EXHIBIT 10.18
LEASE
THIS LEASE made the 14th day of November, 2005,
IN PURSUANCE OF THE SHORT FORMS OF LEASES ACT
BETWEEN:
592423 ONTARIO INC.,
(the “Landlord”)
OF THE FIRST PART
AND
LOYALTY MANAGEMENT GROUP CANADA INC.,
(the “Tenant”)
OF THE SECOND PART
In consideration of the premises and the mutual covenants, agreements and
conditions herein contained, it is hereby covenanted, agreed and declared
between the parties as follows:
ARTICLE 1.00 - DEFINITIONS
The terms defined herein shall, for all purposes of this Lease and all
instruments supplemental hereto, have the following meanings, unless the context
expressly or by necessary implication otherwise requires:

  (a)   “Additional Rent” shall mean all sums of money, other than Basic Rent,
which are required to be paid by the Tenant pursuant to any provision of this
Lease.     (b)   “Additional Service” shall mean any service which is requested
by the Tenant in addition to those supplied by the Landlord as part of the
normal Development service and which the Landlord is prepared to supply at an
additional cost to the Tenant.     (c)   “Additional Service Cost” shall mean
the additional cost payable by the Tenant to the Landlord for any Additional
Service.     (d)   “Basic Rent” shall mean the rent payable by the Tenant
pursuant to Section 4.1.     (e)   “Building” shall mean the building and all
other fixed improvements situate at any time on the Lands, all of which are
commonly known as 438 University Avenue, Toronto, Ontario.     (f)   “Building
Standard” shall mean the building standard established by the Landlord,
including matters of design, construction and/or installation to be observed by
the tenants in the Building, as amended from time to time by the Landlord,
acting reasonably.     (g)   “Business Hours” shall mean the period from 7:00
A.M. to 6:00 P.M. on any Business Day and “Business Day” shall mean Monday
through Friday excluding all statutory or civic holidays. “Business Operating
Hours” has the meaning ascribed to it in Section 6.2 herein.     (h)   “Capital
Tax” shall mean any tax or taxes payable under the Corporations Tax Act
(Ontario) or under any existing or proposed

 

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federal legislation based upon or computed by reference to the paid-up capital
or place of business Of the Landlord and/or the owners of the Development as
determined for the purposes of such tax or based upon or computed by reference
to the taxable capital employed in Canada or any similar tax levied, imposed or
assessed in the future in lieu thereof or in addition thereto by any municipal,
legislative or parliamentary authority.

  (i)   “Common Facilities” shall mean those areas and facilities of the
Development which serve the Development, including, without limitation, the
landscaped areas, sidewalks, public entrance doors, halls, public lobbies,
lavatories, stairways, passageways, elevators, service ramps and common loading
and receiving facilities and Common Use Equipment and which are designated from
time to time by the Landlord for the common use and enjoyment of the tenants in
the Development, including the Tenant, and their agents, invitees, servants,
employees and licensees or for use by the public, but excluding rentable
premises in the Building and other portions of the Building which are from time
to time designated by the Landlord for private use by one or a limited group of
tenants.     G)   “Common Use Equipment” shall mean all mechanical, plumbing,
electrical and HVAC equipment, pipes, ducts, wiring, machinery and equipment and
other integral services, utility connections and the like providing services to
the Building, but for greater certainty shall exclude any items installed by the
Tenant pursuant to Sections 16.27, 16.28 and 16.29 of this Lease.     (k)  
“Development” shall mean the Lands and the Building.     (I)   “Insured Damage”
shall mean that part of any damage occurring to the Development, including the
Premises, of which the cost of repair (except as to any reasonable deductible
amount provided for in the applicable policy or policies of insurance) is
recovered by the Landlord or its assignee under a policy or policies of
insurance from time to time effected by the Landlord pursuant hereto or would
have been recoverable had the Landlord taken out the insurance required of it
pursuant to this Lease.     (m)   “Lands” shall mean the lands described in
Schedule “B” attached hereto, as the boundaries thereof may be varied from time
to time by additions functionally integrated therewith or by deletions for road
widening or other public purposes.     (n)   INTENTIONALLY DELETED     (o)  
“Lease” shall mean this lease agreement, including any Schedules, as amended
from time to time pursuant hereto.     (p)   “Leasehold Improvements” shall mean
all items generally considered as leasehold improvements, including, without
limitation, all fixtures, equipment, improvements, installations, alterations
and additions from time to time made, erected or installed by or on behalf of
the Tenant or any previous occupant of the Premises, in the Premises, including
all partitions however affixed and whether or not movable, and all wall-to-wall
carpeting, other than carpeting laid over finished floors and affixed so as to
be readily removable without damage; but excluding trade fixtures, furniture,
unattached or free-standing partitions and equipment which is readily removable
without causing material damage.

 

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  (q)   “Operating Costs” shall mean operating costs as defined in Schedule “C”
attached hereto;     (r)   INTENTIONALLY DELETED     (s)   “Premises” shall mean
the premises demised to the Tenant under this Lease consisting of all of the
2nd, 3rd, 4th, 5th, 6th, 7th, 8th, 9th, 10th, and 11th floors of the Building,
(each containing 17,656.6 square feet of Rentable Area), for a total of 176,566
square feet of Rentable Area as per the certificate attached as Schedule “J” to
this Lease, which Premises are shown on Schedule “E” attached hereto and the
Rentable Area of which have been determined in accordance with the Standard
Method of Floor Measurement set forth in Schedule “A”.     (t)   “Present Value”
shall mean the value determined by using an annual discount rate equal to the
annual rate of interest in effect as of such date of default announced by the
Canadian Imperial Bank of Commerce as its prime rate, being the reference rate
used by it to determine interest for loans in Canadian dollars to Canadian
customers.     (u)   “Proportionate Share” shall mean a fraction having as its
numerator the Rentable Area of the Premises and as its denominator the Total
Rentable Area of the Building.     (v)   “Rate of Interest” shall mean the
annual rate of interest announced from time to time by the Canadian Imperial
Bank of Commerce as the reference rate of interest then in effect for loans to
customers of varying degrees of credit-worthiness plus 3%, adjusted from time to
time to reflect changes in such rate.     (w)   “Rent” shall mean Basic Rent and
Additional Rent.     (x)   “Rentable Area” and “Net Rentable Area” shall mean
the number of square feet of floor area determined in accordance with the method
of floor measurement set forth in Schedule “A”.     (y)   “Sales Taxes” shall
mean all goods and services taxes or similar taxes imposed by the government of
Canada or any provincial or local government upon the Landlord or the Tenant or
in respect of this Lease or the payments made by the Tenant hereunder or the
goods and services provided by the Landlord hereunder, including, without
limitation, the rental of the Premises and the provision of administrative
services to the Tenant hereunder.     (z)   “Taxes” shall mean all taxes, rates,
duties, levies, fees, charges, sewer levies, local improvement rates and
assessments whatsoever imposed, assessed, levied or charged now or in the future
by any school, municipal, regional, provincial, federal, parliamentary or other
governmental body, corporate authority, agency or commission (including, without
limitation, school boards and utility commissions) against the Development
and/or the Landlord and/or the owner of the Development in connection therewith.
There shall be excluded from Taxes:

  (i)   land improvement levies, development charges and local improvement rates
to the extent incurred in respect of the initial development of the Development
or any additions thereto (including, without limitation, the construction of any
additions to the Building and any additional building(s) erected on the Lands);

 

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  (ii)   the Landlord’s corporate, business, inheritance, estate, succession,
income, profits and excess profits taxes and any other’,fa1<; rate, duty, fee,
assessment, impost, charge or levy of a personal nature to the Landlord,
including, without limitation, Capital Tax (including, without limitation, the
federal Large Corporation Tax); and     (iii)   any penalties or carrying
charges relating to the late payment by the Landlord of Taxes or any
installment(s) thereof.

  (aa)   “Tenant’s Taxes” shall mean the aggregate of:

  (i)   all taxes imposed upon the Tenant which are attributable to the personal
property, furnishings, fixtures and Leasehold improvements installed in the
Premises; and     (ii)   all taxes imposed upon the Tenant which are
attributable to the business, income or occupancy of the Tenant or any other
occupant of the Premises and to the use of any of the Common Facilities by the
Tenant or other occupant of the Premises.

  (bb)   “Term” shall mean the term of this Lease as specified in Section 3.3 as
same may be extended pursuant to Section 16.26 of this Lease.     (cc)   “Total
Rentable Area of the Building” shall mean the aggregate of all Rentable Areas
(including the Premises) of the Building, measured in accordance with the method
of floor measurement specified in Schedule “A” of this Lease, excluding all
storage areas located below grade.

ARTICLE 2.00 — GENERAL COVENANTS

2.1   Tenant’s Covenants       The Tenant covenants with the Landlord:

  (a)   to pay Rent; and     (b)   to observe and perform all the covenants and
obligations of the Tenant herein.

2.2   Landlord’s Covenants       The Landlord covenants with the Tenant:

  (a)   for quiet enjoyment; and     (b)   to observe and perform all the
covenants and obligations of the Landlord herein.

ARTICLE 3.00 — DEMISE AND TERM

3.1   Demise of Premises       The Landlord hereby demises and leases unto the
Tenant, and the Tenant hereby leases from the Landlord, the Premises for the
Term and subject to the provisions of this Lease.

 

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3.2   License Over Certain Common Facilities       The Landlord hereby grants to
the Tenants its agents, employees, invitees and other persons transacting
business with it, in common with all others entitled thereto, a license to have
the use of such of the Common Facilities as is reasonably necessary for the use,
enjoyment and access to the Premises, including, without limitation, the
entrances to the Building, the elevators, stairways, corridors, foyers, lobbies
and lavatories; provided, however, that such use shall be subject to all other
provisions contained in this Lease and to the Landlord’s Rules and Regulations
referred to in Section 7.6.   3.3   Term       To have and to hold the Premises
for and during the term of ten (10) years and 14 days (the “Term”), commencing
September 17th, 2007, or such date as may be extended pursuant to Section 16.19
hereof (the “Commencement Date”) and ending September 30th, 2017.       The
Tenant shall have the right to occupy and commence operation in the Premises
prior to the Commencement Date, provided that both the Tenant’s Work and
Landlord’s Work have been completed. Should the Tenant occupy the Premises prior
to the Commencement Date, the Tenant shall be governed by the terms and
conditions of this Lease, save for the payment of any Basic Rent, and the Tax
component of Additional Rent. For clarity purposes, the Tenant shall be
responsible for the payment of Operating Costs and the Tenant hydro for the
portion of the Premises that it occupies and operates its business in prior to
the Commencement Date. Should the Tenant request the Landlord to complete the
Landlord’s Work prior to December 31, 2006 (on space that is located on the 4th
to 7th floors only), the Tenant shall be responsible for the payment of
Additional Rent for any period that it occupies and operates its business in
prior to December 31, 2006. Prior to occupancy, the Tenant shall provide
evidence of insurance coverage satisfactory to the Landlord, acting reasonably.
  3.4   Overholding       If the Tenant occupies any part of the Premises after
the expiration or sooner termination of the Term without objection by the
Landlord, the Tenant shall be deemed to be only a monthly tenant at a monthly
basic rent payable in advance and equal to one and one-quarter (VA) of the
monthly Basic Rent payable immediately prior to the overholding, plus additional
rent equivalent to Additional Rent hereunder, and otherwise on the same terms as
herein contained, except for any right of renewal; and such tenancy may be
terminated by either the Landlord or the Tenant on 30 days’ notice to the other.
Nothing herein shall limit the liability of the Tenant in damages or otherwise.
  3.5   Leasehold Improvements

  (a)   Subject to Sections 3.5(b) and (c) and Sections 16.27, 16.28, 16.29 and
16.30, upon the expiration or other termination of this Lease, all Leasehold
Improvements in the Premises, including all fixed partitions (including floor to
ceiling partitions which, although demountable, involve attachment to any floor,
ceiling or permanent wall such that they cannot be removed without damage to the
Premises, but excluding the Tenant’s movable partitions, such as free-standing
partitions or partial height partitions which can be removed without damage to
the Premises and which shall be deemed to be removable trade fixtures) shall
remain upon and be surrendered with the Premises as a part thereof without
disturbance, molestation or injury and the same and any trade fixtures not
removed or not in the process of being removed by the Tenant are the property of
the

 

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Landlord absolutely, free of any liens or encumbrances and without payment
therefore to the Tenant.

  (b)   The Landlord may, by notice to the Tenant prior to or promptly after the
expiration or other termination of this Lease, require the removal forthwith, at
the expense of the Tenant, of any or all of the Tenant’s trade fixtures and the
repair forthwith of any damage to the Premises or the Development caused by such
removal, such work to be done forthwith by or at the direction of the Landlord
and at the expense of the Tenant. If such notice is given prior to the
expiration or other termination of this Lease, such removal and repair shall be
completed by such expiration or termination.     (c)   Notwithstanding anything
herein contained, provided the Tenant has paid the Rent hereby reserved and
performed and observed all the covenants and conditions herein contained, the
Tenant shall have, at the expiration or other termination of this Lease, the
right to remove its trade fixtures, furnishings and equipment provided that the
Tenant repairs by the expiration or other termination of this Lease, at its own
expense, any damage to the Premises or the Development caused by such removal,
such work to be done by or at the direction of the Landlord and at the expense
of the Tenant.

ARTICLE 4.00 — RENT

4.1   Basic Rent       The Tenant shall pay to the Landlord yearly and every
year during the Term without any set-off, compensation or deduction whatsoever,
except as is otherwise specifically provided for in this Lease, Basic Rent in
Canadian dollars as follows:

  (a)   For the first year (plus 14 days) to the end of the fifth year, the sum
of $16.00 per square foot of Rentable Area annually plus G.S.T., payable in
advance in equal consecutive monthly installments on the first day of each and
every month during such period; and     (b)   for years six to ten inclusive,
the sum of $16.50 per square foot of Rentable Area annually plus G.S.T., payable
in advance in equal consecutive monthly installments on the first day of each
and every month during such period.

4.2   Additional Rent       The Tenant shall pay to the Landlord during the
Term, when due, as Additional Rent:

  (a)   all Tenant’s Taxes;     (b)   that portion of Taxes payable by the
Tenant pursuant to Section 5.3;     (c)   the Tenant’s Proportionate Share of
Operating Costs pursuant to Section 6.1;     (d)   all Additional Service Costs
payable by the Tenant; and     (e)   all other amounts payable by the Tenant
pursuant to this Lease.

 

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4.3   Payment of Additional Rent       The Additional Rent specified in
Sections 4.2(b) and (c) shall be paid and adjusted with reference to a fiscal
period of 12 calendar months, which shall be the 12-month period ending on
December 31st in each year during the Term, unless the Landlord, by notice to
the Tenant, shall from time to time have selected a fiscal period which ends on
a different date (but which shall be a 12-month period, except where a shorter
broken fiscal period occurs at the commencement or end of the Term or is
necessary to accommodate a change in the fiscal period made during the Term).
From time to time throughout the Term, the Landlord shall give notice to the
Tenant of the Landlord’s estimate of such Additional Rent to be paid by the
Tenant during the next ensuing fiscal period. Each estimate shall be reasonable.
Such Additional Rent payable by the Tenant shall be paid in equal monthly
installments in advance at the same time as payment of Basic Rent is due
hereunder and shall be based on the Landlord’s estimate as aforesaid. From time
to time the Landlord may re-estimate on a reasonable basis the amount of such
Additional Rent for any fiscal period, in which case the Landlord shall give
notice to the Tenant of such re-estimate and fix new equal monthly installments
for the remaining balance of such fiscal period so that after giving credit for
the installments paid by the Tenant on the basis of the previous estimate or
estimates, all the Additional Rent as estimated or re-estimated will have been
paid during such fiscal period.       All Additional Service Costs shall be paid
by the Tenant within 5 days after receipt by it from time to time of invoices
from the Landlord specifying the amounts thereof.   4.4   Adjustment of
Additional Rent       The Landlord agrees to provide the Tenant with an audited
accounting of the actual Additional Rent payable to the Landlord pursuant to
Sections 4.2(b) and 4.2(c) in respect of the relevant fiscal period referred to
in Section 4.3 within one hundred and twenty (120) days of the end of each such
fiscal period. Within thirty (30) days after the receipt of such accounting for
the relevant fiscal period, either the Tenant shall pay to the Landlord any
amount by which the amount found payable by the Tenant with respect to such
fiscal period exceeds the aggregate of the monthly payments made by it on
account thereof or the Landlord shall pay to the Tenant any amount by which the
amount found payable as aforesaid is less than the aggregate of such monthly
payments. The Tenant shall have the right exercisable by the delivery of written
notice to the Landlord within eighteen (18) months following receipt by it of
the relevant audited accounting of such Additional Rent for the relevant fiscal
period, upon reasonable prior notice to have access to Landlord’s books and
records respecting such Additional Rent for the relevant fiscal period for the
purposes of verifying same, provided that such verification is completed by a
chartered accounting firm that is not compensated on a contingency basis. Such
verification shall be done at the sole cost and expense of the Tenant unless the
results of such verification indicate that the said Additional Rent for the
relevant fiscal period have been overstated by 4% or more, in which event
Landlord shall reimburse the Tenant for its costs of such verification within
fifteen (15) days of receipt of an invoice therefore, failing which, the Tenant
shall be entitled to deduct same from the Rent. The Tenant shall reimburse
Landlord for its reasonable bona fide out-of-pocket costs incurred in respect of
any such verification by the Tenant, unless the results of such verification
indicate that the said Additional Rent for the relevant fiscal period have been
overstated by 4% or more, in which event the Landlord shall be responsible for
all such out-of-pocket costs. For greater certainty should the Tenant fail to
provide the Landlord with written notice of the exercise of its rights hereunder
within eighteen (18) months of receipt by it of the relevant audited accounting
of such Additional Rent for the relevant fiscal period, the Tenant’s right to

 

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conduct such verification for such relevant fiscal period shall become null and
void.
In the event of any dispute by the Tenant as to the amount of such Additional
Rent payable, a letter of the Landlord’s auditors shall be conclusive absent
manifest error.

  4.5   Apportionment of Rent         Rent shall be considered as accruing from
day to day hereunder. If it is necessary to calculate Rent for a period of less
than one year or less than one calendar month, an appropriate apportionment and
adjustment on a pro rata daily basis shall be made. Where the calculation of
Additional Rent cannot be made until after the expiration or earlier termination
of this Lease, the obligation of the Tenant to pay such Additional Rent and the
obligation of the Landlord to refund any overpayments shall survive the
expiration or earlier termination hereof and such amount shall be paid by the
Tenant to the Landlord forthwith upon demand or by the Landlord to the Tenant
forthwith upon determination of any such overpayment, as the case may be If the
Term commences on any day other than the first day of the month, Rent for such
fraction of a month shall be adjusted as aforesaid and paid by the Tenant on the
Commencement Date.     4.6   No Right of Set-off         The Tenant expressly
waives the benefits of Section 35 of the Commercial Tenancies Act, and any
amendments thereto and any present or future enactment of the Province of
Ontario permitting the Tenant to claim a set-off against Rent for any cause
whatsoever.     4.7   Additional Rent Deemed Rent         All Additional Rent
shall be deemed to be Rent and the Landlord shall have all rights against the
Tenant for default in payment of Additional Rent as for default in the payment
of Basic Rent.     4.8   Interest on Arrears         If the Tenant fails to pay
Rent when due, the Tenant shall pay interest on the unpaid amount at the Rate of
Interest from the date due until the date paid without prejudice to and in
addition to any other remedy available to the Landlord under this Lease or at
law.     4.9   Net Lease to Landlord         This Lease and the Rent payable
hereunder shall be absolutely net to the Landlord, except as expressly provided
herein.     4.10   Deposit         The Landlord acknowledges that the Tenant has
delivered a cheque in the amount equal to the first months Basic Rent,
Additional Rent and GST due under this Lease to be held by Avison Young
Commercial Real Estate (Ontario) Inc., in trust, in an interest bearing trust
account with all interest accruing to benefit of Tenant as a deposit until
application on account of the first months Basic Rent, Additional Rent and GST
due under this Lease.

 

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ARTICLE 5.00 — TAXES

5.1   Taxes       The Landlord shall pay when due to the taxing authority or
authorities having jurisdiction all Taxes.

5.2   Tenant’s Taxes and Sales Taxes

  (a)   The Tenant shall pay without duplication of any other amount payable by
it pursuant to this Lease when due to the taxing authority or authorities having
jurisdiction all Tenant’s Taxes.     (b)   The Tenant shall pay to the Landlord
when due all Sales Taxes imposed on the Landlord with respect to Rent payable by
the Tenant hereunder or in respect of the rental of space under this Lease.

5.3   Tenant’s Contribution to Taxes

  (a)   The Tenant shall, in respect of each calendar year included in whole or
in part within the Term, pay to the Landlord, without duplication, an amount to
cover the Taxes that are attributable to the Premises for such calendar year,
such amount to be determined on the basis of a separate assessment or separate
valuation for the Premises (or, in lieu thereof, calculations made by
authorities having jurisdiction from which a separate assessment or separate
valuation for the Premises may be readily determined) and in the absence of such
separate assessment or separate valuation (or, in lieu thereof, such
calculations made by authorities having jurisdiction from which a separate
assessment or separate valuation for the Premises may be readily determined),
the Tenant shall pay its Proportionate Share of Taxes. The Tenant shall provide
the Landlord with a copy of any separate notices of assessment for the Premises
which the Tenant has received.     (b)   INTENTIONALLY DELETED     (c)   The
Tenant shall, in respect of each calendar year included in whole or in part
within the Term, pay to the Landlord the amount by which Taxes are increased
above the Taxes which would have otherwise been payable as a result of the
Premises or the Tenant or any other occupant of the Premises being taxed or
assessed in support of separate schools.     (d)   Payment by the Tenant of all
amounts on account of Taxes shall be governed by Sections 4.3 and 4.4.

5.4   Payments

  (a)   The Landlord may postpone any payment payable by it pursuant to Section
5.1 and the Tenant may postpone any payment payable by it directly to a taxing
authority (but not to the Landlord) pursuant to this Article, in each case to
the extent permitted by law and if prosecuting in good faith any appeal against
the imposition thereof, but provided that in the case of a postponement by the
Tenant which involves any risk of the Development or any part thereof or the
Landlord becoming 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.     (b)   Whenever requested
by the Landlord, the Tenant shall deliver to the Landlord receipts for payment
of all Tenant’s Taxes and furnish such other

 

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information in connection therewith as the Landlord may reasonably require.
ARTICLE 6.00 — SERVICES. COMMON FACILITIES

6.1   Tenant’s Contribution to Operating Costs

  (a)   The Tenant shall throughout the Term pay to the Landlord the Tenant’s
Proportionate Share of Operating Costs.     (b)   Payment by the Tenant of all
amounts on account of the Tenant’s Proportionate Share of Operating Costs shall
be governed by Sections 4.3 and 4.4.

6.2   Operation of Regular HVAC System       The Landlord and the Tenant
acknowledge that the Building operating hours shall be Monday through Friday
from 8:00 a.m. to11:59 p.m., Saturday from 8:00 a.m. to 6:00 p.m., and Sunday
from 11:00 am to 1:00 p.m., (the “Building Operating Hours”). Heating,
ventilation and air conditioning (“HVAC”) shall be provided during the Building
Operating Hours so as to maintain during the Building Operating Hours a
comfortable temperature for the Tenant’s intended uses of the Premises and in
any event in accordance with the standards of a first class office building in
the downtown core of the City of Toronto, except during the making of repairs,
inspections, overhauling or replacement. In addition, the Landlord will upon
request of the Tenant make available HVAC services outside of Building Operating
Hours to the Tenant so as to maintain during such after hours HVAC a comfortable
temperature for the Tenant’s intended uses of the Premises and in any event in
accordance with the standards of a first-class office building in the downtown
core of the City of Toronto, which cost to the Tenant shall be equal to the
Landlord’s costs to provide such after-hours HVAC, with no profit. The Tenant
shall provide the Landlord with not less than twenty-four (24) hours’ prior
written notice of the times it requires HVAC services outside of Building
Operating Hours as aforesaid, unless same are required on a weekend or a
statutory holiday, in which event the Tenant shall notify the Landlord of the
times it requires same not later than noon on the Business Day immediately
preceding such weekend or statutory holiday.       If any equipment or systems
are damaged or destroyed or, in the opinion of the Landlord, require repair,
inspection, overhauling or replacement, the Landlord shall (i) give the Tenant
reasonable prior written notice of such repair, inspection, overhauling or
replacement except in the event of an emergency; and (ii) carry out such repair,
inspection, overhauling or replacement with all reasonable diligence and in such
manner so as to minimize any interference with the Tenant’s business operations
in the Premises. The Landlord shall not be responsible for any loss, damages or
costs arising from the failure of such equipment or systems to perform their
function, so long as the Landlord diligently proceeds to the extent reasonably
possible in the circumstances, directed by the cause of any such failure of such
equipment and systems to perform their function. In addition, the Landlord shall
not be responsible for the failure of such equipment and systems to perform
their function if the number of persons in the Premises at any one time exceeds
a reasonable number (the Landlord acknowledging and agreeing that a portion of
the Premises may be used and is intended to be used as a customer care
centre/call centre) or if the electrical load from lights and power in the
Premises is excessive or if such failure results from any arrangement of
partitioning in the Premises or change or alteration thereto or if the window
covering on exterior windows is not kept fully closed while the windows are
exposed to direct sunlight or if any use of mechanical or electrical equipment
installed in the Premises generates heat in excess of amounts

 

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specified in the Building Standard. The Landlord shall not be liable for direct,
indirect or consequential damage or damages for personal discomfort or illness
of the Tenant of its employees, invitees or other persons transacting business
with it by reason of the operation or non-operation of such systems and
equipment.
In no event shall Rent abate during any non-operation.

6.3   Additional HVAC — INTENTIONALLY DELETED   6.4   Other Utilities

  (a)   The Landlord shall furnish to the Premises electricity for lighting and
for office and kitchen equipment capable of operating from the circuits
available and standard to the Building. The Tenant shall pay without
duplication, as an Additional Service Cost all charges for electricity and other
utilities provided to the Premises. The charges for electricity and other
utilities used in the Premises shall be determined by the Landlord or its agent
using a reasonable method of calculation which has been communicated to the
Tenant. If requested by the Landlord or Tenant, the Landlord shall install, at
the Landlord’s sole expense, separate meters for measuring consumption of energy
in the Premises.     (b)   The Landlord shall also replace as and when required
all electric light bulbs, fluorescent tubes and ballasts initially supplied in
the Premises and provide the necessary maintenance and repair of fluorescent and
other standard Building lighting fixtures located in the Premises. The costs of
replacement, maintenance and repair shall, as determined by the Landlord from
time to time and applied on a uniform basis in the Development, either be
charged to the Tenant as an Additional Service Cost or included in Operating
Costs.

6.5   Operation of Common Facilities       All Common Facilities shall be
subject at all times to the exclusive control and management of the Landlord.
The Landlord shall be entitled to operate and police the same, to change the
area and location thereof, to employ all personnel and to make all rules and
regulations necessary for the proper operation and maintenance thereof and to do
such other acts with respect thereto as the Landlord, acting reasonably, shall
determine to be advisable; provided, however, that the Tenant, unless deprived
by reasons beyond the Landlord’s control, shall always have the use of such of
the Common Facilities as is reasonably necessary for the use, enjoyment and
access to the Premises. In the exercise by the Landlord of its rights under this
Section 6.5, the Landlord shall:

  (i)   unless deprived by reasons beyond the Landlord’s control, ensure that
access to the Premises is at all times available from the elevator lobbies of
the Building by at least two (2) elevators;     (ii)   use reasonable commercial
efforts so as not to materially affect the visibility of the Tenant’s exterior
signage referred to in Sections 7.7(a) and 7.7(b) of this Lease; and     (iii)  
use reasonable commercial efforts so as not to materially affect the Tenant’s
business operations in the Premises and repair any damage to the Premises, the
Leasehold Improvements and the furniture and equipment located in the Premises
caused as a result of the exercise of such rights.

 

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6.6   Janitorial Services

  (a)   The Landlord shall provide to the Premises normal office cleaning
services of a standard (both as to extent and frequency) as a reasonably prudent
owner of a similar first-class office building in the downtown core of the City
of Toronto would do, the cost of which is to form a part of Operating Costs.
Such services shall include, but not be limited to, causing periodically as may
be appropriate or necessary in keeping with such standard the floors of the
Premises to be swept, the interior surface of the exterior windows of the
Premises to be cleaned, the desks, tables, other furniture and Venetian blinds,
if any, in the Premises to be dusted and any broadloom in the Premises to be
vacuumed. Cleaning in addition to the foregoing standard (such as, for example,
the washing of carpets and the dry-cleaning of drapes) shall be the
responsibility of the Tenant, although the Landlord shall have the right to
elect to provide such additional cleaning as provided in Section 6.6(c).     (b)
  The Tenant acknowledges that the Landlord will be relieved from its cleaning
obligation as provided in Section 6.6(a) in respect of any part of the Premises
to which access is not granted to the person or persons retained to perform such
work.     (c)   If the Landlord from time to time elects, acting reasonably, to
provide exclusively (either directly or through agents or contractors designated
by it) any janitor or cleaning services for the Premises in addition to those
contemplated by Section 6.6(a) or to supervise the moving of furniture or
equipment of the Tenant or the making of deliveries to or from the Premises,
such additional services referred to in this Section 6.6(c) shall be treated as
Additional Services and all reasonable Additional Service Costs shall be paid by
the Tenant to the Landlord forthwith after demand.     (d)   The Tenant
acknowledges that the Landlord shall not be responsible for any omission or act
of commission on the part of the person or persons employed or retained to
perform the cleaning services referred to in this Section or for any loss
thereby sustained by the Tenant, the Tenant’s employees, agents, invitees or
others. Provided however, the Landlord shall use reasonable commercial efforts
to ensure the person or persons employed or retained to perform the cleaning
services referred to in this Section 6.6(d) are insured in a manner comparable
to the insuring of cleaning personnel in other similar first-class office
buildings in the downtown core of the City of Toronto.     (e)   In the event
the Tenant is not satisfied with the level or quality of cleaning services being
provided to the Premises by the Landlord, the Landlord shall upon receipt from
the Tenant of particulars as to the reason(s) for its dissatisfaction, use
reasonable commercial efforts to cause same to be rectified by the person or
persons employed or retained to perform such cleaning services to the
satisfaction of the Tenant. The Landlord shall keep the Tenant advised at all
times as to the steps being undertaken by it from time to time to rectify the
cause of such Tenant’s dissatisfaction.

6.7   Security Services

  (a)   Subject to Section 16.32 herein, the Landlord shall provide security
services for the Building so as to reasonably ensure that access to the Building
during other than Business Hours shall be restricted to those persons entitled
to be allowed entry to the Building, provided they comply with the requirements
established by the Landlord.     (b)   The Tenant acknowledges that the Landlord
shall not be responsible for any omission or act of commission on the part of
any person employed or

 

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retained to provide security service pursuant to this Section or for any loss
thereby sustained by the Tenant, the Tenant’s employees, agents, invitees or
others. Provided however, the Landlord shall use reasonable commercial efforts
io ensure that the person or persons providing such security services are
insured in a manner comparable to the insuring of security personnel in other
similar first-class office buildings in the downtown core of the City of
Toronto.

6.8   Interruption in Services       The Landlord has the right upon reasonable
prior notice to the Tenant (except in the event of an emergency) to stop the use
of any facilities and the supply of any services when necessary by reason of
accident or during the making of repairs, replacements, alterations or
improvements in the judgment of the Landlord are necessary to be made until the
repairs, replacements, alterations or improvements have been completed to the
satisfaction of the Landlord, provided that the Landlord shall carry out such
repairs, replacements, alterations and improvements with due diligence and in
such a manner so as to minimize any interference with the Tenant’s business
operations in the Premises, both as to the extent and duration of such
interference. The Landlord shall have no responsibility or liability for failure
to operate any facilities or supply any services when the use of the facility is
stopped as aforesaid or when the Landlord is prevented from using the facility
or supplying the service by strike or by orders or regulations of any
governmental authority or agency or by failure of the electric current, gas,
steam or water supply necessary to the operation of any facility or by the
failure to obtain such a supply or by any other cause beyond the Landlord’s
reasonable control. Provided however, in any such instance the Landlord shall to
the extent possible in the circumstances proceed diligently to restore the
operation of any such facility or the supply of any such service, as the case
may be.   6.9   Energy Conservation       The Tenant shall use reasonable
commercial efforts to comply with any measures the Landlord, acting reasonably,
or any legislative authority may from time to time introduce to conserve or to
reduce consumption of energy or to reduce or control other Operating Costs or
pay as Additional Rent the cost, to be estimated by the Landlord, acting
reasonably, of the additional energy consumed by reason of such non-compliance.
      It is understood and agreed that:

  (a)   any and all costs and expenses paid or incurred by the Landlord in
installing energy conservation equipment and systems, so far as the same apply
to or are reasonably apportioned to the Building by the Landlord, shall to the
extent permitted be included in Operating Costs; and     (b)   the Landlord
shall not be liable to the Tenant in any way for any loss, costs, damages or
expenses whether direct or consequential, paid, suffered or incurred by the
Tenant due to any reduction in the services provided by the Landlord to the
Tenant or to the Building or any part thereof as a result of the Landlord’s
compliance with such laws, by-laws, regulations or orders.

6.10   Pest Control by the Tenant       The Tenant agrees to institute and carry
out and maintain at its own expense such pest control measures in the Premises
as the Landlord reasonably requires.

 

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ARTICLE 7.00 — USE AND OCCUPANCY OF PREMISES

7.1   Use of Premises       The Tenant may use the Premises solely for the sole
purpose of general business offices, a customer care centre / call centre,
licensed travel agent, and cafeteria preparing and serving food for its
employees and invitees only (and not general sale to the public) (such uses
being hereinafter individually and collectively referred to as the “Intended
Uses”); and any other use permitted by the applicable by-laws covering the
Premises. The Tenant shall use commercially reasonable efforts to ensure that
odors do not emanate from the Premises. Notwithstanding the above, only the
general business offices shall be entitled to use the Premises above the tenth
(10th) floor of the Building and it is further acknowledged that no form of call
centre shall be permitted above the 10th floor of the Building, and the Tenant
shall not use or permit the Premises to be used for any other purpose.   7.2  
Waste and Nuisance       The Tenant shall not carry on any business or do or
suffer any act or thing which may constitute or result in a nuisance to the
Landlord or to other tenants of the Development or do or suffer any waste or
damage to the Premises or the Development. The Landlord acknowledges and agrees
that the Intended Uses (including, without limitation, as a customer care
centre/call centre so long as same is not permitted above the 10th floor of the
Building) are deemed not to constitute a nuisance to the Landlord or to the
other tenants of the Development, provided that such Intended Uses are being
conducted in accordance with the terms of this Lease.   7.3   No Overloading of
Floors or Common Use Equipment       The Tenant shall not permit or allow any
overloading of the floors of the Premises or the bringing into any part of the
Premises of any articles or fixtures that by reason of their weight or size
might damage or endanger the structure of the Premises or the Building. The
Tenant shall not permit or allow anything that might result in any overloading
of any of the Common Use Equipment.   7.4   Insurance Cancellation or Increase  
    The Tenant shall not do or omit to do or permit to be done or omitted to be
done in the Premises anything which would cause an increase in the cost of any
insurance which the Landlord is obligated by this Lease to maintain. In the
event of any such increase, the Tenant shall pay to the Landlord, forthwith upon
demand, the amount of any such increase in cost. If any insurance policy
maintained by the Landlord on the Development is cancelled or not renewed or
threatened by the insurer to be cancelled or not renewed or the coverage
thereunder is altered in any way because of the use or occupation of the
Premises by the Tenant or by any person for whom the Tenant is in law
responsible, and if the Tenant fails to remedy the condition giving rise to the
cancellation or non-renewal, threatened cancellation or non-renewal or
alteration in coverage within 48 hours (or such longer period as may be afforded
to the Landlord by its insurers) or fails to obtain insurance coverage in
replacement of the coverage cancelled or not renewed, threatened to be cancelled
or not renewed or altered in coverage, the Landlord may, but shall not be
obligated to, without further notice or any liability to the Tenant or any other
occupant of the Premises, enter the Premises and attempt to remedy such
condition or obtain or attempt to obtain insurance coverage in replacement of
the coverage cancelled, not renewed threatened to be cancelled or not renewed or
altered in coverage; and the Tenant shall pay to the Landlord forthwith upon
demand the cost thereof. The Landlord

 

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acknowledges and agrees that the Intended Uses (including, without limitation,
as a customer care centre/call centre, so long as same is not permitted above
the 10th floor of the Building) are deemed not to constitute any such increase
in the cost of any insurance which the Landlord is obligated by this Lease to
maintain or to cause any such cancellation, non-renewal, threatened cancellation
or non-renewal or alteration in coverage, provided that such Intended Uses are
being conducted in accordance with the terms of this Lease.

7.5   Observance of Law by the Landlord and the Tenant

  (a)   The Landlord shall, at its expense (except insofar as the expense is
included in Operating Costs), promptly comply with and conform to the
requirements of every applicable statute, law, by-law, regulation, ordinance and
order at any time or from time to time in force during the Term affecting the
Development, other than to those matters which are the obligation of the Tenant
as provided in Section 7.5(b).     (b)   The Tenant shall, at its expense,
promptly comply with and conform to the requirements of every applicable
statute, law, by-law, regulation, ordinance and order at any time or from time
to time in force during the Term affecting the Tenant’s use of the Premises or
any part thereof and/or the business carried on therein and/or the Leasehold
Improvements, trade fixtures, furniture, machinery, equipment and other
facilities located in the Premises and/or any other part of the Development
affected by the Tenant’s actions in the Premises. Notwithstanding the foregoing,
the Landlord shall be responsible at its sole cost and expense and to the
complete exoneration of the Tenant for remedying any work done by it in the
Premises which was not done in compliance with the requirements of any
applicable statute, law, bylaw, regulation, ordinance or order. The Landlord
hereby covenants, warrants and represents to the Tenant that as of the Access
Date, the Development and the Premises shall be in compliance with the
requirements of all such applicable statutes, laws, by-laws, regulations,
ordinances and orders. Without prejudice to any other rights available to the
Tenant under this Lease or at law, the Landlord shall be responsible at its sole
cost and expense for any work required as a result of the foregoing, covenant,
representation and warranty being untrue.

7.6   Rules and Regulations       The Tenant shall observe and perform and shall
cause its employees, agents, invitees and others over whom the Tenant can
reasonably be expected to exercise control to observe and perform the rules and
regulations attached hereto as Schedule “D” (the “Rules and Regulations”) and
such other rules and regulations or amendments as may be made from time to time
by the Landlord, acting reasonably.       The Tenant acknowledges that the Rules
and Regulations as from time to time amended or replaced are not necessarily of
uniform application, but may be waived in whole or in part in respect of other
tenants without affecting their enforceability with respect to the Tenant and
the Premises and may be waived in whole or in part with respect to the Premises
without waiving them as to future application to the Premises and the imposition
of such Rules and Regulations shall not create or imply any obligation of the
Landlord to enforce them.       In any conflict between a provision of this
Lease and any of the Rules and Regulations, the provision of this Lease shall
govern. Such Rules and

 

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Regulations as amended shall not be promulgated or enforced in an arbitrary or
discriminatory manner as against the Tenant.

7.7   Signs

  (a)   For the Term, the Tenant shall have the exclusive signage rights to the
facia at the top of the Building, to install signage displaying a logo and, or a
name on the Building. The Tenant shall pay for the cost to install, maintain,
and insure such signage, and for the cost to remove such signage at the expiry
or termination of this Lease. There shall be no ongoing charge for such signage
rights. The Landlord will work with the Tenant to assist the Tenant to obtain
any and all required permits for such signage. The exact size and location(s) of
the Tenant’s signage shall be in accordance with the Tenant’s specifications,
subject to all governing authorities, and to the Landlord’s written approval,
such approval not to be unreasonably withheld or delayed.     (b)   For the
Term, the Tenant shall be permitted to install non-exclusive (save that no other
office-only tenant shall have any signage rights at these locations) signage
displaying a logo and, or a name, on the grade, and, or second floor facia, on
the eastern and northern elevations of the Building. The Tenant shall pay for
the cost to install, maintain, and insure such signage, and for the cost to
remove such signage at the expiry or termination of this Lease. There shall be
no ongoing charge for such signage rights. The Landlord will work with the
Tenant to assist the Tenant to obtain any and all required permits for such
signage. The exact size and location of the Tenant’s grade level signage shall
be in accordance with the Tenant’s specifications, subject to all governing
authorities, and to the Landlord’s written approval, such approval not to be
unreasonably withheld or delayed.     (c)   For the Term, the Tenant shall have
exclusive rights for the three (3) signage boxes (display areas) located in the
Building’s northern elevator lobby. The Tenant shall be permitted to display
corporate, and, or sponsor information, signage, logos and, or names in these
display areas. There shall be no ongoing charge for such signage rights, or use
of these display areas.     (d)   The Landlord shall not nor shall it permit any
tenant or occupant of the Building (other than the Tenant) to name the Building
other than its municipal address.

7.8   Name of Development       The Tenant shall, in referring to the
Development, use only the name designated from time to time by the Landlord.

ARTICLE 8.00 — ALTERATIONS

8.1   Alterations by the Tenant

  (a)   The Tenant shall not, without the prior consent of the Landlord, make,
erect, alter or install any Leasehold Improvements or other alterations to the
Premises (the “Work”). Notwithstanding the foregoing, the Tenant shall be
entitled, without the consent of the Landlord but upon prior notice to the
Landlord, to complete Work which does not in the aggregate cost more than Twenty
Five Thousand Dollars ($25,000) to complete (which amount shall increase by
three percent (3%) compounded annually on each anniversary date of the
Commencement Date) provided that same does not affect the structural components
of

 

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the Building and/or the base building mechanical, electrical and/or plumbing
systems and does not require a building permit to complete.

  (b)   If the Tenant wishes to do any Work requiring the Landlord’s prior
written consent, the Tenant shall apply for the Landlord’s consent and furnish
such plans, specifications and designs as shall be necessary to fully describe
the Work. The Landlord’s consent thereto shall not be unreasonably withheld or
delayed; provided that, without limitation, any refusal to grant consent based
on grounds that such Work is not in compliance with the Building Standard or
that the Tenant has not posted security with the Landlord (which in the case of
the Tenant’s Work the Tenant shall not be required to post), shall be
conclusively deemed not to be an unreasonable withholding of consent.     (c)  
Subject to the Landlord’s consent having been obtained and the Landlord’s
reasonable requirements being met, the Landlord recognizes the right of the
Tenant to install such interior partitions and other Leasehold Improvements as
are necessary or appropriate to its use and occupancy of the Premises.     (d)  
Any Work which affects the structural components of the Building and/or the base
building mechanical, electrical and/or plumbing systems (the “Excluded Work”)
shall, if the Landlord so elects, be performed by employees or contractors who
have been designated by the Landlord and who have contracted directly with the
Tenant and agreed to carry out such Work in a good and workmanlike manner and at
a cost to the Tenant which is not unreasonable when compared with the amounts
which would be charged by reputable contractors performing the same Work. In the
absence of any such election by the Landlord with respect to the Excluded Work,
the Excluded Work and all other such Work shall be performed by contractors
retained by the Tenant. In either event, the Landlord shall have the right to
inspect such Work (including the Excluded Work) and require any Work (including
the Excluded Work) not being properly done to be corrected and with respect to
any Work (including the Excluded Work) which requires the Landlord’s prior
written consent to approve on a reasonable basis the contractors, tradesmen or
the Tenant’s own employees (as the case may be) employed by the Tenant in
connection therewith.     (e)   Subject to Section 16.34 in respect of the
Tenant’s Work, the Tenant shall pay to the Landlord within 10 days after the
receipt of the Landlord’s invoice the Landlord’s reasonable out-of-pocket costs
incurred in examining and approving the Tenant’s plans, specifications and
designs and in inspecting the Work (including the Excluded Work), unless the
Tenant uses the Landlord’s base building or designated engineers) or
consultant(s) with respect to such Work (including the Excluded Work) in which
event the Tenant shall not be responsible for any costs incurred by the Landlord
in respect thereof and any additional out-of-pocket expenses actually incurred
by the Landlord in connection with such Work (including the Excluded Work).    
(f)   The Tenant shall upon request provide to the Landlord a complete set of
updated drawings of the Premises, including, without limitation, all electrical,
mechanical and architectural drawings.

8.2   Air-Balancing       The Landlord agrees that it will on the Commencement
Date and periodically throughout the Term, including, without limitation,
whenever any alterations

 

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are made to the Premises, balance the air movement in the Premises at the
Tenant’s expense.

8.3   No Financing by the Tenant of Leasehold Improvements       Deleted
Intentionally   8.4   Liens

  (a)   In connection with the making, erection, installation or alteration of
Leasehold Improvements and trade fixtures and all other work or installations
made by or for the Tenant in the Premises, the Tenant shall comply with every
applicable statute, law, by-law, regulation, ordinance and order affecting the
same and affecting the Development as a result of the actions of the Tenant,
including, without limitation, the Construction Lien Act of Ontario and any
other statutes from time to time applicable thereto (including any provision
requiring or enabling the retention by way of holdback of portions of any sums
payable) and, except as to any such holdback, shall promptly pay all accounts
relating thereto.     (b)   Whenever any construction 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 therefore shall arise or be
filed or any such prohibited mortgage, charge, conditional sale agreement or
other encumbrance shall attach, the Tenant shall within 5 Business Days after
receipt of notice thereof procure and register the discharge thereof, including
any certificate of action registered in respect of any lien, by payment or in
such other manner as may be required or permitted by law and failing which the
Landlord may make any payment into Court required to procure and register the
discharge of any such liens or encumbrances, including any certificate of action
registered in respect of any lien, and shall be entitled to be reimbursed by the
Tenant as provided in Section 15.3, 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.     (c)   The Landlord and the
Tenant agree that any Work done in the Premises during the Term by or on behalf
of the Tenant shall not be done and shall be deemed not to have been done at the
request of the Landlord.

8.5   Alterations by Landlord       The Landlord may from time to time, at its
own expense, make alterations to the Building or any part thereof and
alterations to or relocations of the Common Facilities provided that:

  (a)   the Premises shall not be altered, relocated or interfered with in any
material way;     (b)   the Common Facilities shall not be altered or relocated
to such an extent as to materially reduce their convenience to the Tenant;    
(c)   access and services to or benefiting the Premises shall not be reduced or
interrupted;     (d)   any alteration or relocation shall be such that a
reasonably prudent owner of the Development would make having regard to the type
and age of the Development;

 

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  (e)   the Landlord shall in the course of completing any such alterations or
relocation use reasonable commercial efforts so as not to materially affect the
visibility of the Tenant’s signage referred to in Section 7.7 of this Lease;    
(f)   any alteration or relocation shall not materially affect the Tenant’s
business operations in the Premises; and     (g)   the Landlord shall repair any
damage to the Premises, the Leasehold Improvements and the furniture and
equipment located in the Premises caused as a result of the exercise of such
rights.

ARTICLE 9.00 — REPAIRS

9.1   Landlord’s Repairs       The Landlord shall throughout the Term operate,
secure, maintain, repair and replace the Building, including without limitation,
the structural components and roof of the Building, the Common Facilities and
all base building mechanical, electrical and plumbing systems and equipment in
accordance with all applicable governmental laws, by-laws and regulations and in
a first class manner as would a prudent owner of a similar building, of similar
age, use and class in the downtown core of the City of Toronto, subject to the
Landlord’s right to charge back certain of such charges in Operating Costs.  
9.2   Tenant’s Repairs       Subject to Section 9.5, the Tenant shall at its
expense and throughout the Term keep the Premises, the Leasehold Improvements
and the trade fixtures therein and all electrical and telephone outlets and
conduits and all mechanical and electrical equipment within the Premises in good
condition and repair, reasonable wear and tear, Insured Damage and the
Landlord’s maintenance, repair and replacement obligations pursuant to this
Lease only excepted. All repairs by the Tenant shall be subject to Section 8.1.
  9.3   Entry by Landlord to View State of Repair       The Landlord shall upon
reasonable prior notice (except in the event of an emergency) be entitled to
enter and view the state of repair of the Premises. The Tenant will repair
according to notice as specified in Section 9.2.   9.4   Notice of Defects      
The Tenant shall give to the Landlord prompt notice of any defect in the
plumbing or utility systems and equipment or any damage to the Premises or any
part thereof howsoever caused; provided that nothing herein shall be construed
so as to require repairs to be made by the Landlord except as expressly provided
in this Lease.   9.5   Termination or Abatement after Damage

  (a)   If and whenever the Premises are destroyed or damaged by any cause to
the extent that, in the reasonable opinion of Landlord’s independent and duly
qualified architect (the “Architect”) to be given in writing to the Tenant
within 60 days after the occurrence of such damage or destruction, they are
unable to be repaired or rebuilt within 180 days after such destruction or
damage, then either the Landlord or the Tenant may terminate this Lease by
notice to the other, to be given within 30 days after the giving of the
Architect’s written opinion above

 

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referred to, and the Tenant shall immediately thereupon surrender the Premises
and this Lease to the Landlord and Rent shall be apportioned to the date of such
destruction or damage (subject to the payment of Rent from the date of such
destruction or damage to the date of surrender in the same proportion that the
part of the Net Rentable Area of the Premises fit for occupancy by the Tenant
until such surrender is of the total Net Rentable Area of the Premises).

  (b)   If and whenever all or any substantial portion of the Building is
destroyed or damaged by reason of any cause (whether or not such portion
includes all or any part of the Premises) to such extent that:

  (i)   in the Architect’s reasonable opinion to be given to the Tenant in
writing within 60 days after the occurrence of such damage or destruction, it is
unable to be repaired or rebuilt within 180 days after such destruction or
damage; or     (ii)   the estimated cost (as estimated by the Architect) of
repairing or rebuilding the Development exceeds the proceeds of insurance
available to the Landlord for such purpose (or which would have been available
if the Landlord had insured in compliance with Section 10.1),

the Landlord may terminate this Lease upon not less than 30 days’ prior written
notice to the Tenant given within 90 days after the happening of such
destruction or damage and the Tenant shall immediately thereupon surrender the
Premises and this Lease to the Landlord;

  (iii)   if and to the extent that such destruction or damage has rendered the
Premises in whole or in part unfit for occupancy by the Tenant, Rent shall abate
from the date of such destruction or damage to the date of surrender in the same
proportion that the part of the Net Rentable Area of the Premises unfit for
occupancy is of the total Net Rentable Area of the Premises; and

  (iv)   otherwise Rent shall be apportioned to the date of surrender.

  (c)   If and whenever the Premises are destroyed or damaged by reason of any
cause and this Lease shall not have been terminated, the Landlord shall, with
all reasonable diligence, make the repairs specified in Section 9.1 and the
Tenant shall, with all reasonable diligence and in compliance with Section 8.1,
make all repairs to the Premises specified in Section 9.2 and complete the
Premises for occupancy for the purpose described in Section 7.1 and in
compliance with Section 7.5(b). If as a result of any destruction or damage to
the Premises which the Landlord is obligated to repair pursuant to Section 9.1,
then during the period commencing on the occurrence of such destruction or
damage and ending upon the date when both the repairs to the Premises which the
Landlord is obligated to make as aforesaid are completed sufficiently to enable
the Tenant to commence its repairs and the Tenant has been allowed a reasonable
period of time which is sufficient for the completion by it of the repairs it is
obligated to make as aforesaid with due diligence, Rent shall from time to time
abate in the same proportion that the part of the Net Rentable Area of the
Premises from time to time rendered unfit for such occupancy by reason of such
destruction or damage is of the total Net Rentable Area of the Premises.

 

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9.6   No Claim by the Tenant       Except in respect of abatement of Rent as
provided for in this Article, no claim for compensation or damages, direct or
indirect, shall be made by the Tenant by reason of the loss of use,
inconvenience or otherwise arising from the necessity of repairing any portion
of the Development however the necessity may arise so carried out with
reasonable diligence.   9.7   Tenant to Leave Premises in Good Repair       The
Tenant shall leave the Premises and (subject to Sections 3.5, 16.27, 16.28,
16.29 and 16.30) the Leasehold Improvements at the expiration or other
termination of the Term in the condition and repair required of the Tenant under
Section 9.2.

ARTICLE 10.00 — INSURANCE AND LIABILITY

10.1   Landlord’s Insurance       Subject to its general availability, the
Landlord shall effect and maintain during the Term:

  (a)   “all risks” insurance which shall insure the Development against loss or
damage by perils now or hereafter from time to time embraced by or defined in a
standard all risks insurance policy;     (b)   boiler and machinery insurance on
objects defined in a standard comprehensive boiler and machinery policy against
accidents as defined therein;     (c)   loss of rental income insurance in an
amount sufficient to replace all Basic Rent and Additional Rent payable under
the provisions of this Lease for an indemnity period of a reasonable period of
time;     (d)   comprehensive general liability insurance covering claims for
personal injury and property damage arising out of all operations in connection
with the management and administration of the Development; and     (e)   such
other coverage, or increases in the amount of coverage, as the Landlord may
consider necessary.

    For greater certainty, the Tenant acknowledges that the Landlord is not
obligated to insure Leasehold Improvements in the Premises, except to the extent
herein specifically required. The insurance to be maintained by the Landlord
shall be that which would be carried by reasonably prudent owners of properties
similar to the Development, all as from time to time determined by insurance
advisors selected by the Landlord and whose written opinion shall be conclusive.

10.2 Tenant’s Insurance

    The Tenant shall, at its own expense, take out and keep in force during the
Term:

  (a)   comprehensive insurance of the type commonly called general public
liability, which shall include coverage for personal injury, tenant’s legal
liability, non-owned automobile liability, bodily injury, death and property
damage, all on an occurrence basis with respect to the business carried on in
the Premises and the Tenant’s use and occupancy of the Premises and its use of
the Common Facilities or of any other part of

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      the Building, with coverage for any one occurrence or claim of not less
than $5,000,000.00 or such other amount as the Landlord may reasonably require
upon not less than 10 days’ notice at any time during the Term, Which insurance
shall protect the Landlord in respect of claims as if the Landlord were
separately insured and which insurance shall contain a severability of interest
provision and a cross-liability provision;     (b)   insurance in respect of
fire and such other perils as are from time to time defined in the usual
extended coverage endorsement covering the Leasehold Improvements, trade
fixtures and the furniture and equipment in the Premises for not less than the
full replacement cost thereof, which insurance shall provide that any proceeds
recoverable with respect to Leasehold Improvements shall be payable to the
Landlord and Tenant jointly (the Landlord and Tenant acknowledging and agreeing
that such proceeds shall be used and made available toward the repair or
replacement of the insured property if this Lease is not terminated pursuant to
any other provisions hereof and in the event this Lease is terminated such
proceeds shall become the absolute property of the Tenant); and     (c)  
insurance against such other perils and in such amounts as the Landlord may from
time to time reasonably require upon not less than 60 days’ notice, such
requirement to be made on the basis that the required insurance is customary at
the time in the City of Toronto for tenants of buildings similar to the
Building, provided however, so long as the Tenant pursuant to this Lease is
Loyalty Management Group Canada Inc. or a corporation affiliated (as that term
is defined as of the date of this Lease in the Ontario Business Corporations
Act) with Loyalty Management Group Canada Inc. or a corporation formed as a
result of a merger or amalgamation involving Loyalty Management Group Canada
Inc., the Tenant shall not be required to take out contractual liability or
business interruption insurance.

10.3   Form of the Tenant’s Insurance       All insurance required to be
maintained by the Tenant hereunder shall be on terms and with insurers to which
the Landlord has no reasonable objection. Each policy shall contain an
undertaking by the insurer that no material change adverse to the Landlord or
the Tenant will be made and the policy will not lapse or be cancelled or not be
renewed, except after not less than 30 days’ prior written notice to the
Landlord of the intended change, lapse, cancellation or non-renewal. The
policies of insurance specified in Sections 10.2(a) (as it relates to the
Leasehold Improvements solely) and 10.2(b) shall show the Landlord and its agent
as additional insureds as their respective interests may appear. The Tenant
shall, upon request, furnish to the Landlord certificates as to the insurance
from time to time effected by the Tenant and its renewal or continuation in
force, together with evidence as to the method of determination of full
replacement cost of the Tenant’s Leasehold Improvements, trade fixtures,
furniture and equipment. If the Landlord reasonably concludes that the full
replacement cost has been underestimated, the Tenant shall forthwith arrange for
any consequent increase in coverage required under Section 10.2. If the Tenant
fails to take out, renew or keep in force such insurance, or if the certificates
submitted to the Landlord pursuant to the preceding sentence are unacceptable to
the Landlord (or no such certificates are submitted within a reasonable period
after request therefore by the Landlord), then the Landlord may give to the
Tenant notice requiring compliance with this Section and specifying the respects
in which the Tenant is not then in compliance with this Section. If the Tenant
does not within five (5) Business Days (or such lesser period as the Landlord
may reasonably require having regard to the urgency of the situation), provide
appropriate

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    evidence of compliance with this Section, the Landlord may (but shall not be
obligated to) obtain some or all of the additional coverage or other insurance
which the Tenant shall have failed to obtain, without prejudice to any other
rights of the Landlord under this Lease or otherwise, and the Tenant shall pay
all premiums and other costs incurred by the Landlord forthwith upon demand.  
10.4   Release of Landlord by the Tenant       The Tenant agrees that the
Landlord and those for whom the Landlord is at law responsible shall not be
liable to any extent for any personal injury or death of or loss or damage to
any property belonging to the Tenant or its employees, invitees or licensees or
any other person in, on or about the Development, unless resulting from the act,
fault, omission or negligence of the Landlord or those for whom it is in law
responsible or as a result from a breach of the obligations of the Landlord
under this Lease. In no event shall the Landlord be liable for:

  (a)   any damage (other than Insured Damage) which is caused by steam, water,
rain or snow which may leak into, issue or flow from any part of the Development
or from the pipes or plumbing works, including the sprinkler system, thereof or
from any other place or quarter or for any damage caused by or attributable to
the condition or arrangement of any electric or other wiring or of sprinkler
heads or for any damage caused by anything done or omitted by any other tenant;
    (b)   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 janitorial services, security services, supervision or any other work in
or about the Premises or the Development;     (c)   loss or damage however
caused to money, securities, negotiable instruments, papers or other valuables
of the Tenant;     (d)   damage required to be insured against by the Tenant; or
    (e)   any indirect or consequential damages suffered by the Tenant however
caused.

    The Tenant hereby further releases the Landlord and those for whom the
Landlord is at law responsible from all claims or liabilities in respect of
damage required to be insured against by the Tenant.

10.5   Release of the Tenant by Landlord       The Landlord hereby releases the
Tenant and those for whom the Tenant is at law responsible from all claims or
liabilities in respect of any damage which is Insured Damage to the extent of
the insurance proceeds actually receivable by the Landlord or which would have
been receivable by the Landlord had it maintained the insurance required of it
pursuant to this Lease.   10.6   Indemnity of Landlord by the Tenant      
Except as provided in Section 10.5 and unless caused by or to the extent
contributed to by the act, fault, omission or negligence of the Landlord or
those for whom it is in law responsible or as a result of the breach by the
Landlord of any of its obligations under this Lease or any of its covenants,
warranties or representations contained in this Lease, the Tenant shall
indemnify and save harmless the Landlord against and from any and all expenses,
costs, damages, suits, actions or liabilities arising or growing out of any
default by the Tenant hereunder and from all claims and demands of every kind
and nature made by any person or persons to or against the Landlord and/or its
agent for

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    all and every manner of costs, damages or expenses incurred by or injury or
damage to such person or persons or his, her or their property, which claims or
demands may arise howsoever out of the use and occupation of the Premises by the
Tenant or any subtenant or occupant authorized by the Tenant or by any assignee
or sublessee thereof or any of the above-mentioned or his, her or their
servants, agents, assistants, employees, invitees or other persons entering into
the Building to go to the Premises or any part thereof, and from all costs,
counsel fees, expenses and liabilities incurred in or about any such claim or
any action or proceeding brought thereon.   10.7   Indemnity of Tenant by the
Landlord       Except as provided in Section 10.4 and unless caused by or to the
extent contributed to by the act, fault, omission or negligence of the Tenant or
those for whom it is in law responsible or as a result of the breach by the
Tenant of any of its obligations under this Lease, the Landlord shall indemnify
and save harmless the Tenant and those for whom it is in law responsible against
and from any and all expenses, costs, damages, suits, actions or liabilities
arising or growing out of any act, fault, omission or negligence of the Landlord
or those for whom it is in law responsible or the breach by the Landlord of any
of its obligations under this Lease or any of its covenants, warranties or
representations contained in this Lease and from all costs, counsel fees,
expenses and liabilities incurred in or about any such claim, action or
proceeding brought thereon.

ARTICLE 11.00 — ASSIGNMENTS AND TRANSFERS

11.1   Assignments, Subleases, Charges by the Tenant

  (a)   The Tenant shall not assign this Lease or sublet all or any part of the
Premises without the consent of the Landlord, which consent may not be
unreasonably withheld or delayed. Without limitation, it shall constitute
reasonable grounds for any withholding of consent by the Landlord that, in the
Landlord’s reasonable judgment:

  (i)   the proposed assignee or subtenant does not have a satisfactory
financial condition having regard to the obligations which it will assume as
assignee or subtenant; or     (ii)   the proposed assignee or subtenant is a
tenant or subtenant of other space in the Development; or     (iii)   the
proposed assignee or subtenant does not have an established good reputation in
the business community; or     (iv)   it is intended or likely that it will use
any part of the Premises for purposes which are not permitted by this Lease or
which are not acceptable to the Landlord, acting reasonably, or which are not
compatible with the other businesses or activities which are being carried on in
the Development; or     (v)   where the return to the Tenant on any proposed
assignment or subletting is greater than the amounts payable by the Tenant
hereunder and the Tenant has not agreed to pay one-half of such excess to the
Landlord (after deducting the Tenant’s reasonable costs in procuring any such
assignment or subletting, including, without limitation, commissions, legal
fees, the value of rent-free periods, inducements and improvement allowances
granted to the assignee or sublessee and any other direct costs incurred by the
Tenant in affecting the said assignment or subletting).

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  (b)   Without limitation, the Tenant shall for purposes of this Section be
considered to have, assigned or sublet in any case where it permits the Premises
or any portion thereof to be occupied by a person or persons other than the
Tenant, its employees and others engaged in carrying on the business of the
Tenant, whether pursuant to assignment, subletting, license or other right, and
shall also include any case where any of the foregoing occurs by operation of
law.     (c)   DELETED INTENTIONALLY.     (d)   The Landlord shall also have the
right of approval of any marketing of space by the Tenant.     (e)   If the
Landlord’s consent is given, the Tenant shall assign or sublet, as the case may
be, but only upon the terms set out in the offer submitted to the Landlord and
not otherwise. Such assignment or subletting shall occur within 180 days after
the Tenant’s request for consent and only upon any assignee entering into an
agreement directly with the Landlord and in a form satisfactory to the Landlord,
acting reasonably, 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 payment of Rent from and after the
effective date of any such assignment.     (f)   The Tenant shall have the right
without the consent of the Landlord, provided that the Tenant has first given
notice to the Landlord, to assign or sublet the whole or any portion of the
Premises to:

  (i)   a corporation affiliated (as that term is defined as of the date of this
Lease in the Ontario Business Corporations Act) with the Tenant; or     (ii)   a
purchaser of all or substantially all of the Tenant’s business,

      provided that any assignee has entered into an agreement directly with the
Landlord and in a form satisfactory to the Landlord, acting reasonably, 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 payment of Rent from and after the effective date of such
assignment.     (g)   All costs of the Landlord incurred with respect to any
assignment or sublease by the Tenant shall be paid by the Tenant forthwith after
demand.     (h)   The Tenant shall not require the Landlord’s consent respecting
a merger or amalgamation with another corporation and same shall not be
considered to be an assignment or subletting. In addition, any security
agreement entered into by the Tenant with a lender shall not require the
Landlord’s consent and same shall not be considered to be an assignment or
subletting or to cause a default of any of the Tenant’s obligations under this
Lease. Further, any change in the effective voting control of the Tenant shall
be deemed not to constitute an assignment or subletting and accordingly same may
be effected without the prior written consent and without any notice to the
Landlord.

11.2   Landlord’s Rights of Cancellation Deleted Intentionally

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11.3   Continuing Obligations

  (a)   No consent by the Landlord to any assignment or subletting shall release
or relieve the Tenant from any of its obligations hereunder.     (b)   No
consent by the Landlord to any assignment or subletting shall be construed to
mean that the Landlord has consented or will consent to any further assignment
or subletting which shall remain subject to the provisions of this Article.

11.4   Dealings by Landlord       The Landlord may sell, transfer, mortgage,
encumber or otherwise deal with the Development or any portion thereof or any
interest of the Landlord therein, in every case without the consent of the
Tenant and without restriction. To the extent that any purchaser or transferee
from the Landlord has covenanted and agreed in writing with the Tenant to become
bound by and perform the covenants and obligations of the Landlord under this
Lease, the Landlord shall without further written agreement be freed and
relieved of liability with respect to such covenants and obligations to the
extent that same relates to the period from and after the effective date of any
such sale or transfer. If the Landlord assigns or transfers this Lease it shall
obtain, as a condition thereof, the written agreement of the assignee or
transferee in favor of the Tenant whereby the assignee or transferee covenants
and agrees in writing with the Tenant to become, bound by and perform the
covenants and obligations of the Landlord under this Lease as if an original
signatory hereto.   11.5   Subordination and Attornment       The Tenant
acknowledges that this Lease is, at the option of any mortgagee or chargee,
subject and subordinate to any and all ground leases, mortgages or charges
(including deeds of trust and mortgage securing bonds, all indentures
supplemental thereto or any other instruments of financing, refinancing or
collateral financing) which may now or hereafter affect the Development or any
part thereof and to all renewals, modifications, consolidations, replacements
and extensions thereof, so long as the holder(s) of any such ground leases,
mortgages or charges first grants to the Tenant a written non-disturbance
agreement providing that so long as the Tenant is not in default of any material
covenant under this Lease, the Tenant shall be entitled to remain undisturbed in
its possession of the Premises, subject to the terms, covenants and conditions
of this Lease (a “Non-Disturbance Agreement”). Subject to the Tenant first
obtaining a Non-Disturbance Agreement from any party to which its rights under
this Lease are to be subordinated to, the Tenant agrees to execute promptly any
certificate or instrument in confirmation of such subordination and will, if
requested, attorn to such mortgagee or charges on the terms, covenants and
conditions contained in this Lease, and the Tenant hereby constitutes the
Landlord its agent and attorney for the purpose of executing any such
certificate or instrument.       Within six (6) months after November 4th, 2005,
the Landlord shall obtain a Non-Disturbance Agreement from the holders of any
existing ground leases, mortgages, charges or other interest in the Development
having priority to the Tenant’s rights under this Lease.

ARTICLE 12.00 — ESTOPPEL CERTIFICATES. REGISTRATION

12.1   Estoppel Certificates       Each of the Landlord and the Tenant agrees
that it will at anytime and from time to time upon not less than 10 days’ notice
execute and deliver to the

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    other (and, if required, to any prospective purchaser or mortgagee of the
Development) a certificate in writing as to the status at that time of this
Lease, including as to whether this Lease is unmodified and in full force and
effect (or if modified, stating the modification and that the same is in full
force and effect as modified), the amount of the Rent then being paid hereunder,
the dates on which the same, by installments or otherwise and other charges
hereunder, have been paid, whether or not there is any existing default on the
part of the other of which it has notice and any other matters pertaining to
this Lease as to which the other shall request a statement.       If any such
certificate requested by the Landlord is not returned to the Landlord within
10 days after its request therefore, the Landlord shall have the right and is
hereby appointed by the Tenant as its agent to prepare and execute such
certificate.   12.2   Registration on Title       The Tenant shall not register
this Lease in full on the title to the Development. If the Tenant wishes to
register a notice of this Lease, the Tenant shall deliver the form of notice to
the Landlord for its prior approval, such approval not to be unreasonably
withheld or delayed.       The Tenant agrees that it will, at its sole expense,
discharge and withdraw from title any such registration within 30 days after the
expiration or sooner termination of this Lease. If such registration is not
discharged and withdrawn during the aforesaid time, the Landlord shall have the
right and is hereby appointed by the Tenant as its agent to prepare, execute and
register such documentation as is required to discharge and withdraw any such
registration.

ARTICLE 13.00 — UNAVOIDABLE DELAYS
Whenever and to the extent that either the Landlord or the Tenant is unable to
fulfill or is delayed or restricted in the fulfillment of any obligation
hereunder in respect of the supply or provision of any service or utility or the
doing of any work or the making of any repairs by reason of being unable to
obtain the material, goods, equipment, service, utility or labor required to
enable it to fulfill such obligation, or by reason of any statute, law, by-law
or order-in-council or any regulation or order passed or made pursuant thereto,
or by reason of the order or direction of any legislative, administrative or
judicial body, controller or board, or any governmental department or any
governmental officer or other authority having jurisdiction, or by reason of its
inability to procure any license or permit required therefore, or by reason of
not being able to obtain any permission or authority required therefore, or by
reason of any strikes, lockouts, slow-downs or other combined action of workmen,
or shortages of material, or any other cause beyond its control, other than any
insolvency, lack of funds or other financial cause of delay, the Landlord or the
Tenant, as the case may be, shall be relieved from the fulfillment of such
obligation so long as such cause continues provided always that (except as may
be expressly provided in this Lease) the Tenant shall not be entitled to any
compensation for any inconvenience, or nuisance or discomfort thereby
occasioned, or to cancel or terminate this Lease or to any abatement of Rent
accruing due after the Commencement Date.
ARTICLE 14.00 — LANDLORD’S ACCESS TO PREMISES

14.1   Inspection and Repair       The Landlord and its authorized agents and
employees shall have the right at any time and from time to time to enter the
Premises for the purpose of inspection, providing janitor service, maintenance,
making repairs, alterations or improvements to the Development or to have access
to utilities and

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    services and the Tenant shall provide free and unhampered access for such
purpose . The Landlord in exercising its rights hereunder shall, save and except
for the purposes of providing janitor services and save in the event of an
emergency, provide the Tenant with reasonable prior notice thereof, shall carry
out such maintenance, repairs, alterations and improvements with due diligence
and in such a manner so as to minimize interference with the Tenant’s business
operations in the Premises. The Landlord shall be responsible at its sole cost
and expense to repair any damage to the Premises, the Leasehold Improvements and
the furniture and equipment located therein caused as a result of the exercise
of such rights.   14.2   Right to Exhibit Premises       The Landlord and its
authorized agents and employees shall have the right upon reasonable prior
notice to exhibit the Premises to prospective tenants during business hours
during the last 15 months of the Term and with a representative of the Tenant in
attendance. The Landlord and its authorized agents and employees shall also have
the right upon reasonable prior notice to enter upon the Premises at all
reasonable hours during the Term and with a representative of the Tenant in
attendance for the purpose of exhibiting the Development to any prospective
purchaser or mortgagee thereof.

ARTICLE 15.00 — DEFAULT

15.1   Events of Default       Each of the following shall be an event of
default of the Tenant:

  (a)   whenever the Tenant defaults in the payment of any Rent and such default
continues for five Business Days after notice to the Tenant; or     (b)  
whenever the Tenant defaults in the performance of any of its other obligations
hereunder and such default can be remedied by the Tenant, but is not remedied
within a period next after notice and which period shall be:

  (i)   if the default could reasonably be remedied within 30 days after notice
and provided the Tenant has commenced to remedy such failure within 10 Business
Days after notice and proceeds thereafter diligently and continuously to remedy
it, 30 days;     (ii)   if the default could not reasonably be remedied within
30 days after notice and provided the Tenant has commenced to remedy such
failure not later than 10 Business Days after notice and proceeds thereafter
diligently and continuously to remedy it, that number of days after notice which
would reasonably suffice for the remedying of such default if the Tenant had
commenced to remedy such default within 10 Business Days after notice and
proceeded thereafter diligently and continuously to remedy it; and     (iii)  
in any case where the Tenant does not commence to remedy such default within 10
Business Days after notice, 10 Business Days; or

  (c)   whenever the Tenant defaults in the performance of any of its other
obligations hereunder and such default cannot be remedied by the Tenant; or    
(d)   if the Tenant is adjudicated to be insolvent or makes an assignment for
the benefit of creditors or in bankruptcy or is declared bankrupt, or takes the
benefit of any legislation that may be in force for bankrupt or

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      insolvent debtors or if any proceedings are taken by or against the Tenant
under any winding-up legislation and such adjudication, assignment, declaration
or proceedings are not set aside or revoked within 60 days after the making or
taking of the same, or if the Tenant makes any sale of its assets under the Bulk
Sales Act of Ontario, except to a successor in conjunction with a permitted
assignment of this Lease; or     (e)   if the Premises are used by any other
person or persons other than the Tenant or other person or persons entitled to
the use thereof or for any other purpose than that for which the same were let,
in each case without the prior written consent of the Landlord where required
under this Lease.

15.2   Remedies by Landlord       Upon any event of default of the Tenant, in
addition to any remedy which the Landlord may have by this Lease or at law or in
equity, the Landlord may, at its option:

  (a)   in the event of a default described in Section 15.1(d) provide by notice
to the Tenant that the current month’s Rent and Rent for the next ensuing
3 months shall thereupon become immediately due and payable; and/or     (b)  
re-enter and take possession of the Premises as though the Tenant is overholding
after the expiration of the Term and the Term shall be forfeited and void in
such event; and/or     (c)   enter the Premises as agent of the Tenant, either
by force or otherwise, without being liable for any prosecution therefore and
without being deemed to have terminated this Lease and relet the Premises or any
part thereof as the agent of the Tenant and receive the rent therefore to be
applied on account of the Rent; and/or     (d)   exercise its right of distress
and the Tenant hereby waives any present or future limitation on the Landlord’s
right of distress; and/or     (e)   terminate this Lease and re-enter and take
possession of the Premises in which event the Landlord shall be under an
obligation to mitigate its damages and provide by notice to the Tenant for an
immediate payment by the Tenant of an amount equal to the Present Value as of
the date of such termination of the excess, if any, of the amount of Rent
required to be paid under this Lease for the remainder of the then current Term
over the then reasonable rental value of the Premises for the remainder of the
then current Term.

15.3     Additional Self-help Remedy of Landlord     In addition to all other
remedies the Landlord may have by this Lease at law or in equity, if the Tenant
does not perform any of its obligations hereunder, the Landlord, may at its
option, perform any of such obligations after 5 Business Days notice to the
Tenant or in the event of an emergency, without notice and, in such event, the
cost of performing any of such obligations, plus an administrative charge of 15%
of such cost, shall be payable by the Tenant to the Landlord forthwith on
demand, together with interest at the Rate of Interest from the date of the
performance of any of such obligations by the Landlord to the date of payment by
the Tenant.

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15.4   Legal Costs       The Tenant hereby agrees’ to pay to the Landlord within
5 Business Days after demand all legal fees on a solicitor and his own client
basis incurred by the Landlord for the enforcement of any rights of the Landlord
under this Lease or in the enforcement of any of the provisions of this Lease or
in the obtaining of possession of the Premises or for the collection of any
moneys from the Tenant.       The Landlord hereby agrees to pay to the Tenant
within 5 Business Days after demand all legal fees on a solicitor and his own
client basis incurred by the Tenant for the enforcement of any rights of the
Tenant under this Lease or in the enforcement of any of the provisions of this
Lease or for the collection of any moneys from the Landlord.   15.5   Remedies
Cumulative       The Landlord or Tenant, as the case may be, 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 other, either by any provision of this
Lease or by statute or at law or in equity, all of which rights and remedies are
intended to be cumulative and not alternative, and the express provisions
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
or Tenant, as the case may be, at law or in equity.   15.6   Non-Waiver      
Any condoning, excusing or overlooking by either the Landlord or the Tenant of
any default by the other at any time or times in respect of any obligation of
the other herein shall not operate as a waiver of the non-defaulting party’s
rights hereunder in respect of such default or so as to defeat or affect in any
way the rights of the non-defaulting party in respect of any such continuing or
subsequent default by the defaulting party. No waiver shall be implied by
anything done or omitted by a party. Any waiver of a particular default shall
not operate as a waiver of any subsequent or continuing default.   15.7  
Self-help Remedy of Tenant       In the event the Landlord should at any time
during the Term of this Lease fail to (i) make any payment required of it
pursuant to this Lease within fifteen (15) days of demand therefor by the
Tenant; or (ii) perform any of its obligations hereunder and should such failure
adversely affect access to or egress from the Premises or the Tenant’s business
operations therein and should the Landlord fail to commence and to proceed
diligently with the performance of such obligation within fifteen (15) days
following written notice from the Tenant to the Landlord thereof, then in such
event, the Tenant shall, without obligation to do so, be entitled to make any
such payment or perform any such obligation at the cost of the Landlord to be
paid by it to the Tenant within ten (10) days after receipt of written notice of
such cost accompanied by written evidence of the amount thereof. In the event of
default of such payment by the Landlord, the Landlord shall pay interest to the
Tenant on the unpaid cost at the Rate of Interest from the due date until the
date of payment in full and the Tenant shall, without prejudice to and in
addition to any other remedy available to the Tenant under this Lease or at law
as a consequence thereof, be entitled to deduct such unpaid cost incurred by it,
together with interest as aforesaid, from the Rent payable pursuant to this
Lease to a maximum aggregate amount of Two Hundred Thousand Dollars
($200,000.00) (which amount shall increase by three percent (3%) compounded
annually on each anniversary date of the Commencement Date).

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ARTICLE 16.00 — GENERAL PROVISIONS

16.1   Entire Agreement       This Lease contains all of the terms and
conditions of the agreement between the Landlord and the Tenant relating to the
matters herein provided and supersedes all previous agreements or
representations of any kind, written or verbal, made by anyone in reference
thereto. There shall be no amendment hereto unless in writing and signed by the
party to be bound.   16.2   Schedules       The Schedules to this Lease form a
part of this Lease.   16.3   Planning Act       This Lease is subject to
compliance, if necessary, with the Planning Act of Ontario.   16.4   Survival of
Obligations       Any obligation of a party which is unfulfilled on the
termination of this Lease shall survive until fulfilled.   16.5   Severability
of Illegal Provision       If any provision of this Lease is or becomes illegal
or unenforceable, it shall during such period that it is illegal or
unenforceable be considered separate and severable from the remaining provisions
of this Lease, which shall remain in force and be binding as though the said
provision had never been included.   16.6   Governing Law       This Lease shall
be governed by the laws applicable in the Province of Ontario.   16.7   No
Partnership       Nothing contained herein shall be deemed to create any
relationship between the parties hereto other than the relationship of landlord
and tenant.   16.8   Number, Gender, Joint and Several Liability       The words
“Tenant”, “assignee” and “sublessee” and personal pronouns relating thereto and
used in conjunction therewith shall be read and construed as “Tenant” or
“Tenants”, “assignee” or “assignees” and “sublessee” or “sublessees”,
respectively, and “his”, “her”, “it”, “its” and “their” as the number and gender
of the party or parties referred to in each case require and the number of the
verb agreeing therewith shall be considered as agreeing with the said word or
pronoun so substituted. If at any time there is more than one Tenant together or
in succession, they shall be jointly and severally liable for all of the
obligations of the Tenant hereunder.   16.9   Captions       The captions for
Articles and Sections of this Lease are for convenience only and are not to be
considered a part of this Lease and do not in any way limit or amplify the terms
and provisions of this Lease.

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16.10   Time of Essence       Time shall be of the essence of this Lease.  
16.11   Landlord’s Agent       The Landlord may perform any of its obligations
or exercise any of its rights hereunder through such agency as it may from time
to time determine and the Tenant shall as from time to time directed by the
Landlord pay to any such agent any moneys payable hereunder to the Landlord.  
16.12   Accounting Principles       All calculations referred to herein shall be
made in accordance with generally accepted accounting principles and practices
applicable to the real estate development industry and applied on a consistent
basis.   16.13   Other Leases in Building — INTENTIONALLY DELETED   16.14  
Notices and Consents, Etc.       Any demand notice or other communication (the
“Communication” ) to be given in connection with this Agreement shall be given
in writing and shall be given by personal delivery, telecopier transmission or
by mailing by registered mail with postage thereon, fully prepaid in a sealed
envelope addressed to the intended recipient as follows:

  (a)   to the Landlord, at:

      161 Eglinton Avenue East Suite 201 Toronto, Ontario M4P 1J5
 
   
Attention:
  Moni Lustig Telecopier No: (416) 506-1306

  (b)   to the Tenant, at:

      Prior to the Commencement Date:   4110 Yonge Street Suite 200 Toronto,
Ontario M2P 2B7
 
   
Attention:
  Michael Kline
 
  Senior Vice-President, Legal Services and
 
  Secretary
 
    Telecopier No.: (416) 733-2876
 
    After the Commencement Date:
 
    the Premises
 
    Attention: Michael Kline
 
  Senior Vice-President, Legal Services and
 
  Secretary

      or to such other addresses, telecopier number or individual as may be
designated by a Communication given by a party to the other parties as
aforesaid. Any Communication given by personal delivery shall be

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    conclusively deemed to have been given on the day of actual delivery
thereof, if given by registered mail on the 2nd Business Day following the
deposit thereof in the mail and if given by telecopier transmission, on the
Business Day following the day on which it was telecopied. If the party giving
any Communication knows or reasonably knows of any difficulties with the postal
system which might effect the delivery of mail, any such Communication shall not
be mailed but shall be given by personal delivery or by telecopier transmission.
  16.15   Further Assurances       Each party agrees to make such further
assurances as may be reasonably required from time to time by the other to more
fully implement the true intent of this Lease.   16.16   Environmental       The
Landlord covenants that as of the date hereof, and during the Term, the Landlord
shall not permit within the Premises, Building, the Lands and all appurtenances
thereto, any and all materials proscribed or banned pursuant to environmental
statutes, laws, orders, and regulations of competent jurisdiction (individually
and collectively the “Laws”), and that should it be shown that the Building, the
Lands or Premises (other than by virtue of the Tenant’s acts) contain any such
material(s) beyond acceptable governmental levels, the Landlord shall forthwith
remove same, or deal with same in accordance with all applicable Laws, in good
and proper manner, in accordance with all proper procedures, and certify via
independent environmental engineers as to completion of same, all such work to
be carried out by the Landlord at its sole cost, without reimbursement by the
Tenant. Except as specifically disclosed herein, the Landlord warrants that to
the best of its knowledge and belief the Building, the Lands and the Premises
contains no such material beyond acceptable governmental levels. This covenant
and all obligations in connection therewith shall be ongoing and shall bind
Landlord’s successors and assigns.   16.17   Financial Information       Tenant
acknowledges and agrees that commencing in the fiscal year 2006 it will provide,
at Landlord’s request from time to time, a copy of the Tenant’s most recent
annual financial statements (such financial statements of the Tenant to be
substantially in the form reviewed by Landlord in respect of the Tenant’s year
end December 2004) together with a letter from the Tenant’s parent’s Senior
Vice-President, Controller certifying that such financial statements are those
used in the preparation of the consolidated financial statements of the Tenant’s
parent company, Alliance Data Systems Corporation.   16.18   Letter of Credit  
    The Tenant agrees to take out and maintain within five (5) Business Days of
unconditional acceptance of the Offer between the parties until the later of
thirty (30) days following occupancy of the Premises by the Tenant, or thirty
(30) days after the Commencement Date, an irrevocable Letter of Credit from a
Schedule A Bank in the amount of two million dollars ($2,000,000.00 CAD). This
Letter of Credit shall be in the Landlord’s name, who upon any non-payment of
Basic Rent and/or Additional Rent by the Tenant shall have the unfettered right
to draw down the amount of such non-payment under the Letter of Credit, without
prejudice to any other rights the Landlord may have under this Lease.

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16.19   Force Majeure       If either, the completion of the Landlord’s Work is
delayed beyond the Access Date, or the completion of the Tenant’s Work is
delayed beyond the Commencement Date, for reason of strike, lockout, labor
troubles, inability to procure materials, failure of power, restrictive
governmental laws, riots, insurrection, war or other reason of a like nature not
the fault of the party delayed in performing work or doing acts under the terms
of this Lease, then the Commencement Date shall be delayed by until such time as
the Tenant’s Work is substantially completed, and all other applicable dates in
this Lease with the Landlord shall be adjusted accordingly. In the event of a
change in the Access Date or the Commencement Date as determined in accordance
with the foregoing the parties shall execute an acknowledgement of same.   16.20
  Building Systems       The Landlord represents and warrants that the schedule
attached hereto as Schedule “F”, Building Systems Review, accurately represents
the Building’s systems and improvements, as of August 28, 2005, and the Tenant
can rely on such information.   16.21   No Requirement to Occupy       During
the Term, the Tenant shall be permitted to vacate all or a portion of the
Premises. Should the Tenant vacate the Premises, it shall maintain all its
financial obligations, as if it were in occupancy. The Tenant shall have the
right to resume occupancy of the Premises at anytime without notice to the
Landlord.   16.22   Sale and Demolition       The Landlord shall not have the
right of early termination in the event of any sale, redevelopment, renovation
or demolition of the Building.   16.23   Window Blinds       The Tenant shall
have the right to replace Building Standard window blinds in the Premises with a
new style of window covering. The Tenant shall provide details of such window
treatment to the Landlord for its review and approval, such approval not to be
unreasonably withheld or delayed.   16.24   Parking       The Landlord shall
make available to the Tenant, upon 30 days written notice, underground
unreserved parking spaces located in the parking garage of the Building
throughout the Term, as is proportionate to the Proportionate Share of the
Premises in the Building, (ie. Rentable Area of the Premises as it exists from
time to time divided by the Rentable Area of the Building (322,358 square feet),
which as of the Commencement Date will be 98 unreserved parking spaces), at a
charge of $185.00 per month per space during the first year of the Term
(increased on each anniversary date of the Commencement Date by the percentage
increase in the Consumers Price Index, All Items for Toronto, as published by
Statistics Canada) plus applicable taxes. Such rental shall be payable by the
Tenant to the Landlord on the first day of each month of the Term. Partial
months’ rent owing shall be calculated and paid on a pro rated basis. All such
underground unreserved parking spaces shall be made available to the Tenant on a
24 hour, 7 day a week basis.

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16.25   Right of First Refusal       In addition to the Tenant’! rights under
Section 16.41 herein during the period commencing upon November 4th, 2005 and
throughout the Term (save and except with respect to the 12th floor of the
Building for which the period shall commence on the date the Additional Premises
have been determined pursuant to Section 16.41(b) hereof and only if the
Additional Premises as so determined do not consist of the 12th floor of the
Building and shall continue throughout the balance of the Term), and subject to
any rights in existence as of August 29, 2005 in favor of the tenants of the
Building as of August 29, 2005 and the respective successors and assigns of such
tenants (which existing rights in favor of such tenants are set out in Schedule
“I” of this Lease), the Tenant shall, provided it is not in default, have an
ongoing right of first refusal to lease all or any part of any office space that
is located on the 12th through 18th floors in the Building to a maximum of
35,396 square feet of Rentable Area (the “Right of First Refusal”).       During
the period commencing upon November 4th, 2005 and during the Term of this Lease
(save and except with respect to the 12th floor of the Building for which the
period shall commence on the date the Additional Premises have been determined
pursuant to Section 16.41(b) hereof and only if the Additional Premises as so
determined do not consist of the 12th floor of the Building and shall continue
throughout the balance of the Term), if the Landlord receives an acceptable
written bona fide offer from an arm’s length third party to lease all or any
part of any office space that is located on the 12th through 18th floors in the
Building, then the Landlord will notify the Tenant in writing of the terms of
such acceptable written offer to lease (the “Acceptable Offer to Lease”). The
Tenant shall have five (5) Business Days from receipt of such notice to
unconditionally exercise its Right of First Refusal, in writing, delivered to
Landlord, to lease that portion of the Building covered by the Acceptable Offer
to Lease on the same terms and conditions as provided for in such offer, less
any commissions. It is understood and agreed that the term of any space leased
under this Right of First Refusal will be coterminous with the Term for the
Premises, and any renewal(s) or extension(s) thereof.   16.26   Option to Extend
      If the Tenant is not then in default (after notice of default has been
provided and time to remedy such default has passed) at the notice date or the
commencement of the applicable extension period of any covenants, conditions and
agreements herein reserved and contained and on the part of the Tenant to be
paid and performed, Landlord will, upon the Tenant’s request in writing, given
at least fifteen (15) months and not more than twenty (20) months prior to the
expiration of the then current Term, grant to the Tenant or its permitted
assigns or transferees two (2) successive options to extend this Lease (on the
same terms and conditions including, without limitation, the provisions of
Section 16.25 of this Lease, each for a further five (5) years, save and except
that there shall be no further rights to extend beyond the second of such
extensions and save and except that the Basic Rent payable during the applicable
extension period shall be mutually agreed upon between the parties at least four
(4) months prior to the expiry of the then current Term, and shall be based on
the then current fair market rent for the Premises, taking into account that the
Tenant is receiving no tenant inducements, no Landlord’s Work, and taking into
consideration the age of the Leasehold Improvements in the Premises and premises
similar to the Premises which are comparable in size, location, type, and
condition, for tenants leasing similar premises of a similar size and for a
similar term.       In the event that a new Basic Rent is not agreed upon at
least four (4) months prior to the expiry of the then current Term, the Basic
Rent for the applicable extension period shall be settled by a single arbitrator
pursuant to the

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    Arbitration Act, S.O. 1991 c.17 as amended or replaced, and shall be equal
to the then current market rent for the Premises, taking into account that the
Tenant is receiving no teniht inducements, no Landlord’s Work, and taking into
consideration the age of the Leasehold Improvements in the Premises and premises
similar to the Premises which are comparable in size, location, type, and
condition, for tenants leasing similar premises of a similar size and for a
similar term. The expense of arbitration shall be borne equally by the Landlord
and the Tenant, except that each party shall be responsible for its respective
solicitor’s and experts’ fees and witnesses. It is understood and agreed that
the arbitrator shall be qualified by education, experience, and training to make
a decision on the matter being arbitrated.   16.27   Roof Mounted Communication
Equipment       For the Term, the Tenant shall have the right, exercisable at
its option, risk and expense to install and maintain communication equipment on
the roof of the Building, for its own use. The Landlord will provide, at no cost
or expense to the Tenant, a mutually agreeable location for the installation.
There shall be no ongoing charge for the space required for such communication
equipment. The Landlord shall approve the size and method of installation of the
communication equipment, such approval not to be unreasonably withheld or
delayed. Such work to install and maintain any roof mounted communication
equipment shall be in accordance with the terms of this Lease. Upon expiration
or earlier termination of the Term, the Tenant, at its sole cost and expense,
shall be obliged to remove said equipment and repairing damage caused by said
removal. The Tenant shall co-operate with the Landlord, and shall remove and/or
relocate such equipment, if required to do so, for the purpose of repairs and
maintenance of the Building.   16.28   Roof Mounted Emergency Power Generator
Equipment       For the Term, the Tenant shall have the right, exercisable at
its option, to install and maintain on the roof of the Building, at its cost and
expense, an emergency generator (generator will be self-contained, and include
sound mitigation and an oil tank), a fuel tank in the lowest parking level of
the Building, and fuel lines to supply such emergency generator, all to serve
the Tenant’s electrical requirements. The Landlord will provide, at no cost or
expense to the Tenant, mutually agreeable locations for the installation of the
Tenant’s emergency generator, and associated fuel tank. There shall be no
ongoing charge for the space required for the Tenant’s own generator, fuel tank,
or for the Tenant’s access to conduit or riser space required to connect to such
generator. Such work to install and maintain a generator shall be in accordance
with the terms of this Lease. Upon expiration or earlier termination of the
Term, the Tenant, at its sole cost and expense, shall be obliged to remove said
equipment and repairing damage caused by said removal.   16.29   Internal
Cooling Unit(s)       For the Term, the Tenant shall have the right, exercisable
at its option, to install and maintain a supplemental condenser water system in
the Premises, with heat rejection in the loading dock or on the roof of the
Building. It is expected that the Tenant will require roughly fifty (50) tons of
cooling to service the Tenant’s equipment rooms, 24/7 cooling zones, and to
supplement the base building system in the Premises, where the Tenant’s cooling
loads are intensive. The Landlord shall permit the Tenant to access Building’s
municipal water to service the Tenant’s air-conditioning system. The Landlord
will provide, at no cost or expense to the Tenant, mutually agreeable locations
for the installation of such heat rejection equipment, and distribution pumps,
and access to conduit or riser space required to connect to such cooling units,
such installation to be at the sole cost and expense of the Tenant. There shall

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    be no ongoing charge for the space required for such heat rejection
equipment, and distribution pumps, and any conduit or riser space required for
such installation. Upon expiration or earlier termination of the Term, the
Tenant, at its sole cost and expense, shall be obliged to remove said equipment
and repairing damage caused by said removal. The Tenant shall install at the
Tenant’s sole cost and expense check meters for all utility consumption for the
above-mentioned internal cooling units.   16.30   Restoration       Subject to
Sections 3.5, 16.27, 16.28 and 16.29, the Tenant shall not be responsible for
the restoration of the Premises or the removal of any Leasehold Improvements,
the Tenant cabling or wiring, in the Premises, at the expiry or earlier
termination of this Lease.   16.31   Leasehold Improvements       The Leasehold
Improvements, fixtures, furnishings and equipment installed or placed in or on
the Premises by or on behalf of the Tenant, howsoever affixed (other than the
Building and its systems, and equipment, affixed thereto and forming part
thereof), will be the personal property of the Tenant, during the Term, after
which time same shall subject to Section 3.5 of this Lease become the property
of the Landlord.   16.32   Building Access       The Landlord shall allow the
Tenant, its agents, clerks, servants, employees and other persons transacting
business with it to have access to the Premises by the main entrance or
entrances of the Building and Premises and to use stairways and passages
therefrom, and parking areas at all times, 365 days a year, on a 24 hour basis,
subject to the rules and regulations provided in this Lease, and subject to
emergencies.   16.33   Leasehold Improvement Allowance

  (a)   It is understood and agreed that Landlord shall pay to the Tenant a
leasehold improvement allowance being the sum of thirty-five dollars ($35.00)
per sq.ft. multiplied by the Rentable Area of the Premises, together with the
Sales Taxes thereon, (the “Leasehold Improvement Allowance”). The Tenant shall
use the Leasehold Improvement Allowance to pay the cost of the Tenant’s Work in
the Premises for its use and operation.     (b)   Notwithstanding the provisions
of the foregoing, Landlord shall, on no more than three (3) occasions, allow the
Tenant to draw portions of the Leasehold Improvement Allowance, which shall be
payable within thirty (30) days following the date of the Tenant’s written
request for such draw, subject to construction lien holdback, which shall be no
more than 10% in the aggregate of the said Leasehold Improvement Allowance.    
(c)   Payment of each progress draw shall be subject to the following:

  (i)   delivery of invoices for costs incurred to date of such advance;    
(ii)   the Tenant satisfying Landlord that the value of the construction
materials and labour is commensurate with the amounts invoiced;     (iii)  
statement of the Tenant’s contractor certifying that the level of work has been
completed in respect to the current progress draw for the same has been made to
the Landlord; and     (iv)   a draw request from the Tenant to the Landlord,
including therewith the Tenant’s G.S.T registration number.

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  (d)   In addition to the foregoing provisions the final advance of the
Leasehold Improvement Allowance for the Premises shall be payable upon the
following conditions:

  (i)   the delivery to the Landlord of proof of payment of worker’s
compensation assessment for all the Tenant’s contractors and subcontractors    
(ii)   the completion of the Tenant’s Leasehold Improvements and trade fixtures,
and     (iii)   the delivery to the Landlord of a statutory declaration stating
that there are no construction liens registered or outstanding affecting the
Premises in respect to the Tenant’s Leasehold Improvements, or trade fixtures,
and that all accounts for work, services or materials have been paid in full
with respect to the Tenant’s Leasehold Improvements and trade fixtures.

  (e)   If the Landlord fails to pay any installment(s) of the Leasehold
Improvement Allowance to the Tenant when otherwise due to the Tenant, then the
Tenant may set-off any such unpaid installment(s) together with interest thereon
at a rate of six (6) percent per annum from the Basic Rent and Additional Rent
next coming due until set-off in full.

16.34   Tenant’s Work       The Tenant shall be responsible for all work to
prepare the Premises for its occupancy not provided under Landlord’s Work
including, but not limited to, the installation and cost of all its internal
partitions, fixtures, electrical wiring, telecommunication cabling and plumbing
costs, together with the cost of any modifications to the ceiling, light or
heating ventilation and air-conditioning systems in the Premises, as required by
the Tenant’s occupancy, excluding any Landlord’s Work provided for herein (the
“Tenant’s Work”).       The Tenant shall also be responsible for the cost of
installing any special equipment required by its occupancy. The Tenant’s Work
shall be completed in a good and workmanlike manner, subject to the prior
written approval of the Tenant’s plans by Landlord, acting reasonably, as
detailed and provided for in paragraph 16.35 contained herein and shall be
completed in accordance with the Tenant Leasehold Improvement Manual attached as
Schedule “H” to this Lease governing the Building’s rules and regulations for
the coordination and construction of the Tenant’s Work.       Tenant shall bear
(i) the out-of-pocket costs of all the Landlord’s plan reviews and approvals in
respect of the mechanical and electrical components of the Tenant’s Work in an
amount not to exceed $9,000.00 (plus Sales Taxes), and (ii) the reasonable
out-of-pocket costs incurred by the Landlord in retaining its base building or
designated engineers) or consultant(s) to review and approve the plans for any
other component(s) of the Tenant’s Work (save for the mechanical and electrical
components as aforesaid), unless the Tenant engages the services of any such
base building or designated engineer(s) or consultant(s) with respect to any
such component(s) of the Tenant’s Work in which event the Tenant shall not be
responsible for any costs incurred by Landlord in respect thereof. The Tenant
shall not be responsible for any charges for electrical use or other security,
management, supervision, or elevator use, or other special Landlord costs,
during the construction of the Tenant’s Work or Landlord’s Work, prior to the
Commencement Date. Landlord shall co-ordinate with the Tenant the use of one
(1) service elevator for the Tenant’s use during its Fixturing Period.

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16.35   Working Drawings       The Tenant shall submit to the Landlord working
drawings of its proposed improvements to the Premises, such drawings must be
approved by the Landlord prior to the commencement of any such work, provided
that such work shall be done by qualified and licensed contractors or
sub-contractors of whom the Landlord shall have approved in writing, such
approvals not to be unreasonably withheld or delayed. It shall be deemed that
Landlord has given consent to the Tenant’s drawings and licensed contractors or
subcontractors, if consent or other written notice is not provided to the Tenant
within ten (10) Business Days from the Landlord’s receipt of the Tenant’s
drawings or list of contractors.       The Landlord shall provide the Tenant
with a copy of any and all design, mechanical and electrical drawings, for
existing improvements in the Premises, that are within the Landlord’s possession
and control upon acceptance of the Offer between the parties.   16.36   Permit
and Approvals       It is the Tenant’s responsibility to secure all the
necessary building permits and approvals required by the City of Toronto for all
its Tenant’s Work. Such permits must be secured and copies provided to the
Landlord before any work shall commence in the Premises. The Landlord shall
promptly provide any consent or approvals required of it in this regard.   16.37
  Condition of Premises       Except for the Landlord’s Work, as described
herein, the Tenant shall accept the Premises on an “as is” basis, and with the
understanding that any Leasehold Improvements currently in place shall remain
for the use of the Tenant, for the duration of the Term.   16.38   Landlord’s
Work       The Landlord shall be responsible for the cost and installation of
the work outlined on the schedule attached hereto as Schedule “G” (the
“Landlord’s Work”). The Landlord covenants and agrees to use its reasonable
commercial efforts to complete its Landlord’s Work prior to the Access Date (as
defined in Section 16.39 herein), subject to force majeure outlined in paragraph
16.19 herein.       Notwithstanding anything contained herein, the Tenant may
request the Landlord to complete the Landlord’s Work to any one or more of the
following floors (on a full floor basis only), being the 4th, 5th, 6th, and/or
7th floors in the Building, upon two (2) months written notice provided by the
Tenant to the Landlord.   16.39   Fixturing Period       The Landlord shall
complete the Landlord’s Work to such an extent that will permit the Tenant to
commence and complete the Tenant’s Work without interference by the Landlord’s
workmen or work on the 2nd, 4th, 5th, 6th, 7th, 8th, 9th, 10th and 11th floors
on or before December 31, 2006 and on the 3rd floor on or before June 1, 2007
(the “Access Dates”), to permit the Tenant to carry out the construction of its
Tenant’s Work, and for the installation of the Tenant’s trade fixtures and
equipment which the Tenant shall be entitled to undertake during the period
commencing from and after the Access Dates to and including the day immediately
preceding the Commencement Date on a Rent free basis except as otherwise
provided for in the last paragraph of Section 3.3 of this Lease.

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16.40   Other Charges       The Tenant shall be responsible for its
telecommunication charges and any other special services provided to the
Premises, at its request   16.41   Additional Premises

  (a)   The Landlord hereby represents and warrants to the Tenant that its
existing lease (the “Current Lease”) with the existing tenant of the 12th floor
of the Building (the “CT”) expires on October 31, 2007 and contains options to
extend the term of the Current Lease for two (2) further separate and
consecutive periods of five (5) years each upon written notice delivered to the
Landlord on or before April 30, 2007 in the case of the first extension and
April 30, 2012 in the case of the second extension.     (b)   Subject to
subclause (d) below, at some time between October 1, 2011 and March 1, 2013 (the
“A. P. Commencement Date”), the Landlord shall lease to the Tenant and the
Tenant shall lease from the Landlord additional office space in the Building
(the “Additional Premises”). The Additional Premises shall consist of the entire
12th floor of the Building in the event the CT fails to exercise its first
option to extend the term of the Current Lease or the 12th floor of the Building
is as of October 1, 2009, vacant and available for lease but otherwise shall
consist of one full floor of the 14th, 15th, 16th, 17th and 18th floors of the
Building. The Landlord acknowledges and agrees that it is the Tenant’s
preference that the Additional Premises comprise the entire 12th floor of the
Building and the Landlord shall use reasonable commercial efforts to accommodate
such preference.     (c)   Subject to subclause (d) below, the lease of the
Additional Premises shall commence on the A. P. Commencement Date and shall be
coterminous with the Term (including for greater certainty any extension(s) or
renewal(s) thereof, if exercised) and shall otherwise be under the same terms
and conditions as this Lease, which shall apply mutatis mutandis, subject to the
following provisions:

  (i)   The Landlord shall on or before October 1, 2009 provide written notice
to the Tenant of the exact location of the Additional Premises and the A. P.
Commencement Date. The Landlord will complete the Landlord’s Work to the
Additional Premises and deliver vacant possession of same to the Tenant no later
than three (3) months prior to the A. P. Commencement Date and the Tenant shall
thereafter to and including the day immediately proceeding the A. P.
Commencement Date be permitted on a gross rent free basis to complete its
Tenant’s Work to the Additional Premises.     (ii)   As provided for in this
Lease the Landlord shall provide to the Tenant a leasehold improvement allowance
for the Additional Premises. The value of the leasehold improvement allowance
shall be prorated over the remaining Term after the A. P. Commencement Date and
shall be equal to $0.291667 multiplied by the remaining months of the Term after
the A. P. Commencement Date multiplied by the Rentable Area of the Additional
Premises.

  (d)   Notwithstanding anything contained in this Section 16.41 of this Lease,
in the event that the Tenant has on or before October 1, 2009 leased or
committed to lease pursuant to Section 16.25 of this Lease or otherwise,
additional premises in the Building (other than the Premises) consisting of at
least 17,698 square feet of Rentable Area, then the provisions of this
Section 16.41 of this Lease thereafter shall be null and void and of no

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41

      further force and effect.

16.42   Additional Rent       The Additional Rent for the calendar year 2005 is
estimated to be $17.10 per rentable sq.ft. and composed of the following
estimates:

     
Taxes:
  $ 8.38 per rentable sq.ft. per annum*
Operating Costs:
  $7.72 per rentable sq.ft. per annum**
Tenant Utilities:
  $1.00 per rentable sq.ft. per annum*
Total:
  $17.10 per rentable sq.ft. per annum

 

*   No management or administration fee shall be eligible   **   This estimate
includes a management and administration fee which is not to exceed 15% of
Operating Costs

    The Tenant and the Landlord acknowledge that the above amount for Additional
Rent is an estimate only and is subject to adjustment based on actual costs. It
is further acknowledged that the estimate is based on current Business Hours and
will increase as a result of the increased Building Operating Hours outlined in
Section 6.2 herein.   16.43   Interesse Termini       The Landlord and Tenant
acknowledge and agree that for all purposes of this Lease including, without
limitation, for the purpose of the Tenant enforcing its right to exclusive
possession of the Premises, the parties specifically waive the applicability of
the common law doctrine of interesse termini (the “Doctrine”) and agree that the
Doctrine shall not be applicable to this Lease or the rights of the Tenant under
this Lease and the Tenant shall be entitled to enforce its rights and remedies
contained in this Lease and at law (including, without limitation, obtaining an
order for specific performance) as if the Doctrine had been abolished in the
Province of Ontario.   16.44   Suite 208 — INTENTIONALLY DELETED   16.45  
Landlord’s Covenant, Warranty and Representation       The Landlord covenants,
warrants and represents to the Tenant as follows:

  (i)   that it is the registered owner of the Development, it has the right to
enter into and perform its obligations under this Lease and that it has obtained
all approvals and consents required in order for it to do so; and     (ii)  
save and except for routine day-to-day maintenance items, there are no
significant anticipated or scheduled maintenance, repairs or replacements to the
Development or any of its components.

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42

16.46   INTENTIONALLY DELETED   16.47   Reasonableness       Unless otherwise
stated in this Lease to the contrary, whenever any consent, approval, judgement,
discretion or other similar decision is required of the Landlord, its architect,
engineers, auditors or similar person, such consent, approval, judgement,
discretion or other similar decision shall not be withheld or exercised
unreasonably and all the parties shall be bound to act reasonably, in good faith
and without undue delay.   16.48   Successors and Assigns       Except as
otherwise specifically provided, the covenants, terms and conditions contained
in this Lease shall apply to and bind the parties hereto and their respective
successors and assigns.

IN WITNESS WHEREOF the parties hereto have duly executed this Lease as of the
day, month and year first above written.

                  592423 ONTARIO INC.    
 
           
 
  Per:        
 
           
 
      [Authorized Signing Officer]    
 
           
 
  Per:        
 
           
 
      [Authorized Signing Officer]    
 
                We have authority to bind the Corporation.    
 
                LOYALTY MANAGEMENiT GROUP CANADA INC.    
 
           
 
  Per:        
 
           
 
      [Authorized Signing Officer]    
 
           
 
  Per:        
 
           
 
      [Authorized Signing Officer]    
 
                We have authority to bind the Corporation.