DECIMA INC.
(formerly OSI GROUP INC.)
LEASE FROM STOCKTON & BUSH 2345 LIMITED
FOR PREMISES AT
2345 YONGE ST., 4 th , 7 th AND 10 th FLOORS,
TORONTO, ONTARIO
Gowling Lafleur Henderson LLP
Barristers & Solicitors
Suite 2600, 160 Elgin Street
Ottawa, Ontario
K1P 1C3
(Laurie J. Sanderson / File No. 03-321661)
STOCKTON & BUSH 2345
LIMITED
4 th and 10 th Floors
2345 Yonge Street
Toronto, Ontario
Rentable Area: 4
th floor – approximately 5,931 square
feet
10 th
floor – approximately 3,000
square feet
STANDARD FORM OFFICE
LEASE
Section 1.01 – Variable Lease
Terms
In this Lease the
following terms will have the following meanings:
(1) “Lease”
means this lease dated the 1st day of May, 2002, and includes all
schedules annexed hereto, as from time to time amended in
writing.
(2) “Landlord”
– STOCKTON & BUSH 2345 LIMITED and its successors and
assigns.
Suite 304
2345 Yonge Street
Toronto, Ontario
M4P 2E5
or such other
address as is designated by the Landlord.
(4) “Tenant”
– OSI GROUP INC. and its successors and permitted
assigns.
(5) “Tenant’s
Address” – Suite 1800, 160 Elgin Street, Ottawa,
Ontario K2P 2C4 or such other address as is designated by the
Tenant within the Province of Ontario.
(6) “Guarantor”
– Not applicable.
(7) “Guarantor’s
Address” – Not applicable.
(8) “4th
Floor Premises” – Those premises demised to the Tenant
pursuant to Section 2.01 hereof, cross-hatched on the first
page of Schedule “A” hereto, being part of the 4th
floor.
(9) “10th
Floor Premises” – Those premises demised to the Tenant
pursuant to Section 2.01 hereof, cross-hatched on the second
page of Schedule “A” hereto, being part of the 10th
floor.
(10) “Leased
Premises” – For the period from the Commencement Date
to and including June 30, 2006, “Leased Premises”
means the 4the Floor Premises and for the period
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from
July 1, 2006 to and including April 30, 2012,
“Leased Premises” means both the 4th Floor Premises and
the 10the Floor Premises.
(11) “Rentable
Area of the Leased Premises” – For the period from the
Commencement Date to and including June 30, 2006,
“Rentable Area of the Leased Premises” means the
Rentable Area of the 4th Floor Premises (being approximately 5,931
square feet of area) and for the period from July 1, 2006 to
and including April 30, 2012, “Rentable Area of the
Leased Premises” means the aggregate Rentable Area of the 4th
Floor Premises and the 10th Floor Premises (the latter being
approximately 3,000 square feet of area), all as determined in
accordance with Schedule “D” hereof, and subject to
adjustment in accordance with Section 2.04 hereof.
During each of
the first, second, third and fourth years of the Term and during
the first two (2) months of the fifth year of the Term (being
May 1, 2002 to June 30, 2006), $74,137.50 per annum,
computed at the annual rate of $12.50 per square foot of Rentable
Area of the Leased Premises, and payable monthly in advance in the
amount of $6,178.13 per month commencing on the Commencement
Date.
During the
remainder of the Term (being July 1, 2006 to April 30,
2012), $88,965.00 per annum, computed at the annual rate of $15.00
per square foot of Rentable Area of the Leased Premises, and
payable monthly in advance in the amount of $7,413.75 per month
commencing on July 1, 2006.
all payable
pursuant to Section 2.06 hereof.
(13) “Commencement
Date” – May 1, 2002.
(14) “Term”
– Ten (10) years, subject to the Tenant’s right of
extension pursuant to paragraph 1 of Schedule “F” to
this Lease.
(15) “Agreement
to Lease” means the written agreement to lease between the
Landlord and the Tenant with respect to the 4th Floor Premises
dated February 1, 2002.
(16) “Deposit”
means the sum of Twenty-Nine Thousand, Four Hundred and Seventeen
Dollars and Seventy-Six Cents ($29,417.76) applied in accordance
with Section 14.02.
Section 1.02 – Certain Standard
Definitions
(1) “Additional
Rent” means all sums of money, other than Basic Rent, which
are required to be paid by the Tenant pursuant to any provision of
this Lease.
(2) “Additional
Service” means any service which is requested or required by
or for a tenant (including the Tenant) in addition to those
supplied by the Landlord as part of the normal services provided in
the Complex, and which the Landlord is prepared or elects to supply
at an additional cost to the tenant in question and includes,
without limitation, janitor and cleaning services in addition to
those normally supplied, the provision of labor and supervision
in
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connection with
deliveries, supervision in connection with the moving of any
furniture or equipment of any tenant and the making of any repairs
or alterations by any tenant.
(3) “Additional
Service Cost” means the additional cost payable by the Tenant
to the Landlord for any Additional Service in accordance with
Section 5.02 hereof.
(4) “Architect”
means the independent, professional qualified architect,
professional engineer or surveyor named by the Landlord from time
to time.
(5) “Bank
Rate” means the interest rate per annum as announced by the
chartered bank of the Landlord at the principal office of such bank
in Toronto and reported by it to the Bank of Canada as its prime
rate, which rate is on the its base rates and serves as the basis
upon which effective rates of interest are calculated for Canadian
dollar loans made in Canada with interest payable as a function of
its prime rate as change from time to time.
(6) “Building”
means the structures housing the integrated retail, commercial and
office complex and its related improvements and facilities, all
constructed and located on the Lands, including, without
limitation, the Parking Garage, as the same may from time to time
be altered, expanded or reconstructed, all of which are commonly
known as the Edison Centre.
(7) “Business
Hours” means the period from 8:00 a.m. to 6:00 p.m. on
Mondays to Fridays inclusive (excepting holidays) or such other
hours as may be designated from time to time by the
Landlord.
(8) “Capital
Tax in Respect of the Complex” means the aggregate
of:
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(a)
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an
amount of the tax or excise imposed by the Province of Ontario upon
the Landlord or the owners of the Complex which is measured by or
based in whole or in part upon the capital, surplus, reserves or
indebtedness of such Landlord or owners, and which is at present
based upon the application of the prescribed rate of 0.3% to the
amount of such Landlord’s or owner’s “taxable
paid-up capital” as defined in the Corporations Tax Act
(Ontario); the amount of the tax or excise for the purposes hereof
shall be calculated in any year as if the Complex was the only
establishment in the Province of Ontario owned by such Landlord or
owners in the year and such Landlord or owners had no establishment
other than in the Province of Ontario; and
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(b)
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an
amount of the tax or excise imposed by the Government of Canada
upon the Landlord or the owners of the Complex which is measured by
or based in whole or in part upon the capital, surplus, reserves or
indebtedness of the Landlord or the owners, and which tax is at
present based upon the application of the prescribed rate .2% to
the amount by which the “taxable capital employed in
Canada” by such Landlord or owners as defined in the Income
Tax Act (Canada) exceeds its or their capital deduction for the
year; the amount of the tax or excise for the purposes hereof shall
be calculated in any year as if the Complex was the
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only asset owned by such Landlord or
owners in the year and the capital deduction of such Landlord or
owners for the year was nil.
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(9) “Common
Facilities” means those areas and facilities of the Complex
which serve or benefit the Complex including, without limitation,
roadways, landscaped areas, arcades, sidewalks, public entrance
doors, halls, public lobbies, lavatories, stairways, passageways,
elevators, service ramps (and, to the extent such exist from time
to time, common loading and receiving facilities) and Common Use
Equipment, and which are designated from time to time by the
Landlord for the common use and enjoyment of the tenants in the
Complex, and their agents, invitees, servants, employees and
licensees, or for use by the public, but excluding the Parking
Garage, rentable premises in the Complex and other portions of the
Complex which are from time to time designated by the Landlord for
private use by one or a limited group of tenants.
(10) “Common
Use Equipment” means all mechanical, plumbing, electrical and
heating, ventilating, and air-conditioning equipment, pipes, ducts,
wiring, machinery and equipment and other integral services,
utility connections and the like providing services to the Complex,
including services to and within rentable premises, except to the
extent that the same have been installed within rentable premises
for or by tenants as Leasehold Improvements.
(11) “Complex”
means the Lands and the Building.
(12) “HVAC
Costs” means the cost of heating, ventilating and cooling all
of the rentable premises in the Complex and includes, without
limitation, cost of fuel, electricity, operation of air
distribution and cooling equipment, labor, materials, non-capital
repairs, maintenance, service and other such costs, and
depreciation (provided that with respect to capital costs in excess
of $100,000 such capital cost shall be amortized in accordance with
generally accepted accounting practices in the real estate industry
over the useful life, as determined by the Landlord, acting
reasonably, of the particular items(s) for which the cost was
incurred but any such capital costs of $100,000 or less may be so
amortized or charged over any period the Landlord may determine,
acting reasonably), together with interest on the undepreciated
portion of such costs at an annual rate of interest that is two
percentage (2%) points above the Bank Rate in effect on the date on
which the relevant cost was incurred) of fixtures and equipment
used therefor which, by their nature, require periodic replacement
or substantial replacement, reasonably attributable to the heating,
ventilating and cooling of the specified part, and the reasonable
costs incurred by the Landlord in making allocations of the cost
among the Common Facilities, the Leased Premises and other
components of the Complex, and, when used with reference to only
some (but not all) rentable premises in the Complex, means such
costs of heating, ventilating and cooling such specified part, in
each case plus an administration fee of fifteen percent (15%) of
the total of such respective aforementioned costs.
(13) “HVAC
Hours” means each hour of each day of the year, including
Saturdays, Sundays and holidays, or such other hours as may be
designated from time to time by the Landlord.
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(14) “Insurance
Cost” means, for any Accounting Period, the total cost to the
Landlord calculated in accordance with generally accepted
accounting principles, for insuring the Complex.
(15) “Insured
Damage” means that part of any damage occurring to the
Complex, including the Leased Premises, of which the entire cost of
repair (except as to any deductible amount provided for in the
applicable policy or policies of insurance) is actually recovered
by the Landlord under a policy of insurance from time to time
effected by the Landlord pursuant hereto or any amount which, in
the case of insurance which the Landlord has agreed by this Lease
to carry but has failed to carry, could reasonably have been
expected to have been recovered.
(16) “Janitorial
Costs” means the cost of providing janitorial services to all
of the rentable premises in the Complex and when used with
reference to only some (but not all) rentable premises in the
Complex, means the cost of proving janitorial services to such
specified part, in each case plus an administration fee of fifteen
percent (15%) of the total of such respective costs.
(17) “Lands”
means the lands described in Schedule “B” attached
hereto as the same may be varied from time to time.
(18) “Leasehold
Improvements” means all items generally considered as
leasehold improvements, including, without limitation, all
fixtures, equipment of the nature of fixtures (but not of the
nature of trade 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 Leased
Premises in the Leased Premises, and by or on behalf of other
tenants in other premises in the Building, including any stairways
for the exclusive use of the Tenant, all partitions, however
affixed and whether or not movable, and all wall-to-wall carpeting
other than carpeting laid over finished floors and affixed so as to
be readily removable without damage; but excluding trade fixtures,
furniture, unattached or free-standing partitions and equipment not
of the nature of fixtures.
(19) “Mortgage”
means any instrument, deed of trust, document or security interest
(resulting from any method of financing or refinancing) or blanket
mortgage (affecting the Complex as well as other property) now or
hereafter secured upon the Lands and the Building or any part
thereof, and includes all renewals, modifications, consolidations,
replacements and extensions thereof.
(20) “Mortgagee”
means the mortgagee, hypothecary or other creditor or trustee for
bondholders or others named in any Mortgage.
(21) “Notice”
means any notice, statement, consent, approval, demand or request
herein required or permitted to be given by any party to another
pursuant to this Lease and shall be in writing and, if to the
Landlord, addressed to the Landlord at the Landlord’s
Address, and if to the Tenant, addressed to the Tenant at the
Tenant’s Address, and if to the Guarantor, if any, addressed
to the Guarantor at the Guarantor’s Address. All Notices
shall be hand-delivered and the effective date of such Notices
shall be the date of delivery.
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(22) “Operating
Costs” means the total of all expenses, costs, fees, rentals,
disbursements and outlays of every kind paid, payable or incurred
by or on behalf of the Landlord, or attributable by the Landlord to
the Complex on an accrual basis in accordance with generally
accepted accounting principles, consistently applied, (or on a cash
basis to the extent the Landlord considers appropriate), but
without duplication, in connection with the complete maintenance,
cleaning, heating, ventilating, cooling, repair, operation,
supervision, replacement, administration and management of the
Complex, and in the maintenance, repair, replacement and operation
of property adjacent to the Complex such as any public sidewalks,
public parks and the above or below-ground passageways or tunnels
leading to any underground public transportation system and to
other buildings (including buildings in other city blocks) or
pedestrian malls, and a reasonable amount, as determined by the
Landlord from time to time, for all expenses incurred by or on
behalf of tenants in the Complex with whom the Landlord may from
time to time have agreements whereby, in respect of their premises,
those tenants perform any cleaning, maintenance or other work or
services usually performed by the Landlord which, if directly
incurred by the Landlord, would have been included in Operating
Costs. Subject to, but without limiting the generality of the
foregoing, Operating Costs shall include:
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(i)
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the
Insurance Cost;
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(ii)
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the
cost of providing security, supervision, traffic control,
landscaping, window cleaning, garbage collection and removal and
snow removal services;
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(iii)
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the
cost of operating, providing, inspecting, maintaining, servicing,
repairing and replacing the heating, ventilating, cooling,
electrical, water and music systems, in each case in respect of the
Common Facilities but excluding the original capital cost of same,
provided that capital costs in excess of $100,000 shall be
amortized as required by Section 1.02(22)(A)(xvi);
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(iv)
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the
cost of replacing building standard electric fixtures, ballasts,
tubes, starters, lamps and light bulbs;
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(v)
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the
cost of tempered water (or, at the Landlord’s option, hot and
cold water), electric light and power, telephone, steam, gas,
sewage disposal and other utilities and services;
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(vi)
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the
cost of maintaining and replacing signs and directing
boards;
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(vii)
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accounting costs incurred in
connection with the maintenance, repair, replacement, operation,
administration or management of the Complex, including computations
required for the imposition of charges to tenants, the cost of
preparing statements and opinions for tenants and banking fees and
expenses and audit fees;
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(viii)
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the
cost of performing its obligations under Section 8.03, except
as specifically excluded therein;
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(ix)
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the
fair rental value (having regard to the rentals prevailing from
time to time for similar space) of space in the Complex used by the
Landlord, acting reasonably, in connection with the maintenance,
repair, replacement, operation, administration or management of the
Complex and space in the Complex utilized for fire cross-over
corridors connecting staircases on any floor of the
Building;
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(x)
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the
cost of direct supervision and of management and all other indirect
expenses to the extent allocable to the maintenance, repair,
replacement, operation, administration or management of the
Complex;
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(xi)
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all
costs and expenses (including legal and other professional fees and
interest and penalties on deferred payments) incurred by the
Landlord in contesting, resisting or appealing any Taxes acting
reasonably;
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(xii)
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a
reasonably fee for the administration and management of the Complex
applied to the aggregate of all rents received or receivable from
occupants of the Complex, which fee shall be comparable to fees
charged by management companies for managing and administering
developments in the City of Toronto similar to the
Complex;
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(xiii)
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the
amount of all salaries, wages and fringe benefits paid to or for
personnel, managers, and superintendents, wherever located, to the
extent, as allocated by the Landlord acting reasonably, that they
are employed or retained by or on behalf of the Landlord in
connection with the maintenance, repair, replacement, operation,
administration or management of the Complex, and amounts paid to
independent contractors for any services in connection with the
maintenance, repair, replacement, operation, administration or
management of the Complex or any part of it, provided that capital
costs in excess of $100,000 which are included in invoices from
such independent contractors shall be amortized as required by
Section 1.02(22)(A)(xvi);
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(xiv)
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fees and expenses of architects,
engineers, quantity surveyors and other consultants retained by the
Landlord on matters relating to the Complex;
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(xv)
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the
costs of uniforms for personnel, and of supplies, tools, equipment
and materials used in connection with the maintenance,
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repair, replacement, operation,
administration, management or caretaking of the Complex;
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(xvi)
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depreciation of the costs incurred
to make alterations, replacements or additions to the Complex
intended to reduce the cost of other items included in Operating
Costs, improve the operation of the Complex or maintain its
operation as a first-class multi-use commercial complex, provided
that with respect to capital costs in excess of $100,000 such
capital cost shall be amortized in accordance with generally
accepted accounting practices in the real estate industry over the
useful life, as determined by the Landlord, acting reasonably, of
the particular item(s) for which the cost was incurred but any such
capital costs of $100,000 or less may be so amortized or charged
over any period the Landlord may determine, acting reasonably;
costs being depreciated will include, without limitation, costs
incurred in respect of alterations, replacements or additions to
the roof, elevators and other machinery, equipment, facilities,
decorating, flooring, systems, and property installed in or used in
connection with the Complex (except to the extent that the costs
are charged fully to income account in the Accounting Period in
which they are incurred) and interest on the undepreciated portion
of the original cost of such items being depreciated, payable
monthly, from the date on which the relevant cost was incurred at
an annual rate of interest that is two percentage (2%) points above
the Bank Rate in effect on the date on which the relevant cost was
incurred; the depreciation costs and interest charged under this
clause shall be calculated by the Landlord, acting reasonably, in
accordance with sound and generally accepted accounting principles,
but no depreciation or interest will be charged in respect of any
such items installed in conjunction with the original construction
of the Complex;
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(xvii)
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goods and services taxes, business
transfer taxes, value-added taxes, multi-stage sales taxes, sales,
use or consumption taxes and any like taxes on property and
services by or on behalf of the Landlord, except to the extent
recoverable by the Landlord;
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(xviii)
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Capital Tax in respect of the
Complex, the Ontario commercial concentration tax and any business
or similar taxes or license fees in respect of the business of the
Landlord which pertains to the management, operation and
maintenance of the Complex;
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(xix)
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the
reasonably day-to-day cost of enforcing and collecting payment of
charges to tenants and other occupants including, but not limited
to, such actions as initial and reasonable follow-up telephone
calls and correspondence to advise of and collect late rents
arising from oversight, casual error, late mail service and the
like, but in no
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event including the costs of
enforcement procedures against specific defaulting tenants such as
legal, bailiff, lock-smithing and other similar fees and charges;
and
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(xx)
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all
other direct and indirect costs and expenses of every kind, to the
extent incurred in or allocable to the maintenance, repair,
replacement, operation, supervision, administration or management
of all or any part of the Complex, or any of its
appurtenances;
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(B) except
to the extent otherwise provided in Part (A) of this
definition, Operating Costs shall exclude or shall have deducted
therefrom:
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(i)
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Taxes, HVAC Costs, Janitorial Costs
and Utilities Charges;
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(ii)
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debt service in respect of financing
secured by or related to the Complex and interest on debt save for
interest payable if, as and when costs and expenses in respect of
Operating Costs and/or Taxes temporarily exceed recoveries from
time to time in respect thereof;
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(iii)
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depreciation other than that
referred to in Section 1.02(A)(xvi);
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(iv)
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an
amount equal to the net proceeds of insurance actually recovered by
the Landlord for damage to the Complex to the extent that the cost
to repair such damage is included in Operating Costs;
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(v)
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an
amount equal to recoveries by the Landlord in respect of warranties
or guarantees relating to the construction of the Complex or any
part of it, to the extent that the repair costs in respect of the
work covered by warranty or guarantee is included in Operating
Costs;
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(vi)
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all
amounts chargeable directly to specific tenants of the Complex by
reason of their excess consumption of water, hydro or other
utilities to the extent that those amounts are included in
Operating Costs;
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(vii)
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all
Additional Service Costs chargeable to specific tenants of the
Complex for Additional Service to the extent that those amounts are
included in Operating Costs, including any administrative or
overhead charges;
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(viii)
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an
amount equal to the contribution to Operating Costs made by owners
or occupants of adjacent buildings who are, by agreement, entitled
to use the ramps, truck docks and other facilities located in the
Complex including, without limitation, the contribution made by the
condominium complex adjacent to the Complex, but not
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including any rent paid by such
condominium complex (or occupants thereof) for parking spaces in
the Parking Garage;
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(ix)
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all
amounts which are attributable by the Landlord to the operation of
the Parking Garage;
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(x)
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the
Landlord’s cost of acquiring and/or the cost of constructing
the Complex, whether paid as debt service or ground
rents;
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(xi)
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tenant inducements, including
leasehold improvements allowances, leasing commissions and leasing
costs;
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(xii)
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interest and penalties incurred by
reason of the Landlord’s late payment of any amount required
to be paid by it under this Lease, unless such late payment was
made by the Landlord in good faith in the best interests of the
tenants of the Building;
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(xiii)
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fines and penalties resulting from
the violation by the Landlord of any laws and costs incurred in
respect of work on the Complex made necessary by the
Landlord’s non-compliance with or violation of such
laws;
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(xiv)
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fees or contributions paid by the
Landlord to any merchants’ association, promotion fund,
advertising fund or the like;
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(xv)
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any
costs relating to or incurred in respect of any food
court;
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(xvi)
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costs of alterations, maintenance
and repairs to premises of other tenants of the Building
(including, without limitation, any permit, license and/or
inspection fees) and/or the cost of relocating tenants;
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(xvii)
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legal expenses attributable, whether
directly or indirectly, to entering into leases or other agreements
with, enforcing leases or other agreements against, or otherwise
related to disputes with any actual or prospective tenants or other
occupant of the Building;
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(xviii)
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the
cost of repairs or other work necessitated by the negligence or
willful misconduct of the Landlord, its agents, contractors or
employees;
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(xix)
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corporate, income or profits taxes
upon the income of the Landlord or any other taxes which are of a
personal nature to the Landlord or the owners of the Complex
including, without limitation, the Ontario commercial concentration
tax, but excluding Capital Tax in Respect of the
Complex;
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(xx)
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costs incurred due to a breach by
the Landlord of any terms of this Lease or any other lease of
premises in the Complex and amounts
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incurred by the Landlord because of
its negligence of those for whom it is in law
responsible;
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(xxi)
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expenses associated with excess
lands owned by the Landlord;
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(xxii)
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any
amount in excess of $100,000 which is expended by the Landlord to
improve or upgrade the Complex and which it is not required to
expend to fulfill its obligations under this Lease.
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There shall
also be credited against Operating Costs amounts received by the
Landlord for the use and operation of the Common
Facilities.
(C) in
computing Operating Costs, if less than one hundred percent (100%)
of the Total Complex Rentable Area is occupied during any period
for which a computation must be made, the amount of Operating Costs
referable to those components thereof which by their nature
increase with increased building occupancy, will be increased (as
estimated by the Landlord) to reflect the additional costs that
would have been incurred had one hundred percent (100%) of the
Total Complex Rentable Area been occupied during that
period;
(D) any
costs that are not directly incurred by the Landlord but are
chargeable as Operating Costs may be estimated by the Landlord on a
reasonable basis to the extent that the Landlord cannot ascertain
the exact amount; and
(E) the
taxes enumerated in Section 1.02(22)(A)(xvii) above are
included upon the understanding that the in force at the date
hereof, and to corresponding credits, if any, in the case of
subsequent taxes from time to time in force, the intent being that
so long as such credits are available to the Landlord the taxes
referred to in Section 1.02(22)(A)(xvii) will not be
included.
(23) “Parking
Garage” means those portions of the Complex and lands
adjacent thereto which are designated from time to time by the
Landlord for parking purposes including, without limitation, the
vehicular ramps and other entrances and exits thereto, and all
services, facilities and systems contained exclusively within and
serving such parking facilities, as the same may from time to time
be altered, expanded or reconstructed.
(24) “Proportionate
Share” means, in the case of (a) estimated or actual
Operating Costs or Taxes for any period, the fraction which has as
its numerator the Rentable Area of the Leased Premises and as it
denominator the Total Complex Rentable Area as determined pursuant
to Schedule “D” and (b) estimated or actual HVAC
Costs and Janitorial Costs for any period, the fraction which has
as its numerator the Rentable Area of the Leased Premises and as
its denominator the Rentable Area of any and all premises occupied
by tenants carrying on business and for which a portion of such
HVAC Costs and Janitorial Costs, as the case may be, are being
expended.
(25) “Rent”
means Basic Rent and Additional Rent.
(26) “Rentable
Area” of any portion of the Complex means the floor area
expressed in square feet, determined in accordance with the method
of measurement set out in Schedule “D”
11
annexed hereto
and adjusted from time to time to reflect any addition, reduction,
rearrangement or relocation of space.
(27) “Rules
and Regulations” means those rules and regulations stipulated
in Schedule “C” annexed hereto, any reasonable
amendments thereto and, provided they do not conflict with the
terms of this Lease, any further reasonable rules and regulations
of which the Tenant receives Notice from the Landlord which the
Landlord, in its judgment, may from time to time stipulate for the
proper operation of the Complex, and all such amendments and
further rules and regulations shall be read as forming a part of
this Lease as if the same were embodied herein.
(28) “Taxes”
means all taxes, rates, duties, levies, fees, charges, sewer
levies, local improvement rates, and assessments whatsoever
imposed, assessed, levied or charged, now or in the future, by any
school, municipal, regional, provincial, federal, parliamentary or
other governmental body, corporate authority, agency or commission
(including, without limitation, school boards and utility
commissions), against the Complex or any part thereof and/or the
Landlord and/or the owners of the Complex in connection therewith,
calculated on the basis of the Complex being assessed as a fully
leased and operational building, but excluding (unless specifically
referred to above):
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(a)
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corporate, income or profit taxes
upon the income of the Landlord or the owners of the Complex and
any other tax of a personal nature to them to the extent such taxes
are not levied in substitution or in lieu of any of the realty
taxes, rates, etc. referred to in the immediately preceding
paragraph;
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(b)
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business or similar taxes or license
fees in respect of the business of the Landlord which pertains to
the management, operation and maintenance of the Complex (and which
are included in Operating Costs);
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(c)
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business or similar taxes or license
fees in respect of any business carried on by tenants and occupants
(including the Tenant) of the Complex;
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(d)
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Capital Tax in respect of the
Complex and the Ontario commercial concentration tax (and which are
included in Operating Costs); and
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(e)
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an
amount equal to the contribution (if any) to Taxes made by the
condominium complex adjacent to the Complex.
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(29) “Tenant’s
Taxes” means the aggregate of:
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(a)
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all
taxes imposed which are separately identified by the lawful taxing
authority as being attributable to the personal property,
furnishings, fixtures and Leasehold Improvements installed in the
Leased Premises; and
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(b)
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all
taxes imposed upon the Tenant which are attributable to the
business, income or occupancy of the Tenant or any other occupant
of the Leased Premises, and to the use of any of the Common
Facilities by the Tenant or other occupant of the Leased
Premises.
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(30) “Total
Complex Rentable Area” means the aggregate of all Rentable
Area (including the Leased Premises) of the Building determined in
accordance with Schedule “D” and adjusted from time to
time to reflect any addition, reduction, rearrangement or
relocation of space.
(31) “Transfer”
means an assignment of this Lease in whole or in part, a sublease
of all or any part of the Leased Premises, any transaction whereby
the rights of the Tenant under this Lease to the Leased Premises is
conferred upon anyone, any mortgage, charge or encumbrance of this
Lease or the Leased Premises or any part thereof, or other
arrangement under which either this Lease or the Leased Premises
becomes security for any indebtedness or other obligations, and
includes any transaction or occurrence whatsoever which has changed
or might change the identity of the person or persons having lawful
use or occupancy of any part of the Leased Premises.
(32) “Unavoidable
Delay” means any delay by a party in the performance of its
obligation under this Lease caused in whole or in part by any acts
of God, strikes, lockouts or other industrial disturbances, acts of
public enemies, sabotage, war, blockades, insurrections, riots,
epidemics, washouts, nuclear and radiation activity or fallout,
arrests, civil disturbances, explosions, breakage of or accident to
machinery, any legislative, administrative judicial action which
has been resisted in good faith by all reasonable legal means, any
act, omission or event, whether of the kind herein enumerated or
otherwise, not within the control of such party, and which, by the
exercise of control of such party, could not have been prevented,
but lack of funds on the part of such party shall not constitute an
Unavoidable Delay.
(33) “Useable
Area” of any rentable premises means the floor area expressed
in square feet, determined in accordance with Schedule
“D” annexed hereto, and adjusted from time to time to
reflect any addition, reduction, rearrangement or relocation of
space.
(34) “Utilities”
means water, fuel, power, telephone and other utilities furnished
by the Landlord to the Complex.
(35) “Utilities
Charge” means the aggregate of:
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(a)
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to
total cost of the Utilities used or consumed in or with respect to
the Leased Premises in connection with electricity for lighting,
heating, ventilating and cooling and normal office
equipment;
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(b)
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the
cost of any other charges levied or assessed in respect of or in
addition to the cost of such Utilities, as reasonably determined by
the Landlord;
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(c)
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any
costs incurred by the Landlord in determining the Utilities Charge,
including, without limitation, professional, engineering and
consulting fees; and
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(d)
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an
administration fee of fifteen percent (15%) of the total of the
aforementioned costs.
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13
LEASED PREMISES – TERM
– RENT
Section 2.01 – Leased Premises and
Term
In
consideration of the rents, covenants and agreements herein
contained on the part of the Tenant to be paid, observed and
performed, the Landlord leases to the Tenant, and the Tenant leases
from the Landlord, the 4th Floor Premises for the Term and the 10th
Floor Premises fro that portion of the Term which commences on
July 1, 2006 and ends on April 30, 2012.
Section 2.02 – Uses of Additional
Areas
The use and
occupation by the Tenant of the Leased Premises includes for the
purposes of carrying on its business, the non-exclusive right of
the Tenant, the Tenant’s employees, agents, invitees,
suppliers (subject to the Rules and Regulations) and persons having
business with the Tenant in common with the Landlord, its other
tenants, sub-tenants and all others entitled or permitted, to the
use of the Common Facilities and, to the extent provided in
paragraph 2 of Schedule “F” to this Lease, the Parking
Garage.
Section 2.03 – Construction of the
Leased Premises
Section 2.04 – Adjustment of
Areas
In the event of
any expansion or reduction of the Leased Premises after the
Commencement Date, the Landlord may from time to time re-measure
the Useable Area of the Leased Premises or re-calculate the
Rentable Area of the Leased Premises and may re-adjust the Basic
Rent and/or the Proportionate Share of Additional Rent accordingly.
The effective date of any such re-adjustment shall:
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(a)
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in
the case of an adjustment to the Rentable Area resulting from a
change in the aggregate Useable Area of all rentable premises on
the floor on which the Leased Premises are situated, be the date on
which such change occurred; and
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(b)
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in
the case of a correction to any measurement or calculation error,
be the first date as of which such error was introduced in the
calculation of Basic Rent or Additional Rent.
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Section 2.05 – Covenant to
Pay
The Tenant
shall pay Basic Rent and Additional Rent as herein provided in
lawful money of Canada, without any prior demand therefore and
without any deduction, abatement, set-off or compensation
whatsoever save as provided in Section 9.01 and, except with
respect to set-off, elsewhere in this Lease. The Tenant agrees to
pay to the Landlord in addition to Basic Rent and Additional Rent,
any goods and services tax, business transfer tax, value-added tax,
multi-stage
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sales tax,
sales, use or consumption tax, or any like tax imposed by any
governmental authority in respect of this Lease, or in respect of
any property or services provided hereunder, including, without
limitation, such taxes calculated on or in respect of any Rent
(whether Basic Rent or Additional Rent) payable under this Lease;
any such tax shall be deemed not to be Rent, but the Landlord shall
have the same remedies for and rights of recovery of such amount as
it has for recovery of Rent under this Lease. The obligation to pay
Additional Rent (and adjustments thereto) shall survive the
expiration or sooner termination of this Lease. All amounts payable
under this Lease, unless otherwise provided, become due with the
next installment of Basic Rent. The Landlord may, at its option,
upon Notice to the Tenant direct that the Tenant pay any or all
Rent to any other party specified by the Landlord.
Section 2.06 – Basic
Rent
The Tenant
shall pay from and after the Commencement Date to the Landlord the
Basic Rent, such Basic Rent to be computed in accordance with
Section 1.01(10) hereof, and payable in equal monthly
installments in advance on the first day of each and every month.
As soon as reasonably possible after completion of construction of
the Leased Premises, the Landlord shall measure the Useable Area of
the Leased Premises and shall calculate the Rentable Area of the
Leased Premises and only at such time shall any necessary
adjustments in the Basic Rent and Additional Rent be
made.
If the
Commencement Date is not the first day of a calendar month, then
the Basic Rent for the first and last months of the Term shall be
appropriately adjusted, on a per diem basis, based upon a period of
three hundred and sixty-five (365) days, and the Tenant shall
pay upon the Commencement Date, the portion of the Basic Rent so
adjusted from the Commencement Date to the end of the month in
which the Commencement Date occurs.
Section 2.07 – Late Payment
Charge
The Basic Rent
payable under this Lease is intended to be an absolutely net return
to the Landlord, except as expressly herein set out. The Landlord
is not responsible for any expenses or outlays of any nature
arising from or relating to the Leased Premises, or the use or
occupancy thereof, or the contents thereof or the business carried
on therein, except as expressly herein set out. The Tenant shall
pay all charges, impositions and outlays of every nature and kind
relating to the Leased Premises except as expressly herein set
out.
Section 2.09 – Acknowledgment of
Commencement Date
The Tenant
covenants to execute and return to the Landlord, within fifteen
(15) days of written demand from the Landlord, an
acknowledgment of the Commencement Date in the form set forth in
Schedule “E” annexed hereto, subject to such variations
as the facts require.
15
TAXES, OPERATING COSTS, HVAC
COSTS AND JANITORIAL COSTS
Section 3.01 – Taxes Payable by
Landlord
The Landlord
shall pay directly to the appropriate and lawful taxing authorities
all Taxes, subject to Sections 3.02 and 3.04 hereof. The
Landlord may contest any Taxes and appeal any assessments with
respect thereto, withdraw any such contest or appeal, and agree
with the taxing authorities on any settlement or compromise with
respect to Taxes.
Section 3.02 – Tenant’s Share
of Taxes
The Tenant
shall pay the Landlord as Additional Rent a share of all Taxes
which share be determined as follows:
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(a)
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if
the Leased Premises are separately assessed by the appropriate and
lawful taxing authority in question (or, in lieu thereof,
calculations are made by such authority from which a separate
assessment therefor may, in the Landlord’s reasonable
opinion, be readily determined) for the payment of Taxes on a basis
which includes a valuation of an aliquot part of the Common
Facilities reasonably attributable thereto, and the aggregate of
such assessment together with all other corresponding assessments
for the remainder of the rentable premises in the Building, equals
the total assessment by such taxing authority of the Building and
the Common Facilities reasonably attributable thereto, the Tenant
shall pay to the Landlord its share of Taxes based upon such
separate assessment by multiplying an amount equal to such Taxes by
a fraction, the numerator of which is equal to such assessment of
the Leased Premises and the denominator of which is the aggregate
of all such assessments of rentable premises in the Building,
including the Leased Premises;
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(b)
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if
the Leased Premises and the remainder of the rentable premises in
the Building, are not respectively separately assessed, or
calculations made by which the same may be readily determined, in
each case as contemplated in subsection 3.02(a) above, the Tenant
shall pay to the Landlord its Proportionate Share of the Taxes
assessed against the Building, including a portion of the Taxes
attributable to the Common Facilities and allocated to the Building
by the Landlord, the amounts of such assessment and allocation, if
not determined by allocation or apportionment and identified as
such to the Landlord by the appropriate and lawful taxing authority
in question, shall be determined by allocation or apportionment by
the Landlord from time to time on an equitable basis having regard,
amongst other things, to general principles of assessment;
and
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(c)
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if
the Tenant elects to be assessed as a separate school supporter,
the Tenant will pay to the Landlord, in addition to any other
amounts owing
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pursuant to this Section the excess,
if any, of the separate school taxes over public school taxes
resulting from such election.
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Section 3.03 – Tenant’s
Proportionate Share of Operating Costs
The Tenant
shall pay to the Landlord as Additional Rent in accordance with
Section 3.07 the Proportionate Share of Operating
Costs.
Section 3.04 – Tenant’s
Taxes
The Tenant
shall pay to the appropriate and lawful taxing authorities and
shall discharge when the same become due and payable, all
Tenant’s Taxes. In the event that the Tenant fails to do so,
the same shall be deemed a failure to pay a sum due hereunder as
contemplated in subsection 13.01(a) hereof and the Landlord shall
have all of the rights or remedies provided in Article XIII in
respect thereof.
Section 3.05 – Tenant’s
Responsibility
The Tenant
shall promptly deliver to the Landlord on request, copies of
assessment notices, tax bills and other documents received by the
Tenant relating to Taxes and Tenant’s Taxes and receipts for
payment of Taxes and Tenant’s Taxes. The Landlord hereby
acknowledges that the Landlord is not concerned with those of the
Tenant’s Taxes relating to the Tenant’s personal
property, furnishings, business, income or occupancy to the extent
that the non-payment thereof cannot result in a charge against the
Complex or the Leased Premises in favor of the authority levying
the same (the “Tenant’s Personal Taxes”) and
hereby agrees that the Tenant’s obligations herein to deliver
copies of assessment notices, tax bills and other documents
relating to Tenant’s Taxes shall not extend to those relating
only to Tenant’s Personal Taxes. The Tenant shall not contest
any Taxes or Tenant’s Taxes or appeal any assessments
relating thereto without the Landlord’s prior written
approval. If the Tenant wishes to so appeal and the Tenant can
demonstrate to the Landlord, acting reasonably, that the Tenant has
a prima facie case in respect thereof, the Landlord will approve
the same and co-operate and join in the Tenant’s contestation
or appeal to the extent reasonably as required and requested by the
Tenant, and any reasonable cost of the Landlord in respect thereof
shall be payable forthwith by the Tenant upon the demand by the
Landlord as an Additional Service Cost. If the Tenant obtains such
approval, the Tenant shall deliver to the Landlord such security
for the payment of such Taxes or Tenant’s Taxes as the
Landlord deems advisable and the Tenant shall diligently prosecute
any such appeal or contestation to a speedy resolution and shall
keep the Landlord informed of its progress in that regard from time
to time.
Section 3.06 – Proportionate Share of
HVAC Costs and Janitorial Costs
The Tenant
shall pay to the Landlord as Additional Rent, in accordance with
Section 3.07, the Proportionate Share of HVAC Costs and
Janitorial Costs.
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Section 3.07 – Payment of Estimated
Taxes, Operating Costs, HVAC Costs and Janitorial
Costs
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(a)
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The
amounts payable by the Tenant pursuant to Section 3.02, 3.03
and 3.06 hereof may be estimated by the Landlord for such period as
the Landlord determines from time to time, provided such period
shall not exceed twelve (12) months, and the Tenant agrees to
pay to the Landlord the amounts so estimated in monthly
installments in advance during such period as Additional Rent.
Notwithstanding the foregoing, as soon as bills for all or any
portion of the said amounts so estimated are received, the Landlord
may bill the Tenant for the Proportionate Share thereof and the
Tenant shall pay the Landlord such amounts so billed (less all
amounts previously paid on account by the Tenant on the basis of
the Landlord’s estimate as aforesaid) as Additional Rent on
demand.
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(b)
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Within a reasonable period of time
after the end of the period for which such estimated payments have
been made, and in any event within one hundred and twenty
(120) days of the end of such period, the Landlord shall
deliver to the Tenant a statement from the Landlord, confirmed by
the Landlord’s independent auditors, of Taxes, Operating
Costs, HVAC Costs and Janitorial Costs, together with a calculation
of the Tenant’s share of the costs and expenses payable
pursuant to Sections 3.02, 3.03 and 3.06 and, if necessary, an
adjustment shall be made between the parties in the following
manner. Such statement shall be accompanied by sufficient
particulars of the amounts sought to be recovered from the Tenant
in respect of the foregoing matters as will permit the Tenant to
satisfy itself, acting reasonably, as to the propriety of the
inclusion thereof in Taxes, Operating Costs, HVAC Costs and
Janitorial Costs, as the case may be, in accordance with the
provisions hereof. If the Tenant has paid in excess of the amounts
due, the excess shall be refunded by the Landlord within a
reasonable period of time not to exceed fifteen (15) days
after the delivery of the said statement. If the amount the Tenant
has paid is less than the amounts due, the Tenant agrees to pay
such additional amounts due forthwith upon demand. If any fiscal
year during the Term is greater or less than any such period
determined by the Landlord as aforesaid, the Tenant’s share
of the costs and expenses payable, pursuant to Sections 3.02,
3.03 and 3.06 shall be subjected to a per diem, pro rata adjustment
based upon a period of three hundred and sixty-five
(365) days. The obligations set out herein shall survive the
expiration of the Term or earlier termination of this Lease.
Failure of the Landlord to render any statement of Taxes, Operating
Costs, HVAC Costs or Janitorial Costs shall not prejudice the
Landlord’s right to render such statement thereafter or with
respect to any other period. The rendering of any such statement
shall also not affect the Landlord’s right to subsequently
render an amended or corrected statement. The Landlord shall, from
time to time as relevant, and upon the request in writing by the
Tenant, provide the Tenant with advice as to the amount of the fee
being charged at the relevant time
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for
administration and management contemplated by
Section 1.02(22)(A)(xii) of this Lease and an explanation of
the basis of calculating such fee.
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(c)
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The
Tenant shall have the right, upon reasonable notice to the
Landlord, and at reasonable times during Business Hours during the
six (6) month period next following the receipt by the Tenant of
the relevant statement(s) referred to in Section 3.07(b) to
cause the Tenant’s independent auditor to effect a review of
the Landlord’s books and records relating to Taxes, Operating
Costs, HVAC Costs and Janitorial Costs, and the fee being charged
pursuant to Section 1.02(A)(22)(xii) of this Lease, for the
purpose of verifying such statement(s). If such review determines a
discrepancy in the Tenant’s favor, the Tenant may give
written notice thereof to the Landlord. If the Landlord does not
agree with the determination of such review, the parties shall
exercise their reasonable good faith efforts to settle such
disagreement within ninety (90) days following delivery of the
Tenant’s aforesaid notice. Failing agreement within such
ninety (90) day period, the matter shall be determined by
arbitration pursuant to the provisions of the Arbitration Act,
1991 . The Landlord shall pay to the Tenant any amount owing to
it. Unless such review determines a discrepancy of at least five
percent (5%) in the aggregate in the Tenant’s favor, any
out-of-pocket costs of the Landlord in connection with such review
will be for the account of the Tenant and shall be payable by the
Tenant to the Landlord forthwith upon Notice thereof to the Tenant,
as Additional Rent.
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The
Landlord estimates that the Utilities Charge and the Proportionate
Share of Taxes, Operating Costs, HVAC Costs and Janitorial Costs
for the 2002 calendar year will be $17.26 per square foot of
Rentable Area of the Leased Premises.
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COMPLEX – CONTROL AND
SERVICES
Section 4.01 – Control of the Complex
by the Landlord
The Landlord
shall operate and maintain the Complex in a first class and
reputable manner as would a prudent landlord of a similar multi-use
commercial development, having regard to size, age and location.
The Landlord hereby represents and warrants that at the
Commencement Date, the Common Use Equipment serving the Leased
Premises are in good repair and working order, capable of
adequately performing the respective services for which they were
intended and installed.
The Complex is
at all times subject to the exclusive control, management and
operation of the Landlord. Without limiting the generality of the
preceding sentence, the Landlord has the right, in its control,
management and operation of the Complex and by the establishment of
Rules and
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Regulations and
general policies with respect to the operation of the Complex or
any part thereof at all times during the period when the Tenant is
given possession of the Leased Premises and throughout the Term
to:
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(a)
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construct improvements in or to the
Complex and make alterations and additions thereto, subtractions
therefrom, rearrangements thereof (including all entrances and
exits thereto), build additional storeys on the Complex and
construct additional facilities adjoining or proximate to the
Complex;
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(b)
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relocate or re-arrange the various
facilities and improvements comprising the Complex or erected on
the Lands from those existing at the Commencement Date;
and
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(c)
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do
and perform such other acts in and to the Complex as in the use of
good business judgment the Landlord determines to be advisable for
the more efficient and proper operations of the Complex.
Notwithstanding anything contained in this Lease, and except when
necessary in connection with the completion of the Landlord’s
rights and obligations provided in this Lease, the Landlord agrees
that in exercising its rights hereinbefore set out and in
performing its obligations under Section 8.03 it will do so in
a manner so as not to unreasonably or materially interfere with the
Tenant’s business operations, use and enjoyment of the Leased
Premises, nor access to and from the Leased Premises. The Landlord
shall exercise any rights contained in this Section and perform any
obligations under Section 8.03, in a reasonable and prudent
manner so as to minimize any disruption to the Tenant during
Business Hours. In the event that in the exercise of its rights or
performance of its duties aforesaid, it must proceed with
activities of a nature materially interfering with or disruptive of
the Tenant’s business operations, use and enjoyment of the
Leased Premises or access to or from them, it will use its
reasonable efforts to do so after Business Hours. In no event shall
any such interference or disruption be of a permanent
nature.
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Section 4.02 – Landlord’s
Service
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(a)
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The
Landlord shall provide climate control to the Leased Premises
during HVAC Hours to maintain a temperature adequate for occupancy,
except during the making of repairs, alterations or improvements,
and provided the Landlord shall have no responsibility or liability
for failure to supply climate control service when stopped as
aforesaid or when prevented from so doing by strikes or other
Unavoidable Delay. Any rebalancing of the climate system in the
Leased Premises necessitated by the installation of partitions,
equipment or fixtures by the Tenant or by any use of the Leased
Premises not in accordance with the design standard of such system
will be performed by the Landlord at the Tenant’s expense as
an Additional Service to the Tenant. The Tenant acknowledges that
the adjustment and
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balancing of the climate control
systems may not be finalized until the Building is substantially
occupied by tenants.
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(b)
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Subject to the Rules and
Regulations, the Landlord shall furnish, except when repairs,
maintenance or replacements are being made, elevator and escalator
service during Business Hours in common with others, provided that
the Tenant and its employees and all other persons using the same
shall do so at their own risk. The Landlord agrees that it will
operate at least one elevator or escalator serving the Leased
Premises at all times in addition to Business Hours (except during
Unavoidable Delay), such operation to be carried out however in a
manner consistent with the Landlord’s security arrangements
from time to time in place.
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(c)
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The
Landlord will provide janitorial services to the Leased Premises
consistent with the standards of a first-class office building. The
Landlord shall not be responsible for any indirect or consequential
damages sustained by the Tenant or others as a result of any act or
omission or commission on the part of the persons employed to
perform such work. Such work shall be done at the Landlord’s
direction without interference by the Tenant and its servants or
employees.
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(d)
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The
Landlord shall make available electricity for normal lighting and
miscellaneous power requirements and, in normal quantities, water
and other public utilities generally made available to other
tenants of the Building by the Landlord on a 24 hour per day,
7 days per week basis, except when prevented from doing so by
Unavoidable Delay or any other event beyond the reasonable control
of the Landlord.
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Section 4.03 –
Substitution
At any time,
the Landlord may substitute for either or both the 4th Floor
Premises and the 10th Floor Premises (the premises with respect to
which substitution is being made being hereinafter called the
“Old Premises”) other premises in the Building (the
“New Premises”), in which event (i) if all of the 4th
Floor Premises and the 10th Floor Premises have been so
substituted, the New Premises shall be deemed to be the Leased
Premises and (ii) if only part of the 4th Floor Premises and
the 10th Floor Premises have been so substituted, the New Premises
shall be deemed to be part of the Leased Premises, and in either
case for all purposes hereunder, provided that the New Premises
shall be similar in area and utility to the Old Premises for the
Tenant’s purposes. If the Tenant is occupying the Old
Premises at the time of such substitution, the Landlord shall pay
the reasonable expense of moving the Tenant, its property, trade
fixtures and equipment to the New Premises and other direct and
proper costs and shall, at its sole cost, improve the New Premises
with Leasehold Improvements equal to or better than those located
in the Old Premises. If the Tenant is not occupying the Old
Premises at the time of such substitution but subsequently occupies
the New Premises, the Landlord shall pay such expense and costs
when the Tenant so occupies the New Premises. If the Rentable Area
of the Leased Premises increases as a result of such substitution,
the Rentable Area of the Leased Premises shall nevertheless be
deemed not to have increased for the purposes of the Tenant’s
monetary
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obligations
under this Lease. If all of the 4th Floor Premises and the 10th
Floor Premises is substituted and there is sufficient available
rentable space in the Building so that the New Premises can be
contiguous (either on the same floor or on floors which are
immediately above or below each other), the New Premises shall be
contiguous. If less than all of the 4th Floor Premises and the 10th
Floor Premises is substituted and there is sufficient available
rental space in the Building so that the New Premises can be
contiguous with that portion of the Leased Premises which is not
substituted (either on the same floor or on floors which are
immediately above or below each other), the New Premises shall be
contiguous with that portion of the Leased Premises which is not
substituted.
UTILITIES AND ADDITIONAL
SERVICES
Section 5.01 – Charge for
Utilities
The Tenant
shall be solely responsible for and shall promptly pay to the
Landlord, or as the Landlord otherwise directs, in the manner
hereinafter provided as Additional Rent, the Utilities Charge
applicable to the Leased Premises. The Utilities Charge applicable
to the Leased Premises shall be reasonably and equitably allocated
by the Landlord on the basis of the Rentable Area of the Leased
Premises. The Utilities Charge shall be payable in equal monthly
installments in advance on the basis of the rate determined by the
Landlord’s engineer from time to time. The Landlord shall be
entitled, acting equitably, to allocate to the Leased Premises an
Additional Service Cost for any Additional Service in respect of
usage of Utilities in the Leased Premises in excess of those
covered by the basic rate. In order to more accurately determine an
increased use of electricity by the Tenant, the Landlord is
entitled at its option and at the Tenant’s expense to install
check meters in the Leased Premises.
Section 5.02 – Additional Services of
the Landlord
Subject to
Article 4 hereof, and excluding services supplied by the
Landlord and charged to the Tenant as Operating Costs, HVAC Costs,
Janitorial Costs and the Utilities Charge, one hundred and fifteen
percent (115%) of the cost to the Landlord of all Additional
Services provided by the Landlord or its agent to the Tenant shall
be payable forthwith by the Tenant, upon demand by the Landlord, as
an Additional Service Cost. Such services shall include any
services performed at the Tenant’s request including, without
limitation, maintenance, repair, special janitorial or cleaning
services, construction of additional Leasehold Improvements,
replacement of non-standard bulbs, tubes and ballasts and any
electrical or elevator service provided during hours other than
Business Hours. Such services shall also include any services
provided at the Landlord’s reasonable discretion including,
without limitation, supervising and approving any work performed
pursuant to Article 8, operating elevators for the sole
benefit of the Tenant and supervising the movement of furniture,
equipment, freight and supplies for the Tenant. Additional Services
provided by the Landlord or its agent on behalf of the Tenant in
respect of any of the Tenant’s obligations set out in the
Lease which the Tenant fails to perform shall be one hundred and
twenty-five percent (125%) of the cost to the Landlord without
duplication of charge to the Tenant under any other section of this
Lease.
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Section 5.03 – Third Party
Services
Excluding
services supplied by the Landlord and charged to the Tenant as
Operating Costs or as an Additional Service Cost, the Tenant shall
be solely responsible for, and promptly pay to the appropriate
third party, all charges for services used or consumed in or
provided to the Leased Premises, including, without limitation, rug
shampooing, telephone service and other services not available
through the Landlord. In no event will the Landlord be liable to
the Tenant in damages or otherwise for any failure to supply any
third-party services to the Leased Premises.
Section 6.01 – Use of the Leased
Premises
The Leased
Premises shall be used for general office purposes and purposes
ancillary thereto, provided such purposes comply with the terms,
covenants and conditions of this Lease and all applicable laws,
by-laws, regulations or other governmental ordinances from time to
time in existence. The Leased Premises may not be used for any
other purposes.
Section 6.02 – Observance of
Law
The Tenant
shall at its sole cost and expense and, where applicable, in
compliance with Sections 8.01 and 8.02 hereof promptly observe and
comply with all laws or requirements of all governmental
authorities, including federal, provincial and municipal
legislative enactments, by-laws and other regulations and all other
authorities having jurisdiction, including fire insurance
underwriters, now or hereafter in force (collectively
“Laws”) which pertain to or affect the Leased Premises,
the Tenant’s use of the Leased Premises or the conduct of any
business in the Leased Premises, or the making of any repairs,
replacements, alterations, additions, changes, substitutions or
improvements of or to the Leased Premises. The Tenant shall carry
out all modifications, alterations or changes of or to the Leased
Premises and the Tenant’s conduct of business in or use of
the Leased Premises which are required by any such
authorities.
The obligations
of the Tenant referred to in the paragraph immediately preceding
shall not apply with respect to any laws relating to or affecting
the structure of the Complex or to any other matter to the extent
that the same did not comply with the requirements of all laws in
force as of the Commencement Date and has not since been made to
comply therewith by the Landlord. The Landlord shall comply with
all Laws relating to or affecting the structure of the Complex or
any other matter or area of work originally included in the
construction of the Complex which was not in compliance with the
laws in force as of the Commencement Date.
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Section 7.01 – Tenant’s
Insurance
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(a)
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The
Tenant shall throughout the period that the Tenant is given
possession of the Leased Premises and during the entire Term, at
its sole cost and expense, take out and keep in full force and
effect, the following insurance:
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(i)
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all-risk property insurance in an
amount equal to the full replacement cost thereof upon property of
every description and kind owned by the Tenant or for which the
Tenant is liable, or installed by or on behalf of the Tenant and
which is located within the Complex including, without limitation,
Leasehold Improvements, tenant’s fixtures, the Tenant’s
stock-in-trade, furniture and personal property provided that if
there is a dispute as to the amount which comprises full
replacement cost, the decision of the Landlord, acting reasonably,
shall be conclusive;
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(ii)
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business interruption insurance in
such amount as well reimburse the Tenant for direct or indirect
loss of earnings attributable to all perils insured against in
Section 7.01(a)(i) and other perils commonly insured against
by prudent tenants or attributable to prevention of access to the
Leased Premises or the Building as a result of such
perils;
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(iii)
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comprehensive general and legal
liability insurance, including personal injury liability,
contractual liability and owners’ and contractors’
protective insurance coverage with respect to the Leased Premises
and the Tenant’s use of the Complex, coverage to include the
activities and operations conducted by the Tenant and any other
person for whom the Tenant is in law responsible. Such policies
shall be written on a compressive basis with inclusive limits of
not less than Five Million Dollars ($5,000,000) for bodily injury
to any one or more persons or property damage, and such higher
limits as the Landlord, acting reasonably, or the Mortgagee
requires from time to time and is customary in the real estate
industry at the time, and shall contain a severability of interests
clause and a cross-liability clause; and
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(iv)
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any
other form of insurance which the Landlord, acting reasonably,
requires from time to time in form, in amounts and for risks
against which a prudent tenant would insure.
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(i)
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be
taken out with insurers acceptable to the Landlord, acting
reasonably;
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(ii)
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be
in a form satisfactory from time to time to the Landlord, acting
reasonably;
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(iii)
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be
non-contributing with and shall apply only as primary and not as
excess to any other insurance available to the Landlord or the
Mortgagee;
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(iv)
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not
be invalidated as respects the interests of the Landlord and of the
Mortgagee by reason of any breach or violation of any warranties,
representations or conditions contained in the policies;
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(v)
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contain any undertaking by the
insures to notify the Landlord and the Mortgagee in writing not
less than thirty (30) days prior to any material change,
cancellation or termination thereof; and
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(vi)
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name the Landlord and the Mortgagee
as additional insured parties, as their interests may appear, and,
in respect of property damage insurance, incorporate the
Mortgagee’s standard mortgage clause.
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(c)
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Certificates of insurance on the
Landlord’s standard form or in a form satisfactory to the
Landlord, acting reasonably, evidencing the Tenant’s
compliance with its insurance obligations hereunder, or if required
by the Mortgagee certified copies of each such insurance policy
will be delivered to the Landlord as soon as practicable after the
placing of the required insurance. Provided that no review or
approval of any such insurance certificate by the Landlord shall
derogate from or diminish the Landlord’s rights or the
Tenant’s obligations contained in this Article.
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(d)
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If
the Tenant fails to take out or keep in force any insured referred
to in this Section 7.01, or should any such insurance not be
approved by either the Landlord or the Mortgagee and should the
Tenant not commence to diligently rectify (and thereafter proceed
to diligently rectify) the situation within two (2) Business
Days after written notice by the Landlord to the Tenant (stating,
if the Landlord or the Mortgagee does not approve of such
insurance, the reasons therefor), the Landlord has the right
without assuming any obligation in connection therewith to effect
such insurance at the sole cost of the Tenant and all outlays by
the Landlord shall be paid by the Tenant to the Landlord on demand
as Additional Rent without prejudice to any other rights and
remedies of the Landlord under this Lease.
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(e)
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The
Tenant agrees that in the event of damage or destruction to the
Leasehold improvements in the Leased Premises covered by insurance
pursuant to Section 7.01(a)(i), unless the Lease is terminated
pursuant to Section 9.01 or Section 9.02 hereof, the
Tenant shall use the proceeds of
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such insurance for the purpose of
repairing or restoring such Leasehold Improvements. In the event of
damage to or destruction of the Complex or the Building entitling
the Landlord to terminate the Lease pursuant to
Section 9.01(b) or 9.02, then if the Leased Premises have also
been damaged or destroyed, the Tenant shall forthwith pay to the
Landlord all of its insurance proceeds relating to the Leasehold
Improvements in the Leased Premises and if the Leased Premises have
not been damaged or destroyed, the Tenant shall upon demand deliver
to the Landlord in accordance with the provisions of this Lease the
Leasehold Improvements and the Leased Premises.
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Section 7.02 – Increase in Insurance
Premiums
The Tenant
shall not keep, use, sell or offer to sell in or upon the Leased
Premises any article which may be prohibited by any fire insurance
policy in force from time to time covering the Leased Premises, the
Building or the Complex. If:
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(a)
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the
occupation of the Leased Premises;
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(b)
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the
conduct of business in the Leased Premises; or
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(c)
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any
act or omission of the Tenant in the Complex or any part
thereof;
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causes or
results in any increase in premiums for the insurance carried from
time to time by the Landlord with respect to the Complex, the
Tenant shall pay any such increase in premiums as Additional Rent
forthwith upon demand by the Landlord. In determining whether
increased premiums are caused by or result from the use or
occupancy of the Leased Premises, a schedule issued by the
organization (operating at arm’s length from the Landlord)
computing the insurance rate on the Complex showing the various
components of such rate shall be conclusive evidence of the several
items and charges which make up such rate. The Tenant shall comply
promptly with all requirements of any insurer now or hereafter in
effect pertaining to or affecting the Leased Premises, the Building
or the Complex.
Section 7.03 – Cancellation of
Insurance
If any
insurance policy upon the Complex or any part thereof shall be
cancelled or shall be threatened by the insurer to be cancelled or
the coverage thereunder reduced in any way by the insurer by reason
of the use or occupation of the Leased Premises or any part thereof
by the Tenant or by any assigns or sub-tenant of the Tenant, or by
anyone permitted by the Tenant to be upon the Leased Premises, the
Tenant shall deliver to the Landlord within five (5) days
after Notice thereof by the Landlord, but not less than two
(2) Business Days prior to the cancellation or reduction of
such coverage, its proposal to remedy the condition giving rise to
cancellation, threatened cancellation or reduction of coverage. The
Tenant shall immediately proceed to remedy such condition in
accordance with such proposal, provided that if such proposal is
not satisfactory to the Landlord’s insurer, acting
reasonably, or the Tenant fails to diligently remedy such condition
in accordance with such proposal, the Landlord shall be entitled to
forthwith remedy such condition at the Tenant’s
expense.
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Section 7.04 – Loss or
Damage
The Landlord
shall not be liable for any death or injury arising from or out of
any occurrence in, upon, at or relating to the Complex, or damage
to property of the Tenant or of others located on the Leased
Premises or elsewhere in the Complex, nor shall it be responsible
for any loss of or damage to any property of the Tenant or others
from any cause whatsoever, except for any such death, injury, loss
or damage which results fro the negligence of the Landlord, its
agents, servants or employees or other persons fro whom it may in
law be responsible, and provided that in no event shall the
Landlord be responsible for any loss, injury or damage contemplated
by Section 7.07(b), or for any indirect or consequential damages
sustained by the Tenant or others. Without limiting the generality
of the foregoing but subject to the exceptions to the limitation of
the liability of the Landlord set out herein, the Landlord shall
not be liable for any injury or damage to persons or property
resulting from fire, explosion, falling plaster, falling ceiling
tile, falling ceiling fixtures (including part or all of the
ceiling T grid system) and diffuser coverings, steam, gas,
electricity, water, rain, flood, snow or leaks from any of the
Leased Premises or from the pipes, sprinklers, appliances, plumbing
works, roof, windows or subsurface of any floor or ceiling of the
Complex or from the street or any other place or by dampness or by
any other cause whatsoever. The Landlord shall not be liable for
any such damage caused by other tenants or persons in the Complex
or by occupants of adjacent property thereto, or the public, or
caused by construction or by any private, public or quasi-public
work. All property of the Tenant kept or stored on the Leased
Premises shall be so kept or stored at the risk of the Tenant only
and except in the event of the negligence of the Landlord, its
agents, servants or employees or other persons for whom it may be
in law responsible (but subject to the provision in this
Section 7.04 respecting loss, injury or damage contemplated by
Section 7.07(b) and indirect or consequential damages), the
Tenant shall indemnify the Landlord and save it harmless from any
claims arising out of any damage to the same including, without
limitation, any subrogation claims by the Tenant’s
insurers.
Section 7.05 – Landlord’s
Insurance
The Landlord
shall at all times throughout the Term carry:
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(a)
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insurance on the Building (excluding
the foundations and excavations but including Leasehold
Improvements installed in rentable premises within the Building
with the approval of the Landlord) and the machinery, boilers and
equipment contained therein or servicing the Building and owned by
the Landlord or the owners of the Complex (specifically excluding
any property with respect to which the Tenant and other tenants are
obliged to insure pursuant to Section 7.01 or similar sections
of their respective leases) against damage by fire and extended
perils or all-risks coverage;
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(b)
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public liability and property damage
insurance with respect to the Landlord’s operations in the
Complex;
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(c)
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loss of rental income insurance, or
loss of insurable gross profits commonly insured against by the
prudent landlords, including loss of all
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rentals receivable from tenants in
the Complex in accordance with the provisions of their leases,
including basic additional rentals; and
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(d)
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such other form or forms of
insurance as the Landlord or the Mortgagee reasonably considers
advisable.
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Such insurance
shall be in such reasonable amounts and with such reasonable
deductibles as would be carried by a prudent owner of a reasonably
similar multi-use commercial development, having regard to size,
age and location. Notwithstanding the Landlord’s covenant
contained in this Section 7.05, and notwithstanding any
contribution by the Tenant to the cost of insurance premiums
provided herein, the Tenant acknowledges and agrees that no
insurable interest is conferred upon the Tenant under any policies
of insurance carried by the Landlord, and the Tenant has no right
to receive any proceeds of any such insurance policies carried by
the Landlord.
Section 7.06 –
Indemnification
Except as
provided in Section 7.07(a) but notwithstanding any other
provision of this Lease, the Tenant shall indemnify the Landlord
and save it harmless from and against any loss (including loss of
Basic Rent and Additional Rent), claims, actions, damages,
liability and expenses (collectively “Damages”) in
connection with loss of life, personal injury, damage to property
or any other loss or injury whatsoever arising out of this Lease,
or any occurrence in, upon or at the Leased Premises, or the
occupancy or use by the Tenant of the Leased Premises or any part
thereof, or occasioned wholly or in part by any act or omission of
the Tenant or by anyone permitted to be on the Leased Premises by
the Tenant (provided that if any Damages result from an act or
omission occasioned in part by the Tenant, the Tenant’s
obligation to indemnify as aforesaid shall be in proportion to its
fault). If the Landlord shall, without fault on its part, be made a
party of any litigation commenced by or against the Tenant, then
the Tenant shall protect, indemnify and hold the Landlord harmless
and shall pay all costs, expenses and reasonable legal fees
incurred or paid by the Landlord in connection with such
litigation. The Tenant shall also pay all costs, expenses and
reasonable legal fees (on a solicitor and his client basis) that
may be incurred or paid by the Landlord in enforcing the terms,
covenants and conditions in this Lease unless a Court shall decide
otherwise.
Except to the
extent of any loss, injury or damage caused by the Tenant or those
for whom the Tenant is in law responsible, the Landlord shall
indemnify the Tenant and its directors, officers, employees and
agents and save them harmless from and against any and all
liabilities, claims, damages, losses and expenses due to or arising
from:
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(a)
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any
breach by the Landlord of any provisions of this Lease;
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(b)
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any
loss, injury (including death) or damage in respect of persons or
property arising out of or in connection with any negligence of the
Landlord or those for whom the Landlord is in law responsible on or
about the Complex.
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Section 7.07 – Limitations of
Liability
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(a)
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the
Tenant shall not be liable to the Landlord in respect of any loss,
injury or damage insured by the Landlord under
Sections 7.05(a) and (c)&
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