant which must disclose any and all monetary
payments or other consideration made or to be made;
ii) an instrument, in form satisfactory to the Landlord but
in accordance with the provisions of the Lease, in the
case of an assignment, duly executed by the assignee
wherein such assignee shall assume the Tenant's
obligations pursuant to this Lease and, in the case of
a sublease, duly executed by the subtenant wherein such
subtenant agrees not to do anything which would result
in a breach by the Tenant of its obligations under this
Lease;
iii) payment of the sum of $1,000.00 to the Landlord on
account of the Landlord's legal and other expenses
incurred in connection with the sublease or assignment;
iv) in the event of any subletting by the Tenant by virtue
of which the Tenant receives a rental in the form of
cash, goods, services or other consideration from the
subtenant which is higher than the rental payable
hereunder to the Landlord, the Tenant shall pay to the
Landlord seventy-five percent (75%) of any such excess
to the Landlord in addition to all rentals and other
costs payable hereunder, and such excess for the period
of time during which the said Subtenant remains in
possession of the premises sublet to it. If the Tenant
herein shall receive from any assignee of the Lease,
either directly or indirectly, any consideration for
the assignment of the Lease, either in the form of
cash, goods, or services, the Tenant shall forthwith
pay to the Landlord an amount equivalent to
seventy-five percent (75%) of any such consideration.
In determining whether the Tenant receives from the
subtenant a rental which is higher than the rental
payable hereunder to the Landlord or a consideration
for
24
<PAGE>
the assignment of the Lease, there shall be deducted
from any excess rental or consideration otherwise
determined any reasonable costs or expenses of the
Tenant in completing the subletting or assignment
transaction and any costs or expenses incurred by the
Tenant in performing the Tenant' s Work and the
unamortized costs and expenses of any other leasehold
improvements paid for by the Tenant. All costs must
have third party paid invoices or other reasonable
evidence thereof presented to the Landlord before any
deduction is permitted.
Notwithstanding the foregoing or anything else contained herein, the Landlord
acknowledges and agrees that the Tenant (when it is not materially in default)
may, from time to time, without the Landlord's consent but upon prior written
notice to the Landlord assign the Lease and/or sublease all or part of the
Leased Premises to: (a) an affiliate or associate (as defined in the Business
CORPORATIONS ACT (Ontario), of Tucows International Corporation; (b) a
corporation with which the Tenant amalgamates as part of a bona fide corporate
reorganization of the Tenant; or (c) a bona fide lender to the Tenant or
affiliate of the Tenant. Provided that in each instance, the Tenant and the
Assignee or Sublessee shall otherwise comply with the provisions of clauses
10.1(i) (excluding particulars of monetary or other consideration) and 10.1(ii)
above.
Section 10.2 ASSIGNMENT BY LANDLORD
If there is a sale, lease or other disposition by the Landlord of the
Building or any part thereof, or the assignment by the Landlord of this Lease or
any interest of the Landlord hereunder, and to the extent that the purchaser or
assignee assumes the covenants and obligations of the Landlord hereunder, the
Landlord will, thereupon and without further agreement, be relieved of all
further liability with respect to its covenants and obligations.
Section 10.3 OPTION TO RENEW
If the Tenant:
1) is not then in material default under the Lease; and
25
<PAGE>
2) gives the Landlord not less than nine (9) and not more than
twelve (12) months' written notice prior to the expiration of the
initial Term of the Tenant's intention to renew the Term;
then the Tenant shall have the right to renew the Term of this Lease upon the
expiry of the initial Term for a period of five (5) years on the same terms and
conditions as set out in the initial term except that:
i) there shall be no further right to renew;
ii) the Landlord shall have no obligation to pay to the Tenant any
Tenant's allowance or do or perform any Landlord's Work in, on,
to or for the Leased Premises; and
iii) the Basic Rent payable by the Tenant to the Landlord shall be the
fair market rental for the Leased Premises at such time but in no
event shall it be less than the annual Basic Rent payable during
the last year of the original Term.
All other payments upon the part of the Tenant to be made in this Lease shall
continue to be made during such renewal Term. In the event that the Landlord and
the Tenant do not reach agreement on the rental to be paid for the renewal Term
within three (3) months from the date of the notice from the Tenant, the option
to renew shall be null and void.
Section 10.4 RIGHT OF REFUSAL
At any time during the Term or renewal thereof, the Tenant shall be
entitled to give notice to the Landlord in writing that it requires additional
space. From the date of receipt of such notice until the earlier of:
(a) the Tenant withdrawing such notice; or
(b) the expiration of the Term (including the renewal period, if
exercised), the Tenant shall have the option to rent space in the
Building. The Landlord shall notify the Tenant in writing when
space will be vacant and the Tenant shall advise the Landlord in
writing within five (5) business days after receipt of the
Landlord's notice, whether it wishes to rent said space. If the
Tenant fails to advise the Landlord in writing within five (5)
business days then the Tenant's right of refusal shall be null
and void. The Tenant shall be entitled to rent additional space
on the same terms and conditions as this Lease including rights
of renewal and Rent.
26
<PAGE>
ARTICLE 11
ACCESS AND ALTERNATIONS
Section 11.1 RIGHT OF ENTRY
The Landlord and its agents have the right to enter the Leased Premises at
all reasonable times upon reasonable prior notice, where possible, (except in
the event of an emergency, when the Landlord can enter at any time and excluding
regular periodic service and maintenance of equipment located within the Leased
Premises contracted for by the Landlord and for which the Landlord receives no
advance notice) to show them to prospective purchasers, lessees or mortgagees,
and to examine them and make repairs, alterations or changes to the Leased
Premises or the Building as the Landlord considers necessary including, without
limitation, repairs, alterations or changes to the pipes, conduits, wiring,
ducts and other installations in the Leased Premises where necessary to serve
another part of the Building. For that purpose, the Landlord may take all
required material into the Leased Premises and may have access to the ducts and
access panels to mechanical shafts and the Landlord has the right to check,
calibrate, adjust and balance controls and other parts of the heating,
ventilating and air conditioning. The Rent will not abate while any repairs,
alterations or changes are being made due to loss or interruption of the
business of the Tenant or otherwise, and the Landlord will not be liable for any
damage, injury or death caused to any Person, or to the property of the Tenant
or of others located on the Leased Premises as a result of the entry provided
that in all such events the Landlord takes reasonable steps to minimize the
disruption to the Tenant's business in the Leased Premises.
ARTICLE 12
STATUS STATEMENT, ATTORNMENT AND SUBORDINATION
Section 12.1 STATUS STATEMENT
Within ten (10) days after written request by the Landlord, the Tenant will
deliver in a form supplied by the Landlord, a status statement or a certificate
to any proposed purchaser, assignee, lessor or mortgagee, or to the Landlord,
which will contain such
27
<PAGE>
acknowledgements and information, to the best of the Tenant's knowledge and
belief, as is customarily called for in status statements and estoppel
certificates delivered in conjunction with commercial tenancies.
Section 12.2 SUBORDINATION AND ATTORNMENT
(a) The Landlord shall use its reasonable and best efforts to obtain a
non-disturbance agreement in favour of the Tenant from the holder of any
Encumbrance on the Building in the Encumbrancer's usual form. Subject to the
Tenant receiving a non-disturbance agreement referred to in the first sentence
of this Section 12.2 from the holder of the Encumbrance, this Lease and the
Tenant's rights hereunder are, and will at all times be, subordinate to all
ground or underlying leases, mortgages, trust deeds or the charge or lien
resulting from, or any instruments of, any financing, refinancing or collateral
financing (collectively, an "Encumbrance") or any renewals or extensions thereof
from time to time in existence against the Building or any part thereof. Upon
request, the Tenant will subordinate this Lease in such form as the Landlord
requires to any Encumbrance and, if requested, the Tenant will attorn to the
holder of the Encumbrance so long as in each case the Encumbrancer enters into a
non-disturbance agreement as referred to in the first sentence of this Section
12.2 (a) in favour of the Tenant. The Tenant agrees that it shall be responsible
for the Encumbrancer's reasonable costs of obtaining a non-disturbance
agreement, if any.
(b) The Tenant will, so long as the Encumbrancer enters into a
non-disturbance agreement as referred to in the first sentence of this Section
12.2 (a) in favour of the Tenant, if possession is taken under, or any
proceedings are brought for possession under or the foreclosure of, or in the
event of the exercise of the power of sale under any Encumbrance, attorn to the
Encumbrancer or the purchaser upon any such foreclosure, sale or other
proceeding and recognize the Encumbrancer or the purchaser as the Landlord under
this Lease.
28
<PAGE>
ARTICLE 13
DEFAULT
Section 13.1 RIGHT TO RE-ENTER
(a) An "Event of Default" occurs whenever:
(i) any Rent is not paid when due and payable and the non-payment
continues for five (5) days after written notice to the Tenant
(but if any Rent is not paid when due and payable on two (2)
occasions (whether or not such non-payment becomes an Event of
Default), any such non-payment shall thereafter immediately and
without notice constitute an Event of Default if not paid when
due and payable);
(ii) 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 subparagraph
(iii) for which no notice shall be required except as expressly
provided therein), provided the Landlord first gives the Tenant
ten (10) days' written notice of the Tenant's failure, or such
shorter period of time as is otherwise provided in this Lease,
and the Tenant within the ten (10) day or shorter period fails to
commence diligently and thereafter to proceed diligently to cure
its failure; or
(iv) any of the following events occurs:
(1) a report, statement or certificate delivered by the Tenant
pursuant to this Lease is false or misleading in a material
respect except for a misstatement that is the result of an
inadvertent or unintentional error;
29
<PAGE>
(2) the Tenant, or a Person carrying on business in a part of
the Leased Premises, or an Indemnifier becomes bankrupt or
insolvent or takes the benefit of any statute for bankrupt
or insolvent debtors or makes any proposal, assignment or
arrangement with its creditors;
(3) a receiver or a receiver and manager is appointed for all or
a part of the property of the Tenant, or of another Person
carrying on business in the Leased Premises, or of an
Indemnifier and is not revoked within ten (10) days;
(4) steps are taken or proceedings are instituted for the
dissolution, winding up or other termination of the Tenant's
or the Indemnifier's existence or the liquidation of their
respective assets (other than a bona fide corporate
reorganization) and the Tenant has not diligently commenced
the resistance of such steps or proceedings within ten (10)
days after the same are taken or fails thereafter to proceed
diligently to resist such steps or proceedings;
(5) the Tenant or the Indemnifier makes or attempts to make a
bulk sale of any of its assets regardless of where they are
situated (except for a bulk sale made to an Transferee when
the Transfer is permitted under this Lease or has been
consented to by the Landlord);
(6) property is sold, disposed or removed from the Leased
Premises so that there does not remain sufficient property
on the Leased Premises available for distraint, free and
clear of any lien, charge or other encumbrance ranking ahead
of the
30
<PAGE>
Landlord's right of distress, to satisfy the Rent due or
accruing for at least twelve (12) months;
(7) if the Tenant abandons or attempts to abandon the Leased
Premises or the Tenant fails to carry on business in the
Leased Premises in accordance with the terms of this Lease;
(8) the Tenant effects or attempts to effect a Transfer that is
not permitted by this Lease; or
(9) this Lease or any material part of the Tenant's assets on
the Leased Premises are taken or seized under a writ of
execution, an assignment, pledge, charge, debenture, or
other security instrument and same is not lifted within five
(5) days following written notice thereof to the Tenant.
(b) Upon the occurrence of an Event of Default which is continuing, (i) the
full amount of the current month's and the next three (3) months' instalments of
Rent will become due and payable, and (ii) the Landlord may re-enter and
re-possess the Leased Premises and on such re-entry, this Lease and all of the
Tenant's rights hereunder will terminate without liability on the part of the
Landlord for loss or damage, and without prejudice to the Landlord's rights to
recover arrears of Rent or damages for any previous breach by the Tenant of any
covenant or condition of this Lease. On such a termination, (1) the Tenant will
promptly (and in any case within ten (10) days after written notice requiring it
to do so) remove all of its property from the Leased Premises, or (2) the
Landlord may at any time remove all or part of the property from the Leased
Premises and store it in a public warehouse or elsewhere at the cost of the
Tenant. The Landlord will not be responsible for loss or damage to any of the
Tenant's property regardless of how the loss or damage is caused, and regardless
of negligence. If the Tenant fails to remove its property as required by clause
(1) above, or if it fails to pay the Landlord's costs of removal and storage
within ten (10) days after written notice specifying those costs, the Tenant
will be considered to have abandoned its property and the Landlord will be
entitled to retain it or to sell or dispose of the
31
<PAGE>
Tenant's property for the Landlord's own benefit. Notwithstanding any such
termination, the Landlord shall be entitled to recover damages from the Tenant
including, but not limited to, (a) damages for loss of Rent suffered by reason
of this Lease having been prematurely terminated; (b) the cost of recovering the
Leased Premises; and (c) solicitor's fees on a solicitor and his client basis.
Section 13.2 RIGHT TO RELET
(a) If the Landlord elects to re-enter the Leased Premises, or if 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 without terminating this
Lease make any alterations and repairs as are necessary in order to relet the
Leased Premises. Upon each reletting all rent received by the Landlord will be
applied, first to the payment of any indebtedness other than Basic Rent or
Additional Rent due hereunder; second, to the payment of any costs and expenses
of reletting including brokerage fees and solicitor's fees and the costs of
alterations and repairs; third, to the payment of Basic Rent and Additional Rent
due and unpaid hereunder; and the residue, if any, will be held by the Landlord
and applied in payment of future Rent as it becomes payable hereunder. No
re-entry or taking possession of the Leased Premises will be construed as an
election on its part to terminate this Lease unless a written notice of that
intention is given to the Tenant.
Section 13.3 EXPENSES
If legal action is brought for recovery of possession of the Leased
Premises, for the recovery of Basic Rent and Additional Rent or any other amount
due under this Lease, or because of the breach of any other of the Tenant's
obligations, the Tenant will pay to the Landlord all expenses incurred therefor,
including a solicitor's fee (on a solicitor and his client basis), unless a
court otherwise awards, plus fifteen percent (15%) of such expenses to cover the
Landlord's overhead and administrative costs.
Section 13.4 WAIVER OF EXEMPTION FROM DISTRESS
The Tenant agrees that notwithstanding anything contained in the Landlord
and Tenant Act (Ontario), or any statute or provision subsequently passed to
take the place of or amend the Act, none of the goods and chattels of the
32
<PAGE>
Tenant which are on or have at any time been on the Leased Premises will be
exempt from levy by distress for Basic Rent or Additional Rent in arrears by the
Tenant as provided for by any Sections of the said Act or any amendments
thereto, and that if any claim is made for such exemption by the Tenant or if a
distress is made by the Landlord, this covenant and agreement may be pleaded as
an estoppel against the Tenant in any action brought to test the right to the
levying upon any such goods as are named as exempted in any Sections of the said
Act or amendments thereto; the Tenant waiving, as it hereby does, all and every
benefit that could or might have accrued to the Tenant under and by virtue of
any Sections of the said Act or any amendments thereto but for this covenant.
Section 13.5 LANDLORD'S RIGHTS
If the Tenant fails to pay any Additional Rent payable to a third party
when due, the Landlord, after giving three (3) days' notice in writing to the
Tenant, may, but will 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 other covenants or
obligations under this Lease (other than the payment of Basic Rent, Additional
Rent or other sums required to be paid pursuant to this Lease), the Landlord
may, but will not be obligated to, after giving ten (10) days' written notice to
the Tenant of such default and the Tenant within such ten (10) day period fails
to commence diligently and thereafter proceed diligently to perform such
covenant or obligation, (or without notice in the case of an emergency), perform
or cause to be performed any of the unperformed 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 expenses incurred and
expenditures made by the Landlord plus a sum equal to fifteen percent (15%)
representing the Landlord's overhead and administrative costs will be paid by
the Tenant as Additional Rent forthwith upon demand. The Landlord shall have no
liability to the Tenant for any loss or damage resulting from any such action or
entry by the Landlord upon the Leased Premises under this Article 13 and same is
not a re-entry or a breach of any covenant for quiet enjoyment contained in this
Lease or imposed by law.
33
<PAGE>
Section 13.6 REJECTION OF TENANT'S REPUDIATION
If an Event of Default occurs the Landlord may, instead of terminating this
Lease, insist upon the performance of the covenantsand conditions of this Lease
and in that case may do both or either of the following: (a) levy distress for
arrears of Rent; and (b) take legal proceedings against the Tenant for both or
either of (i) payment of Rent as it becomes due; and (ii) performance of the
covenants and conditions of this Lease; all without prejudice, however, to the
Landlord's right to terminate this Lease at any time should the Event of Default
continue unremedied.
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 for in this Lease. No remedy shall be exclusive or
dependent 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.
Section 13.7 NO CONDONING OF DEFAULT
No condoning, excusing or overlooking by the Landlord or Tenant of any
default, breach or non-observance by the Tenant or the Landlord at any time or
times in respect of any covenant, proviso or condition herein contained shall
operate as a waiver of the Landlord's or the Tenant's rights hereunder in
respect of any continuing or subsequent default, breach or non-observance, or so
as to defeat or affect in any way the rights of the Landlord or Tenant herein in
respect of any such continuing or subsequent default or breach, and no waiver
shall be inferred from or implied by anything done or omitted by the Landlord or
the Tenant save only express waiver in writing.
34
<PAGE>
ARTICLE 14
MISCELLANEOUS
Section 14.1 RULES AND REGULATIONS
The Landlord may adopt Rules and Regulations from time to time which shall
be made a part of this Lease, and the Tenant will observe them. The Landlord
reserves the right to amend or supplement the Rules and Regulations applicable
to the Leased Premises or the Building as in the Landlord's judgment are needed
for the safety, care, cleanliness and efficient operation of the Building.
Notice of the Rules and Regulations and amendments and supplements, if any, will
be given to the Tenant and the Tenant will thereupon observe them provided that
they do not contradict any terms, covenants and conditions of this and shall be
reasonable and have general application to all tenants of the Building. The
Landlord shall enforce same in a reasonable and non-discriminatory manner
against all tenants of the Building.
Section 14.2 INTENT AND INTERPRETATION
(a) Net Lease
The Tenant acknowledges that it is intended that this Lease is a completely
carefree net lease to the Landlord, except as expressly herein set out, that the
Landlord is not responsible during the Term for any costs, charges, expenses and
outlays of any nature whatsoever arising from or relating to the Leased
Premises, or the use and occupancy thereof and the Tenant will pay all charges,
impositions, costs and expenses of every nature and kind relating to the Leased
Premises except as expressly herein set out.
(b) Obligations as Covenants and Severability
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. If any provision of this Lease is or becomes invalid,
void, illegal or unenforceable, it shall be considered separate and severable
from the Lease and the remaining provisions shall remain in force and be binding
upon the parties as though such provision had not been included.
(c) Entire Agreement and Amendment of Modification
35
<PAGE>
This Lease and the Schedules, and Riders, if any, attached Together with
the Rules and Regulations set forth all covenants, promises, agreements,
conditions or understandings, either oral or written, between them. No
alteration or amendment to this Lease will be binding upon the Landlord or the
Tenant unless in writing and signed by the Tenant and the Landlord.
(d) Governing Law
This Lease will be construed in accordance with and governed by the laws of
the Province of Ontario.
(e) Time of the Essence
Time is of the essence of this Lease and of every part of it.
(f) Successors
The rights and obligations under this Lease extend to and bind the
successors and assigns of the Landlord and, if Section 10.1 is complied with,
the heirs, executors, administrators and permitted successors and assigns of the
Tenant. If there is more than one Tenant, they are bound jointly and severally
by this Lease.
Section 14.3 OVERHOLDING--NO TACIT RENEWAL
If the Tenant remains in possession of the Leased Premises after the end of
the Term without having signed a new lease or an extension of Term agreement,
there is no tacit renewal of this Lease or the Term, notwithstanding any
statutory provisions or legal presumptions to the contrary, and the Tenant will
be deemed to be occupying the Leased Premises as a tenant from month-to-month at
a monthly Basic Rent equal to twice the monthly amount of Basic Rent payable
during the last month of the Term, and otherwise, upon the same terms, covenants
and conditions as are set forth in this Lease (including the payment of
Additional Rent) so far as these are applicable to a monthly tenancy.
36
<PAGE>
Section 14.4 TENANT PARTNERSHIP
If the Tenant is a partnership ("Tenant Partnership") each Person who is
presently a member of the Tenant Partnership, and each Person who subsequently
becomes a member of any successor Tenant Partnership will be and continue to be
liable jointly and severally for the full performance of, and will be and
continue to be subject to, the terms, covenants and conditions of this Lease,
whether or not the Person ceases to be a member of the Tenant Partnership or
successor Tenant Partnership.
Section 14.5 WAIVER
The waiver by either party of any breach of the other is not demmed to be a
waiver of any preceding breach by the Tenant regardless of the Landlord's
knowledge of the preceding breach at the time of acceptance of the Rent. No
term, convenant or condition of this Lease is deemed to have been waived by the
Landlord unless the waiver is in writing by the Landlord.
All Basic Rent and Additional Rent to be paid by the Tenant to the Landlord
will be paid without any deduction, abatement, set-off or compensation
whatsoever (except for the Basic Rent to the extent it may be abated pursuant to
Section 9.1), and the Tenant hereby waives the benefit of any statutory or other
rights in respect of abatement, set-off or compensation in its favour at the
time hereof or at any future time.
Section 14.6 ACCORD AND SATISFACTION
No payment by the Tenant or receipt by the Landlord of a lesser amount than
the monthly payment of Rent stipulated is deemed to be other than on account of
the earliest stipulated Rent, nor is any endorsement or statement on any cheque
or any letter accompanying any cheque or payment as Rent deemed an
acknowledgement of full payment of accord and satisfaction, and the Landlord may
accept and cash any cheque or payment without prejudice to the Landlord's right
to recover the balance of the Rent due or to pursue any other remedy provided in
this Lease.
37
<PAGE>
Section 14.7 FORCE MAJEURE
Notwithstanding anything in this Lease, if either party is bona fide
delayed or hindered in or prevented from the performance of any term, covenant
or act required hereunder by reason of inclement weather conditions; strikes;
labour troubles; inability to procure materials or services; power failure;
restrictive overnmental laws or regulations; riots; insurrection; sabotage;
rebellion; war; act of God; or other reason whether of a like nature or not
which is not the fault of the party delayed in performing work or doing acts
required under the terms of this Lease, then the performance of that term,
covenant or act is excused for the period of the delay and the party delayed
will be entitled to perform that term, covenant or act within the appropriate
time period after the expiration of the period of the delay. However, the
provisions of this Section do not operate to excuse the Tenant after the
Commencement Date from the prompt payment of Rent.
Section 14.8 NOTICES
Any notice, demand, request or other instrument which may be or is required
to be given under this Lease will be delivered in person or sent by registered
mail postage prepaid and will be addressed if to the Landlord, at 49 Bathurst
Street, Suite 50, Toronto, Ontario, M5V 2P2, and if to the Tenant, at the Leased
Premises. Any notice, demand, request or consent is conclusively deemed to have
been given or made on the day upon which it is delivered, or, if mailed, then
four (4) business days (excluding Saturdays, Sundays and statutory holidays)
following the day of mailing, as the case may be. Either party may give written
notice of any change of its address and thereafter the new address is deemed to
be the address of that party for the giving of notices. If the postal service is
interrupted or is substantially delayed, any notice, demand, request or other
instrument will be delivered.
Section 14.9 REGISTRATION
Neither the Tenant nor any one on the Tenant's behalf or claiming under the
Tenant will register this Lease. If either party intends to register a document
for the purpose only of giving notice of this Lease or of any assignment or
sublease of this Lease, then, upon request, both parties will join in the
execution of a short form or notice of this Lease which will (i) be prepared by
the Landlord or its solicitors at the Tenant's expense, and (ii) only
38
<PAGE>
describe the parties, the Leased Premises and the Commencement Date and the
expiration date of the Term, and any options to extend or renew the Term.
Section 14.10 ACCRUAL OF BASIC RENT AND ADDITIONAL RENT
Rent will be considered as annual and accruing from day-to-day and where it
becomes necessary for any reason to calculate Rent for an irregular period of
less than one (1) year, an appropriate apportionment and adjustment will be
made.
Section 14.11 QUIET ENJOYMENT
If the Tenant pays the Rent and observes and performs all its terms,
covenants and conditions, the Tenant will quietly hold and enjoy the Leased
Premises for the Term without interruption by the Landlord twenty-four (24)
hours a day, seven (7) days a week throughout the Term of the Lease and any
renewals thereof, unless otherwise permitted under the terms of this Lease.
IN WITNESS WHEREOF, the Landlord and the Tenant have signed and sealed this
Lease.
SIGNED, SEALED & DELIVERED 707932 ONTARIO LIMITED
in the presence of:
Per: /s/ Marcy Lipson
------------------------
TUCOWS INTERNATIONAL
CORPORATION
/s/ Edward Gray
------------------------
I/We have the authority to bind
the corporation
39
<PAGE>
SCHEDULE "A"
------------
FIRSTLY: All and singular those certain parcels or tracts of land and premises
situate, lying and being in the City of Toronto, in the Municipality of
Metropolitan Toronto and being composed of Lot Numbers 64, 65, 66, 67 and 68 on
the easterly side of Dufferin Street, according to Plan No. 684 filed in the
Land Registry Office for the Registry Division of Toronto (No. 63).
SECONDLY: All and singular those certain parcels or tracts of land and premises
situate, lying and being in the City of Toronto, in the Municipality of
Metropolitan Toronto and being composed of Lot Numbers 69, 70, 71, 72 and 73 on
the easterly side of Dufferin Street, according to Plan No. 684 filed in the
Land Registry Office for the Registry Division of Toronto (No. 63).
THIRDLY: All and singular that certain parcel or tract of land and premises'
situate, lying and being in the City of Toronto, In the Municipality of
Metropolitan Toronto, and being more particularly described as follows, namely:
Part of Block 7, a part of the Ordinance Lands conveyed by the Crown to the
Corporation of the City of Toronto under Letters Patent dated the 13th day of
May A.D. 1880; the boundaries of the said parcel of land being described as
follows:
COMMENCING at a point in the latterly limit of Dufferin Street where the same
would be intersected by the production westerly of the line of the southerly
faces of the brick piers forming in part the southerly wall of the westerly part
of the two storey brick building standing in September, 1941, upon the lands
immediately adjoining to the north and west of the lands herein described, the
said point of intersection being distant Two Hundred and Seventy-five feet
(275') more or less, measured southerly along the said limit of Dufferin Street
from the southerly limit of King Street West;
THENCE EASTERLY along the said production, to and along the line of the said
southerly faces of piers, in all, a distance of Fifty-seven feet and Five and
one-quarter inches (57' 5-1/4"),
40
<PAGE>
more or less, to the westerly face of the westerly wall of the one storey brick
building standing at the date hereinbefore last mentioned upon the said lands
herein described;
THENCE NORTHERLY about parallel to the said limit of Dufferin Street, being
along the westerly face of a brick pier and the production northerly thereof, in
all, a distance of One Foot and Three and three-quarters inches (1' 3-3/4"),
more or less, to the centre line of the One Foot and One and a half inch
(1' 1-1/2") part of the said southerly wall;
THENCE EASTERLY along the said centre line. Seventeen feet and Eleven and
one-quarter inches (17' ll-1/4"), more or less, to the point of intersection
with the centre line of the One Foot and One and a half inch (1' 1-l/2") part et
the easterly wall of the said westerly part of the brick building standing upon
the lands immediately to the north and west of the lands herein described;
THBNCE NORTHERLY along the last mentioned centre line of Wall, being about
parallel to the said limit of Dufferin Street, Two Hundred and Seven feet and
seven and one-quarter inches (207' 7-1/4") more or less, to the point of
intersection with the centre line of the Nine inch (9") part of the southerly
wall of the northerly part o the said two storey brick building);
THENCE EASTERLY and about parallel to the said southerly limit of King Street
West, being along the last mentioned centre line of wall, One Hundred and
fifty-nine feet and six and a half inches (159' 6-1/2"), more or less, to the
centre line of a brick pier forming a part of the last mentioned southerly wall;
THENCE NORTHERLY along the said centre line of pier, being parallel to the said
limit of Dufferin Street Two and One-quarter inches (2-1/4") more or less, to
the point of intersection with the centre line of the One Foot and one and a
half inch (1' l-l/2") part of the last mentioned southerly wall;
THENCE EASTERLY along the last mentioned centre line of wall, and about parallel
to the said southerly limit of King Street Meat, Sixty-five feet (65') more or
less, to a point in the westerly limit of Mowat Avenue distant Sixty-five feet
and Eleven inches (65' ll"), more or less, measured southerly thereon from the
said southerly limit of King Street West;
41
<PAGE>
THENCE SOUTHERLY along the said westerly limit of Mowat Avenue Two Hundred and
Eighty-one feet and Four inches (281' 4"), more or less to the north easterly
angle of the property known as The Asylum Farm Building Lot, being to the
north-easterly angle of Lot Number 68, according to a plan filed as Number 684
in the Land Registry Office for the Registry Division of Toronto;
THENCE WESTERLY along the northerly limit of said Lot Number 68, to and along
the northerly limit of Lot Number 69, according to the said plan, being along
the said northerly limit of The Asylum farm Building Lot, in all, a distance of
Two Hundred and ninety-nine feet and Ten and one-quarter inches (299' 10-1/4"),
more or less, to the easterly limit of Dufferin Street aforesaid;
THENCE NORTHERLY along the last mentioned limit, Seventy-two feet and Three
inches (72' 3") more or less, to the point of commencement;
RESERVING a right-of-way, at all times, for all persons now or hereafter
entitled thereto, over, along and upon that part of the said lands hereinbefore
described more particularly described as follows:
BEGINNING at the north-westerly angle of the westerly part of the said lands
hereinbefore described, being a point in the said easterly limit of Dufferin
Street distant Two hundred and seventy-five feet (275'), more or less, measured
southerly thereon from the said southerly limit of King Street West;
THENCE EASTERLY along the northerly limit of the said westerly part of the lands
hereinbefore described, fifty-seven feet and five and one-quarter inches
(57' 5-1/4"), more or less, to the westerly face of the Westerly wall of the
said one storey brick building standing in September, 1941, upon the said lands
hereinbefore described;
42
<PAGE>
THENCE SOUTHERLY along the said westerly face of wall, Thirty-eight feet and
Four and three-quarter inches (38' 4-3/4"), more or less, to the northerly face
of the northerly wall of a brick building standing at the date hereinbefore last
mentioned;
THENCE WESTERLY along the last mentioned face of wall, Seven feet and six inches
(7' 6"), more or less, to the westerly face of the westerly wall of the last
mentioned building;
THENCE SOUTHERLY along the last mentioned westerly face of wall, Five feet and
Eight and a half inches (5' 8-l/2") more or less, to the northerly face of the
northerly wall of a two storey brick building standing at the date hereinbefore
last mentioned upon the lands to the south of the lands over which a right of
way is hereby reserved;
THENCE WESTERLY along the last mentioned face of wall and the production
westerly thereof, in all, a distance of forty-nine Feet and One-quarter of an
inch (49' 0-1/4"), more or less, to the easterly limit of Dufferin Street
aforesaid;
THENCE NORTHERLY along the last mentioned limit, Forty-four feet (44'), more or
less, to the place of Beginning;
TOGETHER WITH the right to maintain in their present position any parts of the
said building which may encroach on or over the herein described parcel of land
over which a right-of-way is reserved.
43
<PAGE>
SCHEDULE "B"
FLOOR PLAN
44
<PAGE>
SCHEDULE "C"
LANDLORD'S WORK
LANDLORD'S WORK
---------------
The Landlord shall finish the Leased Premises in the manner and colour
standard to the Building which, without limiting the generality of the
foregoing, will include the elements outlined below. All work not specifically
described as Landlord's Work, including that work indicated as Tenant's Work in
this Schedule "C" will be the sole responsibility of the Tenant. The Landlord
will complete the work described below by January 1, 2000 if later than this
date, the Landlord will work in conjunction with the Tenant's contractors.
1. Demising Walls: To be in either gypsum wallboard (with joints taped and
sanded but not painted) or, at the Landlord's option, unfinished masonry,
concrete or other suitable material.
2. Exterior Walls: Where required to enclose the Building, to be in glass,
masonry, and/or concrete, at the Landlord's option, including exterior
doors as indicated on the Building plans.
3. Floors: To be of smooth trowelled concrete ready to receive Tenant's floor
finish.
4. Ceilings: Not to be provided. The area above the Leased Premises will be
the exposed underside of overhead construction.
5. Electrical: The Landlord will provide the existing three (3) phase 200 amp
600 volt electrical service.
6. Plumbing: The Landlord will provide hot and cold water lines and drains
capped to the location of the washrooms in a location determined by the
Landlord acting reasonably.
7. Sprinklers: The existing sprinkler system will be provided by the Landlord
with sufficient coverage to protect the total open Leased Premises area.
Modifications required for dropped ceilings or special hazard requirements
will be at the Tenant's expense.
45
<PAGE>
8. H.V.A.C.: The Landlord will provide and install a complete H.V.A.C. system
of sufficient capacity to suit the area of the Leased Premises including
main trunk for open concept design. Location of H.V.A.C. units/systems to
be determined by the Landlord. Distribution of H.V.A.C. to be Tenant's
responsibility.
9. Fire Safety: Provide existing sprinkler system and all fire fighting
equipment except smoke detectors and portable fire extinguishers where
required by the building and fire departments.
TENANT'S WORK
-------------
The Tenant shall provide, at its sole expense, the items enumerated below
together with any other work required for the finishing of the Leased Premises
for the tenant's intended use.
1. Interior Finish: The Tenant will provide all interior partitioning, wall
and floor and ceiling coverings, interior painting, and decorating.
2. Electrical: The Tenant will provide all electrical work beyond the point of
the service entry to the Leased Premises, including:
(a) distribution panel, branch wiring, underfloor conduits (if any),
outlets, receptacles, and switches.
(b) lamps, fixtures, emergency lighting, and related equipment.
(c) wiring for sign(s), hot water heater (s), exhaust fan(s) and baseboard
heaters (s).
3. H.V.A.C.: The Tenant will supply and install all distribution duct work for
heating and air conditioning within the Leased Premises at its own expense.
46
<PAGE>
4. Plumbing: The Tenant will provide all additional branch plumbing and
drainage, mechanical exhaust, washroom fixtures, and accessories required
by the Tenant for the washroom (s). The Tenant will also arrange and pay
for installation of its hot water heater(s).
5. Exhaust Systems: Any required exhaust or special ventilating systems,
including make-up air system, if so required are to be provided by the
Tenant.
6. Fire Protection: The Tenant, at its own expense, will provide all fire
fighting equipment, including smoke detectors, alarms, and portable fire
extinguishers for the Leased Premises in types, quantities and locations as
required by the building and fire departments. When the Tenant's occupancy
requires fire-rated construction, the Tenant shall satisfy the governing
codes for such fireproofing standards.
7. Performance of Tenant's Work: The following provisions are in addition to
and do not waive any other provisions in this Schedule "C" or the
provisions contained in the Lease between the Tenant and the Landlord:
(a) All Tenant's Work shall be performed in accordance with
Landlord-approved Tenant drawings and specifications, and in
accordance with all applicable governing codes and regulations. All
drawings to be submitted for the Landlord's approval within thirty
(30) days of the unconditional acceptance of the Offer; each full day
after thirty (30) days following the acceptance of this Offer that the
Landlord is not in receipt of the Tenant's drawings shall result in
the Commencement Date being postponed by one (1) full day without
penalty to the Landlord. Before performing any Tenant's Work, the
Tenant shall secure and demonstrate to the Landlord on demand, all
necessary permits. Upon completion, the Tenant shall secure all
applicable certificates of completion and occupancy.
(b) All Tenant's Work shall be completed with new materials. Material and
workmanship shall be of a uniformly high quality performed in
accordance with the very best standards of practice and subject to the
approval of the
47
<PAGE>
Landlord and/or its Architect/Engineer. Any damage to the Leased
Premises or the Building caused by the Tenant, or any of its
employees, contractors, or workmen, will be repaired forthwith by the
Landlord at the Tenant's expense plus a fifteen percent (15%)
administration fee.
(c) The Tenant and his contractor(s) shall not impose a greater load on
any concrete floor than the design live load of 100 pounds per square
foot uniformly distributed. No unusual loads may be suspended from the
underside of the ceiling structure.
48
<PAGE>
SCHEDULE "D"
DEFINITIONS
1. "Additional Rent" means all sums of money or charges required to be paid
by the Tenant under this Lease (except Basic Rent and the Taxes payable pursuant
to Section 3.2(b)) whether or not designated "Additional Rent" or payable to the
Landlord.
2. "Building" means the building known municipally 78 Mowat Avenue,
including the Common Areas and Facilities, and the areas and facilities serving
the Building or having utility in connection therewith, as determined by the
Landlord.
3. "Common Areas and Facilities" means (a) those areas, facilities,
utilities, improvements, equipment and installations in the Building which, from
time to time, are not designated or intended by the Landlord to be leased to
tenants of the Building, and (b) those areas, facilities, utilities,
improvements, equipment and installations which serve or are for the benefit of
the Building, whether or not located within, adjacent to, or near the Building
and which are designated from time to time by the Landlord as part of the Common
Facilities, including, without limitation, all areas, facilities, utilities,
improvements, equipment and installations which are provided or designated (and
which may be changed from time to time) by the Landlord for the use or benefit
of the tenants, their employees, customers and other invitees in common with
others entitled to the use and benefit thereof in the manner and for the
purposes permitted by this Lease.
4. "Landlord" means the party of the First Part and includes the Landlord
and its duly authorized representatives.
5. "Mortgagee" means any mortgagee or chargee (including any trustee for
bondholders), from time to time, of the Building or any part thereof, or the
Landlord's or the owners of the Building's interest in them.
6. "Normal Business Hours" means the hours from 8:00 a.m. to 6:00 p.m. on
Mondays to Fridays unless such a day is a holiday.
49
<PAGE>
7.(a) "Operating Costs" means the total amounts incurred, paid or payable
whether by the Landlord or by others on behalf of the Landlord for the
maintenance, operation, repair, replacement, managing and administration of the
Building (calculated as if the Building were fully occupied and operational
during each Rental Year of the Term).
(b) Operating Costs include, without limitation and without duplication,
the aggregate of:
(i) the total annual costs of insuring the Building and the improvements
and equipment and other property servicing the Building from time to
time as the Landlord, or the Mortgagee, from time to time determines;
(ii) window cleaning, exterior maintenance, snow removal, garbage and waste
collection and disposal, recycling, and the costs of security and
supervision;
(iii) the aggregate of the costs and amounts paid by the Landlord, to the
extent such costs are not separately metered and paid for directly by
individual tenants for (1) all fuel used in heating and the purchase
or generation of steam for heating or other purposes; (2) all
electricity furnished by the Landlord to the Building other than
electricity furnished to and paid for by tenants; (3) all hot and cold
water other than that chargeable to tenants; (4) climate control; (5)
heating, ventilating and air conditioning portions of the Building;
and(6) telephone and other utility costs, used in the maintenance and
operation of the Building;
(iv) salaries, wages and other amounts paid or payable for management and
other supervisory personnel including the Building manager and related
staff and the total charges (including contributions and premiums for
fringe benefits, unemployment insurance, and Workers' Compensation,
pension plan contributions and similar premiums and contributions) of
any independent
50
<PAGE>
contractors or managers, engaged in the repair, care, maintenance and
cleaning of the Building;
(v) the cost of the rental of any equipment and signs, and the cost of
supplies, used by the Landlord in the maintenance and operation of the
building;
(vi) all non-capital repairs (including major repairs) and replacements to
and maintenance and operation of the Building (except for repairs or
replacements of inherent structural defects or weaknesses), and the
systems, facilities and equipment serving the Building (including
without limitation, the components of the heating, ventilating and air
conditioning systems serving the Building) including the Leased
Premises;
(vii) depreciation or amortization, together with interest calculated at
two percentage points above the prime rate charged to the Landlord by
its chartered bank, on the costs, including repairs and replacements
of the maintenance, cleaning, operating, heating, ventilating and air
conditioning equipment, master utility meters and all other fixtures,
equipment and facilities that are part of the Building and not
intended to be leased to tenants, which, in accordance with sound
accounting principles, are not fully expensed in the Rental Year in
which they are incurred;
(viii) all business taxes and other Taxes, if any, from time to time
payable by the Landlord with respect to the Common Areas and
Facilities;
(ix) an administration fee of fifteen percent (15%) of the costs set out in
this Paragraph 7(a)(i) through (vii), inclusive.
From the total of the above costs, there is deducted:
(aa) all net recoveries which reduce Operating Costs received by the
Landlord from tenants as a result of any act, omission, default or
negligence of such tenants or by reason of a breach by such tenants of
provisions in their
51
<PAGE>
respective leases (other than recoveries from such tenants under
clauses in their respective leases requiring their contribution to
Operating Costs);
(bb) net proceeds received by the Landlord from insurance policies taken,
out by the Landlord to the extent that the proceeds relate to
Operating Costs; and
(cc) the amount of any GST for which the Landlord liable on the purchase of
goods and services in this Paragraph 7(a) and (b)(i) through (viii)
which may be available to and claimed by the Landlord as an input tax
credit in determining the Landlord's net tax liability or refund under
the GST.
8. "Person", if the context allows, includes any person, firm, partnership
or corporation, or any group of persons, firms, partnerships or corporations or
any combination thereof.
9. "Proportionate Share" means a fraction to be calculated by the Landlord
which has as its numerator the Rentable Area of the Leased Premises and as its
denominator the Total Rentable Area of the Building and all Common Areas and
Facilities.
10. "Rent" means all Basic Rent and Additional Rent. All Rent is payable
without prior demand and without any deduction, abatement or set-off.
11. "Rental Year" means a period of time consisting of consecutive periods
of twelve (12) calendar months unless otherwise stipulated by the Landlord.
12. "Taxes" means (a) all real property taxes, rates, duties and
assessments (including local improvement taxes), impost charges or levies,
whether general or special, that are levied, rated, charged or assessed against
the Building or any part thereof from time to time by any lawful taxing
authority, whether federal, provincial, municipal, school or otherwise, and any
taxes or other amounts which are imposed in lieu of, or in addition to, any such
real property taxes whether of the foregoing character or not and whether in
existence at the Commencement Date or not, and any such real property taxes
levied or assessed against
52
<PAGE>
the Landlord or the owners on account of its interest in the Building or any
part thereof, or their ownership thereof, as the case may be, calculated on the
basis of the Building being assessed as a fully leased and operational building,
and ( b) the costs and expenses incurred for consulting, appraisal, legal and
other fees and expenses to the extent they are incurred in an attempt to
minimize or reduce amounts mentioned in (a) or (b) above.
13. "Tenant" means the party of the Second Part. If there is more than one
Tenant, any notice required or permitted by this Lease may be given by or to any
one of them and has the same force and effect as if given by or to all of them.
Any reference to "Tenant" includes, where the context allows, the servants,
employees, agents, invitees and licensees of the Tenant and all others over whom
the Tenant may reasonably be expected to exercise control.
53