BIG BEND EQUITIES INC.
(the “Landlord”)
LULULEMON ATHLETICA
INC.
(the “Tenant”)
LEASE OF INDUSTRIAL
SPACE
BUILDING: Glenwood 3—5595
Trapp Avenue, Burnaby, British Columbia
LEASE OF INDUSTRIAL
SPACE
This Lease made
as of the 15th day of December, 2006.
IN
CONSIDERATION of the
mutual covenants hereinafter contained, the Landlord and the Tenant
hereby agree as follows:
ARTICLE 1
— BASIC TERMS, SPECIAL PROVISIONS, DEFINITIONS AND
SCHEDULES
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1.1
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The
basic terms of this Lease are:
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Units #105 to
#109, inclusive, at 5595 Trapp Avenue, Burnaby, British Columbia
(inclusive of approximately 2,000 square feet of structural
mezzanine area)
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(b)
Rentable Area of Premises:
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approximately
50,438 square feet (inclusive of approximately 2,000 square feet of
structural mezzanine area)
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10 years
commencing on the Commencement Date and ending on June 30,
2017
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July 1,
2007
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Lease
Year
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Per Sq. Ft.
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Per Annum
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Per Month
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$
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8.00
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$
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403,504.00
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$
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33,625.33
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$
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8.20
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$
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413,591.60
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$
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34,465.97
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A distribution
warehouse and related offices.
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$35,642.85
(inclusive of GST), to be applied towards the first monthly
installments of Base Rent and Occupancy Costs payable by Tenant
hereunder until applied in full.
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Two rights to
renew for two renewal terms of 5 years each.
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(i)
Addresses for Notices:
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2285 Clark
Drive
Vancouver, BC V5N 3G9
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604-874-6124
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c/o Realty
Advisors (B.C.) Ltd.
Suite 600, 789 West Pender Street
Vancouver, B.C. V6C 1H2
Attention: Property Manager and VP,
Property Management
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(604)
684-9122
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See
Schedule H
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The Landlord
and the Tenant agree to the foregoing basic terms. Each reference
in this Lease to any of the basic terms shall be construed to
Include the provisions set forth above as well as all of the
additional terms and conditions of the applicable Articles and
Sections of this Lease where such basic terms are more fully set
forth.
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(a)
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“Architect” means such
firm of professional architects, engineers, surveyors, space
planners and interior designers as the Landlord may select from
time to time engaged for preparation of construction drawings for
the Building or for general supervision of architectural and
engineering aspects and operations thereof or for the measurement
of the Building of part or parts thereof and includes any
consultant(s) from time to time appointed by the Landlord or
Architect whenever such consultant(s) Is acting within the scope of
his appointment and speciality;
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(b)
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“Article” means an
article of this Lease and “Section” means a Section of
this Lease;
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(c)
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“Base Rent” means the
amount payable by the Tenant to the Landlord as set forth in
Section 1.1(e) in respect of each year of the Term or any
portion thereof in accordance with Sections 4.1 and
4.5;
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(d)
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“Building” means the
building known as “Glenwood 3” in which the Premises
are located and which is situate on the Lands;
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(e)
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“Capital Tax” means an
amount allocated by the Landlord, acting reasonably, to the
Building in respect of taxes, rates, duties and assessments
presently or hereafter levied, rated, charged or assessed from time
to time upon the Landlord and payable by the Landlord (or any
corporation acting on behalf of the Landlord) on account of the
capital that the Landlord has invested in the Building. Capital Tax
shall be allocated:
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i)
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as
if the amount of such tax were that amount due if the Building were
the only property of the Landlord; and
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ii)
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on
the basis of the Landlord’s determination of the amount of
capital attributable to the Building.
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Capital Tax
also means the amount of any capital or place of business tax
levied by any government or other applicable taxing authority
against the Landlord with respect to the Building whether known as
Capital Tax or by any other name;
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(f)
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“Commencement Date”
means the date set forth in Section 1.1(d);
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(g)
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“Common Areas” means at
any time those portions of the Lands and the Building which are not
leased to or occupied by or designated or intended by the Landlord
to be leased to or occupied by tenants of the Building and are
provided or designated by the Landlord from time to time to be used
in common in such manner as the Landlord may, acting reasonably,
permit, by the Landlord, the Tenant, and other tenants (or by
sublessees, agents, employees, customers or licensees) of the
Building, whether or not the same are open to the general public,
and shall include any areas used by the Landlord for the
maintenance of the Building, building services and facilities,
fixtures, chattels, systems. decor, signs, facilities, or
landscaping contained therein or maintained or used in connection
therewith, common parking lot, common entrances, common corridors,
stairways, passageways, sidewalks, exterior pedestrian walks,
roofs, driveways, parking areas, common loading and service areas,
truck ways, platforms, ramps, garden and landscaped areas and all
other common, public or tenant conveniences or appurtenances
thereto located on the Lands not leased to or occupied by or
installed for the exclusive use of any individual tenant and shall
be deemed to include any public facility in respect of which the
Landlord is from time to time subject to obligations in its
capacity as owner of the Lands and/or the Building. All expenses
incurred by the Landlord in maintenance and operation of the
Common
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Areas shall be
included in the definition of “Operating Expenses” set
forth in Schedule C attached hereto;
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(h)
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“Environmental Claim”
means all claims, losses, costs, expenses, fines, penalties,
payments and/or damages (including, without limitation, all
solicitors’ fees on a solicitor and client basis) relating
to, arising out of, resulting from or in any way connected with the
presence of any Hazardous Substance at the Premises or the Lands or
the Building, including, without limitation, all costs and expenses
of any investigation, remediation, restoration or monitoring of the
Premises, the Lands or the Building and/or any property adjoining
or in the vicinity of the Lands or the Building required or
mandated by Environmental Law;
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(i)
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“Environmental Law’
means any law, bylaw, order, ordinance, ruling, regulation,
certificate, approval, policy, guideline, consent or directive of
any applicable federal, provincial or municipal government,
governmental department, agency or regulatory authority or any
Court of competent jurisdiction, as well as any common law
obligations or requirements, relating to environmental or health
and safety matters and/or regulating the generation, import,
storage, distribution, labelling, sale, use, handling, transport or
disposal of any Hazardous Substance which may be in force from time
to time;
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(j)
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“Fiscal Year” means a
twelve month period (all or part of which falls within the Term)
from time to time determined by the Landlord, at the end of which
the Landlord’s books in respect of the Building are balanced
for auditing or taxation purposes;
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(k)
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“Fixturing Period” has
the meaning given in Section 7 of Schedule H;
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(l)
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“Force Majeure” means
any Acts of God, strikes, lockouts, or other industrial relations
disturbances, act of the Queen’s enemies, sabotage, war,
blockades, insurrections, riots, epidemics, lightning, earthquakes,
floods, storms, fires, washouts, nuclear and radiation activity or
fallout, arrests and restraints of rules and people, civil
disturbances, explosions, breakage of or accident to machinery or
stoppage thereof for emergency maintenance or repairs, inability to
obtain labour, materials or equipment, any legislative,
administrative or judicial action which has been resisted in good
faith by all reasonable legal means, any act, omission or event,
whether of the kind herein enumerated or otherwise not within the
control of the affected party, and which, by the exercise of due
diligence such party could not have prevented, but lack of funds on
part of such party shall be deemed not to constitute Force
Majeure;
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(m)
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“Hazardous Substance”
means:
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i)
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any
materials or substances declared or deemed to be hazardous,
deleterious, caustic, dangerous, a dangerous good, toxic, a
contaminant, a waste, a source of contaminant, a pollutant or toxic
under any Environmental Law;
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ii)
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any
solid, liquid, gas or odor or combination of any of them that, if
emitted into the air, would create or contribute to the creation of
a condition of the air that:
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A.
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endangers the health, safety or
welfare of persons or the health of animal life;
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B.
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interferes with normal enjoyment of
life or property; or
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C.
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causes damage to plant life or to
property; and
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iii)
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any
substance which is hazardous to the environment, including persons
or property and includes, without limiting the generality of the
foregoing, the following:
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A.
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radioactive materials;
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B.
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explosives;
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C.
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any
substance that, if added to any water, would degrade or alter or
form part of a process of degradation or alteration of the quality
of that water to the extent that it is detrimental to its use by
man or by any animal, fish or plant;
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(n)
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“Landlord’s
Covenants” means all of the terms, covenants and conditions
of this Lease on the part of the Landlord to be observed and
performed;
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(o)
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“Landlord’s
Employees” means the Landlord’s directors, officers,
employees, servants, agents and those for whom the Landlord is
responsible at law;
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(p)
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“Landlord’s Work”
has the meaning given in Schedules E and F and includes the work
delineated as Landlord’s Work in Schedules E, F, G and
paragraph 12 of Schedule H;
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(q)
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“Lands” means the lands
described in Schedule B attached hereto and the buildings,
improvements, equipment and facilities erected thereon or situate
therein from time to time, including without limitation, the
Building;
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(r)
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“Lease” means this
Lease, any schedules and riders attached hereto, and every properly
executed instrument which by its terms amends, modifies or
supplements this Lease;
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(s)
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“Lease Year” means
successive 12-month periods with the first Lease Year commencing on
the Commencement Date and succeeding Lease Years commencing on each
anniversary of such date;
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(t)
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“Leasehold Improvements”
means all fixtures, improvements, installations, alterations and
additions from time to time made, erected or installed by or on
behalf of the Tenant, or any previous occupant of the Premises, in
the Premises and by or on behalf of other tenants in other premises
in the Building (including the Landlord if an occupant of the
Building), including all partitions and hardware however affixed,
and whether or not movable, all mechanical, electrical and utility
installations, with the exception only of furniture and equipment
not of the nature of a fixture;
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(u)
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“Normal Business Hours”
means the business hours set forth in paragraph 2 of the Rules and
Regulations in Schedule D attached hereto;
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(v)
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“Occupancy Costs” means
amounts payable by the Tenant to the Landlord under
Section 4.3 and defined in Schedule C attached
hereto;
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(w)
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“Operating Expenses” has
the meaning given in Schedule C;
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(x)
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“Permitted Use” means
the use described in Section 1.1(f);
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(y)
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“Premises” means those
premises identified in Section 1.1(a) and shown outlined in
heavy black on the plan attached hereto as
Schedule A;
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(z)
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“Proportionate Share”
means a fraction which has as its numerator the Rentable Area of
the Premises and which has as its denominator the Rentable Area of
all buildings on the Lands including the Building;
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(aa)
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“Real Estate Taxes” has
the meaning given in Schedule C;
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(bb)
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“Rent” means the
aggregate of all amounts payable by the Tenant to the Landlord
under this Lease;
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(cc)
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“Rentable Area” of the
Premises, the Building or any portion thereof means the area of the
Premises, the Building or any portion thereof, as applicable,
measured in accordance with the ANSI BOMA 265.1-1996 standard
method of floor measurement for industrial buildings;
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(dd)
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“Tenant’s
Covenants” means all of the terms, covenants and conditions
of this Lease on the part of the Tenant to be observed and
performed;
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(ee)
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“Tenant’s
Employees” means the Tenant’s directors, officers,
employees, servants, agents and those for whom the Tenant is
responsible at law;
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(ff)
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“Tenant’s Work”
has the meaning given in Schedule E;
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(gg)
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“Term” means the period
of time set out in Section 1.1(c);
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(hh)
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“Transfer” means those
occurrences as set forth in Section 13.1; and
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(ii)
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“Utilities” means
electricity, oil, gas, power, telephone, water, and alt other
utilities.
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1.3
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Schedules: The following schedules
are attached to this Lease and are incorporated as part of this
Lease by reference thereto:
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Schedule A
— “Premises”
Schedule B — “Legal Description”
Schedule C — “Occupancy Costs”
Schedule D — “Rules and Regulations”
Schedule E — “Tenant Improvement
Guidelines”
Schedule F — “Landlord’s Work and
Tenant’s Work”
Schedule G — “Base Building Design
Criteria”
Schedule H — “Special Provisions”
ARTICLE 2
— GRANT OF LEASE
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2.1
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Grant : In consideration of the rents,
covenants and agreements hereinafter reserved and contained on the
part of the Tenant to be paid, observed and performed, the Landlord
hereby demises and leases the Premises to the Tenant, and the
Tenant hereby leases and accepts the Premises from the Landlord, to
have and to hold during the Term and any renewals thereof, subject
to the terms and conditions of this Lease.
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2.2
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Quiet Environment
: The Landlord covenants
to provide the Tenant with quiet enjoyment and possession of the
Premises during the Term and any renewals thereof, subject to the
terms and conditions of this Lease.
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2.3
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Covenants of Landlord and
Tenant : The
Landlord covenants to observe and perform all of the terms and
conditions to be observed and performed by the Landlord under this
Lease including the terms and conditions contained in the Schedules
hereto. The Tenant covenants to pay the Rent when due under this
Lease, and to observe and perform all of the terms and conditions
to be observed and performed by the Tenant under this Lease
including the terms and conditions contained in the Schedules
hereto.
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2.4
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Use of Common Areas
: The Tenant shall have
the right (in common with others entitled thereto) to the use of
the Common Areas, provided that the Landlord shall have the right
to make all such changes, improvements, alterations and additions
as the Landlord may, from time to time decide in respect of the
Common Areas, including, without limitation, the right to change
the location and layout of any parking areas, The use of all Common
Areas shall be subject to the provisions of this Lease and to the
rules and regulations made by the Landlord with respect thereto
from time to time.
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2.5
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Net Lease : The Tenant acknowledges and agrees
that, except as otherwise provided in this Lease, and except for
exclusions to Operating Expenses and Real Estate Taxes:
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(a)
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the
Base Rent payable under this Lease is absolutely net to the
Landlord;
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(b)
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the
Landlord is not responsible for any costs, charges, expenses or
outlays of any nature whatsoever arising from or relating to the
Premises, or the use or occupancy thereof, or the contents thereof,
or the business carried on therein;
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(c)
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the
Tenant shall pay all costs, charges, expenses and outlays of every
nature whatsoever arising from or relating to the Premises or the
use or occupancy thereof, or the contents thereof, or the business
carried on therein; and
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(d)
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the
Landlord shall not be called upon, nor shall the Landlord be
obligated, to perform any work on or to the Premises or to correct
any condition relating to or arising out of the Premises unless
otherwise expressly provided for in this Lease.
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ARTICLE 3
— TERM AND POSSESSION
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3.1
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Term : Notwithstanding Sections 3.2
and 3.3, the Term of this Lease shall be as set forth in
Section 1.1(c) unless terminated earlier as provided in this
Lease.
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3.2
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Early Occupancy
: If, with the
Landlord’s prior written consent, the Tenant begins to
conduct business in all or any portion of the Premises before the
Commencement Date, the Tenant shall pay to the Landlord on the
Commencement Date a rental in respect thereof for the period from
the date the Tenant begins to conduct business therein to the
Commencement Date, which rental shall be that proportion of Rent
for one calendar year which the number of days in such period bears
to 365. Except where clearly inappropriate, the provisions of this
Lease shall otherwise be applicable during such period.
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3.3
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Delayed Possession
: If the Landlord is
delayed in delivering possession of all or any portion of the
Premises to the Tenant on or before the commencement of the
Fixturing Period and/or the Commencement Date, then unless such
delay is principally caused by or attributable to the Tenant, its
servants, agents or independent contractors, the date on which the
Premises are to be made available to the Tenant for fixturing, the
Commencement Date, and the obligation of the Tenant to pay Base
Rent and Occupancy Costs and the expiration date of the Term shall
be postponed for a period equal to the duration of the delay, This
Lease shall not be void or voidable, nor shall the Landlord be
liable to the Tenant for any loss or damage resulting from any
delay in delivering possession of the Premises to the Tenant, and
the deferment of the obligation of the Tenant to pay Base Rent and
Occupancy Costs shall be accepted by the Tenant as full
compensation for any such delay.
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If any delay in
the completion of the Landlord’s Work is attributable to the
Tenant, its servants, agents or independent contractors, the
obligation of the Tenant to pay Base Rent and Occupancy Costs shall
not be deferred.
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3.4
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Acceptance of Premises
: Taking possession of
all or any portion of the Premises by the Tenant shall be
conclusive evidence as against the Tenant that the Premises or such
portion thereof are in satisfactory condition on the date of taking
possession, subject only to latent defects and to deficiencies (if
any) listed in writing in a notice delivered by the Tenant to the
Landlord within seven (7) days after the later of the date of
taking possession or the Commencement Date,
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ARTICLE 4
— RENT AND OCCUPANCY COSTS
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4.1
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Base Rent : Subject to paragraph 9 of Schedule
“H”, the Tenant shall pay to the Landlord Base Rent for
the Premises as set forth in Section 1.1(e).
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4.2
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Adjustment of Base Rent based on
Measurement of Rentable Area : The Premises shall be measured by
the Architect within 60 days after the Commencement Date, and
the Architect’s certificate, as to the Rentable Area of the
Premises, shall be conclusive. The Landlord shall deliver a copy of
the Architect’s certificate to the Tenant forthwith after
receipt thereof and the Rent and any calculation which is subject
to Rentable Area shall be appropriately adjusted, if necessary,
retroactively to the Commencement Date.
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4.3
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Occupancy Costs
: The Tenant shall pay
to the Landlord, at the times and in the manner provided in
Section 4.5, the Occupancy Costs determined under
Schedule C attached hereto.
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4.4
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Other Charges
: The Tenant shall pay
to the Landlord, at the times and in the manner provided in this
Lease or, if not so provided, as reasonably required by the
Landlord, all amounts (other than that payable under
Sections 4.1 and 4.3) which are payable by the Tenant to the
Landlord under this Lease.
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4.5
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Payment of Rent
: The Tenant shall
deliver to the Landlord on or before the Commencement Date an
executed authorization and a voided cheque to enable the Landlord
to draw or issue a debit to the Tenant’s designated bank
account at the designated branch of the Tenant’s bank or
financial institution. Each monthly debit shall be made on the
first day of the month in an amount equal to the monthly Base Rent
and Occupancy Costs payment and any ancillary agreement such as,
without limitation, parking or storage agreements, as it may be
adjusted from time to time in accordance with the terms of this
Lease, The Tenant shall not terminate the authorization for the
Landlord to draw or issue a debit to the Tenant’s bank
account. Should the Tenant change banks or financial institutions
or branches within the same bank or financial institution during
the Term of this Lease, then the Tenant shall deliver a new
executed authorization and voided cheque to enable the Landlord to
draw or issue a debit to the new account of the Tenant for payment
of monthly Base Rent and Occupancy Costs payment. The
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Tenant further covenants and agrees
to pay promptly, when billed, any amounts due under the terms of
this Lease that are not specifically covered by the foregoing
monthly debits.
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In
the event that any debit issued by the Landlord and any cheque
issued by the Tenant shall not be honored by the Tenant’s
bank or financial institution for any reason, then, in addition to
any other remedies the Landlord may have, the Tenant shall pay to
the Landlord, upon request, One Hundred Dollars ($100.00) for each
occurrence which amount represents the estimated costs of
processing the dishonored debit or cheque and re-debiting the
Tenant’s account or processing a replacement
cheque.
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4.6
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Payment of Rent —
General : All
amounts payable by the Tenant to the Landlord under this Lease
shall be deemed to be Rent and shall be payable and recoverable as
Rent in the manner herein provided, and the Landlord shall have all
rights against the Tenant for default in any such payment as in the
case of arrears of Rent. Rent shall be paid to the Landlord in
legal tender of the jurisdiction in which the Building is located,
at the address of the Landlord as set forth in this Lease or at
such other address as the Landlord may from time to time designate
in writing. The Tenant’s obligation to pay Rent in respect of
the Term shall survive the expiration or earlier termination of
this Lease.
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4.7
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No Deduction or Set-off
: Except as expressly
provided in this Lease, the Tenant shall not under any
circumstances be entitled to deduct from or set off from the Rent
payable hereunder any amounts that the Tenant may claim to be
entitled to from the Landlord. All disputes with respect to amounts
the Tenant wishes to claim from the Landlord shall be settled as a
matter separate from the Tenant’s obligation to pay
Rent.
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4.8
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Partial Month’s
Rent : If the
Commencement Date is a day other than the first day of a calendar
month, the installment of Base Rent payable on the Commencement
Date shall be that proportion of Base Rent which the number of days
from the Commencement Date to the last day of the month in which
the Commencement Date falls bears to 365. If the Term ends on a day
other than the last day of a calendar month, the installment of
Base Rent payable on the first day of the last calendar month of
the Term shall be that proportion of Base Rent which the number of
days from the first day of such last calendar month to the last day
of the Term bears to 365.
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4.9
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Occupancy Costs Payments
:
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(a)
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Prior to the Commencement Date and
prior to the beginning of each Fiscal Year thereafter, the Landlord
shall compute and deliver to the Tenant a bona fide estimate in
writing of the Occupancy Costs for the next ensuing Fiscal Year or
portion thereof, if applicable. Without further notice or demand,
the Tenant shall pay to the Landlord the amount of the Occupancy
Costs in equal monthly instalments, in advance, over the
Fiscal
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Year or portion
thereof, simultaneously with the Tenant’s payments on account
of Base Rent
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(b)
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The
Landlord shall keep proper and sufficient records and accounts of
all Occupancy Costs and shall deliver to the Tenant as soon as
practicable following the end of each Fiscal Year a written
statement setting out the amount of Occupancy Costs for such Fiscal
Year. The Landlord shall provide the Tenant with further reasonable
details concerning such statement upon receipt of a written request
from the Tenant If the total monthly instalments of Occupancy Costs
actually paid by the Tenant to the Landlord during the Fiscal Year
is lower than the amount of the Occupancy Costs payable for the
Fiscal Year under Schedule C attached hereto, the Tenant shall
pay to the Landlord the difference, without interest, within thirty
(30) days after the date on which such statement is received
by the Tenant, and if the total monthly instalments of Occupancy
Costs actually paid by the Tenant to the Landlord during the Fiscal
Year is greater than the amount of Occupancy Costs payable for the
Fiscal Year under Schedule C attached hereto, the Landlord
shall credit the difference, without interest, against the
Tenant’s rental account for the current Fiscal Year and the
monthly instalments payable in respect of same shall be reduced
accordingly.
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(c)
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If
the Tenant disagrees with the accuracy of Occupancy Costs as set
forth in the Landlord’s written statement, the Tenant will
nevertheless make payment of Occupancy Costs in accordance with
this Lease. Neither party may claim a readjustment in respect of
Occupancy Costs for a Fiscal Year if based upon any error of
computation or allocation except by notice delivered to the other
party within six (6) months after the date of delivery of the
statement referred to in Section 4.9(b).
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(d)
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The
Tenant shall have the right, at is sole cost and expense to audit
the Landlord’s Real Estate Taxes, and Operating Expenses
statements once per calendar year upon giving the Landlord written
notice of its desire to so inspect the Landlord’s statements.
In this regard, the Tenant agrees that in connection with any such
audit, the Tenant will not engage an auditor on a contingency
basis.
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4.10
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Deposit : The Landlord acknowledges receipt
from the Tenant of the Deposit in the amount set forth in
Section 1.1(g) as partial consideration for this Lease and
such sum shall be held and applied by the Landlord without
liability for interest in accordance with Section 1.1(g). The
Landlord may deliver the Deposit to any purchaser of the
Landlord’s interest in the Building and provided the Deposit
is applied in accordance with Section 1.1(g), the Landlord
shall thereby be discharged of any further liability with respect
to such Deposit The Landlord may commingle the Deposit with its own
funds and shall not hold the Deposit as a trustee.
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4.11
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No Deemed Satisfaction
: No payment by the
Tenant or receipt by the Landlord of a lesser amount than any
instalment of payment of the Rent due shall be deemed to be other
than on account of the amount due, and no endorsement or statement
on any cheque or payment of Rent shall be deemed an accord and
satisfaction. The Landlord may accept such cheque or payment
without prejudice to the Landlord’s right to recover the
balance of such instalment or payment of Rent, or pursue any other
remedies available to the Landlord.
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4.12
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Confidential Information
:
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(a)
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The
Tenant shall upon request, provide the Landlord with such
information as to the Tenant’s financial standing and
corporate organization as the Landlord reasonably requires, save
and except contrary to law or not permitted at law, Failure of the
Tenant to comply with the Landlord’s request herein shall
constitute a default to which Article 21 applies.
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(b)
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The
Landlord shall keep any statement or other information acquired
from the Tenant in respect of this Lease strictly confidential and
not use any such statement or other information, or permit the same
to be used for any purpose except:
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(a)
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for
the purpose of obtaining and securing, from time to time as may be
required by the Landlord, mortgage or other financing of the
Building or part thereof;
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(b)
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for
the purpose of full disclosure of the affairs and operations of the
Building to a prospective purchaser; and
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(c)
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for
other bona tide matters relating directly or indirectly to the
tenancy hereby created.
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5.1
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Landlord’s Taxes
: The Landlord shall pay
before delinquency (subject to participation by the Tenant by
payment of Occupancy Costs under Section 4.3) every real
estate tax, property tax, assessment, license fee and other charge
(including Real Estate Taxes but excluding the Tenant’s taxes
under Section 5.2), which is imposed, levied, assessed or
charged by any governmental or quasi-governmental authority having
jurisdiction and which Is payable by the Landlord in respect of the
Term upon or on account of the Lands or the Building.
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5.2
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Tenant’s Taxes
: The Tenant shall pay
or remit before delinquency every tax, assessment, license or
privilege fee, excise, gross receipts or sales tax and other
charge, however described, which is imposed, levied, assessed or
charged by any governmental or quasi-governmental authority having
jurisdiction and which is payable in respect of the Term upon or on
account of:
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(a)
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operations at, occupancy of, or
conduct of business from the Premises by or with the permission of
the Tenant: and
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(b)
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fixtures or personal properly in the
Premises which do not belong to the Landlord, including without
limitation, taxes on equipment and machinery of the
Tenant;
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to the extent
that they are not included in Real Estate Taxes.
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5.3
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No Separate Assessment
To the extent that there
shall not be a separate assessment made against the Premises for
Real Estate Taxes (as defined in Schedule C attached hereto),
the Tenant shall pay to the Landlord, in each and every year during
the Term, as part of Occupancy Costs, the Tenant’s
Proportionate Share of all Real Estate Taxes that are payable by
the Landlord in respect of the Term upon or on account of the Lands
or the Building, as outlined in Schedule C attached
hereto.
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5.4
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Separate Tax Assessment
: If Real Estate Taxes
are assessed separately against the Premises, the following
provisions shall apply:
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(a)
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Payment of Taxes
: The Tenant shall pay
to the Landlord in each and every year during the Term, an amount
equal to the Real Estate Taxes separately assessed against the
Premises. The Tenant agrees to provide the Landlord, within ten
(10) days after receipt by the Tenant, with a copy of all
separate tax bills and separate notices of assessment for the
Premises and all such other information in connection therewith as
the Landlord may reasonably require. If the Landlord requires the
Tenant to pay Real Estate Taxes directly to the relevant taxing
authority, the Tenant shall promptly deliver to the Landlord
receipts evidencing the payment of all such Real Estate Taxes and
furnish such other information in connection therewith as the
Landlord reasonably requires.
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(b)
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Taxes on Common Areas
: Where the separate
assessment levied or made against the Premises does not include a
portion of any separate assessment with respect to Common Areas,
the Tenant shall, in addition, pay its Proportionate Share of the
Real Estate Taxes that have been separately assessed against the
Common Areas.
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5.5
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Alternate Methods of
Taxation :
If, during the Term, the method of taxation is altered so that the
whole or any part of the Real Estate Taxes now levied, rated,
assessed or imposed on the Lands or the Building as real estate and
improvements are levied, assessed, rated or imposed wholly or
partially as a capital levy or on the rents received or otherwise,
or if any tax, assessment, levy, imposition or charge, in lieu
thereof shall be imposed upon the Landlord, then all such taxes,
assessments, levies, impositions and charges shall be included
within the Tenant’s obligation to pay its Proportionate Share
of Real Estate Taxes that are payable by
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the Landlord in
respect of the Term upon or on account of the Lands or the
Building, as set out in this Article.
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5.6
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Pro-Rata Adjustment
: If any taxation year
during the Term of the Lease is less than 12 calendar months, the
Tenant’s share of Real Estate Taxes shall be subject to a per
diem pro-rata adjustment.
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5.7
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Appeal of Real Property Tax
Assessment :
The Landlord may defer payment of Real Estate Taxes relating to the
Lands, or any part thereof, or defer compliance with any statute,
law, by-law regulation or ordinance in connection with the levying
of any such Real Estate Taxes, in each case, to the fullest extent
permitted by law, so long as it shall diligently prosecute any
contest, appeal or assessment on which such tax is based. The
Tenant shall co-operate with the Landlord in respect of any such
contest, appeal or assessment and shall provide the Landlord will
all relevant information, documents arid consents reasonably
required by the Landlord from the Tenant.
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5.8
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Goods and Services Taxes
: The Tenant
specifically acknowledges and agrees that as part of its Occupancy
Costs payable pursuant to Section 4.3 hereof, the Tenant shall
pay to the Landlord any multi-stage sales, sales, use, consumption,
value-added or other similar taxes imposed by the Government of
Canada, or by any provincial or local government upon the Landlord
or the Tenant or in respect of this Lease, the payments made by the
Tenant (whether Base Rent, Occupancy Costs or otherwise) for the
goods and services provided by the Landlord hereunder including,
without limitation, the rental of the Premises or administrative
services provided to the Tenant or to tenants generally.
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5.9
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Right to Contest
: The Landlord and the
Tenant shall each have the right to contest in good faith the
validity or amount of any tax, assessment license fee, excise fee
and other charge which it is responsible to pay under this
Article 5, provided that no contest by the Tenant may involve
the possibility of forfeiture, sale or disturbance of the
Landlord’s interest in the Premises and that upon the final
determination of any contest by the Tenant, the Tenant shall
immediately pay and satisfy any amount found to be due and payable
by the Tenant, together with any costs, penalties and
interest
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ARTICLE 6
— ADDITIONAL CHARGES
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6.1
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The
Landlord may charge a 15% administration fee:
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(a)
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for
services performed for the exclusive benefit of the Tenant at the
Tenant’s express written request and not otherwise required
or to be performed or provided by the Landlord under this Lease,
including without limitation, providing supervisory, inspection,
security and maintenance services, reviewing plans and
specifications and other services performed in excess of the
services provided by the Landlord
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pursuant to
Article 9 (and specifically excluding any such services in
connection with the Landlord’s Work or the Tenant’s
Work):
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(b)
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for
costs incurred and paid by the Landlord due to the Tenant’s
actions or inactions contrary to the terms of this Lease, including
payment of penalties incurred as a result of the Tenant’s
improper use of the Premises or the Building; and third party
invoices property payable by the Tenant;
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(c)
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for
reasonable professional fees (which are based on time only and not
a percentage of costs) paid for environmental or structural
engineers, space planners or architects required solely in
connection with the Tenant’s operations or alterations in the
Premises after the Commencement Date (and specifically excluding
any such fees paid for engineers, space planners, architects or
other consultants in connection with the Landlord’s Work or
the Tenant’s Work) and not otherwise required to be paid for
by the Landlord under this Lease as Landlord’s Work or
otherwise; and
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(d)
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for
legal fees and related costs incurred by the Landlord in enforcing
the Terms of this Lease as result of the Tenant’s
default.
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6.2
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This administration tee shall be
charged without duplication. Where this Lease specifically provides
for an administration fee for additional services, no further fee
shall be charged hereunder.
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6.3
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The
administration fee is due and payable as Rent.
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ARTICLE 7
— USE OF PREMISES
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7.1
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Use : The Premises shall be used and
occupied only for the Permitted Use as set forth in
Section 1.1(f) and as such use is permitted under the existing
applicable zoning regulations which the Tenant hereby confirms that
it has investigated and finds satisfactory. In addition, the Tenant
shall be able to use the Premises for other uses permitted under
the zoning provided the Landlord has given prior written approval
to do so, such approval not to be unreasonably withheld or
delayed.
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7.2
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Compliance with Laws
: The Premises shall be
used and occupied in a safe, careful and proper manner so as not to
contravene any present or future governmental or quasi-governmental
laws in force or regulations or orders. If due solely to the
Tenant’s use of the Premises, improvements are necessary to
comply with any of the foregoing or with the requirements of
insurance carriers, the Tenant shall pay the entire cost
thereof.
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7.3
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Abandonment : The Tenant shall not abandon the
Premises at any time during the Term without the Landlord’s
written consent.
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7.4
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Nuisance : The Tenant shall not cause or
maintain any nuisance in or about the Premises, and shall keep the
Premises free of debris, rodents, vermin and anything
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of a dangerous,
noxious or offensive nature or which could create a fire hazard
(through undue load on electrical circuits or otherwise) or undue
vibration, heat or noise.
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8.1
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Separately Metered
Utilities :
The Tenant shall be solely responsible for and shall promptly pay
all taxes and charges for water, gas, electricity, telephone and
other public and private utilities and services used or consumed in
or in respect of the Premises, and for all fittings, machines,
apparatus or other things leased or purchased in respect thereof,
and for all work or services performed by any corporation or
commission in connection with such utilities or services. Should
the Landlord elect to supply water, gas, electricity and/or sewer
services for the Building, or any other utility or service used or
consumed or to be used or consumed in the Premises, the Tenant
shall purchase and pay for the same as additional rent payable on
demand to the Landlord at rates not in excess of public utility
rates charged to the Landlord for the same service. In no event
shall the Landlord be liable for, nor shall the Landlord have any
obligation with respect to, any interruption or cessation of, or a
failure in the supply of, any such utilities, services or systems
(including, without limitation, the water and sewage systems) to
the Building or to the Premises, whether or not supplied by the
Landlord or others, except for the Landlord’s negligence or
wilful misconduct or breach of this Lease.
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8.2
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Either prior to the Commencement
Date or at any time during the Term, the Tenant may, and shall if
requested by the Landlord, install its own separate meter(s) for
the Premises at its own expense. In the event that separate meters
are not installed for the Premises, the Tenant shall pay its share
of the total costs incurred by the Landlord in the supply of all
utilities and services to the Building, as reasonably and equitably
determined by the Landlord, having regard, among other things, to
the Tenant’s connected load and the then current applicable
commercial rates for the municipality in which the Premises are
located, and the Tenant shall pay monthly, in advance with
instalments of monthly rent, all such utility and service charges
so applicable to the Premises. Notwithstanding anything herein
contained to the contrary, if at any time during the Term the
Landlord should determine, acting reasonably, that the
Tenant’s use of any utility or service used or consumed in or
in respect of the Premises is in any way unusual or of an excessive
nature, the Landlord may, at its option but at the sole cost and
expense of the Tenant, install in the Premises a separate meter or
submeter with respect to such utility or service, whereupon the
Tenant’s costs in connection with such utility or service
shall be determined in accordance with such separate meter or
submeter.
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8.3
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Where a separate meter has been
installed to measure the amount of any utility supplied to the
Premises the Tenant covenants that it shall supply and deliver to
the Landlord within thirty (30) days of taking occupation of
the Premises or within thirty (30) days of the installation of
such a meter. the account and meter
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number relating
to the relevant meter. The Tenant shall, at the commencement of the
Term or occupancy of the Premises if earlier and on or prior to the
Expiry Date, and, if there has been an assignment or subletting on
the date of such assignment or subletting, notify the relevant
utility corporation of any change of the Tenant or termination of
tenancy with respect to the Premises.
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ARTICLE 9
— SERVICES, MAINTENANCE, REPAIR AND ALTERATIONS BY THE
LANDLORD
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9.1
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Operation of Building
: During the Term the
Landlord shall operate and maintain the Building in accordance with
standards from time to time prevailing for similar buildings in the
area in which the Building is located and, subject to participation
by the Tenant by payment of Occupancy Costs under Section 4.3,
shall provide the services set out in Section 9.2.
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9.2
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Services to Premises
: The Landlord shall
arrange for the provision of:
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(a)
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Basic Services: only those services
as described in Schedule G attached hereto and janitor service
in the Common Areas;
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(b)
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Maintenance: maintenance, repair,
and replacement as set out in Section 9.3;
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(c)
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Parking: Tenant and visitor parking;
and
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(d)
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Security; the Landlord shall provide
security usual for a building of this type throughout the Term and
each renewal term, but otherwise the Landlord shall not provide or
make any security provisions specific to the needs of the Tenant or
the Premises; and
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(e)
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Utilities: including water, heat,
light, electricity and sewer.
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9.3
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Maintenance, Repair and
Replacement :
The Landlord shall operate, maintain, repair and replace the
systems, facilities and equipment necessary for the proper
operation of the Building and for provision of the Landlord’s
services under Section 9.2 (except such as may be installed by
or be the property of the Tenant), and shall be responsible for and
shall expeditiously maintain and repair the foundations, structure
and roof of the Building and the Common Areas, all as would a
prudent owner of a similar development in Burnaby, British Columbia
provided that
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(a)
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if
all or part of such systems, facilities and equipment are
destroyed, damaged or impaired, the Landlord shall have a
reasonable time in which to complete the necessary repair or
replacement, and during that time shall be required only to
maintain such services as are reasonably possible in the
circumstances;
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(b)
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the
Landlord may temporarily discontinue such services or any of them
at such times as may be necessary due to causes beyond the
reasonable control of the Landlord, provided that the Landlord uses
all reasonable commercial efforts to restore such services as soon
as reasonably possible;
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(c)
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the
Landlord shall use reasonable diligence in carrying out its
obligations under this Section, but except as expressly provided
otherwise in this Lease, there shall be no allowance to the Tenant
by way of diminution of rent, or otherwise, and no liability on the
part of the Landlord by reason of inconvenience, annoyance or
injury to the business arising from the happening of the event
which gives rise to the need for any repairs, alterations,
additions or improvements or from making of any repairs,
alterations, additions or improvement in or to any portion of the
Building or the Premises, or in and to the fixtures, appurtenances
and equipment thereof. The Landlord agrees to use all reasonable
commercial efforts to do any work in such a manner as not to
unreasonably interfere with or Impair the Tenant’s use of the
Premises; and
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(d)
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no
reduction or discontinuance of such services under this Section
shall be construed as an eviction of the Tenant or (except as
specifically provided in this Lease) release the Tenant from any
obligation of the Tenant under this Lease.
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(a)
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If
from time to time as requested in writing by the Tenant and to the
extent that it is reasonably able to do so the Landlord shall
provide in the Premises services in addition to those set out in
Section 9.2, provided that the Tenant shall within ten
(10) days of receipt of any invoice for any such additional
service pay the Landlord therefor at such reasonable rates as the
Landlord may from time to time establish plus an administrative fee
as set forth in Section 6.1.
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(b)
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The
Tenant shall not without the Landlord’s written consent, such
consent not to be unreasonably withheld, install in the Premises
equipment (including telephone equipment) that generates sufficient
heat to affect the temperature otherwise maintained in the Premises
by the air conditioning system as normally operated, unless the
Tenant provides Its own supplementary air conditioning units. If,
notwithstanding the foregoing, the Tenant’s equipment in the
Premises materially and adversely affects the temperature otherwise
maintained in the Premises by the Landlord’s air conditioning
system as normally operated, the Landlord may install supplementary
air conditioning units, facilities or services in the Premises, or
modify its air conditioning systems, as may in the Landlord’s
reasonable opinion be required to maintain proper temperature
levels and the Tenant shall pay the Landlord within thirty
(30) days of receipt of any invoice for the cost thereof,
including installation, operation and
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maintenance
expense plus an administrative fee of fifteen percent (15%) of the
cost thereof in accordance with Section 6.1.
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(c)
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If
the Landlord shall from time to time reasonably determine that the
use of electricity or any other utility or service in the Premises
is disproportionate to the use thereof by other tenants, the
Landlord may separately charge the Tenant for the excess costs
attributable to such disproportionate use.
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9.5
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Alteration by the
Landlord :
The Landlord may from time to time:
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(a)
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make repairs, replacements, changes
or additions to the structure, systems, facilities and equipment in
the Premises where necessary to serve the Premises or other parts
of the Building;
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(b)
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make changes in or additions to any
part of the Building not in or forming part of the Premises;
and
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(c)
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change or alter the Building
services or facilities, the location of driveways, sidewalks or
other Common Areas, and to extend existing buildings or erect new
buildings or extend existing buildings above the Premises or other
rentable premises or Common Areas of the Building, or add new
Common Areas to or on the Building;
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provided that
in doing so the Landlord shall not materially disturb or interfere
with the Tenant’s use of the Premises and operation of its
business any more than is reasonably necessary in the circumstances
and shall use all reasonable efforts to minimize such interference
and shall repair any damage to the Premises caused
thereby.
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9.6
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Access by the Landlord
: Subject to the Tenants
reasonable security requirements, the Tenant shall permit the
Landlord to enter the Premises outside Normal Business Hours, and
during Normal Business Hours in case of an emergency or where such
will not unreasonably disturb or interfere with the Tenant’s
use of the Premises and operation of its business, to examine,
inspect, and show the Premises to persons wishing to lease them or
to purchase the Building, to provide services or make repairs,
replacements, changes or alterations as set out in and subject to
the other provisions of this Lease, and to take such steps, as the
Landlord may deem necessary for the safety, improvement or
preservation of the Premises or the Building. The Landlord shall
whenever possible consult with or give reasonable notice to the
Tenant prior to such entry, but no such entry shall constitute an
eviction or entitle the Tenant to any abatement of Rent.
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9.7
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Notice of Letting and Inspection by
Prospective Tenants : At any time within one hundred
eighty (180) days prior to the expiry or sooner termination of
this Lease, provided the Tenant has not exercised a right of
renewal hereunder for a further renewal term, or at any time when
the Tenant is in arrears of Rent after notice that is not being
disputed bona fide by the Tenant equal to an amount greater than
one
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month’s
Base Rent for more than thirty (30) days, any prospective
tenant or its representative may inspect the Premises and all parts
thereof at all reasonable hours if accompanied by the Landlord or
its agent or agents, or unaccompanied on production of a written
request signed by the Landlord or its agent or agents, and in any
event subject to the Tenant’s reasonable security
requirements.
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9.8
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Energy Conservative and Security
Policies :
The Landlord shall be deemed to have observed and performed those
things required to be observed and performed pursuant to the terms
of this Lease, including those relating to the provision of
utilities and services, if in doing so it acts in accordance with a
directive, policy or request of a governmental or
quasi-governmental authority serving the public interest, and
having the force of law, in the field of energy conservation or
security.
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9.9
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Landlord’s Work
: It is understood and
agreed that the Tenant has entered into this Lease on the express
understanding that the Landlord’s Work is limited to the
scope delineated as such in Schedules E, F and G and paragraph 12
of Schedule H attached hereto. It is further understood and
agreed that all other Improvements to the Premises constitute the
Tenant’s Work as defined in Schedules E and F attached hereto
and shall be performed at the sole expense of the Tenant in
accordance with the terms of the Lease.
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ARTICLE 10
— MAINTENANCE, REPAIR, ALTERATIONS AND IMPROVEMENTS BY THE
TENANT
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10.1
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Condition of Premises
: Except to the extent
that the Landlord is specifically responsible therefor under this
Lease, and subject to Article 18, the Tenant shall maintain
the Premises and all improvements therein in good order and
condition, including:
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(a)
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Heating and Air Conditioning
Equipment .
Where any heating, ventilation or air-conditioning equipment
services the Premises on an exclusive basis the Tenant shall
provide regular ongoing maintenance for such heating, ventilation
or air-conditioning equipment and shall ensure that the heating and
air-conditioning equipment is maintained by contractors under a
maintenance contract which shall provide for not less than two
(2) full inspections per year and which shall be acceptable to
the Landlord, acting reasonably. The cost of such contractors shall
be payable by the Tenant. Notwithstanding the foregoing, if the
Landlord elects to take out an ongoing maintenance contract with
respect to the heating, ventilation or air-conditioning systems
contained in the Building, the Landlord shall be responsible for
the regular ongoing maintenance of the heating, ventilation or
air-conditioning systems provided that all reasonable costs of such
maintenance and of the maintenance contracts shall be charged by
the Landlord to the Tenant as Occupancy Costs;
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(b)
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Painting : Repainting and redecorating the
Premises and cleaning drapes and carpets at reasonable intervals as
needed;
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(c)
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Plumbing Facilities
: The Tenant shall not
use the plumbing facilities, if any, in the Premises for any other
purpose than that for which they are constructed, and shall not
throw any foreign substances of any kind therein and the expenses
of any breakage, stoppage or damage resulting from a violation of
this Section, shall be borne by the Tenant;
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(d)
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Repairs, Replacements
: Making repairs,
replacements and alterations as needed, including those necessary
to comply with the requirements of any governmental or
quasi-governmental authority having jurisdiction, of all fixtures
and things which at any time during the Term of this Lease are
located or erected in or upon the Premises (including but not
limited to signs, the inside and the outside of the ground floor
windows, partitions and doors, lighting, wiring, plumbing, and
electrical fixtures), such repair and maintenance to be made by the
Tenant when, where and so often as needed shall be, always
excepting only:
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i)
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reasonable wear and tear;
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ii)
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repairs required to be made by the
Landlord pursuant to Section 9.3; and
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iii)
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repairs necessitated by damage from
hazards against which the Landlord is required to insure
hereunder;
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The cost of any
repair, decoration, maintenance, amendment or replacement required
to be made in or to any portion of the Building directly as a
result of any act or omission of the Tenant, its employees,
servants, agents or licensees shall be paid in full by the Tenant
except reasonable wear and tear and except to the extent insured
against, or required by this Lease to be insured against, by the
Landlord.
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10.2
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Failure to Maintain
Premises : If
the Tenant fails to perform any obligation under Section 10.1,
and such default is not remedied after notice as required in
Section 21.1(i), the Landlord may enter the Premises and
perform such obligation without liability to the Landlord for any
loss or damage to the Tenant thereby incurred and the Tenant shall
pay the Landlord for the cost thereof, plus fifteen percent (15%)
of such costs for overhead and supervision, within ten
(10)&
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