Exhibit 10.1

LEAD SKY ENTERPRISES LIMITED

Landlord

- and -

INTELLON CANADA INC.

Tenant

- and -

INTELLON CORPORATION

Indemnitor

 

 

OFFICE LEASE

 

 

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1.       DATE OF LEASE:    June 20, 2008 2.       LEASED PREMISES:    Suites 360
and 385 3.       PROPERTY:    144-146 Front Street West, Toronto

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INDEX

 

ARTICLE I - DEFINITIONS             Section 1.1   Meaning of Certain Terms
            Section 1.2   Calculation of Area             Section 1.3  
Architect’s Certificate Conclusive ARTICLE II - LEASE OF PREMISES
            Section 2.1   Leased Premises             Section 2.2   Term
            Section 2.3   Condition of Premises ARTICLE III - RENT
            Section 3.1   Base Rent             Section 3.1.1   Advance
Rent/Security Deposit             Section 3.2   Additional Rent
            Section 3.3   Payment of Annual Base Rent             Section 3.4  
Payment of Additional Rent             Section 3.5   Charges for Utilities
            Section 3.6   When Services Not Provided             Section 3.7  
Rent in Arrears ARTICLE IV - TENANT’S COVENANTS             Section 4.1   Tenant
to Pay Rent             Section 4.2   Tenant to Pay Certain Taxes
            Section 4.3   Separate School Taxes             Section 4.4   Use of
Leased Premises             Section 4.5   Prohibited Uses of Leased Premises
            Section 4.6   No Waste or Nuisance             Section 4.7   Signs
            Section 4.8   Obligation to Repair             Section 4.9  
Exceptions to Tenant’s Obligation to Repair             Section 4.10  
Compliance by Tenant with Laws etc.             Section 4.11   Notice of Defects
or Damage             Section 4.12   Tenant’s Insurance             Section 4.13
  Increase in Insurance Premiums             Section 4.14   Indemnity by Tenant
            Section 4.15   Surrender of Leased Premises             Section 4.16
  Removal of Tenant’s Property             Section 4.17   Exhibit Leased
Premises             Section 4.18   Assignment and Subletting
            Section 4.19   Tenant’s Fixtures             Section 4.20   Waste
Removal             Section 4.21   Pest Control             Section 4.22  
Compliance with Laws ARTICLE V - LANDLORD’S COVENANTS             Section 5.1  
Quiet Enjoyment             Section 5.2   Repair             Section 5.3  
Heating, Air-Conditioning, Janitorial, Etc.

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            Section 5.4   Exceptions to Landlord’s Obligations
            Section 5.5   Landlord’s Insurance             Section 5.6  
Building Taxes ARTICLE VI - MUTUAL COVENANTS             Section 6.1   Entry by
Landlord             Section 6.2   Maintenance of Services etc.
            Section 6.3   Suspension of Services             Section 6.4   Entry
by Landlord not to Interfere             Section 6.5   Entry in Absence of
Tenant             Section 6.6   Overholding             Section 6.7   Limit of
Landlord’s Liability             Section 6.8   Landlord’s Alterations
            Section 6.9   Tenant’s Alterations             Section 6.9.1  
Tenant to Discharge all Liens             Section 6.10   Termination in the
Event of Damage             Section 6.11   Termination for Sale/Demolition
            Section 6.12   Rules and Regulations             Section 6.13  
Transfers by Landlord             Section 6.14   Rights of Landlord’s Mortgagees
            Section 6.15   Priority of Lease             Section 6.16   Right to
Relocate ARTICLE VII - LANDLORD’S REMEDIES             Section 7.1   Landlord
May Perform Tenant’s Covenants             Section 7.2   Re-entry
            Section 7.3   Landlord May Re-let             Section 7.4   Right to
Distrain             Section 7.5   Landlord May Follow Chattels
            Section 7.6   Waiver of Repudiation of Lease ARTICLE VIII -
CERTIFICATES, NOTICES, PAYMENTS & FINANCIAL INFORMATION             Section 8.1
  Estoppel Certificates             Section 8.2   Notices
            Section 8.3   Payments             Section 8.4   Financial
Information ARTICLE IX - GENERAL PROVISIONS             Section 9.1   Failure of
Landlord to Deliver Possession             Section 9.2   Force Majeure
            Section 9.3   Time of the Essence             Section 9.4   Joint
and Several Liability             Section 9.5   Amendments
            Section 9.6   Waivers             Section 9.7   Severability
            Section 9.8   Headings             Section 9.9   Changes Required by
Context             Section 9.10   Planning Act             Section 9.11  
Notice of Lease             Section 9.12   Whole Agreement
            Section 9.13   Applicable Law             Section 9.14   Assigns

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ARTICLE X - SPECIAL PROVISIONS             Section 10.1   Right of Extension
            Section 10.2   Confidentiality             Section 10.3  
Indemnitor’s Covenants

SCHEDULES

            “A” – FLOOR PLAN

            “B” – LEGAL DESCRIPTION

            “C” – RULES AND REGULATIONS

            “D” – RIGHT OF EXTENSION

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THIS LEASE made the 20th day of June, 2008.

IN PURSUANCE OF THE SHORT FORMS OF LEASES ACT (ONTARIO) BETWEEN:

 

  LEAD SKY ENTERPRISES LIMITED      (herein called the “Landlord”)         OF
THE FIRST PART   - and -      INTELLON CANADA INC.      (herein called the
“Tenant”)         OF THE SECOND PART   INTELLON CORPORATION      (herein called
the “Indemnitor”)         OF THE THIRD PART

WHEREAS the Landlord and the Tenant have agreed to enter into this Lease.

NOW THEREFORE THIS INDENTURE WITNESSETH that in consideration of the rents,
covenants, obligations and agreements hereinafter reserved and contained.

ARTICLE I

DEFINITIONS

Section 1.1 Meaning of Certain Terms

In this Lease and in the schedules and appendices to this Lease:

 

(a) “Additional Rent” means the rental referred to in Section 3.2;

 

(b) “Architect’s Certificate” means the certificate of an architect appointed by
the Landlord;

 

(c) “Base Rent” means the rental referred to in Section 3.1;

 

(d) “Building” means the lands and premises municipally known as 144-146 Front
Street West, Toronto, Ontario together with all buildings, structures,
improvements, fixtures, sprinklers, elevators, heating, ventilating,
air-conditioning and mechanical and electrical equipment and machinery, and
water, gas, sewage, telephone and other communication facilities and electrical
power services and utilities comprised therein, belonging thereto, connected
therewith or used in the operation thereof, and now or hereafter constructed,
erected and installed therein and thereon, but excludes all Leasehold
Improvements made, constructed, erected or installed therein by or on behalf of
any tenant of premises therein;

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(e) “Rights in Common” means rights of tenants in the Building to Service Areas
and Leasable Service Areas (as hereinafter defined) located at 144-146 Front
Street West;

 

(f) “Commencement Date” means the date set out in Section 2.2 for the beginning
of the Term;

 

(g) “Laws” means all statutes, regulations, by-laws, orders, rules, requirement
and directions of all federal, provincial, municipal and other governmental
authority and regulatory authority having jurisdiction;

 

(h) “Leasable Service Areas” means passenger and service elevator lobbies (other
than those on the ground floor and those exclusively for a tenant’s use);
corridors, washroom; rooms and closets for electrical, telephone, janitor,
service and maintenance facilities; and the walls enclosing the same;

 

(i) “Leased Premises” means the premises comprising a leasable area of
approximately 10,200 square feet, outlined in red on Schedule “A” located in the
Building and being Suite Numbers 360 and 385, part of the third (3rd) floor, and
includes all Leasehold Improvements and all water, gas, sewage, telephone and
other communication facilities comprised therein for the exclusive use thereof,
reserving unto the Landlord the right to make reasonable variations in the area,
form and siting of the Leased Premises, and the right to relocate on comparable
floor or floors prior to the Commencement Date with the consent of the Tenant,
such consent not to be unreasonably withheld;

 

(j) “Leasehold Improvements” means all fixtures, improvements, installations,
alterations and additions from time to time made, constructed, erected or
installed in or to the Leased Premises, including all interior partitions
however affixed and all rugs, carpeting and floor coverings attached in any way
to the Leased Premises, but excludes moveable trade fixtures, moveable
partitions, and furniture and equipment not affixed to the Leased Premises;

 

(k) “mortgage” includes a mortgage, pledge, charge, hypothec, encumbrance or
financing agreement and “mortgagee” includes the holder of such mortgage;

 

(l) “Normal Business Hours” means the hours from 8:00 a.m. to 6:00 p.m. on each
day, other than a statutory holiday, from Monday to Friday inclusive in each
week, or such extended hours as the Landlord may reasonably determine from time
to time;

 

(m) “Rent” includes all amounts payable by the Tenant under this Lease;

 

(n) “Sales Taxes” means all transfer, multi-stage sales, sales, use,
consumption, value added or other similar taxes imposed by any federal,
provincial or municipal government upon the Landlord or the Tenant or in respect
of this Lease or the payments made by the Tenant hereunder or the goods and
services provided by the Landlord hereunder including, without limitation, the
rental of the Leased Premises and the provision of services to the Tenant
hereunder;

 

(o) “Service Areas” means all facilities and utilities (other than Leasable
Service Areas) from time to time furnished or designated by the Landlord (as the
same from time to time may be altered, reconstructed or expanded) in connection
with the Building for the use or benefit in common, in such manner as the
Landlord may permit, of occupants of premises in the Building and all others
entitled thereto and now or hereafter developed by the Landlord including,
without limiting the generality of the foregoing, heating, ventilating,
air-conditioning, mechanical and service equipment, areas and rooms; driveways,
entrances and exits, passageways, entrance lobbies, elevator lobbies on the
ground floor, sidewalks, balconies, terrace, malls, courtyard, ramps to parking
areas, landscaped areas, stairways; elevators (other than those stairways and
elevators exclusively for a tenant’s use), shafts, flues, vertical ducts,
garbage facilities, and receiving and shipping facilities including ramps and
access thereto; and the walls enclosing the same;

 

(p) “Stipulated Rate of Interest” means that rate of interest at the time such
interest falls due under this Lease which is equal to the lowest rate then
charged by any chartered Canadian bank with which the Landlord is doing
business, for commercial demand loans, plus 3% per annum;

 

(q) “Taxes” means all taxes, local improvement rates, levies, rates, duties,
assessments and charges from time to time imposed against real property,
buildings, structures and improvements by municipal or other governmental
authorities having jurisdiction and all taxes, liens, rates, duties, assessments
and charges which may at any time be substituted therefore or replace the same
or is supplemental thereto but excludes:

 

  (i) business taxes;

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  (ii) the amount by which separate school taxes exceed the amount which would
have been payable for school taxes if no assessment had been made for the
support of separate schools; and

 

  (iii) any tax separately imposed as provided for in Section 4.2 or allocated
as provided in Section 3.2 in respect of Leasehold Improvements in the Building;

 

(r) “Tenant’s Proportionate Share” means a fraction, the numerator of which is
the total gross leasable area of the Leased Premises and the denominator of
which is the total gross leasable area of the Building;

 

(s) “Term” means the term of this Lease as set out in Section 2.2.

Section 1.2 Calculation of Area

Wherever in this Lease reference is made to the size of any area or areas or the
leasable area or gross leasable area of any premises or the amount of any
payment is required to be determined in reference to the size of any area or
areas, the calculation of the size of any such area or areas shall be made as
follows:

 

(a) the leasable area of premises or a part of any premises comprising a single
tenancy floor on the second (2nd) and higher floors shall be computed by
measuring to the inside finish of the permanent outer walls of the Building and
shall include all area within the permanent outer walls of the Building without
deduction for columns, or projections necessary to the Building but deducting
the area occupied by Service Areas which are located within said premises;

 

(b) the leasable area of premises or a part of any premises on the basement and
the ground floor and on a multiple tenancy floor on the second (2nd) and higher
floors shall be computed by measuring:

 

  (i) to the inside finish of the permanent outer walls of the Building;

 

  (ii) to the surface interior to the premises being measured of interior walls
separating such premises from Service Areas and Leasable Service Areas; and

 

  (iii) to the centre line of interior walls separating such premises from
adjoining premises,

without deduction for columns, and projections necessary to the Building;

 

(c) the gross leasable area of premises or a part of any premises comprising a
single tenancy floor on the fifth (5th) floor shall be the leasable area
thereof;

 

(d) the gross leasable area of premises or a part of any premises comprising a
single tenancy floor on the second (2nd) through to and including the seventh
(7th) floors, shall be the leasable area thereof;

 

(e) the gross leasable area of premises or a part of any premises on a multiple
tenancy floor on the second (2nd) and higher floors shall be the aggregate of:

 

  (i) the leasable area of such premises; and

 

  (ii) the pro-rata share of Leasable Service Areas applicable to such floor;

 

(f) the gross leasable area of premises on the ground floor and basement shall
be the leasable area thereof; and

 

(g) the gross leasable area of the Building shall be the aggregate of the gross
leasable area of all premises in the Building.

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Wherever the permanent outer wall of the Building measured vertically from
finished floor to the underside of the finished ceiling at such outer wall is
more than 50% glass or other material of similar viewing properties, the inside
finish of such outer wall shall be considered to be the inside surface of the
glass or other material. Where any wall, door or window of any premises is
recessed from the demising line of such premises the area of such recess shall
for all purposes be a part of such premises and included in the leasable area of
such premises.

Section 1.3 Architect’s Certificate Conclusive

An Architect’s Certificate as to the size of any area or areas, the leasable
area of any premises, the gross leasable area of any premises, the extent of any
injury, the portion of the Leased Premises capable of being used for the purpose
for which they are leased, the period within which any injury may be repaired,
or the date on which any repairs have been completed, shall be conclusive and
binding on the parties.

ARTICLE II

LEASE OF PREMISES

Section 2.1 Leased Premises

The Landlord hereby leases the Leased Premises to the Tenant and the Tenant
hereby leases the Leased Premises from the Landlord for the Term, at the Rent,
subject to the conditions and in accordance with the covenants, obligations and
agreements contained in this Lease.

Section 2.2 Term

TO HAVE AND TO HOLD the Leased Premises for and during the period of two
(2) years, beginning on January 1, 2011 (the “Commencement Date”) and from
henceforth ensuing and fully to be completed and ended on December 31, 2012 (the
“Term”).

Section 2.3 Condition of Leased Premises

As the Tenant will already have been in occupancy of the Leased Premises, as a
subtenant of Platespin Ltd. prior to the Commencement Date, the Tenant agrees to
accept the Leased Premises in an “as is” condition, being the condition which
the Leased Premises were in as of July 19, 2007.

ARTICLE III

RENT

Section 3.1 Base Rent

From and after the Commencement Date and throughout the Term, the Tenant shall
pay to the Landlord in lawful money of Canada, without any deduction, abatement
or setoff whatsoever, an annual Base Rent for the Leased Premises of ONE HUNDRED
AND FORTY-SEVEN THOUSAND, NINE HUNDRED Dollars ($147,900), being Fourteen
Dollars and Fifty Cents ($14.50) per square foot of the gross leasable area of
the Leased Premises, payable in advance in equal consecutive monthly
installments of Twelve Thousand, three hundred and twenty-five Dollars ($12,325)
on the first day of each and every month.

Section 3.1.1 Advance Rent/Security Deposit

The Landlord acknowledges the receipt of Twenty-Five Thousand, Seven Hundred and
Forty-One Dollars and Fifty-Seven Cents ($25,741.57), to be applied to the Base
Rent, Additional Rent and GST due for the last month of the Term and prior to

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the last month of the Term to be held as a security deposit (the “Security
Deposit”). The said sum of $25,744.57 is the aggregate of $18,282.33 which the
Landlord held as a deposit on account of the Tenant’s lease of Suite 600 at the
Building which is being surrendered and $7,459.24 paid at the time of the
acceptance of the Offer to Lease that gives rise to this Lease.

The Security Deposit shall be held by the Landlord as security for the faithful
performance by the Tenant of all of the terms, covenants and conditions of this
Lease by the Tenant to be kept, observed and performed during the Term. If at
any time during the Term any of the Rent shall be overdue and unpaid, then the
Landlord may, at its sole option, but without any requirement to do so,
appropriate and apply any portion of the Security Deposit to the payment of such
overdue Rent.

In the event of the failure of the Tenant to keep and perform any of the terms,
covenants and conditions of this Lease to be kept and performed by the Tenant,
then the Landlord at its option may appropriate and apply the entire Security
Deposit or so much thereof as may be necessary to compensate the Landlord for
loss and damage sustained or suffered by the Landlord due to such breach on the
part of the Tenant, but such appropriation shall not be deemed to be
substitution for any claims that the Landlord may have under this Lease or in
law.

Should the entire Security Deposit or any portion thereof be appropriated and
applied by the Landlord then the Tenant shall, upon written demand of the
Landlord, remit to the Landlord a sufficient amount in cash to restore the said
Security Deposit to the original sum deposited and the Tenant’s failure to do so
within five (5) days after receipt of such demand shall constitute a breach of
this Lease. Should the Tenant comply with all of the terms, covenants and
conditions of this Lease to be kept, observed and performed by the Tenant and
promptly pay all Rent as and when it falls due the Security Deposit shall be
applied against a portion of the Base Rent, Additional Rent and GST payable for
the last month of the Term.

Section 3.2 Additional Rent

From and after the Commencement Date, the Tenant shall pay to the Landlord in
lawful money of Canada, without any deduction, abatement or setoff whatsoever,
Additional Rent for the Leased Premises equal to the aggregate of the following
amounts:

 

(a) the amount of Taxes imposed in respect of the Leased Premises provided that
if a separate assessment is issued or allocated in respect of the Leased
Premises but not a separate tax bill, then the amount of the Taxes payable by
the Tenant shall be equal to the amount obtained by multiplying such assessment
by the applicable commercial mill rate; plus the Tenant’s Proportionate Share of
Taxes imposed in respect of the Service Areas and Leasable Service Areas, if
separately assessed;

 

(b) if there is no separate assessment issued or allocated in respect of the
Leased Premises, the Taxes charged against the Leased Premises shall be
determined by the Landlord acting reasonably, the costs of such making such
determination to be included in the Operating Costs. In making such
determination the Landlord shall have the right, without limiting its right to
do otherwise, to establish separate assessments for the Leased Premises and all
other portions of the Building by using such criteria as the Landlord, acting
reasonably, shall determine to be relevant including, without limitation:

 

  (i) the then current established principles of assessment used by the relevant
assessment authorities and on the same basis as the assessment actually obtained
for the Building as a whole or the part thereof in which the Leased Premises are
located;

 

  (ii) assessments of the Leased Premises or any other portions of the Building
in previous periods of time;

 

  (iii) the Proportionate Share;

 

  (iv) any act, religion or election of the Tenant or any other occupant of the
Building which results in an increase or decrease in the amount of the Taxes
which would otherwise have been charged against the Building or any portion
thereof; and

 

  (v) the quality of construction, use, location of the Leased Premises within
the Building or income generated by the Leased Premises and/or the assessors
valuation of the Leased Premises or the Building.

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(c) the Tenant’s Proportionate Share of the Operating Costs of the Building and
Rights in Common. For the purpose of this Lease, “Operating Costs” means the
aggregate of all costs and expenses incurred or accrued by the Landlord or by
others on behalf of the Landlord in connection with the management, supervision,
administration, operation, cleaning, maintenance, repair, replacement and
insurance of the Building. By way of example and without limiting the generality
of the foregoing, Operating Costs shall include the costs of all repairs
required in the maintenance of the Building and Rights in Common, heating costs
and the cost of steam for heating or other purposes, elevator maintenance costs,
equipment rental (fixed or otherwise), the costs of providing hot and cold
water, the costs of electricity not otherwise chargeable to any tenant or
tenants of the Building, the costs of air-conditioning, window cleaning, snow
removal, landscaping, uniforms and security, all fire, casualty, liability and
other insurance costs, telephone and other utility costs, the amounts paid under
service contracts with independent contractors, all salaries, wages and other
remuneration and the cost of benefits paid to employees of the Landlord engaged
in operating and maintaining the Building and Rights in Common, sums equal to
the annual amounts required to fully amortize on a straight line basis over its
useful life, equipment, fixed or otherwise, paid for by the Landlord and used to
provide services to the Building and Rights in Common, legal appraisal and
accounting fees incurred for the purpose of attempting to reduce Taxes and the
various costs referred to in this subsection, business taxes assessed against
the Landlord with respect to the Building, that portion of the capital or place
of business tax payable by the Landlord and attributable to the Building and
Rights in Common, and all other expenses paid or payable by the Landlord in
connection with the management and operation of the Building and Rights in
Common but excluding Taxes, taxes on income, capital expenditures (save for the
annual amortization amounts with respect to equipments fixed or otherwise, paid
for by the Landlord and used to provide services to the tenants of the
Building), any provisions for depreciation of or in respect of the Building,
interest on debt or capital retirement of debt, any amounts directly chargeable
by the Landlord to any tenant or tenants of the Building, any costs incurred by
the Landlord or relating to the leasing of space or premises in the Building
(including leasing commissions) and the cost of repairs to the extent of
insurance proceeds received by the Landlord from claims made with respect to the
items so repaired. If in any year during the Term the Building is not fully
leased or occupied, Operating Costs for such year shall be adjusted to reflect
the amount which would have been payable if the Building had been fully leased
and occupied during such year; and

 

(d) The Landlord’s present estimate of the Additional Rent payable pursuant to
Section 3.2 and 3.5 is $14.07 per square foot per annum of the gross leasable
area of the Leased Premises for the 2007 calendar year. Although this is a bona
fide estimate of the Landlord, the Tenant agrees that it is not intended by the
parties to be relied upon by the Tenant and that such estimate does not impose
any liabilities on the Landlord or affect the obligations of the Tenant
hereunder.

Section 3.3 Payment of Annual Base Rent

The annual Base Rent shall be paid in monthly installments in advance. The Base
Rent for the portion of the Term beginning on the Commencement Date to and
including the last day of the month in which the Commencement Date occurs shall
be pro-rated and paid in advance on the Commencement Date and thereafter a
monthly installment of Base Rent shall fall due and be paid in advance on the
first day of each and every month throughout the Term.

Section 3.4 Payment of Additional Rent

The Additional Rent shall be payable to the Landlord upon demand therefor or at
the option of the Landlord shall be payable in monthly installments in advance
on the dates and at the times for payment of Base Rent provided for in this
Lease. The Landlord shall deliver to the Tenant, not less frequently than
annually, a statement showing in reasonable detail the information relevant and
necessary to the calculation of the amount of Additional Rent, in the case of
the first such statement for the period from the date from which Rent commences
to accrue under this Lease and in the case of each such subsequent statement
from the date to which the immediately preceding statement was made up. If
Additional Rent is payable by monthly installments, then until the first
statement of Additional Rent has been delivered, the Additional Rent shall be
based upon the reasonable estimate of the Landlord and thereafter, the
Additional Rent shall be the amount stipulated as such in the most recent prior
statement of Additional Rent delivered to the Tenant by the Landlord, adjusted
to an annual basis if necessary. If the aggregate of the monthly installments,
if any, paid by the Tenant in respect of the period to which any statement of
Additional Rent relates is less than the amount shown by such statement to be
payable by the Tenant, the Tenant shall forthwith pay the amount of the
deficiency to the Landlord. If the aggregate of the monthly installments, if
any, paid by the Tenant in respect of the period to which such statement of
Additional Rent relates exceeds the amount shown by such statement to be payable
by the Tenant, the amount of such excess shall be applied pro tanto in
satisfaction of the next ensuing installments of Rent.

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Section 3.5 Charges for Utilities

From and after the Commencement Date, the Tenant shall pay to the Landlord upon
demand therefor:

 

(a) all rates and charges for chilled water, water, gas and electric power
services and utilities supplied to the Leased Premises as determined by the
Landlord on a consistent basis for all tenants of all premises in the Building;
and

 

(b) a reasonable amount for the cleaning, maintaining and servicing of the
electric lighting fixtures in the Leased Premises including the replacement of
electric light bulbs, tubes, starters and ballasts.

Such cleaning, maintaining, servicing and replacement shall be within the
exclusive right of the Landlord.

Section 3.6 When Services Are Not Provided

When and if any service (such as janitorial service) which is normally provided
by the Landlord to tenants of the Building in their premises:

 

(a) is not provided by the Landlord in the Leased Premises under the specific
terms of this Lease, in determining Operating Costs for the Tenant hereunder,
the cost of such service (except as it relates to Leasable Service Areas and
Service Areas) shall be excluded; and

 

(b) is not provided by the Landlord in a significant portion of the Building, in
determining Operating Costs for the Tenant hereunder, the cost of such service
shall be divided by the difference between the square feet in the Building and
the number of square feet (determined on the basis set out in Section 1.2) in
the Building in which the Landlord does not provide such service.

Section 3.7 Rent in Arrears

All Rent in arrears shall bear interest at the Stipulated Rate of Interest from
the date on which the same became due until the date of payment thereof.

ARTICLE IV

TENANT’S COVENANTS

Section 4.1 Tenant to Pay Rent

The Tenant covenants to pay Rent.

Section 4.2 Tenant to Pay Certain Taxes

The Tenant shall pay and discharge on or before the date when the same or the
installments for the same become due provided that a request therefore and/or a
statement thereof have been provided to the Tenant by the Landlord on the taxing
authority:

 

(a) all taxes, levied, rated, charged or assessed in respect of the Leasehold
Improvements and all moveable trade fixtures and furniture and equipment in or
on the Leased Premises;

 

(b) every tax, rate, duty, assessment and licence fee in respect of any and
every business conducted on or from the Leased Premises and of the use or
occupancy of the Leased Premises by the Tenant including, without limitation,
all business taxes, rates and licences; and

 

(c) all Sales Taxes imposed on the Landlord or the Tenant.

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Section 4.3 Separate School Taxes

If the Leased Premises are assessed in whole or in part for the support of
separate schools the Tenant shall pay and discharge as Rent on or before the
date when the same or the installments for the same become due the amount by
which Taxes for the Building so payable exceed those which would have been
payable except for such assessment for the support of separate schools.

Section 4.4 Use of Leased Premises

The Tenant shall use the Leased Premises only for general office purposes in
connection with the trade or business carried on by the Tenant on the
Commencement Date and for no other purpose.

Section 4.5 Prohibited Uses of Leased Premises

The Leased Premises shall not be used in any manner which obstructs any part of
the Service Areas or Leasable Service Areas or for any purpose except that
permitted by Section 4.4. The Tenant shall not use or permit any part of the
Leased Premises to be used in any manner which interferes with or intrudes upon
the use and enjoyment of the Building or the Rights in Common by any other
tenant or which in the opinion of the Landlord is inconsistent with the general
character of the Building. The Tenant shall also not cause, suffer or permit the
Leased Premises or any part thereof to be used for any business or activity that
is not in compliance with all Laws.

Section 4.6 No Waste or Nuisance

 

(a) The Tenant shall not cause, suffer or permit any waste or damage to the
Leased Premises or Leasehold Improvements, fixtures or equipment therein nor
permit any overloading of the floors thereof and shall not use or permit to be
used any part of the Leased Premises for any dangerous, noxious or offensive
activity or goods and shall not do or bring anything or permit anything to be
done or brought on or about the Leased Premises or the Building which results in
undue noise or vibration or which the Landlord may reasonably deem to be
hazardous or a nuisance or annoyance to any other tenants or any other persons
permitted to be on the Building, including without limitation any objectionable
odours emanating from the Leased Premises. The Tenant shall immediately take
steps to remedy, remove or desist from any activity, equipment, goods or
condition on or emanating from the Leased Premises to which the Landlord objects
on a reasonable basis. The Tenant shall take every reasonable precaution to
protect the Leased Premises and the Building from risk of damage by fire, water
or the elements or any other cause.

 

(b) The Tenant shall not itself, and shall not permit any of its employees,
servants, agents, contractors or persons having business with the Tenant, to
obstruct any Service Areas or Leasable Service Areas except as expressly
permitted by the Landlord in writing nor use or permit to be used any Service
Areas or Leasable Service Areas for other than their intended purposes. Without
limiting the foregoing, the Tenant shall not permit any equipment, goods or
material whatsoever to be placed or stored anywhere in or on the Service Areas
or Leasable Service Areas, including without limitation on the loading docks and
other outside areas adjacent to the Leased Premises. The Tenant shall not, and
shall not permit anyone else to, place anything on the roof of the Building or
go on to the roof of the Building for any purpose whatsoever, without the
Landlord’s prior written approval, which may be arbitrarily withheld in the
Landlord’s sole discretion.

 

(c) The Tenant shall not use any advertising, transmitting or other media or
devices which can be heard, seen, or received outside the Leased Premises, or
which could interfere with any communications or other systems outside the
Leased Premises.

 

(d) The Tenant shall conduct its business on the Leased Premises in keeping with
a first class centre, having regard to the character of the Building. To that
end, the Tenant covenants and agrees that it shall not cause, suffer or permit
any fumes, odours, noise or other element, any of which is determined by the
Landlord to be a nuisance or disturbance to the Landlord or any other occupant
of the Building, to emanate from the Leased Premises; if the Landlord determines
that any such fumes, odours, noise or other element is emanating from the Leased
Premises in such manner as to cause any nuisance or disturbance to the Landlord
or any other occupant of the Building, the Tenant shall forthwith, upon notice
from the Landlord, cause the same to be rectified.

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(e) The Tenant shall be solely responsible for any contaminant, pollutant or
toxic substance at any time affecting the Leased Premises resulting from any act
or omission of the Tenant or any other person on the Leased Premises or any
activity or substance on the Leased Premises during the Term, and any period
prior to the Term during which the Leased Premises were used or occupied by or
under the control of the Tenant, and shall be responsible for the clean-up and
removal of any of the same and any damages caused by the occurrence, clean-up or
removal of any of the same, and the Tenant shall indemnify the Landlord in
respect thereof.

Section 4.7 Signs

The Tenant shall not paint, display, inscribe, place or affix any sign, picture,
advertisement, notice, lettering or direction on any part of the exterior of the
Leased Premises or so as to be visible from the exterior of the Leased Premises.
The Tenant shall adhere to the uniform pattern of identification signs for
tenants to be placed on the outside of the doors leading into the premises of
tenants of part floors.

The Landlord acknowledges and agrees that it shall, at its expense, add the
Tenant’s corporate name to all present and planned internal directory board(s)
and panels used for displaying the Building’s tenant’s roster and suite numbers.

Section 4.8 Obligation to Repair

The Tenant covenants that from and after the Commencement Date:

 

(a) the Tenant shall, at its sole expense, perform such maintenance (including
painting and repair or replacement of any interior finishings) repairs and
redecorating, and upgrading and replacements as required to keep the Leased
Premises, all contents thereof and all services, equipment and systems located
in or primarily serving the Leased Premises, at all times, in a first class
appearance and condition and in accordance with all Laws but excluding only the
obligations of the Landlord expressly provided in Section 4.9. For the purposes
of this Section 4.8 but without affecting the interpretation of any other
provision of this Lease, the Leased Premises shall include all Leasehold
Improvements in, on or serving the Leased Premises;

 

(b) at any time and without notice in cases of emergency and otherwise upon
reasonable notice during Normal Business Hours the Landlord may enter and view
the state of repair, and

 

(c) the Tenant shall repair the Leased Premises according to notice in writing.

Section 4.9 Exceptions to Tenant’s Obligation to Repair

The obligations of the Tenant under Section 4.8 shall be subject to the
following exceptions:

 

(a) reasonable wear and tear which does not affect the proper use and enjoyment
of the Leased Premises in accordance with this Lease and which does not result
in the Leased Premises not being maintained at all times in a first class
appearance and condition;

 

(b) injury caused by fire, lightning, tempest or other casualty for which the
Landlord is indemnified under any policy of insurance and then only to the
extent of actual insurance proceeds received under such policy of insurance,
unless caused by the act, default or negligence of the Tenant or those for whom
the Tenant is in law responsible;

 

(c) injury to the Leased Premises caused by or resulting from structural defects
or weakness; and

 

(d) injury caused by or resulting from the negligence of the Landlord, its
officers, servants, agents or employees.

Section 4.10 Compliance by Tenant with Laws etc.

Except for matters which are the responsibility of the Landlord under this
Lease, the Tenant at its expense shall comply with and conform to the
requirements of all Laws and with every reasonable regulation and order of the
Insurers’ Advisory

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Organization of Canada or of any body having similar functions, or of any
liability or fire insurance company by which the Tenant or the Landlord may be
insured affecting the operation, condition, maintenance, use or occupation of
the Leased Premises and the making of any alteration or addition therein or
thereto whether or not such alteration or addition be required on account of any
particular use to which the Leased Premises may be put and whether or not such
requirement, regulation or order be of a kind now existing or within the
contemplation of the parties.

Section 4.11 Notice of Defects or Damage

The Tenant shall promptly notify the Landlord of any defect or deficiency in,
malfunction of, or damage to the Leased Premises or any equipment, service or
utility therein of which the Tenant becomes aware at any time during the Term.
The provisions of this Section 4.11 shall not be interpreted so as to impose any
obligation whatsoever upon the Landlord.

Section 4.12 Tenant’s Insurance

 

(a) The Tenant shall, at its sole cost and expense, obtain and maintain in full
force and effect at all times throughout the Term and such other times, if any,
as the Tenant occupies the Leased Premises or any portion thereof:

 

  (i) commercial general liability insurance including, but not limited to
property damage, public liability, personal injury liability, contractual
liability, products and completed operations, non-owned automobile liability and
owners’ and contractors’ protective insurance coverage, all on an occurrence
basis, with respect to any use, occupancy, activities or things on the Leased
Premises and with respect to the use and occupancy of any other part of the
Building by the Tenant or any of its servants, agents, contractors or persons
for whom the Tenant is in law responsible, with coverage for any one occurrence
or claim of not less than Three Million ($3,000,000.00) Dollars or such other
amount as the Landlord may reasonably require upon not less than one (1) month’s
notice at any time;

 

  (ii) insurance, in respect of such perils as are from time to time covered in
an all risks policy not less broad than the standard commercial property floater
policy with the exclusions relating to earthquake and flood removed therefrom,
covering the leasehold improvements, trade fixtures, furnishings, equipment,
stock-in-trade, storefront and store facing materials and all signs in, on or
about the Leased Premises, for not less than the full replacement cost thereof
and with a replacement cost endorsement;

 

  (iii) broad form comprehensive boiler and machinery insurance on all insurable
objects located on the Leased Premises or which are the property or
responsibility of the Tenant on a blanket repair or replacement basis with a
replacement cost endorsement and with limits for each accident in an amount not
less than the full replacement cost of all Leasehold Improvements, trade
fixtures, furnishings, equipment, stock-in-trade, storefront and store facing
materials and all signs in, on or about the Leased Premises;

 

  (iv) business interruption insurance either as an extension to or on the same
form as the insurance referred to in subsections 4.12 (i) and (iii) above, and
in such amounts from time to time as necessary to fully compensate the Tenant
for direct or indirect loss of sales or earnings resulting from or attributable
to any of the perils required to be insured against under the policies referred
to in subsections 4.12 (i) and (iii) above and all circumstances usually insured
against by cautious tenants including losses resulting from interference with or
prevention of access to the Leased Premises or the Building as a result of such
perils or for any other reason;

 

  (v) tenant’s legal liability insurance for the full replacement cost of the
Leased Premises, and the loss of use thereof;

 

  (vi) leasehold interest insurance to fully protect the Tenant for loss of its
interest in this Lease and its Leasehold Improvements in the event of
termination of this Lease pursuant to Section 6.10, whether or not there is any
damage or destruction to the Leased Premises;

 

  (vii) standard owners’ form of automobile insurance policy providing third
party liability insurance on all automobiles owned by or registered in the name
of the Tenant with inclusive limits and on such terms as reasonably required by
the Landlord from time to time, covering all licensed vehicles owned by or
operated by or on behalf of the Tenant;

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  (viii) plate glass insurance on all internal and external glass;

 

  (ix) by law compliance insurance; and

 

  (x) insurance against such risks and in such amounts as the Landlord or any
mortgagee, debenture holder or other secured creditor of the Landlord may from
time to time reasonably require upon not less than thirty (30) days’ written
notice.

 

(b) Each of the Tenant’s insurance policies shall name the Landlord and the
Tenant and any others designated by the Landlord as additional named insureds
with the Landlord as loss payee, as their interests may appear under the
policies referred to in subsections 4.12 where applicable, (x) above, and each
of the Tenant’s insurance policies shall contain, as deemed appropriate by the
Landlord:

 

  (i) the mortgage clause as may be required by any mortgagee, debenture holder
or other secured creditor of the Landlord;

 

  (ii) if available at no extra cost, a waiver by the insurer of any rights of
subrogation, or indemnity, or any other claim over, to which such insurer might
otherwise be entitled against the Landlord or any agents or employees of the
Landlord or any other person for whom the Landlord is in law responsible;

 

  (iii) an undertaking by the insurer that no material change adverse to the
Landlord or the Tenant or the mortgagee, debenture holder or other secured
creditor of the Landlord or the Tenant will be made and the policy will not
lapse or be cancelled or terminated, except after not less than thirty
(30) days’ written notice to the Landlord and the Tenant and the mortgagee,
debenture holder or other secured creditor of either of them of the intended
change, lapse, cancellation or termination;

 

  (iv) a provision stating that the Tenant’s insurance policy shall be primary
and shall not call into contribution any other insurance available to the
Landlord;

 

  (v) a disputed loss endorsement or agreement, where applicable;

 

  (vi) a severability of interests clause and a cross-liability endorsement
clause for liability policies, where applicable; and

 

  (vii) a waiver, in respect of the interests of the Landlord and of any
mortgagee, debenture holder or other secured creditor of the Landlord, of any
provision in any such insurance policies with respect to any breach of any
warranties, representations, declarations or conditions contained in the said
policies.

All of the Tenant’s insurance policies shall be taken out with insurers and
shall be in such form and on such terms as are satisfactory to the Landlord from
time to time.

 

(c) The Tenant shall ensure that the Landlord shall at all times be in
possession of either certificates of insurance in the form designated or
approved by the Landlord or certified copies of the Tenant’s insurance policies
which are current and in force in good standing including such certificates or
other evidence satisfactory to the Landlord as to the Tenant’s insurance in
effect and its renewal or continuation in force together with such evidence as
may be required by the Landlord as to the method of determination of the full
replacement cost of the Leasehold Improvements, trade fixtures, furnishings,
equipment, stock-in-trade, plate glass, storefront and store facing materials
and signs and full particulars of the full replacement cost of each of the same,
and if the Landlord reasonably concludes that the full replacement cost has been
underestimated or understated, the Tenant shall forthwith arrange for any
consequent increase in coverage required pursuant to this Section 4.12.

 

(d) The Tenant hereby releases the Landlord and its servants, agents, employees,
contractors and those for whom the Landlord is in law responsible from all
losses, damages and claims of any kind in respect of which the Tenant is
required to maintain insurance or is otherwise insured.

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Section 4.13 Increase in Insurance Premiums

The Tenant shall pay to the Landlord forthwith on demand therefor any amount by
which the basic premium of insurance paid by the Landlord is increased by reason
of any particular use or occupation of the Leased Premises or by reason of any
provision of this Lease.

Section 4.14 Indemnity by Tenant

The Tenant shall indemnify and save harmless the Landlord from any and all
liabilities, damages, costs, claims, suits or actions resulting from:

 

(a) any breach, violation or non-performance of any covenant, obligation or
agreement of the Tenant under this Lease;

 

(b) any damage to property however occasioned by the Tenant, its officers,
agent, servants, employees, contractors, customers, invitees or licensees and
any injury to any person or persons, including death resulting at any time
therefrom, occurring in or on the Leased Premises or the Building or the Rights
in Common or any part thereof arising from or occasioned by any cause whatever,
except where such damage or injury is due to the act, default or negligence of
the Landlord, its officers, agents, servants, employees or contractors, not
under the direction or supervision of the Tenant; and

 

(c) any contract, lien, privilege, mortgage, charge or encumbrance on the
Building arising from or occasioned by the act, default or negligence of the
Tenant, its officers, agents, servants, employees, contractors, customers,
invitees or licensees,

and such indemnification shall survive the termination of this Lease, anything
in this Lease to the contrary notwithstanding.

Section 4.15 Surrender of Leased Premises

At the expiration or earlier termination of the Term the Tenant shall peaceably
surrender and yield up to the Landlord the Leased Premises and all Leasehold
Improvements made, constructed, erected or installed in the Leased Premises in
good and substantial repair and condition in accordance with its covenants to
maintain and repair the Leased Premises. Upon the expiration or earlier
termination of the Term, the Tenant shall not be required to remove all or any
part of the Leasehold Improvements except such of the Leasehold Improvements as
have been installed by or behalf of the Tenant after the Commencement Date
without the prior written approval of the Landlord and which the Landlord
requires to be removed. In the event of any such removal the Tenant shall make
good any damage caused by reason of the installation and removal of such
Leasehold Improvements. On the expiration of the Term all Leasehold Improvements
made, constructed, erected or installed in the Leased Premises and not required
to be removed shall be deemed to have become the property of the Landlord.

Section 4.16 Removal of Tenant’s Property

At any time within thirty (30) days prior to the expiration of the Term the
Tenant, if not in default under this Lease, may, and at the request of the
Landlord shall, remove from the Leased Premises all its moveable trade fixtures
and furniture and equipment (other than rugs, carpeting and floor coverings
attached in any way to the Leased Premises) not affixed to the Leased Premises
but the Tenant shall repair any damage to the Leased Premises and the Building
which may be occasioned by such removal. On the expiration of the Term all such
moveable trade fixtures and furniture and equipment not so removed shall be
deemed to have become the property of the Landlord.

Section 4.17 Exhibit Leased Premises

At any time during the Term, the Landlord may exhibit the Leased Premises to
prospective purchasers or mortgagees of the Building and during the six
(6) months prior to the expiration of the Term, the Landlord may exhibit the
Leased Premises to prospective tenants.

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Section 4.18 Assignment and Subletting

 

(a) The Tenant shall not assign this Lease in whole or in part and shall not
sublet or part with or share possession of all or any part of the Leased
Premises and shall not grant any concessions, franchises, licences or other
rights to others to use any portion of the Leased Premises (all of the foregoing
being hereinafter individually or collectively referred to as a “Transfer”, a
party making a Transfer is referred to as “Transferor” and a party taking a
Transfer is referred to as a “Transferee”) without the prior written consent of
the Landlord in each instance which consent may not be unreasonably withheld or
delayed.

 

(b) Notwithstanding and without in any way affecting or limiting the
interpretation of the foregoing, it is agreed that it shall be reasonable for
the Landlord to withhold its consent to a Transfer unless it is shown to the
Landlord’s satisfaction that:

 

  (i) that the proposed Transferee has a good business and personal reputation
and is an experienced and successful owner and operator of a business of the
same type and quality as that to be operated on the Leased Premises pursuant to
the provisions of this Lease;

 

  (ii) the proposed Transferee and its principal shareholders have not been
bankrupt or the holder of fifty (50%) percent or more of the issued shares of
any class of shares of the corporation or of an interest in a partnership,
neither of which has been bankrupt in the five (5) years preceding the date of
the proposed Transfer;

 

  (iii) the proposed Transferee and its principal shareholders have good
financial strength at least equal to that of the Tenant at the Commencement Date
and as at the date of the request of the Landlord’s consent to the Transfer and
have financial strength at least sufficient to satisfy all of the obligations of
the Tenant hereunder; and

 

  (iv) the Tenant is not in default under this Lease.

 

(c) If the Landlord withholds, delays or refuses to give consent to any
Transfer, whether or not the Landlord is entitled to do so, the Landlord shall
not be liable for any losses or damages in any way resulting therefrom and the
Tenant shall not be entitled to terminate this Lease or exercise any remedy
whatever in respect thereof except to seek an order of a competent court of
jurisdiction compelling the Landlord to grant any such consent which the
Landlord is obliged to grant pursuant to the terms of this Lease.

 

(d) No Transfer may be made other than pursuant to an agreement in writing of
which a copy is given to the Landlord together with the request for consent.

 

(e) No Transfer may be made where any portion of the Rent is lower than that
provided for herein or otherwise on terms more favorable to the Transferee than
the terms set forth herein.

 

(f) All requests to the Landlord for consent to any Transfer shall he made to
the Landlord in writing together with a copy of the agreement pursuant to which
the proposed Transfer will be made and payment to the Landlord of a deposit in
the amount of Five Hundred Dollars ($500.00) on account of all costs incurred by
the Landlord in considering and processing the request for consent including
legal costs and an administration fee which the Landlord shall be entitled to
charge for the processing of such request for consent and including all costs of
completing any documentation to implement any Transfer and all other agreements
contemplated hereby, all of which shall be prepared by the Landlord or its
solicitor if required by the Landlord. All costs incurred by the Landlord in
respect of any such request for consent, including legal costs and the
Landlord’s administrative fee shall be the responsibility of and shall be paid
by the Tenant forthwith upon demand whether or not the Landlord grants its
consent to any proposed Transfer.

 

(g) All such requests to the Landlord for consent to any Transfer shall also be
accompanied by such information in writing as a Landlord might reasonably
require respecting the proposed Transferee and which might be required to
provide the Landlord with all the information necessary to determine whether the
aforementioned factors are satisfied and which information shall include,
without limitation, the name, business and home address and telephone numbers,
business experience, credit information and rating, financial position and
banking and personal references of the proposed Transferee and a description of
the business to be conducted by the Transferee from the Leased Premises.

 

(h) In the event of any Transfer the Landlord shall have the following rights,
in default of any of which no such Transfer shall occur or be effective:

 

  (i) to collect a security deposit equal to at least two (2) month’s Base Rent
and the Additional Rent then payable in respect of the Leased Premises;

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  (ii) to require the Tenant and the Transferee and any indemnifier in respect
to the Tenant’s obligations hereunder to enter into an agreement in writing and
under seal to implement any amendments to this Lease to give effect to the
Landlord’s exercise of any of its rights hereunder;

 

  (iii) to require the Transferee to enter into an agreement with the Landlord
in writing and under seal to be bound by all of the Tenant’s obligations under
this Lease in respect of the Leased Premises and to waive any right it or any
person on its behalf may have to disclaim, repudiate or terminate this Lease
pursuant to any bankruptcy, insolvency, winding-up or other creditors
proceedings, including without limitation, the Bankruptcy and Insolvency Act
(Canada) or the Companies Creditor’s Arrangement Act (Canada) and to agree that
in the event of any such proceedings the Landlord will comprise a separate class
for voting purposes;

 

  (iv) to require the Transferee to waive any rights pursuant to subsections 21
and 39 (2) of the Commercial Tenancies Act (Ontario) and any amendments thereto
and any other statutory provisions of the same or similar effect, to retain the
unexpired Term of the Lease or any portion thereof or obtain any right to enter
into any lease or other agreement directly with the Landlord for the Leased
Premises or any portion thereof or otherwise remain in possession of any portion
of the Leased Premises; and

 

  (v) to require, if the Transfer is a sublease, or other transaction not
including an assignment, that all amounts payable by the Transferee each month
be paid directly to the Landlord who shall apply the same on account of the
Tenant’s obligations under this Lease.

 

(i) No consent of the Landlord to a Transfer shall be effective unless given in
writing and executed by the Landlord and no such consent shall be deemed or
presumed by any act or omission of the Landlord or by the Landlord failing to
respond to any request for consent or by the Landlord’s acceptance of any
payment of any amount payable hereunder from any party other than the Tenant.
The Landlord may collect Rent or any other amounts from any Transferee and apply
the amount collected to any Rent and the collection and acceptance of any Rent
shall not be deemed to be a waiver of the Landlord’s rights under this
Section 4.18 nor an acceptance of or consent to any such Transfer or a release
of any of the Tenant’s obligations under this Lease. No consent by the Landlord
to any Transfer shall constitute a waiver of the necessity to obtain the
Landlord’s consent to any subsequent or other Transfer.

 

(j) In the event of any Transfer or any consent by the Landlord to any Transfer,
the Tenant shall not thereby be released from any of its obligations hereunder
which shall remain bound by all of such obligations pursuant to this Lease for
the balance of the Term. The Tenant agrees that if this Lease is ever
disclaimed, repudiated or terminated by or on behalf of the Transferee pursuant
to any bankruptcy, insolvency, winding-up or other creditors’ proceeding
including any proceeding under the Bankruptcy and Insolvency Act (Canada) or the
Companies Creditors’ Arrangement Act (Canada) or if the Landlord terminates this
Lease as a result of any act or default of the Transferee, the Tenant shall
nonetheless remain responsible for the fulfillment of all of the obligations of
the Tenant hereunder for what would have been the balance of the Term but for
such disclaimer, repudiation or termination and shall, upon the Landlord’s
request enter into a new lease for the Leased Premises for such balance of the
Term and otherwise on the same terms and conditions as in this Lease subject to
such amendments hereto to which the Tenant had agreed at any time prior to such
disclaimer, repudiation or termination and with the exception that the Tenant
will accept the Leased Premises in an ‘as is’ condition.

 

(k) If the Tenant is an incorporated company, any change in the effective voting
or other control of the company shall be deemed for the purposes hereof to be a
Transfer. So long as the shares of Intellon Corporation are being publicly
traded on a recognized stock exchange and Intellon Canada Inc. is a wholly owned
subsidiary of Intellon Corporation, then any change in the effective voting
control of the Tenant that results from: (A) any financing of the Tenant by
lenders who are acting at arms length to the Tenant, or (B) any issuance of
equity securities by the Tenant to investors shall not require the prior written
consent of the Landlord but shall require written notice to the Landlord.

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(l) Notwithstanding anything to the contrary hereinbefore contained, the
Landlord shall have the right, exercisable by written notice to the Tenant given
within fourteen (14) days following the receipt by the Landlord of the Tenant’s
request for a consent to a Transfer and all information and documentation that
is required under the provisions of this Section 4.18 to be provided to the
Landlord, to terminate this Lease, if the request was to assign the Lease,
sublease the whole of the Leased Premises or a change in the voting control of
the Tenant or, to terminate the Lease only as to a portion of the Leased
Premises if the request was to sublet a portion of the Leased Premises or to
assign the Lease in part only. Such termination shall be effective on a date
named in such notice which shall be the last day of a month not less than thirty
(30) days nor more than one hundred and twenty (120) days following the delivery
of such notice. Upon such termination of this Lease as to a portion of the
Leased Premises the Tenant shall peaceably surrender and yield up to the
Landlord such portion of the Leased Premises in accordance with the provisions
of this Lease relating to the surrender of the Leased Premises at the expiration
of the Term and thereafter the Rent shall be adjusted accordingly.

 

(m) If the Landlord elects to terminate this Lease in accordance with the
provisions of subsection 4.18(l), the Tenant shall have the right, to be
exercised by written notice to the Landlord within two (2) day after receipt of
the Landlord’s notice, to withdraw the request for consent, in which case the
Tenant shall not proceed with the Transfer and the Landlord’s notice of
termination shall be null and void and this Lease shall continue in full force
and effect.

Section 4.19 Tenant’s Fixtures

The Tenant shall install and maintain in the Leased Premises at all times during
the Term, new first class trade fixtures including furnishings and equipment
adequate and appropriate for the business to be conducted on the Leased Premises
and of no less a quality or quantity than whatever is usual for such type of
business, all of which shall be kept in good order and condition. The Tenant
shall not remove any trade fixtures or other contents from the Leased Premises
during the Term except with the prior written consent of the Landlord, in the
ordinary course of business or for the purpose or replacing them with others at
least equal in value and function to those being removed.

Section 4.20 Waste Removal

The Tenant shall not allow any refuse, garbage or any loss objectionable
materials to accumulate in or about the Leased Premises or the Building and will
at all times keep the Leased Premises in a clean and neat condition. The Tenant
at its expense shall at all times comply with the Landlord’s rules and
regulations regarding the separation, removal, storage and disposal of waste of
the Leased Premises. The Tenant shall be responsible for all costs of removal of
waste from the Leased Premises other than costs of routine waste removal
included in the Operating Costs.

Section 4.21 Pest Control

The Tenant shall co-operate with the Landlord and with any contractor engaged by
the Landlord in respect of pest control and extermination in the Leased Premises
and the Building.

Section 4.22 Compliance with Laws

 

(a) The Tenant shall be solely responsible for obtaining from all authorities
having jurisdiction all necessary permits, licences and approvals as may be
necessary to permit the Tenant to hold this Lease and to occupy the Leased
Premises and conduct its business thereon, as required by all applicable Laws.

 

(b) The Tenant shall be responsible for and shall comply at its own expense with
all applicable Laws respecting the use, condition and occupation of the Leased
Premises, and all Leasehold Improvements, trade fixtures, furniture, fixtures,
equipment and contents thereof (collectively called “Contents”) and the Tenant
shall promptly perform all necessary repairs, alterations, changes and
improvements to the Leased Premises and the Tenant’s business, use, or occupancy
thereon and the Contents in order to comply with all of such Laws.

 

(c) The Tenant shall provide the Landlord on request with evidence satisfactory
to the Landlord acting reasonably that the Tenant has obtained and is complying
with the terms of all applicable licenses, approvals and permits from time to
time.

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ARTICLE V

LANDLORD’S COVENANTS

Section 5.1 Quiet Enjoyment

Subject to the terms of the Lease and subject to the Tenant paying all Rent and
performing all of its obligations whatsoever as and when the same are due to be
paid and performed, the Tenant may peaceably possess and enjoy the Leased
Premises for the Term without interruption by the Landlord or any person
claiming by, from or under the Landlord.

Section 5.2 Repair

The Landlord shall keep or cause the Building and the Rights in Common but
excluding the Leased Premises to be kept in good repair and in a clean, orderly
and safe condition (both inside and outside) having regard to its size, age,
location and character.

Section 5.3 Heating, Air-Conditioning, Janitorial Service, Etc.

The Landlord in the same manner and to the same extent as a prudent owner and
operator of the Building shall:

 

(a) provide and maintain, at least to the extent from time to time required
under all provisions of this Lease, suitable and adequate Service Areas and
Leasable Service Areas for use during Normal Business Hours in the conduct of
business in the Building by the Tenant and all others entitled thereto;

 

(b) provide and maintain passenger elevator service during Normal Business
Hours;

 

(c) provide heating of the Leased Premises to an extent sufficient to maintain a
reasonable temperature therein at all times during Normal Business Hours;

 

(d) provide air-conditioning of the Leased Premises during Normal Business Hours
with the existing air- conditioning equipment (if any) for the Leased Premises;

 

(e) provide janitorial services for the Leased Premises and the Rights in Common
and the Leasable Service Areas and Service Areas to an extent sufficient to
maintain them in a reasonably clean condition and when reasonably necessary from
time to time to cause the exterior windows of the Building to be washed; and

 

(f) employ personnel necessary to operate and maintain the heating and
air-conditioning systems of the Building and the Rights in Common and to
supervise the Building during Normal Business Hours.

Section 5.4 Exceptions to Landlord’s Obligations

The obligations of the Landlord under Sections 5.2 and 5.3 shall be subject to
the following exceptions:

 

(a) reasonable wear and tear which does not affect the proper use and enjoyment
of the Building;

 

(b) repairs to, replacement or shampooing of carpeting (if any) in the Leased
Premises;

 

(c) the obligations of the Tenant under Article IV;

 

(d) damage or injury resulting from any occurrence for which the Landlord is not
required to maintain insurance under this Lease or which is in excess of the
insurance proceeds actually received by the Landlord from any coverages that are
in place; and

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(e) damage or injury caused by or resulting from any act, default or negligence
of the Tenant, its officers, agents, servants, employees, contractors, invitees
and licensees.

Section 5.5 Landlord’s Insurance

The Landlord shall take out and maintain or cause to be taken out and maintained
with respect to the Building a policy or policies containing deductible clauses
of any insurance company or companies of:

 

(a) insurance against destruction or damage by fire and those additional perils
contained in the “extended perils” endorsement of such insurance company or
companies usual from time to time for similar risks on a replacement cost basis
excluding the replacement value of footings, foundations and pavements, and

 

(b) legal liability for bodily injury or death and property damage resulting
from each occurrence up to such limits as the Landlord may from time to time
reasonably determine but in any event not less than $3,000,000.00 all-inclusive.

Section 5.6 Building Taxes

Subject to Article IV, the Landlord shall pay or cause to be paid in the year in
which same are due all Taxes levied, rated, charged or imposed against the
Building.

ARTICLE VI

MUTUAL COVENANTS

Section 6.1 Entry by Landlord

The Landlord and its officers, agents, servants, employees and contractors shall
be entitled at any time in cases of emergency and upon reasonable notice during
Normal Business Hours to enter upon the Leased Premises for the purpose of
making any repair in this Lease required or permitted to be made by the Landlord
and for the purpose of making any repair which the Tenant fails to make
according to notice in writing, or to do any work which the Landlord is required
or permitted to do under this Lease.

Section 6.2 Maintenance of Services, etc.

The Landlord shall have the right to use, install, maintain and repair pipes,
wires, ducts and other installations in, under or through the walls, ceilings
and floors of the Leased Premises for or in connection with the supply of any
services or utilities to the Leased Premises or to any part of the Building or
the Rights in Common and the right to do such work in the Leased Premises as the
Landlord may deem necessary to preserve, improve or protect the Leased Premises
or the Building.

Section 6.3 Suspension of Services

In order to make any repairs, alterations, improvements or additions in or
relating to the Leased Premises or to any part of the Building or the Rights in
Common, the Landlord, if such action is necessary, may interrupt or suspend the
supply to the Leased Premises of any services or utilities until such repairs,
alterations, improvements or additions shall be completed provided that such
work shall be diligently proceeded with.

Section 6.4 Entry by Landlord Not to Interfere

The Landlord and its officers, agents, servants, employees and contractors in
entering the Leased Premises or in making any repair or in doing any work shall
not unreasonably or unnecessarily interfere with or disturb the conduct of the
business of the Tenant.

Section 6.5 Entry in Absence of Tenant

If the Tenant or its representative shall not be personally present to open and
permit an entry into the Leased Premises at any time when for any reason an
entry therein shall be necessary or permissible under this Lease, the Landlord
or the Landlord’s agent may enter the same by a master key, or may forcibly
enter the same, without rendering the Landlord or such agent liable therefor,
and without in any manner affecting the covenants, obligations and agreements of
the Tenant under this Lease.

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Section 6.6 Overholding

If at the expiration of the Term by lapse of time the Tenant shall hold over
without the written consent of the Landlord for any reason the tenancy of the
Tenant thereafter shall be from month to month and shall, in the absence of
written agreement to the contrary, be subject to all covenants, obligations and
agreements provided for in this Lease, except as to duration and rights of
renewal and extension, if any, and except that the Base Rent shall be twice the
monthly Base Rent payable during the last twelve months of the Term.

Section 6.7 Limit of Landlord’s Liability

Except for matters arising from the negligence of the Landlord, its officers,
agents, servants, employees or contractors, the Landlord shall not be liable or
responsible in any way for, and the Tenant shall not be entitled to any
abatement of Rent in respect of, any loss, damage or injury of any nature
whatever that may be suffered or sustained to any persons or property, and in
particular, without limiting the generality of the foregoing, the Landlord shall
not be liable for any loss, damage or injury of any nature whatever to any
person or persons or property:

 

(a) resulting from any defect in the Leased Premises or in the Building or the
Rights in Common;

 

(b) resulting from the condition or arrangement or from the interruption or
breakdown of any elevators, heating, ventilating, air-conditioning or
mechanical, sprinkler or electrical equipment or machinery or of any water, gas,
sewage, telephone or other communications facilities or electrical power
services or utilities comprised in the Leased Premises or in the Building or the
Rights in Common or belonging thereto, connected therewith or used in the
operation thereof;

 

(c) by reason of the failure to supply adequate drainage;

 

(d) by reason of steam, smoke, water, rain, snow or other substances leaking,
issuing, flowing or escaping into any part of the Leased Premises; or

 

(e) resulting from anything done or omitted to be done by the Landlord, its
servants, employees, agents, contractors, customers, invitees or licensees, by
other occupants of the Building, or by persons in the Leased Premises or the
Building, by occupants of adjacent property or by the public,

nor shall the same constitute an eviction.

Section 6.8 Landlord’s Alterations

The Landlord at any time and from time to time may make alterations or additions
to, and construct additional stories on the Building, and may build adjoining
the same. No such alterations, addition or construction shall unreasonably
interfere with access to the Leased Premises.

Section 6.9 Tenant’s Alterations

The Tenant shall not make any alteration, repair, addition or improvement to the
Leased Premises nor make, construct, erect or install any Leasehold Improvements
in or to the Leased Premises, except with the prior written approval of the
Landlord and in accordance with the procedures and provisions set out in this
section. Before beginning any such work the Tenant shall deliver to the Landlord
sufficient copies of its plans and specifications therefor and such other
information as the Landlord may reasonably require with respect thereto. The
Landlord may require revisions to such plans and specifications and payment of
the cost to the Landlord of having its architects approve such plans and
specifications as conditions of its approval for such work. Such approval shall
not release the Tenant from its obligation to obtain a building permit if one is
necessary. All such work shall be done by the Tenant:

 

(a) in accordance with the applicable Laws;

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(b) as expeditiously as possible in a good and workmanlike manner and with
first-class new materials;

 

(c) in compliance with such reasonable rules and regulations as the Landlord or
its agents or contractors may make;

 

(d) in such manner as will not interfere unreasonably with any work being done
by the Landlord upon the Leased Premises or any other portion of the Building;

 

(e) subject to the reasonable supervision of the Landlord or its agents or
contractors and the payment of a reasonable fee in connection with such
supervision;

 

(f) only by contractors approved by the Landlord, provided that the Landlord may
at its option require any mechanical or electrical work be done by the
Landlord’s contractor;

 

(g) only by persons whose labour union affiliations are acceptable to the unions
of which the employees of the Landlord, its contractors or subcontractors are
members, and

 

(h) at the risk of the Tenant.

Any such work which is not done in accordance with the plans, specifications,
information and revisions delivered to and approved by the Landlord or is not
otherwise in accordance with the requirements of this section, and which has not
been removed or corrected forthwith after demand, may be removed or corrected by
the Landlord at the expense of the Tenant. The Tenant shall also pay to the
Landlord with respect to such work, the reasonable cost to the Landlord of all
utilities supplied to the Leased Premises with respect to such work and any
special or additional services provided to the Tenant during the conduct of such
work, including special supervision, the cost of any necessary cutting or
patching of or repairing any injury to the Building or the Leased Premises, any
cost to the Landlord of removing refuse or materials and of cleaning as a result
of such work, any cost to the Landlord of changes required by the Tenant for the
use of the Leased Premises, and all other costs incurred for the accommodation
of such work (including delays caused by the conduct of such work) and any other
cost of the Landlord which can reasonably be allocated as a direct expense
relating to the conduct of such work. Such costs of the Landlord shall be paid
to the Landlord by the Tenant as they are incurred by the Landlord and invoiced
to the Tenant. Any such invoices may be based upon the Landlord’s reasonable
estimate of any cost wherever such cost cannot be exactly determined from
information then available to the Landlord.

Section 6.9.1 Tenant to Discharge all Liens

 

(a) The Tenant will not allow or cause any construction or other liens or
encumbrances in respect of materials supplied or work done or to be done by or
on behalf of the Tenant to be registered against or otherwise affect the
Building, the Leased Premises or any part thereof or the Landlord’s or the
Tenant’s interest in the Leased Premises.

 

(b) If a lien or other encumbrance is registered against or otherwise affects
the Building or the Leased Premises or the Landlord’s or the Tenant’s interest
therein, and the Tenant fails to discharge or cause any such lien or encumbrance
to be discharged or vacated within five (5) days after it is filed or
registered, then the Landlord may, in addition to its other rights and remedies,
discharge the lien or encumbrance or have it vacated by paying the amount
claimed into court or directly to the lien claimant and the Tenant will pay to
the Landlord, upon demand, all costs (including the amount so paid and any legal
costs and expenses) plus interest at an annual rate of three (3) percentage
points above the Stipulated Rate of Interest, calculated and compounded monthly.

Section 6.10 Termination in the Event of Damage

Notwithstanding the other provisions of this Lease, if the Building or the
Rights in Common is damaged or destroyed by any casualty against which the
Landlord is insured so as to render the Leased Premises unfit for the purpose of
the Tenant or incapable of access, the Rent reserved by this Lease or a
proportionate part thereof shall abate to the extent of insurance recoveries
received by the Landlord from the date of the damage or destruction, until the
Leased Premises are rebuilt unless the Tenant is obliged to repair under the
terms of this Lease; provided that upon the delivery of an Architect’s
Certificate to the effect:

 

(a) that the Leased Premises cannot be rebuilt or made fit for the purposes of
the Tenant within one hundred and twenty (120) days of such damage or
destruction, the Landlord, at its option, instead of making the Leased Premises
fit for the Tenant, may terminate this Lease by giving to the Tenant within
thirty (30) days after such damage or destruction notice of the termination, and
thereupon Rent shall be apportioned and paid to the date of such damage or
destruction and the Tenant shall immediately deliver up vacant possession of the
Leased Premises to the Landlord; or

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(b) that irrespective of whether the Leased Premises are damaged or destroyed,
fifty percent (50%) or more of the leasable area of the Building or the Rights
in Common is damaged or destroyed and such area cannot be rebuilt or made fit
for the purposes of the tenants of such leasable area within one hundred and
eighty (180) days of such damage or destruction, the Landlord, at its option,
may terminate this Lease by giving to the Tenant within thirty (30) days after
such damage or destruction notice of termination requiring vacant possession of
the Leased Premises sixty (60) days after delivery of such notice of termination
and thereupon Rent and any other payments for which the Tenant is liable under
this Lease shall be apportioned and paid to the date on which vacant possession
is required and the Tenant shall deliver up vacant possession of the Leased
Premises to the Landlord in accordance with such notice of termination and the
provisions of this Lease.

Section 6.11 Termination for Sale/Demolition

Notwithstanding any other provisions of this Lease, if the Landlord shall have
decided or determined, in its sole and absolute discretion, to:

 

(a) sell the whole or any part of the Building of which the Leased Premises form
a part;

 

(b) demolish the whole or any part of the Building of which the Leased Premises
form a part; or

 

(c) redevelop, reconstruct, renovate or alter the whole or any part of the
Building of which the Leased Premises form a part;

to the extent that vacant possession of the Leased Premises is necessary,
expedient or desired, as determined by the Landlord in its sole and absolute
discretion and if the Tenant has exercised its right to extend as provided for
in Section 10.3 the Landlord may unilaterally terminate this Lease by giving
twelve (12) months notice in writing to the Tenant which notice can specify a
termination date (the “Termination Date”) which shall not be earlier than
December 31, 2012. It is hereby acknowledged and agreed by the parties hereto
that the Tenant shall have no claim or cause of action whatsoever (including but
not limited to claims for damages, losses, expenses and other compensation)
against the Landlord with respect to, relating to or arising from such
termination of the Lease by the Landlord and that the Landlord shall have no
obligation or liability whatsoever to the Tenant with respect to, relating to or
arising from such termination of the Lease by the Landlord. On the Termination
Date, the Tenant shall deliver up vacant possession of the Leased Premises to
the Landlord in accordance with the provisions of this Lease and shall execute
all documents and other assurances deemed necessary or desirable by the Landlord
in its sole and absolute discretion to give effect to the provisions of this
Section.

Section 6.12 Rules and Regulations

The Landlord shall be entitled from time to time to make and to amend and
supplement reasonable rules and regulations not inconsistent with this Lease and
applying uniformly to all tenants in the Building. Without limiting the
generality of the foregoing, such rules and regulations may relate to and govern
the operation, maintenance, safety, care, cleanliness and use of the Building,
the Leased Premises, the Leasable Service Areas and the Service Areas, and
access to the Building and the Rights in Common and the Leased Premises other
than during Normal Business Hours. The Tenant shall comply with the rules and
regulations set out in Schedule “C” to this Lease and any amendments or
supplements thereto and shall cause its officers, agents, servants, employees,
contractors, customers, invitees and licensees to comply with such rules and
regulations. The Landlord shall be under no responsibility for its failure to
enforce any of such rules or regulations. The Landlord shall give reasonable
notice to the Tenant of any amendments or supplements to such rules and
regulations.

Section 6.13 Transfers by Landlord

The Landlord, at any time and from time to time, may sell, transfer, lease,
assign or otherwise dispose of the whole or any part of its interest in the
Building or in the Leased Premises and, at any time and from time to time, may
enter into any mortgage of

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the whole or any part of its interest in the Building or in the Leased Premises.
If the party acquiring such interest shall have agreed to assume, and so long as
it holds such interest, to perform each of the covenants, obligations and
agreements of the Landlord under this Lease in the same manner and to the same
extent as if originally named as the Landlord in this Lease the Landlord shall
thereupon be released from all of its covenants, obligations and agreements
under this Lease.

Section 6.14 Rights of Landlord’s Mortgagees

If at any time during the currency of a mortgage of the interest of the Landlord
in the Building notice of which has been given to the Tenant, any default shall
occur in the performance of any of the covenants, obligations or agreements of
the Landlord which would give rise to a right in the Tenant to terminate this
Lease, then the Tenant, before becoming entitled as against the holder of such
mortgage to exercise any right to terminate this Lease, shall give to the holder
of such mortgage notice in writing of such default. The holder of such mortgage
shall have such period as may be reasonable in the circumstances within which to
remedy such default as agent of the Landlord (or by such other means as will
avoid the holder of such mortgage becoming a mortgagee in possession of the
Leased Premises by reason of effecting such remedy) and if such default is
remedied within such time the Tenant shall not by reason thereof terminate this
Lease. The rights and privileges granted to the holder of any such mortgage by
virtue of this section shall not in any way be deemed to alter, affect or
prejudice any of the rights available to the Tenant against the Landlord. Any
notice to be given to the holder of such mortgage shall be deemed to have been
given if mailed by registered mail to its most recent address of which the
Tenant shall have notice.

Section 6.15 Priority of Lease

This Lease and all rights of the Tenant under this Lease are subject and
subordinate to all ground or underlying leases and to all mortgages now or
hereafter made by the Landlord provided that the holder thereof shall permit the
Tenant to remain in possession of the Leased Premises in accordance with the
provisions of this Lease so long as the Tenant is not in default under this
Lease. The Tenant, if so required, shall attorn to the mortgagee upon the
foreclosure of any such mortgage and to the purchaser under the sale of the
Building pursuant to any such mortgage and shall recognize such mortgagee or
purchaser as the Landlord under this Lease; provided that the holder of any such
mortgage may subordinate and postpone such mortgage to this Lease at any time by
an instrument in writing to such effect registered against the title to the
Building without any further consent or agreement of the Tenant.

Section 6.16 Right to Relocate

At any time and from time to time prior to or during the Term or any renewal or
extension thereof, the Landlord shall be entitled to relocate or rearrange the
Leased Premises from the location shown on Schedule “A” or to make alterations,
additions or reductions to the Leased Premises provided that:

 

(a) the leasable area of the Leased Premises is not increased or decreased by
more than ten percent (10%); and

 

(b) the Landlord effects such alterations, additions, reductions, relocation or
rearrangement at its expense, including (i) all reasonable moving costs and
(ii) all other reasonable direct costs necessarily and reasonably incurred by
the Tenant. All such costs shall be as evidenced by paid invoices delivered by
the Tenant to the Landlord.

ARTICLE VII

LANDLORD’S REMEDIES

Section 7.1 Landlord May Perform Tenant’s Covenants

If the Tenant shall be in default of any of its covenants, obligations or
agreements under this Lease (other than its covenant to pay Rent) and such
default shall have continued for a period of ten (10) consecutive days after
notice by the Landlord to the Tenant specifying with reasonable particularity
the nature of such default and requiring the same to be remedied, the Landlord,
without prejudice to any other rights which it may have with respect to such
default, may remedy such default and the cost thereof to the Landlord together
with interest thereon at the Stipulated Rate of Interest from the date such cost
was incurred by the Landlord shall be added to the Rent due on the next
succeeding date on which Base Rent is payable and such amount shall thereupon
become due and payable as Rent in addition to the regular payment of Base Rent
then due. The Landlord shall be subrogated to the extent of such payment to all
rights, remedies and priorities of the payee of the amount paid by the Landlord
to remedy such default.

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Section 7.2 Re-Entry

When:

 

(a) the Tenant shall be in default in the payment of any Rent, whether lawfully
demanded or not, and such default shall continue for a period of five
(5) consecutive days after notice by the Landlord to the Tenant;

 

(b) the Tenant shall be in default of any of its covenants, obligations or
agreements under this Lease (other than its covenant to pay Rent) and such
default shall have continued for a period of ten (10) consecutive days after
notice by the Landlord to the Tenant specifying with reasonable particularity
the nature of such default and requiring the same to be remedied;

 

(c) any property of the Tenant has been sold under a valid writ of execution, or
the Tenant shall have made an assignment for the benefit of creditors, or shall
make any assignment or have had a receiving order made against it under the
Bankruptcy and Insolvency Act, or becoming bankrupt or insolvent shall have made
application for relief under the provisions of any statute now or hereafter in
force concerning bankrupt or insolvent debtors, or any action whatever,
legislative or otherwise, shall have been taken with a view to the winding up,
dissolution or liquidation of the Tenant;

 

(d) any insurance policy is cancelled or not renewed by an insurer by reason of
any particular use or occupation of the Leased Premises;

 

(e) the Tenant shall purport to make a Transfer affecting the Leased Premises or
the Leased Premises shall be used by any person or for any purpose other than in
compliance with and expressly authorized by this Lease;

 

(f) the Tenant makes any sale in bulk affecting any property on the Leased
Premises (other than in conjunction with a Transfer approved in writing by the
Landlord and made pursuant to all applicable legislation);

 

(g) a trustee, receiver, receiver manager, manager, agent or other like person
shall be appointed in respect of the assets or business of the Tenant or any
other occupant of the Leased Premises; or

 

(h) the Leased Premises shall have been vacated or have become vacant or shall
have remained unoccupied for a period of fifteen (15) consecutive days,

then and in any of such cases, the then current month’s Rent together with the
Rent for the three (3) months next ensuing shall immediately become due and
payable, and at the option of the Landlord the Term shall become forfeited and
void, and the Landlord without notice or any form of legal process whatever may
forthwith re-enter the Leased Premises or any part thereof in the name of the
whole and repossess and enjoy the same as of its former estate, anything
contained in any statute or law to the contrary notwithstanding. Such forfeiture
shall be wholly without prejudice to the right of the Landlord to recover
arrears of Rent and damages for any antecedent breach of the covenants,
obligations or agreements of the Tenant under this Lease. Notwithstanding any
such forfeiture the Landlord may subsequently recover from the Tenant damages
for loss of Rent suffered by reason of this Lease having been prematurely
determined and it may recover from the Tenant all damages it may incur with
respect thereto, including the cost of recovering the Leased Premises, and
including the worth at the time of such termination of the excess, if any, of
the amount of Rent for the remainder of the Term over the then reasonable rental
value of the Leased Premises for the remainder of the Term, all of which Rent
shall be immediately due and payable from the Tenant to the Landlord. In
determining the Rent which would be payable under this Lease by the Tenant
subsequent to default, the annual rent for each year of the unexpired portion of
the Term shall be equal to the average of the aggregate of the Base Rent and
Additional Rent paid by the Tenant from the Commencement Date to the time of
default, or during the three (3) full calendar years preceding such default,
whichever period is shorter.

Section 7.3 Landlord May Re-let

If the Landlord does not exercise its option under Section 7.2 to terminate this
Lease it may nevertheless in the events set out in Section 7.2 from time to time
re-enter the Leased Premises without terminating this Lease, make such
alterations and repairs as

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may be necessary in order to re-let the Leased Premises, and re-let the Leased
Premises or any part thereof as agent for the Tenant for such period or periods
(which may extend beyond the Term) and at such rental or rentals and upon such
other terms and conditions as the Landlord in its sole discretion may deem
advisable. Upon each such re-letting all rentals received by the Landlord from
such re-letting shall be applied; first, to the payment of any indebtedness
other than Rent due from the Tenant to the Landlord; second, to the payment of
any costs and expenses of such re-letting, including brokerage fees and
solicitor’s fees and of the costs of such alterations and repairs; third, to the
payment of Rent due and unpaid, and the residue, if any, shall be held by the
Landlord and applied in payment of future Rent as the same may become due and
payable. The Tenant shall pay to the Landlord the amount by which the rentals
received from such re-letting during any month are less than the rent payable
during that month by the Tenant. Notwithstanding any such reletting without
termination, the Landlord may at any time thereafter elect to terminate this
Lease. No such re-entry or taking of possession by the Landlord shall be
construed as an election on its part to terminate this Lease unless, at the time
of or subsequent to such re-entry or taking of possession, a written notice of
such intention has been given to the Tenant or unless the termination thereof be
decreed by a court of competent jurisdiction.

Section 7.4 Right to Distrain

The Tenant waives and renounces the benefit of any present or future statute
purporting to limit or qualify the Landlord’s right to distrain and agrees with
the Landlord that in any of the events set out in Section 7.2, the Landlord, in
addition to the other rights reserved to it, shall have the right to enter the
Leased Premises as agent of the Tenant either by force or otherwise without
being liable for any prosecution therefor and to take possession of any goods
and chattels whatever on the Leased Premises, save and except any such goods and
chattels which are owned by any occupiers of the Leased Premises, other than the
Tenant, and to sell the same at public or private sale without notice and apply
the proceeds of such sale on account of the Rent or in satisfaction of the
breach of any covenant, obligation or agreement of the Tenant under this Lease
and the Tenant shall remain liable for the deficiency, if any. Notwithstanding
anything contained in the Commercial Tenancies Act, R.S.O. 1990, c. L. 7 or any
successor legislation or other statute which may hereafter be passed to take the
place of the said Section or to amend the same, none of the goods and chattels
of the Tenant at any time during the continuance of the Term shall be exempt
from levy by distress for Rent and the Tenant hereby waives all and every
benefit that it could or might have under such Section. Upon any claim being
made for such exemption by the Tenant, or on distress being made by the
Landlord, this provision may be pleaded as an estoppel against the Tenant in any
action brought to test the right to the levying upon any such goods.

Section 7.5 Landlord May Follow Chattels

In case of removal by the Tenant of the goods or chattels of the Tenant from the
Leased Premises, the Landlord may follow the same for thirty (30) days in the
same manner as is provided for in the Commercial Tenancies Act, R.S.O. 1990,
c.L.7, or any successor legislation or other statute which may hereafter be
passed to take the place of the said Act or to amend the same.

Section 7.6 Waiver of Repudiation of Lease

The Tenant waives and renounces the benefit of Section 65.2 of the Bankruptcy
and Insolvency Act or any successor legislation as such statute may be amended
from time to time and the Tenant covenants and agrees that it will not repudiate
this Lease pursuant to Section 65.2 of the Bankruptcy and Insolvency Act. Upon
any attempt to repudiate this Lease by the Tenant pursuant to Section 65.2 of
the Bankruptcy and Insolvency Act, the Landlord shall be entitled to plead this
covenant and agreement as an estoppel against the Tenant repudiating this Lease.

ARTICLE VIII

CERTIFICATES, NOTICES, PAYMENTS & FINANCIAL INFORMATION

Section 8.1 Estoppel Certificates

The Tenant at any time and from time to time upon not less than ten (10) days’
prior notice, at the request of the Landlord, shall execute and deliver as
directed by the Landlord, a statement in writing certifying that the Tenant is
not insolvent as defined under the Bankruptcy and Insolvency Act (or if the
Tenant is insolvent, providing details of same), that this Lease is unmodified
and in full force and effect (or, if modified, stating the modifications and
that the same is in full force and effect as modified), the dates to which any
amount provided in this Lease to be paid by the Tenant to the Landlord has been
paid and stating whether or not there is any existing default under this Lease
on the part of the Landlord of which the Tenant has notice.

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Section 8.2 Notices

Any notice, demand or request which any party shall give to any party shall be
in writing and shall be deemed to have been validly given if delivered at, or
mailed by registered mail to the address of such party shown in this Lease or to
such other address as such party shall have given written notice, and shall be
deemed to have been received at the time that it was so delivered or in the case
of those given by registered mail, on the second banking day following the date
of mailing. If two or more persons, firms or corporations are named as Tenant,
notice to any one shall be deemed to be notice to all. The address for notices
to the Landlord shall be c/o Arcturus Realty Corporation 144 Front Street West,
Suite 430, Toronto, Ontario M5J 2L7, Attention: Property Manager. The address
for notices to the Tenant and the Indemnitor shall be c/o the Leased Premises.

Section 8.3 Payments

Until such time as the Tenant shall have received written notice to the
contrary, all payments of Rent shall be paid to the Landlord at its address
referred to in Section 8.2 and notwithstanding any transfer or other disposition
by the Landlord of the Leased Premises or of the Rent or any change of the name
and address of the payee of any Rent, the Tenant, until receipt of such notice,
may continue to pay the Rent to the same payee to which and in the same manner
in which the last preceding payment thereof was made and each such payment made
by the Tenant prior to the receipt by it of such notice shall, to the extent
thereof, exonerate and discharge the Tenant of its liability to pay such Rent.

Section 8.4 Financial Information

Throughout the Term of this Lease, the Tenant shall keep and maintain, in an
accessible location, at all times, full, true and accurate books of accounts and
records adequate to reflect correctly the operations of the Tenant with respect
to the Leased Premises and hereby agrees that the Landlord, and its authorized
representatives, will have access thereto during Normal Business Hours and the
right to make copies thereof and extracts therefrom. The Landlord is to be
provided with full financial statements pertaining to the operation of the
Tenant immediately upon request and in any event within one hundred and twenty
(120) days of the end of each fiscal year of the Tenant. The requirement in the
preceding sentence of this Section 8.4 shall not apply so long as the shares of
Intellon Corporation are publicly trading on a recognized stock exchange and
Intellon Canada Inc is a wholly owned subsidiary of Intellon Corporation and
Intellon Canada Inc is itself in occupation of the Leased Premises. The Tenant
agrees to provide to the Landlord prompt notice of any impending financial
difficulties which could lead to a secured creditor’s exercising, or providing
notice of an intention to exercise, its remedies, including a notice under
Section 244 of the Bankruptcy and Insolvency Act.

ARTICLE IX

GENERAL PROVISIONS

Section 9.1 Failure of Landlord to Deliver Possession

Anything in this Lease to the contrary notwithstanding, and in supplement to the
provision of Section 9.2, the Landlord shall not be deemed to be in default
under this Lease if the Landlord is unable to give possession of the Leased
Premises on the Commencement Date by reason of the holding over or retention of
possession of any tenant or occupant or by reason of the fact that construction,
repairs, improvements or decorations of the Leased Premises or of the Building
or of the Rights in Common are not completed or for any other reason not due to
the negligent or wrongful act or default of the Landlord. No such failure to
give possession of the Leased Premises on the Commencement Date shall in any way
affect the validity of this Lease or the covenants, obligations and agreements
of the Tenant under this Lease (save as specifically provided for) or the terms
or conditions of this Lease, nor shall the same be construed in any way to
extend the Term.

Section 9.2 Force Majeure

Notwithstanding any other provision of this Lease, whenever, and to the extent
that either party to this Lease shall be unable to fulfil, or shall be delayed
or restricted in the fulfillment of any obligation (other than the payment of
any monies) under any provision of this Lease by reason of strike, lock-out, war
or acts of military authority, rebellion or civil commotion, material or labour
shortage not within the control of such party, fire or explosion, flood, wind,
water, earthquake or other casualty, any applicable lawful statute, by-law,
ordinance, regulation or order, any event or matter not wholly or mainly within
the control of

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such party, or act of God, not caused by the default or act of, or omission by
such party and not avoidable by the exercise of reasonable effort or foresight
by it, then, so long as any such impediment exists, such party shall be relieved
from the fulfillment of such obligation and the other party shall not be
entitled to compensation for any damage, inconvenience, nuisance or discomfort
thereby occasioned.

Section 9.3 Time of the Essence

Time shall be of the essence of this Lease. Whenever in this the Lease any
matter requires the approval of either the Landlord or the Tenant such approval
shall not be unreasonably withheld.

Section 9.4 Joint and Several Liability

If two or more individuals, corporations, partnerships or other business
associations, or any combination of two or more thereof, shall sign this Lease
as Tenant, the liability of each such individual, corporation, partnership or
other business association to pay Rent and perform all other obligations under
this Lease shall be deemed to be joint and several. If the Tenant named in this
Lease is a partnership or other business association, the members of which by
law are subject to personal liability, the liability of each such member shall
be deemed to be joint and several.

Section 9.5 Amendments

This Lease may not be modified or amended except by instrument in writing signed
by the Landlord and the Tenant.

Section 9.6 Waivers

No waiver by either party of any breach by the other party of any of its
covenants, obligations and agreements under this Lease shall be a waiver of any
subsequent breach or of any other covenant, obligation or agreement, nor shall
any forbearance to seek a remedy for any breach be a waiver of any rights and
remedies with respect to such or any subsequent breach.

Section 9.7 Severability

If any covenant, obligation or agreement in this Lease or the application
thereof to any person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Lease or the application of such covenant,
obligation or agreement to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby and each
covenant, obligation and agreement in this Lease shall be separately valid and
enforceable to the fullest extent permitted.

Section 9.8 Headings

The article headings and section headings in this Lease have been inserted for
convenience of reference only and do not form part of this Lease. Such headings
shall not be referred to in the interpretation of this Lease.

Section 9.9 Changes Required by Context

This Lease shall be read with all changes of gender and number required by the
context.

Section 9.10 Planning Act

This Lease is entered into subject to the condition that it is to be effective
only on obtaining such consents, if any, as may be required under The Planning
Act, R.S.O. 1990, c.P.13 or any successor legislation or other statute which may
hereafter be passed to take the place of the said Act or to amend the same, and
provided that such consents are granted on conditions which are acceptable to
the Landlord.

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Section 9.11 Notice of Lease

This Lease shall not be registered against the title to the Building. Each of
the Landlord and the Tenant agrees that at the request of the other it will
execute and deliver a notice of this Lease for registration against the title to
the Building. No such notice of lease shall amend or alter, or shall be deemed
to have amended or altered, any of the covenants, obligations or agreements
contained in this Lease.

Section 9.12 Whole Agreement

This Lease contains the whole agreement between the parties with respect to the
subject matter of this Lease. There is no representation, warranty, collateral
agreement or condition affecting the Building, the Leased Premises or this
Lease, or supported by this Lease other than as expressed in this Lease. The
schedules and appendices to this Lease form part of this Lease.

Section 9.13 Applicable Law

This Lease shall be construed in accordance with the Laws of the Province of
Ontario.

Section 9.14 Assigns

This Lease shall enure to the benefit of and be binding upon the parties hereto
and their respective heirs, administrators, executors and the Landlord approved
successors and assigns.

ARTICLE X

SPECIAL PROVISIONS

Section 10.1 Right of Extension

The Tenant shall have the right to extend the Term as set out in Schedule “D” of
this Lease on and subject to the terms therein set out.

Section 10.2 Confidentiality

The Tenant covenants and agrees for itself, its officers, directors,
shareholders and employees, that it will keep confidential the terms of the
proposal to lease giving rise to this Lease as well as the terms of this Lease
and that it will not disclose any of such terms to any other party except for
its lenders, financial advisors and legal advisors who have a need to know and
who will be bound to similarly not disclose the terms of the proposal to lease
and this Lease to any third party. This obligation of the Tenant shall not be
construed so as to prevent the disclosure where required by law.

Section 10.3 Indemnitor’s Covenants

 

(a) The Indemnitor acknowledges receiving one copy of the Lease and further
acknowledges that he understands the contents of this Lease and specifically the
contents of this Section 10.3 (the “Indemnity”).

 

(b) The Indemnitor hereby agrees with the Landlord that at all times during the
Term of this Lease and any renewal or extension thereof, the Indemnitor will:
(i) make the due and punctual payment of all Rent, monies, charges and other
amounts of any kind whatsoever payable under the Lease by the Tenant whether to
the Landlord or otherwise and whether the Lease has been disaffirmed or
disclaimed; (ii) effect prompt and complete performance of all and singular the
terms, covenants and conditions contained in the Lease on the part of the Tenant
to be kept, observed and performed; and (iii) indemnify and save harmless the
Landlord from any loss, costs or damages arising out of any failure by the
Tenant to pay the aforesaid Rent, monies, charges or other amounts due under the
Lease or resulting from any failure by the Tenant to observe or perform any of
the terms, covenants and conditions contained in the Lease.

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(c) This Indemnity is absolute and unconditional and the obligations of the
Indemnitor shall not be released, discharged, mitigated, impaired or affected
by: (i) any extension of time, indulgence or modification which the Landlord
extends to or makes with the Tenant in respect of the performance of any of the
obligations of the Tenant under the Lease; (ii) any waiver by or failure of the
Landlord to enforce any of the terms, covenants and conditions contained in the
Lease; (iii) any assignment of the Lease by the Tenant or by any trustee,
receiver, receiver/manager, or liquidator or pursuant to any court order
including but not limited to any order under the Companies’ Creditors
Arrangement Act; (iv) any consent which the Landlord gives to any such
assignment or subletting; (v) any amendment to the Lease or any waiver by the
Tenant of any of its rights under the Lease; or (vi) the expiration of the Term.

 

(d) The Indemnitor hereby expressly waives notice of the acceptance of this
Indemnity and all notice of non-performance, non-payment or non-observance on
the part of the Tenant of the terms, covenants and conditions contained in the
Lease. Without limiting the generality of the foregoing, any notice which the
Landlord desires to give to the Indemnitor shall be sufficiently given if
delivered pursuant to Section 8.2 above below. The Indemnitor may designate by
notice in writing a substitute address for that set forth above and thereafter
notices shall be directed to such substitute address. If two or more persons are
named as Indemnitors, any notice given hereunder or under the Lease shall be
sufficiently given if delivered or mailed in the foregoing manner to any one of
such persons.

 

(e) In the event of a default under the Lease or under this Indemnity, the
Indemnitor waives any right to require the Landlord to: (i) proceed against the
Tenant or pursue any rights or remedies against the Tenant with respect to the
Lease; (ii) proceed against or exhaust any security of the Tenant held by the
Landlord; or (iii) pursue any other remedy whatsoever in the Landlord’s power.
The Landlord has the right to enforce this Indemnity regardless of the
acceptance of additional security from the Tenant and regardless of any release
or discharge of the Tenant by the Landlord or by others or by operation of any
law.

 

(f) Without limiting the generality of the foregoing, the liability of the
Indemnitor under this Indemnity is not and is not deemed to have been waived,
released, discharged, impaired or affected by reason of the release or discharge
of the Tenant in any receivership, bankruptcy, winding-up or other creditors’
proceedings or the rejection, disaffirmance or disclaimer of the Lease in any
proceeding and shall continue with respect to the periods prior thereto and
thereafter, for and with respect to the Term as if the Lease had not been
disaffirmed or disclaimed, and in furtherance hereof, the Indemnitor agrees,
upon any such disaffirmance or disclaimer, that the Indemnitor shall, at the
option of the Landlord, become the subtenant of the Landlord upon the same terms
and conditions as are contained in the Lease, applied mutatis mutandis. The
liability of the Indemnitor shall not be affected by any repossession of the
Leased Premises by the Landlord, provided, however, that the net payments
received by the Landlord after deducting all costs and expenses of repossessing
and reletting the Leased Premises shall be credited from time to time by the
Landlord against the indebtedness of the Indemnitor hereunder and the Indemnitor
shall pay any balance owing to the Landlord from time to time immediately upon
demand.

 

(g) No action or proceedings brought or instituted under this Indemnity and no
recovery in pursuance thereof shall be a bar or defence to any further action or
proceeding which may be brought under this Indemnity by reason of any further
default hereunder or in the performance and observance of the terms, covenants
and conditions contained in the Lease.

 

(h) No modification of this Indemnity shall be effective unless the same is in
writing and is executed by all parties to this Lease.

 

(i) The Indemnitor shall, without limiting the generality of the foregoing, be
bound by this Indemnity in the same manner as though the Indemnitor were the
Tenant named in the Lease.

 

(j) If two or more individuals, corporations, partnerships or other business
associations (or any combinations of two or more thereof) execute this Indemnity
as Indemnitor, the liability of each such individual, corporation, partnership
or other business association hereunder is joint and several. In like manner, if
the Indemnitor named in this Indemnity are a partnership or other business
association, the members of which are by virtue of statutory or general law,
subject to personal liability, the liability of each such member is joint and
several.

 

(k)

All of the terms, covenants and conditions of this Indemnity extend to and are
binding upon the Indemnitor, his or its

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heirs, executors, administrators, successors and assigns, as the case may be,
and enure to the benefit of and may be enforced by the Landlord, its successors
and assigns, as the case may be, and any mortgagee, chargee, trustee under a
deed of trust or other encumbrancer of all or any part of the Building referred
to in the Lease.

 

(l) The expressions and other terms where used in this Indemnity have the same
meaning as in the Lease unless expressly defined herein.

 

(m) The Indemnitor hereby acknowledges and consents to the Landlord obtaining
credit and financial information about the Indemnitor at the time the Indemnitor
enters into this Indemnity at any time during the Term or any renewal or
extension thereof, from any credit reporting agency or any other agency,
institution, or bank that provides similar information.

 

(n) Wherever in this Indemnity reference is made to either the Landlord or the
Tenant, the reference is deemed to apply also to the respective heirs,
executors, administrators, successors and assigns and permitted assigns,
respectively, of the Landlord and the Tenant, as the case may be, named in the
Lease. Any assignment by the Landlord of any of its interests in the Lease
operates automatically as an assignment to such assignee of the benefit of this
Indemnity.

IN WITNESS WHEREOF, the Landlord and the Tenant and the Indemnitor have signed
and sealed this Lease.

 

LEAD SKY ENTERPRISES LIMITED

Per:

/s/ Razali Embong

Razali Embong ASO I have authority to bind the Corporation INTELLON CANADA INC.
Per:

/s/ Brian T. McGee

Name:   Brian T. McGee Title:   CFO I have authority to bind the Corporation
INTELLON CORPORATION Per:  

/s/ Rick E. Furtney

Name:   Rick E. Furtney Title:   President I have authority to bind the
Corporation

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SCHEDULE “A”

FLOOR PLAN

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SCHEDULE “B”

LEGAL DESCRIPTION

IN THE CITY OF TORONTO, in the Municipality of Metropolitan Toronto and being
composed of Part of Lot A, Plan 184-E, and Lot 1, Plan 699-E, which said parcel
may be more particularly described as follows:

PREMISING that the northerly limit of Front Street West has a bearing of north
74 degrees 00 minutes 00 seconds east (N. 74° 00’ 00” E.) and relating all
bearings herein thereto.

COMMENCING at the southwesterly angle of said Lot A;

THENCE north 16 degrees 00 minutes 20 seconds west (N. 16° 00’ 20” W.) along the
westerly limit of Lot A aforesaid a distance of 250.00 feet more or less to the
southerly limit of a lane;

THENCE north 74 degrees 00 minutes 00 seconds east (N. 74° 99’ 00” E.) along the
southerly limit of said lane 50.21 feet more or less to a point in the westerly
limit of University Avenue;

THENCE south 21 degrees 55 minutes 40 seconds east (S. 21° 55’ 40” E.) along the
westerly limit of University Avenue aforesaid 251.36 feet more or less to a
point in the northerly limit of Front Street West distant 76.15 feet more or
less measured easterly therealong from the southwest angle of said Lot A;

THENCE south 74 degrees 00 minutes 00 seconds west (S. 74° 00’ 00” W.) along the
southerly limit of Lot 1, Plan 699-E aforesaid and along the southerly limit of
Lot A, Plan 184-E aforesaid in all 76.15 feet more or less to the point of
commencement.

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SCHEDULE “C”

RULES AND REGULATIONS

1. The Tenant shall not permit any cooking in the Leased Premises without the
written consent of the Landlord.

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

3. The Tenant, his agents, servants, contractors, invitees or employees, shall
not bring in or take out, position, construct, install or move any safe,
business machine or other heavy office equipment or other articles without first
obtaining the consent in writing of the Landlord. In giving such consent, the
Landlord shall have the right in its sole discretion, to prescribe the weight
permitted and the position thereof, and the use and design of planks, skids or
platforms to distribute the weight thereof. All damage done to the Building or
the Rights in Common or cost occasioned by moving or using any such heavy
equipment or other office equipment or furniture shall be repaired and borne at
the expense of the Tenant. The moving of all heavy equipment or other office
equipment or furniture shall occur only between 6:00 p.m. and 8:00 a.m. or any
other time consented to by the Landlord and the persons employed to move the
same in and out of the Building must be acceptable to the Landlord. Safes and
other heavy office equipment will be moved through the halls and corridors only
upon steel bearing plates. No freight or bulky matter of any description will be
received into the building or carried in the elevators, except during hours
approved by the Landlord.

4. All persons entering and leaving the Building or the Rights in Common at any
time other than during Normal Business Hours shall register in the books kept by
the Landlord at or near the night entrance in the event the Landlord keeps such
books and the Landlord will have the right to prevent any person from entering
or leaving the Building or the Rights in Common unless provided with a key to
the premises to which such person seeks entrance or a pass in a form to be
approved by the Landlord. Any persons found in the Building or the Rights in
Common at such times without such keys or passes will be subject to the
surveillance of the employees and agents of the Landlord. The Landlord shall be
under no responsibility for failure to enforce this rule.

5. The Tenant shall not place or cause to be placed any additional locks upon
any doors of the Leased Premises without the approval of the Landlord and
subject to any conditions imposed by the Landlord. Additional keys may be
obtained from the Landlord at the cost of the Tenant.

6. The water closets and other water apparatus shall not be used for any purpose
other than those for which they were constructed, and no sweepings, rubbish,
rags, ashes or other substances shall be thrown therein. Any damage resulting by
misuse shall be borne by the Tenant by whom or by whose agents, servants, or
employees the same is caused. The Tenant shall not let the water run unless it
is in actual use, and shall not deface or mark any part of the Leased Premises
or the Building, or drive nails, spikes, hooks, or screws into the walls or
woodwork of the Building or the Rights in Common.

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

8. The Tenant shall permit window cleaners to clean the windows of the Leased
Premises during Normal Business Hours.

9. Canvassing, soliciting and peddling in the Building and the Rights in Common
is prohibited.

10. Any hand trucks, carryalls, or similar appliances used in the Building or
the Rights in Common shall be equipped with rubber tires, side guards and such
other safeguards as Landlord shall require.

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11. No animals or birds shall be brought into the Building or the Rights in
Common nor shall the Tenant operate or permit to be operated any musical or
sound producing instrument or device inside or outside the Leased Premises which
may be heard outside the Leased Premises.

12. The Tenant shall not install or permit the installation or use of any
machine dispensing goods for sale in the Leased Premises or the Building or
permit the delivery of any food or beverage to the Leased Premises without the
approval of the Landlord or in contravention of any regulations fixed or to be
fixed by the Landlord. Only persons authorized by the Landlord shall be
permitted to deliver or to use the elevators in the Building for the purpose of
delivering food or beverages to the Leased Premises.

13. The Tenant will not place or allow to be placed in the Building corridors or
public stairways or the Rights in Common any waste paper, dust, garbage, refuse
or anything whatever that would tend to make them unclean or untidy.

14. The skylights and windows that reflect or admit light into passageways and
common areas of the Building or the Rights in Common shall not be covered or
obstructed by the Tenant, and no awnings shall be put up, without the written
consent of the Landlord.

15. The Tenant shall not do or permit anything to be done in the Leased Premises
or bring or keep anything therein which will in any way increase the risk of
fire, or obstruct or interfere with the rights of other tenants, or violate or
act at variance with the laws relating to fires or with the regulations of the
Fire Department or the Board of Health.

16. The Tenant, his clerks or servants, shall not make or commit any improper
noises in the Building or the Rights in Common, lounge about doors or corridors,
or interfere in any way with other tenants or those having business with them.

17. Nothing shall be thrown by the Tenant, his clerks or servants out of windows
or doors or down the passages, elevator shafts or skylights of the Building or
the Rights in Common.

18. The Landlord shall have the right but not the obligation:

 

  (a) to require all persons entering or leaving the Building during such hours
as the Landlord may reasonably determine to identify themselves to a watchman by
registration or otherwise to establish their right to enter or leave; and

 

  (b) to exclude or expel any pedlar or beggar at any time from the premises or
the Building.

19. It shall be the duty of the Tenant to assist and cooperate with the Landlord
in preventing injury to the premises demised to them respectively.

20. No inflammable oils or other inflammable, dangerous or explosive materials
shall be kept or permitted to be kept in said premises. Nothing shall be placed
on the outside of window sills or projections.

21. No bicycles or other vehicles shall be brought within the said Building or
the Rights in Common.

22. The Tenant shall give the Landlord prompt notice of any accident to or any
defect in the plumbing, heating, air-conditioning, mechanical or electrical
apparatus or any other part of the Building or the Rights in Common.

23. The lining of all window drapes facing the interior surface of exterior
windows shall be subject to the prior approval of the Landlord as to colour and
material and the Tenant shall not hang and will remove any draperies which in
the Landlord’s opinion do not conform to any uniform scheme of window coverings
established for the Building.

24. The Landlord shall have the right to make such other and further reasonable
rules and regulations as in its judgment may from time to time be needful for
the safety, care, cleanliness and appearance of the premises and the Building
and the Rights in Common, and for the preservation of good order therein, and
the same shall be kept and observed by the Tenant, his clerks and servants.

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25. The Tenant agrees to the foregoing RULES AND REGULATIONS, which are hereby
made a part of this Lease, and each of them, and agrees that for such persistent
infraction of them, or any of them, as may in the opinion of the Landlord be
calculated to annoy or disturb the quiet enjoyment of any other tenant, or for
gross misconduct upon the part of the Tenant, or any one under it, the Landlord
may declare a forfeiture and cancellation of this Lease and may demand
possession of the premises upon one (1) week’s notice.

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SCHEDULE “D”

RIGHTS OF EXTENSION

 

1.01 The Tenant shall have the right to extend this Lease for a further period
of five (5) years (the “Extension Term”) commencing on the day following the
last day of the Term, subject to the following terms and conditions:

 

  (a) the Tenant shall not be entitled to any right of extension if, the Tenant
has been in default of its obligations under the Lease or if it is then in
default;

 

  (b) the right of extension shall be exercisable by notice in writing by the
Tenant to the Landlord delivered not less than six (6) months prior to the
expiration of the Term;

 

  (c) if the Tenant has properly exercised its right of extension, this Lease
shall be extended for the Extension Term on the same terms and conditions as are
contained in this Lease supplemented as follows:

 

  (1) all references to the Term shall be deemed to include the Extension Term;

 

  (2) the Base Rent during the Extension Term will be the fair market rent
determined in accordance with subsection 1.01(d) below;

 

  (3) the Landlord will not be required to carry out any work in respect of the
Leased Premises or to provide the Tenant with any allowance, inducement , rent
free period or the like; and

 

  (4) there shall be no further right to extend the Term or renew the Lease;

 

  (d) the annual Base Rent during the Extension Term shall be the fair market
rent as agreed upon by the Landlord and the Tenant (the Landlord and the Tenant
agree to negotiate in good faith with a view to agreeing upon such Base Rent),
however, in no event shall the Base Rent for any year of the Extension Term be
less than the Base Rent reserved by the Lease for the year immediately preceding
the commencement of the Extension Term; and

 

  (e) for the purposes of this Lease, the term “fair market rent” means the
annual Base Rent per square foot of the leasable area of the Leased Premises
that a willing tenant extending the term of the lease would pay and a willing
landlord would accept in bona fide arms-length negotiations for a similar
extension period having regard to rents charged for comparable premises in
comparable buildings in the vicinity of the Building.