EXHIBIT 10.64

 

LEASE AGREEMENT

 

BETWEEN:

  

CANAPREV INC., a legal person duly incorporated under the laws of the Province
of Quebec, having its principal place of business at 935 de la Gauchetière
Street West, 8th floor, Montreal (Quebec), Canada H3B 2M9, herein acting and
represented by Mr. Michel V. Legault, its President, duly authorized for the
purposes hereof as he so declares;

    

(hereinafter referred to as the “Landlord”)

AND:

  

PC MALL CANADA INC., a Canadian Corporation having its head office at 1100,
University, 2nd Floor Montreal (Quebec) Canada, herein acting and represented by
Kris Rogers, its President, duly authorized for the purpose hereof as she so
declares ;

    

(hereinafter referred to as the “Tenant”)

AND:

  

PC MALL INC., a US Corporation having its head office at Torrance, CA, USA,
herein acting and represented by Ted Sanders, its CFO, duly authorized for the
purpose hereof as he so declares ;

    

(hereinafter referred to as the “Guarantor”)

 

THE PARTIES HEREBY MUTUALLY AGREE AS FOLLOWS:

 

ARTICLE 1

 

LEASE AND POSSESSION OF THE LEASED PREMISES

 

1.1

Leased Premises

 

The Landlord hereby leases to the Tenant an area of twenty-three thousand six
hundred and seventy-five square feet (23 675 sq.ft.), which area includes the
Tenant’s proportion of service and common areas (the “Leased Premises”),
measured by an expert of the Landlord according to the rules of measurement
known as the “BOMA” standards. The Leased Premises, as shown hatched on the plan
attached hereto as Schedule “A” are located on the second (2nd) floor of the
building situated at 1100, University Street, in the city of Montreal, Province
of Quebec (the building and land being hereinafter referred to as the
“Property”).

 

1.2

Occupancy

 

The Tenant shall be entitled to take possession of the Leased Premises as soon
as possible. The Landlord’s work described in Section 7.1 herein shall be
completed diligently in order for the Tenant to install its furniture, fixture
and equipment, construct its leasehold improvements and subsequently to conduct
its normal business affairs therein (hereinafter referred to as the “Occupation
Date”). The Tenant shall not pay any minimum Rent nor Additional Rentals (as
they are hereinafter defined) during said period of occupancy prior to the Term.
The Tenant shall, however, be responsible for the payment of electrical
consumption charges at the rate of $1.25 per sq.ft. and shall abide by all the
other terms and conditions of the Lease Agreement during the pre-Term occupancy.

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1.3

Acceptance of Leased Premises

 

 

1.3.1

Prior to the Commencement Date, and before Tenant commences any Tenant’s work,
the Tenant shall benefit from a one (1) month period to advise the Landlord of
any   visible defect affecting any base Building system located inside the
Leased Premises in order for the Landlord to correct the situation at its own
costs.

 

 

1.3.2

As for heating and air-conditioning systems, the Tenant shall have a period of
one (1) month from the date when such systems actually start operating in the
Leased   Premises, to satisfy itself that such systems are functional.
Landlord’s responsibility related to this Section specifically excludes any
problems related to distribution or   balancing of such systems which are
Tenant’s responsibility.

 

ARTICLE 2

 

TERM OF LEASE

 

2.1

Term of Lease

 

The term of the Lease shall be for a period of five (5) years (the “Term”),
commencing on July 1st, 2003 (the “Commencement Date”) and terminating on June
30, 2008, (the “Expiration of the Term”) unless sooner terminated in accordance
with the provisions of this Lease.

 

2.2

Option to Renew

 

Provided that the Tenant is not in default under the Lease (at the time that it
exercises the option mentioned hereunder as well as on the effective date with
respect to the option) and that the Tenant continues to occupy the entire Leased
Premises, it will have the option of extending the Term for the entire Leased
Premises for an additional period of five (5) years under the same terms and
conditions as in this Lease, except that there will be no further right to renew
or to cancel the Lease and except for the Minimum Rent, which shall be at the
then market rate. The Tenant shall exercise such option by giving a written
notice to the Landlord, not more than twelve (12) months and not less six (6)
months prior to the expiration of the Term, failing which the option to renew
will become null and void without any other formality.

 

No later than ten (10) days following the receipt by the Landlord of the
Tenant’s Notice, the Landlord shall inform in writing of the proposed rate for
the minimum Rent as established pursuant paragraph. The Tenant shall have sixty
(60) days to accept or negotiate the said rate.

 

ARTICLE 3

 

MINIMUM RENT

 

3.1

Minimum Rent

 

Throughout the Term, the Tenant shall pay to the Landlord, without any
deduction, set-off, reduction or abatement of any nature whatsoever, a minimum
rent of ten dollars per square foot ($ 10.00/sq. ft.) (the “Minimum Rent”).

 

3.2

Place and Mode of Payment

 

The Minimum Rent and Additional Rent shall be paid by the Tenant to the Landlord
at the address indicated in Article 18 of this Lease or at any other location
indicated by written notice of the Landlord to the Tenant, or to any agent or
representative of the Landlord, as may be designated from time to time by
written notice of the Landlord to the Tenant. Any amounts payable by the Tenant
hereunder shall be adjusted on a pro rata basis to reflect the actual
Commencement Date or termination of this Lease.

 

The Minimum Rent and the Additional Rent shall be payable in Canadian dollars in
advance in twelve (12) equal consecutive monthly payments, the first (1st ) of
every month. The first payment is payable on the Commencement Date.

 

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3.3

Late Payment

 

Unless otherwise stipulated herein, should the Tenant default in the payment,
when due, of any amount whatsoever owing under this Lease, the overdue amount
shall bear interest at the prime rate of the Bank of Montreal plus five percent
(5%) per annum, calculated from the due date until full payment is made, without
prejudice to the other rights of the Landlord under this Lease.

 

3.4

Free Minimum Rent

 

Notwithstanding the provisions of Section 3.1 hereabove, the months of July,
August and September 2003 shall be entirely free of Minimum Rent ((hereinafter
referred to as the “Free Rent Period”).

 

ARTICLE 4

 

ADDITIONAL RENT

 

4.1

Payment of Additional Rent

 

In addition to the Minimum Rent provided for in article 3 above, the Tenant
shall pay, as additional rent, his Proportional Share of Operating Costs and
Real Estate Tax as defined below in this article 4 (“Additional Rent”).

 

The Tenant hereby agrees that the Minimum Rent set out in article 3 above shall
be entirely net to the Landlord. The Landlord shall not be responsible for any
costs, taxes or expenses of whatever nature in relation to the Property and the
Leased Premises, their contents and the business transacted therein and the
Tenant shall pay all costs, taxes and expenses of whatever nature in relation to
the Leased Premises, including any that may be incurred or paid by the Landlord
for the Tenant as well as his Proportional Share of Operating Costs and Real
Estate Tax.

 

There shall be no duplication of costs and expenses included in the Additional
Rent at any time, and such costs shall include only expenses actually incurred
by the Landlord, during the Term, less recoveries of same.

 

4.2

Operating Costs

 

For the purposes of these presents, the term “Operating Costs” means all costs,
disbursements and expenditures of whatever nature related to operating,
maintaining, repairing, replacing, supervising and managing the Property and,
without limiting the general nature of the above, includes the following:

 

 

4.2.1

the salaries, wages and costs related to the benefits and pension plans of
whatever nature of the Landlord’s employees involved in operating, maintaining,
repairing, replacing, guarding, supervising and managing the Property;

 

 

4.2.2

the cost of all goods and services provided or used for operating, maintaining,
repairing, replacing, guarding, supervising and managing the Property, and for
which the latter are responsible;

 

 

4.2.3

the reasonable rental value, during each fiscal year, for the space occupied by
the Landlord’s employees and managers in charge of administering, supervising
and managing the Building, as well as any administrative services provided by
the Landlord, as well as any Building space required or used for providing
services related to safety, well-being, health, protection, and other similar
services, for the benefit of the Building and users in general;

 

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4.2.4

costs related to maintaining a guard service;

 

 

4.2.5

the audit, accounting and management costs incurred in relation to operating the
Property;

 

 

4.2.6

costs related to refitting, maintaining, repairing and decorating the common
elements of the Property, including cleaning windows and exterior walls,
removing snow, cleaning, repairing and maintaining the Land and contracts with
independent contractors;

 

 

4.2.7

the cost of all repairs to the Property, including major and structural repairs,
as well as replacement of equipment, apparatus, machinery or other asset of the
Property;

 

 

4.2.8

the cost of any alterations or improvements to the Property, including machinery
and equipment, as well as the cost of any alterations, additions to the
equipment and any specialized services needed to introduce energy saving
measures in the Building if, in the Landlord’s opinion, such expenditures would
reduce Operating Costs or improve the well-being or safety of the tenants or
other occupants of the Building or if the equipment, alterations, materials or
improvements are required by law;

 

 

4.2.9

the entire amortization of capital, calculated by the straight-line depreciation
method, on the basis of the useful life of the capital assets, or on the basis
of any other shorter period the Landlord may reasonably determine based on the
cost of all equipment, apparatus or machinery and the other assets required for
the purpose of operating, maintaining, repairing, guarding, supervising,
managing, altering and improving the Building, introducing energy saving
measures, which, in the Landlord’s opinion, have a useful life longer than one
fiscal year and whose cost was not entirely included in the Operating Costs for
the fiscal year they were acquired (according to generally accepted accounting
principles), as well as interest, at the prime rate, on the non-amortized
capital cost of such assets;

 

 

4.2.10

the cost of the energy required for lighting, humidifying, heating, ventilating
and air-conditioning the Leased Premises and the Building as well as any other
services in the Building requiring energy, except for the following costs:
ventilating and air-conditioning on the Leased Premises in excess of the hours
and/or standards set out in these presents and in case of Tenant’s special use;

 

 

4.2.11

the actual cost of all insurance policies the Landlord may take out in relation
to the Property as a prudent insurance practice or as required by the Landlord’s
creditors;

 

 

4.2.12

the portion of tax on capital the Landlord has allocated to the Property,
business and water taxes as well as any other taxes levied by fiscal authorities
that are not already included in the Real Estate Tax and that are not levied
directly on the Tenants by the fiscal authorities in question;

 

4.3

Real Estate Tax

 

The costs of all real estate and school taxes assessed or imposed, collected or
exacted by any competent authority in respect to the Property imposed on the
Landlord in respect to the same as well as any new tax to replace or to be
legally added to any tax currently imposed (the “Real Estate Tax”), but
excluding specifically:

 

 

4.3.1

any property transfer tax following a sale in whole or in part of the Property;

 

 

4.3.2

income tax on the profit of the Landlord or Landlord’s Business tax;

 

4.4

Proportional Share

 

The term “Proportional Share” means the ratio between the rentable floor area of
the Leased Premises and the rentable floor area of the Building. The parties
have set this ratio at eight dot seventy three percent (8.73%) for the time
being. This percentage may change if the rentable floor area of the Leased
Premises or the Building increases or decreases.

 

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4.5

Revised Proportional Share

 

Notwithstanding the preceding, if less than one hundred percent (100%) of the
Building’s rentable floor area is rented, the Landlord is authorized to allocate
fuel, electricity (except those billed to the Tenants), cleaning and cleaning
supply costs to the rented floor area only and the Tenant shall pay his
Proportional Share of such costs according to a ratio calculated by dividing his
rentable floor area by the rentable floor area of all the Leased Premises in the
Building. In no case will the Tenant be required to pay in respect of the
preceding an amount that would be greater than the amount the Tenant would have
paid if one hundred percent (100%) of the Building’s rentable floor area had
been rented and such costs had been included in Operating Costs.

 

4.6

Estimates of Operating Costs and Real Estate Tax

 

For the purposes of this article, the Landlord shall inform the Tenant, before
every fiscal year (ending on December 31 of each year) of the estimated amount
of his Proportional Share of Operating Costs and Real Estate Tax for the period,
and the monthly amount of the Additional Rent payments, pursuant to this
article, shall then be determined for the said fiscal year on the basis of this
estimate.

 

The Landlord has estimated Operating Costs for fiscal year 2003 at twelve
dollars and forty-eight cents per square foot ($12.48/ sq. ft.) per year.

 

4.7

Actual Operating Costs and Real Estate Tax

 

At the end of every fiscal year, the Landlord shall provide the Tenant with a
statement indicating the actual amount of Operating Costs and Real Estate Tax
for the Property for that fiscal year. If the amount determined by the Landlord
is more or less than the amount already paid by the Tenant to the Landlord,
appropriate adjustments shall be made within thirty (30) days after receipt of
the said statement. The findings of the Landlord’s auditors shall be conclusive
as regards the amount of these costs for the period in question. Any objections
regarding Operating Costs and Real Estate Tax shall be submitted to the Landlord
in writing within ninety (90) days of the billing date.

 

The Landlord shall promptly reply if the Tenant deems that the Operating Costs
or the Real Estate Tax have not been calculated according to generally
recognized accounting principles or in conformity with the stipulations
contained in the Lease. Notwithstanding Tenant’s right to question, it shall pay
upon demand any amount which is due and payable.

 

4.8

Revised Estimates of Operating Costs and Real Estate Tax

 

The Landlord may, from time to time in the course of a fiscal year, revise his
estimates of Operating Costs and Real Estate Tax and shall, in such a case,
notify the Tenant in writing of the revision and set monthly payments for the
remainder of the fiscal year such that, when the amounts the Tenant has already
paid pursuant to the previous estimate are credited to him, the Tenant’s
Proportional Share of Operating Costs and Real Estate Tax will be paid in full
in the course of all or part of the fiscal year in question.

 

4.9

Dispute

 

The Landlord shall not be required to undertake or pursue any dispute as regards
the Property assessment or the levying of Real Estate Tax by a fiscal authority,
whether by legal or other means. He may, at his sole discretion, without
notifying the Tenant and without his consent or approval, compromise, submit to
arbitration, consent to, discontinue or otherwise deal with any dispute
regarding the Property assessment or any present or future claims respecting
Real Estate Tax. The Tenant may not object, either in his own name or in the
Landlord’s name, to the Property assessment or the levying or payment of Real
Estate Tax.

 

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Any costs and expenses incurred by the Landlord in attempting to reduce the
assessed value of the Property or the Real Estate Tax shall be added to the
amount of the Real Estate Tax and shall be included in the Operating Costs. If
the Landlord receives a reimbursement as a result of his dispute, he shall, at
his discretion, either pay or credit to the Tenant his Proportional Share of
such a reimbursement.

 

4.10

Changes to the tax system

 

If the current property tax system is changed or, if instead or in addition to
the current Real Estate Tax on the Building, a new tax, fee or assessment is
levied on the Landlord or on the rental income from the Building, the term “Real
Estate Tax” shall include such new tax, fee or assessment. If at any time a
fiscal authority removes a tax, fee or assessment included in the Real Estate
Tax, the Landlord shall remove it from the Real Estate Tax.

 

4.11

Water Tax, Sales Tax

 

The Tenant shall pay, when due, all taxes, fees, impositions and costs other
than Real Estate Taxes, and in particular water tax, garbage collection tax and
any tax now or henceforth imposed on the business, improvements, equipment or
facilities in the Leased Premises, as well as any other tax, permit rights or
other imposition concerning the business transacted in the Leased Premises or
with respect to the use or occupation of the Leased Premises, as well as any tax
on goods and services, any sales tax and any tax now or henceforth applicable on
or with regards to the rents or other sums payable to the Landlord or for the
benefit of the Landlord in virtue of this Lease, irrespective of the person or
governmental authority concerned.

 

If by law, regulation or otherwise, water taxes or other similar rates and taxes
and taxes upon the Tenant’s fixtures, equipment, machinery or upon improvements
are made payable by landlords or proprietors or if the mode of collecting such
taxes and/or rates be so altered as to make Landlord liable therefore instead of
Tenant. Tenant shall repay to Landlord prior to the due date but in any event
within seven (7) days after demand upon Tenant the amount of the charge imposed
on the Landlord as a result of such change, and shall save the Landlord harmless
from any cost or expense in respect thereof.

 

4.12

Administrative Fees

 

Should the Landlord, at the Tenant’s request, give its consent the way it is
provided for in this Lease to a sub-lease, an assignment of lease or to an
amendment of same, it is understood and agreed that any understanding reached by
the parties shall be confirmed by a written agreement prepared by Landlord’s
attorneys at the Tenant’s costs. Such costs shall be considered as Additional
Rent and shall be paid by the Tenant upon Landlord’s request. No cost shall be
charged to the Tenant when it is exercising an option to renew that could be
provided for in this Lease.

 

4.13

Administration Fees

 

The Tenant shall pay administration fees equivalent to eight percent (8%) of the
Additional Rent as defined in this section 4.

 

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ARTICLE 5

 

SERVICES, COMMON AREAS AND FACILITIES

 

5.1

Description of Services

 

Provided that the Tenant is not in default under this Lease, the Landlord agrees
to supply the services indicated in subsections Subsection 5.1.1 to 5.1.5 to the
Tenant:

 

 

5.1.1

Electricity

 

At the Landlord’s expense (which costs shall be included in the Operating
Costs), the Landlord will make available in the Leased Premises electric power
subject to the Landlord’s capacity to obtain it and may also provide, at the
Tenant’s expense, other public utilities when necessary, such as water and gas.
The electricity and other utilities are provided in quantities for which the
Landlord, acting in a reasonable manner, establishes from time to time as a
normal consumption for tenants of the Building. The Tenant shall ensure not to
cause, in any circumstances, a surcharge of these utilities. The Tenant shall
not bring on the Leased Premises any equipment, device or machine which could
consume a large quantity of electricity or which requires special ventilation,
without the prior written consent of the Landlord, which consent cannot be
refused without reasonable motive.

 

The Tenant shall cover the expenses related to the acquisition and installation
of any check meter. Tenant shall provide and install, also at its own expense,
all cables and ducts necessary for its special equipment.

 

The Tenant undertakes to ensure that his consumption of electricity never
exceeds the capacity of the systems supplying the Leased Premises. The Landlord
shall have the right, at any time, to check the energy needs of the Leased
Premises and, if the needs exceed the capacity of the systems supplying the
Leased Premises, the Landlord may, at his discretion, take steps to increase the
capacity and costs incurred shall be borne by the Tenant, or the Landlord may
require the Tenant to reduce his energy consumption to bring it in line with
available capacity.

 

The Tenant shall assume all costs related to acquiring and installing any
meters. He shall also provide and install, at his expense, all cables and
conduits required for his special equipment.

 

In no event shall the cost for said electricity exceed what Tenant would have to
pay to Hydro-Québec or any succeeding company if electricity was directly
metered.

 

 

5.1.2

Heating and Air-Conditioning

 

The Landlord shall provide heating, ventilation and air-conditioning at a
comfort level acceptable to the Tenant during the Tenant’s Business Hours (as
defined hereinafter). Said comfort level shall be equivalent to that found in
other similar buildings and shall meet minimum standards promulgated by the
American Society of Heating, Refrigeration and Air-Conditioning Engineers Inc.
(A.S.H.R.A.E. 62-1989). The Tenant recognizes that the Building has been
designated for a maximum population of two hundred (200) per floor.

 

 

5.1.3.

Supplies, services and accessories

 

If the Landlord so decides, he shall be the only supplier of goods, accessories,
supplies and any other services or accessories such as lamps, bulbs, fluorescent
tubes, starters and ballasts. The Tenant shall pay the Landlord any sums due for
such goods, services, supplies and accessories, as Additional Rent, upon receipt
of an invoice at a rate comparable to the market rate.

 

If the Landlord decides not to provide the goods, services, supplies or
accessories set out in the previous paragraph, only persons authorized by the
Landlord may do so, at the times and pursuant to the directives established by
the Landlord to this effect.

 

 

5.1.4

Elevators

 

The Landlord shall provide and maintain in working order automatic passenger
elevators, which shall be in service during normal business hours. Outside these
periods, the Landlord shall keep only one elevator in service. The Landlord
shall not be required to provide attendants for these elevators and the fact of
doing so on occasion does not obligate the Landlord to continue the service.

 

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The Tenant shall share the escalators, as the case may be, and the elevators
with everyone else who has access to them.

 

Nevertheless, the Landlord shall not be in any way responsible for any damage
incurred by the Tenant, his employees, agents, representatives or visitors or
any other person using these escalators or elevators, or for any damage
resulting from their use.

 

 

5.1.5

Parking

 

 

a)

The Tenant shall have the option to lease from the Landlord’s parking operator,
in the Building’s adjacent parkade, a maximum of eleven (11) unreserved parking
spaces, at prevailing rental rates. The Tenant acknowledges that such rental
rates are subject to adjustments from time to time according to market
conditions;

 

Notwithstanding the above, the Landlord shall provide the availability of the
eleven (11) unreserved parking spaces for the first ninety (90) days following
the Commencement Date. Thereafter, and until the end of the ninth (9th) month
following the Commencement Date, the Landlord shall be obliged to provide only
up to eight (8) unreserved parking spaces. At the end of the ninth (9th) month
following the Commencement Date any parking not committed to by the Tenant or
given up by the Tenant shall be subject to their availability and Landlord shall
be under no obligation to provide same to Tenant.

 

 

b)

The rental for the parking space shall be payable by the Tenant to the
Landlord’s parking operator, in advance, on the first day of each month,
commencing on the Occupation Date, for the number of parking spaces leased by
the Tenant;

 

 

c)

The Tenant shall also be provided with one (1) parking space in the Building’s
parking garage at the rate charged for such parking within Building from time to
time.

 

5.2

Tenant’s Business Hours

 

The Tenant’s Business Hours are defined as being from Monday to Friday from 6:00
a.m. to 8:00 p.m. with the exception of legal Holidays in the Province of
Quebec.

 

5.3

Cleaning

 

The Landlord shall provide cleaning services for the Leased Premises that meet
the standards for similar office buildings. The Tenant shall give cleaners
access to the Leased Premises for these purposes, including the cleaning of
windows and draperies. The Tenant shall not tolerate the accumulation of useless
items or garbage on the Leased Premises. Without limiting the general nature of
the preceding and at all times during the Duration of this Lease, the Tenant
agrees, in operating his business, to comply with all of the Landlord’s rules,
regulations and directives regarding sanitation on the Leased Premises.

 

5.4

Use of common facilities and areas

 

The Tenant may use and enjoy the benefits of the common facilities and areas he
shares with all others who also have rights and access privileges.

 

The Landlord shall not be responsible for any damage incurred by the Tenant and
his managers, employees, agents, representatives or visitors or any other person
using the common facilities and areas, or for any damage resulting from their
use.

 

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5.5

Suspension of Services

 

The Landlord shall be entitled, without obligation or liability to the Tenant,
to suspend or to modify any service the Landlord is required to provide under
subsections 5.1.1 to 5.1.5 or any other provision of the Lease, for the time
necessary or for the time deemed reasonable by the Landlord, following an
accident or for the purpose of making repairs, replacements, alterations or
improvements, or for any reason beyond the Landlord’s control. The Landlord
shall incur no liability to the Tenant as a result of any failure to supply any
of these services, for any reason whatsoever, even in the event of fault or
negligence of the Landlord or of its employees and there shall be no reduction
of the Minimum Rent, Additional Rent or diminution of the Tenant’s obligations
as a result. The Landlord shall, however, to the extent possible, remedy such
failure with due diligence and dispatch.

 

5.6

Right of Entry

 

Should the Landlord deem necessary the passage of certain components of the
mechanical, electrical, heating and air-conditioning or plumbing systems through
the Leased Premises in order to serve the common areas and facilities or other
premises leased or intended for lease, the Tenant hereby authorizes the
Landlord, the Landlord’s representatives or contractors, to carry out such work
in the Leased Premises, without compensation or reduction of the Tenant’s
Minimum Rent, Additional Rent payable hereunder.

 

5.7

Demising Walls

 

Demising walls required between the Leased Premises and Common areas are
existing and meet Building standards.

 

ARTICLE 6

 

USE AND MAINTENANCE OF LEASED PREMISES

 

6.1

Use

 

The Leased Premises shall be used as office accommodation, training center and
electronic commerce customer contact center and for no other purposes.

 

The preceding section shall not be interpreted to restrict the Tenant’s right to
sublet the Leased Premises or to assign the Lease (as defined hereinafter), so
long as the intended use to Subtenant or Assignee is in keeping with what is
generally considered office accommodations and is not in contravention of any
existing exclusivities or rights of other tenants.

 

The Landlord represents and warrants that the use of the Leased Premises as
described above does not contravene any exclusive right previously given to any
other tenant of the Building.

 

During the Term, the Tenant shall not be obliged to physically occupy the Leased
Premises provided that it respects all the terms and conditions of the Lease
which are reconcilable with the non-occupation of the Leased Premises.

 

6.2

Expenses Related to Leased Premises

 

The Tenant shall assume and pay all expenses related to the use and maintenance
of the Leased Premises.

 

6.3

Condition of Leased Premises

 

The Tenant undertakes, at the Tenant’s expense, to keep and maintain in good
condition the Leased Premises, alterations, improvements, facilities, additions
and any other apparatus or equipment in use in the Leased Premises. The Tenant
undertakes to make use of the Leased Premises as a prudent administrator and to
effect, without delay and at the

 

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Tenant’s expense, all repairs necessary to keep and maintain the Leased Premises
in a good state of repair and in good condition, and at the expiration of the
Lease shall surrender the Leased Premises to the Landlord in the same condition,
except for reasonable wear and tear.

 

6.4

Garbage

 

The Tenant undertakes to maintain the Leased Premises in a sanitary condition,
free of refuse or garbage which could, by their presence, contribute to increase
the risk of fire, be a source of offensive odors or obstruct passages, public
spaces or other common areas and facilities. The Tenant shall place refuse and
garbage in suitable containers and in suitable places indicated by the Landlord.

 

6.5

Default by Tenant

 

Should the Tenant fail to keep and maintain the Leased Premises in a good state
of repair and in good condition, or to maintain the Leased Premises in a
sanitary condition, free of refuse as described above, and should the Tenant not
conform, within a reasonable period of time in the given circumstances, to a
notice to that effect given to the Tenant by the Landlord, the Landlord, and the
Landlord’s officers, employees, agents, contractors, workers and other
representatives, shall be entitled, without another prior notice, to enter the
Leased Premises and to carry out, at the Tenant’s expense, any repairs or other
necessary action. The amount of such expenses plus a fifteen percent (15%)
administration fee thereon shall be paid by the Tenant, as Additional Rent,
without prejudice to the Landlord’s other rights and recourses hereunder. The
Tenant hereby waives any claim against the Landlord or one of its
representatives as well as any compensation, indemnification, reduction of
Minimum Rent and Additional Rent and damages resulting directly or indirectly
from any act of the Landlord or the Landlord’s representatives under this
Article.

 

6.6

Window Panes

 

The Tenant shall, at Tenant’s expense, promptly replace any broken window pane
with a window pane of the same quality.

 

6.7

Nuisance

 

The Tenant shall not commit any act of a nature to be injurious to the rights of
the Landlord and of other tenants of the Landlord. The Tenant shall cease such
acts or activities upon receipt of a written notice from the Landlord to this
effect.

 

6.8

Movable Hypothec

 

N/A

 

6.9

Deposit

 

N/A

 

ARTICLE 7

 

ALTERATIONS, REPAIRS, IMPROVEMENTS,

MODIFICATIONS AND ADDITIONS

7.1

Landlord’s Work

 

Tenant recognizes that the Leased Premises are delivered on an “as is” basis
with Landlord performing only those modifications specifically enumerated in
Schedule “B” hereof.

 

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7.2

Tenant’s Work

 

Any and all other modifications or improvements to the Leased Premises other
than those described in Schedule “B”, including the Tenant’s work required to
enable it to occupy the Leased Premises and carry on its business therein (the
“Tenant’s Work”), shall be the responsibility of the Tenant who shall effect
them at its own expense. The Tenant’s Work and any other work which the Tenant
is required to perform shall be performed in the manner and in accordance with
the conditions set out in Schedule “C”, the whole subject to prior written
approval by the Landlord, in conformity with its general procedures stipulated
in Schedule “D” attached hereto.

 

All existing electrical, mechanical and plumbing plans related to the Base
Building and their revision(s) shall be provided by the Landlord at its costs.

 

The Construction Plans (hereinafter referred to as the “Construction Plans”) and
their specifications shall be carried out by a Architectural firm chosen by the
Tenant. The Construction Plans are subject to the Landlord’s written approval.

 

The Landlord agrees to give free access as of the ratification of the Offer to
Lease, the Landlord shall give free access to the Leased Premises to the
designers, coordinators, architects and the Tenant.

 

7.3

Tenant’s Contractors

 

The Tenant shall require its contractors and subcontractors to observe the rules
and regulations of the Landlord, and the work shall not conflict with any
collective agreement, decree or other contract to which the Landlord is bound.
If a contractor or subcontractor of the Tenant is not fully unionized, or causes
or, in the opinion of the Landlord, might cause difficulties in labor relations
in the Building, the Landlord shall be entitled to demand that such contractor
or subcontractor cease to work in the Building, and, upon written notice from
the Landlord, the Tenant shall agree not to permit the contractor or
subcontractor to perform any work in the Leased Premises.

 

7.4

Connections

 

Any connection to the electrical, plumbing, cold water pipes or air-conditioning
systems shall be considered a change within the meaning of this Article 7.

 

7.5

Insurance and Waiver of Hypothec

 

The Tenant shall demand of any contractor or subcontractor not to commence any
work whatsoever in the Leased Premises before submitting to the Landlord a
notice of waiver or an undertaking to release all legal hypothecs which may
exist or result from the work done or materials supplied. Should such notice or
undertaking not be furnished as required, the Landlord shall be entitled to
order the immediate cessation of any work in progress or to be performed by such
contractor or subcontractor in the Leased Premises or order that it cannot be
done.

 

Should, however, a legal hypothec or a notice be registered against the
Building, the Tenant shall without delay obtain the discharge thereof or
undertake the necessary steps or procedures to do same. Should said legal
hypothec or notice not be discharged within thirty (30) days of its
registration, the Tenant shall immediately deposit with the Landlord an amount
sufficient to cover the payment of such legal hypothec, capital, costs and
interest, including costs and expenses incurred by the Landlord in respect of
the legal hypothec. The Landlord shall be entitled, among other things, to
prevail itself of the provisions of section 2731 of the Civil Code of Quebec in
order to obtain the cancellation of the registration of the legal hypothec by
substituting the amount received from the Tenant.

 

Should the Tenant fail to deposit the required amount, the Landlord may pay to
the hypothecary creditor the amount claimed and obtain the discharge of the
legal hypothec, notwithstanding any dispute or proceedings undertaken by the
Tenant with regards thereto.

 

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The Tenant shall then repay to the Landlord such payment, capital, costs and
interest, upon demand, with interest at the prime lending rate of the Bank of
Montreal plus five percent (5%) per annum, calculated from the date of payment
by the Landlord. Any deposit made by the Tenant to the Landlord as described
hereinabove shall be held by the Landlord in trust until proof of the total
discharge of such legal hypothec has been delivered to the Landlord.

 

The Landlord shall also be entitled to require that any contractor or
subcontractor performing work in the Leased Premises take out an insurance
policy covering all public liability and property damage, of at least five
million dollars ($5,000,000.00) in respect of its activities in the Building.
All work necessary for the performance of repairs or improvements shall be
carried out at the times permitted by the Landlord, so as not to inconvenience
the other tenants of the Building.

 

7.6

Special Facilities

 

The Landlord shall be entitled to install and to maintain in the Leased Premises
anything that may be necessary, reasonable or desirable in the operation of the
Building or its utilization by any other tenant, without compensation or
indemnification in favor of the Tenant, provided that the Tenant’s enjoyment of
the Leased Premises is not unduly affected.

 

7.7

Removal of improvements

 

Upon the expiration or earlier termination of the Term or any renewal(s)
thereof, the Tenant shall not be obliged to remove any improvements made to the
Leased Premises by the Tenant or the Landlord, provided that such improvements
have been previously agreed to by the Landlord in writing and provided that it
leaves the Leased Premises in good order save for a normal wear and tear.

 

Any property which belongs to the Tenant or to any other person which is left in
the Leased Premises at the end of the Term shall be deemed to have been
abandoned in favor of the Landlord and the Landlord shall, at its discretion,
dispose of such property without owing any compensation or indemnity whatsoever.

 

7.8

Supervision Fees

 

There shall be no administration fees or any other coordination fees for the
supervision of the initial build-out of the Leased Premises. As for the other
improvements done to the Leased Premises, the Landlord’s fees shall not exceed
fifteen percent (15%) of the total cost of said improvements and shall not be
payable for the following work:

 

 

7.8.1

paint and wall covering;

 

 

7.8.2

installation of carpets.

 

ARTICLE 8

 

INSURANCE

8.1

Tenant’s Insurance

 

The Tenant shall, at its own expense and throughout the Term of the Lease, keep
in force the following insurance policies, the terms and conditions of which
must be acceptable to the Landlord:

 

 

8.1.1

“all risks” insurance upon all property owned by the Tenant or installed by or
on behalf of the Tenant which is located in the Building including, without
limitation, the leasehold improvements, trade fixtures, furniture, heating,
ventilating, air conditioning equipment and miscellaneous electrical apparatus
owned or operated by the Tenant in the Leased Premises, or relating to or
serving the Leased Premises in an amount not less than the replacement cost
thereof;

 

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8.1.2

comprehensive general liability insurance against claims for bodily injury
(including death), personal injury and property damage in or about the Leased
Premises in amounts satisfactory from time to time to the Landlord acting
reasonably but in any event in an amount not less than five million dollars
($5,000,000.00) per occurrence;

 

 

8.1.3

N/A

 

 

8.1.4

“all risks” tenants’ legal liability insurance in an amount which the Landlord
may from time to time reasonably require including the loss of the use of the
Leased Premises;

 

 

8.1.5

plate-glass insurance; and

 

 

8.1.6

any other insurance which may be reasonably required from time to time by the
Landlord or any hypothecary creditor in a form and for amounts and covered risks
which are acceptable to the Landlord or any hypothecary creditor.

 

8.2

Increase of Risk

 

The Tenant shall not commit any act, do any thing or keep in or about the Leased
Premises anything that may increase risk of fire or increase premium rates for
the Building. The Tenant shall observe the rules and conform to the requirements
of the Landlord’s insurers or of any associations of insurers having
jurisdiction, for all insurance covering or related to the Building. In no case
may the Tenant bring into or keep in the Leased Premises any explosives or
inflammable materials, except for the normal purposes of the Tenant’s occupancy
in the Leased Premises.

 

In the event of any increase of insurance premiums of the Landlord for any of
the insurance policies covering or pertaining to the Building, following any
violation of the provisions of the Lease by the Tenant, the Landlord, in
addition to any other recourse, shall pay the increase in premiums and the
Tenant shall be bound to reimburse such increase promptly upon receipt of a
statement of account.

 

8.3

No Subrogation

 

All insurance policies taken out by the Tenant shall provide that the Landlord
is a “named insured” and shall contain a waiver of any subrogation rights which
the Tenant’s insurers may have against the Landlord, its employees or agents,
and a commitment from his insurers to notify the Landlord in writing of any
cancellation (including a non-renewal) or of any significant modification in the
provisions of the insurance policy at least thirty (30) days in advance.

 

8.4

Choice of Insurer

 

Any insurance required under this Lease shall be established by valid,
enforceable insurance policies issued by recognized insurers acceptable to the
Landlord and holding a permit entitling them to conduct business in the province
of Quebec.

 

8.5

Certificates of Insurance

 

Immediately following their respective issuance, the Tenant shall furnish the
Landlord with the certificates attesting to the issuance and maintenance in
force of all insurance policies required hereunder.

 

If the Tenant neglects to insure or to furnish the Landlord with the said
certificates as required hereinabove, the Landlord may, after having given the
Tenant ten (10) days notice in writing, itself subscribe for the required
insurance policies, in its own name, in the name of the Tenant, or in the name
of both parties, for a period not exceeding the Term of the Lease and all
premiums paid by the Landlord shall be reimbursed by the Tenant as Additional
Rent upon its receipt of an invoice therefore.

 

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ARTICLE 9

 

ACCESS BY LANDLORD TO LEASED PREMISES

 

9.1

Inspection and Repairs

 

The Landlord shall have access to the Leased Premises at any time, without
liability toward the Tenant, to examine and verify the Leased Premises or for
the purpose of making therein any repairs, replacements, alterations or
improvements the Landlord deems necessary or desirable for the operation and
proper maintenance of the Building or the electrical and mechanical systems of
the Building, subject to the provisions of this Lease.

 

9.2

Visiting the Leased Premises

 

During the final twelve (12) months of the Term of this Lease, the Tenant shall
permit the Landlord or any other person designated by the Landlord to visit the
Leased Premises, during normal business hours. The Tenant shall also permit the
Landlord, at any time during normal business hours, to show the Leased Premises
to any broker, purchaser or assessor of the Building.

 

ARTICLE 10

 

DAMAGE AND DESTRUCTION

 

10.1

Destruction of Leased Premises

 

Should the Leased Premises be destroyed or damaged by fire or other casualty
insured against by the Landlord, then:

 

 

10.1.1

if the Landlord is of the opinion that the damage or destruction is such that
the Leased Premises are rendered wholly unfit for occupancy, or it is impossible
or hazardous to use and occupy them, and if in either event the Landlord is of
the opinion (which the Landlord shall signify to the Tenant in writing within
thirty (30) days following the damage or destruction) that the damage cannot be
repaired with reasonable diligence within one hundred and eighty (180) days
following the occurrence of the damage or destruction, either party may, within
five (5) days following the receipt of this notice, terminate the Lease by
written notice to that effect, in which case the Lease shall terminate on the
day of the damage or destruction, and the Minimum Rent and Additional Rent and
all other amounts payable by the Tenant under the Lease shall be calculated and
paid in full up to the date of the damage or destruction. In the event that
neither the Landlord nor the Tenant terminates this Lease, the Minimum Rent and
Additional Rent shall abate from the date of the damage until the date on which
the Leased Premises have been repaired to the extent of enabling Tenant to use
and occupy the Leased Premises;

 

 

10.1.2

if the damage be such as to render the Leased Premises wholly unfit for
occupancy, or if it is impossible or unsafe to use or occupy them, but if, in
either case, the Landlord is of the opinion (which the Landlord shall signify to
the Tenant in writing within thirty (30) days following the damage) that the
damage can be repaired with reasonable diligence within one hundred and eighty
(180) days following the occurrence of the damage, the Minimum Rent and
Additional Rent shall abate from the date of the damage until the date on which
the Leased Premises have been repaired to the extent of enabling Tenant to use
and occupy the Leased Premises;

 

 

10.1.3

if the Landlord is of the opinion that the damage can be repaired as described
above within one hundred and eighty (180) days following the occurrence of the
damage, and that the nature of the damage is such as to render the Leased
Premises only partially fit for occupancy for the purpose for which they were
leased, the

 

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Minimum Rent and Additional Rent shall be reduced in the proportion that the
part of the Leased Premises rendered unfit for occupancy bears to the whole of
the Leased Premises, until the damage has been repaired.

 

10.2

Destruction of Building

 

Should the Building be partially destroyed or damaged so that twenty percent
(20%) or more of the leasable area of the Building is affected, or if the
Landlord is of the opinion that the Building is rendered unsafe, whether or not
the Leased Premises are affected and if the Landlord is of the opinion (which
the Landlord shall signify to the Tenant in writing within thirty (30) days
following the damage or destruction) that the damage or destruction cannot be
repaired with reasonable diligence within one hundred and eighty (180) days of
the occurrence of the damage or destruction, the Landlord may, within five (5)
days following the receipt of the above-mentioned notice, terminate the Lease by
written notice to the Tenant to that effect, in which case this Lease shall
terminate on the date of the damage or destruction, and the Minimum Rent and
Additional Rent and all other amounts payable by the Tenant under the Lease
shall be calculated and paid in full up to the date of the damage or
destruction.

 

10.3

Proceeds of Insurance

 

In the event of a termination of this Lease as described above, all proceeds of
insurance policies, except for those amounts pertaining to the Tenant’s
property, and to the extent that the Tenant is not indebted to the Landlord
under this Lease, shall be and remain the sole property of the Landlord.

 

10.4

No Obligation to Rebuild

 

No provision of this Lease shall oblige the Landlord to repair or rebuild the
Tenant’s alterations, improvements or other property. Despite anything contained
in this Lease to the contrary, and without limiting Landlord’s right or remedies
hereunder, if damage or destruction is such that, for any reason, the proceeds
of insurance are insufficient to permit the repair, replacement, reconstruction
or restoration, according to what is provided herein above, or if any
hypothecary creditor or any person entitled to the proceeds of insurance does
not consent to the use of such proceeds for such repair, replacement,
reconstruction or restoration of the Leased Premises or of the Building, or if
such damage or destruction is caused by any fault or neglect of Tenant, or those
for whom Tenant is legally responsible, or the Term of the Lease which remains
is less than twenty-four (24) months, then Landlord may terminate this Lease on
one hundred and eighty (180) days written notice to Tenant, and all rents shall
be adjusted as of the first day following the date of such damage or
destruction.

 

10.5

Destruction Caused by Tenant

 

If any damage or destruction caused to the Building or the Leased Premises,
either partially or totally, by fire or other casualty, is due to the fault or
negligence of the Tenant or the Tenant’s officers, agents, employees, visitors
or authorized persons, in such case, without prejudice to the Landlord’s other
rights and recourses or to any subrogation rights of the Landlord’s insurer:

 

 

10.5.1

the Tenant shall be liable for all costs and damages;

 

 

10.5.2

the damages may be repaired by the Landlord, at the Tenant’s expense;

 

 

10.5.3

the Tenant shall forfeit its right to terminate the Lease as provided for under
subsection 11.1.1; and

 

 

10.5.4

the Tenant shall not be entitled to any abatement or postponement of the Minimum
Rent or And Additional Rent in virtue of this Article.

 

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ARTICLE 11

 

EXPROPRIATION

 

11.1

Termination of Lease

 

In the event the whole or any part of the Building shall be expropriated or
taken possession of by any competent authority, so that it is no longer feasible
for the Landlord, in its opinion, to continue to operate the Building or the
Leased Premises, the Landlord may terminate the Lease from the date of said
expropriation or taking of possession, by notifying the Tenant in writing to
this effect, and the Landlord shall have no liability toward the Tenant for any
reason whatsoever.

 

11.2

No Obligation to Contest

 

The Landlord and the Tenant hereby reserve all their rights to claim future
damages against the expropriating authority. The Tenant acknowledges that the
Landlord shall have no obligation to contest any expropriation proceedings.

 

ARTICLE 12

 

DAMAGES

 

12.1

Non-Liability of Landlord

 

The Landlord shall not be liable for any material or bodily damage occurring in
the Leased Premises or in the Building at any time and for any reason whatsoever
except that which results directly from its gross fault or gross negligence. The
Landlord shall not be liable for any physical damage or damages to property
occurring in the Leased Premises or in the Building at any time and the Tenant
shall not be entitled to any abatement or postponement of rent nor shall the
Tenant have any recourse against the Landlord for reason of partial or total
interruption of services or for damages resulting from the reduction or
interruption of heating, air-conditioning, electricity for lighting or for
operating equipment, water, plumbing, sewers, elevators or of any other service,
nor in case of damages or inconveniences resulting from the penetration or
presence of water, snow or ice on the roof, skylights, traps, windows or
otherwise, nor from a defect or rupture of any pipes, reservoirs, permanently
attached moveables or other apparatus causing leaking, infiltration or discharge
of vapor, water, snow, smoke or gas in the Leased Premises, nor in case of
damages or inconveniences resulting from the state or layout of electrical wires
or otherwise, or resulting from any act, omission or negligence of co-tenants or
other occupants of the Building or of the owners or occupants of adjacent or
adjoining properties, or attributable to the execution of major repairs,
changes, improvements or transformations of the structure of the Building or of
any item or any service, within or adjoining the Building, provided the work is
done with reasonable diligence if this condition, damage, event or interruption
of service is not directly or indirectly attributable to the Tenant. In
addition, the Tenant undertakes to indemnify and save harmless the Landlord
against any claim brought by anyone arising out of such damage.

 

Furthermore, and without limiting the generality of the above, the Tenant agrees
that the Landlord, the owners of the Queen Elizabeth Hotel, 800 René-Lévesque,
Place Ville-Marie and the access tunnels to the Property as well as the
operators and owners of the trains and railway lines using the Building shall
not be liable for any damages or inconveniences caused to the Tenant, its
agents, employees and clients caused by:

 

 

12.1.1

fire, smoke, water infiltration, flooding, odors or air displacements which can
be caused by the operation of the Building;

 

 

12.1.2

disturbances or interruptions in the upkeep or functioning of the heating,
ventilating and air-conditioning of the Building or the temporary or permanent
interruption of train services or the change in the hours of service of such
trains or

 

16

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the diminishing number of users of the said train services or of any damages
attributable to the Landlord or the owners of the Queen Elizabeth Hotel, 800
René-Lévesque, Place Ville-Marie or the owners or users of the trains and
railway lines in the Building.

 

12.2

Limited Liability

 

Notwithstanding the above paragraph, the Landlord’s liability, if any, shall
extend only to the ordinary furnishings, furniture and fixtures in the Leased
Premises, and in no case shall this liability extend to any indirect damages nor
to any securities, cash, documents, electrical or electronic calculators,
computers, cash registers or other similar machines or equipment.

 

12.3

No Reduction of the Rent

 

The Tenant acknowledges that it shall not be entitled to any abatement or
reduction of the Minimum Rent or Additional Rent, nor to any right to terminate
the Lease, nor to any indemnity from an amount of rent payable hereunder, save
as specifically set out in Article 11 hereto.

 

12.4

Notice of Defect

 

The Tenant shall notify the Landlord without delay of any accident, defect or
fault in the pipes for water or gas, heating or air-conditioning equipment,
lighting or electrical conduits, elevators, electrical wiring or other services
in the Leased Premises or in the Building.

 

ARTICLE 13

 

SIGNS AND ADVERTISING

 

13.1

Consent of Landlord

 

The Tenant may not expose, display, attach or distribute any notice,
advertising, printed matter, sign or other inscription outside the Leased
Premises, or in the Leased Premises in such a manner as to be visible from
outside the Leased Premises, without first obtaining the prior written consent
of the Landlord, failing which the Landlord shall be entitled to demand that the
Tenant remove them, and the Tenant shall comply with such notification within a
maximum of twenty-four (24) hours. Should the Tenant not comply with the
Landlord’s written request, the Landlord shall be entitled to remove, at the
Tenant’s expense, any such notice, advertising, printed matter, sign or
inscription, without recourse by the Tenant against the Landlord.

 

13.2

Injurious Advertising

 

The Tenant shall not publish any advertisement injurious to the reputation of
the Building, the Landlord or another tenant of the Landlord, and upon receipt
of written notice from the Landlord to that effect shall immediately cease any
such advertising.

 

13.3

Identification

 

The Landlord shall, at no cost to the Tenant, provide and post the Tenant’s
corporate designation, onto the Building directory board(s), in the elevator
lobbies, on the Tenant’s floor as well as in the entrance of the Leased
Premises, the whole according to the Building standards.

 

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ARTICLE 14

 

COMPLIANCE WITH LAWS AND INDEMNIFICATION

 

14.1

Compliance with Laws

 

The Tenant shall, at its own expense and without delay, comply with the
requirements of all laws, regulations, ordinances, orders and by-laws in effect
for the City of Montreal, the Montreal Urban Community, the provincial and
federal governments and each of their respective departments, commissions and
agencies, as the case may be, and any other governmental authority having
jurisdiction over the Leased Premises, the occupancy of said Leased Premises by
the Tenant, or the conduct of the Tenant’s business in the Leased Premises. The
Tenant shall further waive any claim for reduction of the Minimum Rent and
Additional Rent or for any damage the Tenant may suffer by reason of the
application to the Tenant of such legislative or regulatory provisions.

 

Without limiting the generality of the foregoing, the Tenant shall carry out all
alterations or changes to the Leased Premises or to the Tenant’s conduct of
business in or utilization of the Leased Premises which may be required by the
above-mentioned authorities, and prior to effecting such alterations or changes
shall submit to the Landlord plans and specifications for the Landlord’s written
approval.

 

Should the Tenant fail to effect within the required time the alterations or
changes required by the authorities having jurisdiction, the Landlord, following
written notice to the Tenant, requiring the Tenant to carry out the required
work within a reasonable period of time, may effect said work and shall
immediately be entitled to claim repayment from the Tenant.

 

14.2

Indemnification of Landlord

 

The Tenant agrees to indemnify the Landlord and to save it harmless against any
fine, penalty, indictment or damage whatsoever resulting from any violation by
the Tenant or the Tenant’s employees, agents or mandatories of the laws,
ordinances or regulations in force. The Tenant also agrees to indemnify the
Landlord and save it harmless against any damage and/or any expense resulting
from any failure by the Tenant to comply with any of the requirements or
provisions of the Lease and shall reimburse Landlord of all expenses, including
legal fees, that the Landlord shall have incurred in order to enforce its rights
and recourses.

 

In addition, the Tenant agrees to exonerate and indemnify the Landlord regarding
any damages to property or physical damages incurred by any person and of all
fees resulting from any accident or other event occurring on the Leased Premises
or in the Building, except if the negligence of the Landlord is the direct cause
thereof.

 

ARTICLE 15

 

SUBLET AND ASSIGNMENT

 

15.1

Consent of Landlord

 

The Tenant shall not at any time have the right to sell, give or otherwise
assign the Lease, nor sublet the Leased Premises or any part thereof, directly
or indirectly, or allow the Leased Premises or any part thereof to be used by
another, without prior written consent of the Landlord, which consent shall not
be unreasonably withheld.

 

Notwithstanding the foregoing and as from the execution of this Lease, the
Tenant may, without the Landlord’s consent, assign the Lease or sublet the
Leased Premises in whole or in part to any affiliated company or partnership,
including the Tenant’s Canadian subsidiary to be created, and to any company or
partnership with which the Tenant has merged or has split provided that the
Tenant notifies the Landlord in writing, remains jointly and severally
responsible for the fulfillment of the Lease obligations and execute an Lease
Amending Agreement to that effect.

 

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15.2

Presumed Subletting and Assignment

 

Any of the following shall be deemed to be a subletting or assignment of Lease:

 

 

15.2.1

any transfer, sale or issuance involving, in all, fifty percent (50%) or more of
the voting shares of the share capital which are not listed on any recognized
stock exchange;

 

 

15.2.2

any transfer, sale or assignment involving, in all fifty percent (50%) or more
of the interest in the partnership, where the Tenant is a partnership;

 

 

15.2.3

the exercising of a right of occupancy, management or control with respect to
the whole or to any part of the Leased Premises, or with respect to the business
conducted therein, by any person other than the Tenant, whether or not said
person is directly under the control or supervision of the Tenant; and

 

 

15.2.4

the acquisition or exercise of effective control of the Tenant’s business by any
other person not having such effective control on the date of signature of the
Lease.

 

15.3

Justified Withholding of Consent

 

The refusal by the Landlord shall be deemed serious and reasonable and shall be
justified in withholding consent in the following cases (without in any way
restricting the Landlord’s right to refuse its consent on other reasonable or
serious grounds):

 

 

15.3.1

where the intended use of the Leased Premises by the proposed assignee or
subtenant conflicts with exclusive rights granted to other tenants or occupants
of the Building; or

 

 

15.3.2

where the proposed assignee or subtenant does not intend to honestly physically
occupy and carry on business from the Leased Premises or when the proposed
assignment or sublease is made prior to the Tenant physically and honestly
occupying and carrying on business from the Leased Premises.

 

15.4

Offer to Landlord

 

Before assigning this Lease or before subletting the whole or any part of the
Leased Premises, the Tenant shall fulfill and observe the following conditions:

 

 

15.4.1

the Tenant shall offer to sublet or to assign, as the case may be, the Leased
Premises to the Landlord, on the same terms and conditions as those in the offer
to sublease or assign;

 

 

15.4.2

the Tenant shall inform the Landlord of the name and address of the proposed
assignee or subtenant and of the precise conditions of the proposed assignment
or subletting; and

 

 

15.4.3

the Tenant shall provide the Landlord with the nature of the business and credit
references relating to the proposed assignee or subtenant as well as the
pertinent details of the assignment or subletting, which the Landlord deems
necessary.

 

The Landlord shall have a period of ten (10) days following receipt of a notice
from the tenant complying with the conditions stated above, to accept or refuse
the offer of assignment or subletting by the Tenant or to cancel this Lease with
respect to the Leased Premises affected by the subletting or the assignment as
of the effective commencement date of such offer to sublet or assign. Failure to
reply within the stipulated delay shall not be deemed a consent by the Landlord
of Tenant’s request pursuant to this section.

 

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15.5

Time Limit for Subletting and Assignment

 

Should the Tenant not sublet or assign the Leased Premises or any part of the
Leased Premises within sixty (60) days after obtaining the authorization of the
Landlord, such authorization shall from that time be considered null and of no
further legal effect, and in such case the Tenant may not sublet or assign the
Leased Premises without once again complying with all provisions of this
Article.

 

15.6

New Lease

 

The Landlord, rather than give its authorization for a subletting or an
assignment of the Lease within the period of thirty (30) days described in
section 15.4, shall be entitled to require the proposed subtenant or assignee to
sign a new lease according to and on the same terms and conditions as contained
in the offer to sublet or assign, and in such case the Tenant agrees and
undertakes to guarantee to the Landlord the performance of all obligations of
such subtenant or assignee under the new lease.

 

15.7

Solidarity

 

Notwithstanding any sublease or assignment or the signature of a new lease as
provided in section 15.6, the Tenant shall remain solidarily liable of the
execution of the obligations found in this Lease and, by the assignment,
subletting or new lease, any assignee or sub-tenant or new tenant shall take on
the performance of Tenant’s obligations to Landlord. The mere assignment,
subletting or signature of a new lease shall render the Tenant and any assignee,
subtenant or new tenant solidarily liable to the Landlord of the execution of
all the obligations found in the Lease.

 

15.8

Approval of Advertising

 

The Tenant may not advertise its intention, nor assign the Lease or sublet the
Leased Premises, and may not authorize a real estate broker or other person to
do so, without the prior written consent of the Landlord. In particular, no
advertisement shall indicate in any manner the rental rate applicable to the
Leased Premises.

 

ARTICLE 16

 

SUBORDINATION AND ATTORNMENT

 

16.1

Assignment by Landlord

 

In the event of the sale, lease or other transfer of the Building or any part of
the Building by the Landlord, or the assignment by the Landlord of this Lease or
any interest of the Landlord hereunder, to the extent that the purchaser, tenant
or assignee takes on the obligations of the Landlord hereunder, the Landlord
shall, thereupon and without further agreement, be freed of all liability with
respect to such obligations.

 

16.2

Status Statement

 

Within ten (10) days following the Landlord’s written request thereof, the
Tenant shall execute and deliver to the Landlord or to any other person
designated by the Landlord a statement on the status of the Lease.

 

16.3

Subordination

 

All of the Tenant’s rights under this Lease shall be subject and subordinate to
the rights of any hypothecary creditor or other holder of any real charge
against the Building or any other assignee of the Landlord’s rights under this
Lease, and the Tenant shall attorn to any such hypothecary creditor or assignee
as if such hypothecary creditor or assignee were the Landlord under this Lease,
as an essential condition of this Lease. The Landlord undertakes to make such
reasonable efforts to see that such subordination or attornment shall not have
the effect of infringing the Tenant’s right to enjoyment of the Leased Premises
under this Lease, for as long as the Tenant is not in default hereunder.

 

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16.4

Signature of Documents

 

The Tenant agrees to execute and sign any act or document deemed necessary or
desirable by the Landlord in order to subordinate the Lease to any hypothec,
trust indenture or other charge, at the Landlord’s expense. The Tenant hereby
irrevocably constitutes and appoints the Landlord as the Tenant’s authorized
agent for the purposes of executing and signing any document under this Article
17 for and on behalf of the Tenant.

 

ARTICLE 17

 

DEFAULT AND RECOURSE

 

17.1

Events of Default

 

The Tenant shall be in default hereunder in the following events:

 

 

17.1.1

if the Tenant fails to pay to the Landlord when due any payment of Minimum Rent
and Additional Rent;

 

 

17.1.2

if the Tenant or the Guarantor or any other person occupying the Leased Premises
in whole or in part becomes insolvent, or makes any assignment of property for
the benefit of creditors; if the Tenant is placed in bankruptcy or liquidation,
or takes advantage of any legislation relating to bankruptcy or insolvency, or
attempts to do so, if a receiver or a trustee in bankruptcy is appointed for the
Tenant’s property or any part of such property, or if a writ of execution or
seizure is issued against the Tenant;

 

 

17.1.3

if the Tenant’s property is transferred, transmitted or otherwise passed on to
any other person or firm, by mutual agreement or by operation of law, except
where such person or firm has, in writing, assumed this Lease toward the
Landlord;

 

 

17.1.4

if the Tenant assigns the Lease or sublets the Leased Premises or permits the
occupation thereof otherwise than in accordance with the provisions of the
Lease;

 

 

17.1.5

if the Tenant fails to carry on its business in a continuous manner in the
Leased Premises, as Tenant is bound to do so in accordance with section 6.1 of
the Lease;

 

 

17.1.6

if the Guarantor sets forth a right to terminate his Guarantee;

 

 

17.1.7

if the Tenant fails to take possession of the Leased Premises upon delivery, or,
after taking possession, leaves the Leased Premises unoccupied or vacant for a
period of five (5) consecutive days, or abandons the Leased Premises for any
reason whatsoever, or if said Leased Premises are occupied by any person or firm
not so authorized under this Lease;

 

 

17.1.8

if the Tenant alters or modifies the use of the Leased Premises;

 

 

17.1.9

if measures are taken or proceedings instituted for the dissolution or
liquidation of the Tenant or any of its property;

 

 

17.10

if the Tenant is in default in fulfilling any other term, condition or
obligation of this Lease.

 

17.2

Resiliation of Lease

 

With the exception of events of default described in subsection 17.1.2 above
where termination of the Lease is automatic, in the event of any default by the
Tenant as defined in this Article 17, the Landlord may give the Tenant written
notice of the Landlord’s intentions to terminate the Lease, and the Term of the
Lease shall end automatically on (unless such default is cured within the
hereinafter delays):

 

 

(i)

the tenth (10th) day after this notice, in the case of default of any provisions
relating to the payment of any amount of money, or

 

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(ii)

the sixteenth (16th) day after the notice, in all other events of default;

 

this termination shall have the same effect and the same force as if it occurred
on the date of expiration of the Term of the Lease, without any legal action
being required and subject in all cases to the Tenant’s obligation to pay to the
Landlord all amounts due to the Landlord and all damages resulting from the
default.

 

The Tenant hereby irrevocably waives his right to resiliate this Lease pursuant
to subsection 65.2 of the Bankruptcy and Insolvency Act or any section passed to
amend or replace such provision.

 

17.3

Waiver of section 1 883 C. c. Q.

 

The Tenant expressly waives the benefit of section 1 883 of the Civil Code of
Quebec which shall not apply to this Lease.

 

17.4

Return of Leased Premises

 

In the event of termination of the Lease under the provisions of this Article
18, the Tenant shall immediately return the Leased Premises to the Landlord, or,
if the Tenant has not yet taken possession thereof, the Tenant shall abandon its
rights to possession thereof, and the Landlord or the Landlord’s agents and
employees may, immediately or at any time thereafter, enter the Leased Premises
and evict the Tenant as well as any other person and all property contained
therein, and may padlock the Leased Premises or change the locks therein,
without being required to take legal action, and without liability of the
Landlord for any damages caused to the Tenant.

 

Should the Tenant leave any property or movable effects in the Leased Premises,
the Landlord shall immediately, without any notice to the owner of said property
or movable effects being required, become the owner of such property or movable
effects. The Tenant shall not be entitled to any damages, whether contractual or
extra contractual or otherwise, and shall indemnify and hold harmless the
Landlord of any claims or actions in connection with said property and movable
effects from whomsoever.

 

17.5

Damages

 

In the event of termination of the Lease under the provisions of this Article
18, the Landlord shall immediately be entitled to payment of all rent in arrears
together with the equivalent of the Minimum Rent and Additional Rent payable on
a monthly basis for the current month plus the next ensuing six (6) months; the
Landlord may claim immediate payment of this amount and of any other amount past
due, and any other amount owed by the Tenant to the Landlord at that time,
subject to the Landlord’s rights and recourses.

 

Should termination of the Lease result from the Tenant’s bankruptcy or
insolvency or be based upon such bankruptcy or insolvency, the Landlord may, in
addition to the other rights and recourses available to it, require payment of
the equivalent of the Minimum Rent and Additional Rent for the three (3) months
preceding the bankruptcy and for the three (3) months after the bankruptcy.

 

17.6

Waiver

 

Should the Tenant fail to fulfill any of its obligations hereunder, and should
the Landlord have begun proceedings to cancel or to terminate this Lease or to
have the cancellation or

 

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the termination of the Lease confirmed, then notwithstanding any law, usage or
custom to the contrary, Tenant may not hinder or prevent such cancellation or
termination, by curing the default, once said legal proceedings have been taken
or measures applied. In particular, the Tenant may not avoid the resiliation of
the Lease once legal proceedings have been instituted by the Landlord by paying
any amount due to the Landlord.

 

17.7

Re-Letting of Leased Premises

 

If the Landlord does not exercise the option to terminate this Lease in
accordance with this Article, the Landlord may, at its option, without
additional notice to the Tenant and without terminating this Lease, as mandatary
of the Tenant, take possession of the Leased Premises and of all property
contained therein, and sublet all or any part of the Leased Premises and any
improvements, fixtures and accessories contained therein, upon such terms and
conditions as the Landlord deems appropriate. The Tenant shall hereby provide
the Landlord with an irrevocable mandate to carry out the preceding. In such
case, the Tenant shall continue to be liable for the performance of all of the
Tenant’s obligations under this Lease, including payment of the Minimum Rent and
Additional Rent and other amounts payable hereunder. The Landlord shall be
entitled to apply all of the Tenant’s obligations to the new subtenant, and to
collect and receive the Minimum Rent and Additional Rent and all other amounts
payable by said subtenant, and to apply these amounts to any indebtedness of the
Tenant to the Landlord from time to time. Any deficiencies shall be paid by the
Tenant upon request of the Landlord.

 

17.8

Indemnity

 

Should the Landlord be required to retain the services of legal counsel in order
to demand the performance by the Tenant of any of the Tenant’s obligations under
this Lease, the Tenant shall pay to the Landlord, upon demand, in addition to
the reasonable legal costs for which the Tenant would otherwise be indebted,
whether or not legal action is taken, an indemnity equal to fifteen percent
(15%) of the amount for which the Tenant would otherwise be indebted to the
Landlord, and this amount shall serve to defray the additional administrative
expenses incurred by the Landlord in obtaining the performance of the Tenant’s
obligations hereunder.

 

17.9

Landlord’s Right to Cure Default

 

Should the Tenant default in the performance of any of the obligations under
this Lease, the Landlord may perform such obligation on behalf of the Tenant,
and, if necessary, enter the Leased Premises without notifying the Tenant. The
Tenant shall pay to the Landlord, upon request, the amount of all reasonable
costs and expenses incurred by the Landlord with regard to the default or in
curing or attempting to cure the default, together with a fifteen percent (15%)
administration fee thereon.

 

17.10

Absence of Waiver

 

No indulgence or oversight on the part of either of the parties with respect to
a default by the other party in the performance of any of its obligations under
this Lease shall be considered to be a waiver of the Landlord’s rights or of the
Tenant’s rights hereunder with regard to the default or to any subsequent
default; neither shall it affect or modify in any manner whatsoever the
Landlord’s rights or the Tenant’s rights hereunder with regard to the subsequent
default; and no waiver may be inferred from any act or omission by the Landlord
or by the Tenant, unless the waiver is in writing.

 

17.11

Remedies Generally

 

Mention in this Lease of any particular remedy or remedies of the Landlord in
respect of any default by the Tenant shall not preclude the Landlord from any
other remedy in respect thereof, whether provided herein or available in law. No
remedy shall be exclusive or dependent upon any other remedy, such remedies
being cumulative and not alternative.

 

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ARTICLE 18

 

NOTICES

 

18.1

Procedure and Addresses

 

Any notice given under this Agreement shall be in writing and shall be
hand-delivered, sent by registered mail or by facsimile transmission, to the
respective parties as follows:

 

 

18.1.1

If to the Tenant:

 

PC MALL CANADA INC.

1100 University, 2nd Floor

Montreal (Quebec)

 

Attention: Kris Rogers, President

 

Telecopier: (310)353 7435

 

 

18.1.2

If to the Landlord:

 

CANAPREV INC.

935 de la Gauchetière Street West, 8th floor,

Montreal (Quebec),

Canada, H3B 2M9

 

Attention: President

 

Telecopier: (514) 399-7703

 

 

18.1.3

If to the Guarantor:

 

PC MALL INC

Torrance, CA, USA, ,

 

Attention: CFO

 

Any notice so delivered will be considered to have been and conclusively given
and received on its delivery date or, if sent by registered mail, on the date of
acknowledgment of receipt.

 

18.2

Election of Domicile

 

The Tenant elects domicile in the Leased Premises on the second (2nd) floor at
1100 University Street in the city of Montreal, Province of Quebec for the
purposes of service of process of any procedure or any other document of a legal
nature in connection with any action, of any nature whatsoever, taken by the
Landlord for the purpose of enforcing the Landlord’s rights hereunder.

 

ARTICLE 19

 

INFORMATION

 

19.1

Information

 

The Tenant authorizes the Landlord to obtain information relevant or necessary
to the execution of this Lease and, in particular, those relating to the
Tenant’s solvency and to

 

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establish a file in respect of such information. For these purposes, the Tenant
authorize any person, including personal information agents, banks,
sub-contractors and suppliers with such information to communicate the
information to the Landlord during the Term of the Lease.

 

ARTICLE 20

 

TERMINATION OF LEASE

 

20.1

Termination of Lease

 

The Lease shall terminate without further consideration and without notice on
the date stipulated herein, and Occupation of the Leased Premises by the Tenant
after the date stipulated herein shall not have the effect of extending the Term
of the Lease or of renewing the Lease, for any period of time, notwithstanding
any other provision of law. In such event, the Tenant shall be presumed to
occupy the Leased Premises against the wishes of the Landlord, and the Landlord
may exercise all recourses available in law to evict the Tenant and claim
damages from the Tenant. However, the Landlord may elect, at its option, if the
Tenant continues to occupy the Leased Premises, to advise it at any time in
writing that Tenant may continue to occupy the Leased Premises on a monthly
basis, in consideration of a Minimum Rent equal to three (3) times that which is
stipulated in section 3, payable monthly in advance, according to the same
conditions as those in the Lease, as well as payment of the Additional Rent
provided in sections 4 and 5 hereof.

 

ARTICLE 21

 

UNAVOIDABLE DELAY

 

21.1

Unavoidable Delay

 

Except for the payment of an amount of money, each time that the Lease provides
for the performance of an obligation, the obligation shall be performed subject
to any delay caused by an act of God, fortuitous event, strike, lockout, labour
conflict, inability to procure materials, restrictive government restrictions or
orders, bankruptcy of a contractor or any other condition of a like nature or
not (except for the financial situation of either parties), which is reasonably
beyond the control of the Landlord or the Tenant, as the case may be (an
“Unavoidable Delay”). The Tenant and the Landlord shall be deemed not to be in
default in the performance of any obligation under this Lease if they are
prevented from so doing by Unavoidable Delay, and any period of time for the
performance of such obligation shall be extended accordingly. The Tenant and the
Landlord shall notify each other respectively, without delay of any Unavoidable
Delay.

 

ARTICLE 22

 

RELOCATION

 

22.1

Relocation during the Term

 

The Landlord shall have the right to relocate the Leased Premises in whole or in
part in the Building at Landlord’s cost. If the space being proposed for the
Tenant’s relocation is not functional, due to its being materially smaller than
the Leased Premises, the Tenant can refuse the relocation.

 

25

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ARTICLE 23

 

AMENDMENT OF LEASE AND PERFORMANCE BY THIRD PARTY

 

23.1

Amendment of Lease

 

Any alteration, waiver or amendment of the terms and conditions of the Lease
shall be valid only if expressly provided in writing, subject to the Landlord’s
right to establish rules and regulations for the good operation of the Building.

 

23.2

Performance by Third Party

 

The Tenant, including any person claiming to be a subtenant or assignee of the
Tenant, agrees that the payment of Minimum Rent and Additional Rent or the
performance of any obligation by any person other than the Tenant shall not
constitute an acknowledgment of rights other than those expressly granted
hereunder or a waiver of any of the Landlord’s rights and recourses.

 

The Landlord may at any time accept the Minimum Rent and Additional Rent from
the Tenant or from any physical person or moral person occupying the Leased
Premises, without in any way waiving any of the Landlord’s rights and recourses
under this Lease.

 

ARTICLE 24

 

MISCELLANEOUS

 

24.1

Successors and Assigns

 

This Lease shall bind the successors and assigns of the Landlord and those of
the Tenant.

 

24.2

Publication

 

This Lease may not be published at length on penalty of cancellation. However,
if the Tenant wishes that certain extracts of the Lease be published, it shall
have a summary of the Lease prepared, at its expense, and submit it to the
Landlord for prior approval, as well as provide a copy to the Landlord, once the
summary of the Lease is published.

 

24.3

Cancellation of Previous Agreements

 

This Lease contains all of the mutual commitments and obligations of the parties
with respect to the leasing of the Leased Premises, and cancels, for all legal
purposes, any previous representations, negotiations or agreements and
especially the Tenant’s Offer to Lease, which as been accepted by the Landlord
on May 8, 2003 (the “Offer to Lease”) of any nature whatsoever.

 

24.4

Solidarity

 

Should this Lease be signed by more than one person as Tenant, each of them
shall be solidarily liable to the Landlord for payment of the Minimum Rent and
Additional Rent and the performance and observance of the terms and conditions
of this Lease, without the benefit of division or discussion.

 

24.5

Brokerage Commission

 

The Tenant and the Landlord state that the only real estate broker involved in
leasing the Leased Premises is Dominique Durand from Durand, Pearson and
Associates Inc. (the “Broker”). The Landlord shall pay the Broker in accordance
with the commission agreement existing between them.

 

24.6

Governing Laws

 

This Lease shall be interpreted according to the laws of the province of Quebec
and the competent judicial district shall be Montreal.

 

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24.7

Headings and Numbers

 

The headings, captions, article numbers, section numbers, subsection numbers,
and table of contents appearing in this Lease are inserted only as a matter of
convenience, and in no way define, limit, construe or describe the scope or
intent of the parties to this Lease nor in any way affect this Lease.

 

24.8

Interpretation

 

The words “herein above”, “herein”, “above-mentioned”, “hereunder” and similar
expressions used in any article, section or subsection of this Lease refer to
the whole of the Lease and not to that article, section or subsection only,
unless otherwise stipulated. Where required by the context hereof, the singular
shall include the plural and the neuter gender the masculine and feminine.

 

24.9

Understanding of this Lease

 

Notwithstanding the fact that the Landlord drafted this Lease and submitted it
to the Tenant, the Tenant recognizes that the essential stipulations of this
Lease were negotiable and understands all of its stipulations and that the
Landlord gave adequate explanations with respect to the terms and conditions of
this Lease.

 

24.10

Schedules

 

The Tenant and the Landlord agree that Schedules “A”, “B”, “C” and “D” attached
hereto form an integral part of this Lease as if they were recited at length.

 

24.11

English Language

 

The Parties specifically declare that they have requested the present Lease and
all writing relating thereto to be drawn up in the English language. Les Parties
déclarent qu’elles ont demandé que le présent Bail et tout écrit s’y relatant
soient rédigés en anglais.

 

ARTICLE 25

 

GUARANTOR

 

25.1

Guarantee

 

The undersigned, PC MALL, INC., (the “Guarantor”), duly represented to these
presents by Mr. Ted Sanders, its CFO, hereby directly and unconditionally
guarantees to and covenants with the Landlord that the Tenant shall duly perform
and observe each and every convenant, provision, condition and agreement of this
Lease which must be observed and performed on the part of the Tenant, including
without limitation, those resulting from the special provisions contained in the
schedules hereto, including the payment of Minimum Rent and Additional Rent and
all other sums and payments agreed to be paid or payable under the Lease on the
days and at the times and in the manner specified; the Guarantor also guarantees
to and covenants with the Landlord that any default by the Tenant, where in
payment of any Minimum Rent and Additional Rent or other sums from time to time
falling due hereunder, as and when the same become due and payable, or whether
in the performance or observance of any of the said covenants, provisions,
conditions and agreements of this Lease which are to be performed or observed by
the Tenant, the Guarantor shall forthwith pay to the Landlord on demand the said
Minimum Rent and Additional Rent and all other sums in respect of which such
default shall have occurred and all damages that may arise in consequence of the
non-observance or non-performance of any of the said covenants, provisions,
conditions and agreements of this Lease.

 

The Guarantor convenants with the Landlord that the Guarantor is solidarily
bound with

 

27

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the Tenant for the fulfillment of all obligations of the Tenant under the Lease.
In the enforcement of its rights hereunder the Landlord may proceed against the
Guarantor as if the Guarantor was the Tenant hereunder. The Guarantor hereby
renounces and waives the benefits of discussion and division with the Tenant.

 

The Guarantor hereby waives any right to require the Landlord to proceed firstly
against the Tenant or to exhaust any security held from the Tenant or to pursue
any other remedy whatsoever which may be available to the Landlord before
proceeding against the Guarantor.

 

Any neglect or forbearance of the Landlord in endeavoring to obtain payment of
the Minimum Rent and Additional Rent reserved herein and/or other payments
required to be made under the provisions of the Lease as and when the same
becomes due or the delay of the Landlord in taking any steps to enforce
performance or observance of the convenants, provisions and conditions of this
Lease to be performed or observed by the Tenant and any extensions of time which
may be given by the Landlord from time to time to the Tenant or any other act or
failure to act by the Landlord shall not release the Guarantor or in any way
lessen or affect the obligations of the Guarantor under the guarantee contained
in this Article.

 

If the Tenant, during the Term, makes any assignment for the benefit of its
creditors or should he become bankrupt or insolvent, or take advantage of any
act or statute which may be in force for bankrupt or insolvent debtors, or if
the Tenant shall be wound up, the Guarantor shall ipso facto be deemed by these
presents and without novation to have entered into a lease with the Landlord for
the Leased Premises for a term equal to the unexpired portion of the Term
commencing at the date of notice from the Landlord to the Guarantor that the
Guarantor has become the Tenant hereunder. Such lease shall be deemed to contain
all the Landlord’s and Tenant’s obligations and all the covenants, provisions,
agreements and conditions as are contained in this Lease.

 

The Guarantor’s guarantee shall extend to any extension or renewal of this Lease
as well as to any expansion of the Leased Premises.

 

The Guarantor hereby irrevocably waives his right to terminate this guarantee
pursuant to articles 2362 and 2363 of the Civil Code of Quebec.

 

ARTICLE 26

 

SPECIAL PROVISIONS

 

26.1

Right of first Offer

 

 

a)

Upon the execution of this Lease, and whether or not the Tenant exercises its
rights of first Offer, the Tenant shall have a right of first offer to lease any
space located on the third (3rd) floor which shall become available (hereinafter
referred to as the “Additional Space”). The Tenant’s right of first offer shall
remain in force as to any Additional Space irrespective Tenant’s refusal to
exercise said right at any given time. The Additional Space shall be leased by
Tenant for a term to be negotiated by Landlord and Tenant at that time;

 

 

b)

The Landlord, upon its awareness of space becoming available shall immediately
notify the Tenant of the fact and the latter shall have ten (10) business days
thereafter to notify the Landlord in writing that it is exercising its right of
first offer. If the Tenant exercises its right, the Additional Space shall be
leased under the same terms and conditions as those contained in this Lease,
except for the financial terms which shall be at the then market rate for office
space in Class B buildings designated as of the Occupation Date, as eligible
buildings under the “E-Commerce Zone”;

 

 

c)

The term for Additional Space shall be renewable under the same terms and
conditions as the ones related to the Leased Premises.

 

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26.2

Right of first refusal

 

 

a)

Upon the execution of this Lease, and whether or not the Tenant exercises its
rights of first offer, the Tenant shall have a right of first refusal for the
first (1st) twenty-four (24) months of the Lease. Therefore, if the Landlord
receives any acceptable bona fide offer from a third party for any space
available or to become available on the third (3rd) floor only, (hereinafter
referred to as the “Available Space”), or if the Landlord makes a bona fide
offer to lease the Available Space to a third party, which is acceptable to such
third party, the Landlord shall, before concluding a leasing transaction with
the third party lessee, offer to lease the Available Space to the Tenant;

 

 

b)

The Tenant shall notify the Landlord in writing, within five (5) business days
from its receipt of the Landlord’s offer of its intention to avail itself of its
right of first refusal to acquire the Available Space, after which time the
Landlord’s offer shall become null and void pertaining to said Offer. The
Tenant’s right of first refusal shall remain in force during the balance of the
aforementioned twenty-four (24) months period for any subsequent offer related
to the Available Space;

 

 

c)

The Landlord’s offer shall be under the same terms and conditions as those
contained in the third party offer;

 

 

d)

Such offer shall be in writing and shall include an abstract of the offer
received containing the salient details of such offer.

 

26.3

Right of cancellation

 

Provided the Tenant is not, and has not been, in default of its obligations
under this Lease, the Tenant shall have the right to cancel the Lease effective
at any time subsequent to the twelfth (12th) month following the Commencement
Date. In order to avail itself of this right, the Tenant must give the Landlord
a two (2) months prior written notice of its intent and remit to the Landlord,
along with its written notice, a certified cheque in the amount of one hundred
and fifty thousand dollars ($150 000.00), plus GST and PST as compensation for
this right of cancellation.

 

The payment of the compensation stipulated above shall not relieve or release
the Tenant of any previous unfulfilled obligations nor shall it constitute a
waiver of any other clause in the Lease related to Lease termination such as but
not limited to adjustments.

 

In all events, the Tenant understands that by exercising its right of first
offer or its right of first refusal, as provided for in this Lease, it shall be
forfeiting its right of cancellation of the Lease and that such right shall
become null and void and of no further effect as of the date of the exercise of
said right of first offer or first refusal.

 

ARTICLE 27

 

QUIET AND PEACEFUL ENJOYMENT

 

27.1

Quiet and peaceful enjoyment

 

Landlord shall ensure that the quiet and peaceful enjoyment of the Leased
Premises by the Tenant is not interrupted, disturbed or hindered by demands or
claims from the Landlord or from any person being legally bound to Landlord or
any other third party.

 

Landlord shall do everything which is reasonable within the limits of its power
as Landlord, to cause the cessation of any impediment to the enjoyment by the
Tenant of the Leased Premises caused by tenants of the Building and to prevent
damage to the Leased Premises by any said tenant.

 

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IN WITNESS WHEREOF the parties have signed this Lease in Montreal as of this
11th (    ) day of June , 2003.

 

   

CANAPREV INC.

   

(Landlord)

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/s/ Michael V. Legault

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Witness

 

Per:

 

Mr. Michael V. Legault

   

Title:

 

President

   

I am authorized to bind the Corporation

   

PC MALL CANADA, INC.

   

(Tenant)

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/s/ Kris Rogers

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Witness

 

Per:

 

Kris Rogers,

   

Title:

 

President

   

I am authorized to bind the Corporation

   

PC MALL INC.

   

(Guarantor)

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/s/ Ted Sanders

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Witness

 

Per:

 

Ted Sanders,

   

Title:

 

CFO

   

I am authorized to bind the Corporation

 

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