Document:

Exhibit 10.20

 

SECOND AMENDING AGREEMENT

 

This Agreement is made as of August 30, 2006 (the “Effective Date”).

 

Between:

 

THE UNIVERSITY OF BRITISH COLUMBIA,
a corporation continued under the University Act
of British Columbia and having its Industry Liaison offices at #103 – 6190
Agronomy Road, Vancouver, British Columbia, V6T 1Z3

 

(the “University”)

 

- and -

 

ONCOGENEX TECHNOLOGIES INC.
a corporation incorporated under the laws of Canada, and having offices at
Suite 400, 1001 West Broadway, Vancouver, British Columbia, V6H 4B1

 

(the “Licensee”)

 

WHEREAS:

 

A.            The University and the Licensee entered
into a license agreement with a Commencement Date of September 1, 2002 with
respect to BP-2 and BP-5 (the “Original Bi-Specific License Agreement”)
pursuant to which the University granted the Licensee an exclusive worldwide
license to the Technology, as defined in the Original Bi-Specific License
Agreement;

 

B.            The University and the Licensee entered
into a letter agreement dated November 14, 2002 relating to the Original BP-5
License Agreement (the “Letter Agreement”);

 

C.            The University and the Licensee entered
into an amending agreement effective as of September 12, 2002 with respect to
the Original Bi-Specific License Agreement (the “Amending
Agreement”);

 

D.            The University and the Licensee now wish to
further amend the Original Bi-Specific License Agreement as set out below (the “Original
Bi-Specific License Agreement as amended by the Amending Agreement and the
Letter Agreement is hereafter referred to as the “Bi-Specific
License Agreement”).

 

Now therefore, in consideration of the premises and the mutual
covenants contained in this Amending Agreement, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto covenant and agree with each other as follows:

 

*Certain information in this exhibit has been omitted as confidential,
as indicated by [***]. This information has been filed separately with the
Commission.

 

 

1.             Article
6.6 is hereby amended by adding the following to the end of it:

 

“The University consents to the termination of any shareholders
agreements to which the University and the Licensee may be party, upon the
Licensee becoming a reporting issuer under the Securities Act of British
Columbia.”

 

2.             Article
7.1 is hereby deleted and the following substituted therefore:

 

“7.1         The
Licensee shall have the right to identify any process, use or products arising
out of the Technology and any University Improvements that may be patentable and
may seek patent protection with respect thereto, in which case the Licensee
shall take all reasonable steps to apply for a patent in the name of the
University provided that the Licensee pays all costs of applying for,
registering and maintaining the patent in those jurisdictions in which the
Licensee might designate that a patent is required. The choice of patent
counsel will be mutually agreed upon between the University and the Licensee. The
University shall remain the client of such patent counsel, however, the
Licensee will provide direct instructions to the patent counsel on all patent
matters relating to the Technology including filing, prosecution, management,
maintenance, including renewals and term extensions thereof, and the scope and
content of patent applications and to request countries for foreign filings. The
Licensee will pay patent counsel for all costs incurred with respect to any and
all patents relating to the Technology. The Licensee will supply or instruct
the patent counsel to supply the University with copies of all documents and
correspondence received and filed in connection with the prosecution of patents.
The Licensee will keep the University advised as to all material developments
with respect to such applications with
sufficient time for the University to review and respond, and generally not
less than 30 days prior to an applicable patent deadline, unless circumstances
reasonably require the Licensee to act sooner to protect the patents, in which
case the Licensee may act sooner.  
The University shall, as required and at the Licensee’s cost for the
University’s reasonable out-of-pocket expenses, reasonably cooperate with the
Licensee, its lawyers and agents in the filing, prosecution, management and
maintenance of the patents.”.

 

3.             The
following is added as Article 10.8:

 

“10.8       Notwithstanding
anything contained in this Article, the parties acknowledge and agree that the
Licensee may disclose Confidential Information to the extent that may be
required by applicable securities laws in connection with the public offering
of the Licensee’s securities and thereafter to comply with its disclosure
obligations as a public company. If required to make such disclosure by any
applicable securities laws, the Licensee shall inform the University in writing
by giving notice and will consider any reasonable comments the University may
have. Such notice shall be generally not less than 48 hours prior to public
disclosure unless a delay of 48 hours would violate applicable securities laws,
in which case notice shall be as soon as practicable.”

 

2

 

4.             Article
11.1 is hereby deleted and the following substituted therefore:

 

“11.1       Notwithstanding
Article 10.7, the Licensee shall not use any of the UBC Trade-marks or make
reference to the University or its name in any advertising or publicity
whatsoever, without the prior written consent of the University, except as
required by law. If the Licensee is required by law to act in contravention of
this Article, the Licensee shall provide the University with sufficient advance
notice in writing to permit the University to bring an application or other
proceeding to contest the requirement.”.

 

5.             Article
11.2 is hereby deleted.

 

6.             Article
11.4 is hereby deleted and the following substituted therefore:

 

“11.4       The
parties acknowledge that two separate technologies are included in the
Technology licensed hereunder: (a) insulin growth factor binding protein -2 (“BP2”) and (b) insulin growth factor binding protein – 2 and
insulin growth factor binding protein -5 (“Bi-Specific”).
All such technologies are at a very early stage of development, and it is too
early to determine which invention will become a Product or Products hereunder.
It is further acknowledged that the Licensee has an existing license agreement
with the University for a technology know as insulin growth factor binding
protein -5 (“BP5”) the (“BP5 License”),
and that it is intended that one of BP5, BP2 or Bi-Specific shall become a lead
Product of the Licensee, and that the other two technologies will be used to
support the intellectual property position of the Licensee in respect of such
Product. [***]. Therefore, the Licensee shall use reasonable commercial efforts
to develop and exploit all or part of the Technology and any Improvements and
to promote, market and sell the Products and utilize all or part of the
Technology and any Improvements and to meet or cause to be met the market
demand for the Products and the utilization of all or part of the Technology
and any Improvements.

 

[***]

 

(a)           [***]

 

(b)           [***]

 

7.             The
contact information for delivery of notices in Article 16.0 is amended as
follows:

 

If to the University:             The Managing Director

University – Industry Liaison Office

University of British Columbia

#103 - 6190 Agronomy Road

Vancouver, British Columbia

V6T 1Z3

Telephone: (604) 822-8580

Fax:            (604)
822-8589

 

3

 

If to the Licensee:                The President

OncoGenex Technologies Inc.

1001 West Broadway, Suite 400

Vancouver, British Columbia

V6H 4B1

Telephone:   (604) 736-3678

Fax:   (604) 736-3687

 

8.             Article
18.3 is hereby amended by adding the following to the end of it as a separate
paragraph:

 

“Notwithstanding anything contained in this Article 18, the failure to
obtain the prior written consent of the University to the events described in
any of Articles 18.3(d), (e) or (f) shall not entitle the University to
terminate this Agreement if at the time of such event the Licensee is a public
company.”

 

9.             In
Article 18.7, the first reference to Article 18.6 is changed to Article 18.5.

 

10.           Except
as modified herein, the University and the Licensee confirm that the
Bi-Specific License Agreement remains unmodified and in full force and effect.

 

11.           The
Bi-Specific License Agreement as modified by this Agreement constitutes the
entire agreement between the parties relating to the subject matter hereof.

 

This Agreement may be executed by the parties in separate counterparts
and by facsimile, each of which such counterparts when so executed and
delivered shall be deemed to constitute one and the same instrument.

 

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

 

	
  SIGNED FOR AND ON BEHALF OF

  
	
  THE UNIVERSITY OF BRITISH COLUMBIA

  
	
  by its duly authorized officers:

  
	
   

  
	
   

  	
   

  	
  J.P. Heale, PhD, MBA

  
	
   

  	
   

  	
  Associate Director

  
	
  /s/ J.P. Heale

  	
   

  	
  University-Industry Liaison Office

  
	
  Authorized Signatory

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  	
   

  

 

4

 

	
  SIGNED FOR AND ON BEHALF OF

  	
   

  	
   

  
	
  ONCOGENEX TECHNOLOGIES INC.

  	
   

  	
   

  
	
  By its duly authorized officer:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Scott Cormack

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  	
   

  

 

5Exhibit 10.21

 

THIS INDENTURE made as of the 1st day of October,      2004.

 

IN PURSUANCE OF THE “LAND TRANSFER FORM ACT”

 

BETWEEN:

 

	
   

  	
  ROSEBUD PROPERTIES NO. 3 LTD.

  	
   

  
	
   

  	
  (hereinafter called the “Landlord”)

  	
   

  
	
   

  	
  508 – 1001 West Broadway

  	
   

  
	
   

  	
  Vancouver, B.C.  V6H 4B1

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  OF THE FIRST PART

  
	
   

  	
   

  	
   

  
	
  AND:

  	
  ONCOGENEX TECHNOLOGIES INC.

  	
   

  
	
   

  	
  (hereinafter called the “Tenant”)

  	
   

  
	
   

  	
  #400 - 1001 West Broadway

  	
   

  
	
   

  	
  Vancouver, B.C. V6H 4B1

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  OF THE SECOND PART.

  

 

ARTICLE 1 - INTERPRETATION

 

WITNESSETH that in consideration of the mutual covenants, conditions and
agreements herein contained the Landlord and Tenant covenant and agree as
follows:

 

Section 1.01 - Definitions

 

In this Lease, unless otherwise stated, the following terms shall have
the following respective meanings:

 

1.               “Additional
Rent” means any payments contemplated by this Lease to be paid by
the Tenant, whether to the Landlord or otherwise, in addition to Basic Rent;

 

2.               “Basic
Rent” means the monthly rental instalments referred to in Section 2.04;

 

3.               “Building” means the building complex
and other improvements situate on the Lands;

 

4.               “Commencement Date” means the date set out in Section 2.02
for the commencement of the Term;

 

5.               “Common
Areas” means all parts of the Lands and the Building not leaseable
to tenants and includes the Parking Area, driveways, pedestrian sidewalks and
ways, landscaped areas, exterior ramps and stairways, elevators, comfort
stations, electrical and plumbing, ducts, shafts, machinery and electrical
rooms, sanitary drainage systems and other facilities of the Building which are
from time to time provided, utilized or available for or for the benefit of the
Building and the tenants, their employees, customers and others or for general
public use and enjoyment;

 

[initials]

 

 

6.               “Common
Expenses” means the total amount paid or incurred whether by the
Landlord or others on behalf of the Landlord for the operation, maintenance,
repair (which in this Lease includes Structural Repairs), replacement,
administration and management of the Lands, the Building and the Common Areas,
and for caretaking services for the public areas of the Building, such as are
in keeping with maintaining the standard of a first-class building with
office, restaurant and retail shopping space, including, without limitation,
the following:

 

(a)          the cost of insuring the Building for fire and
extended perils coverage, public liability, plate glass, tenants’ rent and
other risks against which the Landlord may reasonably insure;

 

(b)         the cost
of gardening, landscaping, cleaning, snow removal, window cleaning, garbage
disposal and repaving and relining the Parking Area;

 

(c)          the
cost of janitorial and caretaking services not otherwise chargeable to
individual tenants;

 

(d)         the cost
of electricity, lighting, fuel, gas, telephone, steam and other utility costs
not otherwise chargeable to tenants and the cost of replacing electrical
fixtures, ballasts, tubes, starters, lamps, controls and bulbs not otherwise
chargeable to individual tenants;

 

(e)          the cost of plumbing, sanitary and sewage disposal,
storm and runoff drainage and maintenance;

 

(f)            the cost of heating, cooling and providing hot and
cold water not chargeable to individual tenants;

 

(g)         the salaries and remuneration (including contributions
towards fringe benefits, unemployment insurance and similar contributions and
workers’ compensation assessments) of persons and staff employed to provide
security, management, repair, maintenance, supervisory and operating services;

 

(h)         business taxes, if any, in respect of parking facilities;

 

(i)             fees and expenses of the Landlord’s chartered
accountants, architects, professional engineers or quantity surveyors
pertaining to services performed in the preparation of certificates
contemplated hereunder;

 

(j)             the cost of maintenance, repair, replacement,
servicing and operation of the Lands and the Building not properly chargeable
to capital account under generally accepted accounting principles;

 

(k)          the cost of supervision and policing of the Lands and
Buildings;

 

2

 

(l)             the total annual amortization of capital costs
(including that of repair and replacement to the Building) on a straight line
basis over the useful life or such other period as reasonably determined by the
Landlord, or fifteen (15) years, whichever is lesser, and the interest on the
unamortized capital at a rate equivalent to the lending rate actually charged
or chargeable by the Landlord’s bankers from time to time on demand commercial
loans made to the Landlord (and if different loans are at a different rate of
interest, then the lowest of the same), of the cost of all furniture,
machinery, equipment, repair, replacement, modifications, additions and
improvements to the Building, other than the excluded costs outlined in Schedule “D”
hereto, and the cost whereof has not been charged to the Tenant elsewhere in
this lease;

 

(m)       depreciation of fixtures and equipment which, by their nature, require
periodic or substantial replacement, including heating and air-conditioning
equipment;

 

(n)         costs of any modification or addition to the Lands and
Building (which shall in this Lease include the machinery and equipment therein
and thereon) when, in the reasonable opinion of the Landlord such expenditure may reduce
Common Expenses, or any additional machinery, equipment or improvements
required by law or the Landlord’s insurers, or, in the Landlord’s reasonable
opinion, for the benefit or safety of the Lands or Building users;

 

(o)         management of the Building, the annual cost of which,
for the purposes of this Lease, shall not exceed five percent (5%) of the total
rents received by the Landlord from the Lands and Building, including Basic
Rents and Additional Rents; and

 

(p)         other costs and expenses not otherwise expressly
excluded hereunder attributable to the maintenance, repair, replacement,
operation, supervision and management of the Lands and the Building but
excluding any costs incurred by or on behalf of an individual tenant or tenants.

 

Costs shall be allocated to each fiscal period without duplication in
accordance with generally accepted accounting practices, and insurance premiums
for any policy whose term is not concurrent with a fiscal year may be
allocated to a fiscal period in which the premium therefor is paid;

 

7.               “Demised Premises”
means the premises described as Demised Premises in Section 2.01;

 

8.               “Hazardous
Substances” means any substance which is hazardous to persons or
property and includes, without limitation, any solid, liquid, smoke, waste,
odour, heat, vibration, radiation, or combination thereof, which is deemed,
classed or found to affect the natural, physical, chemical or biological
quality of the environment, or which is or is likely to be injurious to the
health or safety of persons, or which is injurious or damaging to property,
plant or animal life, or which interferes with or is likely to interfere with
the comfort, livelihood or

 

3

 

enjoyment of
life by a person, or which is declared to be hazardous or toxic under any law
or regulation now or hereafter enacted or promulgated by any governmental
authority having jurisdiction over the Tenant, the Landlord or the Building,
and without limiting the generality of the foregoing shall include any
dangerous, noxious, toxic, flammable or explosive substance, radioactive
material, asbestos or PCBs;

 

9.               “Lands”
means those lands situate at 1001 West
Broadway, Vancouver, British Columbia, and being more particularly
described in Schedule “A”;

 

10.         “Parking
Area” means that portion of the Lands and/or the Building which is
set aside by the Landlord for the purpose of parking vehicles or ancillary
usage or for access and egress thereto;

 

11.         “Proportionate
Share” means the fraction which has as its numerator the Rentable
Area of the Demised Premises and has as its denominator the total Rentable Area
of the Building whether rented or not, subject only to the adjustments which
follow. The total Rentable Area of the Building, whether rented or not, may be
adjusted from time to time to give effect to any structural or functional
change affecting same. The lobby, entrances and public walkways of the Building
and the Parking Area shall be excluded from calculation of the Rentable Area of
the Building. The calculation of the Rentable Area of the Demised Premises
shall be adjusted from time to time to give effect to any change therein during
the Term;

 

12.         “Rentable
Area of the Building” means the total rentable area of all areas of
the Building set aside by the Landlord for leasing to tenants from time to time
(whether leased or not) which shall in all cases be measured from the exterior
face of all exterior walls, doors and windows, provided that if any exterior
wall or walls or portions thereof of the Building are recessed from the outside
line of the main exterior wall or walls of the Building, the area of such
recess shall be included in the determination of the Rentable Area of the
Building. In the determination of the Rentable Area of the Building there shall
be no deduction or exclusions for any space occupied by or used for entrances,
columns, shafts, stairs, flues, pipes, vertical ducts or other interior
construction or equipment;

 

13.         “Rentable
Area of the Demised Premises” is to be measured from the exterior
face of all exterior walls, doors and windows (including walls, doors and
windows separating the Demised Premises from enclosed Common Areas, if any) and
from the centre line of all interior walls separating the Demised Premises from
adjoining premises. In the determination of the Rentable Area of the Demised
Premises, it is agreed that if the exterior walls or walls of the Demised
Premises are recessed from the outside line of the main exterior wall or walls
of the Building, the area of such recess shall be included in the determination
of the Rentable Area of the Demised Premises and it is also agreed that there
shall be no deduction or exclusion for any space occupied by or used for
entrances, columns, shafts, stairs, flues, pipes, vertical ducts or other
interior construction or equipment;

 

4

 

14.         “Structural
Repairs” means repairs and replacements to the footings and
foundations, columns, beams, joists, bearing walls, perimeter walls and floor
slab and roof structure of the Building and whatever else is reasonably deemed
by the Landlord to be structural components of the Building and Lands;

 

15.         “Tax”
means all taxes, rates, duties, levies and assessments whatsoever, whether
municipal, regional, parliamentary or otherwise, charged upon the Building or
the Lands or upon the Landlord on account thereof including corporation capital
tax or other capital taxes and including all taxes, rates, duties, levies and
assessments for education, schools and local improvements and including any
payments which the Landlord is obliged to make in lieu of Tax or a component
thereof if the Building or a portion thereof is or becomes exempt from Tax or
from a component of Tax as defined and including any and all taxes which may in
future be levied in lieu of Tax as hereinbefore defined, but excluding such
taxes as corporate income, profits or excess profits taxes assessed upon the
income of the Landlord, any taxes personal to the Landlord not relating
directly to the Building or the Lands, any grants paid in lieu of business
taxes, and any and all penalties and interest charged, levied or assessed as a
result of the Landlord not paying the Tax in accordance with Section 6.02
hereof;

 

16.         “Tenant’s
Improvements” means all improvements, property, fixtures, equipment,
arrangements, installations and/or modifications done to or placed in or upon
the Demised Premises by the Tenant or by the Landlord at the request of the
Tenant and whether or not such improvements, property, arrangements,
installations and/or modifications are paid for by the Landlord or the Tenant;

 

17.         “Tenant’s
Share of Common Expenses” means, in any Year or fiscal period
adopted by the Landlord, the Proportionate Share of Common Expenses during that
Year or fiscal period, or at the option of the Landlord, the portion of Common
Expenses allocated to the Tenant for that Year or fiscal period by the
Landlord, acting reasonably;

 

18.         “Tenant’s
Share of Tax for the Year” means, in any Year, at the option of the
Landlord:

 

(a)          the product of the separate assessment for the Demised
Premises and the applicable mill rate plus the Proportionate Share of Tax other
than as so calculated; or

 

(b)         the Proportionate Share of Tax during that Year;

 

provided that in any case, notwithstanding
the foregoing, the Tenant’s Share of Tax for the Year shall include any taxes
which may be attracted by the Tenant’s Improvements;

 

5

 

19.         “Term”
means the period from the Commencement Date to the date on which this Lease terminates,
and includes any renewal or extension thereof and any additional period during
which the Landlord shall accept rental as provided in this Lease; and

 

20.         “Year”
means a calendar year.

 

Section 1.02 - Effect of Headings, etc.

 

The division of this Lease into Articles and Sections and the insertion
of headings are for convenience of reference only and shall not affect the
construction or interpretation of this Lease.

 

Section 1.03 - Governing Law

 

This Lease shall be governed by and construed in accordance with the
laws of the Province of British Columbia and shall be treated in all respects
as a British Columbia contract. The venue of any proceedings taken in respect
of or under this Lease shall be Vancouver, British Columbia as long as such venue
is permitted by law, and the Tenant shall consent to any application by the
Landlord to change the venue to Vancouver, British Columbia of any proceedings
taken elsewhere.

 

Section 1.04 - Severability

 

If any provision of this Lease, or the application thereof to any
circumstances, shall be held to be illegal, invalid or unenforceable, then it
shall be considered separate and severable from the Lease, and the remaining
provisions of this Lease, or the application thereof to other circumstances,
shall not be affected thereby and shall be held valid and enforceable to the
full extent permitted by law, and be binding upon the parties as though the
said provision had never been included.

 

Section 1.05 - Joint Covenants and Grammatical Changes

 

All covenants herein contained shall be construed as being joint and
several where there is more than one tenant, and when the context so requires
or permits, the singular number shall be read as if the plural were expressed
and the neuter gender as if the masculine or feminine, as the case may be,
were expressed.

 

Section 1.06 - Net Lease

 

It is the intention of the Landlord and the Tenant and it is hereby
agreed by them that the Tenant shall pay all rents to be paid hereunder to the
Landlord without any deduction, abatement or set-off whatsoever. This Lease
shall be absolutely net to the Landlord and the Landlord shall not be
responsible for any costs of any nature or kind whatsoever except for income
taxes paid by the Landlord, principal and interest paid by the Landlord with
respect to any mortgage or other debts of the Landlord with respect to the
Lands and Building and any costs specifically provided herein to be paid by the
Landlord. Notwithstanding any statutory or other provisions, all charges,

 

6

 

expenses, payments and costs of every nature and kind whatsoever
incurred in respect of the Demised Premises or for any matter or thing
affecting the Demised Premises shall (unless otherwise expressly stipulated
herein to the contrary) be borne by the Tenant so that the rental herein
provided for shall be absolutely net to the Landlord. The Landlord shall not be
responsible for any charge, claim or liability whatsoever in connection with
the Demised Premises except as expressly provided in this Lease and except
liens filed against title to the Lands for work ordered by the Landlord.

 

ARTICLE II - DEMISE, TERM AND
RENT

 

Section 2.01 - Demise

 

In consideration of the rents, covenants, conditions and agreements
hereinafter reserved and contained on the part of the Tenant to be paid,
observed, kept and performed, the Landlord does demise and lease unto the
Tenant all those premises (the “Demised
Premises”) located on the fourth floor of the Building comprising
approximately 4,857 square feet of Rentable Area as shown outlined in red on
the plan attached hereto as Schedule “B”, provided that the exterior face
of the exterior walls of the Building are expressly excluded from the Demised
Premises. For liability and repair purposes, but not for purposes of
calculating rent, the Demised Premises shall be deemed to extend from the inner
surface of its perimeter walls and from the upper surface of the structural
floor to the lower surface of the dropped ceiling.

 

Section 2.02 - Term

 

To have and to hold the Demised Premises for and during the term of five
(5) years to be computed from and including the 1st day of
October, 2004 (the “Commencement Date”) and from thenceforth
next ensuing and fully to be complete and ending on the 30th day of
September, 2009 subject to earlier termination in accordance with the
provisions hereof.

 

Section 2.03 - Delay in Possession

 

In the event
the Tenant should fail to take possession of the Demised Premises on or by the
Commencement Date, this Lease shall nevertheless remain in full force and
effect and the Rent and other monies payable by the Tenant shall be paid as
from the Commencement Date.

 

In the event
the Landlord cannot deliver vacant possession of the Demised Premises on or by
the Commencement Date, then the Tenant shall take possession of the Demised
Premises as soon as vacant possession can be delivered of the same, and this
Lease shall not be void or voidable, nor shall the Landlord be liable for any
loss or damage resulting from the delay in the Tenant obtaining possession and,
in such event, the Term shall commence on delivery of vacant possession, the
Commencement Date shall be the day on which the Demised Premises are so
delivered up, the Termination Date shall be extended and the Term shall remain
the same. Provided, however, if the Term is not

 

7

 

commenced
within six (6) months of the Commencement Date as provided for in Article 2.02,
then this Lease is at an end, and neither party shall have any action or right
against the other.

 

The Landlord
shall not be liable for any loss, injury, damage or inconvenience which the
Tenant may suffer by reason of any delay in the Landlord delivering the
Demised Premises to the Tenant, or which the Tenant may suffer by reason
of any delay in the Tenant taking occupancy of the Demised Premises howsoever
occasioned.

 

For the
purposes of planning and the construction of its leasehold improvements and/or
operation of the Tenant’s business, the Tenant shall have access to the Demised
Premises upon execution of the Lease prior to the Commencement Date. During
this period, the Tenant shall not be obligated to pay any Basic Rent,
Additional Rent and applicable GST (collectively, “Gross Rent”) but shall abide by all other terms of the Lease.

 

Section 2.04 - Basic Rent

 

Yielding and paying therefor unto the Landlord in lawful money of Canada
at the offices of the Landlord as set out in Section 12.03 hereof or to
such other person or persons at such other place or places as the Landlord
shall from time to time designate, the following rent namely:

 

	
  PSF

  	
   

  	
  MONTHLY

  	
   

  	
  ANNUALLY

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  18.00

  	
   

  	
  $

  	
  7,285.50

  	
   

  	
  $

  	
  87,426.00

  	
   

  
									

 

The parties hereto acknowledge that the annual rental set forth in this Section 2.04
has been calculated on the basis of the sum of $18.00 per square foot times the
square footage set forth in Section 2.01 hereof. If the Term commences on
any day other than the first day of a month or if the Term ends on any day
other than the last day of a month, rent for the fraction of a month at the
commencement and at the end of the Term shall be adjusted pro rata.

 

Section 2.05 - Recovery of Additional Rent

 

Any additional payment by the Tenant contemplated by this Lease shall be
deemed to be and be treated as rent and payable and recoverable as rent, and
the Landlord shall have (in addition to any other right or remedy) the same
rights and remedies in the event of default by the Tenant in payment of any
amount payable by the Tenant hereunder as the Landlord would have in the case
of default by the Tenant in payment of Basic Rent.

 

Section 2.06 - Parking

 

During the Term the Tenant, its guests, invitees and customers shall be
entitled to use the Parking Area in common with other Tenants and their guests,
invitees and customers subject to the rules, regulations, costs and charges
permitted by this paragraph to be imposed by the Landlord on the Parking Area. Subject
to all applicable rules, regulations and bylaws of all governmental authorities
having jurisdiction over such matters, the Landlord shall not

 

8

 

at any time during the Term allow the Parking Area to be utilized on any
basis other than a first come first served basis unless otherwise provided for
in Schedule “E” (if any), provided, however, that the Landlord shall be
entitled to impose and charge users of the Parking Area, including the Tenant,
its guests, invitees and customers, such hourly charges as are from time to
time charged by the operators of parking facilities within four blocks of the
Building and the Landlord shall be entitled to enforce any hourly charges
imposed as aforesaid in such reasonable manner as the Landlord sees fit,
including the towing away of cars or other vehicles violating the charges
imposed by the Landlord.

 

The Landlord shall provide to the Tenant ten (10) reserved parking
stalls in the Building for use only by the Tenant’s employees and invitees, for
which the Tenant shall pay a monthly fee at the prevailing rental rate per
parking stall, plus applicable taxes, which fee may be increased from time
to time on not less than one calendar month’s notice to any amount as is from
time to time charged by operators of parking facilities within four blocks of
the Building. If the Tenant fails to pay any monthly fee in advance, then the
Landlord may terminate the Tenant’s right to reserve the parking stall, as
determined by the Landlord. The Landlord shall arrange at its cost for such
reserved parking stalls to be signed “reserved” accordingly. The Tenant shall
provide the Landlord with at least 30 days’ notice if it no longer intends to
use any particular reserved parking stall, after which time the said monthly
fee shall no longer be payable with respect thereto, and the Tenant shall have
no further right to that parking stall, and the Landlord’s obligation to
provide whatever number of parking stalls are herein set out shall be reduced
by the number for which the Tenant gives notice.

 

Section 2.07 - Adjustments

 

The parties hereto acknowledge that the area of the Demised Premises set
forth in Section 2.01 hereof may be an approximation, and the area of
the Demised Premises may be determined by the Landlord’s architect or
surveyor in accordance with the definition of “Rentable Area of the Demised
Premises” herein contained, and in the event the area of the Demised Premises
determined by the Landlord’s architect as aforesaid differs from the area of
the Demised Premises set forth in Section 2.01 hereof, the annual rent
specified in Section 2.03 hereof shall be adjusted to equal the product
obtained by multiplying the area of the Demised Premises determined by the
Landlord’s architect or surveyor as aforesaid times the annual per square foot
charge specified in Section 2.03.

 

The adjustments herein will only be effective from and after the date
upon which the certificate of the Landlord’s architect verifying the actual
rentable area is delivered to the Landlord; neither the Tenant nor the Landlord
shall have any claims as against each other for any adjustment in rent in
respect of the rental period which precedes in time the delivery of the
certificate of the Landlord’s architect to the Landlord.

 

Section 2.08 - Condition of Demised Premises

 

Taking possession of all or any portion of the Demised Premises by the
Tenant shall be conclusive evidence as against the Tenant that the Demised
Premises or such portion thereof and the Common Areas are in satisfactory

 

9

 

condition on the date of taking possession, subject only to latent
defects and to deficiencies (if any) listed in writing in a notice delivered by
the Tenant to the Landlord not more than 10 days after the date of taking
possession.

 

ARTICLE III - TAXES

 

Section 3.01 - Payment of Tax for the Year

 

The Tenant shall, in each Year of the Term, pay the Tenant’s Share of
Tax for the Year in the manner hereinafter provided. The Tenant shall only be
required to pay a proportionate part of Tenant’s Share of Tax for the Year
which relates to a fiscal period of the taxing authority, a part of which
is included in a period prior to the commencement, or after the expiration, of
the Term. The Tenant shall pay the Landlord, at the time that the payment of
Basic Rent reserved hereunder is due and payable, on account of the obligation
of the Tenant to pay the Tenant’s Share of Tax for the Year, one-twelfth
(1/12th) of the Landlord’s reasonable estimate of the amount of the Tenant’s
Share of Tax for the Year until the month in which the Tenant’s Share of Tax
for the Year can be determined. On the first day of the month next following
the month in which the Tax for the Year can be determined, and provided that
the Landlord furnishes the Tenant with a copy of the Tax bill(s) in question,
the Tenant shall pay to the Landlord the Tenant’s Share of Tax for the Year
after first getting credit for the monthly payments of the estimated amount of
the Tenant’s Share of Tax for the Year previously paid to the Landlord. The
Landlord shall, upon requesting payment for the balance of the Tenant’s Share
of Tax for the Year, provide the Tenant with particulars of calculations of the
Tenant’s Share of Tax for the year. In the case of overpayment of the Tenant’s
Share of Tax for the Year by the Tenant, the Landlord shall promptly reimburse
the Tenant for any such overpayment.

 

Section 3.02 - Contestation of Tax for the Year

 

The Tenant shall have at any time the right to contest (or request the
Landlord to contest) any tax, rate (including local improvement rates),
assessment or other charge against the Demised Premises if such contestation
will not involve any forfeiture, foreclosure, escheat, sale or termination of
the Landlord’s title to the Lands, the Demised Premises, the Building or any part thereof,
and provided further that all such proceedings shall be prosecuted with all due
diligence and dispatch. The Tenant will pay the cost of any such contestation
and also pay the Landlord on demand, all proper costs, penalties, interest or
other charges payable as a result of or incidental to such contestation. In the
event that such contestation results in a lowering or reduction or abatement or
a partial refund of the applicable Tax, which lowering or reduction or
abatement or partial refund of the applicable Tax exceeds said costs, then, all
of said costs shall form part of Common Expenses, and the Tenant
shall be reimbursed accordingly. Notwithstanding such contestation by the
Tenant, the Tenant shall continue to pay to the Landlord the Tenant’s Share of
Tax for the Year in the manner hereinbefore set out. Should, as a result of
such contestation, the amount of Tax payable by the Landlord be decreased as a
result of such contestation or appeal, the Landlord hereby agrees to reimburse
the Tenant accordingly for the excess Tax that the Tenant has paid. Should the
amount of Tax payable by the Landlord be increased as a result of such
contestation or appeal or should the Landlord be required to pay a

 

10

 

penalty as a result of such contestation or appeal, then in either of
such events the Tenant hereby covenants and agrees to pay such increase or
penalty.

 

ARTICLE IV - OPERATING COSTS

 

Section 4.01 - Payment of Common Expenses

 

During the Term, the Tenant shall pay to the Landlord the Tenant’s Share
of Common Expenses as follows:

 

1.               before the
commencement of each Year or each fiscal period adopted by the Landlord, the
Landlord shall reasonably estimate the Common Expenses for such period and so
notify the Tenant, and the Tenant shall pay one-twelfth (1/12th) of the
estimated Tenant’s Share of Common Expenses with each monthly instalment of
rent payable throughout that period (which monthly payments shall be adjusted
if the Landlord, acting reasonably, subsequently re-estimates Common Expenses
for such period or the remaining portion thereof); and

 

2.               the actual amount
of Common Expense for such period and the Tenant’s Share of Common Expenses and
the Tenant’s Share of Tax for the Year shall be certified by the Property
Manager of the Building within a reasonable period of time (not to exceed 120
days) after the expiration of such period, and such certificate shall show in
reasonable detail the information relevant and necessary for the exact
calculation and determination of these amounts and shall be binding upon the
parties unless shown to be in error; and

 

3.               when requested, the
Landlord agrees to provide the Tenant with copies of paid invoices and Tax
bill(s).

 

Section 4.02 - Adjustment of Tenant’s Share of Common Expenses

 

Within fourteen (14) days after the delivery by the Landlord of the
certificate described in Section 4.01 (ii) hereof, an adjustment will
be made by the Landlord or the Tenant, as the case may be, in respect of
any overpayment or underpayment by the Tenant of the Tenant’s Share of Common
Expenses for the period covered by the certificate.

 

Section 4.03 - Broken Period

 

If only part of a Year or of a fiscal period adopted by the
Landlord for the calculation of Common Expenses is included within the Term,
any amounts payable on account of the Tenant’s Share of Common Expenses for
that period shall be reduced proportionately.

 

11

 

ARTICLE V - TENANT’S COVENANTS

 

Section 5.01 - Rent

 

The Tenant covenants with the Landlord to pay when due Basic Rent and Additional
Rent, without any set-off or deduction whatsoever.

 

Section 5.02 - Rental and Business Taxes and Telephone

 

The Tenant covenants with the Landlord to pay, as and when they fall
due, all Rental Taxes to the Landlord or directly to the applicable government
authority if legislation so requires, and although Rental Taxes shall not be
construed as rent the Landlord shall have the same remedies for the recovery
therefor as the Landlord has for the recovery of rent. “Rental Taxes” shall mean any tax or duty
charged upon the Landlord or the Tenant which is levied, rated or assessed on
the act of entering into this Lease or otherwise on account of this Lease or on
the use or occupancy of the Demised Premises or any portion thereof, or on the
Basic Rent and/or the Additional Rent (except the Rental Taxes component
thereof) payable under this Lease, whether existing at the date hereof or
hereafter created by any governmental authority, including without limitation,
a goods and services tax, a business transfer tax, a retail sales tax, a
federal sales tax, an excise tax or duty or any tax similar to the foregoing,
together with any penalty or interest assessed or imposed with respect to the
foregoing taxes where such penalty arises as a result of the default of the
Tenant, but excluding any income tax, excess profit tax or luxury tax or other
tax personal to the Landlord not relating to the Building or Lands that may be
levied or charged to the Landlord.

 

The Tenant further covenants with the Landlord to pay, as and when the
same become due, all of its telephone and utility costs and all business,
income and other taxes, charges, rates, duties and assessments personal to it
from time to time levied against or payable in respect of the occupancy of the
Demised Premises by the Tenant and to pay any and all taxes and assessments
that may be assessed or levied upon or against the Tenant’s Improvements.

 

Section 5.03 - Electric Currents

 

The Tenant covenants with the Landlord to pay the cost of electric
current supplied to the Demised Premises as reasonably determined by the
Landlord, provided, however, that if all electric current supplied to the
Demised Premises is measured by way of a separate meter, the cost of the
electric current supplied to the Demised Premises shall be determined in
accordance with the information and reading provided by that separate meter; it
being understood that during any period that the Tenant is to pay for any
separately metered supply, the supply of the same utility to all other leaseable
spaces in the Building shall be excluded from Common Expenses. The Tenant
further covenants with the Landlord to pay the cost of any electrical fixtures,
ballasts, tubes and bulbs used to replace those installed in the Demised
Premises at the commencement of the Term. The Tenant shall, if requested by the

 

12

 

Landlord, make monthly payments to the Landlord throughout the Term on
account of its obligations under this Section 5.03 on the basis of
estimates of the Landlord, acting reasonably, from time to time.

 

Section 5.04 - Use

 

The Tenant covenants with the Landlord to use the Demised Premises only
for general business and administration office purposes, and not for any other
purposes unless the written consent of the Landlord is first obtained.

 

Section 5.05 - Repairs and Maintenance

 

The Tenant covenants with the Landlord to make all repairs (which in
this Lease shall include replacements, and repair shall include replacement
unless the context specifically requires otherwise but shall not include the
carrying out of Structural Repairs) to, and to maintain in first class order
and repair, the Demised Premises at the Tenant’s own expense throughout the
Term, including all Tenant’s Improvements, and except for repairs necessitated
by damage from hazards covered by insurance which the Landlord has maintained
(unless such repairs are necessitated by the acts or omissions of the Tenant,
its agents, employees, invitees, or licensees) and except for normal wear and tear.
The Tenant covenants that all redecoration and repairs will be done to a first class standard
of materials and workmanship and using only qualified workers and first class materials
at least equivalent to that installed in the Demised Premises on the
Commencement Date.

 

Section 5.06 - Condition of Premises on Termination

 

The Tenant covenants with the Landlord to leave the Demised Premises in
the state of repair required to be maintained by the Tenant during the Term
upon vacating the Demised Premises at the end or sooner termination of the Term.
However, notwithstanding the foregoing, the Tenant shall not be required to
restore the Demised Premises to base building standard or remove (or
re-install) any leasehold improvements at the expiry of the Term or any renewal
thereof. Notwithstanding the aforementioned, at the expiry of the Term (early
termination or renewal thereof, as applicable), the Tenant shall be
responsible, at its expense, for removing its furniture, fixtures, equipment
and any related wiring and cabling (installed by or on behalf of the Tenant),
and repairing any damage caused by such removal in accordance with the
provisions of this Lease.

 

Section 5.07 - Landlord May Inspect

 

The Tenant covenants with the Landlord to permit the Landlord or its
authorized agents or representatives of the Landlord’s mortgagee to enter and
view the state of repair of the Demised Premises during all normal business
hours and to forthwith repair and maintain according to notice in writing from
the Landlord or its agents or employees to the extent required by Section 5.05
hereof. The Landlord shall, prior to exercising its rights to enter the Demised
Premises as aforesaid, endeavour to give to the Tenant such period of notice as
may be reasonable in the circumstances.

 

13

 

Section 5.08 - Repairs Where Tenant at Fault

 

The Tenant covenants with the Landlord that if the Building, including
the Demised Premises, the boilers, engines, pipes and other apparatus (or any
of them) used for the purpose of heating or air-conditioning the Building or if
the water pipes, drainage pipes, electrical lighting or other equipment of the
Building or the roof or outside walls of the Building get out of repair or
become damaged or destroyed through the negligence, carelessness or misuse of
the Tenant, its servants, agents, employees or anyone permitted by it to be in
the Building or through it or them in any way stopping up or injuring the
heating apparatus, water pipes, drainage pipes or other equipment or part of
the Building, the expense of all necessary repairs, replacements or alterations
shall be borne by the Tenant, which shall pay same to the Landlord forthwith on
demand.

 

Section 5.09 - Assignment and Subletting

 

The Demised Premises may be occupied in whole or in part by
one or more entities affiliated with the Tenant, without the necessity for the
Tenant to obtain the Landlord’s prior consent. Other than to an affiliate (as
such term is defined in the Business
Corporations Act, as amended and replaced) of the Tenant, for which
no consent shall be required, the Tenant covenants with the Landlord not to let
anyone occupy or use the Demised Premises (other than the Tenant and the
employees of the Tenant) in whole or in part and not to assign or sublet
without leave, which leave shall not be unreasonably withheld, provided
nevertheless:

 

1.               that the Landlord
shall be entitled to withhold leave arbitrarily if the Landlord exercises the
right hereinafter set out in clause 2 of this Section 5.09;

 

2.               if the Tenant
requests the Landlord’s consent to an assignment of this Lease or to a
subletting of the whole or any part of the Demised Premises to any person,
firm or corporation, the Tenant shall submit to the Landlord the name of the
proposed assignee or subtenant and such information as to the nature of its
business and its financial responsibility and standing as the Landlord may reasonably
require, together with payment of the Landlord’s reasonable processing charge
for considering such material. Upon the receipt of such request and information
from the Tenant, the Landlord shall have the right, exercisable in writing
within fourteen (14) days after such receipt, to cancel and terminate this
Lease or to sublet all of the Demised Premises or, if the request is to assign
or sublet a portion of the Demised Premises only, to cancel and terminate this
Lease with respect to such portion, in each case as of the date set forth in
Landlord’s notice of exercise of such right, which shall be neither less than
sixty (60) nor more than one hundred and twenty (120) days following the
service of such notice;

 

3.               if the Landlord
shall exercise its right under clause 2 of this Section 5.09, the Tenant
shall surrender possession of the entire Demised Premises or the portion which
is the subject of the right, or as the case may be, on the date set forth
in such notice in accordance with the provisions of this Lease relating to
surrender of the Demised Premises at the expiration of the Term. If this Lease
shall be cancelled as to a portion of the Demised Premises

 

14

 

only, the rent payable by the Tenant under this Lease shall be abated
proportionately. If the Landlord shall not exercise the right to cancel this Lease
as above provided after the receipt of the Tenant’s written request, then the
Landlord’s consent to such request shall not be unreasonably withheld;

 

4.               If the Landlord
consents to any proposed assignment or subletting, the Tenant shall assign or
sublet, as the case may be, only upon the terms set out in the offer
submitted to the Landlord as aforesaid and not otherwise. As a condition of the
Landlord’s consent, the assignee or subtenant, as the case may be, shall
agree (and will be deemed to have agreed) with the Landlord to observe the
obligations of the Tenant under this Lease as the same relate to the space
assigned or sublet (except, in the case of a sublease, the Tenant’s covenant to
pay Basic Rent and Additional Rent) by entering into an assumption agreement
with the Landlord and the Tenant, in the Landlord’s form, and shall pay the
Landlord’s reasonable then-current processing charge and reasonable solicitor’s
fees and disbursements for preparing such agreement. The Tenant further agrees
that if the Landlord consents to any such assignment or subletting, the Tenant
shall be responsible for and shall hold the Landlord harmless from any and all
capital costs for leasehold improvements and all other expenses, costs, and
charges with respect to or arising out of any such assignment or subletting.
Any consent by the Landlord to any assignment or subletting shall not
constitute a waiver of the requirement for consent by the Landlord to any
subsequent assignment or subletting by either the Tenant or any assignee or
subtenant;

 

5.               If the
Landlord consents in writing to an assignment or sublease as contemplated
herein, the Tenant may complete such assignment or sublease subject to the
following covenants and conditions:

 

(a)          no assignment or sublease shall be valid and no
assignee or subtenant shall take possession of the Demised Premises or any part thereof
until an executed duplicate original of such assignment or sublease has been
delivered to the Landlord; and

 

(b)         all “Excess Rent”, as hereinafter defined, derived
from such assignment or sublease shall be payable to the Landlord. The Excess
Rent shall be deemed to be and shall be paid by the Tenant to the Landlord as
rent. The Tenant shall pay the Excess Rent to the Landlord immediately as and
when such Excess Rent is receivable by the Tenant, or at the Landlord’s option
shall be payable directly to the Landlord by the assignee or sublessee, and on
notice to the Tenant, the Tenant shall forthwith give irrevocable direction to
its assignee or sublessee that such monies are payable directly to the
Landlord.

 

As used
herein, “Excess Rent” means the amount by which the total money and other
economic consideration to be paid by the assignee or subtenant as a result of
an assignment or sublease, whether denominated as rent or otherwise, exceeds,
in the aggregate, the total amount of Basic Rent and Additional Rent which the
Tenant is obligated to pay to the Landlord under this Lease, pro-rated for the
time (and, if applicable, the portion of) the Demised Premises being sublet or
assigned;

 

15

 

6.               Upon request of the Landlord from time to
time, a Tenant that is a corporation (unless its shares are traded on any
public stock exchange or public stock market) or partnership shall make
available to the Landlord for inspection or copying or both, all books and
records of the Tenant which, alone or with other data, in the case of a Tenant
that is a corporation, identify the ownership of all of the shares and
securities of the Tenant, and in the case of a Tenant that is a partnership,
identify the partners of the Tenant and their respective interests in the
partnership, all from the Commencement Date or the date of earlier execution of
this Lease up to the date such books and records are made available to the
Landlord;

 

7.               in no event shall any assignment or
subletting to which the Landlord may have consented release or relieve the
Tenant from its obligations fully to perform all the terms, covenants and
conditions of this Lease on its part to be performed during the period to
and including the last day of the Term;

 

8.               transfers aggregating fifty percent (50%)
or more of the capital or voting stock of the Tenant (if the Tenant is a
non-public corporation) shall be deemed to be an assignment of this Lease. For
greater certainty, issuances of shares by the Tenant from treasury will not be
included in the above calculation;

 

9.               the Tenant shall not display, advertise or
offer the whole or any part of the Demised Premises for the purposes of
assignment or subletting and shall not permit any broker or other party to so
do unless the complete text and format of any such display, advertisement or
offer shall have first been approved in writing by the Landlord. Without in any
way restricting or limiting the Landlord’s right to refuse any text and format
on other grounds, any text and format proposed by the Tenant shall not contain
any reference to the rental rate for the Demised Premises; and

 

10.         notwithstanding anything else in this subsection,
the Landlord may refuse consent to any assignment or sublet if the Tenant
is or has regularly been in default under this Lease and, at the Landlord’s
option, no assignment or sublet shall be completed or valid if the Tenant is in
default after consent is given.

 

Section 5.10 - Rules and Regulations

 

The Tenant covenants with the Landlord to observe, and to cause its
employees, servants, agents, invitees and customers to observe, the rules and
regulations set out in Schedule “C” and all other rules and
regulations as the Landlord may from time to time make for the operation,
reputation, safety, care or cleanliness of the Building and Demised Premises,
the operation and maintenance of equipment, the use of the Common Areas,
Parking Area, the lighting of premises, the display of signs visible outside
the Demised Premises, other matters affecting the operation of the Building and
the Demised Premises and the establishing and maintaining of a suitable image
for the Building, provided, however, that such rules and regulations are
reasonable and consistent with the provisions of this Lease and do not diminish
any rights of the Tenant hereunder. Nothing in this Lease shall be construed to
impose upon the Landlord any obligation to enforce the rules and regulations,
or the terms, covenants or conditions in any other lease, against any other
tenant, and the Landlord shall not be liable to the Tenant for violation of the
same by any other

 

16

 

tenant, its servants, employees, agents, visitors or licensees. If the
Landlord chooses to enforce any of the rules and regulations, the Landlord
shall enforce such rule, regulation, rules or regulations against all
tenants in a fair and equitable manner.

 

Section 5.11 - Observance of Law

 

The Tenant covenants with the Landlord, in its use and occupation of the
Demised Premises, not to violate any law, by-law, ordinance, order, rule,
regulation or requirement of any federal, provincial or municipal government or
any department, commission, board or office thereof.

 

Section 5.12 - Waste and Nuisance

 

The Tenant covenants with the Landlord not to make or suffer any waste
or cause or allow to be caused any damage, disfiguration or injury to the
Demised Premises or the fixtures and equipment thereof or permit or suffer any
over-loading of the floors thereof, and not to use or permit to be used any part of
the Demised Premises for any dangerous, noxious or offensive trade, business or
other activity, and not to cause or maintain any nuisance in, at or on the
Demised Premises.

 

Section 5.13 - Entry by Landlord

 

The Tenant covenants with the Landlord to permit the Landlord or its
agents to enter upon the Demised Premises at any time and from time to time for
the purpose of inspecting and of making repairs, alterations, improvements or
additions to the Demised Premises or to the Common Areas of the Building, and
the Tenant shall not be entitled to compensation for any inconvenience,
nuisance or discomfort occasioned thereby. The Landlord shall, prior to
exercising its rights to enter the Demised Premises as aforesaid, give to the
Tenant such period of notice as may be reasonable in the circumstances. The
Landlord shall, in making all such repairs alterations, improvements or
additions, do so with diligence and all due dispatch, and shall endeavour to
minimize disturbance to the Tenant.

 

Section 5.14 - Exhibiting Premises

 

The Tenant covenants with the Landlord to permit the Landlord or its
agent to exhibit the Demised Premises to prospective tenants during normal
business hours during the last six (6) months of the Term upon reasonable
prior notice to the Tenant.

 

Section 5.15 - Liens

 

The Tenant shall not suffer or permit any lien under the Builders’ Lien
Act of British Columbia or any statute of like import from time to time in
effect to be filed or registered against the Demised Premises, the Building or
the Lands or any part thereof by reason of work, labour, services or
materials supplied or claimed to have been supplied to the Tenant or anyone
holding any interest in a part thereof through or under the Tenant. If any
such lien shall at any time be filed or registered, the Tenant shall cause the
discharge of same to be filed and registered within fifteen (15) days after the
Tenant has notice of the lien, provided, however, that should the Tenant desire
to contest the amount

 

17

 

or validity of any lien in good faith and shall have so notified the
Landlord, if the Tenant shall have deposited with a mutually acceptable trustee
or stake holder (or paid into court to the credit of any lien action if the
applicable statute provides for such payment and such payment shall discharge
the lien or otherwise be adequate protection for the Landlord’s interest) the
amount of the lien claimed plus a reasonable amount for costs, then the Tenant may defer
payment of such lien for a period of time reasonably sufficient to enable the
Tenant to contest same with due diligence, provided always that neither the
Landlord nor the Demised Premises, Building or the Lands or any part thereof,
nor the Tenant’s leasehold interest therein shall or could thereby become
liable to forfeiture or sale.

 

Section 5.16 - Alterations

 

The Tenant covenants with the Landlord that the Tenant will not make or
erect in or to the Demised Premises any installations, alterations, additions
or partitions without submitting plans and specifications to the Landlord and
obtaining the Landlord’s prior written consent in each instance, which consent shall
not be unreasonably withheld (and the Tenant must further obtain the Landlord’s
prior written consent to any change or changes in such plans and specifications
submitted as aforesaid or any change or changes whatsoever to the mechanical or
electrical portion of such plans and specifications submitted as aforesaid,
subject to payment of the Landlord’s reasonable cost of having its architect or
other consultants approve of such plans and specifications prior to proceeding
with any work based on such plans and specifications); such work may be
performed by employees of, or contracted for with contractors engaged by the
Tenant, subject to all reasonable conditions which the Landlord may impose;
including, without limitation, the right, at the option of the Landlord, to
require that the Landlord’s contractors be engaged for any mechanical or
electrical work; the Tenant shall promptly pay to the Landlord or the Tenant’s
contractors, as the case may be, when due, the cost of all such work and
of all materials, labour and services involved therein and of all costs of
redecoration or of alterations or additions to the Demised Premises or the
Building necessitated thereby. Without limiting the generality of any of the
foregoing, any work performed by or for the Tenant shall be performed by
competent workers whose trade union affiliations are not incompatible with
those of any workers who may be employed in the Building by the Landlord,
its contractors or subcontractors. Any improvement or alteration made by the
Tenant to the Demised Premises shall, upon affixation thereto, become part of
the Demised Premises and the property of the Landlord, provided, however, that
the Landlord may, upon the expiration or sooner termination of this Lease,
require the Tenant to remove any or all such improvements or alterations, in
which case the Tenant shall do so forthwith and remedy any damage caused
thereby to the Demised Premises or any other portion of the Building. Notwithstanding
the foregoing, the Tenant may, upon the expiration of the Term and provided
that it is not in default hereunder, remove any or all of the Tenant’s
Improvements and all signs, equipment and personal property of the Tenant,
provided that it remedies any damage caused thereby to the Demised Premises or
any other portion of the Building.

 

Section 5.17 - Signs

 

The Tenant covenants with the Landlord that the Tenant will not paint,
display, inscribe or affix any sign, notice, lettering or direction on any part of
the outside of the Building or in or on the Demised Premises where the same

 

18

 

may be seen from outside of the Demised Premises (including
hallways) without first obtaining the written consent of the Landlord, which
consent may be arbitrarily withheld in regard to anything which may be
seen from outside the Building and otherwise shall not be unreasonably
withheld.

 

Section 5.18 - Locks and Trimmings

 

The Tenant covenants with the Landlord that all locks and trimmings of
the doors and windows in or upon the Demised Premises shall be kept whole and
whenever broken shall be immediately replaced or repaired under the direction
and to the reasonable satisfaction of the Landlord and that such replacement
and/or repairs shall be paid for by the Tenant.

 

Section 5.19 - Rubbish

 

The Tenant covenants with the Landlord to keep the Demised Premises free
of waste, rubbish and debris at all times and to provide proper receptacles for
waste and rubbish.

 

Section 5.20 - Indemnity

 

Except to the extent that the loss of life, personal injury or damage to
property referred to in this Section is caused by the negligence or wilful
misconduct of the Landlord or another person for whose negligence or wilful
misconduct the Landlord is responsible in law, the Tenant will indemnify and
save the Landlord harmless from and against any and all claims, actions,
damages, liability and expenses in connection with loss of life, personal
injury or damage to property arising from any occurrence on the Demised
Premises or the occupancy or use of the Demised Premises or occasioned wholly
or in part by an act or omission of the Tenant, its officers, employees,
agents, customers, contractors, or other invitees, licensees or concessionaires
or by anyone permitted by the Tenant to be on the Demised Premises. If the
Landlord shall be made a party to any litigation commenced by or against the
Tenant, the Tenant shall hold the Landlord harmless and shall pay all costs,
expenses and legal fees incurred or paid by the Landlord in connection with
such litigation unless the Landlord is made a party to any such litigation as a
result of any alleged wrongful act, default hereunder, or negligence or wilful
misconduct on its part. The indemnification given by the Tenant in this Section 5.20
shall survive any termination of this Lease notwithstanding anything to the
contrary in this Lease.

 

Section 5.21 - Deliveries and Loading

 

During the Term the Tenant covenants to ensure that all deliveries to
the Demised Premises and loading and unloading to be done with respect to the
Demised Premises shall be done in and from those areas of the Lands designated
from time to time as loading areas by the Landlord, and during such times as may be
set by the Landlord from time to time.

 

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Section 5.22 - Hazardous Substances

 

1.               The Tenant will not
bring upon, locate, create or store on the Demised Premises or the Building or
any part thereof any Hazardous Substances, nor will the Tenant permit any
of its agents, employees, suppliers, customers, invitees, sub-tenants,
licensees or any other person having business with or under the control of the
Tenant to bring upon, locate, create or store on the Demised Premises any
Hazardous Substances.

 

2.               Without limiting
and notwithstanding any other provision of this Lease, the Tenant will strictly
comply with all laws and regulations from time to time in force relating to
Hazardous Substances and will immediately give written notice to the Landlord
of the occurrence of any event on or about the Demised Premises constituting an
offence thereunder or being in breach thereof of which it is aware and, if the
Tenant, either alone or jointly with others, causes the happening of such event
or brings any Hazardous Substance upon the Building or any part thereof,
the Tenant will, at its own expense:

 

(a)          immediately give
the Landlord written notice to that effect and thereafter give the Landlord
from time to time written notice of the extent and nature of the Tenant’s
compliance with the following provisions of this Section 5.22 (2);

 

(b)         promptly remove the
Hazardous Substances from the Building in a manner which conforms with all laws
and regulations governing movement of the same; and

 

(c)          if requested by the
Landlord, obtain from an independent consultant designated or approved by the
Landlord a report, verifying the complete and proper removal thereof, if such
is not the case, reporting as to the extent and nature of any failure of the
Tenant to comply with this Section 5.22 (2).

 

The Tenant will, at its own expense, remedy any damage to the Building
caused by such event or by the performance of the Tenant’s obligations under
this Section 5.22 (2) as a result of such occurrence.

 

If any governmental authority having jurisdiction requires the cleanup
of any Hazardous Substance held, released, spilled,
abandoned or placed upon the Building by the Tenant or released into the
environment by the Tenant or as a result of
the Tenant’s use or occupancy of the Demised Premises, then the Tenant will, at its own
expense, prepare or cause to be prepared all necessary studies, plans and
proposals and submit the same for approval,
provide all bonds and other security required by governmental authorities
having jurisdiction and forthwith
carry out the work required and will keep the Landlord fully and regularly informed
and provide to the Landlord full information with respect to proposed plans and
comply with the Landlord’s requirements with
respect to such plans, provided that if the Landlord determines, in its sole

 

20

 

discretion, that the Landlord, its property or its reputation is placed
in any jeopardy by the requirement for any
such work, the Landlord may cause such Hazardous Substances to be removed
and may repair and restore the Demised
Premises and may cause its employees or agents to enter on the Demised
Premises for such purpose. Should the
Landlord undertake such removal, repair or restoration, the Tenant shall forthwith
pay to the Landlord the total cost of such removal, repair or restoration plus
a fee equal to 18% of such cost, and the
total of such fee and cost shall, until paid to the Landlord, bear interest at
the rate stipulated herein for amounts
in arrears and shall be recoverable as Additional Rent reserved hereunder.

 

3.               The Tenant hereby
authorizes the Landlord to make enquiries from time to time of any government
or governmental agency with respect to the Tenant’s compliance with any and all
laws and regulations pertaining to the Tenant, the Tenant’s business and the
Demised Premises including, without limitation, laws and regulations pertaining
to Hazardous Substances and the protection of the environment, and the Tenant
will provide to the Landlord, from time to time, such written authorization as
the Landlord may reasonably require in order to facilitate the obtaining
of such information.

 

4.               The
Tenant will comply with all laws and regulations from time to time in force
regulating the manufacture, use, storage, transportation or disposal of Hazardous
Substances and will make, obtain, and deliver all reports and studies required
by all governmental authorities having jurisdiction.

 

5.               The Landlord may at
any time, and from time to time, upon reasonable notice, inspect the Tenant’s
goods upon the Demised Premises and the Tenant’s records relating thereto for
the purpose of identifying the nature of the goods and the existence or absence
of any Hazardous Substances and the Tenant will assist the Landlord in doing
so.

 

6.               If the
Tenant or any of its authorized agents, suppliers, customers, invitees,
sub-tenants, licensees or any other person having business with or under the
control of the Tenant brings or creates upon the Demised Premises prior to the
expiration of the Term any Hazardous Substance, then notwithstanding any rule of
law to the contrary, such Hazardous Substance will be and remain the sole and
exclusive property of the Tenant, and will not become the property of the
Landlord, notwithstanding the degree of affixation of the Hazardous Substance
or the goods containing the Hazardous Substance to the Demised Premises and
notwithstanding the expiry or earlier termination of this Lease.

 

7.               The
obligations of the Tenant relating to Hazardous Substances will survive the
expiry or earlier termination of this Lease, save only that, to the extent that
the performance of those obligations requires access to or entry upon the
Building or any part thereof by the Tenant following the expiry or earlier
termination of this Lease, the Tenant will have such entry and access only at
such times and upon such terms and conditions as the Landlord may from
time to time specify, acting reasonably, and the Landlord may, at the Tenant’s
cost and expense,

 

21

 

undertake the performance of any necessary work in
order to complete such obligations of the Tenant, provided that notwithstanding
that the Landlord may have commenced such work, it will have no obligation
to the Tenant to complete such work.

 

8.               The
Tenant hereby indemnifies and holds the Landlord and the Landlord’s
shareholders, directors officers, employees, agents, successors and assigns
harmless from and against all loss, cost, damage, claim, action, cost recovery
claim, order, fine, penalty and expense (including, without limitation, legal
fees on a solicitor and own client basis and costs incurred in the
investigation, defence and settlement of claims and all costs of remediation of
the Demised Premises or the Building or the Lands or any adjacent or other property,
or each of them) that the Landlord may incur as a result of or in
connection with or arising from the breach of this Section by the Tenant
or in respect of non-compliance by the Tenant with any federal, provincial or municipal laws,
by-laws, rules, regulations, orders or this Lease relating to Hazardous
Substances.

 

ARTICLE VI
- LANDLORD’S COVENANTS

 

Section 6.01 - Quiet Enjoyment

 

The Landlord covenants with the Tenant that the Tenant, upon paying the
rent hereby reserved and performing and observing the covenants, conditions,
restrictions and provisos herein contained on its part to be performed and
observed, shall peaceably enjoy and possess the Demised Premises for the Term
without any interruption from the Landlord or from any other person or persons
lawfully claiming by, from or under it, save and except as expressly provided
in this Lease; provided, and it is hereby agreed that in no event will the
conduct of repairs, alterations, additions or renovations by the Landlord to
the exterior or interior of the Demised Premises or the Building (in accordance
with this Lease) constitute a breach by the Landlord of this covenant.

 

Section 6.02 - Taxes

 

The Landlord covenants with the Tenant to pay, subject to the provisions
of this Lease, all Tax that may be charged, levied, rated or assessed
against the Demised Premises and the Lands and Building. If, in the sole
opinion and discretion of the Landlord, any Tax is not fair and equitable, the
Landlord may take all steps necessary to contest or appeal the validity
thereof, but the Tenant shall not postpone or omit payment of the Tenant’s
Share of Tax for the Year whether because of any such appeal or on-going
contest or otherwise, provided that the Landlord shall notify and account to
the Tenant for any portion to which the Tenant may be entitled of any
savings, refund or reduction which may be forthcoming as a result of such
appeal or contest.

 

22

 

Section 6.03 - Repair

 

The Landlord covenants with the Tenant to make Structural Repairs and
repairs necessitated by damage from hazards covered by insurance which the
Landlord has maintained or is obligated to maintain unless such repairs are
necessitated by the acts or omissions of the Tenant, its agents, employees, invitees
or licensees.

 

Section 6.04 - Heating and Air-Conditioning

 

The Landlord covenants with the Tenant to provide heating and air-conditioning
to the office area of the Demised Premises to an extent sufficient to maintain
therein a reasonable temperature at all times during normal business hours,
except during the making of repairs. In no event shall the Landlord have, at
any time, any obligation or liability in connection with the cessation,
unavailability, interruption or suspension of any such service provided, except
that repairs and maintenance work shall be carried out with reasonable dispatch
so as to have the least adverse effect on the business operations of the
Tenant.

 

Section 6.05 - Access

 

The Landlord covenants with the Tenant to permit the Tenant and the
employees of the Tenant and all persons lawfully requiring communication with
them to have the uses (subject to whatever restrictions the Landlord, acting
reasonably, deems necessary for security, repair or other reasons), at
reasonable times in common with others, of the Common Areas of the Building
including main entrances, stairways and corridors (if any) leading to the
Demised Premises. The Tenant shall have access to the Demised Premises at all
times, subject to whatever restrictions the Landlord, acting reasonably, deems
necessary for security, repair or other reasons.

 

Section 6.06 - Caretaking of Public Areas

 

The Landlord covenants with the Tenant to maintain and keep clean all
public areas in the Building, as well as the Demised Premises.

 

ARTICLE VII - INSURANCE

 

Section 7.01 - Increase in Landlord’s Insurance Rates or
Cancellation of Policy

 

Except for the uses specified in Section 5.04 hereof, the Tenant
covenants with the Landlord not to do or omit or permit to be done or omitted
upon the Demised Premises anything which shall cause the rate of the Landlord’s
insurance upon the Building to be increased or any insurance policy on the
Building to be cancelled and if the Tenant shall be in breach of these
provisions, the Tenant shall not only be responsible for all consequence
flowing therefrom and shall indemnify the Landlord in respect thereof, but
also:

 

1.               if the rate of insurance on the Building be increased
by reason of the use made of the Demised

 

23

 

Premises
by the Tenant or by reason of anything done or omitted or permitted to be done
or omitted by the Tenant or anyone permitted by the Tenant to be upon the
Demised Premises (excluding any use, act or omission resulting from the original
set-up of the Demised Premises as of the Commencement Date in compliance with
the uses permitted by Section 5.04, but including any rate increase
resulting from a change of such original set-up), the Tenant will pay to the
Landlord on demand the amount of such increase; and

 

2.               if any insurance
policy upon the Building shall be cancelled by the insurer by reason of the use
or occupation of the Demised Premises or any part thereof by the Tenant or
by any assignee or subtenant of the Tenant or by anyone permitted by the Tenant
to be upon the Demised Premises (excluding any use resulting from the original
set-up of the Demised Premises as of the Commencement Date in compliance with
the uses permitted by Section 5.04, but including any use resulting from a
change of such original set-up), the Landlord may, at its option, determine the
Term forthwith by leaving upon the Demised Premises with the person apparently
in charge thereof notice in writing of its intention so to do and thereupon
rent and any other payments for which the Tenant is liable under this Lease
shall be apportioned and paid in full to the date of such determination and the
Tenant shall immediately deliver up possession of the Demised Premises to the
Landlord and the Landlord may re-enter and take possession of the same.

 

Section 7.02 - Notice of Threatened Cancellation of Policy

 

It is understood and agreed that if there shall be a threatened
cancellation of insurance as a result of the Tenant’s use of the Demised
Premises or by reason of anything done or omitted or permitted to be done or
omitted by the Tenant or anyone permitted by the Tenant to be upon the Demised
Premises, the Landlord, acting reasonably, shall give to the Tenant such period
of notice as may be possible in the circumstances to correct the condition
or conditions, as a result of which the threatened cancellation has arisen and
so long as the insurer or insurers shall permit the correction of such
condition or conditions without cancellation of the insurance, and if the Tenant
proceeds expeditiously to correct the said condition or conditions, the
Landlord shall not invoke its rights under Section 7.01 (2).

 

Section 7.03 - Landlord’s Insurance - Mandatory

 

The Landlord shall take out and maintain on a replacement cost basis
fire and extended perils insurance on the Building and shall take out and
maintain Tenant’s rental insurance and its own general liability insurance,
including general liability insurance in respect of the Common Areas in an
amount not less than $1,000,000.00 in respect of any injury to or death of one
or more persons and loss or damage to the property of others.

 

24

 

Section 7.04 - Landlord’s Insurance - Optional

 

The Landlord reserves the right to take out and maintain any insurance
which the Landlord, as a prudent and reasonable property owner, may deem
advisable, including without limitation, all risks insurance on a replacement
cost basis, earthquake, plate glass insurance and loss of use and occupancy
under its boiler coverage.

 

Section 7.05 - Tenant’s Insurance

 

Throughout the Term, the Tenant shall take out and maintain at its own
expense, in such form and with such companies as the Landlord may reasonably
require:

 

1.               comprehensive
general liability insurance of $3,000,000.00 (or such greater amount as the
Landlord reasonably deems advisable) inclusive coverage in respect of injury or
death of any person or persons or property damage or loss due to or arising out
of the Tenant’s business or the use or occupation of the Demised Premises; and

 

2.               all risk insurance
on the Tenant’s Improvements, merchandise and stock in trade (if any) in the
Demised Premises, furniture, fixtures and improvements, and plate glass
insurance, in an amount not less than the full replacement value thereof in the
event of fire or other perils covered under Canadian Underwriters’ Association
Standard Extended Coverage Endorsement.

 

The aforesaid insurance shall name the Landlord and any persons, firms
or corporations designated by the Landlord as additional insureds as their
interests may appear, shall contain a “cross liability” or “severability
of interests” clause so that the Landlord and the Tenant may be insured in
the same manner and to the same extent as if individual policies had been
issued to each, shall exclude the exercise of any claim by the Tenant’s insurer
against the Landlord by subrogation and shall provide that such insurance may not
be terminated, cancelled or materially altered unless at least thirty (30) days’
written notice of such termination, cancellation or material alteration is
given by the insurers to the Landlord. The Tenant shall, from time to time upon
request by the Landlord, deliver to the Landlord certificates of such
insurance, or the original or certified copy of such insurance policies.

 

Notwithstanding the foregoing provisions of this Section 7.05, the
Landlord acknowledges that the Tenant carries a blanket insurance policy for
all of its leased locations and that said blanket policy satisfactorily
addresses all of the provisions of this Section 7.05. Said blanket policy
is all the insurance that the Tenant need maintain.

 

ARTICLE VIII - DAMAGE AND
DESTRUCTION

 

Section 8.01 - Injury to Premises and Building

 

If during the Term the Demised Premises or the Building shall be damaged
or destroyed by fire, lightning, tempest, explosion, acts of God or the Queen’s
enemies, structural defects or weakness, impact of aircraft, riots or
insurrection or other casualty, then the following provisions shall have
effect:

 

25

 

1.               if the Demised
Premises or other parts of the Building shall be so badly injured as to render
the Premises unfit for the Tenant’s use and occupancy and shall be incapable,
with reasonable diligence, of being repaired within one hundred and eighty
(180) days from the happening of such injury, then either party may declare
the Term to be forthwith terminated and the Tenant shall surrender the Demised
Premises to the Landlord as soon as is practicable, and shall pay rent only to
the time of such injury and the Landlord may re-enter and repossess the
Demised Premises discharged from this Lease and may remove all persons
therefrom;

 

2.               if the Demised
Premises or other parts of the Building shall be capable, with reasonable
diligence, of being repaired and rendered fit for the Tenant’s use and
occupancy within one hundred and eighty (180) days from the happening of such
injury as aforesaid and:

 

(a)          if the damage is
such as to render the Demised Premises wholly unfit for occupancy during the
process of such repairs, then the rent hereby reserved shall not run or accrue
after such injury or while the process of repair is going on and the rent shall
recommence immediately after such repairs have been completed; or

 

(b)         if the damage is so
slight that the Demised Premises are partially fit for occupancy and use for
the purposes of the Tenant’s business, then until such damage has been repaired
the rent hereby reserved shall abate only in proportion to the extent that
possession and enjoyment are interfered with and until such possession and
enjoyment are fully restored; and

 

3.               the certificate of
the architect of the Landlord as to the extent to which the Demised Premises
are fit for occupancy, as to whether any such injury can or cannot be repaired
within a period of one hundred and eighty (180) days from the happening of any
such injury or as to the completion of repairs, shall be final and binding upon
the parties hereto as to the facts so certified.

 

Section 8.02 - Damage to Property

 

Notwithstanding anything else contained in this Lease, the Landlord
shall not be liable or responsible in any way for any bodily injury to or death
of, or loss of or damage or injury to any property belonging to the Tenant or
to employees of the Tenant or to any other person while such person or property
is in or upon the Demised Premises or in the Building or on the Lands, or any interruption
of any business carried on in the Demised Premises, unless such loss, damage or
injury shall have been caused by the negligence or wilful misconduct of the
Landlord or of its employees, servants or agents or others for whom it is in
law responsible; but, notwithstanding the foregoing, in no event shall the
Landlord be liable for any damage to any such property caused by steam, water,
rain or snow which may leak into, issue or flow from any part of the
Building or from the water, steam or drainage pipes or plumbing works of the
Building or from any other place or quarter or for any damage caused by or
attributable to the condition

 

26

 

or arrangement of any electric or other wiring or for any damage caused
by anything done or omitted to be done by any other tenant.

 

Section 8.03 - Parking Area

 

The Landlord shall not be liable or responsible in any way for any
injury, damage or loss of any kind sustained by the Tenant or by employees,
customers or invitees of the Tenant or by any other person while in, on or
about the Parking Area or for any damage or loss to any automobiles or vehicles
(including accessories thereto and contents thereof), unless caused by the
negligence or wilful act of the Landlord or its employees, servants or agents
or others for whom it is in law responsible.

 

ARTICLE IX - TENANT’S DEFAULT
AND LANDLORD’S REMEDIES

 

Section 9.01 - Default of Tenant

 

If and whenever (i) the rent hereby reserved shall not be paid when
due, and which default has not been remedied within five (5) days after
notice thereof has been given by the Landlord to the Tenant; or (ii) in
the case of the breach, non-observance or non-performance of any of the
covenants or agreements or Rules and Regulations herein contained or
referred to on the part of the Tenant to be observed and performed other
than the covenant to pay rent or any other payment required hereunder, which is
not remedied within ten (10) days after notice has been given by the
Landlord specifying the default, or if the nature of such default is such that
it cannot with due diligence be remedied within such period and provided the
Tenant proceeds with due diligence to remedy such default, then within such
longer period as shall be reasonably required to remedy such default with
diligence; or (iii) in case the Term shall be taken in execution or
attachment for any cause whatever; then and in each case it shall be lawful for
the Landlord at any time thereafter to re-enter into and upon the Demised
Premises or any part thereof in the name of the whole and take possession
thereof and enjoy as of its former estate to the exclusion of the Tenant, and
it may expel all persons and remove all property from the Demised Premises
without resort to legal process and without compensation to the Tenant.

 

Section 9.02 - Interest on Overdue Payments

 

The Tenant shall pay to the Landlord interest at that rate per annum
which is six percent (6%) in excess of the prime rate charged from time to time
by the main branch at Vancouver, British Columbia of the Royal Bank of Canada
on loans in Canadian funds to its best risk commercial borrowers compounded
monthly on all overdue payments required to be made by the Tenant under any one
of the provisions of this Lease. In the event of any dispute between the Tenant
and the Landlord as to the prime rate charged as aforesaid by the main branch
at Vancouver, British Columbia, of the Royal Bank of Canada a letter or other
notice in writing from the Manager of the main branch at Vancouver, British
Columbia, of the Royal Bank of Canada as to the prime rate shall be final and
binding on the Tenant and the Landlord.

 

27

 

Section 9.03 - Bankruptcy, etc.

 

If the Demised Premises shall be used by any person other than the
Tenant or any assignee or subtenant consented to by the Landlord as provided
for herein or for any purpose other than that as herein provided, without the
written consent of the Landlord, or the Term or any of the goods and chattels
of the Tenant shall be at any time seized in execution or attachment by any
creditor of the Tenant in pursuance of a judgment or the Tenant shall make any
assignment for the benefit of creditors or any bulk sale (other than a bulk
sale in respect of an assignment of this Lease to which the Landlord has
consented) or become bankrupt or insolvent or take the benefit of any Act now
or hereafter in force for bankrupt or insolvent debtors or if the Tenant is a
company or corporation any order shall be made for the dissolution, liquidation
or winding-up of the Tenant, then in any such case this Lease shall, at the
option of the Landlord but subject to any agreement that may then be in
effect with a mortgagee of this Lease in respect of a mortgage consented to by
the Landlord, cease and determine and the Term shall immediately become
forfeited and void and the then current month’s Basic Rent and Additional Rent
and the next ensuing three (3) months’ Basic Rent and Additional Rent
shall immediately become due and payable and the Landlord may re-enter and
take possession of the Demised Premises as though the Tenant or other occupant
or occupants of the Demised Premises was or were holding over after the
expiration of the Term without any right whatever, but if permitted by law the
Tenant shall continue to be liable to the Landlord for the rent hereby reserved
for the balance of the Term.

 

Section 9.04 - Distress

 

The Tenant waives and renounces the benefit of any present or future
statute taking away or limiting the Landlord’s right of distress and covenants
and agrees that notwithstanding any such statute none of the goods and chattels
of the Tenant or of any other person in or upon the Demised Premises at any
time during the Term shall be exempt from levy by distress for rent in arrears.

 

Section 9.05 - Right of Entry as Agent of Tenant

 

The Tenant covenants and agrees that upon the Landlord becoming entitled
to re-enter upon the Demised Premises under any of the provisions of this
Lease, the Landlord, in addition to all other rights, shall have the right to
enter the Demised Premises as agent of the Tenant, either by force or
otherwise, without being liable for any prosecution therefor and to re-let the
Demised Premises and to receive the rent therefor and, as agent of the Tenant,
to take possession of any furniture or other property on the Demised Premises
and to sell the same at a public or private sale with or without notice and to
apply any net proceeds of such sale and any net rent derived from re-letting
the Demised Premises (after all expenses) upon account of the rent hereby
reserved, and the Tenant shall be liable to the Landlord for the deficiency, if
any.

 

Section 9.06 - Rights of Termination

 

The Tenant covenants and agrees that upon the Landlord becoming entitled
to re-enter upon the Demised Premises under any of the provisions of this
Lease, the Landlord, in addition to all other rights, shall have the right to
terminate forthwith this Lease and the Term by giving written notice of such
termination to the Tenant at the address

 

28

 

set out herein, and thereupon rent and any other payments for which the
Tenant is liable under this Lease shall be computed, apportioned and paid in
full to the date of such termination of this Lease, and the Tenant shall
immediately deliver up possession of the Demised Premises to the Landlord, and
the Landlord may re-enter and take possession of the same.

 

Section 9.07 - Landlord May Repair

 

If the Tenant fails to repair or maintain the Demised Premises in
accordance with the provisions hereof, and provided that the Landlord has first
given adequate notice to the Tenant to so repair or maintain, the Landlord, its
agents, contractors or employees may (but shall not be obliged so to do)
at any reasonable time enter the Demised Premises to remedy such failure or
default and recover from the Tenant as Additional Rent the cost thereof
(including the cost of repairs or cleaning required to be done after the Tenant
vacates the Demised Premises at the end or sooner termination of the Term) plus
an eighteen per cent (18%) supervision charge on the total amount of such costs.
In making such repairs or doing such maintenance or cleaning, the Landlord may bring
and leave upon the Demised Premises all necessary materials, tools and
equipment and the Landlord shall not be liable to the Tenant for any
inconvenience, annoyance, loss of business or any injury suffered by the Tenant
by reason of the Landlord effecting such repairs, maintenance or cleaning. The
Landlord shall, prior to exercising its rights to enter the Demised Premises as
aforesaid, give to the Tenant such period of notice as may be reasonable
in the circumstances.

 

Section 9.08 - Landlord’s Performance of Tenant’s Obligations

 

Notwithstanding any other provisions herein contained, the Landlord may,
but need not, remedy any default of the Tenant. Any costs incurred by the
Landlord in performing any act which the Tenant has failed to perform or
in remedying any situation which has arisen through the neglect or default of
the Tenant shall be collectible from the Tenant as Additional Rent.

 

Section 9.09 - Legal Costs

 

Any legal costs arising from a breach of any covenant by either party
hereto shall be recoverable by the other on a solicitor and client basis.

 

Section 9.10 - Landlord’s Remedies are Cumulative

 

The remedies of the Landlord hereunder are cumulative and the Landlord may enforce
any of its remedies in priority to, or concurrently with, or subsequent to, any
other remedy which it has under this Lease or any right of action at law or in
equity which may now exist, or later arise.

 

29

 

ARTICLE X - RENEWAL OPTIONS

 

Section 10.01
- Renewal

 

If the Tenant
duly and punctually observes and performs the covenants, agreements, conditions
and provisos in this Lease on the part of the Tenant to be observed and
performed throughout the Term, the Landlord shall, at the expiration of the
Term, at the cost of the Tenant and at its written request, delivered to the
Landlord in the manner provided in this Lease, not earlier than twelve (12)
months and not less than six (6) months prior to the expiration of the
Term, grant to the Tenant at the Tenant’s expense a renewal lease of the
Demised Premises for a further term of five (5) years (the “Renewal Term”)
from the expiration of the Term, upon all of the covenants, agreements,
conditions and provisos contained in this Lease, except this covenant for
renewal and any provisions for Landlord’s work, Tenant’s work, fixturing
period, free rent, bonuses, leasehold improvements or incentive or inducement
and except the Basic Rent to be paid during the Renewal Term.

 

The
Basic Rent for the Renewal Term shall be the then fair market rent for the
Demised Premises, being the rent which would be paid for the Demised Premises
in their then current condition (including all leasehold improvements thereto)
or in whatever condition the Landlord is entitled to require the Tenant to
leave the Demised Premises at the expiration of the Term, whichever condition
would result in higher rent, as being between persons dealing in good faith and
at arm’s length and without regard to any restrictive covenants as to use. If
the Landlord and the Tenant have not mutually agreed on the amount of Basic
Rent three (3) months prior to the commencement of the Renewal Term, the
Basic Rent shall be decided by binding arbitration before a single arbitrator
under the Commercial Arbitration Act,
R.S.B.C. 1996, c. 55 as amended and replaced from time to time, or such similar
statute then in force in British Columbia, provided that the annual Basic Rent
payable during the Renewal Term shall not be less than the annual Basic Rent
payable during the last year of the Term. Until the Basic Rent has been determined
as provided herein, the Tenant shall pay the same monthly rent as the last
month of the Term and, upon the determination of the Basic Rent, the Landlord
and the Tenant shall make the appropriate adjustments without interest.

 

The Landlord and the Tenant acknowledge and
agree that by this section 10.01, the Tenant is given the option of
renewing the Term only for one (1) renewal term of five (5) years and
at the expiration of the Renewal Term there shall be no further right of
renewal.

 

The exercise of this right of renewal is
solely within the control of the Tenant and nothing contained in this Lease
obligates or requires the Landlord to remind the Tenant to exercise this right
of renewal. The Landlord’s acceptance of any future rent for the Renewal Term
shall in no way be deemed a waiver of the Tenant’s requirement to give notice
within the time limits set out in this paragraph 10.01 for renewing the Term.

 

30

 

ARTICLE XI - EXPROPRIATION

 

Section 11.01 - Total Expropriation of the Demised Premises

 

If the whole of the Demised Premises is expropriated, then the Term
shall terminate as of the date of title vesting in the expropriating authority
and rent shall be adjusted to the date of termination.

 

Section 11.02 - Partial Expropriation

 

If only part of the Demised Premises is expropriated, and such
expropriation renders the Demised Premises unusable for the business of the
Tenant, then the Term shall terminate as of the date of title vesting in the
expropriating authority. If such expropriation is not extensive enough to
render the Demised Premises unusable for the business of the Tenant, then the
Landlord shall promptly restore the unexpropriated part of the Demised
Premises to a condition comparable to its condition immediately prior to such
expropriation to the extent of any expropriation proceeds recovered by the
Landlord and this Lease shall continue in full force and effect except after
the date of such title vesting the Basic Rent payable pursuant to paragraph
2.04 and Additional Rent shall be proportionally reduced in accordance with the
actual square footage of the Demised Premises. If any Parking Areas are
expropriated, the Landlord may but shall not be obliged to supply the
Tenant with other parking areas.

 

Section 11.03 - Landlord Award

 

If the Premises are expropriated in whole or in part, then, subject to
paragraph 11.04, the Landlord shall be entitled to the entire award paid for
such expropriation, and the Tenant waives any right or claim to any part thereof.

 

Section 11.04 - Tenant’s Award

 

The Tenant shall have the right to claim from the expropriating
authority but not from the Landlord, such compensation as may be
separately recoverable by the Tenant in the Tenant’s own right on account of any
and all costs of loss (including loss of business) which the Tenant might incur
including removing the Tenant’s merchandise, furniture, fixtures, leasehold
improvements and equipment to a new location.

 

Section 11.05 - Temporary Expropriation

 

If the whole or any part of the Demised Premises is expropriated
for any temporary use or purpose, this Lease shall remain in effect and the
Tenant shall be entitled to such portion of any award made for such use with
respect to the period of such expropriation which is within the Term. If a
temporary expropriation remains in force at the expiration or earlier
termination of this Lease, the Tenant shall pay to the Landlord a sum equal to
the reasonable cost of performing any obligations required of the Tenant by
this Lease with respect to the surrender of the Demised Premises, or, in the
case of a partial expropriation, the expropriated part of the Demised
Premises including, without limitation, repairs and maintenance required, and
upon such payment the Tenant shall be excused from any such obligations. If a
temporary expropriation of the whole of the Demised Premises is for a period
which extends beyond the Term, the Lease shall terminate as of the date of
occupancy by the expropriating authority, and the

 

31

 

parties’ respective entitlement to compensation shall be as provided in
paragraphs 11.03 and 11.04 and the rent payable hereunder shall be adjusted to
the date of occupancy.

 

Section 11.06 - Notice

 

The parties shall, immediately upon service of process in connection
with any expropriation or potential expropriation, give the other notice in
writing thereof. Each party shall immediately execute and deliver to the other
all instruments that may be required to effectuate the provisions of this Article XI.

 

ARTICLE XII - MISCELLANEOUS

 

Section 12.01 - Force Majeure

 

It is understood and agreed that whenever and to the extent that the
Landlord or the Tenant shall be unable to fulfil or shall be delayed or
restricted in the fulfilment of any obligation hereunder in respect of the
supply or provision of any service or utility or the doing of any work or the
making of any repairs by reason of being unable to obtain the material, goods,
equipment, service or labour required to enable it to fulfil such obligation or
by reason of any statute, law or order-in-council or any regulation or order
passed or made pursuant thereto or by reason of the order or direction of any
administrator, controller, board, governmental department or officer or other
authority, or by reason of not being able to obtain any governmental or
regulatory permission or authority required thereby, or by reason of any other
cause beyond its control and which, by the exercise of due diligence, such
party could not have prevented. Lack of funds, for whatever reason, on the part of
such party shall be deemed not to be a force majeure. Whether of the foregoing
character or otherwise, the Landlord or the Tenant, as the case may be,
shall be relieved from the fulfilment of such obligation for the period of the
delay or the period during which fulfilment is restricted (but only to the
extent of such restriction), and the other party shall not be entitled to
compensation for any inconvenience, nuisance or discomfort thereby occasioned.
Provided, however, nothing contained in this section shall extend or
otherwise change the Term.

 

Section 12.02 - Non-Waiver

 

Any condoning, waiving, excusing or overlooking by either party of any
default, breach or non-observance by the other at any time or times of or in
respect of any covenant, proviso or condition herein contained shall not
operate as a waiver of that party’s rights hereunder in respect of any
subsequent default, breach or non-observance nor so as to defeat or affect in any
way the rights of that party in respect of any such default or breach, and no
waiver shall be inferred from or implied by anything done or omitted by that
party save only express waiver in writing. All rights and remedies of the
parties in this Lease contained shall be cumulative and not alternative. The
subsequent acceptance of rent hereunder by the Landlord shall not be deemed a
waiver of any preceding breach of any obligation hereunder by the Tenant other
than the failure to pay the particular rent so accepted, and the acceptance by
the Landlord of any rent from any person other than the Tenant shall not be construed
as a recognition of any

 

32

 

rights not herein expressly granted, or as a waiver of any of the
Landlord’s rights, or as an admission that such person is, or as a consent that
such person shall be deemed to be, a subtenant or assignee of this Lease. Nevertheless
the Landlord may accept rent from any person occupying the Demised
Premises at any time without in any way waiving any right under this Lease.

 

Section 12.03 - Notice

 

Any notice, request or document to be given or delivered pursuant to
this Lease shall be in writing and shall be addressed to the proper party as
follows:

 

To the Landlord:

Rosebud Properties No. 3 Ltd.,

#508 - 1001 West Broadway,

Vancouver, B.C. V6H 4B1

 

To the Tenant:

Oncogenex Technologies Inc.,

#400 – 1001 West Broadway,

Vancouver, B.C. V6H 4B1

 

or such other address as either party hereto may direct by five (5) days’
notice to the other. Any notice or other document to be given or delivered
pursuant to this Lease will be sufficiently given or delivered, if delivered,
to the Landlord or the Tenant, as the case may be, at its address set out
in this paragraph, or if mailed, prepaid and addressed to the Landlord or the
Tenant, as the case may be, at its address set out in this paragraph. Any
notice or other document, if delivered, will be deemed to have been given or
delivered on the date such notice or documents is delivered to such address, or
if mailed, will be deemed to have been given or delivered on the third (3rd)
business day following the day of mailing the same as aforesaid; but any notice
or other document given or delivered during an actual or threatened strike,
lock-out or other labour dispute at the post office or interruption of mail
service will be delivered and not mailed.

 

Section 12.04 - Certification

 

The Tenant agrees that it will at any time and from time to time upon
not less than ten (10) days’ prior notice execute and deliver to the
Landlord or to whomsoever the Landlord directs a statement in writing
certifying that the Tenant is in possession of the Demised Premises and
commenced to pay rent on a specified date; 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 so modified if such be the case; the amount of
the annual rental then being paid hereunder and of any prepaid rent or security
deposit held by the Landlord; the dates to which the rentals, by instalments or
otherwise, and other charges

 

33

 

hereunder have been paid; whether or not there is any existing default
on the part of the Landlord of which the Tenant has notice; and any
additional information or acknowledgement reasonably requested by the Landlord.

 

Section 12.05 - Subordination

 

This Lease is subject and subordinate to all mortgages and charges
(including any deed of trust and mortgage securing bonds and all indentures
supplemental thereto), options to purchase and rights of first refusal which may now
or hereafter affect either the Lands or the Building (and whether or not such
mortgages or charges affect only the Demised Premises or the Building or affect
other premises as well) and to all renewals, modifications, consolidations,
replacements and extensions thereof. The Tenant agrees to execute promptly any
certificate in confirmation of such subordination as the Landlord may request,
and if requested to attorn to such mortgagee or chargeholder (or purchaser or
assignee).

 

Section 12.06 - Stratification

 

The parties hereto agree that the Landlord shall, at any time during the
Term, be at liberty to subdivide the Lands and Building by way of a strata plan
prepared and deposited in accordance with the requirements of the Strata
Property Act of British Columbia, S.B.C. 1998, Ch. 43 and amendments thereto or
such successor legislation as from time to time shall be in effect. In the
event the Landlord proposes to subdivide the Lands and Buildings by way of a
strata plan as aforesaid, the Tenant covenants and agrees to execute such
strata plans or consents as may be required to be executed by the Tenant
in order to facilitate the subdivision of the Lands and Building by way of a
strata plan and in the event this Lease is registered in the appropriate Land
Title Office in the Province of British Columbia, the Tenant further covenants
and agrees to execute such partial discharges as may be required to discharge
this Lease from those strata lots not forming part of the Demised
Premises.

 

Section 12.07 - Sale by Landlord

 

Should at any time during the Term the Landlord convey, assign or
otherwise divest itself of its interest in the Lands and Building, and should
the Purchaser, transferee, assignee or other recipient of such interest agree
with the Landlord to assume the obligations of the Landlord hereunder, the
Landlord will be relieved of all obligations under this Lease from and after
the effective date of such conveyance, assignment or transfer save and except
for the obligations to account to the Tenant for any monies due and payable to
the Tenant by the Landlord pursuant to this Lease.

 

Section 12.08 - Entire Agreement and Changes and Additions to
Building

 

The Tenant acknowledges that there have been no representations made by
the Landlord which are not set out in this Lease, that this Lease constitutes
the entire agreement between the Landlord and the Tenant with respect to the
Tenant’s use and occupation of the Demised Premises, and may not be
modified except as herein explicitly provided or except by subsequent agreement
in writing duly signed by the Landlord and the Tenant; and that,
notwithstanding anything contained in this Lease, but provided that the Tenant
always has access to the Demised Premises and the

 

34

 

use of the parking referred to in Section 2.06, the Landlord shall
have the right to make such changes or alterations as it may, from time to time,
in its sole discretion decide in respect of the Parking Area and Common Areas
or any part thereof including, but without limiting the generality of the
foregoing, the right to acquire other real property or dispose of (by
dedication or otherwise) portions of the Lands, the right to extend in depth
any of the buildings erected or to be erected upon the Lands, the right to
change the size or shape or location of the Parking Area, the right to alter
ingress and egress to and from the Lands, the right to change loading and
unloading facilities and service entrances, the right to erect a further
building or buildings on the Lands, the right to sell or lease part or
parts thereof, and the Landlord reserves the right to add one or more storeys
and construct additions to the Building or any part thereof at any future
time or times, and shall not in any event be liable to the Tenant for any minor
interference or inconvenience arising from any of the foregoing. When and so
often as the Landlord shall so acquire or dispose of the Lands then, at the
Landlord’s option, the reference herein to Lands shall mean and refer to the
Lands after such acquisition or disposition. In no event shall the capacity of
the Parking Area be reduced below that required from time to time by
governmental authorities.

 

When necessary by reason of accident or other cause, or in order to make
any repairs or alterations or improvements to the Demised Premises or to other
portions of the Building or Lands, including those contemplated in this section,
the Landlord may cause such reasonable and temporary obstruction of the
Parking Area and Common Areas, outside of business hours wherever reasonably
possible, as may be necessary, and may interrupt outside of business
hours wherever reasonably possible the supply to the Demised Premises of heat,
electricity, water and other services when necessary and until such repairs,
alterations or improvements have been completed. There shall be no abatement in
rent because of any such obstruction, interruption or suspension, provided that
such repairs, alterations or improvements are made as expeditiously as is
reasonably possible.

 

Section 12.09 - Overholding

 

If, with the consent of the Landlord, but without any further written
agreement, the Tenant shall continue to occupy the Demised Premises and pay
rent after the expiration of the Term, the Tenant shall be a monthly Tenant at
a monthly rent equal to one hundred and twenty-five per cent (125%) of the
monthly instalment of Basic Rent payable on the last monthly payment date
during the Term and on the terms and conditions herein set out, in so far as
the same are applicable to a monthly tenancy, except as to length of tenancy.
Said monthly tenancy may be terminated by either party on at least 30 days’
prior written notice to the other.

 

Section 12.10
- Time of Essence

 

Time is
of the essence of this Lease, and of all covenants, agreements, provisos and
conditions contained in this Lease.

 

Section 12.11
- Successors and Assigns

 

This
Indenture and everything herein contained shall extend to and bind and may be
taken advantage of by the respective heirs, executors, administrators,
successors and permitted assigns and other legal representatives, as the

 

35

 

case may be,
of each and every of the parties hereto subject to the granting of any required
consent by the Landlord to an assignment or sublease.

 

Section 12.12 - Non-registration of Lease

 

The Landlord and Tenant agree that his Lease shall not be registered in
the appropriate Land Title Office. In the event the parties agree at some time
to register this Lease, then the Tenant covenants and agrees with the Landlord
that the Landlord shall only be obligated to execute and deliver this Lease in form registrable
under the Land Title Act or any
other statute governing registration at the expense of the Tenant and, further,
the Landlord shall not be obliged to deliver a plan in registrable form of
the Building or the Demised Premises, except at the expense of the Tenant.

 

Section 12.13 - Tenant’s Fixtures

 

The Tenant’s
fixtures (other than trade fixtures), together with all alterations, additions,
substitutions and improvements made and installed by the Tenant upon or in the
Demised Premises and which in any manner are attached to, on, or under the
floors, walls or ceilings of the Demised Premises shall upon the termination of
this Lease become the Landlord’s absolute property without compensation
therefor to the Tenant, and shall not be removed by the Tenant either during or
after the Term save as herein provided. The making of the Tenant’s repairs
pursuant to this Lease or the making of permissible Tenant’s improvements and
alterations in accordance with this Lease shall not constitute a removal for
the purposes thereof. Upon the termination of this Lease the Landlord may at
its option and at the expense of the Tenant require the Tenant to remove any
such fixtures, alterations, additions, substitutions and improvements made or
installed by the Tenant upon or in the Demised Premises, and if the Tenant does
not, then the Landlord may, at the cost of the Tenant, and the Tenant appoints
the Landlord irrevocably as its agent to sell the same and to apply the net
proceeds to the costs of removal and sale and making good any damage, and the
Tenant shall forthwith pay to the Landlord any shortfall. The Tenant shall in
the case of every removal, either during or at the end of the Term, make good
any damage caused to the Demised Premises or to the Building in the course of
such removal.

 

Section 12.14
- Captions

 

The captions
appearing in this Lease have been inserted as a matter of convenience and for
reference only and in no way define, limit or enlarge the scope or meaning of
this Lease, nor of any provision thereof.

 

36

 

Section 12.15
- Relationship of Landlord and Tenant

 

It is understood and agreed that nothing contained in this Lease nor any
acts of the parties hereto shall be deemed to create any relationship between
the parties hereto other than the relationship of landlord and tenant.

 

IN WITNESS WHEREOF the parties hereto have executed this Indenture the
day and year first above written.

 

The Corporate Seal of

ROSEBUD PROPERTIES NO. 3 LTD.

was hereunto affixed in the

	
  presence of:

  	
  c/s

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ [illegible]

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  

 

 

The Corporate Seal of ONCOGENEX

TECHNOLOGIES INC.

was hereunto affixed in the

	
  presence of:

  	
  c/s

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Sherry Tryssenaar

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  

 

37

 

SCHEDULE “A”

 

PID: 009-773-673

LOT13, EXCEPT THE NORTH 8FEET NOW LANE,

BLOCK 335 DISTRICT LOT 526 PLAN 590

 

PID:  009-773-746

THE WEST 1/2 OF LOT 12, EXCEPT THE NORTH 8 FEET NOW LANE,

BLOCK 335 DISTRICT LOT 526 PLAN 590

 

PID:  009-773-614

LOT A BLOCK 335 DISTRICT LOT 526 PLAN 8153

 

NEW WESTMINSTER LAND DISTRICT

 

or such successor legal description resulting from any consolidation
plans

 

38

 

SCHEDULE “B”

 

FLOOR PLAN OF THE DEMISED PREMISES

 

39

 

 

	
  PREPARED FOR:

  	
   

  	
  1001 WEST BROADWAY

  
	
  Rosebud Properties Ltd.

  	
   

  	
  VANCOUVER, BC V6H 4B1

  
	
  Ste 508–1001 West Broadway

  	
   

  	
   

  
	
  Vancouver, BC V6H 4B1

  	
   

  	
  FOURTH FLOOR

  
	
  Tel (604) 738-4777

  	
   

  	
   

  
	
   

  	
   

  	
  (As Measured: November 2003)

  

 

LEASE PLAN

 

 

	
  Survey Accuracy: +/- 0.21%

  	
   

  	
  AREAS COMPUTED IN ACCORDANCE

  WITH BOMA (1995) STANDARDS

  	
   

  	
  Prepared
  By

  LASERtech Floor Plans

  
	
   

  	
   

  	
   

  	
   

  	
  TEL:

  	
  (888)
  393-6655

  
	
   

  	
   

  	
   

  	
   

  	
  FILE:

  	
  82003-058

  

 

 

SCHEDULE “C”

 

RULES AND REGULATIONS

 

1.                                       The
sidewalks, entrances, stairways, corridors and fire escapes of the Building
shall not be obstructed by the Tenant, its invitees, customers or employees or
used by the Tenant, its invitees, customers or employees for any purpose other
than for ingress and egress to and from the Demised Premises. The Tenant shall
not place or allow to be placed in the hallways, corridors or stairways any
waste paper, dust, garbage, refuse or anything else whatsoever that would
obstruct them or tend to make them appear unclean or untidy. Nothing shall be
thrown by the Tenant or its employees, customers or invitees out of the windows
or doors or down the passages or skylights of Building.

 

2.                                       Heavy
merchandise or other articles liable to overload, injure or destroy any part of
the Building and Demised Premises shall not be taken into the Building or
Demised Premises without the written consent of the Landlord, and the Landlord
shall in all cases retain the right to prescribe the weight of all such
articles taken into the Building and Demised Premises and the keeping of such
articles on the Demised Premises. In addition, the Landlord shall retain the
right to prescribe the times and routes for moving all heavy merchandise or
other articles to or from the Demised Premises. Any damage to the Building from
moving or using such heavy items shall be repaired at the expense of the
Tenant.

 

3.                                       Except
in the normal course of decorating the Demised Premises or making minor
additions, improvements or repairs thereto, the Tenant shall not mark, paint,
drill into or in any way deface the exterior walls, ceilings, partitions,
floors or other parts of the Demised Premises and the Building except with the
prior written consent of the Landlord.

 

4.                                       The
Tenant shall not place any additional lock upon any exterior door of the
Building without the written consent of the Landlord.

 

5.                                       Without
assuming any liability therefor, the Tenant shall endeavour to give the
Landlord prompt written notice of any accident or damage to or any defect in
the plumbing, heating, air conditioning, mechanical or electrical apparatus or
any other part of the Building of which it becomes aware.

 

6.                                       No
dogs or other animals or birds shall be brought into or kept in the Demised
Premises without the written consent of the Landlord, save and except for any
assistance animal required by any customer, employee or invitee of the Tenant.

 

40

 

7.                                       The
Landlord shall have the right to control and operate the Common Areas in such
manner as it deems best for the benefit of the tenants generally. No tenant
shall invite to the Demised Premises, or permit the visit of, persons in such
numbers or under such conditions as to interfere with the use and enjoyment of
the Common Areas by other tenants.

 

8.                                       No
awnings or other projections shall be attached to the outside walls of the
Building. No curtains, blinds, shades or screens other than those furnished or
approved of by the Landlord shall be attached to, or hung in, or used in connection
with, any window or door of the Demised Premises, without the prior written
consent of the Landlord. Such curtains, blinds, shades, screens, or other
fixtures must be of a quality, type, design and colour as approved by the
Landlord, and attached in the manner approved by the Landlord.

 

9.                                       No
sign, advertisement, notice or other lettering shall be exhibited, inscribed,
painted or affixed by any tenant on any window or part of the outside or
inside of the Demised Premises or the Building without the prior written
consent of the Landlord. In the event of the violation of the foregoing by any
tenant, the Landlord may remove same without any liability, and may charge
the expense incurred by such removal to such tenant. Interior signs on doors
shall be inscribed, painted, or affixed for tenants by the Landlord or by sign
painters, first approved by the Landlord, at the expense of the tenants and
shall be of a size, colour, and style acceptable to the Landlord.

 

10.                                 The
windows and doors and, if any, the sashes, sash doors, and skylights that
reflect or admit light and air into the halls, passageways, or other public
places in the Building shall not be covered or obstructed by tenants, nor shall
any bottles, parcels, files, papers or other articles be placed on the
windowsills.

 

11.                                 No
showcase or other articles shall be put in front of or affixed to any part of
the exterior of the Building, including exterior patios or deck areas (if any),
nor placed in the halls, corridors, or vestibules without the prior written
consent of the Landlord.

 

12.                                 The
toilets, urinals, sinks and other water apparatus shall not be used for any
purposes other than those for which they were constructed, and no sweepings,
rubbish, rags, ashes or other substances shall be thrown therein. Any damage
resulting from misuse shall be borne by the tenants by whom or by whose agents,
servants, employees, customers or invitees the same was caused. Tenants shall
not let the water run unless it is in actual use, and shall not deface or
damage any part of the Building, nor drive nails, spikes, hooks, or screws
into the walls or woodwork of the Building.

 

13.                                 No
boring, cutting or stringing of wires shall be permitted except with the prior
written consent of the Landlord and as the Landlord may direct. Only
contractors approved in writing by the Landlord may be

 

41

 

employed by tenants for making repairs, changes or any improvements to
the Demised Premises. Tenants shall not (without the Landlord’s prior consent)
lay floor coverings other than unaffixed rugs, so that the same shall come into
direct contact with the floor of the Demised Premises and, if wall to wall
carpeting, linoleum or other similar floor coverings other than the Building
standard carpet are desired to be used and such use is approved by the
Landlord, and if such floor coverings are placed or to be placed over tile
flooring then an interlining of builder’s deadening felt shall be first affixed
to the floor, by a paste or other material soluble in water, the use of cement
or similar adhesive material being expressly prohibited. Metal cabinets shall
be set on a non-corrosive pad wherever the floors are tile.

 

14.                                 No
space in the Building shall be used for manufacturing or for lodging, sleeping,
residential purposes, or any immoral or illegal purposes. No space shall be
used for the storage of merchandise or for the sale of merchandise, goods or
property, other than in the ordinary course of business, and no auction sales
shall be made by tenants without prior written consent of the Landlord.

 

15.                                 Tenants
shall not make, or permit to be made, any unseemly or disturbing noises or
disturb or interfere with occupants of this or neighbouring buildings or
premises or those having business with them whether by the use of any musical
instrument, radio, television, talking machine, unmusical noise, whistling,
singing or in any other way. Tenants shall not throw anything out of the doors,
windows or skylights, if any, or down the passageways, stairs or elevator
shafts nor sweep anything into the corridors, hallways or stairs of the
Building.

 

16.                                 No
additional locks or bolts of any kind shall be placed upon any of the doors or
windows by tenants, nor shall any changes whatsoever be made to existing locks
or the mechanics thereof except by the Landlord, at its option. Tenants shall
not permit any duplicate keys to be made, but additional keys as reasonably
required shall be supplied by the Landlord when requested by the Tenant in
writing and such keys shall be paid for by the Tenant, and upon termination of
the Tenant’s Lease, the Tenant shall surrender to the Landlord all keys of the
Demised Premises and other part or parts of the Building.

 

17.                                 Tenants
shall not use the name of the Building or the owner in any advertising without
the express consent in writing of the Landlord. The Landlord shall have the
right to prohibit any advertising by any tenant which in any way tends to
impair the reputation of the Building or its desirability as a building, and upon
written notice from the Landlord, tenants shall refrain from or discontinue
such advertising.

 

18.                                 All
entrance doors in the Demised Premises shall be left locked and all windows
shall be left closed by tenants when the Demised Premises are not in use and
occupied.

 

42

 

19.                                 The
Landlord shall in no way be responsible to any tenant for loss of property from
the Demised Premises, however occurring, or for damage done to the furniture or
other effects of any tenant by the Landlord’s agents, janitors, cleaners,
employees or contractors doing work in the Demised Premises. Tenants shall
permit window cleaners to clean the windows of the Demised Premises during
normal business hours.

 

20.                                 The
requirements of tenants will be attended to only upon application to the
Building manager or such other authorized representative as the Landlord may designate
in writing. The Landlord’s employees shall not perform any work or do
anything outside of their regular duties, unless under specific instructions
from the office of the Landlord, from the Building manager or other
representatives as aforesaid.

 

21.                                 Canvassing,
soliciting and peddling in the Building are prohibited, and tenants shall
co-operate to prevent the same.

 

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

 

23.                                 The
Landlord reserves the right to exclude from the Building outside of normal
business hours and during all hours on weekends all persons not authorized by a
tenant in writing, by pass, or otherwise, to have access to the Building and
the Demised Premises. Each tenant shall be responsible for all persons
authorized by him to have access to the Building and shall be liable to the
Landlord for all of their acts while in the Building. When security service is
in effect, entrance to the Building, deliveries and exits shall be made via
designated entrances and the Landlord may require all persons to sign a
register on entering and leaving the Building. Any person found in the Building
at such times without authorization or a pass 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.

 

24.                                 Neither
tenants nor their servants, employees, agents, visitors, or licensees shall at
any time bring or keep upon the Demised Premises any inflammable, combustible
or explosive fluids, chemical or substance, nor do nor permit to be done
anything in conflict with any insurance policy which may or might be in
force upon the Building or any part thereof or by reason of which any fire
insurance premiums may be (or may be liable to be) increased; or with
the laws relating to fires, or with the regulations of the Fire Department or
the Health Department; or with any of the rules, regulations or ordinances of
the City in which the Building is located, or of any other duly constituted
authority.

 

25.                                 No tenant shall, at any time,
while in or on any part of the Lands or Building, feed or leave any
foodstuffs for any birds or other animals.

 

43

 

26.                                 Each tenant shall be
responsible for cleaning at reasonable time intervals any drapes and/or
curtains that may be installed in the Demised Premises.

 

27.                                 No tenant shall place, or
permit to be placed, any signs of any nature whatsoever within the Demised
Premises where the same can be seen from outside of the Demised Premises, and
shall not place, or permit to be placed, any sign of its or any of its
employees or permit its employees to place any sign within the Building or on
or against the Building walls or on the Lands.

 

28.                                 The Landlord reserves the
right to promulgate, rescind, alter or waive the rules or regulations at
any time prescribed for the Building when it is necessary, desirable or proper
for its best interest or, in the opinion of the Landlord, for the best
interests of the tenants.

 

29.                                 The Landlord will publish from
time to time emergency fire regulations and evacuation procedures in
consultation with the applicable municipal authorities. The Tenant will, at the
Landlord’s request, appoint a premises warden (wardens for multi-floor users)
who will be responsible for liaison with Building management in all emergency
matters and who will be responsible for instructing employees of the Tenant in
all emergency matters.

 

44

 

SCHEDULE “D”

 

SPECIAL TERMS & CONDITIONS

 

Notwithstanding
anything in this Lease to the contrary, the following provisions shall apply:

 

1.               Additional Rent
shall not include:

 

•                       depreciation
and all costs with respect to the structure of the Building that are capital
costs in general accounting practice, but Additional Rent shall include the
cost of depreciation of machinery, equipment, facilities and systems installed
and used in conjunction with the Building;

 

•                       costs that are
not costs of operating the Lands and its improvements including contributions
to merchants’ associations and promotional or similar funds and costs that are
personal to the Landlord including the Landlord’s costs of financing, income
taxes, profits taxes, corporation taxes, costs of canvassing for tenants
(including brokerage costs) ground rentals; interest or penalties on late
payments by the Landlord, and costs caused by a negligent or unreasonable act
of the Landlord or a person for whom the Landlord is responsible;

 

•                       costs the
Landlord has the right to recover under a contract or other document to which
the Tenant is not a party;

 

2.               On
request, the Landlord shall allow the Tenant reasonable access, at no
additional cost, to the space above the ceiling for the purpose of installing
cable, wiring or other systems, or for servicing same.

 

3.               The Landlord shall attend promptly to all
maintenance and repairs that are not the Tenant’s obligation, subject to the
Landlord’s right to recover such as are Common Expenses in terms hereof.

 

4.               The Tenant will turn the Premises over to
the Landlord at the expiration of its tenancy in good repair and clean condition, with no obligation
to demolish any of the build-out or leasehold improvements, or to restore any part of
the Building demolished with the Landlord’s consent, or to repair normal wear
and tear, repairs caused by insurable hazards, latent defects, acts of
God or repairs for which the Landlord is responsible. The Tenant shall remove any trade fixtures
brought onto the Premises, as well as any signage wherever erected by or for
it, provided that the Tenant shall repair any damage
caused by such removal.

 

45

 

5.               Provided the Tenant is not in default of
the Lease, the Tenant shall be granted the following a Basic Rent free period based
on the following schedule:

 

	
  (a)

  	
  Year 1 of
  the Term:

  	
  Months 1, 2,
  3 and 4;

  
	
  (b)

  	
  Year 2 of
  the Term:

  	
  Month 1;

  
	
  (c)

  	
  Year 3 of
  the Term:

  	
  Months 1 and
  2;

  
	
  (d)

  	
  Year 4 of
  the Term:

  	
  Months 1 and
  2; and

  
	
  (e)

  	
  Year 5 of
  the Term:

  	
  Months 1 and
  2.

  

 

In Addition, the
Tenant will not be responsible for the payment of Additional Rent for month 13
(year 2, month 1) of the Term.

 

4.               The Demised Premises to be
provided by the Landlord will be on an “as is, where is” basis, save and except
for the following, which shall be completed by the Landlord, at its sole cost,
on or by the latter of 30 days from Lease execution and/or August 1, 2004:

 

(a)          Re-carpet the Demised Premises
with a building standard carpet selected by the Tenant;

 

(b)         Re-paint the Demised Premises,
including all walls, doors and door frames, with Building standard paint
(maximum of 2 colours) selected by the Tenant;

 

(c)          Patch and make good any damage
to walls; and

 

(d)         Ensure all other base building
items (i.e. lighting, window coverings) and existing improvements are in good
working order and/or good condition, as applicable.

 

All other
leasehold improvements will be at the Tenant’s cost.

 

5.               Subject to paragraphs 5.15 and
5.16, for any improvement work the Tenant will be required to prepare working drawings
of any proposed improvement work and obtain the written consent of the Landlord
before commencing the improvement work, such consent not to be unreasonably
withheld. All improvement work will be done at the Tenant’s sole cost and
expense by qualified and licensed contractors and sub-contractors who will be
subject to the reasonable approval of the Landlord. All such Tenant improvement
work will be performed in a first class manner in accordance with the
provisions of the Lease.

 

46

 

6.               The Tenant will be responsible
for obtaining all necessary building permits and approvals as required by the
relevant regulatory authorities for the Tenant’s improvement work. Such permits
and approvals must be secured before the Tenant commences its improvement work.
If required by the municipal authorities, the Tenant will also make application
for an occupancy certificate for the Demised Premises upon completion of the
Tenant’s improvement work.

 

7.               Provided that the Tenant is
not in default of the Lease, the Landlord shall grant the Tenant an option to
terminate its Lease of the Demised Premises at any time after the second
anniversary of the Commencement Date (the “Termination Date”) provided that:

 

(a)                                  The Tenant shall give the
Landlord at least six (6) months’ written notice that it intends to do so;
and

 

(b)                                 The Tenant pays to the
Landlord at least one business day prior to the Termination Date a termination fee
(by way of certified cheque made payable to the Landlord) which shall be equal
to:

 

	
  (i)

  	
   

  	
  If the
  Termination Date falls in the 3rd year of the Term, $39,700.00;

  
	
  (ii)

  	
   

  	
  If the
  Termination Date falls in the 4th year of the Term, $24,800.00;
  and

  
	
  (iii)

  	
   

  	
  If the
  Termination Date falls in the 5th year of the Term, $12,400.00.

  

 

8.               Provided the Tenant is not in
breach of the Lease, the Tenant shall have the option to lease any portion of
the Building which becomes available for Lease (the “Available Office Space”). The
Landlord shall deliver to the Tenant notice in writing identifying the
Available Office Space and the date on which it will be available and the
Tenant shall have ten (10) business days from receipt of the same within
which to notify the Landlord in writing that it exercises its option herein. If
the Tenant exercises its option to lease the Available Office Space, the term
of the lease of the Available Office Space shall commence on the date specified
in the Landlord’s notice and shall terminate on the expiry of the Term of the
Lease or any permitted extension thereof and shall otherwise be on the same
terms as the Lease, excepting the Basic Rent rate, and any Landlord’s work,
free rent, tenant allowance or other tenant inducements. The basic rent payable
with respect to the Available Office Space shall be the prevailing fair market
basic rent, as of the date the lease of the Available Office Space commences
for similarly improved premises of similar size, quality, use and location as
agreed between the Landlord and the Tenant or failing such agreement within a
reasonable period of time as determined by a single arbitrator pursuant to the
provisions of the Commercial Arbitration Act.

 

47

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