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EXHIBIT 10.9
THIS LEASE made as of the 1st day of February, 1997.
BETWEEN:
SUN LIFE ASSURANCE COMPANY OF CANADA, a body corporate incorporated
under the laws of Canada
(hereinafter called the "Landlord")
OF THE FIRST PART.
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NOVATEL WIRELESS TECHNOLOGIES LTD.
(hereinafter called the "Tenant")
OF THE SECOND PART.
WHEREAS the Landlord is registered as owner, subject to such
encumbrances, liens and interests as are notified by memorandum underwritten (or
endorsed hereon) of that certain parcel of land municipally described as 6715
8th St. N.E. and situated in the City of Calgary in the Province of Alberta and
more particularly described in Schedule "A" attached hereto (hereinafter called
the "Land") upon which Land is situated an office building and related
improvements (the said office building and all other fixed improvements now or
hereafter on the Land being hereinafter referred to as the "Building"); and
WHEREAS the Tenant has agreed to lease space in the Building which
will comprise the area more particularly hereinafter set forth for the term and
at the rental and subject to the terms, covenants, conditions and agreements
hereinafter contained; and
WHEREAS in this Lease certain expressions have the defined meanings
set out in Article 16 hereof;
WITNESSETH THAT
ARTICLE 1
PREMISES
Premises 1.01 In consideration of the rents, covenants,
agreements and conditions hereinafter reserved and
contained on the part of the Tenant to be respectively
paid, kept, observed and performed, the Landlord hereby
demises and leases unto the Tenant those certain
premises situate on the 2nd floor of the Building
containing a Rentable Area of 11,494 square feet as
shown outlined in red on the floor plan hereto annexed
as Schedule "B" (hereinafter referred to as the "Leased
Premises") which Leased Premises shall have for
purposes hereinafter set out a Gross Area of 12,644
square feet and the Rentable Area and Gross Area of the
Leased Premises shall be measured as provided in
Sub-sections 16.01 (g), (h), and (j) hereof.
ARTICLE 2
TERM
Term 2.01 TO HAVE AND TO HOLD the Leased Premises for a term
of FIVE (5) YEARS commencing on the 1ST DAY of
FEBRUARY, 1997 (hereinafter referred to as the
"commencement date") and to be fully completed and
ended on the 31ST DAY OF JANUARY, 2002.
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Possession 2.02 It is expressly understood and agreed between the
Landlord and the Tenant that, should all of the Leased
Premises not be ready for occupancy by the Tenant on
the commencement date, the Term of this lease shall
nonetheless commence on the commencement date and this
Lease shall remain in full force and effect and subject
as hereinafter provided the Tenant shall take
possession of the Leased Premises when all of the said
Leased Premises are ready for occupancy (or in the
opinion of the Landlord's Architect would have been
ready for occupancy except for the fault of the
Tenant). The Tenant shall be obligated to pay rent for
the Leased Premises as and from the date that all of
the Leased Premises are ready for occupancy. If such
date shall occur on a day other than the first day of a
month, the basic rent and electrical charges for such
month shall be payable only for the proportionate part
(being the balance of the month commencing on the date
the Leased Premises are ready for occupancy) and the
full monthly installments payable under the within
Lease shall commence and be payable as of and from the
first day of the month next following the date when the
Leased Premises are ready for occupancy.
Ready for Occupancy 2.03 For the purposes of this Article, the date on
which the Leased Premises are "ready for occupancy"
shall be the commencement date.
Inability to Deliver 2.04 The Landlord shall not be liable Possession for
loss, injury, damage or inconvenience which the Tenant
may sustain by reason of the inability of the Landlord
to deliver the Leased Premises ready for occupancy on
the commencement date.
Relocation of Leased 2.05 The Tenant agrees that notwithstanding of Leased
Premises anything herein contained, the Landlord shall have a
ONE TIME RIGHT, to change the location of the Leased
Premises as set forth in Article I hereof and Schedule
"B" attached hereto to comparable premises in the
Building on or above the 2nd floor provided such
premises are acceptable to the Tenant, acting
reasonably. If the Landlord exercises its right to
relocate the Tenant hereunder after the date upon which
the Landlord gives notice to the Tenant that the Leased
Premises are ready for installation of the Tenant's
improvements, THE LANDLORD SHALL PAY THE COSTS OF THE
TENANT IN RELOCATING IN THE AMOUNT OF $250,000.00. THE
LANDLORD SHALL PROVIDE THE TENANT WITH FOUR MONTHS
ADVANCE NOTICE OF THE RELOCATION AND THE TENANT SHALL
HAVE ACCESS TO THE NEW LOCATION IN ORDER TO PERFORM
IMPROVEMENTS AND ALTERATIONS OF THE NEW LOCATION. SUCH
ACCESS TO BE PROVIDED AT LEAST THREE MONTHS PRIOR TO
THE DATE OF THE RELOCATION.
ARTICLE 3
RENT
Rent 3.01 YIELDING AND PAYING THEREFOR unto the Landlord, at
the Landlord's office in the City of Toronto, Ontario
(or to such other persons at such other places as the
Landlord may from time to time in writing designate),
subject to adjustment as hereinafter provided, in
lawful money of Canada, the annual basic rent of ONE
HUNDRED TEN THOUSAND TWO DOLLARS EIGHTY CENTS
($110,002.80) payable without deduction by equal
consecutive monthly installments of NINE THOUSAND ONE
HUNDRED SIXTY SIX DOLLARS NINETY CENTS ($9,166.90) in
advance on the first day of each and every month during
the Term.
Basis of determining 3.02 The aforesaid annual basic rent is calculated on
Rent the basis of the Gross Area of the Leased Premises
being 12,644 SQUARE FEET leased at a rate of $8.70 for
each square foot of Gross Area for the Term.
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Apportionment 3.03 Annual basic rent and Common Costs Escalation are
of Annual Basic Rent considered to accrue from day to day, and where it
and Common Costs becomes necessary to calculate annual basic rent or
Escalation Common Costs Escalation for an irregular period of less
than twelve calendar months, or an installment of
annual basic rent or Common Costs Escalation for a
period of less than one calendar month, an appropriate
apportionment and adjustment will be made on a per diem
basis.
ARTICLE 4
TENANT' S COVENANTS
The Tenant covenants with the Landlord as follows:
Occupancy 4.01 To occupy the Leased Premises on the date the
Leased Premises are ready for occupancy subject to the
terms hereof.
Rent 4.02 To pay the rent hereby reserved promptly on the
days and at the times and in the manner herein
mentioned, without demand or deduction.
Permitted Use 4.03 To use the Leased Premises only for general office
purposes and ELECTRICAL ENGINEERING LABORATORY, and
such normal and lawful business, duties and functions
of a general business office and ELECTRONIC ENGINEERING
LABORATORY, that will not unreasonably interfere with
normal use of a first-class office building OF A NATURE
AND TYPE SIMILAR TO THE WITHIN BUILDING; and not to use
or permit to be used the Leased Premises or any part
thereof for any business which is that of a bank,
treasury branch, credit union, trust or acceptance or
loan company or any other organization engaged in the
business of accepting, money on deposit, or any similar
banking business (excluding insurance, stock brokers or
investment dealers), nor use nor permit the use of any
part of the Leased Premises for the purpose of
installation or operation of any electronic or
mechanical equipment, or machines by which any banking
transaction, operation or function may be available to
the public, nor use or permit the use of any part of
the Leased Premises for or as a restaurant, cafeteria,
lunch counter, food dispensary, snack bar or other food
services operation, OTHER THAN FOR STAFF PURPOSES.
Waste and Nuisance 4.04 Not to commit or permit any waste or injury to the
Leased Premises including the Leasehold improvements
and trade fixtures therein, any overloading of the
floors thereof, any nuisance therein or any use or
manner of use causing annoyance to other tenants and
occupants of the Building and not to use or permit to
be used any part of the Leased Premises for any
dangerous, noxious or offensive trade or business; and
not to place any objects on or otherwise howsoever
obstruct the heating or air conditioning vents within
the Leased Premises. The Landlord acknowledges that the
Tenant's existing use mentioned in Section 4.03 of the
Lease does not constitute a nuisance.
Floor Loads 4.05 That the Tenant shall not place a load upon any
portion of any floor of the Leased Premises which
exceeds the floor load which the area of such floor
being loaded was designed to carry having regard to the
loading of adjacent areas and that which is allowed by
law. The Landlord reserves the right to prescribe the
weight and position of all safes and heavy
installations which the Tenant wishes to place in the
Leased Premises, so as to distribute properly the
weight thereof and the Tenant shall pay for all costs
incurred by the Landlord and the Landlord's Architect
in making such assessment.
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Insurance Risk 4.06 EXCEPT FOR THE PERMITTED USES DESCRIBED IN
PARAGRAPH 4.03, not to do, omit to do or permit to be
done or omitted to be done upon the Leased Premises
anything which would cause the Landlord's cost of
insurance (whether fire or liability) to be increased
(and, without waiving the foregoing prohibition the
Landlord may demand, and the Tenant shall pay to the
Landlord upon demand, the amount of any such increase
of cost caused by anything so done or omitted or
permitted to be done or omitted) or which would cause
any policy of insurance to be subject to cancellation
or refusal of placement or renewal.
Noxious Fumes Vapours 4.07 The Tenant shall so use the Leased Premises that
and Odours noxious or objectionable fumes, vapours and odours will
not occur beyond the extent to which they are
discharged or eliminated by means of the flues and
other devices provided in the Building by the Landlord
and shall prevent any such noxious or objectionable
fumes, vapours and odours from entering into the air
conditioning or being discharged into other vents or
flues of the Building or annoying any of the tenants in
the Building. Any discharge of fumes, vapours and
odours shall be permitted only during such period or
periods, to such extent, in such conditions and in such
manner as is directed by the Landlord from time to
time. THE LANDLORD SHALL BE RESPONSIBLE TO MAINTAIN
REASONABLE VENTILATION AND FLUES COMMONLY FOUND IN A
BUILDING OF THE NATURE AND TYPE OF THE WITHIN BUILDING.
Condition 4.08 Not to permit the Leased Premises to become
untidy, unsightly, offensive or hazardous or permit
unreasonable quantities of waste or refuse to
accumulate therein, and at the end of each business day
to leave the Leased Premises in a condition such as
reasonably to facilitate the performance of the
Landlord's janitor and cleaning services referred to in
Section 5.06.
By-laws 4.09 To comply at its own expense with all municipal,
federal, provincial, sanitary, fire, building and
safety statutes, laws, by-laws, and safety statutes,
laws, by-laws, regulations, ordinances, orders and
requirements pertaining to the operation and use of the
Leased Premises, the condition of the Leasehold
Improvements, trade fixtures, furniture and equipment
installed by the Tenant therein and the making by the
Tenant of any repairs, changes or improvements therein
or any other matter pertaining to the Leased Premises
or the Tenant as well as all rules and regulations of
the Canadian Board of Fire Underwriters, or any
successor body and with the requirements of all
insurance companies having policies of any kind
whatsoever in effect covering the Building which are
communicated to the Tenant.
Rules and Regulations 4.10 To observe, and to cause its employees, invitees
and all others over whom the Tenant can reasonably be
expected to exercise control to observe the Rules and
Regulations attached as Schedule "C" hereto, and such
further and other reasonable Rules and Regulations and
amendments and changes therein as may hereafter be made
by the Landlord of which notice in writing shall be
given to the Tenant and all such Rules and Regulations
shall be deemed to be incorporated into and form part
of this Lease. For the enforcement of such Rules and
Regulations, the Landlord shall have available to it
all remedies in this Lease provided for a breach
thereof and all legal remedies whether or not provided
for in this Lease, both at law and in equity. The
Landlord shall not be responsible or liable to the
Tenant for the non-observance or violation by any other
tenant of any such Rules and Regulations or the
non-enforcement as against other tenants of such Rules
and Regulations or any loss or damage arising out of
the same.
Surrender, Overholding 4.11 That upon the expiration or other termination of
the Term of this Lease, the Tenant shall quit and
surrender the Leased Premises in vacant and clean
possession and in good order, repair, decoration, and
condition (subject to the provisions of Sub-section
6.02 (a) hereof) and shall remove all its property
therefrom, except as otherwise provided in this Lease.
The Tenant's obligation to observe or perform this
covenant shall survive the expiration or other
termination of the Term of this Lease. If the Tenant
shall continue to occupy the Leased Premises after the
expiration of this Lease without further written
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agreement and without objection by the Landlord, the
Tenant shall be a month-to-month tenant at double the
annual basic rent and (except as to length of tenancy)
on and subject to the provisions and conditions herein
set out including the payment of electrical charges and
Common Costs Escalation.
Signs and Directory 4.12 Not to paint, display, inscribe, place or affix
any sign, notice or lettering of any kind anywhere
outside the Leased Premises (whether on the outside or
inside of the Building) or within the Leased Premises
SEE so as to be visible from the outside of the Leased
SECTION 17.06 Premise with the exception only of any identification
sign at or near the entrance of the Leased Premises and
a directory listing in the main lobby of the Building,
in each case containing only the name of the Tenant and
such other names as the Landlord may permit, and to be
subject to the approval of the Landlord as to design,
size, location and content. Such identification sign
and directory listing shall be installed at the expense
of the Tenant, and the Landlord reserves the right to
install them as an Additional Service.
Inspection Access 4.13 Other than regularly scheduled access as agreed to
by the Tenant and Landlord, during Normal Business
Hours and on at least one hours notice to the Tenant,
the Landlord shall be permitted, as reasonably
required, any time and from time to time to enter and
to have its authorized agents, employees and
contractors enter the Leased Premises for the purpose
of inspection, window cleaning, maintenance, providing
janitor services, making repairs, alterations or
improvements to the Leased Premises, adjoining premises
or the Building, or to have access to or make changes
in utilities and services (including underfloor and
overhead ducts, air conditioning, heating, plumbing,
electrical and telephone facilities and access panels,
all of which the Tenant agrees not to obstruct) or to
determine the electric light and power consumption by
the Tenant in the Leased Premises and the Tenant shall
provide free and unhampered access for such purposes,
and shall not be entitled to compensation for any
inconvenience, nuisance and discomfort or loss caused
thereby, but the Landlord in exercising its rights
hereunder shall proceed to the extent reasonably
possible so as to minimize interference with the
Tenant's use and enjoyment of the Leased Premises.
Exhibiting Premises 4.14 That the Landlord or its agents may, ON 24 HOURS
NOTICE TO THE TENANT enter and exhibit the Leased
Premises during Normal Business Hours during the Term
hereof, and place upon the Leased Premises a notice, of
reasonable dimensions and reasonably placed, stating
that said Land or the Leased Premises are for sale or
to let which notice the Tenant shall not remove or
obscure or permit to be removed or obscured, but the
Landlord in exercising its rights hereunder shall
proceed to the extent reasonably possible so as to
minimize interference with the Tenant's use and
enjoyment of the Leased Premises. THE TENANT SHALL BE
PERMITTED TO BE PRESENT AT THE TIME OF ANY SUCH
ENTERING AND EXHIBITING.
Name of Building 4.15 Not to refer to the Building by any name other
than that designated from time to time by the Landlord,
nor to use such name for any purpose other than that of
the business address of the Tenant.
Acceptance Leased 4.16 That the Tenant shall be deemed to have examined
the Leased Premises Premises before taking possession
and the taking of possession shall be conclusive
evidence as against the Tenant that at the time thereof
the Leased Premises were in good order and satisfactory
condition and that all alterations, remodelling,
decorating and installation of equipment and fixtures
required to be done by the Landlord have been
satisfactorily completed save only for such
deficiencies of which notice shall have been given to
the Landlord within fifteen (15) days after the taking
of possession. Any dispute as to any aspects of the
Landlord's work or completion or adequacy of the
Building, the Leased Premises or any part thereof shall
be determined by the Landlord's Architect.
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ARTICLE 5
LANDLORD'S COVENANTS
The Landlord covenants with the Tenant as follows:
Quiet Enjoyment 5.01 That the Tenant paying the rent hereby reserved at
the times mentioned and in the manner aforesaid and
observing and performing each and every of the
covenants, conditions, restrictions and stipulations by
the Tenant to be observed or performed shall and may
peaceably and quietly possess and enjoy the Leased
Premises for the Term hereby granted without any
interruption from the Landlord or any other person
lawfully claiming by, through, or under it.
Interior Climate 5.02 To maintain in the Leased Premises during Normal
Control Business Hours, and to the extent permitted by law by
means of a heating and cooling system, conditions of
reasonable temperature and comfort in accordance with
good standards of interior climate control generally
pertaining at the date of this Lease applicable to
normal occupancy of the said premises, but the Landlord
shall have no responsibility for any inadequacy of
performance of the said system if the Leased Premises
depart from the design criteria for such system as
determined by the Landlord's Architect. If the use of
the Leased Premises does not accord with the said
design criteria and changes in the system are feasible
and desirable to accommodate such use, the Landlord may
make such changes and the entire expense of such
changes will be paid by the Tenant.
Elevators 5.03 Subject to the supervision of the Landlord and
except when repairs are being made thereto, to furnish
for use by the tenant and its employees and invitees in
common with other persons entitled thereto passenger
elevator service (operatorless automatic elevator
service, if used, shall be deemed "elevator service"
within the meaning of this Section) to the floor on
which the Leased Premises or portions thereof are
located, and to furnish for the use of the Tenant in
common with others entitled thereto at reasonable
intervals and at such hours as the Landlord may
REASONABLY select, elevator service for the carriage of
furniture, equipment, deliveries and supplies, provided
however, that if the elevators shall become inoperative
or shall be damaged or destroyed the Landlord shall
have reasonable time within which to repair such damage
or replace such elevator and the Landlord shall repair
or replace the same as soon as reasonably possible, but
shall in no event be liable for indirect or
consequential damages or other damages for personal
discomfort or illness during such period of repair or
replacement. THE ELEVATORS WILL BE AVAILABLE TO THE
TENANT 24 HOURS A DAY.
Entrances, Lobbies, 5.04 To permit the Tenant and its employees and
etc. Lobbies, etc. invitees to have the use during Normal
Business Hours in common with others entitled thereto
of the common entrances, lobbies, stairways and
corridors of the Building giving access to the Leased
Premises, THE TENANT SHALL BE PERMITTED ACCESS TO SUCH
AREAS AT SUCH OTHER TIMES OF ITS OPERATIONS ON SUCH
TERMS AS MAY BE REASONABLE IN ALL OF THE CIRCUMSTANCES,
(subject to the Rules and Regulations referred to in
Section 4.10 and such other reasonable limitations as
the Landlord may from time to time impose) provided
that notwithstanding the foregoing the Landlord
reserves the right to restrict for security purposes
the method of access on Saturdays even during Normal
Business Hours; and to permit access to the Leased
Premises outside of Normal Business Hours by the Tenant
and its authorized employees subject to such reasonable
restrictions for security purposes as the Landlord may
impose.
Washrooms 5.05 To permit the Tenant and its employees and
invitees in common with others, entitled thereto to use
the washrooms in the Building on the floor or floors on
which the Leased Premises are situate and to provide in
such washrooms washroom supplies to a standard
consistent with normal standards.
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Janitor Services 5.06 To provide cleaning and janitorial services,
including window cleaning, to a standard and with
services consistent with normal standards from time to
time for similar buildings in similar locations in the
city in which the Building is situate, provided that
the Tenant shall at the end of each business day leave
the Leased Premises in a reasonably tidy condition.
With the exception of the obligation to cause such work
to be done, the Landlord shall not be responsible for
any act of omission on the part of the person or
persons, firm or corporation employed to perform such
work, and such work shall be done at the Landlord's
direction, without interference by the Tenant, its
servants, agents or employees.
ARTICLE 6
REPAIR AND DAMAGE AND DESTRUCTION
The Landlord and Tenant further covenant and agree as follows:
Landlord's Repairs 6.01 The Landlord covenants with the Tenant, subject to
Sub-section 6.03 (b) and Section 11.02 hereof and
except for reasonable wear and tear, to keep in good
and substantial state of repair the exterior walls,
roof, foundations, and bearing structure of the
Building and the pipes, heating and air conditioning,
plumbing and electrical wires installed by the
Landlord.
Tenant's Repairs 6.02 The Tenant covenants with the Landlord:
(a) subject to Sub-section 6.03 (b) and except
for reasonable wear and tear and Insured
Damage, except where the latter is caused
by the Tenant, its agents, employees,
invitees or licensees, to keep in good and
substantial state of repair and
decoration, including repainting and
cleaning of drapes and carpets at
reasonable intervals as needed, the Leased
Premises including all Leasehold
Improvements and all trade fixtures
therein and all glass therein other than
(subject to Sub-section 6.02 (d) hereof)
perimeter windows on floors above the
Ground Floor of the Building;
(b) that the Landlord may, ON AT LEAST ONE
HOURS NOTICE TO THE TENANT, from time to
time enter and view the state of repair,
and that the Tenant will repair according
to notice in writing;
(c) that if any part of the Building including
without limitation, the structure or the
structural elements of the Building, or
the systems for interior climate control
or for the provisions of utilities or
services get out of repair, or become
damaged or destroyed through the
negligence or misuse of the Tenant or of
its employees, invitees or others over
whom the Tenant can reasonably be expected
to exercise control, the expense of
repairs or replacements thereto
necessitated thereby shall be paid by the
Tenant;
(d) that the Tenant shall during the
continuance of this lease at its expense
repair and replace with as good quality
and size any glass broken on the Leased
Premises, and such obligation shall
include outside windows and doors on the
perimeter of the Leased Premises whenever
such glass shall be broken by the Tenant,
its servants, employees, agents or
invitees; and
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(e) that the Tenant will notify the Landlord
immediately upon the Tenant becoming aware
of any defect in the Leased Premises or of
any other condition which may cause damage
to the Leased Premises or the Building.
Abatement and 6.03 It is agreed between the Landlord and the Tenant
Termination that:
(a) (i) in the event of partial
destruction (as hereinafter
defined) of the Leased Premises by
fire, the elements or other cause
or casualty, then in such event,
if the destruction is such that,
in the REASONABLE opinion of the
Landlord's Architect, the Leased
Premises may be partially used for
the Tenant's business while the
repairs are being made, then the
rent shall abate in the proportion
that the part of the Leased
Premises rendered unusable bears
to the whole of the Leased
Premises, PROVIDED ALWAYS that if
the part rendered unusable exceeds
one-half (1/2) of the area of the
Leased Premises there shall be a
total abatement of rent until the
repairs have been made unless the
Tenant, with the permission of the
Landlord, in fact, uses the
undamaged part, in which case the
Tenant shall pay proportionate
rent for the part so used (being
annual basic rent, electrical
charges and Common Costs
Escalation bearing the same
proportion to the annual basic
rent, electrical charges and
Common Costs Escalation for the
whole of the Leased Premises as
the area in square feet of the
part of the Leased Premises being
used bears to the Rentable Area of
the Leased Premises). "Partial
destruction" shall mean any damage
to the Leased Premises less than
total destruction, but which
renders all or any part of the
Leased Premises temporarily unfit
for use by the Tenant for the
Tenant's business. A certificate
of the Landlord's Architect as to
whether the whole or a part of the
Leased Premises is rendered
unusable, and certifying the
extent of the part rendered
unusable, shall be binding and
conclusive upon both Landlord and
Tenant for the purposes hereof.
Provided that if the partial
destruction is repaired within
fifteen (15) days after the date
of destruction, there shall be no
abatement of rent.
(ii) Notwithstanding the foregoing
provisions concerning total or
partial destruction of the Leased
Premises, in the event of total or
partial destruction of the
Building of which the Leased
Premises form a part (and whether
or not the Leased Premises are
destroyed) to such a material
extent or of such a nature that in
the opinion of the Landlord the
Building must be or should be
totally or partially demolished,
whether to be re-constructed in
whole or in part or not, then the
Landlord may, at its option (to be
exercised within sixty (60) days
from the date of destruction) give
notice to the Tenant that this
Lease is terminated with effect
from the date stated in the
notice. If the Tenant is able
effectively to use the Leased
Premises after the destruction,
such date shall be not less than
thirty (30) days from the date of
the notice. If the Tenant is
unable effectively to use the
Leased Premises after the
destruction, the date given in the
notice shall be the date of
destruction. Upon such
termination, the Tenant shall
immediately surrender the Leased
Premises and all its interest
therein to the Landlord and the
rent shall abate and be
apportioned to the date of
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termination and the Tenant shall
remain liable to the landlord for
all sums accrued due pursuant to
the terms hereof to the date of
termination. The Landlord's
Architect shall determine whether
the Leased Premises can or cannot
be effectively used by the Tenant
and his certificate thereon shall
be binding and conclusive upon
both Landlord and Tenant for the
purposes hereof.
(iii) In none of the cases aforesaid
shall the Tenant have any claim
upon the Landlord for any damages
sustained by it nor shall the
Landlord be obligated to rebuild
the Building or any part thereof
in accordance with the original
plans and specifications therefor.
No damages, compensation or claim
whatsoever shall be payable by the
Landlord for inconvenience, loss
of business or annoyance or other
loss or damage whatsoever arising
from the occurrence of any such
damage or destruction of the
Leased Premises or of the building
and/or the repair or restoration
thereof.
ARTICLE 7
TAXES AND OPERATING COSTS
The Landlord and Tenant further covenant and agree:
Landlord's Obligations 7.01 The Landlord covenants with the Tenant subject to
the Tax provisions of Sections 7.02 and 7.03 to pay
promptly when due to the taxing authority or
authorities having jurisdiction, all Taxes (as defined
in section 16.01 hereof).
Business Taxes 7.02 The Tenant covenants with the Landlord:
and Common Costs
Escalation (a) to pay when due all business taxes,
business licence fees, and other taxes,
rates, duties or charges levied or
assessed by lawful authority in respect of
the use or occupancy of the Leased
Premises by the Tenant, the business or
businesses carried on therein, or the
equipment, machinery or fixtures brought
therein by or belonging to the Tenant, or
anyone occupying the Leased Premises with
the Tenant's consent, and to pay to the
Landlord upon demand the portion of any
tax, rate, duty or charge levied or
assessed upon the land and Building that
is attributable to any equipment,
machinery or fixtures on the Leased
Premises which are not the property of the
Landlord.
(b) to pay to the Landlord in the manner
specified in Section 7.03 as additional
rent any Common Costs Escalation.
(c) to reimburse the Landlord throughout the
Term and at the times and in the manner
specified by the Landlord from time to
time, the full amount of any tax, sales
tax, goods and services tax, value added
tax, multi-stage sales tax, business
transfer tax or any other similar tax
levied, rated, charged, imposed or
assessed in respect of the rent,
additional rent or any other amounts
payable pursuant to this Lease or in
respect of the space demised under this
Lease.
Payment of Common 7.03 (a) After the commencement of the Term of this
Costs Escalation Lease and prior to the commencement of
each calendar year thereafter which
commences during the Term the Landlord
shall estimate the Common Costs Escalation
for the ensuing calendar year or (if
applicable) broken
<PAGE> 10
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portion thereof, as the case may be, to
become payable under Section 7.02, and
notify the Tenant in writing of such
estimate. The amount so estimated (which
amount may be re-estimated from time to
time during the calendar year) shall be
payable in equal monthly installments in
advance over the calendar year in
question, each such installment being
payable on each monthly rental payment
date proved in Article 3 hereof.
See Section 17.08 (b) When the Common Costs for the calendar
year or broken portion of the calendar
year in question become finally determined
the Landlord shall recalculate the Common
Costs Escalation. If the Tenant has
overpaid such Common Costs Escalation, the
Landlord shall refund any excess paid, but
if any balance remains unpaid the Tenant
shall pay such remaining balance within
thirty (30) days of demand by the
Landlord. If for any reason the Common
Costs Escalation is not finally determined
within such calendar year or broken
portion thereof, the parties shall make
the appropriate re-adjustment when such
Common Costs Escalation becomes finally
determined. The obligation of the parties
to observe or perform this covenant shall
survive the expiration or other
termination of the Term of this Lease.
Within 120 days after the end of each
calendar year, the Landlord shall furnish
to the Tenant a statement in writing
certified by the Landlord's external
auditors of the amount of Common Costs for
such calendar year showing in reasonable
detail the main classification of items
included in Common Costs. If the amount
payable by the Tenant as shown on such
statement is greater or less than the
portion paid by the Tenant to the landlord
pursuant to Article 7.03 (a) or (b) , the
proper adjustments shall be paid by the
party liable for such amount within ten
(10) days after delivery of the statement.
(c) Neither party may claim a re-adjustment in
respect of the Common Costs Escalation
based upon any error of estimation,
determination or calculation thereof
unless claimed in writing prior to the
expiration of one (1) year after the end
of the calendar year to which the Common
Costs Escalation relates. Any report of
the Landlord's accountant (who may be the
Landlord's internal auditor or accountant)
as to the Common Costs Escalation shall be
conclusive as to the amount thereof for
any period to which such report relates.
THE TENANT SHALL BE ENTITLED TO REASONABLY
REQUEST THE DOCUMENTATION BASED UPON WHICH
THE LANDLORD HAS DETERMINED THE COMMON
COSTS ESCALATION. THE COMMON COSTS ARE
ESTIMATED TO BE $6.65 PER SQUARE FOOT
INCLUDING ELECTRICITY FOR THE FISCAL YEAR
1996. FURTHER THE LANDLORD AGREES TO LIMIT
ANNUAL INCREASES IN ADDITIONAL RENT,
EXCLUDING PROPERTY TAX AND UTILITIES AND
ANY OTHER LEGISLATED COSTS NOT UNDER THE
LANDLORD'S CONTROL, TO ACTUAL INCREASES OF
5%, WHICHEVER IS LESS.
Postponement, etc., 7.04 The Landlord may postpone payment of any Taxes
of Taxes payable by it pursuant to Section 7.01 and the Tenant
may postpone payment of any taxes, rates, duties,
levies and assessments payable by it under Sub-section
7.02 (a), in each case to the extent permitted by law
and if prosecuting in good faith any appeal against the
imposition thereof, and provided in the case of a
postponement by the Tenant that if the Building or any
part thereof or the Landlord shall become liable to
assessment, prosecution, fine or other liability the
Tenant shall have given security in a form and of an
amount satisfactory to the landlord in respect of such
liability and such undertakings as the Landlord may
reasonably require to ensure payment thereof.
<PAGE> 11
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Receipts, etc. 7.05 Whenever requested by the Landlord the Tenant will
deliver to it receipts for payment of all taxes, rates,
duties, levies and assessments payable by the Tenant
pursuant to Sub-section 7.02 (a) hereof and furnish
such other information in connection therewith as the
Landlord may reasonably require.
ARTICLE 8
UTILITIES AND ADDITIONAL SERVICES
The Landlord and Tenant further covenant and agree as follows:
Water, Telephone and 8.01 The Landlord shall furnish appropriate conduits
Electricity for bringing building standard electrical and telephone
services to the Leased Premises and shall provide hot
and cold or tempered water to the building standard
washrooms on each floor on which the Leased Premises
are situate. (SEE SECTION 16.01(o).
Utilities 8.02 The Tenant shall pay for the cost of all utilities
provided for its exclusive use in the Leased Premises,
including without restricting the generality of the
foregoing or of Section 8.03, gas, water, electricity,
telephone and communication service charges and rates
incurred by the Tenant and any other charges and/or
rates relating to services and/or utilities provided
for the exclusive use of the Tenant in respect of the
Tenant's occupation of the Leased Premises and
operation of its business carried on therein or
therefrom, including laboratory work and any special
systems servicing its own computers, or any other
machinery.
Electricity 8.03 The Landlord may from time to time determine the
Tenant' s electrical consumption in the Leased Premises
upon whatever reasonable basis may be selected by it,
including without limitation, the metering of
electricity either to the Leased Premises or to special
equipment therein or by estimating the consumption of
the Leased Premises or any special equipment therein
having regard to electrical capacity and hours of use.
If the Landlord determines that the Tenant' s
electrical consumption is disproportionate to the
electrical consumption of other tenants in the
Building, the Landlord may require the Tenant to
install at the Tenant's expense a domestic meter for
measurement or checking of the Tenant's electrical
consumption or any part of such consumption or use; and
in that event the Tenant shall pay directly to the
supplier of the electricity as and when due from time
to time any and all electrical charges for such
electrical consumption which is disproportionate as
aforesaid and which the Landlord has required to be
metered. The Landlord's determination shall be verified
by an engineer selected by the Landlord (who may be an
employee of the Landlord) and being so verified shall
be binding on the parties hereto. THE TENANT SHALL,
WHEN REASONABLY REQUESTED BE PERMITTED TO REVIEW THE
RECORDS AND RECEIVE AN ACCOUNTING FROM THE LANDLORD IN
REGARD TO THE DETERMINATION OF THE ELECTRICAL
CONSUMPTION IN THE BUILDING.
Excess Use 8.04 The Tenant's use of electric power in the Leased
Premises shall not be for the operation of other than
normal office electrical fixtures, lights, lamps,
typewriters, photocopiers, bookkeeping machines,
telexes, adding machines and similar small office
machines for the Tenant's own use solely (the Landlord
to determine what equipment is characterizable as
"small office machines" and "normal office" equipment),
AND SUCH OTHER ITEMS AND EQUIPMENT REASONABLY NECESSARY
FOR THE PERMITTED USE AS DESCRIBED IN PARAGRAPH 4.03
HEREOF, without the prior written consent of the
Landlord and shall not at any time exceed the capacity
of any of the electrical conductors and equipment in or
otherwise serving the Leased Premises.
<PAGE> 12
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As a condition of granting such consent, the Landlord
may require the Tenant to pay as additional rent the
cost of all additional risers and other equipment
required therefor as well as the increased cost to the
Landlord of the electric power and the Additional
Services to be furnished by the Landlord in connection
therewith.
Lamps 8.05 The Tenant shall pay throughout the Term promptly
to the Landlord when demanded the cost of maintaining
and servicing in all respects all electric lighting
fixtures in the Leased Premises including the
REASONABLE cost of replacement on a group basis or
otherwise of electric light bulbs, fluorescent tubes,
starters and ballasts installed on commencement of the
said Term. Such maintaining, servicing and replacing
shall be within the exclusive right of the Landlord
and shall be carried out at reasonably competitive
rates.
Additional Services 8.06 The Landlord, if it shall from time to time so
elect, shall have the exclusive right, by way of
Additional Services, to provide or have its designated
agents or contractors provide any janitor or cleaning
services to the Leased Premises required by the Tenant
which are additional to those required to be provided
by the Landlord under Section 5.06, and to supervise
the moving of furniture or equipment of the Tenant and
the making of repairs or alterations conducted within
the Leased Premises, and to supervise or make
deliveries to the Leased Premises. The cost of
Additional Services provided to the Tenant shall be
REASONABLY COMPETITIVE IN RELATION TO SUCH SERVICES IN
THE MARKET PLACE AND SHALL BE paid to the Landlord by
the Tenant from time to time promptly upon receipt of
invoices therefor from the Landlord. The Landlord may
include as part of its costs of rendering such
Additional Services the Landlord's then current
administration fee. Costs of Additional Services
recovered directly from the Tenant and other tenants
shall not be included in computing Operating Costs.
8.07 NOTWITHSTANDING PARAGRAPH 8.06, IF THE ADDITIONAL
COSTS ARISING FROM OR OUT OF PARAGRAPH 8.06 EXCEED
$500.00, THE TENANT, IN ITS SOLE DISCRETION, MAY SEEK
OTHER ARRANGEMENTS FOR THE PROVISION OF THE ADDITIONAL
SERVICES DESCRIBED IN PARAGRAPH 8.06 AND SHALL ADVISE
THE LANDLORD OF THE ALTERNATIVE ARRANGEMENTS MADE AND
WHICH ALTERNATIVE ARRANGEMENTS SHALL IN ALL OF THE
CIRCUMSTANCES, BE REASONABLE.
8.08 NOTWITHSTANDING THE FOREGOING PROVISIONS CONTAINED
IN THIS ARTICLE 8, THE TENANT SHALL NOT BE CHARGED NOR
OBLIGATED TO PAY FOR ANY UTILITIES AND/OR ADDITIONAL
SERVICES REFERRED TO IN THIS ARTICLE 8, WHICH HAVE BEEN
INCLUDED IN THE DETERMINATION OF THE COMMON COSTS
AND/OR OPERATING COSTS AS DEFINED IN THE WITHIN LEASE.
ARTICLE 9
LICENSES, ASSIGNMENTS AND SUBLETTINGS
Assignments and/or 9.01 (a) The Tenant shall not assign, mortgage or
Sublettings charge this Lease or sublet or part with
possession of the whole or any part of the
Leased Premises nor shall it permit any
subtenant to assign, mortgage or charge
its sublease or sublet or part with
possession of the whole or any part of the
Leased Premises (each of the foregoing
transactions being sometimes referred to
herein as a "Transfer") unless it shall
have first requested and obtained the
consent in writing of the Landlord
thereto, which consent shall not be
unreasonably withheld. Any request for
such consent shall be in writing and shall
be accompanied by a true copy of any
agreements relating to the Transfer which
the Tenant may have originated or
received, and the Tenant shall furnish to
the Landlord all information reasonably
requested by the Landlord available to the
Tenant as to the business and financial
responsibility and standing of the
proposed assignee, subtenant, mortgagee or
chargee
<PAGE> 13
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or occupant (herein referred to as the
"Transferee").
(b) The Landlord's consent to the Tenant's
request for consent to a Transfer shall
not unreasonably be withheld, provided
nevertheless that the Landlord shall be
entitled to withhold consent unreasonably
if the Landlord exercises the right
hereinafter set out in subsection 9.01(c).
Provided further that the landlord's
consent to any Transfer shall be
conditional upon the Transferee entering
into an agreement in form and content
stipulated by the Landlord to perform,
observe and keep each and every covenant,
proviso, condition and agreement in this
Lease on the part of the Tenant to be
performed, observed and kept, including
(except in the case of a subtenancy
payment of rent and all other sums and
payments agreed to be paid or payable
under this Lease-on the days and at the
times and in the manner herein specified.
In the case of a subtenancy, the agreement
shall contain an assignment to the
Landlord of the rents and other amounts
payable under the sublease involved and a
provision whereby the subtenant agrees to
pay to the landlord, unless the latter
otherwise directs, all such rents and
other amounts payable under the sublease.
The assignment shall be given as security
for payment of the rents and other amounts
payable under this Lease. Without limiting
the grounds for withholding consent to a
Transfer, the Landlord's refusal to
consent will not be considered
unreasonable if a reason for withholding
the consent is (i) that the Landlord has
concerns, on reasonable grounds, about the
business, financial background, business
history or creditworthiness of the
proposed Transferee or about the use to
which the Leased Premises may be put or
(ii) the Transferee's refusal to execute
an agreement of the type referred to
above.
(c) Upon the receipt from the Tenant of such
request and such required information, the
Landlord shall have the right, exercisable
in writing within fourteen (14) days after
such receipt, to cancel and terminate this
Lease if the request relates to all the
Leased Premises or to cancel this Lease
only with respect to the applicable part
of the Leased Premises if the request
relates only to a part of the Leased
Premises. In a case where the Tenant's
request for consent to a Transfer relates
only to a part of the Leased Premises, the
phrase "cancellation of this Lease" means
cancellation of this Lease only with
respect to the applicable part of the
Premises, and similar expressions have
similar meanings. Such cancellation shall
be effective as of the date set forth in
the Landlord's notice of exercise of such
right, which shall be neither less than
sixty (60) nor more than one hundred and
twenty (120) days following the service of
such notice. If the lease is cancelled
only with respect to a part of the Leased
Premises, basic rent will abate in the
proportion that the Rentable Area of the
part of the Leased Premises for which this
lease is cancelled bears to the Rentable
Area of the Leased Premises, and this
lease will be amended accordingly.
(d) If the landlord shall exercise such right
the Tenant shall surrender possession of
the Leased Premises or the cancelled
portion thereof on the date set forth in
such notice in accordance with the
provisions of this Lease relating to
surrender of the Leased Premises at the
expiration of the Term.
(e) If the Landlord shall not exercise the
right to cancel this Lease or a proportion
thereof, as above provided after the
receipt of the Tenant's written request,
then the Landlord's consent to such
request shall not be
<PAGE> 14
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unreasonably withheld. In no event shall
any Transfer to which the Landlord may
have consented release or relieve the
Tenant from its obligations fully to
perform all the terms, covenants and
conditions of this Lease on its part to be
performed. No consent by the Landlord to
any Transfer shall be construed to mean
that the Landlord has consented or will
consent to any further Transfer.
(f) Documents evidencing the Landlord's
consent to a Transfer, if permitted or
consented to by the Landlord, will be
prepared by the Landlord or its solicitors
and all related legal costs will be paid
by the Tenant to the Landlord or its
solicitors, as Additional Rent, within
fifteen (15) days after receipt of an
invoice from the Landlord setting out
reasonable particulars of the charges.
(g) If after the date of execution of this
Lease shares not listed for sale on a
recognized stock exchange in Canada or the
United States in the capital of either the
Tenant or a corporation that controls the
Tenant are transferred by sale,
assignment, bequest, inheritance,
operation of law or other disposition, or
are issued by subscription or allotment,
or are cancelled or redeemed, so as to
result in a change in the effective voting
or other control of the Tenant, or of a
corporation that controls the Tenant, by
the person or persons holding control on
the date of execution of this Lease, or if
other steps are taken to accomplish a
change of control, the Tenant promptly
will notify the Landlord in writing of the
change of control, which will be
considered to be an assignment of this
Lease to which the provision of this
Article shall apply. Whether or not the
Tenant notifies the Landlord, unless the
Landlord previously had consented to the
change of control, the landlord may,
within sixty (60) days after it learns of
the change in control, notify the Tenant
that it elects to terminate this Lease.
The Tenant will make available to the
landlord or its lawful representative all
PERTINENT corporate books and records of
the Tenant and of any corporation that
controls the Tenant for inspection at all
reasonable times, to ascertain to the
extent possible whether there has been a
change of control. For the purposes of
this section, control means the direct or
indirect beneficial ownership of more than
fifty percent (50%) of the voting shares
in the capital of a corporation.
(h) If an approved Transferee has sublet or
taken an assignment of all or part of the
leased Premises from the Tenant and has
agreed to pay the Tenant a rent or other
amount in respect of the Leased Premises
or any part of the Leased Premises that
exceeds the rent payable by the Tenant to
the Landlord (or a pro-rated portion of
such rent in the case of a sublease or
assignment of less than the entire Leased
Premises), the Tenant will pay to the
Landlord monthly, as additional rent,
together with basic rent, an amount equal
to the excess rent or other amount
received or receivable by the Tenant from
the Transferee.
(i) If the Landlord sells or otherwise
disposes of the Building or an interest in
the Building or in this Lease to the
extent that the purchaser or assignee
assumes responsibility for compliance with
the covenants and obligations of the
Landlord under this Lease, the Landlord
without further written agreement will be
relieved of liability under the covenants
and obligations.
(j) The Tenant covenants and agrees that it
shall not grant to any lender or other
creditor an assignment, mortgage or charge
of its interest in any
<PAGE> 15
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sublease of all or any part of the Leased
Premises or of its interest in any of the
rents payable under any such sublease. The
Tenant hereby agrees that upon the request
of the Landlord from time to time, it
shall assign unto the Landlord, as
security for the payment of the rent under
this Lease, all of its right, title and
interest in the rents payable under any
and all such sublease. Such assignment
shall be acceptable to the Landlord as to
form and content and it is agreed that the
Landlord may withhold its consent to a
proposed sublease if the Tenant fails to
execute the assignment.
ARTICLE 10
FIXTURES AND IMPROVEMENTS
The Landlord and Tenant further covenant and agree as follows:
Installation Fixtures 10.01(a) AFTER FEBRUARY 1, 1997 the Tenant will not
and Improvements make, erect, install or alter any of
Improvements or trade fixtures in the
Leased Premises without having requested
and obtained the Landlord's prior written
approval, which the Landlord shall not
unreasonably withhold.
(b) AFTER FEBRUARY 1, 1997 in making,
erecting, installing or altering any
Leasehold Improvements or trade fixtures
the Tenant will not alter or interfere
with any installations which have been
made by the Landlord without the prior
written approval of the Landlord, and in
no event shall alter or interfere with or
affect the structural elements or the
strength or outside appearance of the
Building, or the mechanical, electrical,
plumbing and climate control systems
thereof or the window coverings installed
by the Landlord on exterior windows.
(c) The Tenant's request for any approval
hereunder shall be in writing and
accompanied by an adequate description of
the contemplated work and where
appropriate, working drawings and
specifications therefor. Any out-of-pocket
expenses incurred by the Landlord in
connection with any such request for
approval shall be deemed incurred by way
of an Additional Service. All work to be
performed by competent contractors and
subcontractors of whom the Landlord shall
have approved (such approval not to be
unreasonably withheld, but provided that
the Landlord may require that the
Landlord's contractors and subcontractors
be engaged for any mechanical or
electrical work) and by workmen whose
labour affiliations are compatible with
those of workmen employed by the Landlord
and its contractors and subcontractors. At
the option of the Landlord, all such work
shall be subject to inspection by and the
reasonable supervision of the Landlord, as
an Additional Service, and shall be
performed in accordance with any
reasonable conditions or regulations
imposed by the Landlord (including without
limitation the examination by the
Landlord's Architect or other experts of
the detailed drawings and specifications
as an Additional Service and contractor's
liability insurance in reasonable amounts)
and completed in a good and workmanlike
manner in accordance with the description
of the work approved by the Landlord.
Liens and 10.02 In connection with the making, erection,
Encumbrances on installation or alteration of Leasehold Improvements
Fixtures and and on trade fixtures and all other work or
Improvements installations made by or for the Tenant in the Leased
Premises the Tenant shall comply with all the
provisions of the applicable provincial legislation in
respect of mechanics' (builders') liens and workmen's
(workers') compensation and other statutes from time to
time applicable thereto
<PAGE> 16
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(including any provision requiring or enabling the
retention of portions of any sums payable by way of
holdbacks) and except as to any such holdback shall
promptly pay all accounts relating thereto. The Tenant
will not create or cause to be created any mortgage,
conditional sale agreement or other encumbrance in
respect of the Leasehold Improvements or permit any
such mortgage, conditional sale agreement or other
encumbrance to attach to the Leased Premises or the
Building or any part thereof. If and whenever any
mechanics' (builders') or other lien for work, labour,
services or materials supplied to or for the Tenant or
for the cost of which the Tenant may be in any way
liable or claims therefor shall arise or be filed or
any such mortgage, conditional sale agreement or other
encumbrance shall attach, the Tenant shall within
twenty (20) days after receipt of notice thereof
procure the discharge thereof, including any
certificate of action registered in respect of any
lien, by payment or giving security or in such other
manner as may be required or permitted by law, and
failing which the Landlord may in addition to all other
remedies hereunder avail itself of its remedy under
Section 13.01 and may make any payments required to
procure the discharge of any such liens or
encumbrances, shall be reimbursed by the Tenant as
provided in Section 13.01, and its right to
reimbursement shall not be affected or impaired if the
Tenant shall then or subsequently establish or claim
that any lien or encumbrance so discharged was without
merit or excessive or subject to any abatement, set-off
or defence.
Tenant's Goods 10.03 The Tenant covenants that it will not sell,
dispose of or remove any of the trade fixtures, goods
or chattels of the Tenant from or out of the Leased
Premises, during the Term without the consent of the
Landlord, unless the Tenant is substituting new trade
fixtures, goods or chattels of equal value or is bona
fide disposing of individual items in the normal course
of its business. The Tenant further covenants that
OTHER THAN GOODS AND CHATTELS WHICH ARE LEASED BY THE
TENANT it will at all times have and retain full legal
and beneficial ownership of its trade fixtures, goods
and chattels and will not permit them to be or become
subject to any lien, mortgage, charge, encumbrance or
title retention agreement except such as are bona fide
incurred for the purpose of financing the purchase of
such trade fixtures, good or chattels.
Removal of Fixtures 10.04 All Leasehold Improvements in or upon the Leased
and Improvements Premises installed by the Tenant shall immediately upon
termination of this Lease be and become the Landlord's
property without compensation therefor to the Tenant.
Except to the extent herein or otherwise expressly
agreed by the Landlord in writing, no Leasehold
Improvements, trade fixtures, furniture or equipment
shall be removed by the Tenant from the Leased Premises
either during or at the expiration or sooner
termination of the Term, except that (1) the Tenant, if
not in default hereunder, may at the end of the Term
remove its trade fixtures; (2) the Tenant, if not in
default hereunder, may remove its furniture and
equipment at the end of the Term; and (3) the Tenant
shall at the end of the Term remove such of the
Leasehold Improvements installed by it, and such of its
trade fixtures, furniture and equipment as the Landlord
shall require to be removed. The Tenant shall, in the
case of every removal either during or at the end of
the Term, make good any damage caused to the Leased
Premises and/or the Building by the installation and
removal.
ARTICLE 11
INSURANCE AND LIABILITY
The Landlord and Tenant further covenant and agree as follows:
Tenant's Insurance 11.01 The Tenant shall take out and keep in force
during the Term:
(a) comprehensive general public liability
insurance (covering bodily injury, death
and property damage) on an occurrence
basis with respect to all construction,
installation and alteration done in the
Leased
<PAGE> 17
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Premises by the Tenant, the business
carried on, in or from the Leased Premises
and the Tenant's use and occupancy
thereof, of not less than $1,000,000.00;
(b) insurance in such amounts as may be
reasonably required by the Landlord in
respect of fire and such other perils as
are from time to time defined in the usual
extended coverage endorsement covering the
Tenant's trade fixtures and the furniture
and equipment of the Tenant and all
Leasehold Improvements of the Tenant, and
which insurance shall include the Landlord
as a named insured as the Landlord's
interest may appear with respect to
insured Leasehold Improvements and provide
that any proceeds recoverable in the event
of loss to Leasehold Improvements shall be
payable to the Landlord but the Landlord
agrees to make available such proceeds
toward the repair or replacement of the
insured property if this Lease is not
terminated pursuant to any provision
hereof, and if this Lease is terminated
for reasons other than the default of the
Tenant hereunder, the Landlord and Tenant
agree that the proceeds shall be divided
between the Landlord and the Tenant as
their respective interest in the Leasehold
Improvements may appear, (as determined by
agreement or failing agreement by
arbitration pursuant to Section 15.10
hereof); and
(c) plate glass insurance (if there shall be
plate glass in the Lease Premises) in
amount and on terms satisfactory to the
Landlord.
All insurance required to be maintained by the Tenant
hereunder shall be in amounts and on terms REASONABLY
satisfactory to the Landlord. Such insurance shall be
by policies in form satisfactory from time to time to
the Landlord and with insurers acceptable to the
Landlord, ACTING REASONABLY, and shall provide that
such insurers shall provide to the Landlord thirty (30)
days prior written notice of cancellation or material
alteration of such policies. Each policy shall name the
Landlord as an additional insured except for coverage
for the Tenant's trade fixtures and furnishings and
equipment but including coverage for Leasehold
Improvements in respect contain a waiver of cross-claim
and subrogation against the Landlord and shall protect
and indemnify both the Landlord and the Tenant. The
Tenant shall furnish to the Landlord certificates, or,
if required by the Landlord, certified copies of the
policies (signed by the insurers) of the insurance from
time to time required to be effected by the Tenant and
evidence acceptable to the Landlord of their
continuation in force. If the Tenant shall fail to take
out, renew and keep in force such insurance the
Landlord may do so as the agent of the Tenant and the
Tenant shall repay to the Landlord any amounts paid by
the Landlord as premiums forthwith upon demand.
11.02 The Tenant covenants and agrees that:
(a) the Landlord shall not be liable for any
bodily injury to or the death of, or loss
or damage to any property belonging to,
the Tenant or its employees, invitees, or
licensees or any other person (on Land for
the purpose of attending at the Leased
Premises), on or about the Land, unless
resulting from the actual fault or
negligence of the Landlord. Provided that,
THE LANDLORD IS NOT DEEMED RESPONSIBLE, in
no event shall the Landlord be liable for
any consequential injury, loss or damage,
or:
(i) for any injury or damage of any
nature whatsoever to any persons
or property caused by the failure
by reason of a breakdown or other
cause, to supply adequate
drainage, snow or ice removal, or
by reason of the interruption of
any public
<PAGE> 18
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utility or other service, or in
the event of gas, steam, water,
rain, snow, ice, or other
substances leaking, issuing or
flowing from the water, steam,
sprinkler or drainage pipes or
plumbing of the Building or from
any other place or quarter, into
any part of the Leased Premises or
for any loss or damage caused by
or attributable to the condition
or arrangement of any electric or
other wiring or for any damage
caused by anything done or omitted
to be done by any other tenant of
the Building;
(ii) for any act or omission (including
theft, malfeasance or negligence)
on the part of any agent,
contractor or person from time to
time employed by it to perform
janitor services, security
services, maintenance, supervision
or Additional Services or any
other work in or about the Leased
Premises or the Building. THE
LANDLORD, ACTING REASONABLY, SHALL
ENSURE THAT SUCH SERVICES SHALL
CARRY SUFFICIENT AND APPROPRIATE
INSURANCE AND/OR ARE BONDED;
(iii) for loss or damage, however
caused, to money, securities,
negotiable instruments, papers or
other valuables of the Tenant,
including any consequential loss
or damage resulting therefrom; or
(iv) for loss or damage to any
automobiles or their contents for
the unauthorized use by other
tenants or strangers of parking
space allotted to the Tenant, but
the covenants to indemnify the
Landlord against and from all
loss, costs, claims and demands in
respect of any such injury or loss
to it or its employees, invitees
or licensees or any other person
on the Land for the purpose of
attending at the Leased Premises
or in respect of any such damage
to property belonging to or
entrusted to the care of any of
the aforementioned;
(b) the Landlord shall have no responsibility
or liability for the failure to supply
interior climate control or elevator
service when prevented from doing so by
strikes, the necessity of repairs, any
order or regulation of any body having
jurisdiction, the failure of the supply of
any utility required for the operation
thereof or any other cause beyond the
Landlord's reasonable control, and shall
not be held responsible for indirect or
consequential damages or other damages for
personal discomfort or illness or injury
resulting therefrom or for any bodily
injury, death or damage to property
arising from the use of, or any happening
in or about, any elevator;
(c) the Landlord may require one (1) year
after the Tenant has fully occupied the
Leased Premises in order to adjust and
balance the climate control system and the
Landlord shall not be responsible for any
inconvenience, discomfort, damages, loss
or claims whatsoever arising out of the
process of such adjustment or balancing;
(d) the Landlord shall be under no obligation
to repair or maintain or insure the
Tenant' s Leasehold Improvements,
furniture, equipment or other property;
(e) the Landlord shall be under no obligation
to remedy any default of the Tenant, and
shall not incur any liability to the
Tenant for any act or
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omission in the course of its curing or
attempting to cure any such default or in
the event of its entering upon the Leased
Premises to undertake any examination
thereof or any work therein or in the case
of any emergency.
11.03 The Tenant agrees to defend, indemnify and save
harmless the Landlord in respect of all claims for
bodily injury or death, property damage or other loss
or damage arising howsoever out of the use or
occupation of the Leased Premises or from the conduct
of any work by or any act or omission of the Tenant or
any assignee, subtenant, agent, employee, contractor,
invitee or licensee of the Tenant, and in respect of
all costs, expenses and liabilities incurred by the
Landlord in connection with or arising out of all such
claims, including the expenses of any action or
proceeding pertaining thereto, and in respect of any
loss, cost, expense or damage suffered or incurred by
the Landlord arising from any breach or non-performance
by the Tenant of any of its covenants or obligations
under this Lease. The Tenant's obligation to observe or
perform this covenant shall survive the expiration or
other termination of the Term of this Lease.
ARTICLE 12
SUBORDINATION, ATTORNMENT, REGISTRATION
AND CERTIFICATES
The Tenant agrees with the Landlord that:
Subordinations and 12.01 This Lease and all rights of the Tenant are
Attornment subject and subordinate to all mortgages, trust deeds
or trust indentures (and all instruments supplemental
thereto) or other forms of loan security now or
hereafter existing which may now or hereafter affect
the Land or Building and to all renewals,
modifications, consolidations, replacements and
extensions thereof; provided that the Tenant whenever
requested by any mortgagee (including any trustee under
a trust deed or trust indenture) shall attorn to such
mortgagee as the tenant upon all terms of this Lease.
The Tenant agrees to execute promptly whenever
requested by the Landlord or by such mortgagee an
instrument or subordination and/or attornment, as may
be required of it.
Registration 12.02 The Tenant will not register this Lease in this
form in the Registry Office or the Land Titles Office
and will not request or apply for issue for a leasehold
title for this Lease. If the Tenant desires to make a
registration in respect of this Lease, the Tenant shall
effect registration by caveat or by a short form of
lease, provided that such caveat or short form of lease
shall not disclose the rental rate or rates payable
under this Lease.
Certificates 12.03 The Tenant shall promptly whenever requested by
the Landlord from time to time execute and deliver to
the Landlord (and if required by the Landlord, to any
mortgagee (including any trustee under a trust deed or
trust indenture) designated by the Landlord a
certificate in writing as to the status of this Lease,
including as to whether it is in full force and effect,
is modified or unmodified, confirming the rental
payable hereunder and the state of the accounts between
the Landlord and Tenant, the existence or non-existence
of defaults, and any other matter pertaining to this
Lease as to which the Landlord shall request a
certificate.
ARTICLE 13
REMEDIES OF LANDLORD AND TENANT'S DEFAULT
The Landlord and Tenant further covenant and agree as follows:
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Remedying by Landlord 13.01 In addition to all rights and remedies of the
Non-Payment and Landlord available to it in the event of any default
Interest hereunder by the Tenant either by any other provisions
of this Lease or by statute or the general law, the
Landlord:
(a) shall have the right (but shall not be
obligated to) at all times to remedy or
attempt to remedy any default of the
Tenant, and in so doing may make any
payments due or alleged to be due by the
Tenant to third parties and may enter upon
the Leased Premises to do any work or
other things therein, and in such event
all expenses of the Landlord in remedying
or attempting to remedy such default shall
be payable by the Tenant to the Landlord
forthwith upon demand, together with a fee
for supervision for carrying out the
Tenant's obligations in an amount equal to
the product of the Prime Rate plus two
percent (2%) multiplied by the cost of
repairs or other work carried out by or
under the supervision of the Landlord
which amount shall be in addition to the
incurred costs of such work;
(b) may recover as additional rent all sums
paid or expenses incurred hereunder by the
Landlord, which ought to have been paid or
incurred by the Tenant, or for which the
Landlord hereunder is entitled to
reimbursement from the Tenant, and any
interest owing to the Landlord hereunder,
by any and all remedies available to it
for the recovery of rent in arrears;
(c) if the Tenant shall fail to pay any rent
or other amount from time to time, payable
by it to the Landlord hereunder promptly
when due, shall be entitled to interest
thereon at the Prime Rate plus two percent
(2%) per annum from the date upon which
the same was due until actual payment
thereof.
Remedies Cumulative 13.02 The Landlord may from time to time resort to any
or all of the rights and remedies available to it in
the event of any default hereunder by the Tenant,
either by any provision of this Lease or by statute or
the general law, all of which rights and remedies are
intended to be cumulative and not alternative, and the
express provision hereunder as to certain rights and
remedies are not to be interpreted as excluding any
other or additional rights and remedies available to
the Landlord by statute or the general law.
Right of Re-entry on 13.03 If this Lease shall have become terminated
Termination pursuant to any provision hereof, or if the Landlord
shall have become entitled to terminate this Lease and
shall have given notice terminating it pursuant to any
provisions hereof, then and in every such case it shall
be lawful for the Landlord thereafter to enter into and
upon the Leased Premises or any part thereof in the
name of the whole and the same to have again, repossess
and enjoy as of its former estate.
Re-entry and 13.04 If and whenever the Landlord becomes entitled to
Termination or does re-enter the Leased Premises under any
provision of this Lease, the Landlord, in addition to
all other rights and remedies, shall have the right to
terminate this Lease forthwith by leaving upon the
Leased Premises notice in writing of such termination,
and in such event the Tenant shall forthwith vacate and
surrender the Leased Premises.
Rights on Re-entry 13.05 Whenever the Landlord becomes entitled to
re-enter upon the Leased Premises under any provision
of this Lease, the Landlord in addition to all other
rights it may have shall have the right to enter the
Leased Premises as agent of the Tenant, either by force
or otherwise without being liable for any loss or
damage occasioned thereby and to re-let them and to
receive the rent therefor and as the agent of the
Tenant to take possession of any furniture or other
property thereon and to sell the same at public or
private sale without notice and to apply the proceeds
thereof and any rent derived from re-letting the
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Leased Premises, after deducting its costs of
conducting such sale and its costs of re-letting, upon
account of the rent due and to become due under this
Lease and the Tenant shall be liable to the Landlord
for the deficiency, if any.
Payment of Rent, etc. 13.06 If the Landlord shall re-enter and this Lease
on Termination shall be terminated as provided for herein, then the
Tenant shall pay to the Landlord on demand:
(a) rent up to the time of re-entry or
termination whichever shall be the later
plus accelerated rent as herein provided;
(b) all other amounts payable hereunder until
such time;
(c) such expenses as the Landlord may incur or
have incurred in connection with
re-entering or terminating and re-letting,
or collecting sums due or payable by the
Tenant or realizing upon assets seized
including brokerage, legal fees and
disbursements, (on a solicitor-client
basis) and the expenses of keeping the
Leased Premises in good order, repairing
the same and preparing them for re-letting
them; and
(d) as liquidated damages for the loss of rent
and other income of the Landlord expected
to be derived from the Lease during the
period which would have constituted the
unexpired portion of the Term had it not
been terminated, the amount, if any, by
which the rental value of the Leased
Premises for such period established by
reference to the terms and provisions of
this Lease exceeds the rental value of the
Leased Premises for such period
established by reference to the terms, and
provisions upon which the Landlord re-lets
them, if such re-letting is accomplished
within a reasonable time after termination
of this Lease, and otherwise with
reference to all market and other relevant
circumstances. Rental value is to be
computed in each case by reducing to
present worth at an interest rate equal to
the then current Prime Rate all rent and
other amounts to become payable for such
period and where the ascertainment of
amounts to become payable requires it, the
Landlord may make estimates and
assumptions of fact which shall govern
unless shown to be unreasonable or
erroneous.
ARTICLE 14
EVENTS TERMINATING LEASE
The Landlord and Tenant further covenant and agree as follows:
Cancellation of 14.01 If any policy of insurance upon the Building from
Insurance time to time effected by the Landlord shall be
cancelled or be about to be cancelled by the insurer or
an insurer shall refuse or decline to place or renew
insurance EACH AS A reason of the use or occupation of
the Leased Premises by the Tenant, OTHER THAN A USE OR
OCCUPATION PERMITTED PURSUANT TO PARAGRAPH 4.03 HEREOF,
or any assignee, subtenant or licensee of the Tenant or
anyone permitted by the Tenant to be upon the Leased
Premises and the Tenant after receipt of notice in
writing from the Landlord shall have failed to take
such immediate steps in respect of such use or
occupation as shall enable the Landlord to reinstate,
renew, replace or avoid cancellation of (as the case
may be), such policy or insurance,, the Landlord may at
its option, at anytime and without notice:
<PAGE> 22
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(a) enter upon the Leased Premises and remove
said use or condition, or
(b) re-enter upon and take possession of the
Leased Premises and/or terminate this
Lease by leaving upon the Leased Premises
notice in writing of such termination.
Default 14.02 If and whenever:
(a) the rent, additional rent, or other moneys
payable by the Tenant or any part thereof
shall not be paid on the day appointed for
payment thereof, whether lawfully demanded
or not, and the Tenant shall have failed
to pay such rent or other moneys within
five (5) BUSINESS days after the Landlord
shall have given to the Tenant notice of
default in such payment;
(b) The Tenant shall breach or fail to observe
or perform any of the covenants,
agreements, provisos, conditions, Rules
and Regulations or other obligations on
the part of the Tenant to be kept,
observed, or performed hereunder and shall
persist in such failure after fifteen (15)
days notice by the Landlord requiring that
the Tenant remedy, correct, desist or
comply (or in the case of any such breach
which reasonably would require more than
fifteen (15) days to rectify unless the
Tenant shall commence rectifications
within the fifteen ( 15 ) day period and
thereafter promptly and diligently and
continuously proceed with the
rectification of the breach);
(c) without the written consent of the
Landlord, the Leased Premises shall be
used by any persons other than the Tenant
or its permitted assigns or subtenants or
for any purpose other than that for which
they were leased, or occupied by any
persons whose occupancy is prohibited by
this Lease;
(d) the Leased Premises shall be vacated or
abandoned, or remain unoccupied for
fifteen (15) BUSINESS days or more while
capable of being occupied;
(e) the Term or any of the goods and chattels
of the Tenant shall at any time be taken
or be exigible in execution or in
attachment or if a writ of execution shall
BE ENFORCED, the Tenant shall attempt or
threaten to move its goods, chattels or
equipment out of the Leased Premises
(other than in the ordinary course of its
business or as permitted hereunder) or
shall cease to conduct business from the
Leased Premises;
(f) the Tenant shall make a general assignment
for the benefit of creditors or a bulk
sale of its goods or if a receiver shall
be appointed for the business, property,
affairs or revenues of the Tenant; or
(g) the Tenant shall become insolvent or
commit an act of bankruptcy or become
bankrupt or take the benefit of any
statute now or hereafter in force for
bankrupt or insolvent debtors or ( if a
corporation) shall take any steps or
suffer any order to be made for its
winding-up or other termination of its
corporate existence;
then and in any of such cases, at the option of the
Landlord, the full amount of the current month's and
the next three (3) months' monthly rent shall
immediately become due and payable and the Landlord may
immediately distrain for the same, together with any
<PAGE> 23
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arrears then unpaid; and the Landlord may without
notice or any form of legal process forthwith re-enter
and take possession of the Leased Premises or any part
thereof in the name of the whole and remove and sell
the Tenant's goods, chattels and equipment therefrom,
any rule of law or equity to the contrary
notwithstanding; and the Landlord may seize and sell
such goods, chattels and equipment of the Tenant as are
in the Leased Premises or at any place to which the
Tenant or any other person may have removed them in the
same manner as if they had remained and been distrained
upon the Leased Premises; and such sale may be effected
in the discretion of the Landlord either by public
auction or by private treaty; and either in bulk or by
individual item, or partly by one means and partly by
another, all as the Landlord in its entire discretion
may decide.
ARTICLE 15
MISCELLANEOUS
The Landlord and Tenant further covenant and agree as follows:
Notices 15.01 All notices, demands, requests, consents,
approvals and other instruments required or permitted
to be given pursuant to the terms of this Lease shall
be given in writing and shall be deemed to have been
properly given if personally served, sent by registered
mail or certified mail (postage prepaid with return
receipt requested) or sent by telegram or by confirmed
receipt of facsimile with report of delivery to:
The Landlord at: Sun Life Assurance Company of Canada
#210, 140 - 4 Avenue S.W.
Calgary, Alberta
T2P 3N3
The Tenant at: 200, 6715 8th St. N.E.
Calgary, AB
T2E 7H7
Provided, however, that such addresses may be changed
upon five (5) business days written notice or confirmed
receipt of facsimile thereof, similarly given to the
other party.
The date of receipt of any such notice, demand,
request, consent, approval or other instrument shall be
deemed to be as follows:
(a) in the case of personal service, the date
of service;
(b) in the case of registered mail or
certified mail, the fifth (5th) business
day following the date of delivery to the
Post Office, provided, however, that in
the event of an interruption of normal
mail service, service shall be effected by
personal delivery;
(c) in the case of telegram, the business day
next following the day of sending.
Entire Agreement 15.02 The Parties acknowledge that there are no
covenants, representations, warranties, agreements or
conditions expressed or implied relating to this Lease
or the Leased Premises save as expressly set out in
this Lease. This Lease may not be modified except by an
agreement in writing executed by the Landlord and the
Parties.
<PAGE> 24
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Area Determination 15.03 In the event that any calculation or
determination by the Landlord of the Rentable Area or
Gross Area of any premises (including the Leased
Premises) of the Building is disputed or called into
question, it shall be calculated or determined by the
Landlord's Architect, USING BOMA STANDARDS, whose
certification shall be conclusive.
Successors and Assigns, 15.04 This Lease and everything herein contained shall
Interpretation enure to the benefit of and be binding upon the
successors and assigns of the Landlord and theirs,
executors, administrators, successors and permitted
assigns of the Tenant. References to the Tenant shall
be read with such changes in gender as may be
appropriate, depending on whether the Tenant is a male
or female person or a firm or corporation, and if the
Tenant is more than one person or entity, the covenants
of the Tenant shall be deemed joint and several.
Force Majeure 15.05 Save and except for the obligations of the Tenant
as set forth in this Lease to pay rent, additional
rent, increased rent and other moneys to the Landlord,
if either party shall fail to meet its obligations
hereunder within the time prescribed, and such failure
shall be caused or materially contributed to by force
majeure (and for the purpose of this Lease, force
majeure shall mean any acts of God, strikes, lockouts,
or other industrial disturbance, acts of the Queen's
enemies, sabotage, war, blockades, insurrections,
riots, epidemics, lightning, earthquakes, storms,
fires, washouts, nuclear and radiation activity or
fallout, arrests, and restraints of rulers and people,
civil disturbances, explosions, breakage of or accident
to machinery, inability to obtain materials or
equipment, any legislative, administrative or judicial
action which has been resisted in good faith by all
reasonable legal means, any act, omission or event
whether of the kind enumerated or otherwise not within
the control of such part, and which by the exercise of
due diligence such party could not have prevented (but
lack of funds on the part of such party shall be deemed
not to be a force majeure), such failure shall be
deemed not to be a breach of the obligations of such
party hereunder but such party shall use reasonable
diligence to put itself in a position to carry out its
obligations hereunder.
Waiver 15.06 Failure of the Landlord to insist upon strict
performance of any of the covenants or conditions of
this Lease or to exercise any right or option herein
contained shall not be construed as a waiver or
relinquishment of any such covenant, condition, right
or option, but the same shall remain in full force and
effect. The Tenant undertakes and agrees, for itself
and for any person claiming to be a subtenant or
assignee, that the acceptance by the Landlord of any
rent from any person other than the Tenant shall not be
construed as a recognition of any rights not herein
expressly granted, or as a waiver of any of the
Landlord's rights, or as an admission that such person
is, or as a consent that such person shall be deemed to
be, a subtenant or assignee of this Lease, irrespective
of whether the Landlord or said person claims that such
person is a subtenant or assignee of this Lease. The
Landlord may accept rent from any person occupying the
Leased Premises at any time without in any way waiving
any right under this Lease.
Governing Law, 15.07 This Lease shall be governed by and construed in
Covenants, Severability accordance with the laws of the province in which the
Building is situate. The Landlord and the Tenant agree
that all of the provisions of this Lease are to be
construed as covenants and agreements as though the
words importing such covenants and agreements were used
in each separate section hereof. Should any provision
or provisions of this Lease be illegal or not
enforceable, it or they shall be considered separate
and severable from the Lease and its remaining
provisions shall remain in force and be binding upon
the parties hereto as though the said provision or
provisions had never been included.
Headings, Captions 15.08 The heading and captions appearing in this Lease
have been inserted for convenience of reference only
and in no way define, limit or enlarge the scope or
meaning of this Lease or of any provision hereof.
Expropriation 15.09 If at any time during the Term of this Lease
title is taken by the right or exercise of condemnation
or expropriation to the whole or a portion of the
Building (whether or
<PAGE> 25
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not including the Leased Premises) the Landlord may, at
its option, give notice to the Tenant terminating this
Lease on the date stated in the said notice. Upon such
termination, the Tenant shall immediately surrender the
Leased Premises and all its interest therein to the
Landlord, and the rent shall abate and be apportioned
to the date of termination and the Tenant shall
forthwith pay to the Landlord the apportioned rent and
all other amounts which may be due to the Landlord up
to the date of termination. The Tenant shall have no
claim upon the Landlord for the value of the unexpired
Term of this Lease, but the parties shall each be
entitled to separately advance their claims for
compensation for the loss of their respective interests
in the Leased Premises and the parties shall be
entitled to receive and retain such compensation as may
be awarded to each respectively.
Arbitration 15.10 That in the case of any dispute between the
Landlord and the Tenant during the Term hereof as to
any matter which by the provisions hereof is required
to be determined by arbitration in accordance with the
provisions of this Section, the matter in dispute shall
be referred to a single arbitrator appointed by the
parties for determination. If the parties cannot agree
on a single arbitrator, then upon the application of
either party a Justice of the Superior Court of the
province in which the Building is situate shall appoint
an arbitrator whose sole determination shall be final.
The arbitrator shall be a disinterested party of
recognized competence in the real estate business in
the city in which the Building is situate. The expense
of such arbitration shall be conducted in accordance
with the provisions of the Arbitration Act of the
province in which the Building is situate and any
amendments thereto or successors to such statute which
provisions shall apply mutatis mutandis.
ARTICLE 16
DEFINITIONS
Definitions The Landlord and Tenant further covenant and agree as
follows:
(a) "Landlord's Architect" means the
independent architect, or engineer or
quantity surveyor selected by the Landlord
from time to time for the purpose of
making determinations hereunder.
(b) The terms "Land" and "building" have the
meanings set out on page one hereof.
(c) "Leased Premises" means that portion of
the Building shown outlined in red on the
Plan attached as Schedule "B" hereto and
described on page 1 hereof. The exterior
face of the Building and any space in the
Leased Premises used for stairways or
passageways to other premises, stacks,
shafts, pipes, conduits, ducts or other
building facilities, the heating,
electrical, plumbing, air conditioning and
other systems in the Building and the use
thereof, as well as access thereto through
the Leased Premises for the purpose of
use, operation, maintenance, replacement
and repair, are expressly excluded from
the Leased Premises and reserved to the
Landlord.
(d) "Leasehold Improvements" means all
fixtures, improvements, installations,
alterations and additions from time to
time made, erected or installed by or on
behalf of the Tenant with the exception of
trade fixtures and furniture and equipment
not of the nature of fixtures, and
includes all wall-to-wall carpeting
(whether or not supplied by the Landlord),
and drapes supplied by the Landlord.
<PAGE> 26
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(e) "Term" means the term of this Lease set
forth in Section 2.01 and any extension
thereof and any period of permitted
overholding.
(f) "Normal Business Hours" means the hours
from 7:30 a.m. to 6:00 p.m., Monday to
Friday, inclusive, of each week, and the
hours from 7:30 a.m. to 1:00 p.m.,
Saturdays, statutory holidays excepted.
(g) "Rentable Area" in the case of a whole
floor shall mean the area within the
outside walls and shall be computed by
measuring to the glass line (that is, the
inside surface of the windows) on the
outer Building walls without deduction for
columns and projections necessary to the
Building, but shall not include stairs and
elevator shafts (supplied by the Landlord
for use in common with other tenants),
flues, stacks, pipes, shafts or vertical
ducts with their enclosing walls.
(h) "Rentable Area" in the case of part of a
floor shall mean all the area occupied and
shall be computed by measuring from the
glass line (that is, the inside surface of
the windows) on the outer Building walls
to the office side of corridors or other
permanent partitions which separate the
area occupied from adjoining Rentable
Areas without deduction for columns and
projections necessary to the Building but
shall not include stairs and elevator
shafts (supplied by the Landlord for use
in common With other tenants) flues,
stacks, pipe shafts or vertical ducts with
their enclosing walls within the area
occupied or janitorial or electrical or
telephone closets not for the exclusive
use of the Tenant.
(i) "Service Areas" shall mean the area of
corridors, fire protection cross-over
corridors, elevator lobbies, washrooms,
air-conditioning rooms, fan rooms,
janitor's closets, telephone and
electrical closets and other closets
serving the Lease Premises in common with
other premises.
(j) "Gross Area" of any Leased Premises means:
(i) in the case of Leased Premises
consisting of a whole floor or
whole floors the Rentable Area
thereof; and
(ii) in the case of Leased Premises
consisting of or including only
part of a floor of the Building,
the Rentable Area thereof plus an
amount equal to the product of (a)
the fraction having as its
numerator the Rentable Area
contained in the Leased Premises
on such floor and as its
denominator the sum of the
Rentable Areas of such floor,
multiplied by (b) the total area
in square feet of Service Areas,
if any, on such floor.
(k) "Total Rentable Area" shall mean the total
Rentable Area of the Building whether
rented or not, calculated as if the
Building were entirely occupied by tenants
renting whole floors. The lobby and
entrances on the ground floor and
subsurface floors used in common by
tenants, mechanical equipment areas and
areas rented or to be rented for
automobile parking or for storage, shall
be excluded from the foregoing
calculations. The calculation of the Total
Rentable Area, whether rented or not,
shall be determined by the Landlord's
Architect upon completion of the Building
and shall be adjusted from time to time to
give effect to any structural or
fractional change affecting the same.
<PAGE> 27
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(l) "Additional Services" means the services
and supervision supplied by the Landlord
and referenced in Section 8.06 or in any
other provision hereof as Additional
Services, and any other services which
from time to time the Landlord supplies to
the Tenant and which are additional to the
janitor and cleaning and other services
which the Landlord has agreed to supply
pursuant to the provisions of this Lease
and to like provisions of other leases of
the Building or may elect to supply to be
included within the standard level of
services available to tenants generally
and includes janitor and cleaning
services, in addition to those normally
supplied, the provision of labour and
supervision in 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 the tenant and maintenance
or other services not normally furnished
to tenants generally.
(m) "Cost of Additional Services" shall mean
in the case of Additional Services
provided by the Landlord a reasonable
charge made therefor by the Landlord which
shall not exceed the cost of obtaining
such services from independent contractors
and in the case of Additional Services
provided by independent labour (including
salaries, wages and fringe benefits) and
materials and other direct expenses
incurred, the cost of supervision and
other indirect expenses capable of being
allocated thereto (such allocation to be
made upon a reasonable basis) and all
other out-of-pocket expenses made in
connection therewith including amounts
paid to independent contractors, plus the
Landlord's then current administration
fee. A report of the Landlord's accountant
(who may be the Landlord's internal
auditor or accountant) as to the amount of
any Cost of Additional Services shall be
conclusive.
(n) "Taxes" means all taxes, rates, duties,
levies and assessments whatsoever, whether
municipal, provincial, federal or
otherwise, levied, imposed or assessed
against the Building, the Land and any
Leasehold Improvements or any of them or
upon the Landlord in respect thereof or
from time to time levied, imposed or
assessed in lieu thereof, including those
levied, imposed or assessed for education,
schools and local improvements, and
including all costs and expenses
(including legal and other professional
fees and interest and penalties on
deferred payments) incurred by the
Landlord in good faith in contesting,
resisting or appealing any taxes, rates,
duties, levies or assessments but
excluding taxes and license fees in
respect of any business carried on by
tenants and occupants of the Building
(including the Landlord) and income or
profits taxes upon the income of the
Landlord to the extent such taxes are not
levied in lieu of taxes, rates, duties,
levies and assessments against the
Building, the Land or Leasehold
Improvements or upon the Landlord in
respect thereof and shall also include any
and all taxes which may in the future by
levied in lieu of Taxes as hereinbefore
defined.
(o) "Operating Costs" means the total of all
expenses, costs and outlays of every
nature incurred in the complete
maintenance, repair, operation and
management of the Building and the Land
and a reasonable proportion as determined
by the Landlord from time to time of all
expenses incurred by or on behalf of
tenants in the Building with whom the
Landlord may from time to time have
agreements whereby in respect of their
premises such tenants perform any
cleaning, maintenance or other work or
services usually performed by the
Landlord, and which expenses if directly
incurred by the Landlord
<PAGE> 28
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would have been included in Operating
Costs. Without limiting the generality of
the foregoing, Operating Costs shall
include (but subject to certain deductions
as hereinafter provided):
(i) the cost of providing complete
cleaning, janitor, supervisory and
maintenance services;
(ii) the cost of operating elevators;
(iii) the cost of heating, cooling and
ventilating all space including
both rentable and non-rentable
areas;
(iv) the cost of providing hot and cold
water, electric light and power,
telephone, sewer, gas and other
utilities and services to both
rentable and non-rentable areas;
(v) the cost of all repairs including
repairs to the Building,
equipment, or services (including
elevators);
(vi) the cost of window cleaning;
(vii) the cost of providing security and
supervision;
(viii) the costs of all insurance for or
against liability, fire, extended
perils, loss of rental, elevator
liability, plate glass, boiler,
sprinkler leakage and all such
other casualties and losses as the
Landlord may elect to insure
against; and if the Landlord shall
elect in whole or in part to
self-insure, the amount of
reasonable contingency reserves
not exceeding the amount of
premiums which would otherwise
have been incurred in respect of
the risks undertaken;
(ix) accounting costs incurred in
connection with the maintenance,
repair, operation or management
including computations required
for the imposition of charges to
tenants and audit charges required
to be incurred for the
determination of any costs
hereunder;
(x) the reasonable rental value
(having regard to the rentals
prevailing from time to time for
similar space) of space utilized
by the Landlord in connection with
the maintenance, repair, operation
or management of the Building and
the Land; (xi) the amount of all
salaries, wages and fringe
benefits paid to employees engaged
in the maintenance, repair,
operation or management of the
Building and the Land;
(xii) amounts paid to independent
contractors for any services in
connection with such maintenance,
repair, operation or management;
(xiii) the cost of direct supervision and
of management and all other
indirect expenses to the extent
allocable to the maintenance,
repair or operation of the
Building and the Land;
(xiv) the cost of any management fees or
management agent fees (if
<PAGE> 29
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any for the Building), (or of the
Landlord if it elects to manage
the Building itself), in an amount
not exceeding four percent (4%) of
the gross rentals received or
receivable from the Building;
(xv) depreciation of the cots of
machinery, equipment, facilities,
systems, and property
(individually and collectively in
this clause called "machinery")
installed in or used in connection
with the Building (except to the
extent that the costs are charged
fully to income account in the
Landlord's tax year in which they
are incurred) if a principal
purpose or intention of such
installation or use is to conserve
energy or to reduce the cost of
other items included in Operating
Costs and interest on the
undepreciated portion of the
original cost of such machinery,
payable monthly, from the date on
which the relevant cost was
incurred, at an annual rate of
interest that is two percentage
points above the Prime Rate in
effect on the date on which the
relevant cost was incurred, (the
rate of interest to be applied to
the undepreciated portion of the
original cost, in each case, to be
adjusted, as long as a rate is
required, every five years, on the
anniversary date of the
acquisition of the relevant
machinery, to the annual rate of
interest that is two percentage
points above the Prime Rate then
in effect); the depreciation costs
and interest charged under this
clause in respect of machinery
installed or used to conserve
energy or reduce the cost of other
items included in Operating Costs
may be equal to, but in no event
shall exceed in any year the
savings resulting from such
installation or use, estimated by
the Landlord, acting reasonably;
(xvi) cost of services by and salaries
for elevator operators, porters,
sidewalk shovellers, window
cleaners, janitors, cleaners,
dusters, handymen, watchmen,
commissionaires, caretakers,
security personnel, carpenters,
engineers,firemen, mechanics,
electricians, plumbers, and other
persons or firms engaged in the
operating, maintenance and repair
of the Building, or the heating,
air conditioning, ventilating,
plumbing, electrical and elevator
systems in the Building and
superintendents, and accounting
and clerical staff attached to the
Building superintendent's or
manager's office;
(xvii) uniforms of employees and agents;
(xviii) supplies and equipment used in
connection with the repair,
maintenance, management,
caretaking and operating of the
Building (including without
limitation straight-line
amortization based on
tax-deductible depreciation
allowance of capitalized cleaning
equipment used in the Building);
(xix) supplies and materials for
washrooms, and other common
facilities;
(xx) workers' compensation costs,
unemployment insurance premiums,
pension plan contributions,
health, accident and group life
insurance for employees, managers,
and superintendents employed by
the Landlord in connection with
the Building;
<PAGE> 30
- 30 -
(xxi) servicing and inspection costs for
elevators, electrical distribution
systems and mechanical, heating,
ventilating and air conditioning
systems;
(xxii) parking area staff and maintenance
costs;
(xxiii) snow and ice removal and related
costs;
(xxiv) sales and excise taxes on goods
and services provided by the
Landlord in the management,
operating, maintenance and repair
of the Building;
(xxv) REASONABLE costs of stationery
supplies and other materials
required for the normal operation
of the superintendent's or
manager's office; and
(xxvi) all other direct and indirect
REASONABLE costs and expenses
whatsoever to the extent allocable
to the operating, maintaining,
managing or repairing of the said
Land, the Building or any
appurtenances thereto.
Notwithstanding any of the foregoing, it
is understood and agreed that Operating
Costs for any period are to be calculated
as if the Building were fully occupied
during such period. Therefore, in addition
to expenses, costs and outlays actually
incurred in the maintenance, repair,
operation and management of the Building,
the Landlord may include in the
calculation and estimation of operating
costs, such additional amounts that in the
Landlord's estimation would have been
incurred had all rentable areas in the
Building been fully occupied during the
period in question. However, in no event
shall the Tenant be required to pay more
on account of its proportionate share of
Operating Costs that it would be if the
Building were fully occupied.
It is understood and agreed that the
Building is one of two office buildings
contained in the development. In this
connection, the Tenant acknowledges that
certain materials and services which
relate in part to the Building will be
incurred in connection with the provision
of materials and services for all of the
Development. The Tenant therefore agrees
that in computing Operating Costs, the
Landlord shall be entitled to allocate to
the Building a reasonable portion of such
Operating Costs that are incurred in
respect of the Development generally.
Operating Costs shall exclude (except as
herein otherwise provided) Taxes, debt
service, depreciation, expenses properly
chargeable to capital account, costs
determined by the Landlord from time to
time to be fairly allocable to the
correction of construction faults or
initial maladjustments in operating
equipment, all management cost not
allocable to the actual maintenance,
repair or operation of the Building (such
as in connection with leasing and rental
advertising), work performed in connection
with the initial construction of the
Building and the Leased Premises, changes
for tenants, capital cost of addition,
improvements and modernizations to the
Building subsequent to date of original
construction, advertising and promotion
expenses, and expenses of redecorating and
renovating space for new tenants.
<PAGE> 31
- 31 -
In computing Operating Costs there shall
be credited as a deduction the amounts of
proceeds of insurance relating to Insured
Damage and other damage actually recovered
by the Landlord (or if the Landlord has
self-insured, a corresponding application
of reserves) applicable to damage, and
also electricity and light bulbs, tube and
ballast replacement costs and insurance
premiums that are directly payable by any
tenants, in each case to the extent that
the cost thereof was included therein. Any
expenses not directly incurred by the
landlord but which are included in
Operating Costs may be estimated by the
Landlord on whatever reasonable basis the
Landlord may select if and to the extent
that the Landlord cannot ascertain the
actual amount of such expenses from the
tenants who incurred them. Any report of
the Landlord' s accountant (who may be the
Landlord's internal auditor or accountant)
for such purpose shall be conclusive as to
the amount of Operating costs for any
period to which such report relates.
(p) "Common Costs" means the aggregate of the
Taxes plus the Operating Costs for or
incurred in a twelve (12) month period.
(q) "Base Common Costs" means $nil per square
foot of the Total Rentable Area;
(r) "Current Common Costs" in respect of any
twelve (12) month period means an amount
equal to the total Common Costs for such
twelve (12) month period divided by the
Total Rentable Area;
(s) "Common Costs Escalation" in any twelve
(12) month period means an amount equal
to:
(i) the amount by which the Current
Common Costs for such period
exceed the Base Common Costs
multiplied by
(ii) the Gross Area of the Leased
Premises.
(t) "Insured Damage" means that part of any
damage occurring to the Leased Premises to
the extent to which the cost of repair is
actually recoverable by the Landlord under
a policy of insurance in respect of fire
or other perils from time to time effected
by the Landlord;
(u) "Prime Rate" means that rate of interest
charged and published from time to time by
the main branch in the city in which the
Building is situate, of the Landlord's
bank, as its most favourable rate of
interest to its most credit-worthy
commercial customers and commonly known as
its Prime Rate.
ARTICLE 17
SPECIAL PROVISIONS
Required Conditions 17.01 The Tenant acknowledges that certain provisions
contained herein are personal to the Tenant and will be
available to the Tenant only in the event that certain
conditions (the "Required Conditions") have been
satisfied. The Required Conditions are as follows:
(a) the Tenant is NOVATEL WIRELESS
TECHNOLOGIES LTD.;
<PAGE> 32
- 32 -
(b) the Tenant is in occupation of the
Premises; and
(c) the Tenant has not been and is not in
default of any of the terms and conditions
contained in the Lease including, without
limitation, the payment of any rent.
Parking 17.02 The Landlord shall permit for the use of the
Tenant during the Term of the Lease, THIRTY FIVE (35)
random surface stalls at no cost to the Tenant.
Right to Renew 17.03 This clause is specific and personal solely to
the Tenant and, provided that:
a) and subject to the rights of existing
tenants on these premises as and when it
becomes available for renewal; and
b) the Tenant has duly and regularly paid all
of the annual basic rent and additional
rent and other sums to be paid pursuant to
this Lease and within the times and in the
manner set out in this Lease; and
c) the Tenant has duly and regularly observed
and performed each and every one of the
terms, covenants and conditions contained
in this Lease on its part to be observed
and performed and within the times and in
the manner set out in this Lease; and
d) the Tenant has given notice to the
Landlord at least SIX (6) months (but not
sooner than TWELVE (12) months) prior to
the expiration of the Term of its
intention to renew the Lease,
then the Landlord will grant to the Tenant the right to
renew this Lease for the Leased Premises on an "as-is"
basis, for a further period of THREE (3) years (the
"Renewal Term") commencing on the expiration of the
Term and such Renewal Term shall be upon the same terms
and conditions as are contained during the Term, save
and except Leasehold Improvement Allowance, and that
there shall be no further right to renew the term and
that the annual basic rent during the Renewal Term
shall be such amount as may be agreed upon between the
parties on or before the commencement of the Renewal
Term, based upon the then current market basic rent
being charged, without deduction, for similarly
improved space in comparable office buildings in the
City of Calgary, in any event not less than the last
annual basic rent paid during the original Lease Term.
If the parties are unable to agree upon the annual
basic rent to be charged during the Renewal Term on or
before the commencement of the Renewal Term then the
annual basic rent shall be determined by arbitration in
accordance with the Arbitration Act of Alberta. If the
annual basic rent for the Renewal Term is to be
determined by arbitration and a final decision under
the arbitration is not reached before the commencement
of the Renewal Term, the Tenant will pay on account in
equal monthly installments, annual basic rent at the
rate charged during the Term. After a decision is
reached under the arbitration, the Tenant will pay to
the Landlord the balance, if any, of annual basic rent
then due together with interest on the balance at an
annual rate equal to one percentage point above the
Prime Rate.
<PAGE> 33
- 33 -
Leasehold Improvement 17.04 The Landlord shall contribute toward the cost of
Allowance the Leasehold Improvements installed by the Tenant
which by the terms of this Lease shall be the property
of the Landlord immediately upon such installation to a
maximum of FOURTEEN DOLLARS AND SEVENTY-FIVE CENTS
($14.75) (the Tenant Improvement Allowance) multiplied
by the number of square feet comprising the Gross Area
of the Leased Premises for which the Tenant pays rent.
The Tenant shall be responsible for any costs which
exceed the Landlord's maximum contribution. If the
Landlord's maximum contribution is not required to
complete the Leasehold Improvements, any savings shall
be applied towards the Basic Rent as it comes due.
The Landlord will carry out the Improvements in
accordance with the design prepared by R S & A Interior
Design and dated the 24th day of October, 1996 or as
otherwise mutually agreed by the Landlord and Tenant
and in accordance with the lawful requirements of all
Government bodies having jurisdiction.
The Landlord will not be obliged to commence the
Improvements except for any preliminary layout design
which the Landlord has authorized in writing, until the
Lease has been fully and unconditionally executed in a
form acceptable to the Landlord.
The construction drawings and specifications shall be
mutually approved by Landlord and Tenant prior to
arranging for construction bids.
The Tenant shall retain the right to review, accept or
alter the Landlord's selected construction bid for the
purpose of deleting any such items deemed necessary to
maintain the cost of construction below the maximum
allowance provided by the Landlord, provided such
deletions in no way make the Improvements below
building standards and provided all Improvements
continue to meet the requirements of all Government
Bodies having jurisdiction.
Lease Termination 17.05 Notwithstanding anything else contained in this
Lease, Provided the Tenant's Required Conditions are
satisfied, the Tenant with SIX (6) months prior written
notice may terminate the Lease on the Anniversary Date
of the term at the end of the second year and each year
thereafter with a one time payment accompanying the
notice as follows:
<TABLE>
<CAPTION>
END OF YEAR PAYMENTS $S/SQ. FT. ESTIMATED TOTAL*
----------- ------------------- ---------------
<S> <C> <C>
2 $10.72 $135,500.00
3 $ 7.20 $ 91,000.00
4 $ 3.44 $ 43,500.00
</TABLE>
* Plus GST as applicable
Signage 17.06 The Landlord will permit the Tenant to install
signage on the pylon by The Deerfoot Atrium Building at
the Tenant's expense in accordance to the Building
specifications and design to be approved by the
Landlord. Tenant will be required to sign a licence
agreement for the sign, at no charge.
Early Occupancy 17.07 If the Landlord completes improvements prior to
the Commencement Date, the Landlord will permit the
Tenant to take occupancy of the premises, and the net
basic rent and proportionate share of taxes and
operating costs will be abetted until the Commencement
Date. The Landlord will do everything reasonably
possible to ensure that the premises are ready for
occupancy on December 1, 1996.
<PAGE> 34
- 34 -
Right of Examination 17.08 The Tenant and its duly authorized
representatives, shall be permitted, from time to time,
during the Landlord's normal business hours, to examine
and make copies, at its entire expense at the main
offices of the Landlord, all books, ledgers and records
of the Landlord required to substantiate the Tenant's
Proportionate Share of Additional Rentals, save that
such right of examination shall cease NINE (9) months
following the date of each annual certification of the
amounts payable by the auditors of the Landlord.
Payment by the Tenant of the Tenant's Proportionate
Share shall not preclude the Tenant from thereafter
contesting such amounts. Should the Tenant and its
auditors and/or consultants determine there is a bona
fide discrepancy of more than three percent (3%)
between the Landlord's stated costs and the actual
audited costs, then the Landlord shall pay the
difference to the Tenant forthwith and be responsible
for the cost of the Tenant's audit.
<PAGE> 35
- 35 -
ARTICLE 18
ACCEPTANCE
Acceptance 18.01 The Tenant hereby accepts this Lease of the
within described lands and premises to be held by it as
Tenant and subject to the conditions, restrictions and
covenants above set forth.
SCHEDULES:
"A" - Legal Description of Land
"B" - Plan of Leased Premises
"C" - Rules and Regulations
IN WITNESS WHEREOF the Landlord and Tenant have executed this Lease
as of the day and year first above written.
SUN LIFE ASSURANCE COMPANY
OF CANADA
Per: /s/
------------------------------------
Landlord
------------------------------------
Name (Please Print)
------------------------------------
Title
c/s
Per: /s/
------------------------------------
Landlord
------------------------------------
Name (Please Print)
------------------------------------
Title
NOVATEL WIRELESS TECHNOLOGIES, LTD.
Per: /s/
------------------------------------
Landlord
------------------------------------
Name (Please Print)
------------------------------------
Title
c/s
Per: /s/
------------------------------------
Landlord
------------------------------------
Name (Please Print)
------------------------------------
Title
<PAGE> 36
SCHEDULE "A"
LEGAL DESCRIPTION OF LAND
6715 8TH ST. N.E.
CALGARY, AB
T2E 7H7
The northwesterly 110 feet in perpendicular width throughout Lot Nine
(9), all of Lots Ten (10) to Fourteen (14) and the southerly 26.50 feet
in perpendicular width throughout Lot Fifteen (15) inclusive, Block Two
(2), Calgary Deerfoot Business Centre, plan 7911331. Reserving unto her
Majesty all Mines and Minerals.
<PAGE> 37
SCHEDULE "B"
[DEERFOOT BUSINESS CENTRE MAP GOES HERE]
<PAGE> 38
SCHEDULE "C"
RULES AND REGULATIONS
1. The landlord shall have the right to control and operate the
public portions of the Building and the public facilities, as well
as facilities furnished for the common use of the tenants, in such
manner as it deems best for the benefit of the tenants generally.
No tenant shall invite to the Lease Premises, or permit the visit
of, persons in such numbers or under such conditions as to
interfere with the use and enjoyment of the entrances, corridors,
elevators and facilities of the Building by other tenants.
2. The sidewalks, driveways, entrances, vestibules, passages,
corridors, halls, elevators and stairways shall not be encumbered
or obstructed by tenants or tenants' agents, servants, employees,
licensees or invitees, or be used by them for any purpose other
than for ingress to and egress from the Leased Premises. Landlord
reserves the right to restrict and regulate the use of
aforementioned public areas of the Building by tenants and tenants'
agents, employees, servants, licensees and invitees and by persons
making deliveries to tenants (including, but not limited to, the
right to allocate certain elevator or elevators, if any, and the
reasonable hours of use thereof for delivery service), and the
right to designate which Building entrance or entrances shall be
used by persons making deliveries in the Building.
3. No awnings or other projections shall be attached to the outside
walls of the Building. No curtains, blinds, shades or screens other
than those furnished by Landlord shall be attached to, or hung, or
used in connection with, any window or door of the Leased Premises,
without the prior written consent of Landlord. Such curtains,
blinds, shades, screens or other fixtures must be of a quality,
type, design and colour, and attached in the manner approved by
Landlord.
4. No sign, advertisement, notice or other lettering shall be
exhibited, inscribed, painted or affixed by any tenant on any
window or part of the outside or inside of the Leased Premises or
the Building without the prior written consent of Landlord. In the
event of the violation of the foregoing by any tenant, Landlord may
remove same without any liability, and may charge the expense
incurred by such removal to such tenant. Interior signs on doors
shall be inscribed, painted, or affixed for tenants by Landlord or
by sign painters, first approved by the Landlord, at the expense of
tenants and shall be of a size, colour, and style acceptable to
Landlord.
5. The windows and doors, and, if any, the sashes, sash doors, and
skylights, that reflect or admit light and air into the halls,
passageways, or other public places in the Building shall not be
covered or obstructed by tenants, nor shall any bottles, parcels,
files, papers or other articles be placed on the windowsills.
6. No showcases or other articles shall be put in front of or
affixed to any part of the exterior of the Building, nor placed in
the halls, corridors, or vestibules without the prior written
consent of Landlord.
7. The toilet, urinals, sinks and other water apparatus shall not
be used for any purposes other than those for which they were
constructed, and no sweepings, rubbish, rags, ashes or other
substances shall be thrown therein. Any damage resulting by misuse
shall be borne by the tenants by whom or by whose agents, servants,
employees, customers or invitees the same was caused. Tenants shall
not let the water run unless it is in actual use, and shall not
deface or damage any part of the Building, nor drive nails, spikes,
hooks, or screws into the walls or woodwork of the Building.
<PAGE> 39
- 2 -
8. Tenants shall not mark, paint, drill into, or in any way deface
any part of the Leased Premises or the Building. No boring, cutting
or stringing of wires shall be permitted except with the prior
written consent of Landlord and as Landlord may direct. Only
contractors approved in writing by Landlord may be employed by
tenants for making repairs, changes or any improvements to the
Leased Premises. Tenants shall not (without Landlord's prior
consent) lay floor coverings other than unaffixed rugs, so that the
same shall come in direct contact with the floor of the Leased
Premises, and, if wall to wall carpeting, linoleum or other similar
floor coverings other than the Building Standard carpet are desired
to be used and such use is approved by the Landlord, and if such
floor coverings are placed or to be placed over tile flooring then
an interlining of builder's deadening felt shall be first affixed
to the floor, by a paste or other material soluble in water, the
use of cement or similar adhesive materials being expressly
prohibited. Metal cabinets shall be set on a non-corrosive pad
wherever the floors are tile. In those portions of the Leased
Premises where the Landlord has provided carpeting, whether
directly or indirectly, the Tenant shall install at its own expense
protective padding under all furniture not equipped with carpet
casters.
9. No bicycles, vehicles or animals or birds of any kind shall be
brought into or kept in or about the Building or the Leased
Premises excepting that those vehicles so authorized by the
Landlord may enter and be kept in the Buildings' parking facilities
(if any).
10. No space in the Building shall be used for lodging, sleeping,
or any immoral or illegal purposes. No space shall be used for the
storage of merchandise or for the sale of merchandise, goods, or
property, and no auction sales shall be made, by tenants without
prior written consent of Landlord.
11. Tenants shall not make, or permit to be made, any unseemly or
disturbing noises or disturb or interfere with occupants of this or
neighbouring buildings or premises or those having business with
them whether by the use of any musical instrument, radio,
television, talking machine, unmusical noise, whistling, singing or
in any other way. Tenants shall not throw anything out of the
doors, windows, or skylights, of any, or down the passageways,
stairs or elevator shafts nor sweep anything into the corridors,
hallways or stairs of the Building.
12. No additional locks or bolts of any kind shall be placed upon
any of the doors or windows by tenants, nor shall any changes
whatsoever be made to existing locks or the mechanics thereof
except by the Landlord, at its option. Tenants shall not permit any
duplicate keys to be made, but additional keys as reasonably
required shall be supplied by the Landlord when requested by the
tenant in writing and such keys shall be paid for by the tenant,
and upon termination of tenant's Lease, the tenant shall surrender
to the Landlord all keys of the Leased Premises and other part or
parts of the Building.
13. The tenants and their agents, servants, contractors, invitees
or employees, shall not bring in or take out, position, construct,
install or move any safe, business machine or other heavy office
equipment without first obtaining the consent in writing of the
Landlord. In giving such consent, the Landlord shall have the right
in its sole discretion, to prescribe the weight permitted and the
position thereof, and the use and design of planks, skids or
platforms to distribute the weight thereof. All damage done to the
Building by moving or using any such heavy equipment or other
office equipment or furniture shall be repaired at the expense of
the tenant. The moving of all heavy equipment or other office
equipment or furniture shall occur only outside of Normal Business
Hours or at any other time consented to by the Landlord and the
persons employed to move the same in and out of the Building and
must be acceptable to the Landlord. Safes and other heavy office
equipment will be moved through the halls and corridors only upon
steel bearing plates. No freight or bulky matter of any description
will be received into the Building or carried in the elevators,
except during hours approved by the Landlord.
<PAGE> 40
- 3 -
14. Tenants shall not occupy or permit any portion of the Leased
Premises to be occupied as an office for a public stenographer or
typist, or, for the possession, storage, manufacture, or sale of
narcotics or drugs, or, except as incidental to tenant's main
business, as an employment bureau.
15. Tenants shall not use the name of the Building or the owner in
any advertising without the express consent in writing of the
Landlord. Landlord shall have the right to prohibit any advertising
by any tenant which, in any way, tends to impair the reputation of
the Building or its desirability as a building for offices, and
upon written notice from Landlord, tenants shall refrain from or
discontinue such advertising.
16. All entrance doors in the demised premises shall be left locked
and all windows shall be left closed by tenants when the Leased
Premises are not in use.
17. Except for the negligence of the Landlord or persons for whom
in law it is responsible, Landlord shall be in no way responsible
to any tenant for loss of property from the Leased Premises,
however occurring, or for damage done to the furniture or other
effects of any tenant by Landlord's agents, janitors, cleaners,
employees, or contractors doing work in the Leased Premises. The
tenants shall permit window cleaners to clean the windows of the
Leased Premises during Normal Business Hours.
18. The requirements of tenants will be attended to only upon
application to the Building manager or such other authorized
representative as the Landlord may designate in writing. Landlord's
employees shall not perform any work or do anything outside of
their regular duties, unless under specific instructions from the
office of the Landlord, from the Building manager or other
representative as aforesaid.
19. Canvassing, soliciting, and peddling in the Building are
prohibited, and tenants shall cooperate to prevent the same.
20. Any hand trucks, carryalls, or similar appliances used in the
Building shall be equipped with rubber tires, side guards and such
other safeguards as Landlord shall require.
21. Without first obtaining Landlord's written permission, tenants
shall not install, attach, or bring into the Leased Premises any
equipment (other than normal office equipment such as electric
typewriters, computers, printers, calculators, and the like) or any
instrument, duct, refrigerator, air conditioner, water cooler, or
any other appliance requiring the use of gas, electric current or
water. Any breach of this rule will entitle the Landlord at the
tenant's expense to enter the Leased Premises and remove whatever
the tenant may have so installed, attached, or brought in.
22. Landlord reserves the right to exclude from the Building
outside of Normal Business Hours and during all hours on Saturdays
all persons not authorized by a tenant in writing, by pass, or
otherwise, to have access to the Building and the Leased Premises.
Each tenant shall be responsible for all persons authorized to have
access to the Building and shall be liable to Landlord for all of
their acts while in the Building. When security service is in
effect, entrance to the Building, deliveries, and exits shall be
made via designated entrances and the Landlord may require all
persons to sign a register on entering and leaving the Building
<PAGE> 41
- 4 -
23. Tenant shall at all times keep all drapes, blinds or curtains
adjusted to block the direct rays of the sun in order to avoid
overloading the air conditioning systems.
24. Neither tenants nor their servants, employees, agents,
visitors, or licensees shall at any time bring or keep upon the
Leased Premises any inflammable, combustible or explosive fluid,
chemical or substance, nor do nor permit to be done anything in
conflict with any insurance policy which may or might be in force
upon the Building or any part thereof or with the laws relating to
fires, or with the regulations of the Fire Department or the Health
Department, or with any of the rules, regulations or ordinances of
the City in which the Leased Premises are located, or of any other
duly constituted authority.
25. Subject to section 4.3 hereof, Tenants shall not, without first
obtaining Landlord's prior written approval, do any cooking,
conduct any restaurant, luncheonette, or cafeteria for the sale or
service of food or beverages to its employees or to others, or
cause or permit any odours of cooking or other processes or any
unusual or objectionable odours to emanate from the Leased
Premises. Tenants shall not, without first obtaining Landlord's
written approval, install or permit the installation or use of any
food, beverage, cigarette, cigar, or stamp dispensing machine; or
permit the delivery of any food or beverage to the Leased Premises,
except by such persons delivering the same as shall be approved by
the Landlord. No food or beverage shall be carried in the public
halls or elevators except in closed containers.
26. Lists of automobile license numbers of people working in the
Building and the names of people who normally work off-hours may be
required by the Landlord, who may also require tenants' employees
to display a card or sticker as a prerequisite to admission to the
parking facility (if any).
27. The Landlord reserves the right to promulgate, rescind, alter
or waive any rules or regulations at any time prescribed for the
Building when it is necessary, desirable or proper for its best
interest and in the opinion of the Landlord, for the best interests
of the tenants.
28. The Landlord may publish from time to time emergency fire
regulations and evacuation procedures in consultation with the
applicable municipal authorities. Each tenant will appoint a
premises warden (wardens for multi-floor users) who will be
responsible for liaison with building management in all emergency
matters and who will be responsible for instructing employees of
the tenant in emergency matters.
29. The tenants shall promptly notify the Landlord of all requests
by any taxing authority for information relating to the Leased
Premises (including fixtures, improvements, or machinery and
equipment therein) or the tenant's occupation or use thereof and
any such information to be given by the tenant to such taxing
authority shall be forwarded by the tenant to the Landlord for
delivery of such taxing authority.
30. If any apparatus used or installed by a tenant requires a
permit as a condition for its installation, the tenant must file a
copy of such permit with the Landlord.
31. Tenants shall be responsible for the cleaning of any drapes
and/or curtains that may be installed in their Leased Premises,
including those installed by the Landlord.
<PAGE> 42
--------------------------------------------------------------------------------
LEASE
BETWEEN
SUN LIFE ASSURANCE COMPANY OF CANADA
LANDLORD
AND
NOVATEL WIRELESS TECHNOLOGIES, LTD.
TENANT
Lease #387170
--------------------------------------------------------------------------------
<PAGE> 43
LEASE
SUN LIFE ASSURANCE COMPANY OF CANADA
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I PREMISES
1.01 PREMISES 1
ARTICLE II TERM
2.01 TERM 1
2.02 POSSESSION 1
2.03 READY FOR OCCUPANCY 2
2.04 INABILITY TO DELIVER POSSESSION 2
2.05 RELOCATION OF LEASED PREMISES 2
ARTICLE III RENT
3.01 RENT 2
3.02 BASIS OF DETERMINING RENT 3
3.03 APPORTIONMENT OF ANNUAL BASIC RENT
AND COMMON COSTS ESCALATION 3
ARTICLE IV TENANT'S COVENANTS
4.01 OCCUPANCY 3
4.02 RENT 3
4.03 PERMITTED USE 3
4.04 WASTE AND NUISANCE 3
4.05 FLOOR LOADS 4
4.06 INSURANCE RISK 4
4.07 NOXIOUS FUMES VAPOURS AND
ODOURS 4
4.08 CONDITION 4
4.09 BY-LAWS 4
4.10 RULES AND REGULATIONS 5
4.11 SURRENDER, OVERHOLDING 5
4.12 SIGNS AND DIRECTORY 5
4.13 INSPECTION ACCESS 6
4.14 EXHIBITING PREMISES 6
4.15 NAME OF BUILDING 6
4.16 ACCEPTANCE LEASED PREMISES 6
ARTICLE V LANDLORD'S COVENANTS
5.01 QUIET ENJOYMENT 7
5.02 INTERIOR CLIMATE CONTROL 7
5.03 ELEVATORS 7
5.04 ENTRANCES, LOBBIES, ETC. 7
5.05 WASHROOMS 8
5.06 JANITOR SERVICES 8
ARTICLE VI REPAIR AND DAMAGE AND DESTRUCTION
6.01 LANDLORD'S REPAIRS 8
6.02 TENANT'S REPAIRS 8
6.03 ABATEMENT AND TERMINATION 9
ARTICLE VII TAXES AND OPERATING COSTS
7.01 LANDLORD'S OBLIGATIONS 12
7.02 BUSINESS TAXES AND COMMON COSTS ESCALATION 12
7.03 PAYMENT OF COMMON COSTS ESCALATION 13
7.04 POSTPONEMENT, ETC., OF TAXES 14
7.05 RECEIPTS, ETC 14
ARTICLE VIII UTILITIES AND ADDITIONAL SERVICES
8.01 WATER, TELEPHONE AND ELECTRICITY 14
</TABLE>
<PAGE> 44
<TABLE>
<S> <C> <C>
8.02 UTILITIES 14
8.03 ELECTRICITY 15
8.04 EXCESS USE 15
8.05 LAMPS 15
8.06 ADDITIONAL SERVICES 16
ARTICLE IX LICENSES, ASSIGNMENTS AND SUBLETTINGS
9.01 ASSIGNMENTS AND/OR SUBLETTINGS 16
ARTICLE X FIXTURES AND IMPROVEMENTS
10.01 INSTALLATION FIXTURES AND IMPROVEMENTS 20
10.02 LIENS AND ENCUMBRANCES ON FIXTURES AND
IMPROVEMENTS 21
10.03 TENANT'S GOODS 21
10.04 REMOVAL OF FIXTURES AND IMPROVEMENTS 22
ARTICLE XI INSURANCE AND LIABILITY
11.01 TENANT'S INSURANCE 22
11.02 LIMITATION ON LANDLORD'S LIABILITY 23
11.03 INDEMNITY OF LANDLORD 25
ARTICLE XII SUBORDINATION, ATTORNMENT, REGISTRATION AND
CERTIFICATES
12.01 SUBORDINATIONS AND ATTORNMENT 26
12.02 REGISTRATION 26
12.03 CERTIFICATES 26
ARTICLE XIII REMEDIES OF LANDLORD AND TENANT'S DEFAULT
13.01 REMEDYING BY LANDLORD NON-PAYMENT AND
INTEREST 27
13.02 REMEDIES CUMULATIVE 27
13.03 RIGHT OF RE-ENTRY ON TERMINATION 28
13.04 RE-ENTRY AND TERMINATION 28
13.05 RIGHTS ON RE-ENTRY 28
13.06 PAYMENT OF RENT, ETC. ON TERMINATION 28
ARTICLE XIV EVENTS TERMINATING LEASE
14.01 CANCELLATION OF INSURANCE 29
14.02 DEFAULT 29
ARTICLE XV MISCELLANEOUS
15.01 NOTICES 31
15.02 ENTIRE AGREEMENT 32
15.03 AREA DETERMINATION 32
15.04 SUCCESSORS AND ASSIGNS, INTERPRETATION 32
15.05 FORCE MAJEURE 32
15.06 WAIVER 33
15.07 GOVERNING LAW, COVENANTS, SEVERABILITY 33
15.08 HEADINGS, CAPTIONS 33
15.09 EXPROPRIATION 33
15.10 ARBITRATION 34
ARTICLE XVI DEFINITIONS
16.01 DEFINITIONS 34
ARTICLE XVII SPECIAL PROVISIONS 43
ARTICLE XVIII ACCEPTANCE
ACCEPTANCE 42
SCHEDULE "A" - LEGAL DESCRIPTION OF LAND
SCHEDULE "B" - PLAN OF LEASED PREMISES
SCHEDULE "C" - RULES AND REGULATIONS
</TABLE>
