Exhibit 10.4

 

T O R O N T O    E A T O N    C E N T R E

 

1    D U N D A S    S T R E E T    W E S T

 

O F F I C E    L E A S E

 

BETWEEN

 

T.E.C. LEASEHOLDS LIMITED

 

- AND -

 

LEARNING TREE INTERNATIONAL INC.

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TORONTO EATON CENTRE

 

1 DUNDAS STREET WEST

 

LEASE

 

TABLE OF CONTENTS

 

ARTICLE I - PREMISES - TERM AND USE

   1

Section 1.01 Grant and Premises

   1

Section 1.02 Term

   1

Section 1.03 Construction of Premises

   1

Section 1.04 Use and Conduct of Business

   1

ARTICLE II - RENT

   1

Section 2.01 Covenant to Pay

   1

Section 2.02 Net Rent

   2

Section 2.03 Payment of Operating Costs

   2

Section 2.04 Payment of Taxes

   2

Section 2.05 Payment of Estimated Taxes and Operating Costs

   2

Section 2.06 Additional Rent

   3

Section 2.07 Rent Past Due

   3

Section 2.08 Utilities

   3

Section 2.09 Adjustment of Areas

   3

Section 2.10 Net Lease

   3

Section 2.11 Deposit

   3

Section 2.12 Electronic Data Interchange - Intentionally Deleted

   3

ARTICLE III - CONTROL OF BUILDING

   3

Section 3.01 Landlord’s Services

   3

Section 3.02 Alterations by Landlord

   4

ARTICLE IV - ACCESS AND ENTRY

   4

Section 4.01 Right of Examination

   4

Section 4.02 Right to Show Premises

   4

Section 4.03 Entry not Forfeiture

   4

ARTICLE V - MAINTENANCE, REPAIRS AND ALTERATIONS

   5

Section 5.01 Maintenance By Landlord

   5

Section 5.02 Maintenance by Tenant; Compliance with Laws

   5

Section 5.03 Approval of Tenant’s Alterations

   5

Section 5.04 Repair Where Tenant at Fault

   6

Section 5.05 Removal of Improvements and Fixtures

   6

Section 5.06 Liens

   7

Section 5.07 Notice by Tenant

   7

ARTICLE VI - INSURANCE AND INDEMNITY

   7

Section 6.01 Tenant’s Insurance

   7

Section 6.02 Increase in Insurance Premiums

   8

Section 6.03 Cancellation of Insurance

   8

Section 6.04 Loss or Damage

   8

Section 6.05 Landlord’s Insurance

   8

Section 6.06 Indemnification of the Landlord

   8

Section 6.07 Release By the Landlord

   9

ARTICLE VII - DAMAGE AND DESTRUCTION

   9

Section 7.01 No Abatement

   9

Section 7.02 Damage to Premises

   9

Section 7.03 Right of Termination

   9

Section 7.04 Destruction of Building or the Development

   9

Section 7.05 Architect’s Certificate

   10

ARTICLE VIII - ASSIGNMENT, SUBLETTING AND TRANSFERS

   10

Section 8.01 Assignments, Subleases and Transfers

   10

Section 8.01A Related Corporation

   10

Section 8.02 Landlord’s Right to Terminate

   11

Section 8.03 Conditions of Transfer

   11

Section 8.04 Change of Control

   12

Section 8.05 No Advertising

   12

Section 8.06 Assignment By Landlord

   12

 

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ARTICLE IX - DEFAULT

   12

Section 9.01 Default and Remedies

   12

Section 9.02 Distress

   13

Section 9.03 Costs

   13

Section 9.04 Allocation of Payments

   13

Section 9.05 Survival of Obligations

   13

ARTICLE X - STATUS STATEMENT, ATTORNMENT AND SUBORDINATION

   13

Section 10.01 Status Statement

   13

Section 10.02 Subordination

   13

Section 10.03 Attornment

   13

Section 10.04 Execution of Documents

   13

ARTICLE XI - GENERAL PROVISIONS

   13

Section 11.01 Rules and Regulations

   13

Section 11.02 Delay

   13

Section 11.03 Overholding

   14

Section 11.04 Waiver

   14

Section 11.05 Registration

   14

Section 11.06 Notices

   14

Section 11.07 Successors

   14

Section 11.08 Joint and Several Liability

   14

Section 11.09 Captions and Section Numbers

   14

Section 11.10 Extended Meanings

   14

Section 11.11 Partial Invalidity

   14

Section 11.12 Entire Agreement

   14

Section 11.13 Governing Law

   15

Section 11.14 Time of the Essence

   15

Section 11.15 Head Lease

   15

Section 11.16 Quiet Enjoyment

   15

Section 11.17 Rent Free Period

   15

Section 11.18 Space Planning

   15

Section 11.19 Landlord’s Work

   15

Section 11.20 Tenant’s Work

   16

Section 11.21 Option to Extend Term

   16

Section 11.22 Expansion Option

   17

Section 11.23 Parking

   17

Section 11.24 Right of First Refusal

   18

Section 11.25 Restrictive Covenant

   18

SCHEDULE “A” - LEGAL DESCRIPTION OF LANDS

   20

SCHEDULE “B” - FLOOR PLAN OF THE PREMISES

    

SCHEDULE “C” - DEFINITIONS

   20

SCHEDULE “D” - RULES AND REGULATIONS

   25

 

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THIS LEASE is dated the 6th day of March, 2000.

 

B E T W E E N:

 

T.E.C. LEASEHOLDS LIMITED

(the “Landlord”)

 

- and -

 

LEARNING TREE INTERNATIONAL INC.

(the “Tenant”)

 

ARTICLE I - PREMISES - TERM AND USE

 

Section 1.01 Grant and Premises

 

In consideration of the performance by the Tenant of its obligations under this
Lease, the Landlord leases the Premises to the Tenant for the Term. The Premises
are located on the 10th Floor of the Building and are shown crosshatched in
parallel lines on the floor plan attached as Schedule “B”. The Rentable Area of
the Premises is approximately Fourteen Thousand (14,000) square feet.

 

Section 1.02 Term

 

The Term of this Lease is Ten (10) years and Two (2) months from and including
the later of: (a) the day following the expiry of the Fixturing Period; and
(2) the 1st day of September, 2000.

 

Section 1.03 Construction of Premises

 

The Tenant shall abide by the provisions of the tenant leasehold improvement
manual supplied by the Landlord for any construction it proposes to do prior to
or upon occupancy of the Premises, and any Alterations to the Premises after it
takes occupancy. Prior to the Commencement Date, the Tenant shall be permitted
to take possession of the Premises for a period of ninety-two days (the
“Fixturing Period”) in order to construct its Leasehold Improvements, to
relocate from its existing premises and, if applicable, to conduct its business
in the Premises. The Fixturing Period shall commence on the later of: (i) the
day following the date the Landlord completes its work pursuant to Section 11.19
of this Lease; and (ii) June 1, 2000. During the last 60 days of the Fixturing
Period, the Tenant shall have exclusive possession of the Premises.

 

During the Fixturing Period, the Tenant shall not be obligated to pay Net Rent
or portions of Additional Rent payable under Sections 2.03, 2.04(c), 2.05 and
2.08(a) of this Lease, but the Tenant shall be subject to all other terms and
conditions of this Lease insofar as they are applicable including, without
limitation, the obligations to pay all amounts for Additional Rent (other than
those payable under Sections 2.03, 2.04(c), 2.05 and 2.08(a)) to the Landlord at
the times and in the manner directed by the Landlord, the provisions relating to
the liability of the Tenant for its acts and omissions, and the acts and
omissions of its servants, employees, agents, contractors, invitees,
concessionaires and licensees and the indemnification of the Landlord.

 

Section 1.04 Use and Conduct of Business

 

The Premises shall be used only for general office use and/or as an
instructor-led computer training facility and for no other purpose. The Tenant
shall conduct its business in the Premises in a reputable and first class
manner. Provided the Tenant has provided the Landlord with evidence satisfactory
to the Landlord, acting reasonably, that the Tenant has obtained all necessary
permits and licenses and has complied with all applicable laws and by-laws, the
Tenant shall be permitted to serve to its staff and clientele continental
breakfasts in the morning, afternoon snacks, afternoon wine and cheese and
beverages throughout the day.

 

ARTICLE II – RENT

 

Section 2.01 Covenant to Pay

 

(a) Except as otherwise expressly provided in this Lease, the Tenant shall pay
Rent from the Commencement Date without prior demand and without any deduction,
abatement, setoff or compensation. If the Commencement Date is not on the first
day of a calendar month, or the period of time from the Commencement Date to the
end of the first Fiscal Year during the Term is less than 12 calendar months, or
the period of time from the last Fiscal Year end during the Term to the end of
the Term is less than 12 calendar months, then Rent for such month and such
periods shall be pro-rated on a per diem basis, based upon a period of 365 days.

 

(b) The Tenant will deliver to the Landlord on each Fiscal Year end throughout
the Term, a series of monthly post-dated cheques for the next ensuing twelve
month period, for the total of the monthly payments of Net Rent and any
Additional Rent estimated by the Landlord in advance.

 

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Section 2.02 Net Rent

 

Subject to Section 11.17, the Tenant shall pay Net Rent in the sum of ONE
HUNDRED AND EIGHTY-FIVE THOUSAND FIVE HUNDRED DOLLARS ($185,500.00) per annum
payable in equal monthly instalments of FIFTEEN THOUSAND FOUR HUNDRED AND
FIFTY-EIGHT DOLLARS AND THIRTY-THREE CENTS ($15,458.33) each in advance on the
first day of each calendar month of the Term. The Net Rent is based on an annual
rate of THIRTEEN DOLLARS AND TWENTY-FIVE CENTS ($13.25) per square foot of the
Rentable Area of the Premises. As soon as reasonably possible after completion
of construction of the Premises, the Landlord shall measure the Net Rentable
Area of the Premises and shall calculate the Rentable Area of the Premises in
accordance with the Standard Method for Measuring Floor Area in Office
Buildings, as per ANSI Z65.1-1980 as established by the Building Owners and
Managers Association International and Rent shall be adjusted accordingly.

 

Section 2.03 Payment of Operating Costs

 

Subject to Section 11.17, the Tenant shall pay to the Landlord the Tenant’s
Proportionate Share of Operating Costs.

 

Section 2.04 Payment of Taxes

 

(a) The Tenant shall pay when due all Business Tax. If the Tenant’s Business Tax
is payable by the Landlord to the relevant taxing authority, the Tenant shall
pay the amount thereof to the Landlord or as it directs. If no separate tax
bills for Business Tax are issued with respect to the Tenant or the Premises,
the Landlord may allocate Business Tax charged, assessed or levied against the
Building or the Lands to the Tenant on the basis of the Tenant’s Proportionate
Share.

 

(b) The Landlord shall allocate Taxes between the Total Rentable Area of the
Building and other components of the Development on such basis as the Landlord,
acting equitably, determines from time to time.

 

(c) Subject to Section 11.17, the Tenant shall pay to the Landlord its
Proportionate Share of the Taxes allocated to the Total Rentable Area of the
Building by the Landlord.

 

(d) If the Landlord obtains a written statement from the assessment or taxing
authorities indicating that as a result of any construction or installation of
improvements in the Premises, or any act or election of the Tenant or the
exemption from taxation at full commercial rates of any part of the Total
Rentable Area of the Building, the Taxes payable by the Tenant under subsection
2.05(b) do not accurately reflect the Tenant’s proper share of Taxes, the
Landlord may require the Tenant to pay such greater or lesser amount as is
determined by the Landlord, acting reasonably.

 

(e) The Landlord may: contest any Taxes and appeal any assessments with respect
thereto; withdraw any such contest or appeal; and agree with the taxing
authorities on any settlement or compromise with respect to Taxes. The Tenant
will co-operate with the Landlord in respect of any such contest or appeal and
will provide the Landlord with all relevant information, documents and consents
required by the Landlord in connection with any such contest or appeal. The
Tenant will not contest any Taxes or appeal any related assessments without the
Landlord’s prior written consent.

 

(f) The Tenant shall promptly deliver to the Landlord on request, copies of
assessment notices, tax bills and other documents received by the Tenant
relating to Taxes and Business Tax and receipts for payment of Taxes and
Business Tax payable by the Tenant.

 

(g) The Tenant shall on demand, pay to the Landlord or to the appropriate taxing
authority if required by the Landlord, all goods and services taxes, sales
taxes, value added taxes, business transfer taxes, or any other taxes imposed on
the Landlord with respect to Rent or in respect of the rental of space under
this lease, whether characterized as a goods and services tax, sales tax, value
added tax, business transfer tax or otherwise. The Landlord shall have the same
remedies and rights with respect to the payment of recovery of such taxes as it
has for the payment or recovery of Rent under this lease.

 

Section 2.05 Payment of Estimated Taxes and Operating Costs

 

(a) The amount of Taxes and Operating Costs may be estimated by the Landlord for
such period as the Landlord determines from time to time, and the Tenant agrees
to pay to the Landlord the amounts so estimated in equal instalments, in
advance, on the first day of each month during such period. Notwithstanding the
foregoing, when bills for all or any portion of the amounts so estimated are
received, the Landlord may bill the Tenant for the Tenant’s Proportionate Share
thereof (or the amount determined under Section 2.04(d)) after crediting against
such amounts any monthly payments of estimated Taxes and Operating Costs
previously made by the Tenant and the Tenant shall pay the Landlord the amounts
so billed.

 

(b) Within a reasonable time (not to exceed 180 days) after the end of the
period for which such estimated payments have been made, the Landlord shall
submit to the Tenant a statement showing the calculation of the Tenant’s share
of Taxes and Operating Costs together with a report from the Landlord’s auditor
as to the total amount of Operating Costs. If:

 

  (i) the amount the Tenant has paid is less than the amounts due, the Tenant
shall pay such deficiency to the Landlord; or

 

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  (ii) the amount paid by the Tenant is greater than the amounts due, the
Landlord shall pay such excess to the Tenant within 15 business days after the
delivery of such statement.

 

The obligations contained in this subsection shall survive the expiration or
earlier termination of the Term. Failure of the Landlord to render any statement
of Taxes or Operating Costs shall not prejudice the Landlord’s right to render
such statement thereafter or with respect to any other period. The rendering of
any such statement shall also not affect the Landlord’s right to subsequently
render an amended or corrected statement.

 

Section 2.06 Additional Rent

 

Except as otherwise provided in this lease, all Additional Rent shall be payable
by the Tenant to the Landlord within 15 business days after demand.

 

Section 2.07 Rent Past Due

 

All Rent past due shall bear interest from the date on which the same became due
until the date of payment at 3% per annum in excess of the prime interest rate
for Canadian Dollar demand loans announced from time to time by any Canadian
chartered bank designated by the Landlord.

 

Section 2.08 Utilities

 

(a) Subject to Section 11.17, the Tenant shall pay to the Landlord, or as the
Landlord directs, all gas, electricity, water, steam and other utility charges
applicable to the Premises on the basis of the Rentable Area of the Premises.
Charges for utilities shall be payable in advance on the first day of each month
at a basic rate determined by the Landlord’s engineers. The Landlord shall be
entitled to allocate to the Premises an additional charge, as determined by the
Landlord’s engineer, acting reasonably, and with a copy of such engineer’s
report to the Tenant, for any supply of utilities to the Premises in excess of
those covered by such basic charge. If any utility rates or related taxes or
charges are increased or decreased during the Term, such charges shall be
equitably adjusted and the decision of the Landlord, acting reasonably, shall be
final and binding with respect to any such adjustment.

 

(b) The Landlord shall have the exclusive right to replace bulbs, tubes and
ballasts in the lighting system in the Premises, on either an individual or a
group basis. The Tenant shall pay the cost of such replacement on the first day
of each month or at the option of the Landlord upon demand.

 

(c) The Tenant shall pay the cost of installing and maintaining any meters
installed at the request of the Landlord or the Tenant to measure the usage of
utilities in the Premises.

 

Section 2.09 Adjustment of Areas

 

The Landlord may from time to time re-measure the Net Rentable Area of the
Premises or re-calculate the Rentable Area of the Premises and may re-adjust the
Net Rent and/or the Tenant’s Proportionate Share of Additional Rent accordingly.
The effective date of any such re-adjustment shall:

 

(a) in the case of an adjustment to the Rentable Area resulting from a change in
the aggregate Net Rentable Area of all office premises on the floor on which the
Premises are situated, be the date on which such change occurred; and

 

(b) in the case of a correction to any measurement or calculation error, be the
date as of which such error was introduced in the calculation of Rent.

 

Section 2.10 Net Lease

 

This lease is a completely net lease to the Landlord, except as expressly herein
set out. The Landlord is not responsible for any expenses or outlays of any
nature arising from or relating to the Premises, or the use or occupancy
thereof, or the contents thereof or the business carried on therein. The Tenant
shall pay all charges, impositions and outlays of every nature and kind relating
to the Premises except as expressly herein set out.

 

Section 2.11 Deposit

 

The Landlord acknowledges receipt of the Tenant’s deposit cheque in the sum of
$NIL which will be applied without interest against the first Rent due under
this Lease.

 

Section 2.12 Electronic Data Interchange – Intentionally deleted

 

ARTICLE III - CONTROL OF BUILDING

 

Section 3.01 Landlord’s Services

 

(a) The Landlord shall provide climate control to the Premises during the hours
of 7:00 a.m. to 6:00 p.m. from Monday to Friday to maintain a temperature
adequate for normal occupancy for the permitted use pursuant to Section 1.04,
except during the making of repairs, alterations or improvements, provided that
the Landlord shall have no liability for failure to supply climate control
service when stopped as aforesaid or when prevented from doing so by repairs, or
causes beyond the Landlord’s reasonable control. Any rebalancing of the climate
control system in the Premises necessitated by the installation of partitions,
equipment or fixtures by the Tenant or by any use of the Premises not in
accordance with the design standards of such system will be performed by the
Landlord at the Tenant’s expense.

 

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(b) Subject to the Rules and Regulations, the Landlord shall provide elevator
service during Normal Business Hours for use by the Tenant in common with
others, except when prevented by repairs. The Landlord will operate at least one
passenger elevator for use by tenants at all times.

 

(c) The Landlord will provide cleaning services in the Building consistent with
the standards of a first class office building.

 

(d) Subject to Section 2.08, the Landlord shall make available to the Premises
electricity for normal lighting and miscellaneous power requirements and, in
normal quantities gas, water, and other public utilities generally made
available to other tenants of the Building by the Landlord.

 

Section 3.02 Alterations by Landlord

 

The Landlord may:

 

(a) alter, add to, subtract from, construct improvements to, rearrange, build
additional storeys on and construct additional facilities adjoining or near the
Development;

 

(b) relocate the facilities and improvements comprising the Building or erected
on the Lands, or relocate, alter or rearrange the Premises, provided that the
premises as relocated, altered, or rearranged shall be in all material aspects
comparable to the Premises as herein defined;

 

(c) do such things on, or in the Lands or Development as are required to comply
with any laws, by-laws, regulations, orders or directives affecting the Lands or
any part of the Development; and

 

(d) do such other things on or in the Lands or Development as the Landlord, in
the use of good business judgment determines to be advisable;

 

provided that notwithstanding anything contained in this Section, access to the
Premises shall at all times be available from the elevator lobbies of the
Building and the Tenant shall not be deprived of its ability to operate its
business.

 

The Landlord shall not be in breach of its covenant for quiet enjoyment or
liable for any loss, costs or damages, whether direct or indirect, incurred by
the Tenant due to any of the foregoing provided the Landlord takes all
reasonable measures to minimize such loss, costs or damages.

 

ARTICLE IV - ACCESS AND ENTRY

 

Section 4.01 Right of Examination

 

The Landlord shall be entitled at all reasonable times upon 24 hours written
notice (and at any time without notice in case of emergency) to enter the
Premises to examine them; to make such repairs, alterations or improvements in
the Premises as the Landlord considers necessary or desirable; to have access to
underfloor ducts and access panels to mechanical shafts; to check, calibrate,
adjust and balance controls and other parts of the heating systems; and for any
other purpose necessary to enable the Landlord to perform its obligations or
exercise its rights under this lease. The Tenant shall not obstruct any pipes,
conduits or mechanical or electrical equipment so as to prevent reasonable
access thereto. In exercising its rights under this Section, the Landlord shall
take all commercially reasonable measures possible in the circumstances, so as
to minimize interference with the Tenant’s use and enjoyment of and the conduct
of the Tenant’s business in the Premises.

 

Section 4.02 Right to Show Premises

 

The Landlord and its agents shall have the right to enter the Premises upon 24
hours written notice at all reasonable times during Normal Business Hours to
show them to prospective purchasers, or Mortgagees or prospective Mortgagees,
and, during the last six months of the Term (or the last six months of any
renewal term if this lease is renewed), to prospective tenants. Notwithstanding
the foregoing, the Landlord shall not enter the classroom areas while classes
are in progress, but the Landlord shall be entitled to enter the public areas in
the Premises, subject to the above-mentioned written notice to Tenant.

 

Section 4.03 Entry not Forfeiture

 

No entry into the Premises or anything done therein by the Landlord pursuant to
a right granted by this lease shall constitute a breach of any covenant for
quiet enjoyment, or (except where expressed by the Landlord in writing) shall
constitute a re-entry or forfeiture, or an actual or constructive eviction. The
Tenant shall have no claim for injury, damages or loss suffered as a result of
any such entry or thing, except in the case of willful misconduct by the
Landlord in the course of such entry, but the Landlord shall in no event be
responsible for the acts or negligence of any Persons providing cleaning
services in the Building. The Landlord shall, however, ensure that any Person
providing such cleaning services in the Building shall carry liability insurance
and the Landlord shall require such Person providing cleaning services to the
Premises to employ only bonded personnel.

 

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ARTICLE V - MAINTENANCE, REPAIRS AND ALTERATIONS

 

Section 5.01 Maintenance By Landlord

 

(a) The Landlord covenants to keep the following in good repair as a prudent
owner:

 

  (i) the structure of the Building including exterior walls and roofs;

 

  (ii) the mechanical, electrical and other base building systems; and

 

  (iii) the entrance, lobbies, plazas, stairways, corridors, parking areas and
other facilities from time to time provided for use in common by the Tenant and
other tenants of the Building.

 

If such maintenance or repairs are required by law due to the business carried
on by the Tenant, then the full cost of such maintenance and repairs plus a sum
equal to 15% of such cost representing the Landlord’s overhead, shall be paid by
the Tenant to the Landlord.

 

(b) The Landlord shall not be responsible for any damages caused to the Tenant
by reason of failure of any equipment or facilities serving the Building or
delays in the performance of any work for which the Landlord is responsible
under this lease. The Landlord shall have the right to stop, interrupt or reduce
any services, systems or utilities provided to, or serving the Building or
Premises to perform repairs, alterations or maintenance or to comply with laws
or regulations, or binding requirements of its insurers, or for causes beyond
the Landlord’s reasonable control or as a result of the Landlord exercising its
rights under Section 3.02. The Landlord shall not be in breach of its covenant
for quiet enjoyment or liable for any loss, costs or damages, whether direct or
indirect, incurred by the Tenant due to any of the foregoing, but the Landlord
shall make reasonable efforts to restore the services, utilities or systems so
stopped, interrupted or reduced.

 

(c) If the Tenant fails to carry out any maintenance, repairs or work required
to be carried out by it under this lease to the reasonable satisfaction of the
Landlord, the Landlord may at its option carry out such maintenance or repairs
without any liability for any resulting damage to the Tenant’s property or
business. The cost of such work, plus a sum equal to 15% of such cost
representing the Landlord’s overhead, shall be paid by the Tenant to the
Landlord.

 

(d) (i) The Landlord agrees that the Tenant’s technology education classes shall
not be materially interfered with by any deliberate act of the Landlord or its
contractors on the floors of the Building abutting the Premises during the hours
of 9:00 a.m. to 5:00 p.m., Monday through Friday throughout the Term. Said
interference shall include but not be limited to: (1) core drilling floors
immediately above and below the Premises: (2) construction of Leasehold
Improvements on floors immediately above and below the Premises involving
hammering, drilling and other noise which may hider the education process;
(3) any other work performed by the Landlord or its contractors which would
create sufficient noise to hinder the education process, except for emergencies
or repairs which must be attended to immediately.

 

(ii) The Landlord and the Tenant agree to act reasonably in resolving any
complaints regarding interference to the Tenant’s business. The Landlord further
agrees to use reasonable efforts to control noise created by other tenants on
floors which abut the Premises.

 

(e) The Landlord warrants that the Lands and Building comply with all applicable
laws, by-laws, regulations, orders and directives.

 

Section 5.02 Maintenance by Tenant; Compliance with Laws

 

(a) The Tenant shall at its sole cost repair and maintain the Premises exclusive
of base building mechanical and electrical systems, all to a standard consistent
with a first class office building, (normal wear and tear excepted) with the
exception only of those repairs which are the obligation of the Landlord under
this lease, subject to Article VII. The Landlord may enter the Premises at all
reasonable times upon 24 hours written notice to view their condition and the
Tenant shall maintain and keep the Premises in good and substantial repair
according to notice in writing. At the expiration or earlier termination of the
Term, the Tenant shall surrender the Premises to the Landlord in as good
condition and repair as the Tenant is required to maintain the Premises
throughout the Term.

 

(b) The Tenant shall, at its own expense, promptly comply with all laws,
by-laws, government orders and with all reasonable requirements or directives of
the Landlord’s insurers affecting the Premises or their use, repair or
alteration.

 

Section 5.03 Approval of Tenant’s Alterations

 

(a) No Alterations shall be made to the Premises without the Landlord’s written
approval unless: (i) such alterations do not affect the structure of the
Building or the mechanical, electrical, plumbing, heating, ventilation, air
conditioning or other base building systems, and (ii) such alterations do not in
the aggregate cost more than $10,000. The Tenant shall submit to the Landlord
details of the proposed work including drawings and specifications prepared by
qualified architects or engineers conforming to good engineering practice. All
such Alterations shall be performed:

 

  (i) at the sole cost of the Tenant;

 

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  (ii) by contractors and workmen approved by the Landlord;

 

  (iii) in a good and workmanlike manner;

 

  (iv) in accordance with drawings and specifications approved by the Landlord;

 

  (v) in accordance with all applicable legal and insurance requirements;

 

  (vi) subject to the reasonable regulations, supervision, control and
inspection of the Landlord; and

 

  (vii) subject to such indemnification against liens and expenses as the
Landlord reasonably requires.

 

The Landlord’s reasonable cost of supervising all such work (which cost shall
not exceed an amount equal to $0.50 per square foot of the Rentable Area of the
Premises) shall be paid by the Tenant.

 

(b) If any Alterations would affect the structure of the Building or any of the
electrical, plumbing, mechanical, heating, ventilating or air conditioning
systems or other base building systems, such work shall at the option of the
Landlord be performed by the Landlord at the Tenant’s cost. On completion of
such work, the cost of the work plus a sum equal to 15% of said cost
representing the Landlord’s overhead shall be paid to the Landlord. The Landlord
confirms there shall be no such 15% charge with respect to such work performed
pursuant to this Section 5.03(b) at or prior to the commencement of the Term.

 

(c) If the Tenant installs Leasehold Improvements, or makes Alterations which
depart from the Building standard and which restrict access by the Landlord to
any Building system, or which restrict the installation of the leasehold
improvements of any other tenant in the Building, then the Tenant shall be
responsible for all costs incurred by the Landlord in obtaining access to such
Building system, or in installing such other tenant’s leasehold improvements.

 

Section 5.04 Repair Where Tenant at Fault

 

Notwithstanding any other provisions of this Lease but subject to Section 6.07,
if the Building is damaged or destroyed or requires repair, replacement or
alteration as a result of the act or omission of the Tenant, its employees,
agents, invitees, licensees, contractors or others for whom it is in law
responsible, the cost of the resulting repairs, replacements or alterations plus
a sum equal to 15% of such cost representing the Landlord’s overhead, shall be
paid by the Tenant to the Landlord.

 

Section 5.05 Removal of Improvements and Fixtures

 

All Leasehold Improvements (other than Trade Fixtures) shall immediately upon
their placement become the Landlord’s property without compensation to the
Tenant. Except as otherwise agreed by the Landlord in writing, no Leasehold
Improvements shall be removed from the Premises by the Tenant either during or
at the expiry or sooner termination of the Term except that:

 

(a) the Tenant may, during the Term, in the usual course of its business, remove
its Trade Fixtures, provided that the Tenant is not in default under this lease;
and

 

(b) the Tenant shall, at the expiration or earlier termination of the Term, at
its sole cost, remove its Trade Fixtures from the Premises, failing which, at
the option of the Landlord, the Trade Fixtures shall become the property of the
Landlord and may be removed from the Premises and sold or disposed of by the
Landlord in such manner as it deems advisable; and

 

(c) the Tenant shall, at the expiration or earlier termination of the Term,
leave the Premises in good repair, reasonable wear and tear excepted and,
provided all Leasehold Improvements installed by the Tenant in the Premises have
been approved by the Landlord, the Tenant shall not be required to remove
Leasehold Improvements but the Tenant shall remove its Trade Fixtures and the
Tenant shall repair any damage to the Premises and/or the Building caused by
such removal. at its sole cost, either remove such of the Leasehold Improvements
in the Premises as the Landlord shall require to be removed, and restore the
Premises to the Landlord’s then current base Building standard to the extent
required by the Landlord, or at the Landlord’s option, pay to the Landlord the
estimated cost of such removal and restoration as determined by the Architect,
acting reasonably. If the Landlord requires the Tenant to perform such work,
then: (i) the Tenant shall submit detailed demolition drawings to the Landlord
for its prior approval, and such work shall be completed under the supervision
of the Landlord; (ii) the Tenant shall, at its expense, repair any damage caused
to the Building by such removal; and (iii) if the Tenant fails to complete such
work within 30 days following the expiry or earlier termination of the Term, the
Tenant shall pay compensation to the Landlord for each day following such 30th
day until the completion of such work, at a rate equal to the per diem Rent
payable during the last month preceding the expiry or earlier termination of the
Term, which sum is agreed by the parties to be a reasonable estimate of the
damages suffered by the Landlord for the loss of use of the Premises.

 

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Section 5.06 Liens

 

The Tenant shall promptly pay for all materials supplied and work done in
respect of the Premises so as to ensure that no lien is registered against any
portion of the Lands or Building or against the Landlord’s or Tenant’s interest
therein. If a lien is registered or filed, the Tenant shall discharge it at its
expense forthwith, failing which the Landlord may at its option discharge the
lien by paying the amount claimed to be due into court or directly to the lien
claimant and the amount so paid and all expenses of the Landlord including legal
fees (on a solicitor and his client basis) shall be paid by the Tenant to the
Landlord.

 

Section 5.07 Notice by Tenant

 

The Tenant shall notify the Landlord of any accident, defect, damage or
deficiency in any part of the Premises or the Building which comes to the
attention of the Tenant, its employees or contractors notwithstanding that the
Landlord may have no obligation in respect thereof.

 

ARTICLE VI - INSURANCE AND INDEMNITY

 

Section 6.01 Tenant’s Insurance

 

(a) The Tenant shall maintain the following insurance throughout the Term at its
sole cost:

 

  (i) “All Risks” (including flood and earthquake) property insurance with
reasonable deductibles, naming the Landlord, the owners of the Lands and
Development and the Mortgagee as insured parties, containing a waiver of any
subrogation rights which the Tenant’s insurers may have against the Landlord and
against those for whom the Landlord is in law responsible, and (except with
respect to the Tenant’s chattels) incorporating the Mortgagee’s standard
mortgage clause. Such insurance shall insure:

 

  (1) property of every kind owned by the Tenant or for which the Tenant is
legally liable located on or in the Development including, without limitation,
Leasehold Improvements, in an amount equal to not less than 90% of the full
replacement cost thereof, subject to a stated amount co-insurance clause; and

 

  (2) extra expense insurance in such amount as will reimburse the Tenant for
loss attributable to all perils referred to in this paragraph 6.01(a)(i) or
resulting from prevention of access to the Premises.

 

  (ii) Comprehensive general liability insurance which includes the following
coverages: owners protective; personal injury; occurrence property damage; and
employers and blanket contractual liability. Such policies shall contain
inclusive limits of not less than $5,000,000, provide for cross liability, and
name the Landlord as an insured.

 

  (iii) Tenant’s “all risks” legal liability insurance for the replacement cost
value of the Premises;

 

  (iv) Automobile liability insurance on a non-owned form including contractual
liability, and on an owner’s form covering all licensed vehicles operated by or
on behalf of the Tenant, which insurance shall have inclusive limits of not less
than $1,000,000; and

 

  (v) Any other form of insurance which the Tenant or the Landlord, acting
reasonably, or the Mortgagee requires from time to time in form, in amounts and
for risks against which a prudent tenant would insure.

 

(b) All policies referred to in this Section 6.01 shall:

 

  (i) be taken out with insurers reasonably acceptable to the Landlord;

 

  (ii) be in a form reasonably satisfactory to the Landlord;

 

  (iii) be non-contributing with, and shall apply only as primary and not as
excess to any other insurance available to the Landlord;

 

  (iv) not be invalidated as respects the interests of the Landlord or the
Mortgagee by reason of any breach of or violation of any warranty,
representation, declaration or condition; and

 

  (v) contain an undertaking by the insurers to notify the Landlord by
registered mail not less than 30 days prior to any material change, cancellation
or termination.

 

Certificates of insurance on the Landlord’s standard form or other proof of
insurance as reasonably required by the Landlord, shall be delivered to the
Landlord prior to the Commencement Date and from time to time, forthwith upon
request. If the Tenant fails to take out or to keep in force any insurance
referred to in this Section 6.01 or should any such insurance not be approved by
either the Landlord or the Mortgagee and should the Tenant not commence to
diligently rectify (and thereafter proceed to diligently rectify) the situation
within 48 hours after written notice by the Landlord to the Tenant (stating, if
the Landlord or the Mortgagee, from time to time, does not approve of such
insurance, the reasons therefor) the Landlord has the right

 

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without assuming any obligation in connection therewith, to effect such
insurance at the sole cost of the Tenant and all outlays by the Landlord shall
be paid by the Tenant to the Landlord without prejudice to any other rights or
remedies of the Landlord under this lease.

 

Section 6.02 Increase in Insurance Premiums

 

The Tenant shall not keep or use in the Premises any article which may be
prohibited by any fire insurance policy in force from time to time covering the
Premises or the Development. If: (a) the conduct of business in, or use or
manner of use of the Premises; (b) or any acts or omissions of the Tenant in the
Development or any part thereof; cause or result in any increase in premiums for
any insurance carried by the Landlord with respect to the Development, the
Tenant shall pay any such increase in premiums.

 

In determining whether increased premiums are caused by or result from the use
or occupancy of the Premises, a schedule issued by the organization computing
the insurance rate on the Development showing the various components of such
rate, shall be conclusive evidence of the items and charges which make up such
rate.

 

Section 6.03 Cancellation of Insurance

 

If any insurer under any insurance policy covering any part of the Development
or any occupant thereof cancels or threatens to cancel its insurance policy or
reduces or threatens to reduce coverage under such policy by reason of the use
of the Premises by the Tenant or by any Transferee, or by anyone permitted by
the Tenant to be upon the Premises, the Tenant shall remedy such condition
within 48 hours after notice thereof by the Landlord.

 

Section 6.04 Loss or Damage

 

The Landlord shall not be liable for any death or injury arising from or out of
any occurrence in, upon, at, or relating to the Lands or Development or damage
to property of the Tenant or of others located on the Premises or elsewhere in
the Development, nor shall it be responsible for any loss of or damage to any
property of the Tenant or others from any cause, whether or not any such death,
injury, loss or damage results from the negligence of the Landlord, its agents,
employees, contractors, or others for whom it may, in law, be responsible.
Without limiting the generality of the foregoing, the Landlord shall not be
liable for any injury or damage to Persons or property resulting from fire,
explosion, falling plaster, falling ceiling tile, falling fixtures, steam, gas,
electricity, water, rain, flood, snow or leaks from any part of the Premises or
from the pipes, sprinklers, appliances, plumbing works, roof, windows or
subsurface of any floor or ceiling of the Development or from the street or any
other place or by dampness or by any other cause whatsoever. The Landlord shall
not be liable for any such damage caused by other tenants or Persons on the
Lands or in the Development or by occupants of adjacent property thereto, or the
public, or caused by construction or by any private, public or quasi-public
work. All property of the Tenant kept or stored on the Premises shall be so kept
or stored at the risk of the Tenant only and the Tenant releases and agrees to
indemnify the Landlord and save it harmless from any claims arising out of any
damage to the same including, without limitation, any subrogation claims by the
Tenant’s insurers.

 

Section 6.05 Landlord’s Insurance

 

The Landlord shall throughout the Term carry:

 

(a) insurance on the Development (excluding the foundations and excavations) and
the machinery, boilers and equipment in or servicing the Development and owned
by the Landlord or the owners of the Development (excluding any property which
the Tenant and other tenants are obliged to insure under Section 6.01 or similar
sections of their respective leases) against damage by fire and extended perils
coverage;

 

(b) public liability and property damage insurance with respect to the
Landlord’s operations in the Development; and

 

(c) such other form or forms of insurance as the Landlord or the Mortgagee
reasonably considers advisable.

 

Such insurance shall be in such reasonable amounts and with such reasonable
deductibles as would be carried by a prudent owner of a reasonably similar
building, having regard to size, age and location.

 

Notwithstanding the Landlord’s covenant in this Section and notwithstanding any
contribution by the Tenant to the cost of the Landlord’s insurance premiums, the
Tenant acknowledges and agrees that:

 

(i) subject to Section 6.07, the Tenant is not relieved of any liability arising
from or contributed to by its negligence or its willful act or omissions;

 

(ii) no insurable interest is conferred upon the Tenant under any insurance
policies carried by the Landlord; and

 

(iii) the Tenant has no right to receive any proceeds of any insurance policies
carried by the Landlord.

 

Section 6.06 Indemnification of the Landlord

 

Notwithstanding any other provision of this lease, the Tenant shall indemnify
the Landlord and save it harmless from all loss (including loss of Net Rent and
Additional Rent) claims, actions, damages, liability and expense in connection
with loss of life, personal injury, damage to property or any other loss or
injury

 

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whatsoever arising out of this lease, or any occurrence in, upon or at the
Premises, or the occupancy or use by the Tenant of the Premises or any part
thereof, or occasioned wholly or in part by any act or omission of the Tenant or
by anyone permitted to be on the Premises by the Tenant. If the Landlord shall,
without fault on its part, be made a party to any litigation commenced by or
against the Tenant, then the Tenant shall protect, indemnify and hold the
Landlord harmless in connection with such litigation. The Landlord may, at its
option, participate in or assume carriage of any litigation or settlement
discussions relating to the foregoing, or any other matter for which the Tenant
is required to indemnify the Landlord under this lease. Alternatively, the
Landlord may require the Tenant to assume carriage of and responsibility for all
or any part of such litigation or discussions.

 

Section 6.07 Release By the Landlord

 

Despite any other section or clause of this Lease (except the last sentence of
this Section 6.07), the Tenant is not responsible for any part, in excess of
$5,000,000.00, or the amount of liability insurance coverage available to the
Tenant, whichever is the greater, of any loss or damage to property of the
Landlord that is located in, or is part of the Development caused by any of the
perils for which the Landlord is required under Section 6.05 to maintain
insurance. This release applies whether or not the loss or damage arises from
the negligence of the Tenant. This release does not apply, however, to damage
arising from the wilful or grossly negligent acts of the Tenant.

 

ARTICLE VII - DAMAGE AND DESTRUCTION

 

Section 7.01 No Abatement

 

If the Premises or Building are damaged or destroyed in whole or in part by fire
or any other occurrence, this lease shall continue in full force and effect and
there shall be no abatement of Rent except as provided in this Article VII.

 

Section 7.02 Damage to Premises

 

If the Premises are at any time destroyed or damaged as a result of fire or any
other casualty required to be insured against by the Landlord under this lease
or otherwise insured against by the Landlord and not caused or contributed to by
the Tenant, then the following provisions shall apply:

 

(a) if the Premises are rendered untenantable only in part, the Landlord shall
diligently repair the Premises to the extent only of its obligations under
Section 5.01 and Net Rent shall abate proportionately to the portion of the
Premises rendered untenantable from the date of destruction or damage until the
Landlord’s repairs have been completed;

 

(b) if the Premises are rendered wholly untenantable, the Landlord shall
diligently repair the Premises to the extent only of its obligations pursuant to
Section 5.01 and Net Rent shall abate entirely from the date of destruction or
damage until the Landlord’s repairs have been completed;

 

(c) if the Premises are not rendered untenantable in whole or in part, the
Landlord shall diligently perform such repairs to the Premises to the extent
only of its obligations under Section 5.01, but in such circumstances Net Rent
shall not terminate or abate;

 

(d) upon being notified by the Landlord that the Landlord’s repairs have been
substantially completed, the Tenant shall diligently perform all repairs to the
Premises which are the Tenant’s responsibility under Section 5.02, and all other
work required to fully restore the Premises for use in the Tenant’s business, in
every case at the Tenant’s cost and without any contribution to such cost by the
Landlord, whether or not the Landlord has at any time made any contribution to
the cost of supply, installation or construction of Leasehold Improvements in
the Premises;

 

(e) nothing in this Section shall require the Landlord to rebuild the Premises
in the condition which existed before any such damage or destruction so long as
the Premises as rebuilt will have reasonably similar facilities to those in the
Premises prior to such damage or destruction, having regard, however, to the age
of the Building at such time; and

 

(f) nothing in this Section shall require the Landlord to undertake any repairs
having a cost in excess of the insurance proceeds actually received by the
Landlord with respect to such damage or destruction or which it would have
received had the Landlord complied with its obligations pursuant to this Lease).

 

Section 7.03 Right of Termination

 

Notwithstanding Section 7.02, if the damage or destruction which has occurred in
the Premises, is restricted to the Premises, and in the reasonable opinion of
the Landlord Architect the Premises cannot be rebuilt or made fit for the
purposes of the Tenant within 90 180 days of the happening of the damage or
destruction, the either the Landlord or the Tenant may, at its option, terminate
this lease on notice to the other Tenant given within 30 days after the
rendering of the Architect’s opinion as aforesaid. If such notice of termination
is given, Rent shall be apportioned and paid to the date of such damage or
destruction and the Tenant, within 30 days after receipt of such notice of
termination, deliver vacant possession of the Premises in accordance with the
terms of this lease.

 

Section 7.04 Destruction of Building or the Development

 

(a)

Notwithstanding anything contained in this lease (including, without limitation,
Section 7.03), of 50% or more of the Total Rentable Area of the Building is
damaged or destroyed by any cause

 

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whatsoever (irrespective of whether the Premises are damaged or destroyed) and
if, in the opinion of the Landlord reasonably arrived at, the Total Rentable
Area of the Building, so damaged or destroyed cannot be rebuilt or made fit for
the purposes of the respective tenants of such space within 180 days of the
happening of the damage or destruction; then and so often as any of such events
occur, the Landlord may at its option (to be exercised by written notice to the
Tenant within 60 days following any such occurrence), elect to terminate this
lease. In the case of such election, the Term and the tenancy hereby created
shall expire upon the 30th day after such notice is given, without indemnity or
penalty payable by, or any other recourse against the Landlord, and the Tenant
shall, within such 30 day period, vacate the Premises and surrender them to the
Landlord with the Landlord having the right to re-enter and repossess the
Premises discharged of this lease and to expel all Persons and remove all
property therefrom. Net Rent and Additional Rent shall be due and payable
without reduction or abatement subsequent to the destruction or damage and until
the date of termination, unless the Premises shall have been destroyed or
damaged as well, in which event Section 7.02 shall apply.

 

  (b) If the Landlord is entitled to, but does not elect to terminate this lease
under Section 7.04(a), the Landlord shall, following such damage or destruction,
diligently repair if necessary that part of the Building damaged or destroyed,
but only to the extent of the Landlord’s obligations under the terms of the
various leases for premises in the Building and exclusive of any tenant’s
responsibilities with respect to such repair. If the Landlord elects to repair
the Building, the Landlord may do so in accordance with plans and specifications
other than those used in the original construction of the Building.

 

Section 7.05 Architect’s Certificate

 

The certificate of the Architect shall bind the parties as to:

 

(a) the percentage of the Total Rentable Area of the Building damaged or
destroyed;

 

(b) whether or not the Premises are rendered untenantable and the percentage of
the Premises rendered untenantable;

 

(c) the date upon which either the Landlord’s or Tenant’s work of reconstruction
or repair is completed or substantially completed and the date when the Premises
are rendered tenantable; and

 

(d) the state of completion of any work of the Landlord or the Tenant.

 

ARTICLE VIII - ASSIGNMENT, SUBLETTING AND TRANSFERS

 

Section 8.01 Assignments, Subleases and Transfers

 

The Tenant shall not enter into, consent to, or permit any Transfer without the
prior written consent of the Landlord in each instance, which consent shall not
be unreasonably withheld but shall be subject to the Landlord’s rights under
Section 8.02. Notwithstanding any statutory provision to the contrary, it shall
not be considered unreasonable for the Landlord to take into account the
following factors in deciding whether to grant or withhold its consent:

 

(a) whether such Transfer is in violation or in breach of any covenants or
restrictions made or granted by the Landlord to other tenants or occupants or
prospective tenants or occupants of the Building;

 

(b) whether in the Landlord’s opinion, the financial background, business
history and capability of the proposed Transferee is satisfactory; and

 

(c) if the Transfer is to an existing tenant of the Landlord.

 

Consent by the Landlord to any Transfer if granted shall not constitute a waiver
of the necessity for such consent to any subsequent Transfer. This prohibition
against Transfer shall include a prohibition against any Transfer by operation
of law and no Transfer shall take place by reason of the failure of the Landlord
to give notice to the Tenant within 30 days as required by Section 8.02.

 

Section 8.01A Related Corporation

 

However, notwithstanding anything to the contrary contained in Section 8.01, so
long as the Tenant is LEARNING TREE INTERNATIONAL INC. and is itself in
occupation of the whole of the Premises, and has not failed or neglected to
remedy or commenced to remedy any default or breach of its obligations as set
out in this Lease after notice and within the times as set forth in this Lease,
the Tenant shall have the right without the consent of the Landlord, but upon
prior written notice to the Landlord, to assign this Lease or sublet the whole
of the Premises to: (i) a corporate entity resulting from a merger or
consolidation with the Tenant; (ii) a corporation which is an affiliate or
Subsidiary body corporate of LEARNING TREE INTERNATIONAL INC. (within the
meaning of the Canada Business Corporations Act) (collectively, “Permitted
Assignee”), but only so long as:

 

(A) such affiliate or Subsidiary body corporate remains an affiliate or
Subsidiary body corporate (as the case may be) of LEARNING TREE INTERNATIONAL
INC.;

 

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(B) such assignee or sublessee shall be bound by the permitted use set out in
Section 1.04 of this Lease; and

 

(C) The Tenant shall remain liable under this Lease and shall not be released
from performing any of the terms of this Lease.

 

In the event of any further proposed Transfer, except for a subsequent Transfer
back to Learning Tree International Inc., the terms of this Lease shall prevail
as if this Section 8.01A had not formed part of this Lease.

 

Section 8.02 Landlord’s Right to Terminate

 

If the Tenant intends to effect a Transfer, the Tenant shall give prior notice
to the Landlord of such intent specifying the identity of the Transferee, the
type of Transfer contemplated, the portion of the Premises affected thereby, and
the financial and other terms of the Transfer, and shall provide such financial,
business or other information relating to the proposed Transferee and its
principals as the Landlord or any Mortgagee requires, together with copies of
any documents which record the particulars of the proposed Transfer. The
Landlord shall, within 14 days after having received such notice and all
requested information, notify the Tenant in writing either that:

 

(a) it consents or does not consent to the Transfer in accordance with the
provisions and qualifications of this Article VIII; or

 

(b) it elects to cancel this lease as to the whole or part, as the case may be,
of the Premises affected by the proposed Transfer, in preference to giving such
consent.

 

If the Landlord elects to terminate this lease it shall stipulate in its notice
the termination date of this lease, which date shall be no less than 30 days nor
more than 90 days following the giving of such notice of termination. Failure by
the Landlord to deliver such notice to the Tenant of the Landlord’s election to
terminate this Lease shall be deemed to be a waiver by the Landlord of its right
to terminate this Lease. If the Landlord elects to terminate this lease, the
Tenant shall notify the Landlord within 10 days thereafter of the Tenant’s
intention either to refrain from such Transfer or to accept termination of this
lease or the portion thereof in respect of which the Landlord has exercised its
rights. If the Tenant fails to deliver such notice within such 10 days or
notifies the Landlord that it accepts the Landlord’s termination, this lease
will as to the whole or affected part of the Premises, as the case may be, be
terminated on the date of termination stipulated by the Landlord in its notice
of termination. If the Tenant notifies the Landlord within 10 days that it
intends to refrain from such Transfer, then the Landlord’s election to terminate
this lease shall become void.

 

Section 8.03 Conditions of Transfer

 

(a) If there is a permitted Transfer, the Landlord may collect rent from the
Transferee and apply the net amount collected to the Rent payable under this
lease but no acceptance by the Landlord of any payments by a Transferee shall be
deemed a waiver of the Tenant’s covenants or any acceptance of the Transferee as
tenant or a release from the Tenant from the further performance by the Tenant
of its obligations under this lease. Any consent by the Landlord shall be
subject to the Tenant and Transferee executing an agreement with the Landlord
agreeing that the Transferee will be bound by all of the terms of this lease
and, except in the case of a sublease, that the Transferee will be so bound as
if it had originally executed this lease as tenant; and

 

(b) Notwithstanding any Transfer permitted or consented to by the Landlord, the
Tenant shall remain liable under this lease and shall not be released from
performing any of the terms of this lease.

 

(c) The Landlord’s consent to any Transfer shall be subject to the condition
that:

 

  (i) the net and additional rent payable by the Transferee shall not be less
than the current rental rate charged by the Landlord for similar premises in the
building as at the effective date of the Transfer, and

 

  (ii) if the net and additional rent to be paid by the Transferee under such
Transfer exceeds the Rent payable under this Lease: (a) the Tenant shall deduct
from such excess (the “Excess”) the Tenant’s out-of-pocket costs (the “Costs”)
associated with such Transfer, including brokerage fees, legal fees, financial
inducements paid by the Tenant to the Transferee and the Tenant’s cost of
constructing Leasehold Improvements on behalf of the Transferee; and (b) fifty
percent (50%) of the difference between the Excess and the Costs the amount of
such excess shall be paid by the Tenant to the Landlord. If the Tenant receives
from any Transferee, either directly or indirectly, any consideration other than
rent or additional rent for such Transfer, either in the form of cash, goods or
services (other than the proceeds of any financing as the result of a Transfer
involving a mortgage, charge or similar security interest in this lease) the
Tenant shall forthwith pay to the Landlord an amount equivalent to such
consideration. The Tenant and the Transferee shall execute any agreement
required by the Landlord to give effect to the foregoing terms.

 

(d) Notwithstanding the effective date of any permitted Transfer as between the
Tenant and the Transferee, all Rent for the month in which such effective date
occurs shall be paid in advance by the Tenant so that the Landlord will not be
required to accept partial payments of Rent for such month from either the
Tenant or Transferee.

 

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(e) Any document evidencing any Transfer permitted by the Landlord, or setting
out any terms applicable to such Transfer or the rights and obligations of the
Tenant or Transferee thereunder, shall be prepared by the Landlord or its
solicitors and all associated legal costs shall be paid by the Tenant.

 

Section 8.04 Change of Control

 

If the Tenant is at any time a corporation or partnership, any actual or
proposed Change of Control in such corporation or partnership shall be deemed to
be a Transfer and subject to all of the provisions of this Article VIII. The
Tenant shall make available to the Landlord or its representatives the Tenant’s
shareholder ledger for inspection at all reasonable times, in order to ascertain
whether any Change of Control has occurred.

 

Section 8.05 No Advertising

 

The Tenant shall not advertise that the whole or any part of the Premises are
available for a Transfer and shall not permit any broker or other Person to do
so unless the text and format of such advertisement is approved in writing by
the Landlord. No such advertisement shall contain any reference to the rental
rate of the Premises.

 

Section 8.06 Assignment By Landlord

 

The Landlord shall have the unrestricted right to sell, lease, convey or
otherwise dispose of all or any part of the Building or Lands or this lease or
any interest of the Landlord in this lease. To the extent that the purchaser or
assignee from the Landlord assumes the obligations of the Landlord under this
lease, the Landlord shall thereupon and without further agreement be released
from all liability under this lease.

 

ARTICLE IX – DEFAULT

 

Section 9.01 Default and Remedies

 

If and whenever an Event of Default occurs, then without prejudice to any other
rights which it has pursuant to this lease or at law, the Landlord shall have
the following rights and remedies, which are cumulative and not alternative:

 

(a) to terminate this lease by notice to the Tenant;

 

(b) to enter the Premises as agent of the Tenant and to relet the Premises for
whatever term, and on such terms as the Landlord in its discretion may determine
and to receive the rent therefor and as agent of the Tenant to take possession
of any property of the Tenant on the Premises, to store such property at the
expense and risk of the Tenant or to sell or otherwise dispose of such property
in such manner as the Landlord may see fit without notice to the Tenant; to make
alterations to the Premises to facilitate their reletting; and to apply the
proceeds of any such sale or reletting first, to the payment of any expenses
incurred by the Landlord with respect to any such reletting or sale; second, to
the payment of any indebtedness of the Tenant to the Landlord other than rent;
and third, to the payment of Rent in arrears; with the residue to be held by the
Landlord and applied in payment of future Rent as it becomes due and payable.
The Tenant shall remain liable for any deficiency to the Landlord;

 

(c) to remedy or attempt to remedy any default of the Tenant under this lease
for the account of the Tenant and to enter upon the Premises for such purposes.
No notice of the Landlord’s intention to perform such covenants need be given
the Tenant unless expressly required by this lease. The Landlord shall not be
liable to the Tenant for any loss, injury or damage caused by acts of the
Landlord in remedying or attempting to remedy such default and the Tenant shall
pay to the Landlord all expenses incurred by the Landlord in connection with
remedying or attempting to remedy such default;

 

(d) to recover from the Tenant all damages, and expenses incurred by the
Landlord as a result of any breach by the Tenant including, if the Landlord
terminates this lease, any deficiency between those amounts which would have
been payable by the Tenant for the portion of the Term following such
termination and the net amounts actually received by the Landlord during such
period of time with respect to the Premises; and

 

(e) to recover from the Tenant the full amount of the current month’s Rent
together with the next 3 months’ instalments of Rent, all of which shall accrue
on a day-to-day basis and shall immediately become due and payable as
accelerated rent.

 

(f) if this lease has been terminated in accordance with Section 9.01(a), to
recover from the Tenant the unamortized portion of any leasehold improvement
allowance or inducement paid by the Landlord under the terms of this lease
calculated from the date which is the later of the date of payment by the
Landlord or the Commencement Date and reducing on a straight line basis to zero
over the initial Term.

 

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Section 9.02 Distress

 

Notwithstanding any provision of this lease or any provision of applicable
legislation, none of the goods and chattels of the Tenant on the Premises at any
time during the Term shall be exempt from levy by distress for Rent in arrears,
and the Tenant waives any such exemption. If the Landlord makes any claim
against the goods and chattels of the Tenant by way of distress, this provision
may be pleaded as an estoppel against the Tenant in any action brought to test
the right of the Landlord to levy such distress.

 

Section 9.03 Costs

 

The Tenant shall pay to the Landlord all damages and costs (including, without
limitation, all legal fees on a solicitor and his client basis) incurred by the
Landlord in enforcing the terms of this lease, or with respect to any matter or
thing which is the obligation of the Tenant under this lease, or in respect of
which the Tenant has agreed to insure, or to indemnify the Landlord.

 

Section 9.04 Allocation of Payments

 

The Landlord may at its option apply sums received from the Tenant against any
amounts due and payable by the Tenant under this lease in such manner as the
Landlord sees fit.

 

Section 9.05 Survival of Obligations

 

If the Tenant has failed to fulfil its obligations under this lease with respect
to the maintenance, repair and alteration of the Premises and removal of
improvements and fixtures from the Premises during or at the end of the Term,
such obligations and the Landlord’s rights in respect thereto shall remain in
full force and effect notwithstanding the expiration or sooner termination of
the Term.

 

ARTICLE X - STATUS STATEMENT, ATTORNMENT AND SUBORDINATION

 

Section 10.01 Status Statement

 

Within 10 days after written request by the Landlord, the Tenant shall deliver
in a form supplied by the Landlord a statement or estoppel certificate to the
Landlord as to the status of this lease, including as to whether this lease is
unmodified and in full force and effect (or, if there have been modifications
that this lease is in full force and effect as modified and identifying the
modification agreements); the amount of Net Rent and Additional Rent then being
paid and the dates to which same have been paid; whether or not there is any
existing or alleged default by either party with respect to which a notice of
default has been served and if there is any such default, specifying the nature
and extent thereof; and any other matters pertaining to this lease as to which
the Landlord shall request such statement or certificate.

 

Section 10.02 Subordination

 

This lease and all rights of the Tenant shall be subject and subordinate to any
and all Mortgages and any ground, operating, overriding or underlying leases,
from time to time in existence against the Lands and Building. On request, the
Tenant shall subordinate this lease and its rights under this lease to any and
all such Mortgages and leases and to all advances made under such Mortgages. The
form of such subordination shall be as required by the Landlord or any Mortgagee
or the lessee under any such lease. On written request of the Tenant, the
Landlord shall use its reasonable best efforts to obtain a non-disturbance
agreement in favour of the Tenant from any Mortgagee and/or holders of
underlying leases and the Tenant shall be responsible for all reasonable costs
and charges incurred by the Landlord in connection therewith.

 

Section 10.03 Attornment

 

The Tenant shall promptly, on request, attorn to any Mortgagee, or to the owners
of the Building and Lands, or the lessor under any ground, operating,
overriding, underlying or similar lease of all or substantially all of the
Building made by the Landlord or otherwise affecting the Building and Lands, or
the purchaser on any foreclosure or sale proceedings taken under any Mortgage,
and shall recognize such Mortgagee owner, lessor or purchaser as the Landlord
under this lease.

 

Section 10.04 Execution of Documents – Intentionally deleted

 

ARTICLE XI - GENERAL PROVISIONS

 

Section 11.01 Rules and Regulations

 

The Tenant shall comply with all Rules and Regulations, and amendments thereto,
adopted by the Landlord from time to time including those set out in Schedule
“D”. Such Rules and Regulations may differentiate between different types of
businesses in the Building, and the Landlord shall have no obligation to enforce
any Rule or Regulation or the provisions of any other lease against any other
tenant, and the Landlord shall have no liability to the Tenant with respect
thereto.

 

Section 11.02 Delay

 

Except as expressly provided in this lease, whenever the Landlord or Tenant is
delayed in the fulfilment of any obligation under this lease (other than the
payment of Rent and surrender of the Premises on termination) by an unavoidable
occurrence which is not the fault of the party delayed in performing such
obligation, then the time for fulfilment of such obligation shall be extended
during the period in which such circumstances operate to delay the fulfilment of
such obligation.

 

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Section 11.03 Overholding

 

If the Tenant remains in possession of the Premises after the end of the Term
with the consent of the Landlord but without having executed and delivered a new
lease or an agreement extending the Term, there shall be no tacit renewal of
this lease, and the Tenant shall be deemed to be occupying the Premises as a
Tenant from month to month at a monthly Net Rent payable in advance on the first
day of each month equal to one and a half times the monthly amount of Net Rent
payable during the last month of the Term, and otherwise upon the same terms as
are set forth in this lease, so far as these are applicable to a monthly
tenancy.

 

Section 11.04 Waiver

 

If either the Landlord or Tenant excuses or condones any default by the other of
any obligation under this lease, no waiver of such obligation shall be implied
in respect of any continuing or subsequent default.

 

Section 11.05 Registration

 

Neither the Tenant nor anyone claiming under the Tenant shall register this
lease or any Transfer without the prior written consent of the Landlord. If the
Tenant or any permitted Transferee wishes to register a document for the
purposes of giving notice of this lease or a Transfer, then the Landlord shall,
at the request and expense of the Tenant, execute a notice, caveat or short form
of lease for the purposes of registration in such form as approved by the
Landlord and without disclosure of any terms which the Landlord does not desire
to have disclosed. If the Lands comprise more than one parcel of land, the
Landlord may direct the Tenant or Transferee as to the parcel or parcels against
which registration may be effected.

 

Section 11.06 Notices

 

Any notice, consent or other instrument which may be or is required to be given
under this lease shall be in writing and shall be delivered in person or sent by
registered mail postage prepaid, addressed: (a) if to the Landlord: c/o The
Cadillac Fairview Corporation Limited, 20 Queen Street West, 5th Floor, Toronto,
Ontario, M5H 3R4, Attention: Executive Vice President, Property Management, with
a copy to the Building Manager, and (b) if to the Tenant, at the Premises, with
a copy to Learning Tree International Inc., 160 Elgin Street, 23rd Floor,
Ottawa, Ontario K2P 2N8 Attention: Comptroller. Any such notice or other
instrument shall be deemed to have been given and received on the day upon which
personal delivery is made or, if mailed, then 48 hours following the date of
mailing. Either party may give notice to the other of any change of address and
after the giving of such notice, the address therein specified is deemed to be
the address of such party for the giving of notices. If postal service is
interrupted or substantially delayed, all notices or other instruments shall be
delivered in person.

 

Section 11.07 Successors

 

The rights and liabilities created by this lease extend to and bind the
successors and assigns of the Landlord and the heirs, executors, administrators
and permitted successors and assigns of the Tenant. No rights, however, shall
enure to the benefit of any Transferee unless the provisions of Article VIII are
complied with.

 

Section 11.08 Joint and Several Liability

 

If there is at any time more than one Tenant or more than one Person
constituting the Tenant, their covenants shall be considered to be joint and
several and shall apply to each and every one of them. If the Tenant is or
becomes a partnership, each Person who is a member, or shall become a member, of
such partnership or its successors shall be and continue to be jointly and
severally liable for the performance of all covenants of the Tenant pursuant to
this lease, whether or not such Person ceases to be a member of such partnership
or its successor.

 

Section 11.09 Captions and Section Numbers

 

The captions, section numbers, article numbers and table of contents appearing
in this lease are inserted only as a matter of convenience and in no way affect
the substance of this lease.

 

Section 11.10 Extended Meanings

 

The words “hereof”, “hereto” and “hereunder” and similar expressions used in
this lease relate to the whole of this lease and not only to the provisions in
which such expressions appear. This lease shall be read with all changes in
number and gender as may be appropriate or required by the context. Any
reference to the Tenant includes, where the context allows, the employees,
agents, invitees and licensees of the Tenant and all others over whom the Tenant
might reasonably be expected to exercise control.

 

Section 11.11 Partial Invalidity

 

All of the provisions of this lease are to be construed as covenants even though
not expressed as such. If any such provision is held or rendered illegal or
unenforceable it shall be considered separate and severable from this lease and
the remaining provisions of this lease shall remain in force and bind the
parties as though the illegal or unenforceable provision had never been included
in this lease.

 

Section 11.12 Entire Agreement

 

This lease and the Schedules and riders, if any, attached hereto, and the
Landlord’s leasehold improvement manual, set forth the entire agreement between
the Landlord and Tenant concerning the

 

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Premises and there are no agreements or understandings between them other than
as are herein set forth. Subject to Section 11.01, this lease and its Schedules
and riders may not be modified except by agreement in writing executed by the
Landlord and Tenant.

 

Section 11.13 Governing Law

 

This lease shall be construed in accordance with and governed by the laws of the
Province of Ontario.

 

Section 11.14 Time of the Essence

 

Time is of the essence of this lease.

 

Section 11.15 Head Lease

 

The Tenant acknowledges that the Landlord is a lessee of all or part of the
Lands under a ground lease registered in the Land Registry Office for the Land
Titles Division of Metropolitan Toronto (NO. 66). The Landlord represents and
warrants that it has full authority, for the Term of this Lease, to enter into
this Lease.

 

Section 11.16 Quiet Enjoyment

 

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

 

Section 11.17 Rent Free Period

 

Notwithstanding the provisions of Sections 2.01, 2.02, 2.03, 2.04, 2.05, 2.06
and 2.08 and provided this Lease has been executed in a form acceptable to the
Landlord, and the Tenant is in possession of and conducting its business in the
Premises, the Tenant shall have a one-time rent free period (the “Rent Free
Period”) of 61 days from and including the Commencement Date. During the Rent
Free Period, the Tenant shall not be obligated to pay Net Rent or Tenant’s
Proportionate Share of Taxes and Operating Costs. However, the Tenant shall be
responsible for the payment of all other Additional Rent payable under the terms
of this Lease, including but not limited to: insurance, utilities and the cost
of operating the climate control equipment outside of Normal Business Hours
pursuant to Section 3.01 hereof.

 

Section 11.18 Space Planning

 

The Landlord acknowledges that the Tenant has engaged a space planner to
complete a preliminary space plan of the Premises (plus one revision. The
Landlord shall pay to the space planner the cost of such preliminary space plan
(and one revision) to a maximum amount of Seven Cents ($0.07) per square foot of
the Rentable Area of the Premises.

 

Section 11.19 Landlord’s Work

 

The Landlord shall provide, build or install the following base Building
standard items in the Premises (and the Landlord shall use reasonable efforts to
substantially complete such work by May 31, 2000), at its sole cost and expense:

 

(a) existing floor to be made good and smooth, ready to accept Tenant’s new
carpet or floor coverings;

 

(b) replace or repair all damaged, disfigured or discolored ceiling tiles or
T-bars such that they are “like new”. Minimum ceiling height requirement is
8’-6”;

 

(c) prime painted perimeter drywall walls and columns ready for Tenant finishes.
Demising walls or columns to be taped, sanded and ready for Tenant finishes. Any
Tenant demising partitions shall be constructed as required by the Ontario
Building Code;

 

(d) Building standard lighting throughout the Premises. Such lighting shall
include relocatable overhead lay-in light fixtures with acrylic lenses, in base
Building layout. All lenses are to be cleaned and free of dust and debris;

 

(e) base Building sprinkler distribution located within the ceiling plenum to
provide sufficient coverage for an open floor plan. All additional sprinklers
shall be at Tenant’s cost;

 

(f) climate control system of sufficient capacity for general office use during
the hours specified in Section 3.01(a). All climate control equipment will be in
accordance with base Building standards;

 

(g) Floor electrical panels (i.e. approximately 168 circuits) and power source
(i.e. 2 X 45KVA transformers) to be supplied to the Tenant as is;

 

(h) telephone cabling provided in the Landlord’s telephone room in the core of
the Building;

 

(i) men’s and women’s washrooms which are adequate for office use with finishes
upgraded to the Landlord’s new Building standard finishes. Any additional
washrooms required by Ontario Building Code to meet the Tenant’s needs are to be
supplied by the Tenant at the Tenant’s expense;

 

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(j) basic venetian blinds on all typical floor windows to be cleaned and
reconditioned to Building standard;

 

(k) card access system for the lobby entrance of the Building. Tenant shall have
the opportunity, at the Tenant’s cost, to connect Tenant’s security system with
Building security for monitoring and card access. Such work shall be performed
at Tenant’s cost by a contractor approved by the Landlord;

 

(l) entrance doors to Premises shall be full height Building standard entrance
doors or an equivalent credit including locking hardware or an equivalent credit
to be applied to the first Rents due under this Lease. Should any assembly use
require panic hardware on stairwell doors, the Landlord agrees to provide and
install same at the Tenant’s cost;

 

(m) Tenant shall be permitted to use a portion of the mechanical floor
(approximately 100 square feet) for installing a dedicated ventilation air
handling unit with a dedicated duct located within a return air shaft delivering
this ventilated air to the Premises, all at the Tenant’s cost. Maintenance of
said unit shall be at the Tenant’s cost;

 

(n) The Tenant’s requirement for condenser water is approximately 50 USGPM at 10
degrees Fahrenheit temperature differential. If the base Building condenser
water system needs to be upgraded to achieve the Tenant’s requirements, the
Tenant will be required to pay its fair share of the cost of such upgrade, such
amount not to exceed $30,000.

 

Section 11.20 Tenant’s Work

 

The Tenant shall, at its sole expense, in accordance with the tenant leasehold
improvement manual provided by the Landlord, perform all the work and provide
all the necessary material and equipment to fit up the Premises with such
Leasehold Improvements to render the Premises complete and to permit the Tenant
to occupy the Premises. The Tenant shall pay to the Landlord on the Commencement
Date a supervision fee equal to $0.50 per square foot of the Rentable Area of
the Premises and an administration fee for any subsequent work done by or on
behalf of the Tenant during the Term. A list of pre-approved contractors and
professionals is to be supplied by the Landlord.

 

The Tenant shall obtain the Landlord’s approval in writing of its plans and
specifications, which approval shall not be unreasonably withheld, before
commencing the Tenant’s Work.

 

Section 11.21 Option to Extend Term

 

Provided that:

 

1. the Tenant is not then in default under the terms of this Lease and has not
been habitually late in the payment of Rent;

 

2. the Tenant has given written notice (the “Notice”) to the Landlord no more
than twelve (12) months and no less than nine (9) months prior to the expiration
of the initial Term of its intention to exercise the within option to extend;
and

 

3. so long as the Tenant is LEARNING TREE INTERNATIONAL INC., or a Permitted
Assignee (as defined in Section 8.01A) and is itself in possession of and
conducting its business in the whole of the Premises in accordance with the
terms of this Lease, then

 

the Landlord will grant to the Tenant (or a Permitted Assignee) the right to
extend the Term of the Lease for the Premises (as they exist at the time the
Notice is delivered to the Landlord) on an “as is” basis for a further period of
Five (5) years (the “Extension of Term”) commencing upon the expiration of the
initial Term, and such Extension of Term shall be upon the same terms and
conditions as during the Term, save and except: (a) there shall be no further
right to extend the Term, (b) there will be no inducement or leasehold
improvement allowance payable to the Tenant, (c) there will be no rent free
period, and (d) the rental rate will be fair market net rental for similar
premises in a similar building in the surrounding area (taking into account all
economic inducements) at the time of the exercise by the Tenant of the within
option to extend (the “Extension Rent”).

 

If the Landlord and Tenant are unable to agree on the Extension Rent ninety
(90) days prior the expiry of the Term, the matter shall be submitted to binding
arbitration, whereupon each party shall at once appoint an arbitrator and such
appointees shall appoint a third. The decision of any two of the arbitrators so
appointed as to the Extension Rent shall be final and binding upon the parties
hereto, who covenant that their dispute shall be so decided by arbitration alone
within sixty (60) days and not by recourse to any court or action of law. In
rendering this decision the arbitrators shall have regard to the guidelines for
establishing Extension Rent set out above. The aforesaid arbitration shall be
carried out pursuant to the provisions of the Arbitrations Act, R.S.O. 1990,
c.A.24, as amended or replaced.

 

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The parties shall enter into an extension agreement in order to give effect to
the Extension of Term and the revised rental but the Tenant shall be deemed to
have exercised the option to extend on the terms referred to above whether or
not such lease extension agreement is executed.

 

In the event the Term of Lease is extended pursuant to this clause, the Tenant
covenants and agrees that there shall be no further right to extend the Term. If
the Tenant fails to give the appropriate notice within the time limit set out
herein for extending the Term then this option to extend shall be null and void
and of no further force or effect. If the Tenant gives such appropriate notice
within the time limit set out herein for extending the Term it will forthwith
execute the documentation submitted by the Landlord as hereinbefore set out.

 

Section 11.22 Expansion Option

 

Provided the Tenant is not in default, the Landlord hereby grants to the Tenant
the option to lease in an “as is” condition any vacant premises adjoining the
Premises, either on the 10th floor or the floors immediately above or below the
10th floor (collectively, the “Expansion Space”) at any time(s) during the Term
or any extension or renewal thereof. If and when the Expansion Space, or a part
thereof, becomes vacant or the Landlord becomes aware that the Expansion Space,
or a part thereof, will become available for lease, the Landlord shall deliver
to the Tenant written notice setting out that the Expansion Space is vacant, or
if the Expansion Space is not then vacant, the date the Expansion Space will
become vacant and whether all or part of the Expansion Space is available for
lease by the Tenant, provided that the Landlord shall not give notice hereunder
earlier than 45 days 6 months prior to the date the Expansion Space or any part
thereof is to become vacant. If the Tenant elects to lease the Expansion Space
which is the subject of the Landlord’s notice, the Tenant shall deliver written
notice to the Landlord of its intention to do so within five (5) fourteen
(14) days of receipt of the Landlord’s notice. The parties hereto shall enter
into a lease amending agreement on the same terms as this Lease, and coterminous
with this Lease, except that:

 

(a) the term for the Expansion Space shall commence on the later of: (i) 30 days
after the date of the Tenant’s notice; or (ii) the date the Expansion Space
became vacant or will become vacant as set out in the above-mentioned notice
from the Landlord; and

 

(b) the Landlord will provide the Expansion Space in base Building condition and
there will be no additional Landlord’s Work or Rent free period, and the net
rent will be in accordance with the Landlord’s rental schedule for office space
in the Building as of the commencement date for the Expansion Space, which shall
be equal to the fair market rent for similar space for similar buildings located
in the vicinity of the Building.

 

It is understood and agreed that any renewal or extension of any existing tenant
in the Expansion Space, whether by option or otherwise, will not trigger this
expansion option.

 

The Tenant shall not have the right to assign this expansion option pursuant to
this Section 11.22 except in conjunction with a permitted assignment of all of
its rights under the Lease.

 

Section 11.23 Parking

 

The Landlord agrees to make available to the Tenant during the Term, ten
(10) unreserved parking spaces in the Dundas Parkade in the Development. The
Tenant shall pay parking fees to the Landlord (or to the parking operator if the
Landlord so directs) throughout the Term at the prevailing rates being charged
for parking permits in the parking facility, from time to time. The current rate
is $210.00 per permit per month. Each such payment shall be made in advance on
the first day of each month throughout the Term. The use of each parking permit
by the Tenant is subject to the following:

 

(a) the parking permits are for the use of Ten (10) vehicles, with 1 vehicle
designated by the Tenant for each permit and accordingly the Tenant will be
issued with Ten (10) parking permits by the Landlord or the parking operator;

 

(b) the Landlord reserves the right to make such Rules and Regulations with
respect to the use of the parking facility provided for the Building as the
Landlord deems advisable from time to time;

 

(c) the use by the Tenant of the parking facility is subject to the exclusive
control of the Landlord;

 

(d) the Tenant shall use the parking facility at its sole risk; and

 

(e) the Tenant shall give one calendar month prior written notice if it requires
an increase or decrease in the number of parking permits at any given time
(subject to the maximum number of parking spaces set out above), and permits
must be used from the first day of a calendar month to the last day of a
calendar month; and

 

(f) use of the parking facility after Normal Business Hours shall be on a first
come, first served basis.

 

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Section 11.24 Right of First Refusal

 

Provided that:

 

(a) the Tenant is not then and has not been in default under this Lease; and

 

(b) the Tenant is LEARNING TREE INTERNATIONAL INC. and is itself in possession
of the whole of the Premises, then

 

the Tenant shall have an ongoing right of first refusal to lease the portion of
the 10th floor of the Building shown crosshatched in intersecting lines on
Schedule “B” (the “First Refusal Premises”), comprising approximately 2,500
square feet of Rentable Area on the terms hereinafter set forth:

 

(i) Any First Refusal Premises offered on each occasion to the Tenant under this
right of first refusal are to be dealt with as a whole.

 

(ii) The Landlord shall, upon receipt of any bona fide offer to lease (the
“Offer”) from any third party of any part of the First Refusal Premises, which
the Landlord is prepared to accept, deliver to the Tenant written notice (the
“First Refusal Notice”) containing the terms and conditions of the Offer. The
Tenant acknowledges that this right of first refusal will not be triggered by a
request by any tenant in any part of the First Refusal Premises for the
Landlord’s consent to an assignment, subletting or other parting with possession
or with respect to a renewal or extension of the lease by an existing tenant or
its assignee. The Tenant shall have the right, within three (3) business days of
its receipt of the First Refusal Notice from the Landlord, to elect, by written
notice to the Landlord within such three (3) business day period, to lease the
First Refusal Premises. If the Tenant exercises such option, the Landlord shall
lease to the Tenant such First Refusal Premises on the same terms and conditions
as contained in this Lease and coterminous with the Lease, except that the
Tenant shall accept the First Refusal Premises in base Building condition
without any additional Landlord’s Work or Rent free period, and the Net Rent
with respect to the First Refusal Premises shall be in accordance with the
Landlord’s rental schedule for the Building as of the date of the First Refusal
Notice, which shall be fair market rent for similar space in similar buildings
in the vicinity of the Building. If the Tenant does not so elect within such
time, the Landlord shall be free to accept the Offer and if such Offer is not
accepted, the Tenant shall have a further right of first refusal (on the terms
set out herein) in connection with any subsequent offer to lease.

 

(iii) If the Tenant exercises the foregoing right of first refusal, the First
Refusal Premises shall become part of the Premises and Rent shall commence and
accrue with respect to such First Refusal Premises on the possession date set
out in the Offer.

 

Section 11.25 Restrictive Covenant

 

So long as the Tenant is LEARNING TREE INTERNATIONAL INC. or a Permitted
Transferee and is itself in occupation of and carrying on business in the whole
of the Premises, the Tenant expressly acknowledging and agreeing that this
Section 11.25 is personal to the Tenant or the Permitted Transferee, then during
the Term of this Lease, and any renewal or extension thereof, the Landlord will
not lease or permit to be occupied any other office premises on the 2nd to and
including 14th floors of the Building for the purpose of a computer training
facility operated by PPI, Learnix/TMI, Learnquest/Executrain, PBSC, GP Learning,
CDI Corporate Education Services or GeoTrain/Global Knowledge Network.

 

It is further understood that the Landlord is not obligated to enforce the
aforementioned covenant against any Person if by so doing it shall be in breach
of any laws, rules or regulations from time to time in force, and no provision
of this Lease is intended to apply or to be enforceable to the extent that it
would give rise to any offence under the Competition Act (Canada), or any
statute that may be substituted therefor, as from time to time amended. Provided
further that as the aforementioned covenant has been granted only at the
Tenant’s request, the Tenant shall indemnify and hold the Landlord harmless from
any loss, injury or damage suffered by the Landlord as a result of breaching any
such legislation as aforesaid, including all expenses incurred in connection
with any claims, actions or proceedings brought with respect thereto, whether of
a criminal or civil nature, and will reimburse the Landlord for any and all
costs or expenses incurred in connection with any enforcement of this covenant
by the Landlord, including legal fees on a solicitor and his client basis.

 

IN WITNESS WHEREOF the Landlord and Tenant have signed this lease under seal.

 

   

T.E.C. LEASEHOLDS LIMITED

--------------------------------------------------------------------------------

    (Landlord) Per:  

/s/ Ellen Williamson

--------------------------------------------------------------------------------

    Authorized Signature         Per:  

/s/ Tony Grossi

--------------------------------------------------------------------------------

    Authorized Signature        

--------------------------------------------------------------------------------

   

LEARNING TREE INTERNATIONAL INC.

--------------------------------------------------------------------------------

    (Tenant) Per:  

/s/ David Booker

--------------------------------------------------------------------------------

    Authorized Signature         Per:  

/s/ Scott G. Elliott

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    Authorized Signature             I/We have authority to bind the corporation

 

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SCHEDULE “A” - LEGAL DESCRIPTION OF LANDS

 

FREEHOLD PARCEL

 

The whole of Parcel 1-14 in the Register for Section A-2-A, comprising Units 4
and 5 according to Plan D-282.

 

SCHEDULE “C” - DEFINITIONS

 

In this lease and in the Schedules to this lease:

 

1. “Additional Rent” means all sums of money required to be paid by the Tenant
under this lease (except Net Rent) whether or not the same are designated
“Additional Rent” or are payable to the Landlord or otherwise.

 

2. “Alterations” means all repairs, replacements, improvements or alterations to
the Premises by the Tenant.

 

3. “Architect” means the architect from time to time named by the Landlord.

 

4. “Building” means the multi-storey building known municipally as 1 Dundas
Street West, Toronto, Ontario from and including the ground floor of such
Building to and including the roof thereof and including all premises rented or
intended to be rented therein, whether for office, retail, cafeteria, banking or
other purposes, but excluding the ground floor premises rented or intended for
renting for retail and/or banking purposes; and facilities serving the Building
or having utility in connection therewith, as determined by the Landlord,
whether or not located directly under the Building, which areas and facilities
may include, without limitation, internal malls, sidewalks and plazas, exhibit
areas, storage and mechanical areas, janitor rooms, mail rooms, telephone,
mechanical and electrical rooms, stairways, escalators, elevators, truck and
receiving areas, driveways, parking facilities, loading docks and corridors.

 

5. “Business Tax” means all taxes (whether imposed on the Landlord or Tenant)
attributable to the personal property, trade fixtures, business, income,
occupancy or sales of the Tenant or any other occupancy of the Premises and to
any Leasehold Improvements installed in the Premises and to the use of the
Building or Lands by the Tenant.

 

6. “Capital Tax” is an amount determined by multiplying each of the “Applicable
Rates” by the “Building Capital” and totalling the products. “Building Capital”
is the amount of capital which the Landlord determines, without duplication, is
invested from time to time by the Landlord, the owners, or all of them, in doing
all or any of the following: acquiring, developing, expanding, redeveloping and
improving the Lands and Building. Building Capital will not be increased by any
financing or refinancing except to the extent that the proceeds are invested
directly as Building Capital. An “Applicable Rate” is the capital tax rate
specified from time to time under any statute of Canada and any statute of the
Province of Ontario which imposes a tax in respect of the capital of
corporations. Each Applicable Rate will be considered to be the rate that would
apply if none of the Landlord or the owners employed capital outside of the
Province of Ontario.

 

7. “Change of Control” means, in the case of any corporation or partnership, the
transfer or issue by sale, assignment, subscription, transmission on death,
mortgage, charge, security interest, operation of law or otherwise, of any
shares, voting rights or interest which would result in any change in the
effective control of such corporation or partnership unless such change occurs
as a result of trading in the shares of a corporation listed on a recognized
stock exchange in Canada or the United States. and then only so long as the
Landlord receives assurances reasonably satisfactory to it that there will be a
continuity of management and of the business practices of such corporation
notwithstanding such Change of Control.

 

8. “Commencement Date” means the date on which the Term commences under
Section 1.02.

 

9. “Development” means the Lands more particularly described in Schedule “A”
attached to this lease or as such Lands may be altered, expanded or reduced from
time to time, and the improvements, buildings, equipment and facilities erected
thereon or situate from time to time therein, and located within a portion of
the area approximately bounded by Dundas Street, Queen Street, Yonge Street and
Bay Street, in the City of Toronto, Province of Ontario. The Development
includes those areas designated or intended by the Landlord to be leased for
office, retail, service and storage purposes, and those areas not so designated
or intended, and all non-leasable areas, parking facilities and the shared
common areas and facilities of the Development. The Development is known
generally as “Toronto Eaton Centre” or “The Eaton Centre”.

 

10. An “Event of Default” shall occur whenever:

 

  (a) any Rent is in arrears and is not paid within 5 days after written demand
by the Landlord;

 

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  (b) the Tenant has breached any of its obligations in this lease (other than
the payment of Rent) and:

 

  (i) fails to remedy such breach within 15 days (or such shorter period as may
be provided in this lease); or,

 

  (ii) if such breach cannot be reasonably remedied within 15 days or such
shorter period, the Tenant fails to commence to remedy such breach within such
15 days or shorter period or thereafter fails to proceed diligently to remedy
such breach;

 

in either case after notice in writing from the Landlord;

 

  (c) the Tenant or any Indemnifier becomes bankrupt or insolvent or takes the
benefit of any statute for bankrupt or insolvent debtors or makes any proposal,
assignment or arrangement with its creditors, or any steps are taken or
proceedings commenced by any Person for the dissolution, winding-up or other
termination of the Tenant’s existence or the liquidation of its assets;

 

  (d) a trustee, receiver, receiver/manager or like Person is appointed with
respect to the business or assets of the Tenant or any Indemnifier;

 

  (e) the Tenant makes a sale in bulk of all or a substantial portion of its
assets other than in conjunction with a Transfer approved by the Landlord;

 

  (f) this lease or any of the Tenant’s assets are taken under a writ of
execution;

 

  (g) the Tenant purports to make a Transfer other than in compliance with the
provisions of this lease;

 

  (h) the Tenant abandons or attempts to abandon the Premises or disposes of its
goods so that there would not after such disposal be sufficient goods of the
Tenant on the Premises subject to distress to satisfy Rent for at least 3
months, or the Premises become vacant and unoccupied for a period of 10
consecutive days or more without the consent of the Landlord;

 

  (i) any insurance policies covering any part of the Building or any occupant
thereof are actually or threatened to be cancelled or adversely changed as a
result of any use or occupancy of the Premises; or,

 

  (j) if an Event of Default as defined in this paragraph occurs with respect to
any lease or agreement under which the Tenant occupies other premises in the
Building.

 

11. “Fiscal Year” means (i) the period of time commencing on the Commencement
Date and ending on the last day of the next ensuing October; and (ii) thereafter
the period of time commencing on the first day of November and ending on the
last day of the next ensuing October, or (iii) the fiscal period designated by
the Landlord from time to time.

 

12. “Indemnifier” means the Person, if any, who has executed or agreed to
execute the Indemnity Agreement attached to this Lease as Schedule “E”, or any
other indemnity agreement in favour of the Landlord.

 

13. “Landlord” means the party named as landlord on the first page of this lease
and those for whom it is responsible in law.

 

14. “Lands” means the lands situated in the City of Toronto in the Province of
Ontario on which the Building is constructed, as more particularly described in
Schedule “A”, or as such lands may be expanded or reduced from time to time.

 

15. “Lease” or “lease” means this document as originally signed, sealed and
delivered or as amended from time to time, which amendments shall be in writing,
signed, sealed and delivered by both the Landlord and Tenant.

 

16. “Leasehold Improvements” means leasehold improvements in the Premises
determined according to common law, and shall include, without limitation, all
fixtures, improvements, installations, alterations and additions from time to
time made, erected or installed in the Premises by or on behalf of the Tenant or
any previous occupant of the Premises, including signs and lettering,
partitions, doors and hardware however affixed and whether or not movable, all
mechanical, electrical and utility installations and all carpeting and drapes
with the exception only of furniture and equipment not in the nature of
fixtures.

 

17. “Mortgage” means any and all mortgages, charges, debentures, security
agreements, trust deeds, hypothecs or like instruments resulting from any
financing, refinancing or collateral financing (including renewals or extensions
thereof) made or arranged by the Landlord of its interest in all or any part of
the Building or Lands.

 

18. “Mortgagee” means the holder of, or secured party under, any Mortgage and
includes any trustee for bondholders.

 

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19. “Net Rent” means the annual rent payable by the Tenant under Section 2.02.

 

20. “Net Rentable Area” means, in the case of premises consisting of part of a
floor, the floor area bounded by the inside surface of the exterior glass, the
office side of the corridor or other permanent partitions and the centre of
partitions that separate the premises from adjoining leasable areas (if any)
without deductions for columns or projections but after making the same
exclusions as are made in computing Rentable Area.

 

21. “Normal Business Hours” means the hours from 8:00 a.m. to 6:00 p.m. on
Mondays through Fridays and the hours from 8:00 a.m. to 1:00 p.m. on Saturdays,
unless any such day is a statutory holiday.

 

22. “Operating Costs” means (without duplication) any amounts paid or payable
whether by the Landlord or by others on behalf of the Landlord for maintenance,
operation, repair, replacement to and administration of the Lands and Building
or allocated by the Landlord to the Lands and Building and for services provided
generally to tenants, calculated as if the Building were 100% occupied by
tenants during the Term, including without limitation:

 

  (a) the cost of insurance which the Landlord is obligated or permitted to
obtain under this lease;

 

  (b) the cost of security, janitorial, landscaping, window cleaning, garbage
removal and snow removal services;

 

  (c) the cost of heating, ventilating and air-conditioning;

 

  (d) the cost of fuel, steam, water, electricity, telephone and other utilities
used in the maintenance, operation or administration of the Building, including
charges and imposts related to such utilities to the extent such costs, charges
and imposts are not recovered from other tenants;

 

  (e) management office expenses of operation and salaries, wages and other
amounts paid or payable for all personnel involved in the repair, maintenance,
operation, leasing, on site management, security, supervision or cleaning of the
Building, including fringe benefits, employment and worker’s compensation
insurance premiums, pension plan contributions and other employment costs;

 

  (f) auditing, accounting, legal and other professional and consulting fees and
disbursements;

 

  (g) the costs:

 

  (i) of repairing, operating and maintaining the Building and the equipment
serving the Building and of all replacements and modifications to the Building
or such equipment, including those made by the Landlord in order to comply with
laws or regulations affecting the Building;

 

  (ii) incurred by the Landlord in providing and installing energy conservation
equipment or systems and life safety systems;

 

  (iii) incurred by the Landlord to make alterations, replacements or additions
to the Building intended to reduce operating costs, improve the operation of the
Building or maintain its operation as a first class office building; and,

 

  (iv) incurred to replace machinery or equipment which by its nature requires
periodic replacement;

 

all to the extent that such costs are fully chargeable in the Fiscal Year in
which they are incurred in accordance with sound accounting principles;

 

  (h) the cost of the rental of all equipment, supplies, tools, materials and
signs;

 

  (i) all costs incurred by the Landlord in contesting or appealing taxes or
related assessments including legal, appraisal and other professional fees, and
administration and overhead costs;

 

  (j) Capital Tax;

 

  (k) depreciation or amortization of the costs referred to in paragraph 22(g)
above as determined by the Landlord in accordance with sound accounting
principles, if such costs have not been charged fully in the Fiscal Year in
which they are incurred;

 

  (l) interest calculated at 2 percentage points above the average daily prime
bank commercial lending rate charged during such rental year by any Canadian
chartered bank designated from time to time by the Landlord upon the
undepreciated or unamortized balance of the costs referred to in paragraph
22(k); and

 

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  (m) a reasonable fee for the administration and management of the Building
applied to the total rents (including additional rents) received from tenants of
the Building, which fee shall be comparable to fees charged by property
management companies for managing and administering developments in the City of
Toronto similar to the Building.

 

Operating Costs shall exclude or have deducted from them as the case may be:

 

  (aa) all amounts which otherwise would be included in Operating Costs which
are recovered by the Landlord from tenants (other than under sections of their
leases comparable to section 2.03 of this lease);

 

  (bb) such of the Operating Costs as are recovered from insurance proceeds,
warranties or guarantees, to the extent such recovery represents reimbursements
for costs previously included in Operating Costs;

 

  (cc) interest on debt and capital retirement of debt;

 

  (dd) ground rent payable by the Landlord to the owner of the Lands under any
ground lease of the Lands;

 

  (ee) all amounts which otherwise would be included in Operating Costs which
are directly attributable to the operation of the parking garage forming part of
and serving the Building;

 

  (ff) commissions and other expenses payable in connection with the marketing
and leasing of the Building including the cost of any leasehold improvement
allowance or other inducement paid to tenants of the Building;

 

  (gg) the amount of any goods and services tax (“G.S.T.”) paid or payable by
the Landlord on the purchase of goods and services included in Operating Costs
which may be available to the Landlord as a credit in determining the Landlord’s
net tax liability or refund on account of G.S.T.;

 

  (hh) the cost of all repairs and replacements as a result of faulty
construction, and/or inferior or deficient materials or workmanship with respect
to the original construction of the Building or any part thereof; and

 

  (ii) the cost of construction of any addition to or expansion of the Building.

 

Operating costs may be attributed by the Landlord to the various components of
the Building in accordance with reasonable and current practices, on a basis
consistent with the nature of the particular costs being attributed, and in
accordance with GAAP and the policies set by the Canadian Institute of Public
Real Estate Companies (CIPREC), and the costs so attributed may be allocated to
the tenants of such components accordingly.

 

23. “Person” means any person, firm, partnership or corporation, or any group or
combination of persons, firms, partnerships or corporations.

 

24. “Premises” means the premises leased to the Tenant described in Section 1.01
and includes Leasehold Improvements in such premises.

 

25. “Proportionate Share” means a fraction which has as its numerator the
Rentable Area of the Premises and as its denominator the Total Rentable Area of
the Building.

 

26. “Rent” means the aggregate of Net Rent and Additional Rent.

 

27. “Rentable Area” means (a) in the case of premises used or intended to be
used for office purposes and occupying an entire floor, the floor area bounded
by the inside surface of the glass on the exterior walls, including without
limitation, washrooms, telephone, electrical and janitorial closets and elevator
lobbies; (b) in the case of premises used or intended to be used for office
purposes and consisting of part of a floor, the area computed by multiplying the
Net Rentable Area of such premises by a fraction, the numerator of which is the
aggregate floor area of the floor on which the Premises are located (using the
measurement method set out in subparagraph (a)) and the denominator of which is
the aggregate Net Rentable Area of all office premises on such floor; and (c) in
the case of premises used or intended to be used for retail purposes, the Net
Rentable Area thereof. In calculating Rentable Area, stairs, elevator shafts,
flues, stacks, pipe shafts and vertical ducts with their own enclosing walls,
any of which are used in common, shall be excluded but no deductions or
exclusions shall be made for columns and projections necessary for the Building.
The Landlord may for the purpose of calculating the Net Rent and any
Proportionate Share change the fraction referred to in subparagraph (b) from
time to time to reflect the actual ratio of the aggregate floor area of the
floor on which the Premises are located (using the measurement method set out in
subparagraph (a)) to the aggregate Net Rentable Area of all office premises on
such floor.

 

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28. “Rules and Regulations” means the rules and regulations adopted and
promulgated by the Landlord from time to time pursuant to Section 11.01. The
Rules and Regulations existing as at the Commencement Date are those set out in
Schedule “D”.

 

29. “Taxes” means all taxes, levies, charges, local improvement rates and
assessments whatsoever assessed or charged against the Development or any part
thereof by any lawful taxing authority and including any amounts assessed or
charged in substitution for or in lieu of any such taxes, but excluding only
such taxes as capital gains taxes, corporate, income, profit or excess profit
taxes to the extent such taxes are not levied in lieu of any of the foregoing
against the Development or the Landlord in respect thereof. Taxes shall in every
instance be calculated on the basis of the Total Rentable Area of the Building
being fully assessed and taxed at prevailing commercial tax rates for occupied
space for the period for which Taxes are being calculated.

 

30. “Tenant” means the party named as tenant on the first page of this lease and
those for whom it is responsible in law.

 

31. “Term” means the period set out in Section 1.02.

 

32. “Total Rentable Area of the Building” means the aggregate of the Rentable
Area of each floor in the Building as if each floor is occupied by one tenant,
all as determined by the Architect. The Total Rentable Area of the Building
shall:

 

  (a) exclude the main telephone, mechanical, electrical and other utility rooms
and enclosures, public lobbies on the ground floor, and other public space
common to the entire Building; and,

 

  (b) be adjusted by the Architect from time to time to take account of any
structural, functional or other change affecting the same.

 

33. “Trade Fixtures” means trade fixtures as determined at common law, but for
greater certainty, shall not include:

 

  (a) heating, ventilating or air conditioning systems, facilities and equipment
in or serving the Premises;

 

  (b) floor coverings affixed to the floor of the Premises;

 

  (c) light fixtures;

 

  (d) internal stairways and doors; and,

 

  (e) any fixtures, facilities, equipment or installations installed by or at
the expense of the Landlord pursuant to this Lease or otherwise.

 

34. “Transfer” means an assignment of this lease in whole or in part, a sublease
of all or any part of the Premises, any transaction whereby the rights of the
Tenant under this lease or to the Premises are transferred to another, any
transaction by which any right of use or occupancy of all or any part of the
Premises is conferred upon anyone, any mortgage, charge or encumbrance of this
lease or the Premises or any part thereof or other arrangement under which
either this lease or the Premises become security for any indebtedness or other
obligations and includes any transaction or occurrence whatsoever (including,
but not limited to, expropriation, receivership proceedings, seizure by legal
process and transfer by operation of law), which has changed or might change the
identity of the Persons having lawful use or occupancy of any part of the
Premises.

 

35. “Transferee” means the Person or Persons to whom a Transfer is or is to be
made.

 

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SCHEDULE “D” - RULES AND REGULATIONS

 

1. Life Safety

 

  (a) The Tenant shall not do or permit anything to be done in the Premises, or
bring or keep anything therein which will in any way increase the risk of fire
or the rate of fire insurance on the Building or on property kept therein, or
obstruct or interfere with the rights of other tenants or in any way injure or
annoy them or the Landlord, or violate or act at variance with the laws relating
to fires or with regulations of the Fire Department, or with any insurance upon
the Lands or Building or in any part thereof, or violate or act in conflict with
any statutes, rules and ordinances governing health standards or with any other
statute or municipal by-law.

 

  (b) No inflammable oils or other inflammable, dangerous or explosive materials
save those approved in writing by the Landlord’s insurers shall be kept or
permitted to be kept in the Premises.

 

2. Security

 

  (a) The Landlord shall permit the Tenant and the Tenant’s employees and all
Persons lawfully requiring communication with them to have the use, during
Normal Business Hours in common with others entitled thereto, of the main
entrance and the stairways, corridors, elevators, escalators, or other
mechanical means of access leading to the Building and the Premises. At times
other than during Normal Business Hours the Tenant and the employees of the
Tenant shall have access to the Building and to the Premises only in accordance
with the Rules and Regulations and shall be required to satisfactorily identify
themselves and to register in any book which may at the Landlord’s option be
kept by the Landlord for such purpose. If identification is not satisfactory,
the Landlord is entitled to prevent the Tenant or the Tenant’s employees or
other Persons lawfully requiring communication with the Tenant from having
access to the Building and to the Premises. In addition, the Landlord is not
required to open the door to the Premises for the purpose of permitting entry
therein to any Person not having a key to the Premises.

 

  (b) The Tenant shall not place or cause to be placed any additional locks upon
any doors of the Premises without the approval of the Landlord. Two keys shall
be supplied to the Tenant for each entrance door to the Premises and all locks
shall be Building standard to permit access by the Landlord’s master key. If
additional keys are required, they must be obtained from the Landlord at the
cost of the Tenant. Keys or other means of access for entrance doors to the
Building will not be issued without the written authority of the Landlord.

 

3. Housekeeping

 

  (a) The Tenant shall permit window cleaners to clean the windows of the
Premises during Normal Business Hours.

 

  (b) The Tenant shall not place any debris, garbage, trash or refuse or permit
same to be placed or left in or upon any part of the Lands or Building outside
of the Premises, other than in a location provided by the Landlord specifically
for such purposes, and the Tenant shall not allow any undue accumulation of any
debris, garbage, trash or refuse in or outside of the Premises. If the Tenant
uses perishable articles or generates wet garbage, the Tenant shall provide
refrigerated storage facilities suitable to the Landlord.

 

  (c) The Tenant shall not place or maintain any supplies, or other articles in
any vestibule or entry of the Premises, on the adjacent footwalks or elsewhere
on the exterior of the Premises or elsewhere on the Lands or Building.

 

  (d) The sidewalks, entrances, passages, escalators, elevators and staircases
shall not be obstructed or used by the Tenant, its agents, servants,
contractors, invitees or employees for any purpose other than ingress to and
egress from the Premises and the Building. The Landlord reserves entire control
of all parts of the Lands and Building employed for the common benefit of the
tenants and without restricting the generality of the foregoing, the sidewalks,
entrances, corridors and passages not within the Premises, washrooms,
lavatories, air conditioning closets, fan rooms, janitor’s closets, electrical
closets and other closets, stairs, escalators, elevator shafts, flues, stacks,
pipe shafts and ducts and shall have the right to place such signs and
appliances therein, as it deems advisable, provided that ingress to and egress
from the Premises is not unduly impaired thereby.

 

  (e) The Tenant shall not cause or permit: any waste or damage to the Premises;
any overloading of the floors or the utility, electrical or mechanical
facilities of the Premises; any nuisance in the Premises; or any use or manner
of use causing a hazard or annoyance to other occupants of the Building or to
the Landlord.

 

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4. Receiving, Shipping, Movement of Articles

 

  (a) The Tenant shall not receive or ship articles of any kind except through
facilities and designated doors and at hours designated by the Landlord when
deemed necessary by the Landlord acting reasonably, and under the supervision of
the Landlord.

 

  (b) Hand trucks, carryalls or similar appliances shall only be used in the
Building with the consent of the Landlord and shall be equipped with rubber
tires, slide guards and such other safeguards as the Landlord requires.

 

  (c) The Tenant, its agents, servants, contractors, invitees or employees,
shall not bring in or take out, position, construct, install or move any safe,
business machinery or other heavy machinery or equipment or anything liable to
injure or destroy any part of the Building, including the Premises, without
first obtaining the consent in writing of the Landlord. In giving such consent,
the Landlord shall have the right in its sole discretion, to prescribe the
weight permitted and the position thereof, the use and design of planks, skids
or platforms, and to distribute the weight thereof. All damage done to the
Building, including the Premises, by moving or using any such heavy equipment or
other office equipment or furniture shall be repaired at the expense of the
Tenant. The moving of all heavy equipment or other office furniture shall occur
only by prior arrangement with the Landlord. The cost of such moving shall be
paid by the Tenant. Safes and other heavy office equipment and machinery shall
be moved through the halls and corridors only in a manner expressly approved by
the Landlord. No freight or bulky matter of any description will be received
into any part of the Building, including the Premises, or carried in the
elevators except during hours approved by the Landlord. The Landlord agrees to
provide the Tenant with access to shipping facilities outside Normal Business
Hours. However, the Tenant acknowledges and aggress that the Tenant will make
special arrangements with the Landlord for the transport of items being
delivered from such shipping facilities to the 10th floor of the building and
the Premises outside Normal Business Hours.

 

5. Prevention of Injury to Premises

 

  (a) It shall be the duty of the Tenant to assist and co-operate with the
Landlord in preventing injury to the Premises.

 

  (b) The Tenant shall not deface or mark any part of the Building, including
the Premises, and shall not drive nails, spikes, hooks or screws into the walls,
floors, ceilings or woodwork of any part of the Building, including the
Premises, or bore, drill or cut into the walls, floors, ceilings or woodwork of
any part of the Building including the Premises, in any manner or for any
reason.

 

  (c) If the Tenant desires telegraphic or telephonic connections, the Landlord,
in its sole discretion, may direct the electricians as to where and how the
wires are to be introduced. No gas pipe or electric wire will be permitted which
has not been ordered or authorized by the Landlord. No outside radio or
television antenna shall be allowed on any part of the Premises without
authorization in writing by the Landlord.

 

6. Windows

 

Except for the proper use of approved blinds and drapes, the Tenant shall not
cover, obstruct or affix any object or material to any of the skylights and
windows that reflect or admit light into any part of the Building, including,
without limiting the generality of the foregoing, the application of solar
films.

 

7. Washrooms

 

  (a) The Landlord shall permit the Tenant and the employees of the Tenant in
common with others entitled thereto, to use the washrooms on the floor of the
Building on which the Premises are situated or, in lieu thereof, those washrooms
designated by the Landlord, save and except when the general water supply may be
turned off from the public main or at such other times when repair and
maintenance undertaken by the Landlord shall necessitate the non-use of the
facilities.

 

  (b) The water closets and other apparatus shall not be used for any purposes
other than those for which they were intended, and no sweepings, rubbish, rags,
ashes or other substances shall be thrown into them. Any damage resulting from
misuse shall be borne by the Tenant by whom or by whose agents, servants,
invitees, or employees such damage is caused.

 

8. Use of Premises

 

  (a) No one shall use the Premises for sleeping apartments or residential
purposes, or for the storage of personal effects or articles other than those
required for business purposes.

 

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  (b) No cooking or heating of any foods or liquids (other than the heating of
water or coffee in coffee makers or kettles or the cooking or heating of foods
through the use of microwave ovens) shall be permitted in the Premises without
the written consent of the Landlord.

 

  (c) The Tenant shall be permitted to install machines dispensing food and
beverages in the Premises which is for the sole use of the Tenant and/or its
clients. The Tenant acknowledges and agrees any delivery of any food or beverage
to the Premises shall at all times be through the service elevators and not the
passenger elevators.

 

  (d) The Tenant shall not permit or allow any odours, vapours, steam, water,
vibrations, noises or other undesirable effects to emanate from the Premises or
any equipment or installation therein which, in the Landlord’s opinion, are
objectionable or cause any interference with the safety, comfort or convenience
of the Building to the Landlord or the occupants and tenants thereof or their
agents, servants, invitees or employees.

 

9. Canvassing, Soliciting, Peddling

 

Canvassing, soliciting and peddling in or about the Lands and Building are
prohibited.

 

10. Bicycles

 

No bicycles or other vehicles shall be brought within any part of the Lands or
Building without the consent of the Landlord.

 

11. Animals and Birds

 

No animals or birds shall be brought into any part of the Lands or Building
without the consent of the Landlord.

 

12. Signs and Advertising

 

The Tenant shall not paint, affix, display or cause to be painted, affixed or
displayed, any sign, picture, advertisement, notice, lettering or decoration on
any part of the outside of the Building or in the interior of the Premises which
is visible from the outside of the Building. The sign to be placed on the
outside of (or beside, as the case may be) the interior door leading to the
Premises shall be: (i) installed by the Landlord at the Tenant’s sole cost and
expense; (ii) consistent with the uniform pattern, size and design prescribed by
the Landlord; (iii) the property of the Landlord and shall be maintained by the
Landlord throughout the Term at the Tenant’s sole cost and expense; and
(iv) removed by the Landlord (or, at the Landlord’s option, by the Tenant) at
the sole cost and expense of the Tenant. All damage caused by the removal of
such sign shall be promptly repaired by the party that removed the sign, at the
Tenant’s sole cost and expense. The Tenant’s obligation to observe and perform
this covenant shall survive the expiration of the Term or earlier termination of
the Lease. The Landlord, at the Tenant’s cost shall allow the Tenant’s
“directional” signage in the lobby of the Building on Mondays and Tuesdays only,
between the hours of 7:30 a.m. and 9:30 a.m. Such signage shall be done in a
professional manner, approved by the Landlord and displayed in the Landlord’s
metal sign holder measuring approximately 22” x 28”.

 

13. Directory Board

 

The Tenant shall be entitled at its expense to have a maximum of 2 entries shown
upon the directory board in the main lobby of the Building and in the elevator
lobby on the floor on which the Premises are located (if the Premises are
located on a multi-tenant floor). The Landlord shall design the style of such
identification and shall determine the number of spaces available on the
directory board(s) for each tenant. The directory board(s) shall be located in
an area designated by the Landlord.

 

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