LEASE OF OFFICE SPACE

Exhibit 10.3

 

Oxford Properties Group Inc.

 

1254115 Ontario Inc.

 

-AND-

 

Yak Communications (Canada) Inc.

300 Consilium Place•

Suite No. 500, Scarborough, ON

 

 

LEASE OF OFFICE SPACE

 

LEASE OF OFFICE SPACE

 

TABLE OF CONTENTS

 

 

SCHEDULES

 

SCHEDULE A

SCHEDULE B

SCHEDULE C

SCHEDULE D

LEASE OF OFFICE SPACE

 

DATE: November 6, 2003

 

BETWEEN:

 

Oxford Properties Group Inc.

1254115 Ontario Inc.

 

(“Landlord”)

 

AND

 

Yak Communications (Canada) Inc.

 

(“Tenant”)

 

PREMISES: 300 Consilium Place, Suite No. 500, Scarborough, ON

 

LANDLORD AND TENANT , in consideration of the covenants herein contained, hereby agree as follows:

 

ARTICLE 1.00 DEFINITIONS

 

1.01	Definitions

 

In this Lease.

 

( a) “Annual Rent” means in respect of the following period(s), the following annual amount(s), monthly installment(s) and annual rates calculated on the basis of the Square Feet in the Premises:

 

 

( b) “Article” means an article of this Lease.

 

( c) “Commencement Date” means the first day of the Term.

 

(d) “Fiscal Year” means the period ending on December 31 (all or part of which falls within the Term) or such other period from time to time determined by Landlord.

 

( e) “Lease” means this lease, Schedules A, B, C and, if applicable, D to this Lease, and every properly executed instrument which by its terms amends, modifies or supplements this Lease.

 

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(f) “Leasehold Improvements” means the alterations, fixtures and improvements in or serving the Premises made from time to time by or on behalf of Tenant or any prior occupant of the Premises with the exception only of furniture and equipment not in the nature of fixtures.

 

( g) “Operating Costs” means the amounts determined in accordance with section 2.02 of Schedule B.

 

( h) “Other Charges” means amounts payable to Landlord under Article 4.04.

 

(I ) “Premises” means the area on the 5th floor of the Building shown hatched on Schedule A and shall extend from the upper surface of the structural sub-floor to the lower surface of the suspended ceiling within the boundaries of the Premises as described in Section 3.00 of Schedule B.

 

(j) “Prime” means the rate of interest per annum from time to time announced by The Toronto Dominion Bank or its successors and reported to the Bank of Canada as its prime rate for Canadian dollar loans.

 

( k) “Rent” means the aggregate of all amounts payable by Tenant pursuant to any provision of this Lease except under Article 4.03.

 

( l) “Rental Taxes” means any tax or duty imposed upon either Landlord or Tenant which is measured by or based in whole or in part directly upon the Rent payable under this Lease or in respect of the rental or rental value of premises under this Lease whether existing at the date hereof or hereafter imposed by any governmental authority including, without limitation, goods and services taxes, value added tax, business transfer tax, sales tax, federal sales tax, excise taxes or duties or any tax similar to the foregoing.

 

( m) “Rules and Regulations” means the rules and regulations from time to time made by Landlord and consisting as of the Commencement Date of those listed in Schedule C.

 

( n) “Square Feet in the Premises” means 19,240 square feet to be determined by Landlord in accordance with Section 3.00 ofSchedule B.

 

( o) “Tenant’s Proportionate Share” means the amount determined in accordance with section 2.01(c) of Schedule B.

 

(p) “Term” means the period of time set out in Article 3.01.

 

ARTICLE 2.00 GRANT OF LEASE

 

2.01

Grant

 

Landlord hereby demises and leases the Premises to Tenant, and Tenant hereby leases and accepts the Premises from Landlord, in a “then as is” condition, to have and to hold during the Term subject to the terms and conditions of this Lease. Landlord hereby grants to Tenant a non-exclusive license throughout the Term subject to control of Landlord and to Landlord’s right to alter them in accordance with this Lease to use those parts of the Common Areas providing access to or, in the case of the area above the suspended ceiling to the lower surface of the structural ceiling, servicing the Premises.

 

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2.02	Quiet Enjoyment

 

If Tenant pays Rent, fully performs all its obligations under this Lease and there has been no default, Tenant shall be entitled to peaceful and quiet enjoyment of the Premises for the Term without interruption or interference by Landlord or any person claiming through Landlord.

 

2.03	Covenants of Landlord and Tenant

 

Landlord covenants to observe and perform all of the terms and conditions to be observed and performed by Landlord under this Lease. 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 Tenant under this Lease.

 

2.04

Net Lease

 

Tenant acknowledges and agrees that it is intended that the Lease and the Rent payable hereunder are completely net and carefree to Landlord.

 

ARTICLE 3.00 TERM AND POSSESSION

 

3.01

Term

 

Notwithstanding Articles 3.02 and 3.03, the Term of this Lease shall be five (5) years beginning on the 1 of August, 2004 and ending on the last day of the month of July, 2009, unless terminated earlier as provided in this Lease.

 

3.02	Early Occupancy

 

If Tenant begins to conduct business in all or any portion of the Premises before the Commencement Date, Tenant shall pay to Landlord on the Commencement Date a rental in respect thereof for the period from the date Tenant begins to conduct business therein to the Commencement Date, which rental shall be that proportion of the Rent payable in the first twelve (12) months of the Term which the number of days in such period bears to three hundred sixty five (365). All the provisions of this Lease shall be applicable during the early occupancy period.

 

3.03	Delayed Possession

 

If Landlord is for any reason delayed in delivering possession of the Premises to Tenant on the Commencement Date, then Tenant shall take possession of the Premises on the date when Landlord delivers possession thereof, which date shall be conclusively established by Landlord by notice to Tenant. This Lease shall not be void or voidable nor shall Landlord be liable to Tenant for any loss or damage resulting from any delay in delivering possession of the Premises to Tenant. If such delay is not principally caused by or attributable to Tenant, no Rent shall be payable by Tenant for the period prior to the date on which Landlord can so deliver possession of the Premises. If Landlord is for any reason delayed in delivering only part of the Premises, the provisions of this Article shall apply, making necessary changes, to such part.

 

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3.04	Acceptance of Premises

 

Taking possession of all or any part of the Premises by Tenant shall be conclusive evidence as against Tenant that the Premises or such part thereof are in satisfactory condition.

 

ARTICLE 4.00 RENT, OPERATING COSTS AND TAXES

 

4.01	Annual Rent

 

Tenant shall pay to Landlord as Annual Rent the amount(s) set out in Article 1 .01(a), payable in advance and without notice in monthly installments as set out in Article 1 .01(a), on the Commencement Date and on the first day of each calendar month thereafter during the Term.

 

4.02	Operating Costs, Taxes and Utilities

 

Tenant shall pay to Landlord, at the times and in the manner provided in Article 4.07, Taxes, utilities and Tenant’s Proportionate Share of Operating Costs all as determined under this Lease including Schedule B.

 

4.03	Rental Taxes

 

Tenant shall pay to Landlord all Rental Taxes applicable from time to time. Landlord shall calculate the amount of Rental Taxes payable by Tenant in accordance with the applicable legislation and Tenant shall pay such amount together with monthly installments of Rent. The amount payable by Tenant under this Article 4.03 shall be deemed not to be Rent for the purpose of such calculation but in the event of a failure by Tenant to pay under this Article 4.03, Landlord shall have the same rights and remedies as it has in the event of default by Tenant in the payment of Rent.

 

4.04	Other Charges

 

Tenant shall pay to Landlord, at the times and in the manner provided in this Lease or, if not so provided, upon demand by Landlord, all amounts (other than those payable under Articles 4.01, 4.02, and 4.03) that are payable by Tenant under this Lease.

 

4.05	Payment of Rent - General

 

All amounts payable by Tenant under this Lease, except that payable under Article 4.03, shall be deemed to be Rent and shall be payable and recoverable as Rent in the manner herein provided, and Landlord shall have all rights against Tenant for default in any such payment as in the case of arrears of Rent. Tenant shall pay to Landlord Rent, in legal tender of the jurisdiction in which the Building is located, without deduction or set-off, as a covenant independent of all other covenants of Landlord or Tenant in this Lease. At Landlord’s request, Tenant will make all payments under this Lease by way of electronic funds transfer from Tenant’s bank account and will execute and deliver either concurrently with this Lease or from time to time within three (3) business days following request there for, such documentation as may be required by Landlord and its bank in order to effect all payments under this Lease by electronic funds transfer. Tenant’s obligation to pay Rent shall survive the expiration or earlier termination of this Lease.

 

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4.06	Rent - Adjustment

 

If the Term begins on a day other than the first day of a calendar month or ends on a day other than the last day of a calendar month, the Rent payable for such month shall be prorated on a per diem basis using a three hundred sixty five (365) day period.

 

4.07	Payment - Operating Costs and Taxes

 

( a) Prior to the Commencement Date and the beginning of each Fiscal Year thereafter, Landlord shall compute and deliver to Tenant a bona fide estimate of Taxes and Tenant’s Proportionate Share of Operating Costs for the appropriate Fiscal Year and without further notice Tenant shall pay to Landlord in monthly installments one-twelfth ( of such estimate simultaneously with Tenant’s payments of Annual Rent.

 

(b) Landlord shall deliver to Tenant within one hundred twenty (120) days after the end of each Fiscal Year a written statement (the “Statement”) setting out in reasonable detail the amount of Operating Costs and Taxes for such Fiscal Year and certified by a representative of Landlord. If the amount of Taxes and Tenant’s Proportionate Share of Operating Costs actually paid by Tenant to Landlord during such Fiscal Year differs from the amount of Taxes and Tenant’s Proportionate Share of Operating Costs payable for such Fiscal Year, Tenant shall pay such difference or Landlord shall credit Tenant’s account (as the case may be), without interest within thirty (30) days after the date of delivery of the Statement. Failure of Landlord to render any statement under this section shall not prejudice Landlord’s right to render such Statement thereafter or with respect to any other period, or relieve Tenant from its obligations hereunder.

 

( c) If Tenant disputes the accuracy of any Statement, Tenant shall nevertheless make payment in accordance with the Statement, but the disagreement shall be referred by Landlord for prompt decision to an independent professional consultant, who is qualified by education and experience to make such decision and who shall be deemed to be acting as an expert and not an arbitrator. The consultant’s signed determination shall be final and binding on both Landlord and Tenant. Any adjustment required to any previous payment made by Tenant or Landlord by reason of any such determination shall be made within fourteen (14) days thereof, and the party required to pay such adjustment shall bear all costs of the consultant, except that if the amount to be paid is three percent (3%) or less of the amount in dispute, Tenant shall pay all such costs.

 

(d) Tenant may only dispute a Statement and claim a re-adjustment by notice given to Landlord within six (6) months after the date of delivery of the Statement to Tenant.

 

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ARTICLE 5.00 USE OF PREMISES

 

5.01

Use

 

The Premises shall be actively, diligently and continuously used and occupied as a business office for Tenant’s business as initially conducted in the Premises. Tenant shall operate the business office in a first-class, reputable manner befitting the reputation and image of the Building.

 

5.02	Compliance with Laws

 

Tenant shall use and occupy and shall cause the Premises to 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, including without limitation all applicable environmental laws, regulations or orders. If due primarily to Tenant’s use or occupancy of the Premises, improvements are necessary to comply with any of the foregoing or with the requirements of insurance carriers, Tenant shall pay to Landlord the entire cost thereof. Tenant will immediately advise Landlord in writing of (i) any and all governmental or regulatory notices, orders and/or actions instituted, completed, or threatened affecting the Premises; and (ii) all claims made or threatened by any third party against Tenant, Landlord or the Premises arising out of Tenant’s use or occupancy of the Premises and the Land.

 

5.03	Abandonment

 

Tenant shall not vacate or abandon the Premises.

 

5.04

Nuisance

 

Tenant shall not cause or maintain any nuisance in or about the Premises, and shall keep the Premises free of debris or anything kept in a manner which attracts rodents, vermin and anything 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.

 

5.05	Extraordinary Installations

 

Tenant shall not install anything that might affect the integrity or capacity of either the structure or the systems of the Building.

 

5.06	Jeopardy of Insurance

 

Tenant shall neither do nor omit to do anything that might result in any increase in the premiums for insurance maintained by Landlord in respect of the Building or which might result in the actual or threatened reduction or cancellation of or material adverse change in such insurance. If the premiums for such insurance are increased as a result of the use or occupancy of the Premises or any article kept on the Premises or any act or omission of Tenant or any person for whom Tenant is in law responsible or any subtenant of the Premises, or if any such insurance is actually, or threatened to be, either cancelled, reduced or materially adversely changed by an insurer by reason of the use or occupancy of the Premises, and if

 

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Tenant fails to remedy the condition or the use or occupancy giving rise to such actual or threatened cancellation, reduction or change within twenty four (24) hours after notice thereof, Landlord may, without limiting its other remedies for the default, either:

 

( a) re-enter and take possession of the Premises forthwith upon notice by Landlord to Tenant of its intention to do so; or

 

( b) enter upon the Premises and remedy the condition, use or occupancy giving rise to such actual or threatened cancellation, reduction or change, and Tenant shall pay to Landlord its cost of doing so forthwith on demand. No such entry by Landlord shall be deemed a re-entry or a breach of Article 2.02 and Landlord shall not be liable for any damage to either the Premises or any property located on the Premises as a result of such entry.

 

ARTICLE 6.00 SERVICES, MAINTENANCE, REPAIR AND ALTERATIONS BY LANDLORD

 

6.01	Operation of Building

 

Subject to Tenant performing its obligations under this Lease, Landlord shall operate and maintain the Building in accordance with all applicable laws and regulations and with standards from time to time prevailing for similar office buildings in the area in which the Building is located, subject, however, to the limitations occasioned by the design and age of the Building and the capacity of its systems and shall provide the services set out in Articles 6.02, 6.03 and 6.04, subject to such limitations, and shall be entitled to make the alterations set out in Article 6.06. Landlord’s costs associated with this Article 6.00 that are properly includable in Operating Costs shall be included.

 

6.02	Services to Premises

 

Landlord shall provide in the Premises:

 

( a) heat, ventilation and cooling as required for the comfortable use and occupancy of the Premises during Normal Business Hours;

 

( b) janitor services, as reasonably required to keep the Premises in a clean and tidy condition, provided that Tenant shall leave the Premises in a reasonably tidy condition at the end of each business day;

 

(c) electric power for lighting and small business office equipment (but not lighting or equipment using amounts of power disproportionate to that used by typical office tenants); and

 

(d) replacement of the standard fluorescent tubes, light bulbs and ballasts used in the Building as required from time to time as a result of normal usage.

 

6.03	Building Services

 

Landlord shall provide in the Building:

 

( a) domestic running water and necessary supplies in washrooms sufficient for the normal use thereof by occupants in the Building;

 

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(b) elevator or escalator service if included in the Building;

 

( c) heat, ventilation, cooling, lighting, electric power, domestic running water, and janitor service in those areas of the Building from time to time designated by Landlord for use during Normal Business Hours by Tenant in common with all tenants and other persons in the Building but under the exclusive control of Landlord;

 

(d) a general directory board on which Tenant shall be entitled to have its name shown, provided that Landlord shall have exclusive control thereof and of the space thereon to be allocated to each tenant; and

 

( e) maintenance, repair, and replacement as set out in Article 6.04.

 

6.04	Maintenance, Repair and Replacement

 

Landlord shall operate, maintain, repair and replace the systems, facilities and equipment necessary for the provision of services of Landlord under Articles 6.02 and 6.03 and shall maintain and repair the foundations, structure and roof of the Building and repair damage to the Building which Landlord is obligated to insure against under Article 9.00, provided that:

 

( a) if all or part of such systems, facilities and equipment require maintenance or inspections or are destroyed, damaged or impaired, Landlord shall have a reasonable time in which to complete the necessary repair or replacement, and during the period of repair or replacement shall only be required to maintain such services as are reasonably possible in the circumstances;

 

(b) Landlord shall use reasonable diligence in carrying out its obligations under this Article 6.04, but shall not be liable in any circumstances for any direct, indirect or consequential damages to Tenant or any other person or property for any failure to do so;

 

( c) no reduction or discontinuance of such services or loss of use of the Premises shall be construed as an eviction of Tenant or (except as specifically provided in this Lease) release Tenant from any obligation under this Lease; and

 

d) nothing contained herein shall derogate from the provisions of Article 16.00.

 

6.05	Additional Services

 

(a) If from time to time requested in writing by Tenant and to the extent that Landlord is reasonably able to do so, Landlord may elect to provide in the Premises services in addition to those set out in Article 6.02, provided that Tenant shall within ten (10) days of receipt of any invoices for any such additional service pay Landlord therefore at such reasonable rates as Landlord may from time to time establish.

 

( b) Tenant shall not without Landlord’s written consent install in the Premises equipment which generates sufficient heat to affect the temperature otherwise maintained in the Premises by the air conditioning system as normally operated. Landlord may install supplementary air conditioning units, facilities or services in the Premises, or modify its air conditioning system, as may in Landlord’s

 

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reasonable opinion be required to maintain proper temperature levels, and Tenant shall pay Landlord within ten (10) days of receipt of any invoice for the cost thereof, including installation, operation and maintenance expense plus fifteen percent (15%) of such costs for overhead.

 

(c) If 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 of other typical office tenants, Landlord may separately charge Tenant for the excess costs attributable to such disproportionate use calculated on a reasonable basis.

 

( d) Landlord may install and maintain at Tenant’s expense, metering devices for measuring the use of any utility or service in the Premises. Tenant shall pay Landlord within ten (10) days of receipt of any invoice for the cost of installation and maintenance of such device plus fifteen percent (15%) of such cost on account of Landlord’s overhead.

 

6.06	Alterations by Landlord

 

Landlord may from time to time:

 

( a) make repairs, replacements, changes or additions to the structure, systems, facilities and equipment in the Building (including the Premises) where necessary to serve the Premises or other parts of the Building;

 

(b) make changes in or additions to any part of the Building not in or forming part of the Premises;

 

( c) terminate or amend Tenant’s right of use of any of the Common Areas or eliminate or change the location and size of any of the Common Areas or their facilities;

 

( d) retain contractors and employ all personnel, including supervisory personnel and managers, that Landlord considers necessary for the effective maintenance, repair, operation, management and control of the Building; and

 

( e) do and perform such other acts in and to the Building or any of its component parts as Landlord considers reasonable for the proper and efficient maintenance, repair, operation, management and control of the Building, provided that in the course of Landlord’s exercise of its rights hereunder, Landlord shall be deemed not to have re-entered the Premises nor to have breached Article 2.02. Landlord shall perform all of its work as expeditiously as is reasonably possible so as to interfere as little as is reasonably possible with Tenant’s use of the Premises.

 

6.07	Access by Landlord

 

Tenant shall permit Landlord, its agents and consultants to enter the Premises outside Normal Business Hours, and during Normal Business Hours if such entry is necessitated by an emergency or will not unreasonably disturb or interfere with Tenant’s use of the Premises, to inspect, to provide services or make repairs, replacements, changes or alterations as set out in this Lease, to take such steps as Landlord may deem necessary for the safety, improvement or preservation of the Premises or the Building, to remedy any nuisance in the Premises, to show the

 

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Premises to mortgagees, prospective mortgagees, purchasers, and prospective purchasers and, during the last eighteen (18) months of the Term, to prospective tenants. Landlord shall whenever possible consult with Tenant prior to such entry, but no such entry shall constitute a re-entry by Landlord or an eviction or entitle Tenant to any abatement of Rent.

 

6.08	Energy, Conservation, Safety and Security Policies

 

Landlord shall be deemed to have observed and performed the terms and conditions to be performed by Landlord under this Lease, including those relating to the provision of utilities and services, if in so doing it acts in accordance with any directive, policy or request of any governmental or quasi-governmental authority in respect of any energy, conservation, safety or security matter. Tenant shall at the request of Landlord comply with any such directive, policy or request.

 

ARTICLE 7.00 MAINTENANCE, REPAIR, ALTERATIONS AND IMPROVEMENTS BY TENANT

 

7.01	Condition of Premises

 

Except to the extent that Landlord is specifically responsible therefore under this Lease, Tenant shall maintain and repair the Premises and all Leasehold Improvements therein and keep them in good order and condition, including:

 

( a) repainting and redecorating the Premises and cleaning window coverings and carpets in each case at reasonable intervals; and

 

( b) making repairs, replacements and alterations as needed, including those necessary to comply with the requirements of any governmental or quasi-governmental authority having jurisdiction.

 

7.02	Failure to Maintain Premises

 

If Tenant fails to perform any obligation under Article 7.01, then on not less than ten (10) days notice to Tenant Landlord may enter the Premises and perform such obligation without liability to Tenant for any loss or damage to Tenant thereby incurred, and Tenant shall pay Landlord the cost thereof plus twenty percent (20%) of such cost for overhead and supervision, within ten (10) days of its receipt of Landlord’s invoice therefore.

 

7.03	Alterations by Tenant

 

Tenant may from time to time at its own expense install Leasehold Improvements and alter existing Leasehold Improvements (the “Tenant’s Work”) provided that:

 

(a) the Tenant’s Work shall not commence without the prior written approval of Landlord, which approval shall not be unreasonably withheld or delayed;

 

(b) Tenant shall have furnished Landlord with two (2) complete sets of professionally prepared working drawings (which shall include any architectural, structural, electrical, mechanical, computer system wiring and telecommunication plans) of the proposed Tenant’s Work. Landlord requires that Tenant retain Landlord’s base building mechanical, electrical and structural engineering consultants to ensure compatibility of base building systems and the Tenant’s

 

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Work. If Tenant uses other consultants for the preparation of Tenant’s working drawings, then Landlord may elect to retain architects and engineers to review such working drawings for the purpose of approving the proposed Tenant’s Work (it being understood that notwithstanding such approval, Landlord shall have no responsibility with respect to the adequacy of such working drawings). Tenant shall pay on demand to Landlord the costs for the examination of such drawings by either Landlord or an outside consultant plus an amount equal to fifteen percent (15%) of such costs for overhead;

 

(c) In addition to any other payment contained in this Article, Tenant shall pay to Landlord, on demand, a fee equal to the lesser of eighty cents ($0.80) per square foot of the Square Feet in the Premises, and ten percent (10%) of the cost of completing the Tenant’s Work (as evidenced by a sworn statement as to cost accompanied by receipted invoices) for coordination services provided by Landlord during Tenant’s construction of its Tenant’s Work;

 

( d) Landlord shall have approved, prior to commencement of the Tenant’s Work, the contractors and subcontractors and their respective labour affiliations;

 

( e) Tenant shall have provided prior to the commencement of the Tenant’s Work, performance and payment bonds as well as proof of workers compensation, all risks, builders’ risk, and contractors’ public liability and property damage insurance coverage, with Landlord and any mortgagee, as required by Landlord to be named as additional insureds, in amounts with insurers, and in form reasonably satisfactory to Landlord, which shall remain in effect during the entire period in which the Tenant’s Work will be carried out;

 

( f) Tenant will deliver a complete list identifying every contractor and sub-contractor, accompanied by an up- to-date valid clearance certificate for each of them issued by the appropriate worker compensation, safety and insurance authority, and Tenant will not use any contractor or permit the use of any sub-contractor that is not identified on the list;

 

( g) Tenant acknowledges that certain Tenant’s Work may require modification and interfacing with the base building and its systems and structure. If any proposed Tenant’s Work could affect the structure, the exterior walls or the systems of the Building, Landlord may require that any such Tenant’s Work be performed by either Landlord or its contractors in which case Tenant shall pay Landlord’s cost and fifteen percent (15%) thereof for overhead;

 

(h) Tenant shall have provided to Landlord a copy of the contract for the Tenant’s Work and, if applicable, evidence satisfactory to Landlord as to the existence of all necessary permits;

 

( I) Tenant shall perform the Tenant’s Work or cause the Tenant’s Work to be performed: (i) in accordance with any construction methods and procedures manual for the Building; (ii) in accordance with the plans and specifications submitted to and approved by Landlord; (iii) in accordance with any conditions, regulations, procedures or rules imposed by Landlord; (iv) in compliance with all applicable laws ( including occupational health and safety, and workplace hazardous materials information system requirements and legislation); and (v) in a good and workmanlike and expeditious manner using new materials;

 

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(j) Landlord may inspect construction as it proceeds (the onus being on Tenant to advise Landlord whenever any phase has been completed so that an inspection can be made);

 

( k) upon completion of the Tenant’s Work, Tenant shall provide Landlord with a complete set of “as built” drawings for the Tenant’s Work; and

 

(1) if Tenant fails to observe any of the requirements of this Article, Landlord may require that construction stop and that the Premises be restored to their prior condition failing which Landlord may do so and Tenant shall pay Landlord’s cost plus fifteen percent (15%) thereof for overhead.

 

Any increase in Operating Costs or Taxes attributable to such Tenant’s Work shall be borne by Tenant.

 

7.04	Telephone and Computer Systems

 

With Landlord’s prior written consent which may be withheld in Landlord’s sole discretion, Tenant may utilize a telecommunication service provider of its choice, subject to the provisions of this Lease, including but not limited to the following:

 

( a) the service provider shall execute and deliver Landlord’s standard form of license agreement which shall include a provision for Landlord to receive compensation for the use of the space for the service provider’s equipment and materials;

 

( b) Landlord shall incur no expense or liability whatsoever with respect to any aspect of the provision of telecommunication services, including without limitation, the cost of installation, service, materials, repairs, maintenance, and interruption or loss of telecommunication service;

 

(c) Landlord must first reasonably determine that there is sufficient space in the risers of the Building for the installation of the service provider’s equipment and materials;

 

( d) Tenant shall indemnify and hold harmless Landlord for all losses, claims, demands, expenses, and judgments against Landlord caused by or arising out of, either directly or indirectly, any acts or omissions by the service provider or Tenant or those for whom they are responsible at law; and

 

( e) Tenant shall incorporate in its agreement with its service provider a provision granting the Tenant the right to terminate the service provider agreement if required to do so by Landlord and Landlord shall have the right at any time from time to time during the Term to require Tenant at its expense to exercise the termination right.

 

As part of the Tenant’s Work, Tenant shall be responsible for the costs associated with the supply and installation of telephone, computer and other communications equipment and systems and related wiring within the Premises to the boundary of the Premises for hook up or other integration with telephone and other

 

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communications equipment and systems of a telephone or other communications service provider, which equipment and systems of the service provider are located or are to be located in the Building pursuant to Landlord’s standard form of license agreement.

 

Landlord shall supply space in risers in the Building and space on the floor(s) of the Building in which the Premises are located, the location of which shall be designated by Landlord in its sole discretion, to telecommunication service providers who have entered into Landlord’s standard form of license agreement for the purpose, without any cost or expense to Landlord therefore of permitting installation in such risers and on such floor(s) of telephone and other communications services and systems (including data cable patch panels) to the Premises at a point designated by Landlord.

 

Landlord shall have the right to assume control of cables and other telecommunications equipment in the Building and may designate them as part of the Common Areas.

 

7.05

Liens

 

Tenant shall pay before delinquency all costs for work done in the Premises which could result in any lien or encumbrance on the Land or Building, shall keep the title to the Land and the Building free and clear of any lien or encumbrance and shall indemnify and hold harmless Landlord from and against any claim, loss, cost, demand and legal or other expense, whether in respect of any lien or otherwise, arising from the supply of material, services or labour for such work or otherwise. Tenant shall immediately notify Landlord of any such lien or encumbrance of which it has or reasonably should have knowledge, and shall cause the same to be removed or vacated within five (5) days failing which Landlord may take such action as Landlord deems necessary to remove or vacate the same and Tenant shall pay to Landlord on demand the entire cost thereof plus an administration fee of fifteen percent (15%) of such cost. Tenant shall not mortgage, charge, grant a security interest in or otherwise encumber any Leasehold Improvements.

 

7.06

Signs

 

Any sign, lettering or design in the Premises that is visible from the exterior of the Premises shall be subject to approval by Landlord, and shall conform to the uniform pattern of identification signs for tenants in the Building as prescribed by Landlord. Tenant shall not inscribe or affix any sign, lettering or design which is visible from the exterior of the Building.

 

7.07	Removal of Leasehold Improvements - Expiration or Termination of Term

 

Subject as hereinafter provided, immediately prior to the expiration of the Term, or immediately following the termination thereof, Tenant shall remove all Leasehold Improvements, personal property and any signs, restore the Premises to the then current base building standard of the Building and repair any damage to the Building or the Premises occasioned by such installation, removal and restoration. Landlord may by notice prior to the expiration of the Term stipulate which Leasehold Improvements are not to be removed. Landlord may also, by notice

 

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given prior to the expiration of the Term, or immediately following the termination thereof, elect to remove some or all of the Leasehold Improvements and Tenant shall pay Landlord’s cost on account thereof plus an administration fee of fifteen percent (15%) of the cost. Upon the expiration or earlier termination of the Term. all personal property of Tenant remaining in the Premises shall at the option of Landlord become its property, and may be appropriated, sold, removed, destroyed or otherwise disposed of by Landlord without notice or obligation to compensate Tenant or to account to Tenant, and Tenant shall pay to Landlord on demand all costs incurred by Landlord in connection therewith, plus an administration fee of fifteen percent (15%) of the costs.

 

ARTICLE 8.00 TAXES

 

8.01	Landlord’s Taxes

 

Landlord shall pay before delinquency (subject to Tenant’s obligation to pay Operating Costs and Taxes under Article 4.02) every real estate tax, assessment, license fee and other charge, excepting Tenant’s taxes under Article 8.02, which is imposed, levied, assessed or charged by any governmental or quasi-governmental authority having jurisdiction upon or on account of the Land or the Building.

 

8.02	Tenant’s Taxes

 

Tenant shall pay to the appropriate authority before delinquency every tax, assessment, license fee, excise and other charge, however described, which is imposed, levied, assessed or charged by any governmental or quasi-governmental authority having jurisdiction upon or on account of:

 

( a) operations at, occupancy of, or conduct of business in or from the Premises by or with the permission of Tenant; and

 

(b) Leasehold Improvements and all property in the Premises that is not owned by Landlord, provided that if Landlord so elects by notice to Tenant, Tenant shall pay to Landlord any amounts payable under this Article 8.02 in monthly installments and Landlord shall remit such amounts to the appropriate authorities.

 

8.03	Right to Contest

 

Tenant shall not contest the validity or amount of any tax, assessment, license fee, excise fee and other charge payable under Article 8.01. Tenant shall have the right to contest the validity or amount of any tax, assessment, license fee, excise fee and other charge payable under Article 8.02, provided that no contest by Tenant may involve the possibility of forfeiture, sale or disturbance of Landlord’s interest in the Premises or result in any increase in taxes paid by other tenants in the Building or taxes under Article 8.01 and that upon the final determination of any contest by Tenant, Tenant shall immediately pay the amount found to be due, together with any costs, penalties and interest. Tenant shall indemnify Landlord for any costs, expenses, liabilities or damages, including without limitation increases in taxes which are or may be suffered by Landlord directly or indirectly as a result of such contest.

 

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ARTICLE 9.00 INSURANCE

 

9.01	Landlord’s Insurance

 

Landlord shall maintain (Landlord’s cost of compliance with this Article 9.01 being included in Operating Costs) liability insurance, all risk property insurance, boiler and pressure vessel insurance, and other insurance on the Building and all property and interest of Landlord in the Building as determined by Landlord with coverage and in amounts that are comparable to coverages typically maintained by the owners of similar buildings in the vicinity of the Building.

 

9.02	Tenant’s Insurance

 

Tenant shall maintain:

 

( a) all risk property insurance in amounts sufficient to fully cover, on a replacement cost basis without deduction for depreciation, all Leasehold Improvements and all property, including without limitation Tenant’s inventory, furniture and movable equipment, in the Premises which is not owned by Landlord;

 

( b) if applicable, boiler and machinery insurance on a replacement cost basis to cover Leasehold Improvements and all property in the Premises that is not owned by Landlord;

 

( c) liability insurance on an occurrence basis, against claims for bodily injury, personal injury and property damage in or about the Premises, contractual liability, tenant’s legal liability, non-owned automobile liability, and owner’s and contractors protective liability, in amounts which are from time to time acceptable to a prudent tenant in the community in which the Building is located, but not less than $5,000,000.00 in respect of each occurrence;

 

( d) business interruption insurance including loss of profits; and

 

( e) any other form of insurance, in such amounts and against such risks, as Landlord may in its discretion require. Policies for such insurance shall (i) be in a form, on terms and with an insurer approved by Landlord, (ii) require at least thirty (30) days’ written notice to Landlord of termination or material alteration during the Term, (iii) waive any right of subrogation against Landlord and those for whom Landlord is at law responsible, ( iv) contain a standard mortgage clause as required by any mortgagee, (v) contain a provision that Tenant’s insurance is primary, (vi) not call into contribution any other insurance available to Landlord, (vii) contain a severability of interests clause and a cross-liability clause, where applicable and shall not contain a co insurance clause, and (viii) add Landlord and its mortgagees as additional insureds. If requested by Landlord, Tenant shall from time to time promptly deliver to Landlord certified copies or other evidence satisfactory to Landlord of such policies, and evidence satisfactory to Landlord that all premiums thereon have been paid and the policies are in full force and effect.

 

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9.03	Tenant Failure To Insure

 

Should Tenant fail to maintain the insurance required in Article 9.02, in addition to its rights under Article 19.03, Landlord may elect to obtain the required insurance. Tenant shall upon demand pay to Landlord, as Rent, Landlord’s cost of obtaining such insurance.

 

ARTICLE 10.00 INJURY TO PERSON OR PROPERTY

 

10.01

Indemnity by Tenant

 

Tenant shall indemnify Landlord against any claim, loss, cost, demand, damage, cause of action, judgment, expense and legal fees and disbursements on a solicitor and client basis, relating to death, injury or loss of use of or damage to the person or property of any other tenants in the Building, or to all and any of the following persons or entities (referred to in this Article 10.00 as “Other Persons”): Tenant’s agents, servants, employees, customers, contractors or any other person for whom Tenant is in law responsible or to any other person in or about the Premises, Building or Land, arising from:

 

(a) any breach of this Lease by Tenant;

 

( b) the operations of or any act or omission of Tenant and its agents, servants, employees or anyone for whom at law it is responsible, in the Premises or anywhere in the Building or on the Land;

 

( c) interference with or obstruction of deliveries to or from the Premises or interruption of utilities or services, including but not limited to telecommunication or similar services, whether or not resulting from any fault, default, negligence, gross negligence, willful action or omission of Landlord, its agents, servants, employees or anyone for whom at law it is liable; and

 

( d) any cause not specified above, if the death, injury or damage is caused by any reason other than the gross negligence or wilful misconduct of Landlord, its agents, servants, employees or those for whom at law it is liable.

 

10.02

Landlord’s Liability

 

Landlord, regardless of negligence or gross negligence, or any fault, default or willful act or omission of Landlord, shall not be liable for and is hereby released from any liability or claim related to any bodily injury or death of, or loss or damage to, or loss of use of any property belonging to Tenant or the Other Persons or to any other person or entity, in, or about the Building or the Premises or the Land. Without limiting the foregoing Landlord shall not be liable for any injury, death, loss or damage which is caused by moisture, mould, steam, water, rain, or snow which may be found, or which may leak into, issue or flow from part of the Building or the Land including the Premises or from the pipes or plumbing works thereof, or from any other place or quarter or for any damage caused by or attributable to the condition or arrangement of any electric or other wiring. Tenant acknowledges that, without limiting the generality of the foregoing, in no event shall Landlord be liable for:

 

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( a) any damages caused by anything done or omitted to be done by any other tenant, occupant or user of the Building;

 

( b) any act or omission (including theft, malfeasance, negligence, gross negligence, fault, default or willful act or omission) on the part of any agent, contractor or person from time to time employed by Landlord to perform janitorial services, security services, supervision or any other work in or about the Premises or the Building;

 

( c) any loss or damages, however caused, to books, records, files, money, securities, negotiable instruments, or papers or computer disks or other electronic files or other valuables of Tenant, the Other Persons, or any other person such that all property situated or stored within the Premises or elsewhere about the Building or Land by Tenant or the Other Persons or any other person shall be at Tenant’s sole risk and Tenant shall indemnify Landlord in respect of same;

 

(d) any loss or damage arising from interruption of utilities or services, including but not limited to telecommunication or other similar services; or

 

(e) any other direct or indirect or consequential damages including but not limited to loss of profit.

 

10.03

Extended Meaning

 

Any and all release and indemnity clauses which are included in the Lease for the benefit of Landlord are intended also to benefit the mortgagees and property managers and asset managers of Landlord and the officers, directors, shareholders, employees, and agents of each one of them, and, for the purposes of such clauses, Landlord is hereby acting as agent or trustee on behalf of and for the benefit of the persons or entities mentioned above.

 

ARTICLE 11.00 ASSIGNMENT, SUBLETTING AND OTHER TRANSFERS

 

11.01

Transfer

 

“Transfer” means all or any of the following, whether by conveyance, written agreement or otherwise, and whether or not by operation of law: an assignment of this Lease by Tenant or any interest in this Lease, in whole or in part, any mortgage, charge, debenture (floating or otherwise), or encumbrance of this Lease or Tenant’s interest in this Lease, in whole or in part, a sublease, or sharing or parting with possession of all or any part of the Premises, a change in a partnership if the change results in a change in the effective control of Tenant and, a transfer or other dealing in respect of all or part of the corporate shares of Tenant or an affiliate of Tenant that results in a change in the effective voting control of Tenant. “Transferor” and “Transferee” have meanings corresponding to this definition of “Transfer” and in the case of a Transfer involving corporate shares, or par