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EXHIBIT 10.5
LEASE
THIS LEASE is dated as of the 19th day of May, 1999.
BETWEEN:
ATLANTIS REAL ESTATE CORPORATION
as agents for the Owner,
(the "Landlord")
OF THE FIRST PART
HYDROGENICS CORPORATION INCORPORATED
(the "Tenant")
OF THE SECOND PART
IN CONSIDERATION OF the mutual convenants and conditions herein
contained, the parties hereto agree as follows:
1. DEMISE
(a) In consideration of the rents, covenants and agreements
hereinafter reserved and contained on the part of the Tenant to be
respectively paid, observed and performed, the Landlord hereby
leases to the Tenant all and singular that certain parcel or tract
of land and premises situate, lying and being in the City of
Vaughan, in the Province of Ontario, and being more particularly
described in Schedule A annexed hereto, together with all
buildings and improvements (including all heating, ventilating,
air conditioning, mechanical, sprinkler, electrical and utility
equipment and machinery) erected thereon and used in connection
therewith and all appurtenances thereto from time to time (all of
which are collectively hereinafter referred to as the "Premises").
The Premises are municipally known as 100 Caster Avenue,
containing 13,600 sq. ft. more or less of space.
(b) INSPECTION: The Tenant acknowledges that it has examined the
Premises and is familiar with the condition thereof and the
permitted uses thereof. The Tenant accepts the Premises on an "as
is" basis and agrees that the Landlord shall not be obligated or
required to perform any work on or correct any condition of the
Premises prior to the commencement of the Term or at any time
thereafter, except as, provided herein.
(c) CONDITION: The Landlord warrants that all mechanical, electrical,
air conditioning, heating and ventilation systems are in good
working condition at the commencement of the lease term.
(d) OCCUPANCY: The Tenant may, in agreement with the existing tenant,
Atlas Copco, take occupancy at an earlier date, prior to July 30,
1999, as long as the Lease has been signed.
Any rental fees and charges, such as proportionate Realty Tax
payments, are subject to such an individual agreement between the
parties. Occupancy while the Atlas Copco lease is still in effect
is subject to the terms of said Lease. Terms and conditions agreed
to in the new lease agreement between the Landlord and the Tenant
will take effect as per August 1, 1999.
2. TERM
(a) To have and to hold the Premises, unless such term shall be
otherwise terminated as hereinafter provided, for and during the
period of THREE (3) years, to be computed from and inclusive of
the first day of AUGUST, 1999 (the "Commencement Date") and from
thenceforth next ensuing and fully to be complete ended on the
31st day of JULY, 2002 (the "Term")
(b) OPTION TO RENEW: The Landlord covenants with the Tenant that if
the Tenant duly and regularly pays the Rent and any and all
amounts required to be paid pursuant to this Lease and performs
each and every covenant, proviso and agreement on the part of the
Tenant to be paid, rendered, observed and performed, punctually
and in accordance with the provisions of this Lease, the Landlord
will at the expiration of the Term on written notice received by
the Landlord not more than NINE (9) months and not less than SIX
(6) months prior to the expiration of the initial Term, grant to
the Tenant the right to renew the term for a further TWO (2) years
(the "Renewal Term") on the same general terms and conditions as
in the Lease then in force at the
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commencement of the Renewal Term being used by the Landlord for
the Premises, save and except for the right of further renewal and
Minimum Rent. The Minimum Rent for the Renewal Term shall be the
then current market rental for similar Premises in the area
prevailing at the date the notice was given. The Minimum Rent
shall be determined by and agreed upon by the Landlord and the
Tenant between six (6) months and three (3) months prior to the
expiry of the initial Term, failing which it shall be subject to
arbitration between the parties in accordance with the Arbitration
Act, Ontario, and the renewal of the Lease shall be completed by
the parties prior to the commencement of the Renewal Term, but in
no event shall the Minimum Rent per annum be less than the Minimum
Rent for the last year of the Term just ending.
3. MINIMUM RENT
(a) Yielding and paying therefor yearly and every year during the
Term hereby granted the following sum of lawful money of Canada as
an annual minimum rent (the "Minimum Rent"), together with
Additional Rent hereinafter reserved for the period of the Term
commencing on the 1st day of AUGUST, 1999 to the 31st day of JULY,
2002, the sum of EIGHTY THOUSAND, NINE HUNDRED AND TWENTY DOLLARS
AND ZERO CENTS ($80,920.00), payable in advance in equal
consecutive monthly installments of SIX THOUSAND, SEVEN HUNDRED
AND FORTY-THREE DOLLARS AND THIRTY-THREE CENTS ($6,743.33), on the
first day of each month during such period.
(b) DEPOSIT: The Landlord acknowledges receipt from the Tenant of the
sum of FOURTEEN THOUSAND, FOUR HUNDRED AND THIRTY DOLLARS AND
SEVENTY-THREE CENTS ($14,430.73) to be applied on account of the
Minimum Rent coming due and owing for the first and last months of
the term.
(c) POSTDATED CHEQUES: The Tenant shall deliver to the Landlord on or
before the Commencement Date a series of postdated cheques in
respect of the monthly payments of Minimum Rent, and any other
payments required by this lease to be paid by the Tenant monthly
in advance for the first twelve months of the Term and shall, one
month before each anniversary date, give twelve postdated cheques
for the ensuing twelve months.
(d) All payments required to be made by the Tenant under or in
respect of this Lease shall be made to the Landlord at the
Landlord's office, or to such agent or agents of the Landlord or
at such other place as the Landlord shall hereafter from time to
time direct in writing to the Tenant.
4. ADDITIONAL RENT
(a) Any and all sums of money or charges required to he paid by the
Tenant under this Lease (except Minimum Rent), shall be deemed and
paid as Additional Rent, whether or not the same are designated as
Additional Rent hereunder, or whether or not the same are paid to
the Landlord or otherwise, and all such sums are payable in lawful
money of Canada without any deduction, setoff or abatement
whatsoever. Additional rent is due and payable with the next
monthly installment of Minimum Rent, unless otherwise provided
herein, but in any event, such Additional Rent is not payable as
part of Minimum Rent. Additional rent may be estimated by the
Landlord from time to time and such estimated amount is payable in
monthly installments in advance with annual adjustments, if
necessary, and all Additional Rent is deemed to he accruing due on
a day to day basis.
5. USE OF PREMISES
(a) The Tenant shall not use or occupy the Premises for any purpose
other than for offices and the manufacturing of data acquisitions
and power source equipment. The Tenant, in the use and occupation
of the Premises and in the prosecution or conduct of any business
therein shall comply with all requirements of all laws, by-laws,
zoning or otherwise, orders, ordinances, rules and regulations of
any federal, provincial or municipal authorities and with any
direction or certificate of occupancy issued pursuant to any law
by any public officer or officers. The Tenant shall operate its
business in a diligent, active and continuous manner in the whole
of the Premises throughout the Term of this Lease.
(b) The Tenant will not do or omit to do or permit to be done or
omitted to be done upon or in respect of the Premises anything the
doing or omission of which is forbidden by law or would be or
result in a nuisance, or use or operate any apparatus or appliance
which may cause annoyance to the Landlord. The Tenant covenants
that it will not use or permit to be used all or any part of the
Premises for any dangerous, noxious or offensive trade or
business, or cause or permit the Premises or any part thereof to
be used for the purpose of any bankruptcy, liquidation or auction
sale.
(c) ENVIRONMENT: The Tenant warrants that the Premises will not be
used in any manner which would deposit in, add to, emit or
discharge into the natural environment or into the Premises any
contaminant, including any solid, liquid, gas, odour, heat, sound,
vibration, radiation ("Contaminants"), or a combination thereof,
resulting directly or indirectly from the activities of the Tenant
or its agents, contractors, invitees, or licensees which:
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(I) impairs the quality of the natural environment or the
Premises;
(ii) causes damage to property, plant, or animal life;
(iii) causes material discomfort or harm to any person;
(iv) adversely impairs the health or safety of any person;
(v) renders any property, plant or animal life unfit for human
use; or
(vi) interferes with the normal conduct of business.
The Tenant will neither construct, alter or replace any structure,
equipment, apparatus, or mechanism which may emit or discharge any
Contaminant into any part of the natural environment or the
Premises nor alter any process or rate of production with the
result that a Contaminant may be emitted or discharged into the
natural environment or the Premises without first obtaining a
Certificate of Approval for the methods or devices to be used to
control the emission or discharge from a Director appointed by the
Ministry of the Environment pursuant to Section 4 of the
Environmental Protection Act, R.S.O. 1990, c. E. 19, as amended,
and providing a copy and obtaining a receipt therefore from the
Landlord.
The Tenant covenants with the landlord to notify the Landlord at
once in the event any Contaminants are produced on or brought onto
the Premises by the Tenant or its agents, contractors, suppliers,
invitees or licensees, and to enter into a contract with a
properly authorized disposal authority for the neutralizing or
disposal of such Contaminants, and the Tenant shall leave the
Premises at the termination of this Lease, free from all pollution
by such Contaminants.
The Tenant covenants that it will not store any Contaminants on
the Premises and if such Contaminants are produced on the
Premises, it will at once notify the Landlord and enter into a
contract with a property authorized disposal authority for the
neutralizing or disposal of such Contaminants.
The Tenant will at the date of termination of this Lease, remove
at its sole cost and expense any and all waste resulting from the
Tenant's use and occupation of the Premises including, without
limitation, ashes, garbage, refuse, industrial or domestic waste.
The Tenant shall not carry on any business or operation or permit
any thing to be done on the Premises which contravenes any
Environmental Laws
"Environmental Laws" means any treaties, laws, statutes, codes,
ordinances, orders, decrees, rules, regulations and municipal
by-laws, whether domestic, foreign or international, together with
any order, decision, ruling, decree or award of any governmental
or regulatory authority relating, in whole or in part, to the
protection and enhancement of the Environment, occupational
safety, product liability, public health, public safety and
transportation of dangerous goods including, without limitation,
the Environmental Protection Act, the Ontario Water Resources Act,
the Clean Air Act, the Environmental Contaminants Act, the
Pesticides Act and the Dangerous Goods Transportation Act.
LANDLORD ACKNOWLEDGES THAT THE TENANT WILL BE USING INDUSTRIAL
GASES, PAINTS, PETROLEUM BASED FLUIDS, ETC. IN ITS MANUFACTURING
AND PRODUCT TESTING PROCESSES. THE TENANT SHALL NOT BE LIABLE FOR
ANY COSTS OR DAMAGES ARISING FROM BREACH OF ENVIRONMENTAL LAWS BY
ANOTHER PARTY INCLUDING, WITHOUT LIMITATION, THE LANDLORD, A
PREVIOUS TENANT OR A PREVIOUS OCCUPIER OF THE PREMISES.
(d) The Tenant acknowledges that the landlord has made no
investigation of the Tenant's proposed use of the Premises and no
representation has been made as to the acceptability thereof.
(e) The Landlord and its agents, servants, employees and
representatives including such experts and technical personnel as
the Landlord deems necessary, shall have the right to inspect
(including testing) the Premises at any time or times during the
Term of any renewal thereof, upon reasonable prior notice to the
Tenant, for the purpose of determining whether the operation of
the Tenant complies with the above provisions. The Tenant shall
pay as Additional Rent any costs incurred by the landlord in
making such inspections. Such costs shall be paid forthwith upon
demand. In the event that the Landlord, acting reasonably,
determines that the Tenant is in breach of the above covenants,
then the Landlord shall provide the Tenant with notice in writing
of the breach and the Tenant shall after receipt of such notice
immediately commence to rectify such breach at the Tenant's
expense. In the event that the Tenant does not immediately
commence to rectify such breach, then the Landlord at its option
and in its sole discretion may terminate this Lease without any
further notice or may rectify such breach at the cost of the
Tenant, and the Tenant shall forthwith upon demand reimburse the
Landlord for the cost of rectification and such sum shall be
considered to be Additional Rent under this Lease and collectible
as Additional Rent. Provided further that in the event the Tenant
takes action to rectify such breach as noted above, the Tenant
shall complete such rectification within thirty (30) days after
receipt of notice given above by the Landlord. In every event, the
Tenant shall be fully responsible for all damage which may be
caused as a result of the breach of any provision contained in
Sections 5(d) and 5(e) hereof by the Tenant, its agents, servants,
employees, contractors, suppliers, invitees or licensees and
shall indemnify the Landlord from all liability and claims of any
nature arising therefrom. The covenant of indemnity contained
herein shall survive the termination of this Lease notwithstanding
anything herein to the contrary. The Tenant agrees that the making
of inspections or remedial work by the Landlord pursuant to this
Section 5(e) shall not constitute a reentry or a breach of any
covenant for quiet enjoyment contained in this Lease.
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In addition, the Tenant shall during the Term and any
renewal thereof permit the Landlord, at the
Landlord's expense, to conduct a Phase 1 Audit and/or
Phase II Audit, commission a survey of the Premises
and commission and/or conduct such other reports,
plans and studies with respect to any facility
contained within the Premises (collectively, the
"Studies") as the Landlord shall require. In
conducting or commissioning the Studies, the Landlord
shall use its reasonable best efforts not to interfere
with the operations of the Tenant.
(f) DELETED
6. TENANT'S COVENANTS
The Tenant hereby covenants and agrees with the Landlord as
follows:
(a) COVENANT TO PAY: To pay Rent and Additional Rent
without deduction, abatement or setoff.
(b) BUSINESS TAXES: The Tenant shall pay, in each and
every year during the Term, as Additional Rent, and
discharge within twenty (20) days after same shall
become due and payable, any or all taxes, rates,
duties, assessments and other charges that may now or
in the future be levied, rated, charged or assessed
against or in respect of all improvements, equipment
and facilities on or in the Premises (whether
installed by the Tenant or by the Landlord on behalf
of the Tenant) and every tax and license fee in
respect of any and every business carried thereon or
therein in respect of the use or occupancy thereof by
the Tenant (and every subtenant or licensee), whether
such taxes, rates, duties, assessments and license
fees are charged by any municipal, parliamentary,
school or other body during the Term hereby demised.
The tenant will indemnify and keep indemnified the
Landlord from and against payments of all loss,
costs, charges and expenses occasioned by or arising
from any and all such taxes, levies, rates, duties,
assessments, license fees (including all Realty Taxes
pursuant to Section 6(c) hereof), and any and all
taxes which may in future be levied in lieu of such
taxes; and any such loss, costs, charges and expenses
suffered by the Landlord pursuant to this Section
6(b) may be collected by the Landlord as Rent with
all rights of distress and otherwise as reserved to
the Landlord in respect of Rent arrears. The Tenant
further covenants and agrees that upon written
request of the Landlord, the Tenant will promptly
deliver to the Landlord for inspection receipts for
payment of all taxes, rates, duties, assessments and
other charges payable by the Tenant pursuant to this
Section 6(b) which were due and payable up to one (1)
month prior to such request, and will furnish such
other information in connection therewith as the
Landlord may reasonably require.
(c) REALTY TAXES:
(i) The Tenant will, as Additional Rent, in each and
every year during the Term and within the time or
times hereinafter provided, pay directly to the
taxing authority or to the Landlord as the Landlord
may direct from time to time, and discharge all taxes
(including local improvement rates), rates, duties,
levies, fees, charges and assessments whatsoever
imposed, assessed, levied or charged now or in the
future by any municipal, regional, provincial,
federal, parliamentary or other governmental body,
corporate authority, agency or commission ("Realty
Taxes") against the Premises and/or the Landlord in
connection therewith during the Term hereby demised.
The Tenant agrees to provide the Landlord within ten
(10) days after demand therefor by the Landlord with
a copy of any real property tax bill and real
property assessment notice for the Premises. The
Tenant will, upon request, promptly deliver to the
Landlord receipts for payment of all such Realty
Taxes paid to any such taxing authorities, as
aforesaid, and will furnish and deliver all such
other information in connection therewith as the
Landlord may reasonably require.
(ii) The amount payable by the Tenant pursuant to Section
6(c)(i) may be estimated by the Landlord for such
period or periods as the Landlord may determine from
time to time, and upon written request from the
Landlord, the Tenant shall pay to the Landlord the
amount so estimated in monthly installments in
advance during such period, together with all other
rental payments provided for in this Lease.
Notwithstanding anything hereinbefore contained, if
the Landlord decides to be responsible in the first
instance for the payment of such Realty Taxes in
respect of the Premises in accordance with the
provisions of this Section 6(c) and if at any time
when payment by the Landlord of such Realty Taxes,
whether interim, installment or final is due, the
Landlord shall not have on deposit a sufficient sum
to pay the full amount of such Realty Taxes, the
Tenant shall forthwith, upon demand, pay, as
Additional Rent, the amount determined as aforesaid
of any such deficiency to the Landlord. When the
final real property tax bill in any year has been
received, which relates to the period for which such
estimated payments have been made by the Tenant, as
aforesaid, the parties hereto agree to adjust all
payments made by the Tenant on account of such Realty
Taxes in accordance with such final real property tax
bill. The Tenant shall pay any and all costs and
expenses incurred by the Landlord or the Tenant, as
the case may be, in respect of any appeal or
contestation conducted by the Landlord or the Tenant,
as the case may be, in respect of any appeal or
contestation conducted by the Landlord or the Tenant
(with the prior consent of the Landlord) of such
Realty Taxes levied or assessed against the Premises.
(d) UTILITIES: The Tenant shall be solely responsible
for and shall promptly pay all charges for water,
gas, electricity, telephone and any and all other
utilities used or consumed in, or any other charges
levied or assessed on or in respect of the Premises,
and for all fittings, machines, apparatus or other
things leased in respect thereof and for all work or
services performed by any corporation or commission
in connection with such public or private utilities.
In no event shall the Landlord be liable for, nor
have any obligation with respect to, any interruption
or cessation of, or any failure in the supply of any
such utilities, services or systems, including,
without limitation, the water and sewage systems, to
the Premises.
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(e) MAINTENANCE AND REPAIR: The Tenant shall, at its
sole cost and expense and at all times throughout the
Term, keep and maintain the whole of the Premises and
every part thereof (including, without limitation,
all equipment, machinery and fixtures therein and all
appurtenances thereof and improvements thereto) in
good order, repair and first class condition, as
would a prudent owner. Without in any way limiting
the generality of the foregoing, the Tenant shall
promptly make all needed repairs or replacements in
and to the Premises, including, without limitation,
all repairs or replacements which are interior and
exterior and nonstructural, ordinary as well as
extraordinary, foreseen as well as unforeseen, it
being understood, confirmed and agreed by the Tenant
that the Landlord shall not at any time during the
Term of this Lease be required or called upon to make
any repairs or replacements in and to the Premises of
any nature or kind whatsoever, except that the
Landlord shall be responsible, at Landlord's expense,
for all repairs to the structure including
foundations, roof structure and walls. Provided that
any repairs or replacements performed by the Tenant
which involve work on the roof of the Building,
including, without limitation, repairs or replacement
to the HVAC system, shall be performed by a roofing
contractor appointed by the Landlord or under the
supervision of the Landlord's engineer. The Tenant's
obligation to maintain and repair and, where
necessary, replace, shall extend to all driveways,
sidewalks, parking areas and landscaping generally.
The Tenant shall be responsible at its own cost and
expense for all snow removal.
(f) ENTRY BY LANDLORD: It shall be lawful for the
Landlord and its agents, at all reasonable times
during the Term upon reasonable notice to the Tenant,
to enter the Premises to inspect the condition
thereof. Where an inspection reveals repairs or
replacements are necessary, the Landlord shall give
the Tenant notice in writing that such repairs are to
be commenced and thereupon the Tenant will make the
necessary repairs in a good and workmanlike manner
and to the satisfaction of the Landlord. The failure
by the Landlord to give notice shall not relieve the
Tenant from any of its obligations to repair or
replace in accordance with the provisions hereof.
Upon the Tenant's failure to repair upon notice as
herein provided, the Landlord may, but shall not be
obligated to, make such repairs or replacements, and
the Tenant shall forthwith pay upon demand the
Landlord's costs for making any such repairs or
replacements plus a sum equal to fifteen percent
(15%) thereof for overhead, as Additional Rent. The
Tenant agrees that the making of any repairs or
replacements by the Landlord pursuant to this Section
6(f) is not a reentry or a breach of any covenant for
quiet enjoyment contained in this Lease.
(g) LIENS: The Tenant covenants that it will not suffer
or permit any construction liens, or other liens or
orders for the payment of money to be registered
against the Premises during the Term by reason, or
arising out of any labour or material, work or
service tarnished to the Tenant or to anyone claiming
through the Tenant and should any such lien or order
be so registered the Tenant shall satisfy and
discharge the same forthwith, and should the Tenant
fail or neglect so to do within fifteen (15) days
after written notice thereof from the Landlord, tile
Landlord may, but without obligation so to do,
satisfy and discharge such lien and may add to the
next ensuing installment of Rent the amount of such
lien and all legal and other expenses including
solicitors' fees and bond premiums, together with
interest thereon from the date of payment, which
shall thereupon become due and payable as additional
Rent. The Tenant shall defend all suits to enforce
such lien or order whether against the Landlord or
the Tenant at the Tenant's sole cost and expense.
The Tenant hereby indemnifies the Landlord against
any expense incurred by the Landlord as a result of
such lien or order.
(h) SURRENDER OF THE PREMISES: The Tenant will, at the
expiration or sooner determination of the Term,
peaceably surrender and yield up unto the Landlord,
the Premises, with the appurtenances, together with
all buildings and erections which at any time during
the Term shall be made therein or thereon, in a
broom-swept condition and in as good condition and
repair as the Tenant is required to maintain the
Premises hereunder and shall surrender all keys for
the Premises to the Landlord at the place then fixed
for the payment of Rent and shall inform the Landlord
of all combinations on all locks, safes and vaults in
the Premises.
(i) HEAT (AND AIR-CONDITIONING, IF APPLICABLE):
(a) The Tenant shall heat (and air-condition if
the Premises contain air-conditioning
equipment) the Premises in a reasonable
manner at its own expense from existing
heating equipment supplied by the Landlord
(and from existing air-conditioning
equipment, if any) so as to prevent damage by
cold or frost to the Premises and to maintain
and keep in good repair the heating equipment
(and air-conditioning, equipment if any)
including, without limitation, repairs and
maintenance occasioned by every day wear and
tear, and replacements required to maintain
such heating equipment (and air-conditioning
equipment, if any) and all other expenses in
connection therewith.
(b) In this regard the Tenant shall at its own
expense, obtain and keep in good standing
during the Term of the Lease a maintenance
and service contract on the heating equipment
(and air conditioning equipment, if any)
issued by mechanical contractor approved by
the Landlord and shall supply the Landlord
with a copy of such contract.
(j) COMPLIANCE WITH LAWS: The Tenant shall, at its sole
cost and expense, comply with all statutes, by-laws,
rules, regulations, ordinances, orders and other
requirements of any federal, provincial, municipal or
other competent authority or of any of their
departments, and with all rules, regulations and
recommendations of the Insurance Advisory
Organization of Canada or any body having a similar
function, or of any liability or fire insurance
company by which the
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Landlord and the Tenant or either of them may be
insured at any time during the Term hereof, from
time to time in force applicable to the Premises and
to the business from the time being carried on by
the Tenant upon the Premises or to the use or
occupation of the Premises by the Tenant or anyone
claiming under the Tenant.
(k) SIGNS: The Tenant will not paint, fix, display, or
cause to be painted, fixed or displayed any sign,
picture, advertisement, notice, lettering, or
decoration (the "Sign") on any part of the exterior
of the Premises without in each instance, the prior
written approval of the Landlord, such approval not
to be unreasonably withheld. Any Sign shall comply
to all applicable laws. The Tenant, on ceasing to be
the Tenant of the Premises, will, before leaving
them, cause any Sign to be removed at its own expense
and shall promptly repair any and all damage caused
by such installation or removal.
(l) DAMAGE TO PREMISES: If any damage occurs to the
Premises by any cause, the Tenant will give notice to
the Landlord of such damage forthwith upon the same
becoming known to the Tenant.
7. INSURANCE
(a) LANDLORD'S INSURANCE:
(i) The Tenant shall pay within ten (10) days of
demand by the Landlord, as Additional Rent,
all premiums with respect to the insurance
covering:
(1) the Premises (excluding the
foundations and excavations) and the
machinery, boilers and equipment
contained therein and owned by the
Landlord (specifically excluding any
property with respect to which the
Tenant is obligated to insure
pursuant to Section 7(b) hereof)
against damage by fire, explosion,
impact by aircraft or vehicles,
lightning, riot, vandalism,
malicious acts, smoke, leakage from
fire protective equipment, windstorm
or hail and other perils now or
hereafter from time to time embraced
by or defined in a standard fire
insurance policy with extended or
additional perils supplemental
coverage and by-law endorsement;
(2) boiler and pressure vessel insurance
which shall include, without
limitation, loss or damage of
whatsoever kind or nature by reasons
of explosion or collapse by vacuum
or cracking, burning, or bulging of
any steam or hot water boilers,
pipes and accessories in an amount
as the Landlord shall from time to
time reasonably require, having
regard to the nature of the boilers
and the pressure vessels, if any, in
the Premises;
(3) loss of insurable gross profits
attributable to all perils insured
against by the Landlord or commonly
insured against by prudent
landlords, including loss of all
rentals receivable from the Tenant,
including Minimum Rent and
Additional Rent in such amount as
the Landlord or the Landlord's
mortgagee from time to time
requires;
(4) public liability and property damage
insurance in such reasonable amounts
as would be carried by a prudent
owner of similar premises; and
(5) any other form of such reasonable
insurance the Landlord or the
landlord's mortgagee reasonably
consider advisable.
(ii) Notwithstanding any contribution by the
Tenant to the cost of insurance premiums in
respect of the insurance maintained by the
Landlord for the Premises as herein provided,
the Tenant acknowledges and agrees that no
insurable interest is conferred upon the
Tenant under any policies of insurance
carried by the Landlord and the Tenant has no
right to receive any proceeds of any
insurance policies carried by the Landlord.
(iii) The Tenant will pay upon demand, as
Additional Rent, the amount of any increase
in insurance premiums on the Premises if such
increase is caused by the Tenant's occupancy,
operations in, use or possession of the
Premises whether or not the Landlord has
consented to same.
(iv) The Tenant covenants that nothing will be
done or omitted to be done whereby any policy
of insurance shall be canceled or the
Premises rendered uninsurable. If notice of
cancellation shall be given respecting any
insurance policy or any part thereof shall be
canceled or refused to be renewed by any
insurer by reason of the use or occupation of
the Premises by the Tenant, whether or not
the Landlord has consented to such use and
occupation, the Tenant shall within
forty-eight (48) hours after written notice
remedy or rectify such use or occupation, and
if the Tenant shall fail to do so within such
period, the Landlord may, at its option,
determine this Lease forthwith by leaving
upon the Premises notice in writing of
termination and thereupon Rent and any other
payment for which the Tenant is liable under
this Lease shall be apportioned and paid up
in full to the date of such determination of
the Lease, and the Tenant shall immediately
deliver up vacant possession of the Premises
to the Landlord.
<PAGE> 7
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(b) TENANT'S INSURANCE
(i) The Tenant shall, throughout the Term of the Lease, at its
sole cost and expense, take out and keep in full force and
effect, in the names of the Tenant, the Landlord and the
Landlord's mortgagee (if applicable), as their respective
interest may appear, the following insurance:
(1) property damage and public liability insurance
including personal liability, contractual
liability, tenants' legal liability, and owners'
and contractors' protective and non-owned
automobile liability insurance coverage with
respect to the Premises, including the business
operations conducted from the Premises. Such
policies shall be written on a comprehensive
occurrence basis with limits of not less than Two
Million Dollars ($2,000,000.00) for bodily injury
to any one or more persons, or property damage,
and such higher limits as the Landlord or its
mortgagees may reasonably require from time to
time.
(2) insurance upon property of every description and
kind owned by the Tenant, or for which the Tenant
is legally liable, or installed by or on behalf of
the Tenant and which is located within the
Premises including without limitation
stock-in-trade, chattels, furniture and equipment
in an amount not less than the cost of replacement
thereof without deduction for depreciation.
(ii) All property damage policies written on behalf of the
Tenant shall contain a waiver of any subrogation rights
which the Tenant's insurers may have against the Landlord
and against the Landlord's employees, servants, agents and
those for whom the Landlord is, in law, responsible
whether any such damage is caused by the act, omission or
negligence of the Landlord or by the Landlord's employees,
servants, agents or those for whom the Landlord is in law
responsible and shall contain the standard mortgage clause
of the Landlord's mortgagee. All liability policies taken
out by the Tenant shall be taken out in the names of the
Tenant, the Landlord and the Landlord's mortgagee (if
applicable) and shall contain a severability of interest
clause, a cross liability clause and shall be primary and
not call into contribution any other insurance available
to the Landlord.
(iii) All policies will be taken out with insurers acceptable to
the Landlord, acting reasonably, and on policies in form
satisfactory from time to time to the Landlord. The Tenant
agrees that certificates of insurance or, if required by
the Landlord or the Landlord's mortgagee, certified copies
of each such insurance policy will be delivered to the
Landlord prior to taking possession of the Premises and
every renewal date thereafter. All policies will contain
an undertaking by the insurers to notify the Landlord and
the Landlord's mortgagee in writing not less than thirty
(30) days' prior to any material change, cancellation, or
other termination thereof.
(iv) The Tenant agrees that if the Tenant fails to take out or
keep in force any such insurance referred to in this
Section 7(b) hereof, or should any such insurance not be
approved by either the Landlord or the Landlord's
mortgagee, and should the Tenant not rectify the situation
within fourty-eight (48) hours after written notice by the
Landlord to the Tenant (stating if the Landlord or the
Landlord's mortgagee does not approve of such insurance,
the reasons therefor), the Landlord has the right without
assuming any obligation in connection therewith, to effect
such insurance at the sole cost and expense of the Tenant
and all outlays by the Landlord shall be immediately paid
by the Tenant to the Landlord as Additional Rent on the
first day of the next month following such payment by the
Landlord, without prejudice to any other rights and
remedies of the Landlord under this Lease.
(v) If any insurance policy upon the Premises or any part
thereof shall be canceled or shall be threatened by the
insurer to be canceled, or the coverage thereunder reduced
in any way by the insurer by reason of the use and
occupation of the Premises or any part thereof by the
Tenant or by any assignee or subtenant of the Tenant, or
by anyone permitted by the Tenant to be upon the Premises,
and if the Tenant fails to remedy the conditions giving
rise to the cancellation, threatened cancellation or
reduction of coverage within fourty-eight (48) hours after
notice thereof by the Landlord, the Landlord may, at its
option, in addition to all other rights and remedies
under the terms of this Lease enter upon the Premises and
remedy the conditions giving rise to such cancellation,
threatened cancellation or reduction, and the Tenant shall
forthwith pay the cost thereof to the Landlord, which cost
may be collected by the Landlord as Additional Rent. The
Tenant agrees that any such entry by the Landlord is not a
re-entry or a breach of any covenant for quiet enjoyment
contained in this Lease.
(c) LOSS OR DAMAGE: The Landlord shall not be liable or responsible in
any way for any injury or death arising from or out of any
occurrence in, upon, at or relating to the Premises, or damage to
property of the Tenant or of others located on the Premises, nor
shall the Landlord be responsible for any loss of or damage to any
property of the Tenant or others from any cause whatsoever,
whether or not any such death, injury, loss or damage results from
the negligence of the Landlord, its agents, servants, employees or
any other parties for whom the Landlord may in law be responsible.
Without limiting the generality of the foregoing, the Landlord
shall not be liable for any damage to persons or property
resulting form fire, explosion, falling plaster, steam, gas,
electricity, water, rain or snow from any part of the Premises or
from the pipes, appliances, plumbing works, roof, or subsurface of
any floor or ceiling or from the street or any other place or
<PAGE> 8
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by dampness or by any cause of whatsoever nature. The Landlord
shall not be liable for any such damage caused by persons in the
Premises or by occupants of adjacent property or the public, or
caused by construction or by any private, public or quasi-public
work. All property of the Tenant kept or stored on the Premises
shall be so kept or stored at the risk of the Tenant only and the
Tenant shall hold the Landlord harmless from and against any
claims arising out of damages to the same, including subrogation
claims by the Tenant's insurers.
(d) INDEMNIFICATION OF LANDLORD: Notwithstanding anything contained
in this Lease to the contrary, the Tenant will indemnify the
Landlord and save the Landlord harmless from all loss (including
loss of Rent payable by the Tenant under this Lease), claims,
actions, damages, liability and expenses in connection with loss
of life, personal injury, damage to property or any other loss or
injury arising from this Lease, or any occurrence in, on, or at
the Premises, or the occupancy or use by the Tenant of the
Premises or any part of them, or occasioned wholly or in part by
an act or omission of the Tenant or by anyone permitted to be on
the Premises by the Tenant. The Tenant will also pay all costs,
expenses and legal fees incurred by the Landlord in enforcing
the covenants and agreements of this Lease.
8. IMPROVEMENTS, ALTERATIONS, PARTITIONS
(a) If the Tenant shall during the Term desire to make alterations,
decorations, additions or improvements (sometimes hereinafter
collectively called "Alterations") to any part of the Premises,
it may do so at its own expense at any time and from time to
time, provided that such Alterations, shall be made by
contractors approved by the Landlord and, provided further, that
the Tenant's rights to make such Alterations to the Premises
shall be subject to the following conditions:
(1) Before undertaking any such Alterations, the Tenant shall
submit to the Landlord a plan showing the proposed
Alterations and shall obtain the written approval and
consent of the Landlord to the same and such approval and
consent shall not be unreasonably withheld, provided such
Alterations are of a nonstructural nature, and further
provided no such Alterations shall commence until the
Tenant has delivered to the Landlord all requisite permits
with respect thereto;
(2) All such Alterations shall conform to all building by-laws,
if any, then in force affecting the Premises and such
Alterations or improvements shall be completed in a good
and workmanlike manner; and
(3) Such Alterations will not be, in the sole opinion of the
Landlord, of such kind or extent as to in any manner weaken
the structure of the Building after the Alterations are
completed or reduce the value of the Premises, in which
case the Landlord may arbitrarily withhold its consent to
same.
(b) All Alterations made by the Tenant, or made by the Landlord on
the Tenant's behalf (other than the Tenant's trade fixtures)
shall immediately become the property of the Landlord without
compensation therefor to the Tenant. Such Alterations shall not
be removed from the Premises either during or at the expiration
of the Term or sooner determination of this lease except that:
(1) The Tenant may at the end of the Term, if not in default,
remove its trade fixtures at its own cost;
(2) the Tenant shall, at the end of the Term, at its own cost
remove such of its leasehold improvements and fixtures as
the Landlord may require to be removed; and
(3) the Tenant may remove its trade fixtures at the end of the
Term and also during the Term in the usual and normal
course of its business or if such trade fixtures are excess
for the Tenant's purpose or the Tenant is substituting
therefor new and similar trade fixtures, provided the
Tenant is not in default and provided the Tenant first
notifies the Landlord thereof.
(c) The Tenant shall, in the case of every such removal, either
during or at the end of the Term, make good any damage caused to
the Premises by the installation and removal of any such
Alterations.
(d) It is understood and agreed that the Tenant will not remove or
carry away from the Premises any plumbing, heating, ventilating
and air-conditioning plant or equipment or other building service
or services; the Tenant shall leave the plumbing, heating,
ventilating and air-conditioning equipment and systems in good
operating condition subject to the Tenant's repair obligations
hereunder at the expiration of the Term.
9. DEFAULT
(a) INTEREST ON RENT PAST DUE: The Tenant shall pay to the Landlord
interest at a rate equal to 4% per annum over the prime rate
charged by the Landlord's principal banker to the Landlord,
calculated and compounded monthly, upon all Rent required to be
paid hereunder from the due date for payment thereof until the
same is fully paid and satisfied. The Tenant shall indemnify the
Landlord against all costs and charges (including legal fees)
lawfully and reasonably incurred in enforcing payment thereof,
and in obtaining possession of the Premises after default of the
Tenant
<PAGE> 9
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or upon expiration or earlier termination of the Term of this
Lease, or in enforcing any covenant, proviso or agreement of the
Tenant herein contained.
(b) RIGHT OF LANDLORD TO PERFORM COVENANTS: All covenants and
agreements to be performed by the Tenant under any of the terms
of this Lease shall be performed by the Tenant, at the Tenant's
sole cost and expense, and without abatement of Rent. If the
Tenant shall fail to perform any act on its part to be performed
hereunder, and such failure shall continue for 10 days after
notice thereof from the Landlord, the Landlord may (but shall not
be obligated so to do) perform such act without waiving or
releasing the Tenant from any of its obligations relative
thereto. All sums paid or costs incurred by the Landlord in so
performing such acts under this paragraph 9(a), together with
interest thereon at the rate set out in paragraph 9(a) from the
date each such payment was made or each such cost incurred by the
Landlord, shall be payable by the Tenant to the Landlord on
demand.
(c) EVENTS OF DEFAULT: If and whenever:
(1) part or all of the Rent hereby reserved is not paid when
due, and such default continues for five days after the due
date thereof; or
(2) the remaining Term of this Lease, or any goods, chattels or
equipment of the Tenant is taken or exigible in execution or
in attachment or if a writ of execution is issued against
the Tenant; or
(3) the Tenant becomes insolvent or commits an act of
bankruptcy or becomes bankrupt or takes the benefit of any
statute that may be in force for bankrupt or insolvent
debtors or becomes involved in voluntary or involuntary
winding-up proceedings or if a receiver shall be appointed
for the business, property, affairs or revenues of the
Tenant; or
(4) the Tenant makes a bulk sale of its goods or moves or
commences, attempts or threatens to move its goods,
chattels and equipment out of the Premises (other than in
the normal course of its business) or ceases or fails to
conduct business from the Premises; or
(5) the Tenant fails to observe, perform and keep each and
every one of the covenants, agreements, provisions,
stipulations and conditions herein contained to be
observed, performed and kept by the Tenant (other than
payment of Rent) and persists in such failure after 10 days
notice by the Landlord requiring that the Tenant remedy,
correct, desist or comply (or if any such breach would
reasonably require more than 10 days to rectify, unless the
Tenant commences rectification within the 10 days notice
period and thereafter promptly and effectively and
continuously proceeds with the rectification of the
breach); or
(6) the Tenant effects a Transfer as defined in paragraph 11(a)
without the Landlord's consent; or
(7) the Premises become and remain vacant or not used for a
period of ten (10) consecutive days while the same are
suitable for use by the Tenant or if the Tenant attempts to
or abandons the Premises or the Premises are used by any
person other than the Tenant without the prior written
consent of the Landlord; or
(8) re-entry is permitted under any other provisions of the
Lease;
then and in any of such cases, at the option of the Landlord, the
full amount of the current month's and the next ensuing three
months' installments of Minimum Rent shall immediately become due
and payable and the Landlord may immediately distrain for the
same, together with any arrears then unpaid, and the Landlord may
without notice or any form of legal process forthwith re-enter
upon and take possession of the Premises or any part thereof in
the name of the whole and remove and sell the Tenant's goods,
chattels and trade fixtures therefrom, any rule of law or equity
to the contrary regarding the Landlord's right of distress
notwithstanding, and the Landlord may seize and sell such goods,
chattels and equipment of the Tenant as are in the Premises and
may apply the proceeds thereof to all Rent and other payments to
which the Landlord is then entitled under this Lease. Any such
sale may be effected in the discretion of the Landlord by public
auction or otherwise, 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. If any of the
Tenant's property is disposed of as provided in this paragraph
9(c), 10 days' prior notice to the Tenant of disposition shall be
deemed to be commercially reasonable.
(d) WAIVER OF EXEMPTION AND REDEMPTION: Notwithstanding anything
contained in any statute now or hereafter in force limiting or
abrogating the right of distress, none of the Tenant's goods,
chattels or trade fixtures on the Premises at any time during the
continuance of the Term shall he exempt from levy by distress for
Rent in arrears, and upon any claim being made for such exemption
by the Tenant or on distress being made by the Landlord this
agreement may he pleaded as an estoppel against the Tenant in any
action brought to test the right to levying upon any such goods
as are named as exempted in any such statute, the Tenant hereby
waiving all and every benefit that could or might have accrued to
the Tenant under and by virtue of any such statute but for this
Lease. The Tenant covenants not to encumber assets on the
Premises otherwise eligible for distress.
<PAGE> 10
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(e) SURRENDER: If and whenever the Landlord is entitled to or does
re-enter, the Landlord may terminate this Lease by giving notice
thereof, and in such event the Tenant shall forthwith vacate and
surrender the Premises.
(f) PAYMENTS: If the Landlord shall re-enter or if this Lease shall
be terminated hereunder, the Tenant shall pay to the Landlord on
demand:
(1) Rent up to the time of reentry or termination, whichever
shall be the later, plus accelerated Rent as herein
provided;
(2) all expenses incurred by the Landlord including, without
limitation, the costs incurred in performing any of
the Tenant's obligations under this Lease, re-entering or
terminating and re-letting, collecting sums due or payable
by the Tenant, realizing upon assets seized (including
brokerage, legal fees and disbursements), and the expense
of keeping the Premises in good order repairing the same
and preparing them for re-letting; and
(3) as damages for the loss of income of the Landlord expected
to be derived from the Premises, the amounts (if any) by
which the Rent which would have been payable under this
Lease exceeds the payments (if any) received by the
Landlord from other tenants of the Premises payable on the
first day of each month during the period which would have
constituted the unexpired portion of the Term had it not
been terminated, or if elected by the Landlord by notice to
the Tenant at or after re-entry or termination, a lump sum
amount equal to the Rent which would have been payable
under this Lease from the date of such election during the
period which would have constituted the unexpired portion
of the Term had it not been terminated, reduced by the
rental value of the Premises for the same period,
established by reference to the terms and conditions upon
which the Landlord re-lets them if such re-letting is
accomplished within a reasonable period after termination
and otherwise established by reference to market and other
relevant circumstances. Rent and rental value shall be
reduced to present worth at an assumed interest rate of 10%
on the basis of the Landlord's estimates and assumptions
of fact which shall govern.
(g) RIGHT TO RELET: If the Landlord elects to re-enter the Premises
as hereinbefore provided, or if it takes possession pursuant to
legal proceedings or pursuant to any notice provided for by law,
it may either terminate this Lease or it may from time to time
without terminating this Lease make such alterations to the
Premises as are necessary in order to relet the Premises or any
part thereof for such term or terms (which may be for a term
extending beyond the Term) and at such Rent and upon such other
terms, covenants and conditions as the Landlord in its sole
discretion considers advisable. Upon each such reletting all
Rent received by the Landlord from such reletting shall be
applied in accordance with the provisions of paragraph 9(h). If
such rent received from such reletting during any month is less
than that to be paid during that month by the Tenant hereunder,
the Tenant shall pay any such deficiency, which shall be
calculated and paid monthly in advance on or before the first day
of each and every month. No such reentry or taking of possession
of the Premises by the Landlord shall be construed as an election
on the Landlord's part to terminate this Lease unless a written
notice of such intention is given to the Tenant. Notwithstanding
any such reletting without termination, the Landlord may at any
time thereafter elect to terminate this Lease for such previous
breach.
(h) REMEDIES CUMULATIVE: No reference to nor exercise of any specific
right or remedy by the Landlord or the Tenant shall prejudice or
preclude the Landlord or the Tenant from exercising or invoking
any other remedy in respect thereof, whether allowed at law or in
equity or expressly provided for herein. No such remedy shall be
exclusive or dependent upon any other such remedy, but the
Landlord or the Tenant may from time to time exercise any one or
more of such remedies independently or in combination.
10. DAMAGE OR DESTRUCTION
(a) Provided it is hereby expressly agreed that if and whenever
during the Term hereby demised the Building shall be destroyed or
damaged, then and in every such event:
(1) If the damage or destruction of the Building renders
TWENTY-FIVE percent (25%) or more of the area of the
Building wholly unfit for occupancy or impossible or
unsafe for use and occupancy, the Landlord may at its
option, terminate this Lease by giving to the Tenant
notice in writing of such termination, in which event,
this Lease and the Term hereby demised shall cease and be
at an end as of the date of such destruction or damage and
the Rent and all other payments for which the Tenant is
liable under the terms of this Lease shall be apportioned
and paid in full to the date of such destruction or
damage.
(2) If the damage or destruction is such that the damage to
the Premises, in the reasonable opinion of the Landlord to
be given to the Tenant within twenty (20) days of the
happening of such damage or destruction, cannot be
repaired with reasonable diligence within one hundred and
twenty (120) days from the happening of such damage or
destruction, then the Landlord may, within five (5) days
next succeeding the giving of the Landlord's opinion as
aforesaid, terminate this Lease by giving to the Tenant
notice in writing of such termination, in which event this
Lease and the Term hereby demised shall cease and be at
an end as of the date of such destruction or damage and
the Rent and all
<PAGE> 11
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other payments for which the Tenant is liable under the
terms of this Lease shall be apportioned and paid in full
to the date of such destruction or damage; in the event
that the Landlord does not terminate this Lease, then the
Landlord shall repair the Premises, except for the
Tenant's furnishings, fixtures, improvements and
alterations, with all reasonable speed.
(3) If in the reasonable opinion of the Landlord the damage
can be made good as aforesaid within one hundred and
twenty (120) days of the happening of such destruction or
damage or if the Landlord has not terminated this Lease as
aforesaid, and the damage is such that the Premises are
capable of being partially used for the purposes for which
they are hereby leased, then until such damage has been
repaired, Rent shall abate in the proportion that the part
of the Premises which is rendered unfit for occupancy
bears to the whole of the Premises and the Landlord shall
repair the damage, except for the Tenant's furnishings,
fixtures, improvements, and alterations, with all
reasonable speed, provided that in the event that the
repairs are not completed within 120 days of the happening
of such destruction or damage, the Tenant may termination
this lease.
(b) ABATEMENT OF RENT: Except as provided in Subsections 10(a)(2) and
(3) hereof, there shall be no abatement from or reduction of the
rent due hereunder. The Tenant shall not be entitled to damages,
losses, costs; or disbursements from the Landlord during the Term
hereby created, caused or contributed by or on account of any
cause whatsoever including without limitation fire, water,
sprinkler systems, failure or stoppage of heat, air-conditioning,
light, elevator, live steam or plumbing service in or to the
Premises, whether due to acts of God, strikes, accidents, the
making of alterations, repairs, improvements, structural changes
to the Premises or the equipment or system supplying the said
services, or from any cause whatsoever.
11. ASSIGNMENT AND SUBLETTING
(a) CONSENT NEEDED: The Tenant will not, during the said Term or any
renewals thereof:
(1) assign this Lease in whole or in part; nor
(2) sublet, share, part with possession or license all or any
part of the Premises; nor
(3) mortgage or encumber this Lease or the Premises
to or in favour of any person (collectively a "Transfer") without
the prior written consent of the Landlord, such consent not to be
unreasonably withheld. The Landlord will consent to any assignment
or sublease intended as security only to a bona fide lender
provided such lender agrees to be bound by the terms of this lease
upon enforcement of its security and agrees to require any further
assignee or sublessee to covenant directly with the Landlord to be
bound by the terms and conditions of this Lease.
(b) HOW CONSENT OBTAINED: In requesting the Landlord's consent
pursuant to Section 11(a) herein, the Tenant shall provide the
Landlord with all information that it may reasonably require, as
set out above, including a true copy of any agreement to assign,
or agreement to sublease. Such information may pertain to the
identity to the proposed assignee, licensee or sublessee
(collectively the "Transferee"), the nature of its business, and
information pertaining to the financial strength of its covenant,
and such other information as the Landlord shall, from time to
time, acting reasonably, require. The Landlord shall maintain
confidentially in respect of all such information received. The
Landlord will, within thirty (30) days after having received such
notice and all such necessary information, notify the Tenant in
writing either that it consents to the Transfer, or it does not
consent to the Transfer.
(c) TENANT'S OBLIGATIONS CONTINUED: No assignment, sublease, or other
disposition by the Tenant of the Lease or of any interest under
this Lease or its right to the use and occupancy of the Premises
shall relieve the Tenant from the obligation for the performance
of the covenants, obligations, and agreements contained in this
Lease. Such assignment or disposition shall render null and void
at the time of such assignment or other disposition any options to
renew this Lease, options or rights to additional area and options
and rights to car parking areas unless the Landlord shall have
otherwise agreed in writing.
(d) CHANGE IN CORPORATE CONTROL: If the sale, assignment, transfer or
other disposition of any of the issued and outstanding capital
stock, of the Tenant (or any successor or assignee of the Tenant
which is a corporation), shall result in changing the control of
the Tenant, such sale, assignment, transfer or other disposition
shall be deemed a Transfer of this Lease and shall be subject to
all of the provisions of this Lease with respect to assignments by
the Tenant. Provided, however, that the Landlord's consent shall
not be required to any assignment or transfer of the issued and
outstanding capital stock of the Tenant:
<PAGE> 12
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(1) to a corporation controlled by or subject to the same
control as the assignor or transferor;
(2) to a member or members of the family of the assignor or
transferor; or
(3) in the case of devolution through death.
For the purposes of this section, "control" of any corporation
shall be deemed to be vested in the person or persons owning more
than fifty (50%) percent of the voting power for the election of
the Board of Directors of such corporation and a "member or
members" of the family of any assignor or transferor shall include
his spouse, parents, brothers, sisters and issue.
(e) ADVERTISING: The Tenant shall not advertise or allow the Premises
or a portion thereof to be advertised as being available for
assignment, sublease, or otherwise without the prior written
approval of the Landlord as to the form and content of such
advertisement, provided that no such advertisement shall contain
any reference to the rental rate of the Premises or any part
thereof.
12. STATUS STATEMENT, SUBORDINATION AND ATTORNMENT
(a) SALE, CONVEYANCE AND ASSIGNMENT: Nothing in this Lease shall
restrict the right of the Landlord to sell, convey, assign or
otherwise deal with the Premises, subject only to the rights of the
Tenant under this Lease.
(b) EFFECT OF SALE, CONVEYANCE OR ASSIGNMENT: A sale, conveyance or
assignment of the Premises by the Landlord where the purchaser
enters into an agreement with the Tenant to be bound by this Lease
and to assume the obligations of the Landlord hereunder shall
operate to release the Landlord from liability from and after the
effective date thereof upon all of the covenants, terms and
conditions of this Lease, express and/or implied, except as such
may relate to the period prior to such effective date, and the
Tenant shall thereafter look solely to the Landlord's successor in
interest in and to this Lease. This Lease shall not be affected by
any such sale, conveyance or assignment, and the Tenant shall
attorn to the Landlord's successor in interest thereunder provided
such successor in interest has entered into the agreement with the
Tenant as aforesaid.
(c) SUBORDINATION: This Lease is and shall be subject and subordinate
in all respects to any and all mortgages, development agreements
and site plan agreements now or hereafter placed on the Premises,
and to all renewals, modifications, consolidations, replacements
and extensions thereof.
(d) ATTORNMENT: If the interest of the Landlord is transferred to any
person (herein called the "Purchaser") by reason of foreclosure or
other proceedings for enforcement of any mortgage, or by delivery
of a deed in lieu of such foreclosure or other proceedings, the
Tenant shall immediately and automatically attorn to the Purchaser.
(e) EFFECT OF ATTORNMENT: Upon attornment under paragraph 12(d), this
Lease shall continue in full force and effect as a direct lease
between the Purchaser and the Tenant, upon all of the same terms,
conditions and covenants as are set forth in the Lease.
(f) EXECUTION OF INSTRUMENTS: The subordination and attornment
provisions of this Section 12 shall be self-operating and no
further instrument shall be required. Nevertheless the Tenant, on
request by and at the expense of the Landlord or any successor in
interest, shall execute and deliver any and all instruments further
evidencing such subordination and (where applicable hereunder)
attornment.
(g) STATUS STATEMENT: Each of the parties hereto shall at any time and
from time to time upon not less than ten (10) days prior notice
from the other execute, acknowledge and deliver a written statement
certifying, if such is the case:
(1) that this Lease is in full force and effect, subject only
to such modification (if any) as may be set out therein;
(2) that the Tenant is in possession of the Premises and paying
Rent as provided in this Lease;
(3) the dates (if any) to which Rent is paid in advance;
(4) that there are not, to such party's knowledge any uncured
defaults on the part of the other party hereunder, or
specifying such defaults if any are claimed;
(5) that all work to be completed by the Landlord has been
completed;
(6) that any option to renew has been exercised;
(7) whether there exist any claims or deductions from, or
defenses to, the payment of Rent; and
(8) such other matters as may reasonably requested by the
Landlord.
Any such statement may be relied upon by any prospective transferee
or encumbrancer of all or any portion of the Premises, or any
assignee of any such persons. If the Tenant fails to deliver such
statement in a timely manner, the Tenant shall be deemed to have
acknowledged that this Lease is in full force and effect, without
modification except as may be represented by the Landlord, and that
there are no uncured defaults in the Landlord's performance.
(h) AUTHORITIES FOR ACTION: The Landlord may act in any matter
provided for herein by its property manager and other person who
shall from time to time be designated by the Landlord by notice to
the Tenant. The Tenant shall designate in writing one or more
persons to act on its
<PAGE> 13
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behalf in any matter provided for herein may from time to time change,
by notice to the Landlord, such designation. In the absence of any
such designation, the person or persons executing this Lease for the
Tenant shall be deemed to be authorized to act on behalf of the Tenant
in any matter provided for herein.
13. MISCELLANEOUS
(a) WAIVER OF BREACH: The failure of the Landlord to insist upon a strict
performance of any of the agreements, terms, covenants and conditions
hereof shall not be deemed a waiver of any rights or remedies that the
Landlord may have and shall not be deemed a waiver of any subsequent
breach or default in any of such agreements, terms, covenants and
conditions. No waiver by the Landlord hereunder shall be effective
unless such waiver is in writing signed by the Landlord.
(b) HOLDING OVER: If the Tenant shall continue to occupy the Premises
after the expiration of this Lease, with or without the consent of the
Landlord and without any further written agreement, the Tenant shall
be a monthly tenant at the monthly Rent herein reserved and otherwise
on the terms and conditions herein set forth, except as to the length
of tenancy.
(c) PAYMENTS DEEMED RENT: All payments and charges payable by the Tenant
pursuant to this lease shall, for all purposes hereunder, be deemed to
be Rent. If the Tenant fails to pay any Realty Taxes, rates, insurance
premiums or other charges which it has herein covenanted to pay, the
Landlord may pay the same and shall be entitled to charge the sums so
paid to the Tenant who shall pay them forthwith on demand; and the
Landlord, in addition to any other rights, shall have the same
remedies and may take the same steps for the recovery of all such sums
as it might have and take for the recovery of Rent in arrears under
the terms of this Lease.
(d) EVIDENCE OF PAYMENTS BY TENANTS: The Tenant shall from time to time
at the request of the Landlord produce to the Landlord satisfactory
evidence of the due payment by the Tenant of all payments required to
be made by the Tenant under this Lease.
(e) ADJUSTMENTS OF TAXES: The rentals, Realty Taxes, and local improvement
rates and other charges herein provided in respect of the first and
last years of the Term hereby demised and portion of any months and
any period or over holding shall be adjusted between the Landlord and
the Tenant on a per diem basis.
(f) OVERLOADING: The Tenant will not bring upon the Premises or any part
thereof any machinery, equipment, article or thing that by reason of
its weight, size or use might damage the floors of the Premises and
that if any damage is caused to the Premises by any machinery,
equipment, article or thing or by overloading or by any act, neglect
or misuse on that part of the Tenant or any of its servants, agents or
employees or any person having business with the Tenant, the Tenant
will forthwith repair the same or pay to the Landlord the cost of
making good the same.
(g) REFUSE: It is hereby expressly agreed that the Tenant will keep the
Premises and every part thereof in a clean and tidy condition and will
not permit waste paper, garbage, ashes or waste or objectionable
material to accumulate thereon.
(h) NET LEASE: It is the purpose and intent of the Landlord and the
Tenant that the Minimum Rent shall be absolutely net carefree to the
Landlord, so that save as hereinbefore set out, this Lease shall
yield, net carefree to the Landlord, the Minimum Rent specified in
Section 3(a) hereof, in each year during the Term of this Lease
without notice or demand, and free of any charges, assessments,
impositions or deductions of any kind and without abatement, deduction
of setoff and under no circumstances or conditions whether now
existing or hereafter arising whether beyond the present contemplation
of the parties is the Landlord to be expected or required to make any
payment of any kind whatsoever or to be under any obligation or
liability hereunder. All expenses and obligations of every kind and
nature whatsoever relating to the Premises which may arise or become
due during the Term of this Lease shall be paid by the Tenant and the
Landlord shall be indemnified and saved harmless by the Tenant for all
costs of same.
(i) SALES TAXES: Notwithstanding any other section or clause of the
Lease, the Tenant shall pay to the Landlord an amount equal to any and
all goods and services taxes, sales taxes, value added taxes, or any
other taxes imposed on the Landlord with respect to Rent payable by
the Tenant to the Landlord under this Lease, whether characterized as
a goods and services tax, sales tax, value added tax or otherwise
(herein called "Sales Taxes"), it being the intention of the parties
that the Landlord shall be fully reimbursed by the Tenant with respect
to any and all Sales Taxes payable by the Landlord. The amount of the
Sales Taxes so payable by the Tenant shall be calculated by the
Landlord in accordance with the applicable legislation and shall be
paid to the Landlord at the same time as the amounts to which such
Sales Taxes apply are payable to the Landlord under the terms of this
Lease or upon demand at such other time or times as the Landlord from
time to time determines. Notwithstanding any other section or clause
in this Lease, the amount payable by the Tenant under this paragraph
shall be deemed not to be Rent, but the Landlord shall have all of the
same remedies for any rights of recovery of such amount as it has for
recovery of Rent under this Lease.
(j) INSPECT PREMISES: Provided that during the Term hereby created any
person or persons may inspect the Premises and all parts thereof at
all reasonable times, on producing a written order to that effect
signed by the Landlord or its agents.
<PAGE> 14
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(k) NOTICE FOR SALE OR TO LET: Provided that the Landlord shall have the
right during the Term of this Lease to place upon the Premises a
notice stating that the Premises are for sale and shall, within six
(6) months prior to the termination of the Term, have the right to
place upon the Premises a notice stating that the Premises are for
rent and, further provided that the Tenant will not remove such notice
or permit the same to be removed.
(l) EXPROPRIATION:
(1) If during the Term any expropriation of all or any part of the
Premises takes place, neither of the parties shall have any claim
against the other for the value of any unexpired portion of the
Term of this Lease or for damages or otherwise.
(2) Each party shall have the right to claim and recover from the
expropriating authorities such compensation as may be separately
awarded or recoverable.
(3) The Landlord and the Tenant agree to inform each other fully as
to their respective claims for compensation made by them in the
event of any expropriation and not to claim compensation on any
basis inconsistent with this Lease and to reasonably cooperate
with each other in the prosecution of any proper separate claims.
Neither party shall compromise the claim of the other party
without its consent.
(m) FORCE MAJEURE: Notwithstanding any other provision of this Lease, if
the Landlord or the Tenant is, in good faith, delayed or prevented
from doing anything required by this Lease because of a strike, labour
trouble, inability to get materials or services, power failure,
restrictive governmental laws or regulations, riots, insurrection,
sabotage, rebellion, war, act of God, or any other similar reason that
is not the fault of the party delayed, the doing of the thing is
excused for the period of the delay and the party delayed will do what
was delayed or prevented within the appropriate period after the
delay. The preceding sentence does not excuse the Tenant from payment
of Rent or the Landlord from payment of amounts that it is required to
pay, in the amounts and at the times specified in this Lease.
(n) PLANNING ACT: It is a condition of this Lease that the subdivision
control provisions of the Planning Act (Ontario), and amendments
thereto, be complied with if they apply. If the provisions of the
Planning Act do apply, then until any necessary consent to the Lease
is obtained, the Term (including any extensions thereof) and the
Tenant's rights and entitlement granted by this Lease are deemed to
extend for a period not exceeding twenty-one (21) years less one (1)
day from the commencement of the Term.
(o) ENTIRE AGREEMENT: This Lease and the Schedules annexed hereto
constitute the entire agreement between the parties hereto with
respect to the Premises and may be amended only by an agreement in
writing signed by the Landlord and the Tenant and no party hereto is
bound by any representations, warranties, promises or agreements or
inducements not embodied herein and in particular, no warranties of
the Landlord not expressed herein are to be implied.
(p) PARTIAL INVALIDITY: If any term, covenant or condition of this Lease
or the application thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, the remainder of this Lease, or
the application of such term, covenant or condition to persons or
circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby and each term, covenant
or condition of this Lease shall be valid and enforced to the fullest
extent permitted by law.
(q) REGISTRATION: The Tenant shall not register this Lease, but may
register a Notice of Lease. Such Notice of Lease shall describe the
parties, the Premises, the Term of this Lease and any renewals and
shall be prepared by the Tenant's solicitors, subject to the prior
written approval of the Landlord and its solicitors, at the Tenant's
expense, and shall be registered at the Tenant's expense.
(r) NOTICE:
(1) Any notice, request or demand herein provided for or given
hereunder if given by the Tenant to the Landlord shall be
sufficiently given if hand delivered or mailed by registered
mail, postage prepaid, return receipt requested, addressed to the
Landlord at 1131 Leslie St., Toronto, Ontario M3C 2K6. Any notice
herein provided for or given hereunder if given by the Landlord
to the Tenant shall be sufficiently given if hand delivered or
mailed as aforesaid addressed to the Tenant at the Premises.
(2) Any notice mailed as aforesaid shall be conclusively deemed to
have been given on the third business day following the day on
which such notice is mailed as aforesaid or if hand delivered on
the date of delivery. Either party may at any time notify the
other in writing of a change of address and the address specified
in the notice will be considered the address of the party for the
giving of notices under this Lease. If the postal service shall
be interrupted or substantially delayed, any notice, request,
demand or other communication will only be delivered in person. A
notice given by or to one Tenant is a notice by or to all of the
persons who are the Tenants under this Lease.
<PAGE> 15
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(s) QUIET ENJOYMENT: The Landlord covenants with the Tenant for quiet
enjoyment, without hindrance or interruption by the Landlord, or any
other person or persons lawfully claiming by, through or under the
Landlord.
(t) GENDER AND NUMBER: Words importing the singular number only shall
include the plural and vice-versa and words importing the masculine
gender shall include the feminine gender and words importing persons
shall include firms and corporations and vice-versa. The captions are
descriptive only and do not form part of this lease.
(u) GOVERNING LAW: This Lease shall be governed and shall be construed in
accordance with the laws of the Province of Ontario.
(v) TIME OF THE ESSENCE: Time shall be of the essence of this Lease and
of every part hereof.
(w) BINDING: This agreement and everything herein contained shall be
binding upon the parties hereto and their respective heirs,
executors, administrators, successors and assigns and enure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, successors and permitted assigns. All the Tenant's
covenants herein contained shall be deemed joint and several and all
rights and powers reserved to the Landlord may be exercised by either
the Landlord or its agents or representatives.
IN WITNESS WHEREOF the Parties hereto have executed this Lease as of the
date above first written.
<TABLE>
<S> <C>
SIGNED, SEALED AND DELIVERED
in the presence of: )
) ATLANTIS REAL ESTATE CORPORATION
) on behalf of the owners
)
)
) Per: XXXXXXXXXXXXX Date: June 8/99
------------------------------------ ) ---------------------------- ------------
Witness )
)
) HYDROGENICS CORPORATION
) INCORPORATED
)
)
/s/ RAY CANDIDO ) Per: /s/ BOYD TAYLOR Date: June 7/99
------------------------------------ ) ---------------------------- ------------
Witness Ray Candido ) Boyd Taylor - Director
)
)
)
/s/ DR. JEAN HAMELIN ) Per: /s/ PIERRE RIVARD Date: June 7/99
------------------------------------ ) ---------------------------- ------------
Witness Dr. Jean Hamelin ) Pierre Rivard - President
</TABLE>
<PAGE> 16
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SCHEDULE "A"
ALL AND SINGULAR that certain parcel or tract of land situate, lying and being
in the Township of Vaughan in the Regional Municipality of York, described as
lot 36 on registered Plan 65-M-2309, having a frontage of 131 feet and a depth
of 255 feet, more or less, bearing civic address of 100 Caster Avenue, having a
net rentable area of approximately 13,600 square feet.
