Exhibit 10.43

 

  PROJECT # 0128         TENANT # TRITCBR01         LEASE # 0128 A01

 

LEASE CONFIRMATION AND

AMENDMENT TO DEVELOPMENT AGREEMENT

 

THIS AGREEMENT is dated as of May 6, 2010.

 

BETWEEN:

 

RITCHIE BROS. PROPERTIES LTD.

9500 Glenlyon Parkway

Burnaby, British Columbia V5J 0C6

 

(“RB”)

 

AND:

 

RITCHIE BROS. AUCTIONEERS (CANADA) LTD.

9500 Glenlyon Parkway
Burnaby, British Columbia V5J 0C6

 

(the “Tenant”)

 

AND:

 

THE GREAT-WEST LIFE ASSURANCE COMPANY

c/o Suite 3000

650 West Georgia Street

P.O. Box 11505

Vancouver, British Columbia V6B 4N7

 

(“Great-West Life”)

 

AND:

 

LONDON LIFE INSURANCE COMPANY

c/o Suite 3000

650 West Georgia Street

P.O. Box 11505

Vancouver, British Columbia V6B 4N7

 

(“London Life” and together with Great-West Life, the “Owner”)

 

WHEREAS:

 

A.Pursuant to a Development Agreement (the “Original Development Agreement”)
dated August 12, 2008 between RB and the Owner, RB is responsible for managing
the development, construction and completion of the Building and associated work
on the Lands which are located at 9500 Glenlyon Parkway, Burnaby, British
Columbia;

 

 

 

 

B.Pursuant to a Lease dated August 12, 2008 between the Owner as landlord and
the Tenant as tenant and a Lease Modification Agreement and an Indemnity
Agreement each dated February 12, 2010 among the Owner as landlord, the Tenant
as tenant and Ritchie Bros. Auctioneers Incorporated as indemnifier
(collectively, the “Lease”) the Owner agreed to demise and lease to the Tenant
and the Tenant agreed to lease from the Owner the Building and the Lands,
commencing on the Handover Date;

 

C.The Tenant is an affiliate of RB;

 

D.Pursuant to an agreement entitled “Pre-Handover Occupancy Rental Agreement and
Amendment to Development Agreement” dated as of November 25, 2009 between RB,
the Tenant and the Owner (the “Amendment Agreement”), RB, the Tenant and the
Owner agreed to certain matters, including those amendments to the Original
Development Agreement as set out in section 8 thereof (the Original Development
Agreement as amended by the Amendment Agreement is hereafter called the
“Development Agreement”);

 

E.The Project was Totally Completed on or before the Outside Completion Date,
but the correction of all deficiencies and the issuance of Acceptance will not
be completed on or before the Outside Handover Date of May 7, 2010; and

 

F.As contemplated by subsections 10.8(b) and (c) of the Development Agreement,
the Owner has elected to proceed with Handover on May 7, 2010 despite the
requirements for Handover under the Development Agreement not being fully
satisfied, and accordingly, RB, the Tenant and the Owner have agreed to enter
into this Agreement to confirm certain matters with respect to the Lease and to
amend the Development Agreement as necessary to address the fact that the
correction of certain deficiencies and the issuance Of Acceptance will be
completed after the Handover Date.

 

THIS AGREEMENT WITNESSES THAT in consideration of the mutual covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:

 

1.Interpretation

 

All terms that are capitalized in this Agreement and are not otherwise defined
herein will have the same defined meanings as are ascribed to such terms in the
Development Agreement

 

2.Payment of Basic Rent

 

RB, the Tenant and the Owner confirm, acknowledge and agree that,
notwithstanding any provision of the Lease:

 

(a)no Basic Rent (as defined in the Lease) will be payable by the Tenant to the
Owner under the Lease during the period prior to May 7, 2010; however, for
greater certainty, occupation rent under the Amendment Agreement will be payable
up to and including May 6, 2010;

 

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(b)RB, the Tenant and the Owner agree that as of the date hereof, the Project
Costs have been estimated as being approximately $53,000,000.00 and,
accordingly, the annual Basic Rent (as defined in the Lease) payable by the
Tenant to the Owner under the Lease for the period from and including the
Handover Date to and including May 6, 2015 has been estimated (for purposes of
Handover) to be $4,009,788.60 (as determined pursuant to Article 4 of the Lease
and section 15.2 of the RB/Owner Purchase Agreement on the basis of the
estimated Project Costs). Such estimated annual Basic Rent shall be subject to
adjustment and to a final determination pursuant to subsection 2(e) below;

 

(c)that portion of the occupation rent paid by the Tenant to the Owner under the
Amendment Agreement in respect of the days of the month from and including the
Handover Date of May 7, 2010 to and including May 31, 2010 (calculated on a per
diem basis) will be deemed to be, and credited as, Basic Rent (as defined in the
Lease) paid by the Tenant to the Owner pursuant to the Lease in respect of such
period (the “Credited Basic Rent”);

 

(d)the Owner will pay to the Tenant on or before May 31, 2010, $1,506.81 being
the difference between (i) the Credited Basic Rent of $270,981.85 and (ii) the
estimated amount of Basic Rent (as defined in the Lease) payable on the
Commencement Date (as defined in the Lease) for the period from and including
such Commencement Date to and including May 31, 2010 pursuant to subsection 2(b)
above (namely, $269,475.04);

 

(e)concurrently with the settlement of the final forth of the Project Cost
reconciliation pursuant to section 11.4 of the Development Agreement, as amended
by this Agreement, and section 9 hereof, RB, the Tenant and the Owner shall
determine, on the basis of the actual Project Costs the actual amounts of Basic
Rent (as defined in the Lease) payable under the Lease adjusted in accordance
with section 15.2 of the RB/Owner Purchase Agreement, and the Tenant will pay to
the Owner on the first day of the first month following the date on which RB and
the Owner have settled the Project Cost reconciliation, the difference, if any,
between (i) the amount of Basic Rent (as defined in the Lease) payable on and
from the Commencement date (as defined in the Lease) to and including the day
immediately before the first day of the first month following the date on which
RB and the Owner have settled the Project Cost reconciliation, adjusted in
accordance with section 15.2 of the RB/Owner Purchase Agreement and determined
on the basis of the actual Project Costs, find (ii) the amount paid by the
Tenant to the Owner pursuant to subsection 2(b) above on account of estimated
Basic Rent (as defined in the Lease) in respect of such period- If the amount of
such difference is negative as a result of an adjustment pursuant to section
15.2 of the RB/Owner Purchase Agreement, the Owner will pay the amount of such
difference to the Tenant on the first day of the first month following the date
on which RB and the Owner have settled the Project Cost reconciliation; and

 

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(f)commencing on the first day of the first month following the date on which RB
and the Owner have settled the final Project Cost reconciliation pursuant to
section 9 of this Agreement, and after all amounts required to be paid under
subsection 2(e) have been paid, the Tenant shall pay to the Owner the actual
Basic Rent (as defined in the Lease) determined pursuant to such reconciliation.

 

3.Confirmations

 

(a)The Owner and RB confirm, acknowledge and agree that the acceptance
provisions in Article 10 of the Original Development Agreement and the handover
provisions in Article 11 of the Original Development Agreement remain in full
force and effect, subject to section 8 of the Amendment Agreement and this
Agreement

 

(b)With respect to subsection 10.8(a)(i) of the Development Agreement, the Owner
and RB confirm, acknowledge and agree that Acceptance will not be issued by the
Owner prior to Handover, and that such non-issuance will not prevent Handover
from occurring.

 

(c)With respect to subsection 10.8(a)(ii) of the Development Agreement the Owner
and RB confirm, acknowledge and agree that the delivery of some or all of the
Project Documents will be deferred until after Handover; and such deferral will
not prevent Handover from occurring on the Handover Date.

 

(d)With respect to subsection 10.8(a)(iii) of the Development Agreement the
Owner and RB confirm, acknowledge and agree that the Tenant will be in
occupation of the Building and the Lands under the Amendment Agreement at the
time at which Handover occurs and such occupation will not prevent possession of
the Project from being delivered to the Owner in accordance with the terms of
the Development Agreement as amended by this Agreement

 

(e)The Tenant confirms, acknowledges and agrees that:

 

(i)the Commencement Date under the Lease is May 7, 2010;

 

(ii)the Handover Date is May 7, 2010 and Acceptance will occur thereafter in
accordance with section 8 hereof;

 

(iii)the Tenant’s obligation to pay rent under the Lease will not be affected in
any way by the presence of any defects or deficiencies in the Project which RB
is required to remedy under this Agreement; and

 

(iv)the Tenant shall not be entitled to any right of abatement, deduction or
set-off under the Lease as a result of any defects or deficiencies in the
Project which RB is required to remedy under this Agreement.

 

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4.Handover, Certificate of Completion and Project Documents

 

(a)RB and the Owner will proceed with Handover on May 7, 2010 notwithstanding
that the defects and deficiencies (the “Outstanding Deficiencies”) set out in
Exhibit A hereto have not been fully corrected.

 

(b)RB and the Owner acknowledge and agree that the Certificate of Completion
contemplated by subsection 10.8(a)(ii) and subsection 11.2(a) of the Development
Agreement will be delivered to the Owner at Handover, however, such delivery and
acceptance thereof by the Owner will not be construed as a waiver by the Owner
of RB’s obligation to rectify the Outstanding Deficiencies. A supplemental
certificate of completion (the “Supplemental Certificate”) confirming that all
deficiencies noted in the correspondence attached hereto as Schedule A-l from
Bunting Coady, Architects (letter dated April 16, 2010 together with the
attached Field Review Report dated March 1, 2010), except for those items
numbered 1.16 “Feature Floors” and 1.22 “Perforated Panels” under the “General”
heading in the said Field Review Report, the Landscape Deficiency List prepared
by Phillips Farevaag Smallenberg dated April 15, 2010, and the letter from
Stantec Consulting Ltd. dated May 3, 2010 (collectively, the “Material
Deficiencies”) have been corrected will be issued by the Payment Certifier and
delivered by RB to the Owner following Handover, in accordance with section 7
hereof. For greater certainty, the Outstanding Deficiencies include the Material
Deficiencies, and any Outstanding Deficiencies which are not Material
Deficiencies are hereinafter referred to as the “Remaining Outstanding
Deficiencies”.

 

(c)In the event the Payment Certifier is no longer in business at the time when
the Payment Certifier is to inspect the Project for the purpose of issuing the
Supplemental Certificate, the parties will, in a timely manner and acting
reasonably, mutually appoint a qualified architectural firm to replace the
Payment Certifier for such purpose.

 

(d)Notwithstanding the assignment by RB of its interest in the Project Documents
to the Owner, the Owner has agreed to extend the timeframe for delivery by RB of
the Project Documents as required by subsection 10.8(a)(ii) and section 11.2 of
the Development Agreement, to August 9, 2010 (except for the LEED Certificate
which must be delivered by RB as soon as it is available, which is expected to
be no later than eight (8) months following Handover). During such period as the
Project Documents remain undelivered by RB, RB shall hold them in trust for the
Owner, and shall provide the Owner with unrestricted access thereto.

 

5.Holdback for Outstanding Deficiencies

 

RB and the Owner acknowledge and agree that the amount of the holdback being
held by the Owner in respect of the Outstanding Deficiencies pursuant to section
10.4 of the Development Agreement is currently nil; however, at any time prior
to or following Handover, the Owner may hold back funds in accordance with
Section 10.4 of the Development Agreement to secure the costs of correcting and
repairing the Outstanding Deficiencies. Such holdback funds will be released to
RB in accordance with section 10.4 of the Development Agreement as and when such
Outstanding Deficiencies are corrected and repaired and certified by the Payment
Certifier as corrected and repaired.

 

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6.Correction of Outstanding Deficiencies

 

Without in any way derogating from subsection 3(a) hereof, RB shall diligently
work with the Owner and the Owner’s consultants to correct all of the
Outstanding Deficiencies as expeditiously as possible, and in any event, in
respect of the Material Deficiencies, before September 30, 2010 (such that the
Supplemental Certificate is issued by September 30, 2010), and in respect of the
Remaining Outstanding Deficiencies, by October 30, 2010. If RB fails to correct
any of the Outstanding Deficiencies by the aforesaid deadlines, the Owner may,
at its option, do whatever it deems appropriate to correct such defects or
deficiencies and may use the monies (if any) held back pursuant to section 10.4
of the Development Agreement to do so. If the Owner corrects such defects or
deficiencies, any actual reasonable expenses incurred by the Owner which are not
paid for using the monies held back pursuant to section 10.4 of the Development
Agreement will be charged back to RB. RB shall reimburse the Owner for such
reasonable expenses within thirty (30) days of the Owner invoicing RB.

 

7.Notice of Completion of Outstanding Deficiencies

 

RB covenants to deliver the Supplemental Certificate to the Owner by no later
than September 30, 2010. RB acknowledges that such covenant is provided at the
express request of the Owner and is intended to be relied upon by the Owner in
providing certain commitments to its lenders. Within three (3) Business Days
after delivery of the Supplemental Certificate, the Owner and RB (along with
their respective consultants and representatives) will conduct a final joint
inspection of all Remaining Outstanding Deficiencies to verify which, if any,
have not yet been corrected to the Owner’s satisfaction. If any such Remaining
Outstanding Deficiencies are identified, the Owner will notify RB, and RB will
forthwith cause such Remaining Outstanding Deficiencies to be rectified, to the
Owner’s satisfaction, by no later than October 30, 2010. If RB fails to deliver
the Supplemental Certificate to the Owner by September 30, 2010 and/or fails to
correct any Remaining Outstanding Deficiencies to the Owner’s satisfaction by
October 30, 2010, such failure(s) will constitute a default by RB under the
Development Agreement for which the Owner will have recourse to its rights and
remedies thereunder, including Without limitation, the indemnity provided at
Article 16 in respect of any Losses that the Owner may incur. For greater
certainty, and without otherwise derogating from the scope of Election 16.1 of
the Development Supplemental Certificate and with respect only to the Remaining
Outstanding Deficiencies, RB will not be liable under Section 16.1 of the
Development Agreement for loss of profits or special or consequential damages
that arise in connection with any of the Remaining Outstanding Deficiencies that
have been corrected in accordance with the Development Agreement (as amended by
this Agreement), but in respect of which the Owner is not satisfied. The Owner
will not act unreasonably in determining its satisfaction with the correction of
the Remaining Outstanding Deficiencies.

 

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8.Acceptance

 

Subject to subsection 3(a) hereof, the Owner will issue Acceptance within ten
(10) Business Days after all Remaining Outstanding Deficiencies have been
rectified in accordance with sections 6 and 7 hereof.

 

9.Project Cost Reconciliation

 

Notwithstanding section 11.4 of the Development Agreement, RB and the Owner
acknowledge and agree that the final form of Project Cost reconciliation will be
completed within ten (10) Business Days following the issuance of Acceptance.

 

10.Authorizations

 

On the Handover Date, the Owner will execute and deliver to RB such
authorizations as RB requires in order for RB to be able to continue to deal
with third parties under the Project Documents and the Material Contracts as
necessary in order for RB to complete the Outstanding Deficiencies in accordance
with the terms of this Agreement. Such authorizations will be prepared by RB’s
solicitors and will be delivered to the Owner’s solicitors as part of the
Handover Documents under section 11.2 of the Development Agreement.

 

11. Entire Agreement

 

(a)This Agreement contains all of the terms and conditions of the agreement
between the parties hereto relating to matters herein provided and supersedes
all previous agreements or representations of any kind, written or verbal, made
by anyone in reference thereto, except as specifically provided herein.

 

(b)Notwithstanding subsection 11(a), RB and the Owner hereby ratify the
Development Agreement, as amended by this Agreement, and confirm that, except as
expressly provided in this Agreement, all covenants, representations,
warranties, terms and other provisions of the Development Agreement are in full
force and effect and binding on the parties (including, without limitation, the
Owner’s right of enforcement pursuant to the terms of the Development Agreement
in the event that RB is in default under this Agreement), will apply mutatis
mutandis to RB’s obligations hereunder and will survive Handover. In the event
of any inconsistency or conflict between any provision of this Agreement and any
provision of the Development Agreement, the provision of this Agreement will
govern.

 

12.Exhibits

 

Exhibit A and Schedules A-l, A-2 and A-3 attached to this Agreement form a part
of this Agreement.

 

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13.Amendments

 

This Agreement will not be modified or amended in any way except in writing
signed by all parties hereto.

 

14.Severability

 

If any provision of this Agreement is or becomes illegal or unenforceable, it
will during such period that it is illegal or unenforceable be considered
separate and severable from the remaining provisions of this Agreement which
will remain in force and be binding as though the said provision had never been
included.

 

15.Assignment

 

This Agreement may not be assigned by any party hereto without the prior written
consent of each of the other parties hereto.

 

16.Binding Effect

 

This Agreement will bind and enure to the benefit of the parties hereto and
their respective successors and permitted assigns.

 

17.Governing Law

 

This Agreement will be governed by the laws applicable in the Province of
British Columbia and the courts of the Province of British Columbia will have
exclusive jurisdiction to entertain and determine all disputes and claims,
whether for specific performance, injunction, declaration or otherwise arising
out of or in any way connected with the construction, breach, or threatened
breach of this Agreement.

 

18.Headings for Convenience Only

 

The division of this Agreement into sections, subsections and paragraphs and the
insertion of headings is for the convenience of reference only and will not
affect the construction or interpretation of this Agreement.

 

19.Currency

 

All sums of money expressed herein are in the lawful currency of Canada.

 

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20.Time of tbe Essence

 

Time is of the essence of this Agreement

 

IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the
date first above written.

 

  RITCHIE BROS. PROPERTIES LTD.   by its authorized signatory:       /s/ Darren
Watt   Name: Darren Watt       RITCHIE BROS. AUCTIONEERS   (CANADA) LTD.   by
its authorized signatory:       /s/ Darren Watt   Name: Darren Watt       THE
GREAT-WEST LIFE ASSURANCE   COMPANY   by its authorized signatories:       /s/
Murray Wilks   Name: Murray Wilks   Senior Asset Manager       /s/ Donald J.
Harrison   Name: Donald J. Harrison   Senior Vice President, Asset Management  
    LONDON LIFE INSURANCE COMPANY   by its authorized signatories:       /s/
Murray Wilks   Name: Murray Wilks   Senior Asset Manager       /s/ Donald J.
Harrison   Name: Donald J. Harrison   Senior Vice President, Asset Management

 

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Exhibit “A”

 

LIST OF OUTSTANDING DEFICIENCIES

 

1.All deficiencies noted in the correspondence attached hereto as Schedule A-l
from Bunting Coady, Architects (letter dated April 16, 2010 together with the
attached Field Review Report dated March 1, 2010), except for those items
numbered 1.16 “Feature Floors” and 1.22 “Perforated Panels” under the “General”
heading in the said Field Review Report, the Landscape Deficiency List prepared
by Phillips Farevaag Smallenberg dated April 15, 2010, and the Mechanical and
Electrical Deficiency List prepared by Stantec Consulting dated May 3rd, 2010.

 

2.The following items from the Omicron Consulting Limited Deficiency List dated
April 7, 2010 (attached as Schedule A-2):

 

List #1 (Starting Page 1)

 

1.1

1.2(Clean Only)

1.6

1.7

1.8

1.14only a deficiency in areas where a tripping hazard is identified

1.15

1.20

1.22

1.23

1.25

2.2

2.4

3.4

3.6

3.11

3.12

4.4Ladder to be provided as per specifications. Conduit to be provided from the
emergency generator to the main electrical room.

4.6

 

For Items 1.3,1.5,1.11,1.12,2.1,4.7, and 4.9, as-built drawings are to be
updated to reflect on site condition.

 

A general cleaning of the premises is still required.

 

 

 

 

List #2 (Starting Page 6)

 

1.5 (only deficiency if damaged pre-substantial completion)

1.7

1.10

1.14

4.1

4.2

4.3

4.4

4.8

1.8

4.11

5.7

 

3.The following items from Section 3 of the Wells Klein Consulting Group Ltd.
Preliminary Roof Condition Assessment dated April 16, 2010 (attached as Schedule
A-3):

 

1,2,3,5,6,7,8,9,10,11,12,13,14,15

 

4.Such other non-material deficiencies which the Owner or RB, acting reasonably,
is, or may become, aware of during the currency of this Agreement which the
Owner reasonably expects to be rectified in the ordinary course of the
completion of the Project The Owner and RB will maintain current lists of such
items which will be available to either party for review and consultation
throughout the deficiency correction process.

 

 

 

 

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