Document:

Limited Partnership Agreement Dated March 24, 2005

 

  Exhibit 4.18

LIMITED PARTNERSHIP AGREEMENT

of

SEA BREEZE PACIFIC JUAN DE FUCA CABLE, LP

     This Limited Partnership Agreement of Sea Breeze Pacific Juan de Fuca Cable, LP, a Delaware
limited partnership (the “Partnership”) is entered into as of the 24th day of
March, 2005 (this “Agreement”) by and between Juan de Fuca Cable Management, Inc., a
Delaware corporation (the “General Partner”), with an address at 203 Red Stone Hill,
Plainville, CT 06062, SBJF Holding Corp., a British Columbia corporation (“Sea Breeze”)
and Boundless Energy NW, Inc., a Delaware corporation (“Boundless Energy”, and together
with Sea Breeze, the “Limited Partners”, and the Limited Partners, together with the
General Partner shall collectively be referred to as the “Partners”).

     WHEREAS, the Limited Partners are affiliates of Sea Breeze Pacific Regional Transmission
System, Inc., a Delaware corporation (“Assignor”);

     WHEREAS, the Partnership is entering into that certain Asset Assignment Agreement dated as
March 31, 2005 with Assignor and is the beneficiary of that certain Bill of Sale dated as of March
31, 2005 by Assignor, pursuant to which the Assignor is transferring, or agreeing to transfer upon
receipt of necessary consents, or agreeing to cause its affiliates to transfer, all right, title
and interest in and to all of the assets used or held for use in connection with the Project and
located in Canada, issued by Canadian governmental authorities or otherwise primarily connected to
Canada (the “Canada Assets”), in exchange for the Partnership issuing Partnership Interests
(as defined herein) to the Limited Partners; and

     WHEREAS, the Partners desire to enter into this Limited Partnership Agreement for the purposes
set forth herein, to admit the Limited Partners as limited partners of the Partnership and appoint
the General Partner as the general partner of the Partnership, and to set forth the rights, duties
and obligations of the Partners.

ARTICLE I

General Provisions

     Section 1.01 Formation. The parties hereto hereby form the Partnership as a limited
partnership pursuant to the provisions of the Delaware Revised Uniform Limited Partnership Act (as
in effect on the date hereof and as amended from time to time, the “Delaware Act”).

     Section 1.02 Partnership Name. The name of the Partnership is and shall be Sea Breeze
Pacific Juan de Fuca Cable, LP.

     Section 1.03 Purpose. The purpose of the Partnership shall be to develop a 550 MW
High Voltage Direct Current submarine transmission link spanning the Strait of Juan de Fuca
connecting the city of Victoria on the southern tip of Vancouver Island, British Columbia, Canada
to Port Angeles, Washington State, U.S.A., or some alternative route connecting Greater Victoria on
Vancouver Island to the Olympic Peninsula (the “Project”) and to engage in any

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other legal business or activity as determined from time to time by the General Partner. The
Partnership may engage in any and all activities and transactions, including the expenditure or
borrowing of funds, as General Partner may deem to be necessary, advisable, appropriate or
incidental to carrying out the purpose of the Partnership.

     Section 1.04 Place of Business. The Partnership shall have offices located at 203 Red
Stone Hill, Plainville, CT 06062, or elsewhere as the General Partner may from time to time
determine. The Partnership may have more than one (1) office as the General Partner may from time
to time determine.

     Section 1.05 Fiscal Year and Fiscal Quarter. The fiscal year of the Partnership shall
end on December 31 of each year (the “Fiscal Year”). The Fiscal Year may be changed by the
General Partner. In the event that the General Partner changes the Partnership’s Fiscal Year, the
dates and time periods referred to in this Agreement shall be appropriately adjusted. The term
“Fiscal Quarter” shall mean the three (3) month period beginning on January 1, April 1,
July 1 and October 1 of each calendar year and such other periods as may be designated from time to
time as a Fiscal Quarter by the General Partner.

     Section 1.06 Term of Partnership. The term of the Partnership commenced upon filing
of the Partnership’s Certificate of Limited Partnership (the “Certificate”) with the
Delaware Secretary of State and shall be perpetual, unless earlier terminated as provided in
Section 13.01 below.

ARTICLE II

Composition; Admissions

     Section 2.01 Names of the Partners. Juan de Fuca Cable Management, Inc., a Delaware
corporation, shall be the sole General Partner of the Partnership. SBJF Holding Corp., a British
Columbia corporation and Boundless Energy NW, Inc., a Delaware corporation, shall be the sole
Limited Partners of the Partnership. The names and addresses of the General Partner and of each of
the Limited Partners are set forth on Schedule 1 attached hereto, which schedule shall be
updated from time to time as new partners are admitted and kept on file at all times at the
principal place of business of the Partnership.

     Section 2.02 Admission of Partners. Additional Limited Partners may be admitted to
the Partnership after the date hereof only as provided in Article VIII below. In connection with
the admission of a Limited Partner to the Partnership, such Limited Partner shall, in advance of
such admission and as a condition thereto, sign a copy of this Agreement or an agreement to become
bound by the provisions of this Agreement. A substitute General Partner, and affiliated or
additional general partners, may be admitted to the Partnership only as provided in Article IV
below.

     Section 2.03 Partnership Interests. For purposes of this Agreement, the term
“Partnership Interest” shall mean the quotient resulting from dividing the amount in a
Partner’s Capital Account (as defined in Section 9.01 below) by the aggregate amount in the Capital
Accounts of all Partners. The Partnership Interests of the Partners are set forth on Schedule
1

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attached hereto, which the General Partner shall update from time to time to reflect changes
in the Capital Accounts of the Partners.

     Section 2.04 Certificates.

     (a) Every Partner shall be entitled to have a certificate of certificates evidencing the
Partnership Interest owned by such Partner. Certificates evidencing the Partnership Interests be
in such form as shall approved by the General Partner. Certificates shall be consecutively
numbered and shall state the following upon the face thereof: (i) that the Partnership is a
limited partnership formed under the Delaware Act, (ii) that the certificates evidence Partnership
Interests and (iii) the name of the record holder in whose name the Partnership Interests are
registered.

     (b) Certificates evidencing Partnership Interests shall be signed on behalf of the Partnership
by the General Partner. The signatures of the General Partner upon a certificate may be
facsimiles.

     (c) All certificates evidencing Partnership Interests shall have affixed thereto a legend
substantially in the following form:

THE INTERESTS EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED OR APPLICABLE STATE SECURITIES LAWS AND ACCORDINGLY SUCH INTERESTS
MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER SUCH ACT AND
SUCH LAWS OR UNLESS PURSUANT TO AN EXEMPTION THEREFROM. TRANSFERS, SALES, PLEDGES,
HYPOTHECATIONS AND OTHER DISPOSITIONS OF THE INTERESTS EVIDENCED BY THIS CERTIFICATE ARE
FURTHER RESTRICTED BY THE TERMS OF THE LIMITED PARTNERSHIP AGREEMENT OF SEA BREEZE PACIFIC
JUAN DE FUCA CABLE, LP.

     (d) The Partnership may issue a certificate in place of a certificate evidencing Partnership
Interests alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the Person claiming the certificate to be lost, stolen or destroyed. When authorizing the
issuance of a new certificate or certificates, the Partnership may, in its discretion and as a
condition precedent to the issuance thereof, require that the owner of such lost, stolen or
destroyed certificate or certificates, or its legal representative, give the Partnership a bond
sufficient to indemnify the Partnership against any claim that may be made against the Partnership
on account of the alleged loss, theft or destruction of any certificate or the issuance of such new
certificate.

     (e) The Partnership Interests shall be securities under Chapter 8 of the Uniform Commercial
Code.

ARTICLE III

Management

     Section 3.01 Management of Partnership.

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     (a) The Limited Partners shall take no part in the management or control of the Partnership’s
business and shall have no authority to act for or bind the Partnership. The General Partner shall
have the sole discretion and authority, on behalf of and in the name of the Partnership, to manage
and operate the Partnership and perform all acts and enter into and perform all contracts and other
undertakings that it may deem necessary, advisable or incidental to the Purposes, and shall have
the specific powers set forth in Section 3.02 below.

     (b) The General Partner shall not be required to devote its full time to the business of the
Partnership, but shall devote so much of its time and efforts to the affairs of the Partnership as
may in its judgment be necessary to accomplish the purposes of the Partnership. Nothing herein
contained shall prevent the General Partner or its shareholders, or any Limited Partner or any of
their respective owners, from conducting any other business, whether such business ventures are in
direct or indirect competition with the Partnership.

     Section 3.02 Powers of the General Partner. Without in any way intending to limit the
general powers and authority of the General Partner set forth in Section 3.01, the General Partner
shall have the right, power and authority, in the name of and on behalf of the Partnership:

     (a) To acquire any Partnership real or personal property (and to incur all expenses and enter
into all contracts relating thereto);

     (b) To incur indebtedness on behalf of the Partnership, grant security interests or mortgages
in the Partnership property, or pledge any security interest in the securities or other ownership
interests held by the Partnership;

     (c) To acquire and enter into any contract of insurance that the General Partner deems
necessary or appropriate for the protection of the Partnership and the General Partner or for any
purpose convenient or beneficial to the Partnership;

     (d) To engage in any transaction with affiliates of the General Partner;

     (e) To employ persons, whether full-time or part-time, in the operation and management of the
business of the Partnership, on such terms and for such compensation as the General Partner shall
determine, regardless of whether such persons also may be employed by the General Partner or its
shareholders or other affiliates;

     (f) To file, conduct and defend legal proceedings of any form, including proceedings against
Partners, and to compromise and settle any such proceedings, or any claims against any person,
including claims against Partners, on whatever terms deemed appropriate by the General Partner,

     (g) To open brokerage, bank and other accounts and, to the extent that funds are not invested,
to deposit and maintain such funds in the name of the Partnership in such accounts and to
temporarily invest such funds in short-term United States government securities, money market
accounts and/or other short-term interest bearing instruments, provided, however, that the
Partnership funds shall not be commingled with the funds of any other person or entity;

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     (h) To cause the Partnership to make or revoke any of the elections referred to in Section 754
of the Internal Revenue Code of 1986, as amended (the “Code”), or any similar provision
enacted in lieu thereof;

     (i) To select as its accounting year the period ending December 31 or any other Fiscal Year as
is permitted by the Internal Revenue Service;

     (j) To engage independent accountants, attorneys, investment managers, brokers, custodians and
such other persons as the General Partner may deem necessary or advisable;

     (k) To establish and maintain for the conduct of Partnership affairs one or more offices and
in connection therewith rent or acquire office space, and engage personnel, whether part-time or
full-time, and do such other acts and incur such expenses, as the General Partner may deem
necessary or advisable in connection with maintenance or administration of such office(s);

     (l) To require a provision in all Partnership contracts that the General Partner shall not
have any personal liability therefor, but that the person or entity contracting with the
Partnership shall be entitled to any satisfaction only from the Partnership and its assets;

     (m) To purchase, lease, transfer or sell Partnership assets at such price or amount for cash,
securities or other property and upon such terms as are deemed in the General Partner’s absolute
discretion to be in the best interests of the Partnership;

     (n) To prepare, or cause to be prepared, to execute, acknowledge and deliver any and all
instruments to effectuate the business of the Partnership;

     (o) To waive or reduce, in whole or in part, any notice period, minimum amount requirement, or
other limitation or restriction imposed on Capital Contributions, withdrawals of capital, any fee,
any special allocation to the General Partner, and/or any requirement imposed on a Limited Partner
by this Agreement, regardless of whether such notice period, minimum amount, limitation,
restriction, fee, or special allocation, or the waiver or reduction thereof, operates for the
benefit of the Partnership, the General Partner or fewer than all the Limited Partners;

     (p) To establish such reserves as the General Partner shall, in its sole but reasonable
discretion, deem appropriate to pay current and future, definite, contingent and possible
obligations of the Partnership; and

     (q) To do any act, engage in any activity or execute any agreement of any nature, necessary or
incidental to the accomplishment of the purposes of the Partnership in accordance with the
provisions of this Agreement and all applicable federal, state and local laws and regulations.

     Section 3.03 Actions of General Partner. The General Partner is authorized, directed
and empowered to act individually on behalf of the Partnership, and in accordance therewith, to
execute, deliver and perform all documents and instruments on behalf of the Partnership. No Person
shall be required to inquire into the authority of the General Partner to bind the

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Partnership. Persons dealing with the Partnership shall be entitled to rely on a
certification by the General Partner with regard to the authority of any other Person to act on
behalf of the Partnership in any matter.

     Section 3.04 Liability and Indemnification.

     (a) The General Partner shall not be liable to the Partnership or any other Limited Partner
for any claims, costs, expenses, damages or losses arising out of the performance or nonperformance
of its duties under this Agreement, or any action taken or omitted to be taken in connection with
the business and affairs of the Partnership, other than those directly attributable to its own
fraud, gross negligence or willful disregard of duties.

     (b) The Partnership agrees to indemnify and hold harmless the General Partner and its
shareholders, officers, directors, employees and agents, if any, from and against any and all
claims, actions, demands, losses, costs, expenses (including attorney’s fees and other expenses of
litigation), damages, penalties or interest, as a result of any claim or legal proceeding related
to any action taken or omitted to be taken in connection with the business and affairs of the
Partnership (including the settlement of any such claim or legal proceeding); provided, however,
that the party against whom the claim is made or legal proceeding is directed is not guilty of
gross negligence or willful misconduct as determined by a final non-appealable court of competent
jurisdiction. Any indemnity under this Section shall be paid from and to the extent of Partnership
assets only, and only to the extent that such indemnity does not violate applicable Federal and
state laws.

     Section 3.05 No Prohibition Against Other Business Ventures. The General Partner, its
shareholders and employees may engage and hold interests in other business ventures of every kind
and description for their own respective accounts, whether such business ventures are in direct or
indirect competition with the Partnership and whether the Partnership or any of the Partners also
has an interest therein, without having to account to the Partnership or any Partner for any
profits or other benefits derived therefrom and without incurring any obligation to offer any
interest in any such activity to the Partnership or any Partner.

     Section 3.06 Duty to Keep Books, Financial and Tax Reports.

     (a) At all times during the existence of the Partnership, the General Partner shall keep true
and complete records and books of account, in which shall be entered fully and accurately each
transaction of the Partnership. The General Partner has the power, in its sole and absolute
discretion, to delegate some or all of the administrative bookkeeping functions relating to the
Partnership to an agent, which may be the General Partner’s accountants.

     (b) The General Partner shall cause to be prepared and distributed to each Partner as soon as
practicable following each Fiscal Year an annual financial statement prepared in accordance with
generally accepted accounting principles. The General Partner shall also have prepared and filed
all Federal, state and local income, franchise, gross receipts, payroll and other tax returns that
the Partnership is obligated to file. Copies of all Partnership tax returns, information returns
or reports shall be available to all Partners as soon as possible after the close of the
Partnership Fiscal Year at the offices of the Partnership. Copies of Schedule K-1 of the

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Partnership Tax Return (Form 1065) shall be distributed to all Partners as soon as practicable
after the Partnership Fiscal Year.

ARTICLE IV

Resignation; Prohibition Against Transfer; Continuation of Partnership; and Substitution of
General Partner

     Section 4.01 General Partner Resignation and Involuntary Withdrawal, Admission of
Additional General Partners and Transfer by General Partner.

     (a) The General Partner shall be permitted to voluntarily withdraw or resign as the general
partner at any time in its absolute and sole discretion. In the event of dissolution of the
General Partner, or if a voluntary or involuntary petition for bankruptcy shall be filed by or
against the General Partner, or the General Partner shall make any assignment for the benefit of
its creditors, (collectively, an “Involuntary Withdrawal”), the General Partner or the
General Partner’s trustee, receiver or assignee shall become inactive in the affairs of the
Partnership, shall have none of the rights and powers of a General Partner hereunder, shall have no
authority to act on behalf of the Partnership or have any voice in the management and operation of
the Partnership.

     (b) The General Partner may admit additional general partners to the Partnership at such times
as the General Partner shall determine, without the consent of the Limited Partners.
Notwithstanding anything to the contrary, the General Partner shall have the right to transfer its
interest, as the general partner of the Partnership, to any affiliate of the General Partner,
including any person or entity controlled by the General Partner, controlling the General Partner
or under common control with the General Partner, without the consent of the Limited Partners. In
the event of such transfer by the General Partner to an affiliate, the General Partner shall not be
deemed to have resigned or withdrawn from the Partnership for purposes of Section 13.01(b). Any
affiliate transferee of the General Partner under this Section 4.01(b) shall assume the status of
and shall have all of the rights, powers and obligations that the General Partner possessed prior
to such transfer. The General Partner shall not assign, transfer, sell, mortgage or otherwise
encumber or transfer its interest as the General Partner of the Partnership except as set forth
herein. Any additional general partner, or transferee of the General Partner as provided herein,
shall execute and acknowledge any and all instruments that are necessary or appropriate to effect
the admission of any such person or entity as a general partner, including, without limitation, the
written acceptance and adoption by such person of the provisions of this Agreement.

     Section 4.02 Substitute General Partner Requirements. Any substitute General Partner
shall execute and acknowledge any and all instruments that are necessary or appropriate to effect
the admission of any such person or entity as a substitute General Partner, including, without
limitation, the written acceptance and adoption by such person of the provisions of this Agreement.
Any successor to such office of General Partner shall assume the status of and shall have all of
the rights, powers and obligations that the General Partner possessed prior to its withdrawal,
resignation or Involuntary Withdrawal from the Partnership.

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ARTICLE V

Status, Rights, Powers and Voting Rights of Limited Partners

     Section 5.01 Limited Liability. Neither Limited Partner, any Substitute Limited
Partners (as defined herein) nor any Additional Limited Partners (as defined herein) shall be
personally liable or bound for the expenses, liabilities or obligations of the Partnership beyond
the amount of such Partner’s Capital Contribution (as defined in Section 8.01 below).

     Section 5.02 Return of Capital Contributions. No Limited Partner shall be entitled to
a return of such Limited Partner’s Capital Contribution or any portion thereof.

     Section 5.03 Liability of Limited Partner. No Limited Partner shall be obligated to
provide any contributions to the Partnership other than the Original Capital Contribution (as
defined in Section 9.02 below) of such Limited Partner. No Limited Partner shall be obligated to
make any loan to the Partnership.

     Section 5.04 Rights of Limited Partners to Inspect Books, Records, and Partnership
Documents. Each Limited Partner shall have the right to inspect and copy the Partnership’s
books and records at any reasonable time upon reasonable advance written notice, at such Limited
Partner’s sole cost and expense and solely for a purpose reasonably related to the Limited
Partner’s interest as a Partner, and to receive on demand true and full information regarding all
transactions and circumstances affecting the Partnership, and a formal account of the Partnership’s
affairs whenever circumstances render it just and reasonable, as shall be determined in the General
Partner’s sole discretion. Any such inspection must be in good faith without any intent to damage
the Partnership or any of its Partners in any manner.

     Section 5.05 No Restriction on Other Activities. Limited Partners may engage and hold
interests in business ventures of every kind and description for their own accounts including,
without limitation, business ventures which are, directly or indirectly, in competition with the
Partnership and whether the Partnership or any of the Partners also has an interest therein.
Neither the Partnership nor any of the Partners shall have any rights in such independent business
ventures by virtue of this Agreement.

     Section 5.06 Voting Rights. Limited Partners shall only have the right to vote on
amendments to this Agreement to the extent provided in Section 14.08 hereof and as otherwise
required by the Delaware Act.

     Section 5.07 Rights as to Dissolution. The Limited Partners shall have no right or
power to cause the dissolution and winding up of the Partnership by court decree or otherwise or to
withdraw or reduce their Capital Contributions. No Limited Partner shall have the right to bring
an action for partition against the Partnership and each Partner hereby waives any right to
partition of the Partnership’s property.

     Section 5.08 Consent by Limited Partners in Lieu of Meeting. Any action required by
this Agreement or the Delaware Act to be taken at any regular or special meeting of the Partners
may be taken without a meeting, without prior notice and without a vote, if a consent or consents
in writing, setting forth the action so taken, shall be signed by the Partners having not

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less than the minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all Partners entitled to vote thereon were present and voted.

ARTICLE VI

Management Fee and Expenses

     Section 6.01 Management Fee. The General Partner shall not be paid a management fee
for its management of the Partnership.

     Section 6.02 Expenses. The Partnership shall pay or reimburse the General Partner for
(A) all expenses related to organizing the Partnership, including but not limited to, legal and
accounting fees, printing and mailing expenses and government filing fees, (B) all expenses
incurred in connection with the offer and sale of Partnership Interests, and (C) all operating
expenses of the Partnership such as tax preparation fees, governmental fees and taxes, and ongoing
legal, accounting and bookkeeping fees and expenses. The General Partner, in its absolute
discretion, may from time to time pay for Partnership expenses or waive reimbursement from the
Partnership for the Partnership’s expenses, as well as terminate any such voluntary payment or
waiver of reimbursement. The Partnership’s organizational expenses will be paid by the
Partnership.

ARTICLE VII

Withdrawals from Capital Account

     Section 7.01 No Withdrawals. No Limited Partner shall have any right to withdraw all
or any of the value in such Limited Partner’s Capital Account.

ARTICLE VIII

Additional Limited Partners

     Section 8.01 Future Issuance of Partnership Interests. The General Partner may admit,
as of the first day of any Fiscal Quarter, or at any time that the General Partner determines in
its sole and absolute discretion, as additional Limited Partners (“Additional Limited
Partners”), persons who contribute cash or, in the General Partner’s sole discretion, assets,
for Partnership Interests (“Capital Contributions”). The General Partner may establish a
minimum amount for such initial Capital Contributions as the General Partner deems appropriate and
that minimum limitation may thereafter be waived or changed by the General Partner. Any assets
accepted as Capital Contributions shall be valued by the General Partner in the manner determined
by the General Partner in its sole discretion.

ARTICLE IX

Capital Accounts, Capital Contributions

Net Worth Adjustments and Taxable Income and Loss

     Section 9.01 Capital Accounts. A Partner’s “Capital Account” as of a
particular date shall consist of the following:

     (a) An amount equal to the Partner’s Original Capital Contribution;

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     (b) The increases, if any, to such account by reason of Additional Capital Contributions;

     (c) The decreases, if any, to such account by reason of withdrawals from such Capital Account;
and

     (d) The increases or decreases, if any, to such Capital Account in accordance with the
provisions of Section 9.04 below.

     Section 9.02 Original Capital Contributions. A Partner’s “Original Capital
Contribution” shall be the amount of the cash, or in the sole and absolute discretion of the
General Partner, assets, contributed by such party upon such Partner’s admission as a Partner. If
the General Partner consents to a Limited Partner’s contribution of assets to the Partnership, the
Partnership may, in the General Partner’s sole and absolute discretion, assess a special charge
against such Limited Partner equal to the actual costs incurred by the Partnership in connection
with accepting such contributed assets. Such special charge will be assessed as of the date on
which such assets are contributed. The General Partner hereby consents to the contribution by
Assignor after the date hereof, as an affiliate of the Limited Partners and for the Original
Capital Contributions of the Limited Partners, of the Canada Assets, all of which are set forth on
Schedule 2 attached hereto, and acknowledges that no special charge shall be assessed
against either Limited Partner in respect of such asset contribution. The Original Capital
Contributions of the Partners are set forth on Schedule 1.

     Section 9.03 Additional Capital Contributions.

     (a) A Partner shall be permitted, with the consent of the General Partner, to make additional
Capital Contributions in an amount deemed appropriate by the General Partner in cash or, in the
sole and absolute discretion of the General Partner, assets (such contributions, “Additional
Capital Contributions”) to the capital of the Partnership as of the first day of a Fiscal
Quarter or at any other time that the General Partner determines in its sole and absolute
discretion. In the event that Additional Capital Contributions are accepted as of the beginning of
a Fiscal Quarter pursuant to this Section, the General Partner shall end the prior Fiscal Quarter
on the last day of the prior month and commence a new Fiscal Quarter on the date of the acceptance
of the Additional Capital Contribution and upon such acceptance, the Partnership Interests shall be
adjusted and reallocated based upon the Capital Accounts of the respective Partners.

     (b) Any assets accepted as an Additional Capital Contribution shall be valued by the General
Partner, in its sole and absolute discretion. If the General Partner consents to a Limited
Partner’s contribution of assets to the Partnership, the Partnership may, in the General Partner’s
sole and absolute discretion, assess a special charge against such Limited Partner equal to the
actual costs incurred by the Partnership in connection with accepting such contributed assets.
Such special charge will be assessed as of the date on which such assets are contributed.

     (c) The General Partner shall update Schedule 1 from time to time to include any
Additional Capital Contributions made by any Partner.

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     Section 9.04 Determination of Net Worth. The net worth of the Partnership (“Net
Worth”) shall be determined on the accrual basis of accounting in accordance with generally
accepted accounting principles consistently applied, and, further, in accordance with the
following:

     (a) A determination shall be made on the last day of each Fiscal Year (or Fiscal Quarter or
other time period, as the case may be) as to the value of all Partnership assets and as to the
amount of liabilities of the Partnership. The Partnership’s name and goodwill shall be deemed to
have no value and shall belong to the General Partner or any successor thereof, and no Limited
Partner shall have any right or claim individually to the use thereof.

     (b) There shall be deducted estimated expenses for accounting, legal, custodial and other
administrative services (whether performed therein or to be performed thereafter) and such reserves
for contingent liabilities of the Partnership, including estimated expenses, if any, in connection
therewith, as the General Partner shall determine.

     (c) After the foregoing determinations have been made, a further calculation shall be made to
determine the increase or decrease in Net Worth of the Partnership during the Fiscal Year (or
Fiscal Quarter or other time period, as the case may be) just ended. The term “increase in Net
Worth” shall be the excess of Net Worth at the end of any Fiscal Year (or Fiscal Quarter or other
time period, as the case may be) over that of the preceding period, after adjusting for interim
Capital Contributions and withdrawals. The term “decrease in Net Worth” shall be the amount by
which the Net Worth at the end of the Fiscal Year (or Fiscal Quarter or other time period, as the
case may be) is less than the Net Worth of the Partnership as of the end of the preceding period
after making the adjustments specified above.

     Section 9.05 Allocation of Increases and Decreases in Net Worth. Any net increase or
decrease in Net Worth during any Fiscal Year (or such other period, as the case may be) shall be
allocated as of the end of such Fiscal Year (or such other period, as the case may be) to the
Capital Accounts of all Partners in the proportions that each Partner’s Capital Account bore to the
sum of the Capital Accounts of all of the Partners as of the beginning of such Fiscal Year (or such
other period, as the case may be).

     Section 9.06 Allocation for Tax Purposes.

     (a) Taxable income, losses and deductions of the Partnership for each year shall accrue to,
and be borne by, the Partners in proportion to their sharing of net increases or decreases in Net
Worth, the allocations of various types of taxable income and losses likewise being as nearly
proportionate as possible.

     (b) All allocations under this paragraph shall be made pursuant to the principles of Section
704 of the Code and in conformity with Treasury Regulations promulgated thereunder, or the
successor provisions to such Code Section and Regulations.

     (c) All matters concerning the allocation of profits, gains and losses among the parties
(including the taxes thereon) and accounting procedures not expressly provided for by the terms of
this Agreement shall be determined by the General Partner in its sole and absolute

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discretion in consultation with the accountants for the Partnership, and the General Partner’s
determination shall be final and conclusive as to all parties.

     (d) Any taxes, fees or other charges that the Partnership is required to withhold under
applicable law with respect to any Partner shall be withheld by the Partnership (and paid to the
appropriate government authority) and shall be deducted from the capital account of such partner as
of the last day of the Fiscal Year (or earlier if the Partner withdraws) with respect to which
amounts are required to be withheld.

ARTICLE X

Restrictions on Transfers of Partnership Interests of

Limited Partners; Admission of Substitute Limited

Partners; and Other Matters Affecting Partnership Interests

     Section 10.01 Restrictions on Transfer of Partnership Interests of Limited Partners.

     (a) Except for transfers by will or intestate succession or by operation of law, no Limited
Partner may offer, sell, transfer, assign, exchange, hypothecate or pledge, or otherwise dispose of
or encumber (collectively, “Transfer”), in whole or in part, such Limited Partner’s
Partnership Interest without the consent of the General Partner, which may be given or withheld in
the sole and absolute discretion of the General Partner.

     (b) No Limited Partner may Transfer, in whole or in part, such Limited Partner’s Partnership
Interest if such Transfer would cause the termination of the Partnership for Federal income tax
purposes, and any purported Transfer that would cause the termination of the Partnership for
Federal income tax purposes shall be void ab initio. Counsel for the Partnership
shall give its written opinion to the General Partner as to whether any contemplated Transfer would
cause the termination of the Partnership for Federal income tax purposes and the General Partner
shall be entitled to rely conclusively upon such opinion in determining whether such Transfer would
cause the termination of the Partnership and whether consent to such disposition should be given.

     (c) No Transfer of any Partnership Interest of a Limited Partner may be made unless the
General Partner shall have received a written opinion of counsel satisfactory to the General
Partner that such proposed Transfer may be effected without:

	 	(i)	 	Registration of the Partnership Interest being made under the
Securities Act of 1933, as amended;
	 
	 	(ii)	 	Violating any applicable state securities or “Blue Sky” law
(including investment suitability standards) or the laws of any other
jurisdiction; or
	 
	 	(iii)	 	Violating the Delaware Act.

     (d) In no event shall a Limited Partner Transfer its Partnership Interest or any portion
thereof to a minor or incompetent person, except by will or intestate succession.

     Section 10.02 Admission of Substitute Limited Partner.

12

 

     (a) Subject to the general restriction on transfer set forth in this Article X, an assignee of
the Partnership Interest of a Limited Partner (which shall include any purchaser, transferee, donee
or other recipient of any disposition of such Partnership Interest) shall be deemed admitted to the
Partnership as a Limited Partner (hereinafter a “Substitute Limited Partner”) only upon the
satisfactory completion of the following:

	 	(i)	 	Consent of the General Partner shall have been given, which
consent shall be evidenced by a written consent executed by the General Partner
or by the execution by the General Partner of an amendment, if required, to the
Certificate evidencing the admission of such person as a Limited Partner;
	 
	 	(ii)	 	The assignee shall have accepted and agreed to be bound by the
terms and provisions of this Agreement (as it may be amended from time to time)
by executing a counterpart hereof and such assignee shall have expressly
assumed all of the obligations of the assignor Limited Partner hereunder, and
shall have executed such other documents or instruments as the General Partner
may require in its sole and absolute discretion in order to effect the
admission of such person as a Limited Partner;
	 
	 	(iii)	 	An amendment to the Certificate, if required by the Delaware
Act, evidencing the admission of such person as a Limited Partner shall have
been filed;
	 
	 	(iv)	 	The assignee shall have delivered a letter containing a
representation that the assignee’s acquisition of the Partnership Interest is
made as a principal, for the assignee’s own account, for investment purposes
only and not with a view to the resale or distribution of such Partnership
Interest, and that the assignee will not Transfer such Partnership Interest or
any fraction thereof to anyone in violation of this Agreement;
	 
	 	(v)	 	If the assignee is a corporation, the assignee shall have
provided to the General Partner evidence satisfactory to counsel for the
Partnership of its authority to become a Limited Partner under the terms and
provisions of this Agreement;
	 
	 	(vi)	 	The assignee shall have complied with all applicable
governmental rules and regulations, if any;
	 
	 	(vii)	 	The assignee meets the suitability requirements for investing
in the Partnership and the assignee completes a subscription agreement provided
by the General Partner; and
	 
	 	(viii)	 	All costs and expenses incurred by the Partnership and General Partner in
connection with this Section 10.02 are paid by the person or entity seeking to
become a Substitute Limited Partner.

     Section 10.03 Rights of Assignee of Partnership Interest.

13

 

     (a) Subject to the provisions of Section 10.01, and except as required by operation of law,
the Partnership shall not be obligated for any purposes whatsoever to recognize the assignment by
any Limited Partner of such Limited Partner’s Partnership Interest until the Partnership has
received notice thereof and the General Partner has set forth in writing its consent to such
assignment.

     (b) Any person or entity who is the assignee of all or any portion of the Partnership Interest
of a Limited Partner, but who has not become a Substitute Limited Partner, and desires to make a
further disposition of such Partnership Interest, shall be subject to all the provisions of this
Article X to the same extent and in the same manner as any Limited Partner desiring to make a
disposition of such Limited Partner’s Partnership Interest.

     Section 10.04 Effect of Bankruptcy, Death or Incompetence of a Limited Partner. The
bankruptcy of a Limited Partner or, if an individual, an adjudication that a Limited Partner is
incompetent (which term shall include, but not be limited to, insanity), shall not cause the
termination or dissolution of the Partnership and the business of the Partnership shall continue.
If a Limited Partner becomes bankrupt, the trustee or receiver of such Limited Partner’s estate or,
if a Limited Partner dies, such Limited Partner’s executor, administrator or trustee, or, if such
Limited Partner is adjudicated incompetent, such Limited Partner’s committee, guardian or
conservator, shall have the rights of such Limited Partner for the purposes of settling or managing
such Limited Partner’s estate or property and such power as the bankrupt, deceased or incompetent
Limited Partner possessed to dispose of all or any part of such Limited Partner’s Partnership
Interest and to join with any assignee in satisfying conditions precedent to the admission of the
assignee as a Substitute Limited Partner.

     Section 10.05 Attachment by Creditors. If a Partnership Interest is subjected to
attachment by a creditor, or is assigned for the benefit of any creditor, the Partnership Interest
obtained by such creditor shall be only that of an assignee, and in no event shall such creditor
have the rights of a Substitute or Additional Limited Partner, unless such creditor is a
shareholder or affiliate of the General Partner, in which case such creditor shall have any and all
rights of a Substitute or Additional Limited Partner.

ARTICLE XI

Representations and Warranties

     Section 11.01 Limited Partners. Each Limited Partner represents and warrants, as to
itself, to the Partnership and to every other Partner as follows:

     (a) Such Limited Partner will promptly, upon request by the General Partner, provide all
financial data, documents, reports, certifications or other information necessary or appropriate to
enable the Partnership to apply for and obtain an exemption from the registration provisions of
applicable law and any other information required by governmental agencies having jurisdiction over
the Partnership.

     (b) There is no misrepresentation contained in any document or questionnaire completed by the
Limited Partner at the request of the General Partner, its managers, members, officers, employees,
agents or affiliates.

14

 

     (c) If such Limited Partner is a corporation, trust or association, the officer signing on
such Partner’s behalf has been duly authorized to execute and deliver this Agreement and the
Certificate.

ARTICLE XII

Special Power of Attorney

     Section 12.01 Execution and Consent. Each Limited Partner hereby irrevocably
constitutes and appoints the General Partner and its respective successors (hereinafter referred to
as “Special Attorney”) as the attorney-in-fact for such Limited Partner with power and
authority to act in the Limited Partner’s name and on the Limited Partner’s behalf to execute,
acknowledge, swear to and file documents and instruments necessary or appropriate to the conduct of
Partnership business, which will include, but not be limited to, the following:

     (a) the Certificate and this Agreement, as well as amendments thereto as required by the laws
of any state;

     (b) any other certificates, instruments and documents, including fictitious name certificates,
as may be required by, or may be appropriate under, the laws of any state; and

     (c) any documents that may be required to effect the continuation of the Partnership, the
admission of an Additional or Substitute Limited Partner, the withdrawal of a Limited Partner, or
the dissolution and termination of the Partnership, provided such continuation, admission or
dissolution and termination are in accordance with the terms of the Certificate and this Agreement.

     Section 12.02 Procedural Aspects. The power of attorney granted by each Limited
Partner to the Special Attorney:

     (a) is a Special Power of Attorney, coupled with an interest, and is accordingly irrevocable;

     (b) may be exercised by the Special Attorney for each Limited Partner by listing all of the
Limited Partners executing any instrument with a single signature of such Special Attorney acting
as attorney-in-fact for all of them; and

     (c) shall survive the delivery of an assignment by a Limited Partner of the whole or any
portion of such Limited Partner’s Partnership Interest; except that where the assignee has been
approved in accordance with the provisions of this Agreement for admission to the Partnership as a
Substitute Limited Partner, the Power of Attorney shall survive the delivery of such assignment for
the sole purpose of enabling the Special Attorney to execute, acknowledge and file any instrument
necessary to effect such substitution.

ARTICLE XIII

Dissolution and Liquidation

     Section 13.01 Dissolution. The Partnership shall be dissolved upon the earliest to
occur of the following:

15

 

     (a) the expiration of the term of the Partnership;

     (b) the withdrawal, resignation or Involuntary Withdrawal of the General Partner, or any other
event that results in such entity ceasing to be a General Partner;

     (c) the General Partner, in its sole and absolute discretion, elects to dissolve the
Partnership; or

     (d) The happening of any other event, including the entry of a decree of judicial dissolution
under Section 17-802 of the Delaware Act, that under the law of the State of Delaware, mandates the
dissolution of the Partnership.

     Section 13.02 Liquidation. Upon the dissolution of the Partnership, (i) the General
Partner or, if there is then no General Partner or if the principals of the General Partner are
unable to act on its behalf, (ii) (a) the person or persons previously designated in writing by the
General Partner, or (b) if the General Partner has not made such a designation, the person or
persons designated by Limited Partners owning more than fifty (50%) percent of the Partnership
Interests held by Limited Partners, or (iii) the trustees, receivers or other persons required by
law to wind up the affairs of the Partnership (collectively, the “Liquidators”), shall
cause the cancellation of the Certificate, liquidate the assets of the Partnership, pay off known
liabilities, establish reserves for contingent liabilities and expenses of liquidation, apply and
distribute the proceeds of such liquidation in accordance with Capital Account balances maintained
in accordance with the provisions of Section 9.01 hereof and the Delaware Act, and shall take all
other steps necessary to wind up the affairs of the Partnership as promptly as practicable. To the
extent reasonable, the business of the Partnership may continue to be conducted until liquidation
is complete.

     Section 13.03 Distribution in Kind. Notwithstanding the provisions of Section 13.02
hereof, if upon dissolution of the Partnership the Liquidators shall determine that an immediate
sale of part or all of the Partnership’s assets would be impractical or would cause undue loss to
the Partners, the Liquidators may, in their absolute discretion, either defer for a reasonable time
the liquidation of any assets except those necessary to satisfy liabilities of the Partnership
(other than those to Partners) or distribute to the Partners, in lieu of cash, as tenants in common
and in proportion to their respective interests in the Partnership, undivided interests in such
Partnership assets as the Liquidators deem not suitable for liquidation.

     Section 13.04 Final Statement. As soon as practicable after the dissolution of the
Partnership, the Liquidators shall cause the Partnership’s accountants to prepare and furnish to
the Partners a final statement of the Partnership’s assets and liabilities.

ARTICLE XIV

General Provisions

     Section 14.01 Notices and Addresses. Any notice or other communication required or
permitted to be given pursuant to this Agreement shall be in writing and shall be considered
properly given if mailed by first class United States mail, postage prepaid, registered or
certified with return receipt requested, facsimile, or by delivering same in person to the intended
addressee. Notice so mailed shall be effective (a) upon personal delivery thereof, including,

16

 

without limitation, by overnight mail or courier service, (b) in the case of notice by United
States mail, two (2) days after such notice was deposited in a receptacle maintained by the United
States Post Office for the acceptance of mail, or (c) in the case of notice by facsimile, upon
transmission thereof; provided such transmission is promptly confirmed by any method set
forth in clause (a) or (b) above. Notice given in any other manner shall be effective only if and
when received by the addressee. For purposes of notice, the addresses of the Partners shall be as
set forth on Schedule 1 attached hereto; provided, however, that any Partner shall have the
right to change its address for notice hereunder to any other location within the continental
United States by the giving of ten (10) days’ notice to the other Party in the manner set forth
hereinabove.

     Section 14.02 Titles and Captions. All Article and Section titles and captions in
this Agreement are for convenience only and shall not be deemed part of this Agreement and in no
way define, limit, extend or describe the scope or intent of any provisions hereof.

     Section 14.03 Pronouns and Plurals. Whenever the context may require, any pronoun
used herein shall include the corresponding masculine, feminine or neuter forms. The singular form
of nouns, pronouns and verbs shall include the plural and vice versa.

     Section 14.04 Further Action. The Partners shall execute and deliver all documents,
provide all information and take or forbear from taking all such action as may be necessary or
appropriate to achieve the purposes set forth in this Agreement.

     Section 14.05 Applicable Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Delaware.

     Section 14.06 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties and their heirs, executors, administrators, successors, legal
representatives and assigns.

     Section 14.07 Integration. This Agreement constitutes the entire agreement among the
parties pertaining to the subject matter hereof, and supersedes all prior agreements and
understandings pertaining thereto. No covenant, representation or condition not expressed in this
Agreement shall affect or be deemed to interpret, change or restrict the express provisions hereof.

     Section 14.08 Amendment. This Agreement may be modified or amended only by
affirmative vote of the General Partner and Limited Partners owning more than fifty percent (50%)
of the Partnership Interests held by Limited Partners, provided, however that the
General Partner may amend this Agreement from time to time without the consent, approval or other
authorization of, or notice to, any of the Limited Partners if, in the opinion of the General
Partner, the amendment does not have a material adverse affect on the Limited Partners generally,
and to update Schedule 1.

     Section 14.09 Waiver by Partner.

     (a) Any Partner may, but shall not be obligated to, by notice to the General Partner, waive
any of its rights or any conditions to its obligations hereunder, or any duty, obligation or
covenant of any other Partner to it.

17

 

     (b) No such waiver shall affect or alter the remainder of this Agreement, but each and every
covenant, agreement, term and condition hereof shall continue in full force and effect with respect
to any other existing or subsequent breach.

     Section 14.10 Rights and Remedies.

     (a) The rights and remedies of any of the Partners hereunder shall not be mutually exclusive,
and the implementation of one or more of the provisions of this Agreement shall not preclude the
implementation of any other provision.

     (b) Each of the Partners confirms that damages at law may be an inadequate remedy for a breach
or threatened breach of any provision hereof. The respective rights and obligations hereunder
shall be enforceable by specific performance, injunction or other equitable remedy but nothing
herein contained is intended to or shall limit or affect any rights at law or by statute or
otherwise of any Partner aggrieved as against the other Partners for a breach or threatened breach
of any provision hereof, it being the intention of this paragraph to make clear that the respective
rights and obligations of the Partners hereunder shall be enforceable in equity as well as at law
or otherwise.

     Section 14.11 Counterparts. This Agreement may be executed in counterparts, all of
which taken together shall constitute one agreement binding on all parties, notwithstanding that
all the parties are not signatories to the original or the same counterpart. Each party shall
become bound by the Agreement immediately upon affixing his or its signature hereto, independently
of the signature of any other party.

     Section 14.12 Waiver of Partition. Each Partner hereby waives any right to partition
of the Partnership property.

[Signature Page Follows.]

18

 

     IN WITNESS WHEREOF, this Limited Partnership Agreement has been duly executed as of the day
and year first above written.

	 	 	 	 	 
	 	 	GENERAL PARTNER:
	 
	 	 	 	 
	 	 	JUAN DE FUCA CABLE MANAGEMENT, INC.
	 
	 	 	 	 
	 

	 	By:	 	/s/ Anthony O. Duggleby
	 

	 	 	 	 
	 

	 	Name:	 	Anthony O. Duggleby
	 

	 	 	 	 
	 

	 	Title:	 	President
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	LIMITED PARTNERS:
	 
	 	 	 	 
	 	 	SBJF HOLDING CORP.
	 
	 	 	 	 
	 

	 	By:	 	/s/ Paul Manson
	 

	 	 	 	 
	 

	 	Name:	 	Paul B. Manson
	 

	 	 	 	 
	 

	 	Title:	 	President
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	BOUNDLESS ENERGY NW, INC.
	 
	 	 	 	 
	 

	 	By:	 	/s/ Brian N. Chernack
	 

	 	 	 	 
	 

	 	Name:	 	Brian N. Chernack
	 

	 	 	 	 
	 

	 	Title:	 	President
	 

	 	 	 	 

19

 

Schedule 1

Names, Addresses and Partnership Interests of Partners

	 	 	 	 	 	 	 
	 	 	Capital Contributions	 	Partnership Interest
	GENERAL PARTNER:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Juan de Fuca Cable Management, Inc.

	 	Original: $1.00
	 	1% General Partnership
	203 Red Stone Hill

	 	Additional:                     
	 	Interest
	Plainville, CT 06062
	 	 	 	 	 	 
	Telephone: (860) 747-0497
	 	 	 	 	 	 
	Facsimile: (860) 747-0297
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	LIMITED PARTNERS:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	SBJF Holding Corp.

	 	Original: $49.50
	 	49.5% Limited Partnership
	Lobby Box 91

	 	Additional:                     
	 	Interest
	Suite 1400
	 	 	 	 	 	 
	333 Seymour Street
	 	 	 	 	 	 
	Vancouver, British Columbia V6B 5A6
	 	 	 	 	 	 
	Telephone: (604) 689-2991
	 	 	 	 	 	 
	Facsimile: (604) 689-2990
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Boundless Energy NW, Inc.

	 	Original: $49.50
	 	49.5% Limited Partnership
	203 Red Stone Hill

	 	Additional:                     
	 	Interest
	Plainville, CT 06062
	 	 	 	 	 	 
	Telephone: (860) 747-0497
	 	 	 	 	 	 
	Facsimile: (860) 747-0297
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	TOTAL:

	 	$	100.00	 	 	100% Partnership Interests

20

 

Schedule 2

List of Assets Contributed or to be Contributed

by Assignor, as an affiliate of Limited Partners

	 	 	 	 	 
	Item	 	Date	 	Description
	Government/public
relations (Canada)
consulting contract

	 	February 16, 2005
	 	Contract with Pilot
House to advise and
assist in
communications,
publications and
meeting for Canadian
permitting &
development.
	 

	 	 
	 	 
	Filing and accounting
systems

	 	Under development,
currently in draft
form
	 	Accounting system
soon to be updated
to conform with
specifics in Gantt
charts -
confidential.
Filling structure
will follow a
hierarchical model
based on NEB
Application
structure
	 

	 	 
	 	 
	Presidential Permit
Application

	 	Filed December 16,
2004
	 	Federal US
regulatory document
required for the
project as a
preliminary step in
permitting major
projects.
Docket no: PP_299
	 

	 	 
	 	 
	BPA Interconnection
Application for Queue

position

	 	Sent June 1, 2004
	 	Request for
interconnection
(#132, 133, 134) up
to 990 MW at Port
Angeles and/or
Fairmount
substations, secured
by $10,000 deposit
	 

	 	 
	 	 
	ABB Interconnection
Facility Study No.
04TX-11754 (completed
for BPA)

	 	January 25, 2005
	 	Potential connection
points in the Port
Angeles area,
sensitivity analyses
for feasibility of
different siting,
routing and
technical options.
	 

	 	 
	 	 
	Western Electric
Coordinating Council
(WECC) Regional Study
Authorization

	 	 	 	Application,
approval,
organizational
materials, meeting
minutes, study scope
and progress report
for SBPRTS to
undertake the
analysis of regional
impact of the
project — beyond
immediate effects on
interconnected
utilities — to
establish path
rating for
transmission line
and to determine
system
impacts/benefits.
Preliminary results
required to verify
project capacity for
open season.
	 

	 	 
	 	 
	BCTC interconnection
application

	 	Sent June 3, 2004,
revised November 15,
2004
	 	Application for
interconnection to
990MW, upgraded to
multi-terminal 1600
MW HVDC line with
PG&E, with capacity
to expand up to
3200MW
	 

	 	 
	 	 
	NEB Application
material, includes:

     1. Project outline

     2. Draft project
justification

     3. Tables for
VECs/species of
concern

	 	1. Updated as
details require

2.Revised December

2, 2004

3. January 11, 2005
	 	1. Describes the
nature, background,
technical,
regulatory and
environmental
rationale behind the
project

2. Summary of
infrastructure,
economic and
technological
benefits of the
project compared to
other options

3. Preliminary
matrices of
environmental
features of special
concern, applicable
at different spatial
and temporal scales
to assess project
impacts.

21

 

	 	 	 	 	 
	Item	 	Date	 	Description
	Table of stakeholder
consultations to date
and minutes

	 	Daily updates
	 	Summary of dates,
representatives and
topics of all
communications, as
requested by NEB to
include in
Application.

22Lease Amendment Dated May 24, 2005

 

EXHIBIT 4.20

CORDOVA EQUITIES INC.

Landlord

- and -

SEA BREEZE POWER CORP.

Tenant

LEASE OF OFFICE SPACE

MULTI-TENANT OFFICE PROJECT

	 	 	 	 	 	 	 
	 

	 	LEASED PREMISES:
	 	Suite 1400 — 333 Seymour Street
	 	 
	 

	 	 	 	Vancouver, British Columbia	 	 

 

 

INDEX

	 	 	 	 	 	 	 
	SECTION	 	 	 	PAGE	 
	 
	 	Term Sheet	 	 	1	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE 1.00 - DEFINITIONS	 	 	 	 
	 
	 	 	 	 	 	 
	1.01
	 	Definitions	 	 	3	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE 2.00 - GRANT OF LEASE AND GENERAL COVENANTS	 	 	 	 
	 
	 	 	 	 	 	 
	2.01
	 	Grant	 	 	3	 
	2.02
	 	Landlord’s General Covenants	 	 	3	 
	2.03
	 	Tenant’s General Covenants	 	 	3	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE 3.00 - TERM AND POSSESSION	 	 	 	 
	 
	 	 	 	 	 	 
	3.01
	 	Term	 	 	4	 
	3.02
	 	Early Occupancy	 	 	4	 
	3.03
	 	Delayed Possession	 	 	4	 
	3.04
	 	Acceptance of Leased Premises	 	 	4	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE 4.00 - RENT	 	 	 	 
	 
	 	 	 	 	 	 
	4.01
	 	Rent	 	 	4	 
	4.02
	 	Security Deposit	 	 	4	 
	4.03
	 	Intent	 	 	5	 
	4.04
	 	Payment of Rent - General	 	 	5	 
	4.05
	 	Partial Month	 	 	5	 
	4.06
	 	Payment of Tenant’s Occupancy Costs	 	 	5	 
	4.07
	 	Resolution of Disputes	 	 	6	 
	4.08
	 	Area Determination	 	 	6	 
	4.09
	 	Vacancy	 	 	7	 
	4.10
	 	Method of Payment	 	 	7	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE 5.00 - USE AND OCCUPATION	 	 	 	 
	 
	 	 	 	 	 	 
	5.01
	 	Use of Leased Premises	 	 	7	 
	5.02
	 	Compliance with Laws	 	 	7	 
	5.03
	 	Prohibited Uses	 	 	8	 
	5.04
	 	Common Elements	 	 	8	 
	5.05
	 	Hazardous Use	 	 	8	 
	5.06
	 	Tenant’s Security Interest	 	 	8	 
	5.07
	 	Rules and Regulations	 	 	8	 
	5.08
	 	Permitted Signs	 	 	9	 
	5.09
	 	Prohibited Signs	 	 	9	 
	5.10
	 	Window Coverings	 	 	9	 
	5.11
	 	Parking	 	 	9	 
	5.12
	 	Authorization of Enquiries	 	 	9	 
	5.13
	 	Records	 	 	9	 
	5.14
	 	Overloading	 	 	10	 
	5.15
	 	Telecommunications	 	 	10	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE 6.00 - SERVICES, MAINTENANCE, REPAIR AND ALTERATIONS	 	 	 	 
	 
	 	BY LANDLORD	 	 	 	 
	 
	 	 	 	 	 	 
	6.01
	 	Operation of Project	 	 	10	 
	6.02
	 	Building Services and Facilities	 	 	10	 
	6.03
	 	Maintenance, Repair and Replacement	 	 	11	 
	6.04
	 	Alterations / Renovations by Landlord	 	 	11	 
	6.05
	 	Access by Landlord	 	 	12	 
	6.06
	 	Energy Conservation	 	 	12	 
	6.07
	 	Supervision and Extended Services	 	 	12	 
	6.08
	 	Landlord’s Work	 	 	12	 
	6.09
	 	Control by Landlord	 	 	12	 

 

 

	 	 	 	 	 	 	 
	SECTION	 	 	 	PAGE	 
	 
	 	ARTICLE 7.00 - PAYMENT FOR SERVICES AND MAINTENANCE, REPAIR AND	 	 	 	 
	 
	 	ALTERATIONS BY TENANT	 	 	 	 
	 
	 	 	 	 	 	 
	7.01
	 	Utilities 	 	 	12	 
	7.02
	 	Lights 	 	 	13	 
	7.03
	 	Heating, Ventilation and Air Conditioning	 	 	13	 
	7.04
	 	Alterations by Tenant 	 	 	13	 
	7.05
	 	Tenant’s Trade Fixtures and Personal Property 	 	 	14	 
	7.06
	 	Maintenance and Repair 	 	 	14	 
	7.07
	 	Inspection 	 	 	14	 
	7.08
	 	Failure to Maintain 	 	 	14	 
	7.09
	 	Liens 	 	 	15	 
	7.10
	 	Roof 	 	 	15	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE 8.00 TAXES	 	 	 	 
	 
	 	 	 	 	 	 
	8.01
	 	Taxes Payable by Landlord 	 	 	15	 
	8.02
	 	Taxes Payable by Tenant 	 	 	15	 
	8.03
	 	Tax Increases Attributable to Tenant 	 	 	15	 
	8.04
	 	GST 	 	 	16	 
	8.05
	 	Landlord’s Election 	 	 	16	 
	8.06
	 	Right to Contest 	 	 	16	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE 9.00 - INSURANCE, LIABILITY AND ENVIRONMENTAL	 	 	 	 
	 
	 	 	 	 	 	 
	9.01
	 	Landlord’s Insurance 	 	 	16	 
	9.02
	 	Tenant’s Insurance	 	 	 	 
	9.03
	 	Placement of Tenant’s Insurance by Landlord 	 	 	18	 
	9.04
	 	Limitation of Landlord’s Liability 	 	 	18	 
	9.05
	 	Environmental Issues 	 	 	18	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE 10.00 - DAMAGE AND DESTRUCTION	 	 	 	 
	 
	 	 	 	 	 	 
	10.01
	 	Limited Damage to Leased Premises, Access or Services 	 	 	19	 
	10.02
	 	Major Damage to Leased Premises 	 	 	19	 
	10.03
	 	Damage to Building 	 	 	20	 
	10.04
	 	No Abatement 	 	 	20	 
	10.05
	 	Notify Landlord 	 	 	20	 
	10.06
	 	Expropriation 	 	 	20	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE 11.00 - DEFAULT	 	 	 	 
	 
	 	 	 	 	 	 
	11.01
	 	Arrears 	 	 	20	 
	11.02
	 	Costs of Enforcement 	 	 	21	 
	11.03
	 	Performance of Tenant’s Obligations 	 	 	21	 
	11.04
	 	Remedies on Default 	 	 	21	 
	11.05
	 	Availability of Remedies	 	 	22	 
	11.06
	 	Waiver 	 	 	22	 
	11.07
	 	Waiver of Exemption and Redemption 	 	 	22	 
	11.08
	 	Companies’ Creditors Arrangement Act 	 	 	22	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE 12.00 - ASSIGNMENT, SUBLETTING AND OTHER TRANSFERS	 	 	 	 
	 
	 	 	 	 	 	 
	12.01
	 	Request for Consent 	 	 	22	 
	12.02
	 	Basis for Consent 	 	 	23	 
	12.03
	 	Terms and Conditions Relating to Consents 	 	 	24	 
	12.04
	 	Subsequent Transfers 	 	 	24	 
	12.05
	 	Profit Rents upon Transfers 	 	 	24	 
	12.06
	 	Advertising 	 	 	24	 
	12.07
	 	Grant of Security Interest by Transferee 	 	 	24	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE 13.00 - TRANSFERS BY LANDLORD	 	 	 	 
	 
	 	 	 	 	 	 
	13.01
	 	Sale, Conveyance and Assignment 	 	 	25	 
	13.02
	 	Effect of Transfer 	 	 	25	 
	13.03
	 	Subordination 	 	 	25	 
	13.04
	 	Attainment 	 	 	25	 
	13.05
	 	Effect of Attornment 	 	 	25	 
	13.06
	 	Repurchase 	 	 	25	 

 

 

	 	 	 	 	 	 	 
	SECTION	 	 	 	PAGE	 
	 
	 	ARTICLE 14.00 - SURRENDER	 	 	 	 
	 
	 	 	 	 	 	 
	14.01
	 	Possession and Restoration	 	 	25	 
	14.02
	 	Tenant’s Trade Fixtures and Personal Property	 	 	26	 
	14.03
	 	Overholding 	 	 	26	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE 15.00 - GENERAL	 	 	 	 
	 
	 	 	 	 	 	 
	15.01
	 	Estoppel Certificates 	 	 	26	 
	15.02
	 	Entire Agreement	 	 	27	 
	15.03
	 	No Registration of Lease or Notice	 	 	27	 
	15.05
	 	Demolition / Substantial Renovation	 	 	27	 
	15.06
	 	Relocation	 	 	27	 
	15.07
	 	“For Lease” Signs	 	 	27	 
	15.08
	 	Unavoidable Delays	 	 	27	 
	15.09
	 	Limitation of Recourse	 	 	27	 
	15.11
	 	Delegation of Authority	 	 	28	 
	15.12
	 	Relationship of Parties	 	 	28	 
	15.13
	 	Governing Law	 	 	28	 
	15.14
	 	Amendment or Modification	 	 	28	 
	15.15
	 	Legal and Administration Costs	 	 	28	 
	15.16
	 	Construction	 	 	28	 
	15.17
	 	Captions and Headings	 	 	28	 
	15.18
	 	Interpretation	 	 	28	 
	15.19
	 	Time of the Essence	 	 	29	 
	15.20
	 	Successors and Assigns	 	 	29	 
	15.21
	 	Counterparts	 	 	29	 
	15.22
	 	Further Schedules	 	 	29	 
	15.23
	 	Independent Legal Advice	 	 	29	 
	15.24
	 	No Offer	 	 	29	 
	15.25
	 	Landlord’s Security Interest	 	 	29	 
	15.26
	 	Survival of Covenants and Indemnities	 	 	30	 
	15.27
	 	Exculpatory Provisions	 	 	30	 
	15.28
	 	Brokerage Commissions	 	 	30	 
	15.29
	 	Covenants to be Performed at Landlord’s Option	 	 	30	 
	15.30
	 	Radiation	 	 	30	 

SCHEDULES

	 	 	 	 	 	 	 
	Schedule A

	 	-
	 	Plan Showing Leased Premises
	 	 
	 
	 	 	 	 	 	 
	Schedule A1

	 	-
	 	Legal Description of Land	 	 
	 
	 	 	 	 	 	 
	Schedule B

	 	-
	 	Definitions	 	 
	 
	 	 	 	 	 	 
	Schedule C

	 	-
	 	Rules and Regulations	 	 
	 
	 	 	 	 	 	 
	Schedule D

	 	-
	 	Landlord’s Work	 	 
	 
	 	 	 	 	 	 
	Schedule E

	 	-
	 	Additional Covenants, Agreements and Conditions (if any)	 	 
	 
	 	 	 	 	 	 
	Schedule F

	 	-
	 	Form of Indemnity Agreement
(if applicable)	 	 
	 
	 	 	 	 	 	 
	Schedule G

	 	-
	 	Security Interest - Remedies on Default	 	 
	 
	 	 	 	 	 	 
	Schedule H

	 	-
	 	Contents of Leased Premises	 	 

 

 

 PAGE 1 OF TERM SHEET — FORMING PART OF LEASE OF OFFICE SPACE — MULTI-TENANT

	 	 	 	 	 	 	 	 	 	 	 
	1.

	 	(a)
	 	LANDLORD: CORDOVA EQUITIES INC.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	ADDRESS:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	c/o Morguard Investments Limited
	 	TELEPHONE:
	 	 	604.681.9474	 
	 

	 	 	 	Suite 400 — 333 Seymour Street
	 	FAX NUMBER:
	 	 	604.685.0161	 
	 

	 	 	 	Vancouver, British Columbia	 	 	 	 	 	 
	 

	 	 	 	V6B 5A6	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	(b)
	 	LANDLORD’S HEAD OFFICE:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	c/o Morguard Investments Limited
	 	TELEPHONE:
	 	 	905.281.3800	 
	 

	 	 	 	800 — 55 City Centre Drive
	 	FAX NUMBER
	 	 	905.281.1800	 
	 

	 	 	 	Mississauga, ON L5B 1M3

 	 	 	 	 	 	 
	 

	 	 	 	Attention: President	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	(c)	 	Landlord’s “Environmental Contact”: Operations Manager	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	2.	 	   TENANT (legal name): SEA BREEZE POWER CORP.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	   ADDRESS:
	 	 	 	TELEPHONE:
	 	604.689.2991

	 

	 	 	 	 	 	FAX NUMBER:
	 	 	604.689.2990	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	   Suite 1400-333 Seymour Street	 	 	 	 
	 	 	   Vancouver, British Columbia	 	 	 	 
	 

	 	   V6B 5A6	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 

	 	 	 	 	 
	3.

	 	PROJECT NAME:
	 	MUNICIPAL ADDRESS OF PROJECT:
	 
	 	 	 	 
	 

	 	333 SEYMOUR
	 	333 Seymour Street Vancouver,
	 

	 	 	 	British ‘Columbia V6B 5A6

	4.	 	LEASED PREMISES:

		 	Attached as Schedule A to this Lease is a plan of the Project showing the Leased Premises
by hatching. The Leased Premises are designated as Suite 1400.

	5.	 	RENTABLE AREA OF LEASED PREMISES:

		 	10,788 square feet subject to adjustment in accordance with the definition of Rentable
Area and Section 4.08. The Rentable Area of the Leased Premises shall be calculated in
accordance with the BOMA ANSI standards ANSI Z65.1-1980, except to the extent modified by
the definition of Rentable Area.

	6.	 	(a) SECURITY DEPOSIT: $26,760.89 (shall be due on July 1, 2005) (SECTION 4.02)

		 	(b) OTHER DEPOSIT: $25,798.96 (SCHEDULE E)

 

 

PAGE 2 OF TERM SHEET — FORMING PART OF LEASE OF OFFICE SPACE — MULTI-TENANT

	 	 	 	 	 	 	 
	7.

	 	TERM:
	 	 	 	3 years
	 
	 	 	 	 	 	 
	 

	 	(a)
	 	FIRST DAY OF TERM:
	 	October 1, 2005
	 
	 	 	 	 	 	 
	 

	 	(b)
	 	LAST, DAY OF TERM:
	 	September 30, 2008

	8.	 	BASIC RENT:

		 	From October 1, 2005 to September 30, 2007, $129,456.00 per annum, $10,788.00 per
month calculated at a rate of $12.00 per square foot per annum of the Rentable Area
of the Leased Premises; and

		 	From October 1, 2007 to September 30, 2008, $140,244.00 per annum, $11,687.00 per
month calculated at a rate of $13.00 per square foot per annum of the Rentable Area
of the Leased Premises.

	9.	 	USE OF LEASED PREMISES:

		 	The Leased Premises shall be used solely for the purpose of a general office for the
business of the development of renewable energy projects and the application of
related power technologies, and for no other purpose. The Leased Premises shall not
be used for any use prohibited by Article 5.00 or Section 9.05.

	10.	 	ENVIRONMENTAL ISSUES:

	 	 	 	 	 	 	 
	 

	 	LEASE SECTION 9.05:
	 	Applies þ
	 	Does not applyo
	 
	 

	 	RIDER I (SECTION 9.05):
	 	Applies ·o
	 	Does not apply þ
	 
	 	 	 	 	 	 
	11.

	 	INDEMNIFIER:
	 	NOT APPLICABLE	 	 

Additional Covenants, Agreements and Conditions (if any) listed here are more particularly
set out in Schedule E.

	 	1.	 	Other Deposit
	 
	 	2.	 	Special Equipment
	 
	 	3.	 	Signage
	 
	 	4.	 	Parking

 

 

LEASE OF OFFICE SPACE

MULTI-TENANT OFFICE BUILDING

THIS LEASE is made as of the 24th day of May, 2005.

	BETWEEN:	 	CORDOVA EQUITIES INC.,

		 	 a company incorporated under the laws of the Province of British Columbia;

		 	 (the “Landlord”)

	AND:	 	SEA BREEZE POWER CORP.

		 	 a company incorporated under the laws of the Province of British Columbia;

		 	 (the “Tenant”)

     IN CONSIDERATION of the mutual covenants contained herein, the parties hereby agree as follows:

ARTICLE 1.00 — DEFINITIONS

1.01 Definitions - In this Lease the terms defined in Schedule B shall have the meanings
designated therein respectively.

ARTICLE 2.00 — GRANT OF LEASE AND GENERAL COVENANTS

2.01 Grant - The Landlord hereby leases to the Tenant and the Tenant hereby leases from
the Landlord the Leased Premises, to have and to hold during the Term, subject to the terms and
conditions of this Lease.

2.02 Landlords General Covenants - The Landlord covenants with the Tenant:

	(a)	 	subject to the provisions of this Lease, for quiet enjoyment of the Leased Premises so
long as the Tenant shall observe and perform all of the covenants and obligations of the
Tenant herein; and
	 
	(b)	 	to observe and perform all the covenants and obligations of the Landlord herein.

2.03 Tenant’s General Covenants - The Tenant covenants with the Landlord:

	(a)	 	to pay Rent without any deduction, abatement or set-off whatsoever; and
	 
	(b)	 	to observe and perform all the covenants and obligations of the Tenant herein.

 

 

ARTICLE 3.00 - TERM AND POSSESSION

3.01 Term - The Term of this Lease shall begin on the Commencement Date and end on the
date set out in Item 7(b) of the Term Sheet unless terminated earlier as provided in this Lease.

3.02 Early Occupancy - The Tenant may, with the Landlord’s prior written consent, use
and occupy the Leased Premises or portions thereof before the Commencement Date. In the event of
early occupancy, the Tenant shall pay to the Landlord on the date of occupancy a rental for the
period from the date the Tenant begins to use or occupy the Leased Premises or portions thereof
to the Commencement Date, which rental shall be that proportion of the Rent for the first
calendar year of the Term which the number of days in such period is of 365, multiplied by that
proportion that the part of the Leased Premises used and occupied from time to time by the
Tenant prior to the Commencement Date is of the total area of the Leased Premises. Except where
clearly inapplicable, all provisions of this Lease shall apply during such period.

3.03 Delayed Possession - If the Landlord is unable to deliver possession of all or any
portion of the Leased Premises by the Commencement Date, this Lease shall remain .in full force
and effect and the Tenant shall take possession of the Leased Premises on the date when the
Landlord delivers possession of all of the Leased Premises, which date shall be conclusively
established by notice in writing from the Landlord to the Tenant at least 10 days before such
date. The Landlord shall not be liable to the Tenant for any loss, damage or inconvenience
resulting from any delay in delivering possession of the Leased Premises but, unless the delay is

caused by or attributable to the Tenant, its servants, agents or independent contractors, no Rent
shall be payable by the Tenant for the period prior to the date on which the Landlord can deliver
possession of all. of the Leased Premises, unless the Tenant elects to take possession of a
portion of the Leased Premises, in which case Rent shall be payable in respect thereof from the
date such possession is so taken. Despite anything contained to the contrary in this Section
3.03, if the Landlord is of the opinion that it is unable to deliver possession of all or any
part of the Leased Premises by the expiration of 6 months from the Commencement Date, the
Landlord shall have the right to terminate this Lease upon written notice to the Tenant,
whereupon neither party shall have any liability to the other and, after the termination date,
the Landlord shall return to the Tenant, without interest or deduction, the Security Deposit, if
any.

3.04 Acceptance of Leased Premises - Taking possession of all or any portion of the
Leased Premises by the Tenant shall be conclusive evidence as against the Tenant that the Leased
Premises or such portion thereof and the Common Elements are in satisfactory 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 4.00 — RENT

	4.01	 	Rent - The Tenant shall pay to the Landlord as Rent for the Leased Premises the
aggregate of:
	 
	(a)	 	Basic Rent in respect of each year of the Term, payable in advance and without notice or
demand In monthly instalments as set out in Item 8 of the Term Sheet commencing on the
Commencement Date and on the first day of each calendar month thereafter during the Term;
	 
	(b)	 	the Tenant’s Proportionate Share of Operating Costs and the Tenant’s Proportionate
Share. of Taxes, during the Term, in each case payable in monthly instalments at
the times and in the manner provided in Section 4.06; and
	 
	(c)	 	all amounts (other than payments under Subsections 4.01 (a) and! (b)) payable by the
Tenant to the Landlord under this Lease, at the times and in the manner provided in this
Lease or, if not so provided, as reasonably required by the Landlord.

4.02 Security Deposit - The Landlord acknowledges receipt on or before the Commencement
Date of the amount set out in Item 6(a) of the Term Sheet (the “Security Deposit”) to be held by
the Landlord, without any liability whatsoever on the part of the Landlord for the payment of
interest thereon, as a security deposit for the faithful performance by the Tenant of the terms,
covenants and conditions of this Lease during the Term hereof and not to be applied on account
of Rent except as otherwise provided in this Section 4.02. The Security Deposit will not be a
limitation on the Landlord’s damages or other rights and remedies available under this Lease or
at law or equity, nor shall the Security Deposit be either a payment of liquidated damages or an
advance payment of Rent. The Landlord shall have no fiduciary responsibilities or trust
obligations whatsoever with regard to the Security Deposit and shall not assume the duties of a
trustee for the Security Deposit. The Security Deposit shall not be mortgaged, assigned or
encumbered by the Tenant and the Landlord shall not be bound by any such mortgage, assignment or
encumbrance. It is understood and agreed between the parties that any portion of the Security
Deposit may, at the Landlord’s

 

 

option, be applied toward the payment of overdue or unpaid Rent and may also be applied as
compensation to the Landlord for any loss or damage sustained with respect to the breach on the
part of the Tenant of any terms, covenants and conditions of this Lease, provided in all cases,
however, that the Tenant’s liability hereunder is not limited to the amount of the Security
Deposit. If during the Term any portion of the Security Deposit is so applied, then the Tenant
shall on written demand deliver to the Landlord a sufficient amount by certified cheque to
restore the Security Deposit to the original sum deposited. The Landlord shall refund to the
Tenant after the expiry date of this Lease any portion of the Security Deposit not used by the
Landlord after application by the Landlord to any damage incurred by the Landlord by reason of
the default of the Tenant under the terms of this Lease. It is further provided that the
Landlord will be discharged from all liability to the Tenant with respect to the Security
Deposit to the extent that it is transferred to any purchaser of the Landlord’s interest in the
Leased Premises.

4.03 Intent - It is the stated purpose and intent of the Landlord and the Tenant that
this Lease and the Rent shall be fully net to the Landlord.

4.04 Payment of Rent - General - All amounts payable by the Tenant to the Landlord
pursuant to this Lease shall be deemed to be Rent and shall be payable and recoverable as Rent
in the manner herein provided and the Landlord shall have all rights against the Tenant for
default in any such payment as in the case of arrears of Rent. Rent shall be paid to the
Landlord in lawful money of Canada, without deduction, abatement or set-off, at the local
address of the Landlord set out in Item 1 of the Term Sheet or to such other Person or such
other address as the Landlord may from time to time designate in writing. The Tenant’s
obligation to pay Rent shall survive the expiration or earlier termination of
this Lease. Any Rent or other sum received or accepted by the Landlord and paid by
anyone other than the Tenant, on behalf of the Tenant, shall not release or in any way affect
the covenants of the Tenant set out in this Lease and shall not be deemed to constitute or
evidence the Landlord’s consent to a Transfer under Article 12.00. Any Rent or other sum
received by the Landlord from or for the account of the Tenant while the Tenant is in default
under this Lease may be applied at the Landlord’s option to the satisfaction in whole or in
part of any of the obligations of the Tenant then due under this Lease in such manner as the
Landlord sees fit regardless of any designation or instruction of the Tenant to the contrary.

4.05 Partial Month - If the Commencement Date is a day other than the first day of
a calendar month, or if the Term ends on any day other than the last day of a calendar month,
Rent for the fractions of a month at the beginning and at the end of the Term shall be adjusted
pro rata on a per diem basis.

4,06 Payment of Tenant’s Occupancy Costs

	(1)	 	Estimate and Payment
	 
	(a)	 	The Landlord shall deliver to the Tenant a written estimate or a written revised
estimate of: (i) the Tenant’s Proportionate Share of Operating Costs for each Fiscal Year;
and (ii) the Tenant’s Proportionate Share of Taxes for each Fiscal Year. The Tenant shall
pay to the Landlord the amount so estimated in equal monthly instalments (except as
otherwise required in this Section 4.06 with respect to Property Taxes) in advance over
that Fiscal Year simultaneously with the Tenant’s payments on account of Basic Rent. If
the Landlord does not deliver to the Tenant such an estimate, the Tenant shall continue to
pay the Tenant’s Proportionate Share of Operating Costs and the Tenant’s Proportionate
Share of Taxes based on the last such estimate delivered by the Landlord until a further
estimate is delivered by the Landlord and the next payment on account of the Tenant’s
Operating Costs or Taxes shall be adjusted to take into account any over or under payment
in the preceding. instalments paid in the Fiscal Year to which the estimate or
revised estimate relates. Notwithstanding the foregoing, as soon as bills for all or any
portion of amounts included in Operating Costs and Taxes as so estimated are received, the
Landlord may bill the Tenant for the Tenant’s Proportionate Share thereof and the Tenant
shall pay the Landlord such amounts so billed (less all amounts previously paid on account
by the Tenant on the basis of the Landlord’s estimate as aforesaid) as Rent within 5 days
following demand therefor.
	 
	(b)	 	Within a reasonable time after the date in each calendar year when the final instalment
of Property Taxes is due in respect of commercial properties generally in the municipality
in which the Project is located (the “Final Payment Date”), the Landlord shall deliver a
statement (the “Tax Statement”) to the Tenant that: (i) specifies the Tenant’s
Proportionate Share of Taxes for the Property Tax Year; and (ii) sets out the total (the
“Prepayment Total”) of amounts payable under this Subsection 4.06(1)(b) that have been
paid by the Tenant between the Final Payment Date in the previous Property Tax Year and
the Final Payment Date of the current Property Tax Year. If the Prepayment Total, less any
amounts that were previously credited to the Tenant, and any amounts paid for arrears in
respect of previous Property Tax Years, (the “Net Prepayment Total”) is less than the
Tenant’s Proportionate Share of Taxes specified in the Tax Statement, the Tenant shall pay
the deficiency with the next monthly payment of Basic Rent. If the Net Prepayment Total
exceeds the Tenant’s Proportionate Share of Taxes specified in the Tax Statement, the
Landlord shall, unless the

 

 

	 	 	Tenant is then in default under this Lease, credit the excess to the Tenant on account of
the next succeeding payments of the Tenant’s Occupancy Costs. The Landlord may estimate
Property Taxes for the Property Tax Year following the then current Property Tax Year and
the Tenant shall continue after the Final Payment Date to make monthly payments in
advance, in amounts determined by the Landlord, for periods determined by the Landlord.
The monthly payments paid by the Tenant after the Final Payment Date shall be credited
against the Tenant’s Proportionate Share of Taxes for the subsequent Property Tax Year.
	 
	(c)	 	Any portion of the Tenant’s Proportionate Share of Taxes accrued with respect to the Term
or any part thereof paid by the Landlord prior to the Commencement Date shall be reimbursed
by the Tenant to the Landlord on the Commencement Date or on demand thereafter. Subject to
Sections 8.03 and 8.05, the Tenant shall pay the Tenant’s Proportionate Share of any
Property Taxes or the Landlord’s reasonable estimate thereof monthly in advance in the same
manner as for payment of the Tenant’s Proportionate Share of Operating Costs.
	 
	 	 	Notwithstanding the foregoing, the Landlord shall always have the right:
	 
	 	 	(i) to revise the amount of instalments on account of Property Taxes payable by the Tenant
to an amount that allows the Landlord to collect all Property Taxes payable by the Tenant
by the final due date of Property Taxes for the calendar year; and/or
	 
	 	 	(ii) to schedule and require payment by the Tenant of instalments on account of Property
Taxes payable by the Tenant such that by the final due date of Property Taxes for any
calendar year, the Tenant shall have paid to the Landlord the full amount of Property
Taxes payable by the Tenant for such calendar year, which arrangement may include payment
of instalments by the Tenant in a calendar year on account of Property Taxes payable by
the Tenant for the next calendar year.

(2) Annual Statement and Adjustment - The Landlord shall deliver to the Tenant within 120 days
after the end of each Fiscal Year or as soon after that date as the same shall be prepared by or
for the Landlord, a written statement setting out in reasonable detail the amount of the Tenant’s
Occupancy Costs for such Fiscal Year. If the total of monthly instalments of the Tenant’s
Occupancy Costs actually paid by the Tenant to the Landlord during that Fiscal Year differs, from
the amount of the Tenant’s Occupancy Costs payable for that Fiscal Year under Subsection 4.01(b),
the Tenant shall pay to the Landlord or, if the Tenant is not in default, the Landlord shall
credit to the Tenant on account of the next succeeding payments of the Tenant’s Operating Costs
and Taxes, as the case may be, the difference, without interest, within 30 days after the date of
delivery of the statement.

(3) Disputes - If the Tenant disputes the Landlord’s statement setting out Operating Costs or the
Tax Statement for any Fiscal Year, the Tenant shall provide notice thereof in writing to the
Landlord within 60 days of delivery of the applicable statement in respect of that Fiscal Year.
Notwithstanding delivery of such notice, the Tenant shall continue to pay Rent in accordance with
the terms of this Lease. In the event of a dispute, the determination of the Tenant’s
Proportionate Share of Operating Costs or the Tenant’s Proportionate Share of Taxes as made by the
Landlord’s auditors shall be conclusive and binding upon both the Landlord and the Tenant. All
costs of obtaining such determination shall be included in Operating Costs; provided that if the
Landlord’s auditors confirm the Landlord’s calculations within a variance of 5%, the Tenant shall
be solely responsible for the entire cost of such determination and shall. pay such
costs to the Landlord forthwith upon demand. If the Tenant and any one or more of the other
tenants in the Project are responsible to pay such costs, the Tenant shall be jointly and
severally liable with such other tenant or tenants.

4.07 Resolution of Disputes - In the event of any disagreement as to the amount or
propriety of any amount included in Operating Costs, a certificate of the auditor of the
Landlord, acting reasonably, shall be conclusive as to the amount of Operating Costs for any
period to which such certificate relates.

4.08 Area Determination - The Landlord may from time to time, as it deems necessary,
cause the Rentable Area of the Leased Premises and the Total Rentable Area of the Building or any
part thereof to be recalculated or remeasured and the cost thereof shall be included in Operating
Costs (except as otherwise provided in this Section 4.08). Upon any such recalculation or
remeasurement, Rent (including without limitation Basic Rent) shall be adjusted accordingly. If
any calculation or determination by the Landlord of the Rentable Area of any premises (including
the Leased Premises) is disputed or called into question, it shall be calculated or determined by
the Landlord’s architect or surveyor from time to time appointed for that purpose, whose
certificate shall be conclusive and binding upon the parties hereto. The cost of such calculation
or determination shall be included in Operating Costs; provided that if the Tenant disputes the
Landlord’s calculation or determination and the calculation or determination by the Landlord’s
architect or surveyor agrees with the Landlord’s calculation or determination within a 2%
variance, the Tenant shall pay the full cost of such calculation or determination forthwith upon
demand. If the Tenant and any one or more

 

 

of the other tenants in the Project are responsible to pay such costs, the Tenant shall be
jointly and severally liable with such other tenant or tenants.

If any error shall be found in the calculation of the Rentable Area of the Leased Premises or in
the calculation of the Tenant’s Proportionate Share, Rent (including without limitation Basic
Rent) shall be adjusted for the Fiscal Year in which the error is discovered and for the Fiscal
Year preceding the Fiscal Year in which the error was discovered, if any, and thereafter, but
not for any prior period.

4.09 Vacancy - if any part of the Building available for leasing is not occupied, the
Landlord shall have the right, in respect of amounts forming part of Operating Costs which vary
proportionately with occupancy, to include in Operating Costs a larger amount of costs, which
larger amount shall be based on a reasonable estimate of the actual cost which would have been
incurred if the unoccupied parts of the Building available for leasing were occupied, it being
intended hereby that the Landlord shall obtain, to the extent reasonably possible, full
reimbursement of Operating Costs attributable to or in respect of occupied premises, and not
that: (i) the Tenant shall subsidize Operating Costs incurred by the Landlord attributable to or
in respect of vacant premises; or (ii) the Landlord shall recover more than actual Operating
Costs.

4.10 Method of Payment

(1) Unless the Landlord advises otherwise in writing, the Tenant shall provide to the Landlord
on or before the Commencement Date and thereafter on or before the beginning of each Fiscal Year
during the Term and within 10 days after delivery of the Landlord’s estimate of any payment
constituting Rent, postdated cheques in the amount of Rent for each month during that Fiscal
Year.

(2) At the Landlord’s request, the Tenant shall participate in a pre-authorized payment plan
whereby the Landlord will be authorized to debit the Tenant’s bank account each month or from
time to time for Rent payable on a monthly basis, and any amount payable provisionally on an
estimated basis. The Tenant hereby undertakes to execute and deliver such documents as may
reasonably be required to give full force and effect to this Subsection 4.10(2) within 5 days of
such request.

ARTICLE 5.00 - USE AND OCCUPATION

5.01 Use of Leased Premises - The Tenant shall use and occupy only the usable part of
the Leased Premises and only for office purposes to carry on the business set out in Item 9 of
the Term Sheet and shall not use or permit the Leased Premises or any part thereof to be used or
occupied for any other purpose or business except as otherwise expressly permitted under this
Lease or by any Person other than the Tenant. The Tenant shall be responsible for obtaining at
its expense all necessary approvals, licences and permits, including but not limited to zoning,
development, building, occupancy and business approvals, licences and permits, for its intended
use of the Leased Premises and shall submit all applications for such approvals, licences and
permits to the Landlord for its consent (which consent, if the application pertains to the
zoning applicable to the Project or may adversely affect the value or use of the Project or any
part thereof, may be arbitrarily withheld by the Landlord) prior to making application.
Notwithstanding the Landlord’s consent to an application, the Tenant shall indemnify and defend
the Landlord and hold it harmless from and against any and all Claims incurred or suffered by
the Landlord directly or indirectly arising out of the Tenant’s application for such approvals,
licences or permits or the resulting approvals, licences and permits with respect to the use,
intended or otherwise, of the Leased Premises whether such Claims are in respect of the Leased
Premises or in respect of the Building or the Project. The Landlord makes no representation
whether or not necessary approvals can be obtained for the Tenant’s use or intended use. The
Landlord makes no representation or warranty, express or implied, that the present or future use
of the Leased Premises, if such use is anything other than office use, is legally fit for the
intended use, or complies with any law, by-law or regulation governing the use of the Leased
Premises.

5.02 Compliance with Laws - The Tenant shall promptly and at its own cost comply with
all present and future laws, regulations and orders relating to, and obtain and maintain in
force all approvals, permits, licences and registrations required for, any of the following:

	(a)	 	the occupation or use of and the conduct of any business in or from the Leased Premises;
	 
	(b)	 	the condition of the Leasehold Improvements, fixtures, furniture and equipment installed
therein;
	 
	(c)	 	Pollutants and the protection of the environment so far as those laws, regulations and
orders or any of them relate to the Project; and
	 
	(d)	 	the making by the Tenant of any repairs, changes or improvements in or to the Project;

and the Tenant shall immediately give written notice to the Landlord of the occurrence of any
event in the Leased Premises constituting an offence thereunder or being in breach thereof and
if the

 

 

Tenant shall, either alone or with others, cause the happening of any such event, the Tenant
shall immediately give the Landlord 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
foregoing provisions of this Section.

The Tenant agrees that if the Landlord determines in its sole discretion that the Landlord, its
property, its reputation or the Leased Premises or any one or more of the foregoing is placed in
any jeopardy, as determined by the Landlord, by the requirements for any work required to ensure
compliance with the foregoing provisions of this Section 5.02, or the Tenant is unable to fulfil
its obligations under this Section, the Landlord may itself undertake such work or any part
thereof at the cost and expense of the Tenant.

The Tenant shall, at its own expense, remedy any damage to the Leased Premises caused by such
event or work or by the performance of the Tenant’s obligations under this Section.

If alterations or improvements to the Leasehold Improvements or to the Leased Premises are
necessary to comply with any of the foregoing provisions of this Section or with the requirements
of insurance carriers, the Tenant shall forthwith complete such work, complying always with the
applicable provisions of this Lease, to the extent that it can be done within the Leased Premises
and in any event shall pay the entire cost of alterations and improvements so required.

In the event that structural repairs or upgrading of the Building, including but not limited to
seismic upgrading, is required to permit the Tenant’s use, the Landlord may, at its sole
discretion, terminate this Lease.

5.03 Prohibited Uses - The Tenant shall not commit, cause or permit any nuisance in or
about or any damage to the Leased Premises or any part thereof, the Building, the Project or any
of the Leasehold Improvements or goods or fixtures therein, any overloading of the floors of the
Leased Premises or any use or manner of use causing annoyance to other tenants or occupants of
the Project. Without limiting the generality of the foregoing, the Tenant shall not use or permit
the use of any portion of the Leased Premises for any dangerous, illegal, noxious, odorous or
offensive trade, business or occurrence. The Tenant shall keep the Leased Premises free of
debris, Pollutants and anything of a dangerous, noxious, odorous or offensive nature or which
could create a fire hazard (through undue load on electrical circuits or otherwise) or vibration,
heat, odour or noise detectable outside the Leased Premises in the sole discretion of the
Landlord. The Tenant shall not use equipment in the Leased Premises in a manner that results in
its being seen or heard outside the Leased Premises.

5.04 Common Elements - The Tenant and its employees and invitees shall be entitled to
use, in common with others entitled thereto, for purposes for which they are intended and only
during such hours as the Landlord may designate from time to time, the Common Elements. The
Tenant and its employees and invitees shall not obstruct the Common Elements or use the Common
Elements other than for their intended purposes and then only in accordance with the rules and
regulations set by the Landlord from time to time.

5.05 Hazardous Use - The Tenant shall not do, omit to do or permit to be done anything
which will cause or may have the effect of causing the cost of the Landlord’s insurance in
respect of the Project or any part thereof to be increased at any time during the Term or any
policy of insurance on or relating to the Project to be subject to cancellation. Without waiving
or limiting the foregoing prohibition, the Landlord may demand and the Tenant shall pay to the
Landlord upon demand, the amount of any increase in the cost of insurance caused by anything so
done or omitted or permitted to be done. The Tenant shall forthwith upon the Landlord’s request
comply with the requirements of the Landlord’s insurers, cease any activity complained of and
make good any circumstance which has caused any increase in insurance premiums or the
cancellation or threatened cancellation of any insurance policy. In determining the amount of
increased premiums for which the Tenant is responsible, a schedule or statement issued by the
Person who computes the insurance rates for the Landlord showing the components of the rate shall
be conclusive evidence of the items that make up the rate. If any policy of insurance in respect
of the Project or any part thereof is cancelled or becomes subject to cancellation by reason of
anything so done or omitted or permitted to be done, the Landlord may without prior notice
terminate this Lease and re-enter the Leased Premises.

5.06 Tenant’s Security interest - The Tenant shall not, without the Landlord’s prior
written consent, create a security interest in Leasehold improvements installed by the Tenant or
the Landlord in the Leased Premises.

5.07 Rules and Regulations - The Tenant shall observe and cause its employees, servants,
agents, invitees, customers, subtenants, licensees and others over whom the Tenant can reasonably
be expected to exercise control to observe the rules and regulations attached as Schedule C
hereto and such further and other reasonable rules and regulations and amendments and additions
thereto as may be made by the Landlord and notified to the Tenant by mailing a copy
thereof. to the Tenant or by posting same in a conspicuous place in the Building. All
such rules and regulations now or hereafter in force shall be read as forming part of this Lease;
provided that if there is a conflict

 

 

between the rules and regulations and this Lease, the terms of this Lease shall prevail. The
Landlord shall not be responsible to the Tenant for the non-observance of any rule or regulation
or the terms of any lease or agreement to lease by any other tenant of the Project.

5.08 Permitted Signs - The Tenant shall use only such identification signs as are
prescribed by the Landlord from time to time and as comply with all applicable by-laws,
regulations and codes as to size, location, arrangement, type of lettering, colour; appearance
and design for uniform use by office tenants in the Building. Such signs shall contain only the
name under which the Tenant carries on business.

5.09 Prohibited Signs - Except with the prior written consent of the Landlord, which
consent may be arbitrarily withheld or rescinded in the Landlord’s sole discretion, or as
provided in Section 5.08, the Tenant shall not paint, display, inscribe, place or affix any
sign, symbol, notice, advertisement, display or direction of any kind anywhere outside the
Leased Premises or on the interior of any glass, windows or doors or elsewhere within the Leased
Premises so as to be visible from the outside of the Leased Premises.

5.10 Window Coverings - Without the prior written consent of the Landlord, the Tenant
shall not install any blinds, drapes, curtains or any other window coverings in the Leased
Premises and shall not remove, add to or change the blinds, drapes, curtains or other window
coverings installed by the Landlord from time to time. The Tenant shall keep all window
coverings open or closed at various times as the Landlord may from time to time direct by the
rules and regulations or otherwise.

5.11 Parking - Any Parking Facilities provided by the Landlord shall at all times be
subject to the exclusive control and management of the Landlord or those whom the Landlord may
designate from time to time. The Landlord shall have the right from time to time to establish,
modify and enforce reasonable rules and regulations with respect to any Parking Facilities and
shall have the right from time to time:

	(a)	 	to expand, reduce, or change the area, level, location and arrangement of the Parking
Facilities and to construct any Parking Facilities;
	 
	(b)	 	to enforce parking charges with appropriate provisions for free parking ticket validating
by tenants of the Building;
	 
	(c)	 	to temporarily close all or any portion of the Parking Facilities to such extent as may,
in the Landlord’s opinion, be legally sufficient to prevent a dedication thereof or the
accrual of rights to any Person or the public;
	 
	(d)	 	to temporarily obstruct or close off all or any part of the Parking Facilities for the
purpose of maintenance or repair; and
	 
	(e)	 	to do and perform such other acts in and to the Parking Facilities as, in the judgment of
the Landlord, shall be advisable with a view to the improvement of the convenience of and
use of the Building by tenants, their employees and invitees.

The Landlord will operate and maintain the Parking Facilities in such manner as the Landlord in
its sole discretion shall determine from time to time. Without limiting the scope of such
discretion, the Landlord shall have the sole right to employ all personnel and make all rules
and regulations pertaining to and necessary for the proper operation and maintenance of the
Parking Facilities. The Tenant shall participate in any free parking or other ticket validation
system established by the Landlord and abide by all rules and regulations pertaining thereto and
the Tenant shall pay to the Landlord monthly, together with payments on account of Basic Rent,
all parking charges attributable to the Tenant as evidenced by parking tickets validated by the
Tenant in accordance with any system established by the Landlord.

5.12 Authorization of Enquiries - The Tenant hereby authorizes the Landlord to make
enquiries from time to time of any government or municipality or governmental or municipal
agency with respect to the Tenant’s compliance with any and all laws and regulations pertaining
to the Tenant or the business conducted in the Leased Premises including, without limitation,
laws and regulations pertaining to Pollutants and the protection of the environment; and the
Tenant covenants and agrees that the Tenant shall from time to time provide to the Landlord such
written authorization as the Landlord may reasonably require in order to facilitate the
obtaining of such information.

5.13 Records - The Tenant shall keep on the Leased Premises or at the Tenant’s head
office complete records of, all goods stored on, or processed, manufactured, packaged
or used in any process in the Leased Premises by the Tenant and by any other occupant of the
Leased Premises or any part thereof. The Landlord may examine such records and the Tenant shall
provide extracts from or copies thereof all as required by the Landlord from time to time. This
requirement to maintain such records shall survive the expiry or earlier termination of the
Term.

 

 

5.14 Overloading - The Tenant shall not install or permit the installation of equipment
or storage of items that, in the opinion of the Landlord’s engineer, overloads the capacity of
any utility or of any electrical or mechanical facility in the Project or which may exceed the
load-bearing capacity of the floors of the Project. If damage is caused to the Leased Premises
or to the Project as a result of any installation in contravention of this Section, the Tenant
shall repair the damage or, at the Landlord’s option, pay to the Landlord on demand the cost of
repairing the damage incurred by the Landlord.

5.15 Telecommunications

(1) The Tenant may utilize a telecommunication service provider of its choice with the
Landlord’s prior written consent, which consent shall not be unreasonably withheld, subject to
the provisions of this Lease, including but not limited to the following:

	(a)	 	prior to commencing any work in the Project, the service provider shall execute and
deliver the Landlord’s standard form of licence agreement, which shall include a provision
for the Landlord to receive compensation for the use of the space for the service
provider’s equipment and materials;
	 
	(b)	 	the Landlord shall incur no expense or liability whatsoever with respect to any aspect
of the provision of telecommunication services, including without limitation, the cost of
installation, service, materials, repairs, maintenance, removal, interruption or loss of
telecommunication service;
	 
	(c)	 	the Landlord must first reasonably determine that there is sufficient space in the
risers of the Building for the installation of the service provider’s wiring and cross
connect; and
	 
	(d)	 	the Tenant shall indemnify and hold harmless the Landlord for all losses, claims,
demands, expenses and judgments against the Landlord caused by or arising out of, either
directly or indirectly, any acts or omissions by the service provider or the Tenant or
those for whom either of them is responsible at law.

(2) The Tenant shall be responsible for the costs associated with the supply and installation of
telephone, computer and other communication equipment and systems and related wiring within the
Leased Premises to the boundary of the Leased Premises for hook up or other integration with
telephone and other communication equipment and systems of a telephone or other communication
service provider, which equipment and systems of the service provider are located or are to be
located in the Building pursuant to the Landlord’s standard form of licence agreement and,
subject to the provisions of Section 14.01, for the removal of same.

(3) The Landlord shall supply space in risers in the Building and space on floor(s) of the
Building in which the Leased Premises are located, the location of which shall be designated by
the Landlord in its discretion, to telecommunication service providers who have entered into the
Landlord’s standard form of licence agreement for the purpose, without any cost or expense to
the Landlord therefor, of permitting installation in such risers and on such floor(s) of
telephone and other communication services and systems (including data cable patch panels) to
the Leased Premises at a point designated by the Landlord.

(4) The Landlord shall have the right to assume control of wiring, cables and other
telecommunication equipment in the Building and may designate them as part of the Common
Elements.

ARTICLE 6.00 SERVICES, MAINTENANCE, REPAIR AND ALTERATIONS BY LANDLORD

6.01 Operation of Project - During the Term, and so long as no Event of Default shall
exist, and so long as no event shall occur which, with the passage of time or the giving of
notice or both, would constitute an Event of Default, the Landlord shall operate and maintain
the Project in accordance with applicable laws and regulations and with standards from time to
time prevailing for similar projects in the area in which the Project is located and, subject to
payment by the Tenant of Rent, shall provide the Services set out in this Article 6.00; provided
that the Landlord shall not be responsible for operating, maintaining, repairing or replacing
any systems, facilities or equipment to the extent that the operation, maintenance, repair or
replacement thereof are specifically stated in this Lease to be the responsibility of the
Tenant.

6.02 Building Services and Facilities - The Landlord shall provide:

	(a)	 	washrooms accessible to the Leased Premises for the use of the Tenant, its employees and
invitees in common with other persons entitled thereto;
	 
	(b)	 	domestic running water to the building standard washrooms in the Leased Premises, if
any, and to washrooms available for the Tenant’s use in common with others entitled
thereto;

 

 

	(c)	 	access to and egress from the Leased Premises for use by the Tenant, its employees and
invitees in common with other persons entitled thereto, provided that the Landlord may
restrict access for security purposes or require that all persons seeking access produce
identification;
	 
	(d)	 	heating, ventilation and air conditioning to the Building, including the Leased Premises, to
a level sufficient to maintain therein conditions of reasonable temperature and comfort
provided that, unless otherwise agreed by the parties, a full standard of interior climate
control shall only be maintained during those hours and on those days established from time
to time by the Landlord as being operating periods for the Building, having reasonable regard
to energy conservation;
	 
	(e)	 	lighting and electrical power to the Common Elements as reasonably required;
	 
	(f)	 	electrical power to the Leased Premises for lighting and for standard office equipment
capable of operating from the voltage circuits available and then standard for the Building;
	 
	(g)	 	janitorial services to the Leased Premises and Common Elements to a standard consistent from
time to time with similar buildings in the area in which the Building is located;
	 
	(h)	 	a directory board located in the Common Elements providing identification of the tenants in
the Building in such manner and containing such information as the Landlord may determine;
and
	 
	(i)	 	subject to Section 5.15; appropriate ducts for bringing telephone services to the Leased
Premises.

6.03 Maintenance, Repair and Replacement - Subject to the provisions of Article 10.00 and
payment by the Tenant of Rent, the Landlord shall operate, maintain, repair and replace the
systems, facilities and equipment necessary for the proper operation of the Project and for
provision of the Landlord’s Services set out in Section 6.02 (except as may be installed by or be
the property of the Tenant) and shall maintain and repair the foundations, structure and roof of
the Building and repair damage to the Building which the Landlord is obligated to insure against
under Article 9.00, provided that:

	(a)	 	if and so long as all or part of the systems, facilities and equipment in the Project or the
supply of utilities to the Project are destroyed, damaged or interrupted, the Landlord shall
have a reasonable time within which to complete any necessary repair or replacement and,
during that time, shall only be required to maintain such Services as are reasonably possible
in the circumstances;
	 
	(b)	 	the Landlord may temporarily discontinue such Services or any of them at such times as may
reasonably be necessary;
	 
	(c)	 	the Landlord shall use reasonable diligence in carrying out its obligations under this
Section 6.03, but shall not be liable under any circumstances for any consequential damages,
whether direct or indirect, to any Person or property resulting from any failure to do so;
	 
	(d)	 	no reduction or discontinuance of Services under this Section 6.03 shall be construed as a
breach of the Landlord’s covenant for quiet enjoyment or as an eviction of the Tenant or,
except as specifically provided otherwise in this Lease, release the Tenant from any
obligation under this Lease;
	 
	(e)	 	the Landlord shall not be liable under any circumstances for any damage caused by
interruption or failure of any satellite, telecommunications system, utility, wiring,
elevator or escalator;
	 
	(f)	 	the Landlord shall have no responsibility for any inadequacy of performance of any systems
within the Leased Premises if the Leased Premises or the use thereof depart from the design
criteria for such systems as established by the Landlord for the Building; and
	 
	(g)	 	nothing contained herein shall derogate from the provisions of Article 10.00.

6.04 Alterations / Renovations by Landlord - During the Term or any renewal or extension
thereof, it is understood and agreed that, if the Landlord intends to make changes, additions or
improvements to or renovate the Project or any part thereof, of which the Leased Premises form a
part (the “Renovation Work”), notwithstanding anything contained in this Lease to the contrary,
the Landlord, its servants, agents, contractors and representatives may proceed with the
Renovation Work without further consent or approval of the Tenant and the Tenant hereby
irrevocably grants to the Landlord its consent to the carrying out of the Renovation Work;
provided that the Renovation Work shall not materially interfere with or adversely affect the
business of the Tenant carried on in the Leased Premises. It is specifically understood and agreed
that there shall be no compensation

 

 

paid to the Tenant nor shall there be any abatement of Rent in connection with the Renovation
Work. In exercising its rights pursuant to this Section 6.04, the Landlord shall be entitled to:

	(a)	 	enter the Leased Premises from time to time to make changes or additions to the structure,
systems, facilities and equipment in the Leased Premises where necessary to serve the Leased
Premises or other parts of the Building;
	 
	(b)	 	limit from time to time as may be necessary by reason of the Renovation Work, ingress to
and egress from the Leased Premises and/or the Project;
	 
	(c)	 	change, add to, diminish, demolish, dedicate for public purposes part or parts of, improve
or alter any part of the Project not in or forming part of the Leased Premises; and
	 
	(d)	 	change, add to, diminish, improve or alter the location and extent of the Common Elements.

The Landlord agrees to use commercially reasonable efforts to give to the Tenant notice of its
intention to proceed with the Renovation Work and the Tenant shall cooperate with the Landlord in
order to allow the Renovation Work to be completed as expeditiously as possible. It is
specifically agreed by the Landlord and the Tenant that the Landlord shall not, ‘by reason of
exercising its rights pursuant to this Section 6.04, be in default or be deemed to be in default
of any covenant or proviso contained in this Lease or at law.

6.05 Access by Landlord - The Tenant shall permit the Landlord to enter the Leased
Premises at any time in case of an emergency or a health related issue, either real or perceived,
and otherwise during normal business hours where such entry will not unreasonably disturb or
interfere with the Tenant’s use of the Leased Premises or operation of its business, to: (i)
examine, inspect and show the Leased Premises for purposes of leasing, sale or financing; (ii)
provide Services or make repairs, replacements, changes or alterations as provided for in this
Lease; or (iii) take such steps as the Landlord may deem necessary for the safety, improvement or
preservation of the Leased Premises or the Project. The Tenant shall cooperate with the Landlord
in any such showing of the Leased Premises. The Landlord shall, whenever possible, consult with or
give reasonable notice to, the Tenant prior to entry but no such entry shall constitute an
eviction or a breach of the Landlord’s covenant for quiet enjoyment or entitle the Tenant to any
abatement of Rent.

6.06 Energy Conservation - The Landlord shall be deemed to have observed and performed its
obligations under this Lease, including those relating to the provision of utilities and Services,
if in so doing it acts in accordance with a directive, policy or request of an authority having
jurisdiction in the field of energy conservation, security or environmental matters.

6.07 Supervision and Extended Services - The Landlord, if it shall from time to time so
elect, shall have the right to supervise the moving of furniture or equipment of the Tenant and
(in addition to supervising the Tenant’s work as provided for in this Lease) to supervise the
making of repairs conducted within the Leased Premises and the exclusive right to supervise or
make deliveries to the Leased Premises. In addition, and by arrangement with the Tenant, the
Landlord may provide extended cleaning or other services to the Tenant in addition to those
normally supplied and referred to in this Lease. In each case, the Landlord’s costs and expenses
incurred with respect thereto together with a reasonable administration fee shall be paid to the
Landlord by the Tenant from time to time promptly upon receipt of invoices from the Landlord.

6.08 Landlord’s Work The Tenant agrees that it has entered into this Lease on the express
understanding that, unless otherwise specifically provided in Schedule D or Schedule E, the Leased
Premises are being leased “as is” and that the Landlord’s work in respect of the Leased Premises
is limited to the scope delineated as Landlord’s work in Schedule D. All other improvements to the
Leased Premises shall be performed at the sole expense of the Tenant in accordance with the terms
of this Lease including, but not limited to, Section 7.04.

6.09 Control by Landlord - The Tenant agrees that the Landlord shall have control of the
Project and, without limiting the generality of anything contained elsewhere in this Lease, the
Landlord may make such use of the Common Elements and permit others to make such use of the Common
Elements as the Landlord may from time to time determine subject, in the case of use by others, to
such terms and conditions and for such consideration as the Landlord may in its discretion
determine, provided that such uses do not materially obstruct access to the Leased Premises and
the Landlord may temporarily close all or any part or parts of the Project to such extent as may,
in the opinion of the Landlord or any Consultants engaged by the Landlord in that regard, be
legally sufficient to prevent a dedication thereof or the accrual of rights therein to any Person
or the public.

ARTICLE 7.00 - PAYMENT FOR SERVICES AND MAINTENANCE, REPAIR AND ALTERATIONS BY TENANT

7.01 Utilities - In addition to the payment of the Tenant’s Occupancy Costs and
notwithstanding Sections 6.01 and 6.02, the Tenant shall be responsible for the cost of all
utilities including electricity

 

 

supplied to the Leased Premises. The Tenant shall not, without the prior written approval of the
Landlord, which may be arbitrarily withheld, install or cause to be installed in the Leased
Premises any equipment that will require additional utility usage or any telecommunications lines
and/or conduits in excess of that normally required for office premises. If, with the Landlord’s
approval, such additional equipment is installed, the Tenant shall be solely responsible for such
excess utility usage. If utilities are supplied to the Tenant through a meter common to other
tenants in the Project (there being no obligation on the Landlord to install separate meters), the
Landlord shall pay the cost of the utilities and apportion the cost pro rata among the tenants
supplied through the common meter, based on all relevant factors including, but not limited to,
the hours of use, number and types of lights and electrical equipment and the proportion of each
tenant’s Rentable Area to the Rentable Area of all tenants to which the common meter relates. Upon
receipt of the Landlord’s statement of apportionment, the Tenant shall promptly reimburse the
Landlord for all amounts apportioned to the Tenant by the Landlord; provided that the Landlord may
elect by notice to the Tenant to estimate the amount which will be apportioned to the Tenant and
require the Tenant to pay that amount in monthly instalments in advance simultaneously with the
Tenant’s payments of Basic Rent. Notwithstanding the foregoing, and whether the Leased Premises
are separately metered or not, the Landlord may purchase in bulk from the utility supplier the
aggregate utility requirements of the Project at the applicable rates determined by a single meter
on the Project and may, in billing the Tenant for its share of such utility, apply a scale of
rates not greater than the current scale of rates at which the Tenant would from time to time be
purchasing the whole of its utilities required and consumed in respect of the Leased Premises if
the Tenant were purchasing directly from the utility supplier. The Tenant shall upon the
Landlord’s request install a separate utility meter or meters in the Leased Premises at the
Tenant’s expense.

In addition to the payments to the’ Landlord required by this Article 7.00, the Tenant shall pay
all rates, charges, costs and expenses as may be assessed or levied by any supplier of utilities
to the Tenant other than those supplied by the Landlord.

7.02 Lights - In addition to the payment of the Tenant’s Occupancy Costs and
notwithstanding Sections 6.01 and 6.02, except to the extent the same is included in Operating
Costs, the Tenant shall pay to the Landlord monthly in advance, with its payments of Basic Rent, a
reasonable amount as determined by the Landlord in respect of replacement of building standard
fluorescent tubes, light bulbs and ballasts in the Leased Premises on a periodic basis or as
required from time to time and the costs of cleaning, maintaining and servicing of the electrical
light fixtures in the Leased Premises.

7.03 Heating, Ventilation and Air Conditioning - In addition to the payment of the
Tenant’s Occupancy Costs and notwithstanding Sections 6.01 and 6.02, the Tenant shall be
responsible for the cost of all heating, ventilation and air conditioning required in the Leased
Premises or any part thereof in excess of that required to be provided by the Landlord under
Section 6.02(d). If at any time during the Term the Landlord shall determine that the cost of the
heating, ventilation and air conditioning required in the Leased Premises or any part thereof is
in excess of that normally required in other parts of the Building which are used for normal
office purposes, the Landlord may deliver to the Tenant a statement in writing setting out the
cost of the excess and upon receipt of the statement from time to time the Tenant shall promptly
reimburse the Landlord for the amount shown in the statement as attributable to the Leased
Premises.

7.04 Alterations by Tenant - The Tenant may from time to time at its own expense make
changes, additions and improvements to the Leased Premises to better adapt the same to its
business, provided that any change, addition or improvement shall:

	(a)	 	comply with the requirements of the Landlord’s insurers and any governmental or municipal
authority having jurisdiction;
	 
	(b)	 	be made only if, prior to preparation of any plans and specifications and prior to
commencement of any work in the Leased Premises, including, without limiting the generality
of the foregoing, any demolition, construction or alterations, the Tenant has determined
through testing at its own cost and expense what Pollutants, if any, are present in the
Leased Premises and, if the Tenant fails to do so, the Tenant acknowledges and agrees that it
shall indemnify and hold harmless the Landlord from and against any and all Claims growing or
arising out of the Tenant’s failure to do so;
	 
	(c)	 	be made only after detailed plans and specifications therefor have been submitted to the
Landlord and received the prior written approval of the Landlord, all at the expense of the
Tenant, and should the Landlord provide its written approval, such approval shall not be
deemed to mean that the proposed changes, additions or improvements comply with any existing
or future municipal by-laws or any other applicable laws, by-laws, codes or requirements. All
costs incurred with respect to such approval shall be at the expense of the Tenant. Any
changes, additions and/or improvements affecting the Building’s electrical, mechanical and/or
structural components shall only be performed by contractors selected by the Landlord (the
“Landlord’s Contractors”). A list of the Landlord’s Contractors is available upon request;

 

 

	(d)	 	equal or exceed the then current standard for the Building;
	 
	(e)	 	be carried out in a good and workmanlike manner and, subject to Subsection 7.04(c), only
by Persons selected by the Tenant and approved in writing by the Landlord who shall, if
required by the Landlord, deliver to the Landlord before commencement of the work,
performance and payment bonds as well as proof of workers’ compensation and public liability
and property damage insurance coverage, with the Landlord and the Landlord’s Agent and
nominee (if any) named as additional insureds, in amounts, with companies and in a form
reasonably satisfactory to the Landlord, which shall remain in effect during the entire
period in which the work will be carried out; and
	 
	(f)	 	be made only after the Tenant has provided to the Landlord evidence of all requisite
permits and licences and any other information reasonably required by the Landlord.

Upon completion of such change, addition or improvement, the Tenant shall provide to the Landlord
as-built drawings and/or a CAD disk of same in a format useable by the Landlord, together with
evidence satisfactory to the Landlord of a final inspection of such change, addition or
improvement (including inspection of mechanical and electrical systems where applicable) by the
authority which issued the permit or licence for same.

7.05 Tenant’s Trade Fixtures and Personal Property - The Tenant may install in the Leased
Premises its usual trade fixtures and personal property in a proper manner; provided that no
installation or repair shall interfere with or damage the mechanical or electrical systems or the
structure of the Building. If the Tenant is not then in default hereunder, the trade fixtures and
personal property installed in the Leased Premises by the Tenant may be removed by the Tenant
from time to time in the ordinary course of the Tenant’s business or in the course of
reconstruction, renovation or alteration of the Leased Premises by the Tenant, subject to the
provisions of Article 14.00, and provided that the Tenant promptly repairs at its own expense any
damage to the Leased Premises and the Building resulting from the installation and removal and
provided further that in the event of removal of trade fixtures, except at the expiration of the
Term, the Tenant shall promptly replace such trade fixtures with trade fixtures of equal or
greater quality and value, subject to, the provisions of Section 14.01.

7.06 Maintenance and Repair - Except to the extent that the Landlord is specifically
responsible therefor under this Lease, the Tenant, at its cost, shall maintain, repair and
replace the Leased Premises, all Leasehold Improvements and all apparatus therein in good order
and condition, and in compliance with the requirements of all authorities having jurisdiction,
including without limitation:

	(a)	 	keeping the Leased Premises and the immediate surrounding area in a clean and tidy
condition and free of debris and garbage;
	 
	(b)	 	repainting and redecorating the Leased Premises and cleaning and maintaining window
coverings and carpets at reasonable intervals as reasonably required by the Landlord;
	 
	(c)	 	making repairs and replacements as needed to the Leased Premises including, without
limitation, to internal and external glass within or on the exterior of the Leased Premises
(with the exception of glass comprising the curtain wall), doors, hardware, partitions,
walls, fixtures, lighting and plumbing fixtures, wiring, piping, ceilings, floors and
thresholds in the Leased Premises; and
	 
	(d)	 	keeping the Leased Premises in such condition as to comply with the requirements of any
authority having jurisdiction.

7.07 Inspection - The Landlord and its Consultants may from time to time enter upon the
Leased Premises:

	(a)	 	to inspect the Leased Premises and its condition; and
	 
	(b)	 	to inspect any work being done by the Tenant both during the course of such work and
following completion thereof.

If the Landlord or the Landlord’s Agent shall determine that the work being done by the Tenant is
in breach of this Lease or fails to comply with the requirements of this Lease in any respect,
the Tenant shall forthwith remedy such breach or failure to comply and shall desist from
continuing the same. The Tenant shall, at its own cost, make good any deficiency in such work and
remedy any failure to comply with the requirements of this Lease.

7.08 Failure to Maintain - If the Tenant fails to perform any obligation under this
Article 7.00, then on not less than 5 days’ notice to the Tenant, the Landlord may enter the
Leased Premises and perform the obligation without liability to the Tenant for any loss or damage
thereby incurred. The Tenant shall promptly after receiving the Landlord’s invoice therefor
reimburse the Landlord for all costs incurred by the Landlord in performing the obligation plus
20% of the costs for overhead and

 

 

supervision.

7.09 Liens - The Tenant shall:

	(a)	 	pay promptly when due all costs for work done or caused to be done or goods affixed by the
Tenant in the Leased Premises which could result in any lien or encumbrance on the
Landlord’s interest in the Project or any part thereof, or the filing or registration of
any
security interest or notice thereof;
	 
	(b)	 	keep the title to the Project, including every part thereof and the Leasehold
Improvements, free and clear of any lien, encumbrance or security interest or notice
thereof; and
	 
	(c)	 	indemnify and hold harmless the Landlord against any Claims arising out of the supply of
goods, materials, services or labour for the work.

The Tenant shall immediately notify the Landlord of any lien, encumbrance, claim of lien,
security interest, or notice thereof or other action of which it has, or reasonably should have,
knowledge and which affects the title to the Project or any part thereof and, except for those
contemplated, by Section 15.25, shall cause the same to be removed within 5 Business Days (or
such additional time as the Landlord may consent to in writing), failing which the Landlord may
take such action as the Landlord deems necessary to remove same and the entire cost thereof shall
immediately become due and payable by the Tenant to the Landlord. The Tenant shall not affix or
cause to be affixed to the Project any goods acquired under conditional sale or with respect to
which any lien, encumbrance or security interest exists. The Landlord may from time to time post
such notices in such places on the Leased Premises as the Landlord considers advisable to prevent
or limit the creation of any liens upon the Project or any part thereof.

7.10 Roof - The Tenant shall not be entitled to install upon the roof of the Building any
equipment except as consented to in writing by the Landlord, which consent may be arbitrarily
withheld, but if given shall be subject to whatever conditions the Landlord, in its sole
discretion, deems necessary in the circumstances.

ARTICLE 8.00 - TAXES

8.01 Taxes Payable by Landlord - The Landlord covenants and agrees to pay all
Taxes assessed against the Landlord or the Project on account of its ownership when due (except
for Business Taxes payable directly to the taxing authority by the Tenant under Subsection
8.02(b) and similar taxes levied or assessed separately from Taxes and payable directly to the
taxing authority by other tenants or occupants of the Project) and subject to the provisions
hereinafter contained in this Article 8.00. Provided however, that the Landlord may defer payment
of any such Taxes or defer compliance with any statute, law, by-law, regulation or ordinance in
connection with the levy of such Taxes in each case to the fullest extent permitted by law as
long as it shall diligently prosecute any contest or appeal of such Taxes.

8.02 Taxes Payable by Tenant - The Tenant shall pay promptly when due all Taxes upon or
on account of the following:

	(a)	 	to the Landlord, the Tenant’s Proportionate Share of Taxes; and
	 
	(b)	 	to the taxing authority or to the Landlord at the Landlord’s direction, any Taxes imposed
or assessed against or in respect of the personal property and Leasehold Improvements of
the, Tenant in the Leased Premises or in respect of any business operations carried on or in
respect of the use or occupancy thereof by the Tenant or by any subtenant or licensee, if
levied or assessed separately from Taxes upon the remainder of the Land and Building and
referred to herein as “Business Taxes”.

The Tenant agrees to provide to the Landlord within 3 days of receipt thereof, an original or
duplicate copy of any separate bill for Taxes. The Tenant shall deliver promptly, upon request of
the Landlord, receipts for all such payments and will furnish such other information as the
Landlord may require.

8.03 Tax Increases Attributable to Tenant - If any Taxes in respect of the Leased
Premises or Project are greater than they otherwise would have been by reason of the constitution
or ownership of the Tenant, the use of the Leased Premises by the Tenant, the school support of
the Tenant or any other reason peculiar to the Tenant, the portion of such Taxes in each year
attributable to such reason, as determined by the Landlord, shall be paid by the Tenant to the
Landlord at least 15 days prior to the due date for payment thereof by the Landlord, and in
addition to Property Taxes and other Taxes otherwise payable by the Tenant under this Lease.

8.04 GST - The Tenant shall pay to the Landlord the amount of all GST accruing due with
respect to Rent at the time the Rent is due and payable to the Landlord under this Lease. The
Tenant’s obligation to pay GST under this Section shall not be limited or precluded by any
limitation contained

 

 

in this Lease upon the Landlord’s right to recover or receive payment from the Tenant of taxes
upon the Landlord’s income or profits or otherwise.

8.05 Landlord’s Election - Notwithstanding that any Taxes (including without limitation,
any of the foregoing payable by the Tenant under Subsection 8.02(a)) may be separately imposed,
levied, assessed or charged by the appropriate authority for or in respect of the (Leased
Premises and other portions of the Project, the Tenant shall nevertheless be obligated to pay
the Tenant’s Proportionate Share of Taxes as part of the Tenant’s Occupancy Costs.
Notwithstanding the foregoing, the Tenant’s Proportionate Share of Taxes so determined may be
adjusted by the Landlord, acting reasonably and equitably to the extent necessary, to ensure
that the Tenant’s Proportionate Share of Taxes is the same as it would have been following
application of any special provision of real property tax related legislation applicable to this
Lease.

8.06 Right to Contest - Each of the Landlord and the Tenant (provided the Tenant is
legally entitled to do so) shall have the right to contest in good faith the validity or amount
of any Taxes which, in the case of the Landlord, the Landlord is responsible to pay under this
Article 8.00 and which, in the case of the Tenant, the Tenant is responsible to pay under
Subsection 8.02(b) and for which it is separately assessed. Notwithstanding anything to the
contrary herein, the Tenant may, upon prior written notice to the Landlord, defer payment of any
amount payable by it pursuant to Subsection 8.02(b) for which it is separately assessed, to the
extent permitted by law; provided that no contest by the Tenant shall involve the possibility of
forfeiture, sale or disturbance of the Landlord’s interest in the Leased Premises or the
imposition of any penalty or interest, charge or lien and that, upon the final determination of
any contest by the Tenant, the Tenant shall immediately pay and satisfy the amount found to be
due, together with any costs, penalties and interest. If, as a result of any contest by the
Tenant, any tax, rate, levy, assessment, fee or other charge is increased, the Tenant shall be
responsible for the full amount of such increase in respect of the period to which the contest
relates and to any subsequent tax periods which commence during the Term.

The Tenant shall not contest any amount payable by it under Subsection 8.02(a) but may contest
any amount payable by it under Subsection 8.02(b) or appeal any assessment therefor subject to
complying with the following:

	(a)	 	the Tenant shall deliver to the Landlord any notices of appeal or other like instrument
and obtain the Landlord’s consent thereto, which consent shall not be unreasonably
withheld, before filing the same;
	 
	(b)	 	the Tenant shall deliver whatever security the Landlord reasonably requires;
	 
	(c)	 	the Tenant shall promptly and diligently prosecute the contest or appeal at its sole
expense; and
	 
	(d)	 	the Tenant shall keep the Landlord fully informed thereof.

ARTICLE 9.00 - INSURANCE, LIABILITY AND ENVIRONMENTAL

9,01 Landlord’s Insurance - During the Term, the Landlord shall place insurance coverage
on and with respect to the Project excluding the area(s) to be insured by the Tenant as set out
in Section 9.02, which coverage shall include the following, if available at reasonable cost in
the opinion of the Landlord:

	(a)	 	all risks insurance for the full reconstruction value of the Project, excluding Leasehold
Improvements, as determined by the Landlord;
	 
	(b)	 	as an extension to the insurance maintained pursuant to Subsection 9.01(a), insurance on
the rental income derived by the Landlord from the Project on a gross rental income form
with a period of indemnity of not less than the period as estimated by the Landlord from
time to time which would be required to rebuild and, if necessary, to re-tenant the Project
in the event of the complete destruction thereof;
	 
	(c)	 	boiler and machinery insurance, including repair or replacement and rental income
coverage, if applicable;
	 
	(d)	 	plate glass insurance (not including plate glass fronting or within the Leased Premises)
if deemed appropriate by the Landlord;
	 
	(e)	 	commercial general liability insurance; and
	 
	(f)	 	such other insurance which is or may become customary or reasonable for owners of
projects similar to the Project to carry in respect of loss of, or damage to, the Project
or liability arising therefrom.

 

 

The insurance referred to in this Section shall be carried in amounts determined reasonably by the
Landlord. The insurance shall be written in the name of the Landlord with loss payable to the
Landlord and to any mortgagee (including any trustee under a deed of trust and mortgage) of the
Project from time to time. The policies of insurance referred to in Subsections 9.01(a), (b), (c),
(d) and (e) shall contain a waiver of the insurer’s right of subrogation as against the Tenant.
The Landlord hereby waives its right of recovery against the Tenant, its employees and those for
whom the Tenant is in law responsible with respect to all Claims required to be insured against by
the Landlord hereunder.

Notwithstanding any contribution by the Tenant to insurance premiums as provided for in this
Lease, no insurable interest is conferred upon the Tenant under policies carried by the Landlord.
Except as specifically provided in this Lease, the Landlord shall in no way be accountable to the
Tenant regarding the use of the insurance proceeds arising from any Claims.

9.02 Tenant’s Insurance - At its own expense the Tenant shall take out and thereafter
maintain in force at all times during the Term and at all times when the Tenant is in possession
of the Leased Premises insurance policies as follows:

	(a)	 	all risks insurance on Leasehold Improvements and on all other property of every
description, nature and kind owned by the Tenant or for which the Tenant is legally liable,
which is installed, located or situate within the Leased Premises or elsewhere in the
Project, including without limitation, all inventory or stock-in-trade in an amount not less
than the full replacement cost thereof without deduction for depreciation; such insurance
shall be subject to a replacement cost endorsement and shall include a stated amount
co-insurance clause and a breach of conditions clause;
	 
	(b)	 	commercial general liability insurance to respond to any and all incidents occurring in the
Leased Premises in the minimum amount of $3,000,000.00 per occurrence including the following
extensions: owners and contractors protective; limited pollution coverage endorsement;
products and completed operations; personal injury; occurrence basis property damage; blanket
contractual and non-owned automobile liability; such insurance shall include the Landlord and
the Landlord’s Agent and nominee (if any) as named additional insureds, and shall protect and
indemnify the Landlord and the Landlord’s Agent and nominee (if any) in respect of all
Claims, including Claims by the Tenant, as if the Landlord and the Landlord’s Agent and
nominee (if any) were separately insured; such insurance shall include cross liability and
severability of interest clauses;
	 
	(c)	 	boiler and machinery or equipment breakdown insurance, including repair or replacement
endorsement, in an amount satisfactory to the Landlord and providing coverage with respect to
all objects introduced into the Leased Premises by or on behalf of the Tenant or otherwise
constituting Leasehold Improvements;
	 
	(d)	 	plate glass insurance on all internal and external glass within or fronting the Leased
Premises; however, notwithstanding the foregoing, the Tenant may elect to self-insure for the
insurance described in this Subsection 9.02(d);
	 
	(e)	 	business interruption insurance on the profit form providing all risks coverage with a
period of indemnity of not less than 12 months and subject to a stated amount co-insurance
clause;
	 
	(f)	 	tenant’s legal liability insurance for the full replacement cost of the Leased Premises,
including loss of use thereof; and
	 
	(g)	 	any other form of insurance in such amounts and against such risks as the Landlord may from
time to time reasonably require.

The Tenant acknowledges and agrees that it shall be solely responsible for insuring the Leasehold
Improvements, its equipment and stock and any other property owned or brought into the Leased
Premises by the Tenant whether affixed to the Building or not.

The insurance policies referred to in this Section shall be subject to such higher limits as the
Tenant, or the Landlord. acting reasonably, or any mortgagee of the Landlord’s interest in the
Project may require from time to time. The policies of insurance referred to in Subsections
9.02(a), (b), (c), (d), (e), (f) and (g) shall contain a waiver of the insurer’s right of
subrogation as against the Landlord. The Tenant hereby waives its right of recovery against the
Landlord, its employees and those for whom the Landlord is in law responsible with respect to all
Claims required to be insured against by the Tenant hereunder. Any and all deductibles in the
Tenant’s insurance policies shall be borne solely by the Tenant and shall not be recovered or
attempted to be recovered from the Landlord. In addition, all such policies shall be
non-contributing with, and will apply only as primary and not excess to, any insurance proceeds
available to the Landlord.

The Tenant shall provide to the Landlord at the commencement of the Term and at least 30 days
prior to the renewal of all insurance referred to in this Section 9.02, and promptly at any time
upon

 

 

request, a certificate of insurance evidencing the insurance coverage maintained by the Tenant in
accordance with this Section 9.02. The delivery to the Landlord of a certificate of insurance or
any review thereof by or on behalf of the Landlord shall not limit the obligation of the Tenant
to provide and maintain insurance pursuant to this Section 9.02 or derogate from the Landlord’s
rights if the Tenant shall fail to fully insure.

All policies shall provide that the insurance shall not be cancelled or changed to the prejudice
of the Landlord without at least 30 days’ prior written notice given by the insurer to the
Landlord. All policies of insurance shall be placed with a company licensed to sell commercial
insurance in Canada.

The Tenant acknowledges and agrees that, if it fails to obtain and maintain in force any of the
insurance policies set out in this Section 9.02, then the Tenant shall indemnify and hold
harmless the Landlord in respect of any losses arising therefrom.

9.03 Placement of Tenant’s Insurance by Landlord - If the Tenant fails to place or
maintain all or any of the insurance coverage referred to in Section 9.02, the Landlord may, at
its option, place all or any part of such insurance in the name of or on behalf of the Tenant and
the Tenant shall pay to the Landlord upon demand all costs incurred by the Landlord in so doing
including, without limitation, the premium or premiums for such insurance together with the
Landlord’s administrative fee of 15% of such premium.

9.04 Limitation of Landlord’s Liability - The Landlord, the Landlord’s Agent, their
employees and any Person for whom any of them are in law responsible shall not be liable under
any circumstances for any damage caused by anything done or omitted to be done by any other
tenant of the Project or any Person for whom such tenant is in law responsible or any damage
resulting from the exercise of the Landlord’s control over the Project or any part thereof.

9.05 Environmental Issues

(1) Landlord’s Requirements - The Tenant shall not bring into or allow to be present
in the Leased Premises or the Project any Pollutants except such as are disclosed in
Schedule H hereto. If the Tenant shall bring, create, discharge or release upon, in or from the
Project, including the Leased Premises, any Pollutants, whether or not disclosed in Schedule H
and whether during the Term of this Lease or any prior lease by the Tenant, then such Pollutants
shall be and remain the sole property of the Tenant and the Tenant shall promptly remove same at
its sole cost at the expiration or sooner termination of the Term or sooner if required by the
Landlord.

(2) Governmental Requirements - If, during the Term or any renewal or extension of this Lease or
at any time thereafter, any governmental authority shall require the clean-up of any Pollutants:

	(a)	 	held in, discharged in or from, released from, abandoned in, or placed upon the Leased
Premises or the Project by the Tenant or its employees or those for whom it is in law
responsible; or
	 
	(b)	 	released or disposed of by the Tenant or its employees or those for whom it is in law
responsible;

whether during the Tenant’s occupancy of the Leased Premises or any other premises in the Project
pursuant to this Lease or any prior lease by the Tenant of the Leased Premises or any other
premises in the Project, then the Tenant shall, at its own expense, carry out all required work,
including preparing all necessary studies, plans and approvals and providing all bonds and other
security required by any governmental authority or required by the Landlord and shall provide
full information with respect to all such work to the Landlord; provided that the Landlord may,
at its option, perform any such work at the Tenant’s sole cost and expense, payable on demand as
additional Rent.

(3) Environmental Covenants In addition to and without restricting any other obligations or
covenants herein, the Tenant covenants that it will:

	(a)	 	comply in all respects with all Environmental Laws relating to the Leased Premises or the
use of the Leased Premises;
	 
	(b)	 	promptly notify the Landlord in writing of any notice by any governmental authority
alleging a possible violation of or with respect to any other matter involving
any Environmental Laws relating to operations in the Leased Premises or relating to any
Person for whom it is in law responsible or any notice from any other party concerning any
release or alleged release of any Pollutants; and
	 
	(c)	 	permit the Landlord to:

 

 

	 	(i)	 	enter and inspect the Leased Premises and the operations conducted therein;
	 
	 	(ii)	 	conduct tests and environmental assessments or appraisals;

	 
	 	(iii)	 	remove samples from the Leased Premises; and
	 
	 	(iv)
   examine and make copies of any documents or records relating to the Leased Premises
and interview the Tenant’s employees as necessary; and

	(d)	 	promptly notify the Landlord of the existence of any Pollutants in the Project.

(4) Environmental Indemnification - The Tenant shall, during the Term and at all times
thereafter, indemnify and hold the Landlord harmless at all times from and against any and all
losses, damages, penalties, fines, costs, fees and expenses (including legal fees on a
solicitor and client or substantial indemnity basis and Consultants’ fees and expenses)
resulting from:

	(a)	 	any breach of or non-compliance with the environmental obligations and covenants of the
Tenant as set out in this Lease; and
	 
	(b)	 	any legal or administrative action commenced by, or claim made or notice from, any
third party, including, without limitation, any governmental authority, to or against the
Landlord and pursuant to or under any Environmental Laws or concerning a release or
alleged release of Pollutants at the Leased Premises into the environment and related to
or as a result of the operations. of the Tenant or those acting under its authority or
control at the Leased Premises or any other premises in the Project, and any and all costs
associated with air quality issues, if any, and ‘whether during the Term of this Lease or
any prior lease by the Tenant of the Leased Premises or any other premises in the Project.

[If Rider 1 (Section 9.05) is attached to this Lease this Section will be deleted and
initialled and the terms and conditions stated on Rider 1 will govern the relationship between
the Landlord and the Tenant with respect to environmental issues.]

ARTICLE 10.00 - DAMAGE AND DESTRUCTION

10.01 Limited Damage to Leased Premises, Access or Services If during the Term, the
Leased Premises or any part thereof, or other portions of the Building providing access or
Services essential to the Leased Premises, shall be destroyed or damaged by any hazard against
which the Landlord is obligated to insure pursuant to Section 9.01, the Landlord, if permitted
by law to do so, shall proceed with reasonable diligence to rebuild and restore or repair the
Leased Premises or comparable premises or such access routes or Service systems, as the case
may be, in conformance with current laws to the extent of insurance proceeds received. The
covenants of the Tenant to repair shall not include any repairs of damage required to be made
by the Landlord under this Section 10.01. For greater certainty, it is understood and agreed
that, upon substantial completion of the Landlord’s work, the Tenant shall repair or restore
the Leased Premises as required by Section 7.06. Rent payable by the Tenant shall abate from
the date of such damage or destruction to the date of substantial completion of the Landlord’s
work as determined by the Landlord’s architect or engineer or restoration of access or
Services, as the case may be. If less than all of the Leased Premises is destroyed or damaged
as contemplated in this Section 10.01, Rent payable by the Tenant shall abate from the date of
such damage or destruction to the date of substantial completion of the Landlord’s work in the
same proportion as the Rentable Area of the Leased Premises so damaged or destroyed is of the
total Rentable Area of the Leased Premises.

10.02 Major Damage to Leased Premises - Notwithstanding any other right of termination
contained herein, if the Leased Premises shall be damaged or destroyed by any hazard against
which the Landlord is obligated to insure under this Lease, and if in the opinion of the
Landlord’s architect or engineer, given within 30 Business Days of the happening of said damage
or destruction, said damage or destruction is to the extent that the Leased Premises shall be
incapable of being rebuilt or repaired or restored with reasonable diligence within 6 months
after the occurrence of such damage or destruction, then the Landlord may, at its option,
terminate this Lease by notice in writing to the Tenant. If such notice is given by the
Landlord under this Section 10.02, then this Lease shall terminate on the date of such notice
and the Tenant shall immediately surrender the Leased Premises and all interest therein to the
Landlord and Rent shall be apportioned and shall be payable by the Tenant only to the date of
such damage or destruction and the Landlord may thereafter re-enter and repossess the Leased
Premises. For greater certainty, it is understood and agreed that: (i) if the Landlord does not
elect to terminate this Lease as aforesaid, upon substantial completion of the Landlord’s work,
the Tenant shall repair or restore the Leased Premises as required by Section 7.06; and (ii) if
the Landlord elects to terminate this Lease as aforesaid, the Tenant shall pay to the Landlord
forthwith upon demand the cost of repairing or restoring the Leased Premises, as determined by
the Landlord’s architect or engineer, acting reasonably (but not in any event to exceed the
replacement cost of the then existing Leasehold Improvements), by way of insurance proceeds
available to the Tenant or otherwise.

 

 

10.03 Damage to Building - Notwithstanding anything to the contrary contained in this
Lease or that the Leased Premises may not be affected, if in the reasonable opinion or
determination of the Landlord or the Landlord’s architect or engineer, rendered within 30
Business Days of the happening of damage or destruction, the Building shall be damaged or
destroyed to the extent that any one or more of the following conditions exist:

	(a)	 	in the reasonable opinion of the Landlord the Building must be totally or partially
demolished, whether or not to be reconstructed in whole or in part;
	 
	(b)	 	in the reasonable opinion of the Landlord’s architect or engineer the Building shall be
incapable of being rebuilt or repaired or restored with reasonable diligence within 6
months after the occurrence of such damage or destruction;
	 
	(c)	 	any tenant of the Building which, in the Landlord’s absolute discretion, is a major
tenant of the Building becomes entitled to terminate its lease as a result of such damage
or destruction;
	 
	(d)	 	more than 35% of the Total Rentable Area of the Building is damaged or destroyed. as
reasonably determined by the Landlord’s architect or engineer; or
	 
	(e)	 	any or all of the heating, ventilating, air conditioning, electrical, mechanical or
elevator systems in the Building are damaged or destroyed as reasonably determined by the
Landlord’s architect or engineer;

then the Landlord may at its sole option terminate this Lease by notice in writing to the
Tenant. If notice is given by the Landlord under this Section 10.03, then this Lease shall
terminate from the date of such notice and the Tenant shall immediately surrender the Leased
Premises and all interest therein to the Landlord and Rent shall be apportioned and shall be
payable by the Tenant only to the date of such notice and the Landlord may thereafter re-enter
and repossess the Leased Premises. If the Building is damaged to the extent described in this
Section 10.03 and the Landlord does not terminate this Lease, the Landlord will, to the extent
of insurance proceeds received, rebuild or repair the Building to base building standards, but
the rebuilt or repaired Building may be different in configuration and design from that
comprising the Project prior to the damage or destruction.

10.04 No Abatement - Except as specifically provided in this Article 10.00, there shall
be no abatement of Rent and the Landlord shall have no liability to the Tenant by reason of any
injury to, loss of or interference with the Tenant’s business or property arising directly or
indirectly from fire or other casualty, howsoever caused, or from the making of any repairs
resulting therefrom or to any portion of the Building or the Leased Premises.

10.05 Notify Landlord - The Tenant shall immediately notify the Landlord or its
representative in the Project of any accident or defect in the Project, the Leased Premises or
any systems thereof and, as well, of any matter or condition which may cause injury or damage
to the Project or any person or property located therein.

10.06 Expropriation - In the event of Expropriation of all or part of the Leased
Premises and/or the Building, neither the Landlord nor the Tenant shall have a claim against the
other for the shortening of the Term, nor the reduction or alteration of the Leased Premises or
the Building. The Landlord and the Tenant shall each look only to the Expropriating authority
for compensation. The Landlord and the Tenant agree to cooperate with one another so that each
is able to obtain the maximum compensation from the Expropriating authority as may be permitted
in law in relating to. their. respective interests in the Leased Premises and the Building.
Nothing herein contained shall be deemed or construed to prevent the Landlord or the Tenant from
enforcing and prosecuting a claim for the value of their respective interests in any
Expropriation proceedings. However, to the extent that a part of the Project other than the
Leased Premises is Expropriated, the full proceeds paid or awarded therefor will belong solely
to the Landlord and the Tenant will assign to the Landlord any rights it might have or acquire
in respect of such proceeds or awards and will execute those documents that the Landlord
reasonably requires in order to give effect to this intention.

Where used in this Section 10.06 “Expropriation” means expropriated by a governmental or
municipal authority, or transferred, conveyed or dedicated in contemplation of a threatened
expropriation and “Expropriated” and “Expropriating” have corresponding meanings.

ARTICLE 11.00 - DEFAULT

11.01 Arrears - The Tenant shall pay monthly to the Landlord interest at a rate per
annum equal to the lesser of the Prime Rate plus 5% and the maximum rate permitted by
applicable law upon all Rent required to be paid hereunder from the due date for payment
thereof until the same is fully paid and satisfied.

 

 

In addition to the interest charges, in order to cover the extra expense involved in handling
delinquent payments, the Tenant, at the Landlord’s sole option; shall pay to the Landlord a
charge of $100.00 (the “Late Charge”) when any instalment of Rent is received by the Landlord
after the relevant due date thereof.

In addition, if any cheque presented to the Landlord by the Tenant representing payment of Rent
is not honoured by the Tenant’s bank or such cheque is returned to the Landlord indicating that
there are not sufficient funds in the Tenant’s account to honour such cheque, the Tenant shall
pay to the Landlord a charge of $50.00 for the first such occurrence during the Term, $150.00 for
the second such occurrence during the Term and $250.00 for each such subsequent occurrence during
the Term (the “NSF Charge”). It is hereby understood and agreed that the Late Charge and the NSF
Charge is charged as Rent and not as a penalty or interest, for the purpose of defraying the
Landlord’s expenses incident to the processing of such overdue payments and that such Late Charge
or NSF Charge is due and payable on and from the day immediately following the due date of such
overdue payment or, if no due date is specified in this Lease, then on the 10th day following
demand for same by the Landlord.

11.02 Costs of Enforcement - The Tenant shall indemnify the Landlord against all costs
and charges (including legal fees on a solicitor and client or substantial indemnity basis and
the Landlord’s reasonable administration charges) reasonably incurred either during or after the
Term in enforcing payment of Rent hereunder and in obtaining possession of the Leased Premises
after default of the Tenant or upon expiration or earlier termination of this Lease or in
enforcing any covenant, proviso or agreement of the Tenant herein contained or in determining the
Landlord’s rights or the Tenant’s obligations under this Lease or both. All such costs and
charges shall be paid by the Tenant to the Landlord forthwith upon demand.

11.03 Performance of Tenant’s Obligations - All covenants and agreements to be performed
by the Tenant under any of the terms of this Lease shall be performed by the Tenant, at the
Tenant’s sole cost and expense, and without any abatement of Rent. If the Tenant fails to perform
any act to be performed by it hereunder then, in the event of an emergency, either real or
perceived, or if the failure continues for 10 days following written notice thereof, the Landlord
may (but shall not be obligated to) perform the act without waiving or releasing the Tenant from
any of its obligations relative thereto, but having commenced to do so may cease to do so without
completing performance thereof. All sums paid and costs incurred by the Landlord in so performing
the act, plus 20% of the cost for overhead and supervision together with interest thereon at the
rate set out in Section 11.01 from the date payment was made or such cost was incurred by the
Landlord shall be payable by the Tenant to the Landlord on demand.

11.04 Remedies on Default - Upon the happening of an Event of Default the Landlord may,
at its option, and in addition to and without prejudice to all rights and remedies of the
Landlord available to it either by any other provision of this Lease or by statute or the general
law, exercise any one or more of the following remedies:

	(a)	 	be entitled to the full amount of the current month’s and the next ensuing 3 months’
instalments of Rent which shall immediately become due and payable and the Landlord may
immediately distrain for the same, together with any arrears then unpaid;
	 
	(b)	 	without notice or any form of legal process, forthwith re-let or sublet the Leased Premises
or any part or parts thereof for whatever term or terms and at whatever rent and upon
whatever other terms, covenants and conditions the Landlord considers advisable including,
without limitation, the payment or granting of inducements all on behalf of the Tenant; and
on. each such re-letting or subletting the rent received by the Landlord therefrom will be
applied first to reimburse the Landlord for any such inducements and for any expenses,
capital or otherwise, incurred by the Landlord in making the Leased Premises ready for
re-letting or subletting; and secondly to the payment of any costs and expenses of
re-letting or subletting including brokerage fees and legal fees on a solicitor and client
or substantial indemnity basis; and third to the payment of Rent; and the residue, if any,
will be held by the Landlord and applied to payment of Rent as it becomes due and payable.
If rent received from re-letting or subletting during any month is less than Rent to be paid
during that month hereunder, the Tenant will pay the deficiency which will be calculated and
paid monthly on or before the first day of every month; and no re-letting or subletting of
the Leased Premises by the Landlord or entry by the Landlord or its agents upon the Leased
Premises for the purpose of re-letting or subletting or other act of the Landlord relating
thereto including, without limitation, changing or permitting a subtenant to change locks,
will be construed as an election on its part to terminate this Lease unless a written notice
of termination is given to the Tenant; and if the Landlord elects to re-let or sublet the
Leased Premises without terminating, it may afterwards elect to terminate this Lease at any
time by reason of any Event of Default then existing;
	 
	(c)	 	seize and sell such goods, chattels and equipment of the Tenant as are in the Leased
Premises and the Landlord may, but shall not be obligated to, apply the proceeds thereof to
all Rent to which the Landlord is then entitled under this Lease. Any such sale may be

 

 

	 	 	effected by public auction, private sale or otherwise, and either in bulk or by
individual item, or partly by one means and partly by another; all as the Landlord in its
sole discretion may decide;
	 
	(d)	 	terminate this Lease by leaving upon the Leased Premises notice in writing of the
termination, and such termination shall be without prejudice to the Landlord’s right to
damages; it being agreed that the Tenant shall pay to the Landlord on demand as damages the
loss of income of the Landlord to be derived from this Lease and the Leased Premises for
the unexpired portion of the Term had it not been terminated; or
	 
	(e)	 	re-enter into and upon the Leased Premises or any part thereof in the name of the whole
and repossess and enjoy the same as of the Landlord’s former estate, anything herein
contained to the contrary notwithstanding;

and the Tenant shall pay to the Landlord forthwith upon demand all expenses of the Landlord in
re-entering, terminating, re-letting, collecting sums due or payable by the Tenant or realizing
..upon assets seized or otherwise exercising its rights and remedies under this Section 11.04
including tenant inducements, leasing commissions, legal fees on a solicitor and client or
substantial indemnity basis and all disbursements and the expense of keeping the Leased Premises
in good order, repairing the same and preparing the same for re-letting.

In addition, and without limiting the generality of the foregoing provisions of this Section
11.04,. upon the happening of an Event of Default, and whether or not this Lease is terminated
in accordance with such provisions: (i) the Landlord shall have no further liability to pay to
the Tenant or any third party any amount on account ‘or in respect of a refund of any Security
Deposit, prepaid Rent or prepaid Taxes or any tenant inducement, leasehold improvement
allowance, lease takeover or lease subsidy or any other concession or inducement otherwise
provided to the Tenant under or with respect to this Lease, and any Rent free period otherwise
provided to the Tenant hereunder shall be null and void and of no further force or effect and
Rent shall be payable in full hereunder without regard to any such Rent free period; and (ii)
any cash allowance, inducement payment, and the value of any other benefit paid to or conferred
on the Tenant by or on behalf of the Landlord in connection with the Leased Premises or this
Lease shall be recoverable in full as additional Rent and shall be payable to the Landlord on
demand.

11.05 Availability of Remedies - The Landlord may from time to time resort to any or all
of the rights and remedies available to it upon the occurrence of an Event of Default either by
any provision of this Lease or by statute or the general law, all of which rights and remedies
are intended to be cumulative and not alternative, and the express provisions herein as to
certain rights and remedies are not to be interpreted as excluding any other or additional
rights or remedies available to the Landlord by statute or the general law.

11.06 Waiver - If the Landlord shall overlook, excuse, condone or suffer any default,
breach or non-observance by the Tenant of any obligation hereunder, this shall not operate as a
waiver of the obligation in respect of any continuing or subsequent default, breach or
non-observance and no such waiver shall be implied but shall only be effective if expressed in
writing.

The Landlord’s acceptance of Rent after a default is not a waiver of any preceding default under
this Lease even if the Landlord knows of the preceding default at the time of acceptance of the
Rent. No term, covenant or condition of this Lease shall be considered to have been waived by
the Landlord or the Tenant unless the waiver is in writing. The Tenant waives any statutory or
other rights in respect of abatement, set-off or compensation in its favour that may exist or
come into existence hereafter with respect to Rent.

11.07 Waiver of Exemption and Redemption - Notwithstanding anything contained in any
statute now or hereafter in force limiting the right of distress, none of the Tenant’s goods or
chattels in the Leased Premises at any time during the Term shall be exempt from levy by
distress for Rent in -arrears, and this agreement of the Tenant in this Section may be pleaded
as an estoppel against the Tenant.

11.08 Companies’ Creditors Arrangement Act - By virtue of its interest in this Lease,
the importance of the Tenant continuing to carry on business in the Leased Premises in
accordance with this Lease, and the Landlord’s entitlement to damages where this Lease is
terminated by reason of an Event of Default, the Landlord does and will (despite any changes in
circumstances of the Tenant or its business) constitute a separate class or category of creditor
in any plan of arrangement or other proposal submitted by or on behalf of the Tenant under the
Companies’ Creditors Arrangement Act (Canada) or any similar legislation for bankrupt .or
insolvent debtors.

ARTICLE 12.00 - ASSIGNMENT, SUBLETTING AND OTHER TRANSFERS

12.01 Request for Consent - The Tenant shall not effect a Transfer of this Lease or of
all or part of the Leased Premises without the prior consent in writing of the Landlord, which
consent shall not,

 

 

provided no Event of Default has occurred, be unreasonably withheld. Provided that the Tenant
shall, at the time the Tenant shall request the consent of the Landlord, deliver to the Landlord
such information in writing (herein called the “required information”) as the Landlord may
reasonably require respecting the proposed Transferee including, without limitation, the name,
address, nature of business, financial responsibility and standing of such proposed Transferee.
Provided further that after receiving such request, the Landlord shall have the right, at its
option, to terminate this Lease if the request relates to all of the Leased Premises or, if the
request relates to a portion of the Leased Premises only, to terminate this Lease with respect to
such portion, by giving, within 10 days after receiving the required information, not less than 30
nor more than 60. days’ written notice of termination to the Tenant. In the event of
such termination, the Rent and other payments required to be made by the Tenant hereunder shall be
adjusted to the date of termination and, in the case of a partial termination, Rent shall abate in
the proportion that the area of the portion of the Leased Premises for which this Lease is
terminated bears to the area of the Leased Premises and this Lease shall be deemed to be amended
accordingly.

If the Landlord elects to terminate this Lease as to all or part of the Leased Premises, the
Tenant may by written notice (given within 10 days or such longer time as the Landlord may consent
to in writing after receipt of the Landlord’s notice of termination) notify the Landlord of the
Tenant’s intention to refrain from the Transfer which gave rise to the Landlord’s notice of
termination or of the Tenant’s intention to accept such notice of termination. If the Tenant gives
written notice to the Landlord within such time period that it intends to refrain from such
Transfer, then the Landlord’s election to terminate this Lease in whole or in part shall become
null and void. Otherwise, the Landlord’s termination shall take effect on the date stipulated by
the Landlord in its notice of termination.

12.02 Basis for Consent - Notwithstanding anything in the Landlord and Tenant Act, the
Commercial Tenancies Act or any other statute or law and without limiting the grounds upon which a
consent may be refused, the Landlord will not be deemed to be unreasonable in refusing consent
when:

	(a)	 	the giving of such consent would place the Landlord in breach of any other tenant’s lease in
the Project or the proposed use by the Transferee is not substantially the same as that of
the Tenant;
	 
	(b)	 	such consent is requested for a mortgage, charge, debenture (secured by floating charge or
otherwise) or other encumbrance of, or in respect of, this Lease or the Leased Premises or
any part of them;
	 
	(c)	 	the Transferee, in the opinion of the Landlord: (i) does not have a history of successful
business operation in the business to be conducted in the Leased Premises; (ii) does not have
a good credit rating or a substantial net worth; or (iii) there is a history of default under
other leases by the Transferee or by companies or partnerships that the Transferee was a
principal shareholder of or a partner in at the time of the default;
	 
	(d)	 	the Transferee is an existing tenant in the Project or in any other project of the Landlord,
or has been within 3 months prior to the proposed assignment or sublease taking effect;
	 
	(e)	 	the Landlord has other premises in the Project available for leasing to the Transferee;
	 
	(f)	 	in the case of a Transfer to a subtenant of less than the entire Leased Premises, if such
would result in a configuration which: (i) would require access to be provided through space
leased or held for lease to another tenant or improvements to be made outside of the Leased
Premises; or (ii) would, in the sole opinion of the Landlord, be unreasonable to attempt to
re-lease to a third party;
	 
	(g)	 	the required information received from the Tenant or the proposed Transferee is not
sufficient in the Landlord’s opinion to enable the Landlord to make a determination
concerning the matters set out above; or
	 
	(h)	 	the use of the Leased Premises by the proposed Transferee, in the Landlord’s opinion arrived
at in good faith, could result in excessive use of the systems or Services in the Project, be
inconsistent with the image and standards of the Project or expose the occupants of the
Project to risk of harm, damage or interference with their use and enjoyment thereof, or
reduce the value of the Project.

The Landlord shall not be liable for any claims, actions, damages, liabilities, losses or expenses
of the Tenant or any proposed Transferee arising out of the Landlord’s unreasonably withholding
its consent to any Transfer and the Tenant’s only recourse will be to bring an application for a
declaration that the Landlord must grant its consent to the Transfer.

In no event shall any Transfer to which the Landlord may have consented release or relieve the
Tenant or any Indemnifier from its obligations fully to perform all the terms, covenants and
conditions

 

 

of this Lease; the Indemnity Agreement or any renewals or extensions of this Lease or the Term on
its part to be performed and, in any event, the Tenant shall be liable for the Landlord’s costs
incurred in connection with the Tenant’s request for consent as set out in Subsection 12.03(g).

12.03 Terms and Conditions Relating to Consents - The following terms and conditions
apply in respect of a consent given by the Landlord to a Transfer:

	(a)	 	the consent by the Landlord is not a waiver of the requirement for consent to subsequent
Transfers, and no Transfer shall relieve the Tenant of its obligations under this Lease,
unless specifically so provided in writing;
	 
	(b)	 	no acceptance by the Landlord of Rent or other payments by a Transferee is: (i) a waiver
of the requirement for the Landlord to consent in writing to the Transfer; (ii) the
acceptance of the Transferee as tenant or subtenant; or (iii) a release of the Tenant or
Indemnifier from its obligations under this Lease or any Indemnity Agreement;
	 
	(c)	 	the Landlord may apply amounts collected from the Transferee to any unpaid Rent;
	 
	(d)	 	the Transferor, unless the Transferee is a subtenant of the Tenant, will retain no rights
under this Lease in respect of obligations to be performed by the Landlord or in respect of
the use or occupation of the Leased Premises after the Transfer and will execute an
Indemnity Agreement on the Landlord’s standard form in respect of obligations to be
performed after the Transfer by the Transferee;
	 
	(e)	 	the Transferee shall, when required by the Landlord, jointly and severally with the
Tenant, enter into an agreement directly with the Landlord agreeing to be bound by this
Lease as if the Transferee had originally executed this Lease as the Tenant, and the Tenant
will not be released nor relieved from its obligations under this Lease including, without
limitation, the obligation to pay Rent;
	 
	(f)	 	in the .event that this Lease is disaffirmed, disclaimed or terminated by any trustee in
bankruptcy of a Transferee, the original Tenant named in this Lease shall be deemed, upon
notice by the Landlord given within 30 days of such disaffirmation, disclaimer or
termination to have entered into a lease with the Landlord containing the same terms and
conditions as in this Lease, with the exception of the Term of such Lease which shall expire
on the date on which this Lease would have ended save for such disaffirmation, disclaimer or
termination; and
	 
	(g)	 	any documents relating to a Transfer or the Landlord’s consent will be prepared by the
Landlord or its solicitors and a reasonable administration charge of at least $250.00 and
the greater of: (i) a reasonable document preparation fee of at least $450.00; or (ii) those
legal fees on a solicitor and client or substantial indemnity basis incurred by the Landlord
will be paid to the Landlord by the Tenant on demand.

12.04 Subsequent Transfers - The Landlord’s consent to a Transfer shall not be deemed to
be consent to any subsequent Transfer, whether or not so stated.

12.05 Profit Rents upon Transfers - In the event of any Transfer by the Tenant by virtue
of which the Tenant receives a rent in the form of cash, goods or services from the Transferee
which is greater than the Rent payable hereunder to the Landlord, the Tenant shall pay any such
excess to the Landlord in addition to all Rent payable under this Lease, and such excess rent
shall be deemed to be further Rent payable hereunder.

12.06 Advertising - The Tenant shall not advertise the Leased Premises or any part
thereof as being available for leasing or this Lease as being available for transfer in any
medium and will not cause or permit any such advertisement, unless the Landlord has permitted the
Tenant to do so in writing and has given written approval of the wording of such advertisement,
which permission and approval may be arbitrarily withheld.

12.07 Grant of Security Interest by Transferee - The Tenant will cause any Transferee and
any new Indemnifier of this Lease to grant a mortgage, charge and security interest to the
Landlord in form corresponding to the Security Interest granted in Section 15.25 by delivery of a
written security agreement in form and substance satisfactory to the Landlord prior to the
effective date of the Transfer.

The Tenant shall pay all costs associated with the granting and perfection of mortgages, charges
and security interests granted pursuant to this Lease upon any Transfer.

 

 

ARTICLE 13.00 - TRANSFERS BY LANDLORD

13.01 Sale, Conveyance and Assignment - Nothing in this Lease shall restrict’ the right
of the Landlord to sell, convey, assign, pledge or otherwise deal with the Project, subject
(except as provided in Section 13.03) only to the rights of the Tenant under this Lease.

13.02 Effect of Transfer - A sale, conveyance or assignment of the Project by the
Landlord shall operate to release the Landlord from liability from and after the effective date
thereof in respect of all of the covenants, terms and conditions of this Lease, express or
implied, except as they may relate to the period prior to the effective date, and the Tenant
shall thereafter look solely to the Landlord’s successor in interest.

13.03 Subordination - Subject to Section 13.04, this Lease, at the option of any
mortgagee, trustee or chargee, is and shall be subject and subordinate in all respects to any
and all mortgages (including deeds of trust and mortgage) now or hereafter registered against
title to the Building or Land and all advances thereunder, past, present and future and to all
renewals, modifications, consolidations, replacements and extensions thereof. The Tenant agrees
to execute promptly and in any event within 10 days after request therefor by the Landlord or
the mortgagee or trustee under any such mortgage or deed of trust and mortgage an instrument of
subordination as may be requested.

13.04 Attornment - The Tenant agrees, whenever requested by any mortgagee, trustee or
chargee (in this Section 13.04 and in Section 13.05 called the “Mortgagee”) taking title to the
Project by reason of foreclosure or other proceedings for enforcement of any mortgage or deed
of trust, or by delivery of a deed in lieu of such foreclosure or other proceeding, to attorn
to such Mortgagee as a tenant under all of the terms of this Lease. The Tenant agrees to
execute promptly and in any event within 10 days after a request by any Mortgagee an instrument
of attornment as may be required by it.

13.05 Effect of Attornment - Upon attornment pursuant to Section 13.04, this Lease
shall continue in full force and effect as a direct lease between the Mortgagee and the Tenant,
upon all of the same terms, conditions and covenants as are set forth in this Lease except
that, after attornment, the Mortgagee and its successors in title shall not be:

	(a)	 	liable for any act or omission of the Landlord;
	 
	(b)	 	subject to any offset or defence which the Tenant might have against the Landlord; or
	 
	(c)	 	bound by any prepayment by the Tenant of more than 1 month’s instalment of Rent unless
the prepayment shall have been approved in writing by the Mortgagee or by any predecessor
of the Mortgagee’s former interest as mortgagee of the Project.

13.06 Repurchase - The Tenant acknowledges and agrees that should the Landlord sell,
convey, assign, pledge or otherwise deal with the Project or any interest therein, or
intend to deal with the Project or any interest therein, in any manner described herein
then the Landlord may, at its option, if the Landlord has provided the Tenant with Basic
Rent free periods, Rent free periods and/or other inducements during the Term and/or any
renewal or extension of the Term of this Lease, reimburse the Tenant for the then present
value of any then unexpired Basic Rent free periods or Rent free periods and/or other
inducements provided to the Tenant under this Lease, in an amount equal to the discounted
cash value thereof determined by applying the then current yield of 10 year Canadian
Government Bonds plus 4% (hereinafter referred to in this Section 13.06 as the “Discounted
..Cash Value”) to the dollar amount of such outstanding Basic Rent free periods, Rent free
periods and/or other inducements and the Tenant agrees that any such periods or inducements
for which it has received such Discounted Cash Value from the Landlord will no longer exist
or be payable or be of any force or effect from and after the date on which such Discounted
Cash Value is received by the Tenant from the Landlord. The Tenant agrees to forthwith
execute any agreement prepared by the Landlord, the purpose of which agreement is to amend
this Lease by deleting such Basic Rent free periods, Rent free periods and/or other
inducements from this Lease for which the Tenant has received the Discounted Cash Value
from the Landlord.

ARTICLE 14.00 - SURRENDER

14.01 Possession and Restoration

(1) Upon the expiration or other termination of the ‘Term, the Tenant shall immediately quit
and surrender possession of the Leased Premises and all Leasehold Improvements in substantially
the condition in which the Tenant is required to maintain the Leased Premises, excepting only
reasonable wear and tear and damage covered by the Landlord’s insurance under Section 9.01, and
the Tenant shall deliver to the Landlord the keys, mechanical or otherwise, and combinations,
if any, to the locks in the Leased Premises and entries thereto.
Notwithstanding the forgoing, the Landlord shall have the
right, at its sole option upon expiration or other termination of the
Term, to

 

 

require that the
Tenant remove or cause to be removed at the Tenant’s cost all or
any part of Leasehold Improvements ion the Leased Premises whether or
not installed by or on behalf of the Tenant or installed by or on
behalf of a previous tenant or during a previous term and to restore
the Leased Premises and other parts of the Project affected by the
installation or removal thereof to base building standards.
Notwithstanding the forgoing, the Landlord may, at its sole option,
perform the said removal and restoration work at the Tenant’s
sole cost and expense. The Tenant will deliver the Leased Premises clean subject only to reasonable wear and
tear, with repairs to any damaged walls and flooring due to the removal of any Tenant fixtures.
In addition, the Landlord shall have the right, at its sole option upon expiration or other
termination of the Term, to require that the Tenant remove or cause to be removed at the
Tenant’s cost all or any part of any wiring, cables, risers or similar installations
appurtenant thereto installed by the Tenant or on the Tenant’s behalf in the risers of the
Building (the “Wiring”) and to restore the risers and other parts of the Project affected by
the installation or removal of the Wiring to their condition existing prior to the installation
of the Wiring (the `Wire Restoration Work”). Notwithstanding the foregoing, the Landlord may,
at its sole option, perform the Wire Restoration Work at the Tenant’s sole cost and expense.
Upon surrender, all right, title, and interest of the Tenant in the Leased Premises and all
Leasehold Improvements located therein and in all Wiring shall cease.

(2) If the Landlord elects to perform the said removal and restoration work and/or the Wire
Restoration Work, 90 days (or as soon after such date as is reasonably possible) prior to the
expiration of the Term the Landlord may inspect the Leased Premises to determine the extent of
the Wire Restoration Work and the work required to restore the Leased Premises and other parts
of the Project affected by any installation or removal of Leasehold Improvements to base
building standards and upon receipt of the Landlord’s estimate of the costs thereof (the
“restoration cost”) the Tenant shall provide to the Landlord, by certified cheque, the
restoration cost.

14.02 Tenant’s Trade Fixtures and Personal Property - After the expiration or other
termination of the Term or in the event of the abandonment of the Leased Premises by the
Tenant, all of the Leasehold Improvements and the Tenant’s trade fixtures and personal property
remaining in the Leased Premises shall be deemed conclusively to have been abandoned by the
Tenant and may be appropriated, sold, destroyed or otherwise disposed of by the Landlord
without notice or obligation to compensate the Tenant or to account therefor, and the Tenant
shall pay to the Landlord upon written demand all of the costs incurred by the Landlord in
connection therewith.

14.03 Overholding - If the Tenant remains in the Leased Premises or any part thereof
after the expiration or other termination of the Term:

	(a)	 	without the consent of the Landlord, no yearly or other periodic tenancy shall be
created and the Tenant shall be deemed, notwithstanding any statutory provision or legal
assumption to the contrary, to be occupying the Leased Premises as a tenant at will of the
Landlord, which tenancy may be terminated at any time by the Landlord without the
necessity of any prior notice to the Tenant, but the Tenant shall be bound by the terms
and provisions of this Lease except any options thereby granted to the Tenant and except
the Basic Rent which shall be twice the greater of: (i) the rate provided for herein for
the final year of the Term; and (ii) the market rate for similar premises as determined by
the Landlord at the time of such overholding, plus, in either case, the sum of $200.00
daily, and subject to such additional obligations and conditions as the Landlord may
impose by notice to the Tenant; or
	 
	(b)	 	with the consent of the Landlord and agreement as to the Rent payable, the tenancy
shall be month-to-month at the Rent agreed and otherwise on the terms and conditions of
this Lease, but without any option to renew or for a new lease.

The Landlord may recover possession of the Leased Premises during any period’ with respect to
which the Tenant has prepaid the amount payable under Subsection 14.03(a).

The Tenant shall promptly indemnify and hold harmless the Landlord from and against all Claims
against the Landlord as a result of the Tenant remaining in possession of all or any part of
the Leased Premises after the expiry of the Term without the consent of the (Landlord
(including, without limitation, any compensation to any new tenant or tenants which the
(Landlord may elect to pay whether to offset the cost of overtime work or otherwise).

ARTICLE 15.00 - GENERAL

15.01 Estoppel Certificates - The Tenant shall whenever requested by the Landlord, a
prospective purchaser or any mortgagee (including any trustee under a deed of trust and
mortgage) promptly, and in any event within 10 days after request, execute and deliver to the
Landlord or to any party or parties designated by the Landlord a certificate in writing as to
the then status of this Lease, including as to whether it is in full force and effect, is
modified or unmodified, confirming the Rent payable hereunder and each element hereof and the
then state of the accounts between the Landlord and the Tenant, the existence or non-existence
of defaults and any other matters pertaining to this Lease in respect of which the Landlord
shall request a certificate, and provide such other information as may reasonably be required,
including a copy of the Tenant’s most recent

 

 

audited financial statements. The party or parties to whom such certificates are addressed
may rely upon them.

15.02 Entire Agreement - There is no promise, warranty, representation, undertaking,
covenant or understanding by or binding upon the Landlord except such as are expressly set forth
in this Lease and this Lease, including the Term Sheet and schedules hereto, contains the entire
agreement between the parties hereto.

15.03 No Registration of Lease or Notice - The Tenant shall not register or apply to
register this Lease or any notice of this Lease or any interest under this Lease and waives any
statutory obligation upon the Landlord to execute and deliver this Lease in registrable form.
The Tenant shall, at its own cost, promptly on request discharge any registration or filing or
notice that contravenes this Section. Notwithstanding the foregoing, the Landlord may elect to
require that this Lease or notice of this Lease be registered.

15.04 Project Name and Trademarks - The Tenant shall not refer to the Project or
Building by any name other than that designated from time to time by the Landlord and the Tenant
shall use the name of the Building for the business address of the Tenant, but for no other
purpose. Compliance with this Section shall be at the sole cost and expense of the Tenant and
the Tenant shall have no claim against the Landlord for any costs or expenses incurred by the
Tenant, whether direct or indirect, in complying with this Section.

15.05 Demolition / Substantial Renovation - Notwithstanding any other provision of this
Lease, the Landlord may terminate this Lease at any time upon giving to the Tenant not less than
12 months’ notice of such termination if it is the Landlord’s intention to demolish, redevelop
or substantially renovate all or part of the Building.

15.06 Relocation - The Landlord shall have the right, at any time and from time to time
before and during the Term and any renewal or extension of the Term of this Lease, to change the
location of the Leased Premises from the location described in this Lease to another location of
similar size and finishes anywhere else in the Project. Provided that the Landlord shall give
the Tenant reasonable notice of such relocation and the Landlord shall reimburse the Tenant for
all reasonable costs directly related to such relocation, but not including any indirect costs
such as lost profits during the relocation period or damages for inconvenience.

15.07 “For Lease” Signs - The Landlord shall have the right during the last 12 months of
the Term to place upon the Leased Premises a notice of reasonable dimensions stating that the
Leased Premises are “for lease” and the Tenant shall not obscure or remove such notice or permit
the same to be obscured or removed.

15.08 Unavoidable Delays - If the Landlord or the Tenant (the “delayed party”) shall be
delayed, hindered or prevented in or from the performance of any of its covenants under this
Lease by any cause not within the control of the delayed party, as determined by the Landlord
acting reasonably (excluding lack of finances of the delayed party), the performance of the
covenant shall be excused for the period during which performance is rendered impossible and the
time for performance thereof shall be extended accordingly, but this shall not excuse the Tenant
from the prompt payment of Rent or from the performance of any of its other obligations under
this Lease not related to such cause.

15.09 Limitation of Recourse - The Tenant acknowledges that, notwithstanding any other
provision contained in this Lease, the obligations of and rights against the Landlord under this
Lease shall be performed, satisfied and paid only out of and enforced against, and recourse
hereunder shall be had only after judgment and only against, the right, title and interest of
the Landlord from time to time in, and the Landlord’s revenue derived from, the Project. No
obligation of the Landlord hereunder or in respect hereof is personally binding upon, nor shall
any resort or recourse be had, judgment issued or execution or other process levied against, the
Landlord (except to the extent necessary for enforcement under the first sentence of this
Section 15.09 and only for that purpose), or against any other assets or revenues of the
Landlord. The only remedy against the Landlord shall be an action for damages, except that if
the Tenant is of the opinion that any consent requested pursuant to Article 12.00 hereof has
been wrongfully withheld, its remedies are as set out in Section 12.02.

If the Landlord is, or this Lease is assigned by the Landlord to, a real estate investment trust
(“REIT”), the parties acknowledge and agree that the obligations of the REIT hereunder and under
all documents delivered pursuant hereto (and all documents to which this document may be
pursuant) or which give effect to, or amend or supplement, the terms of this Lease are not
personally binding upon any trustee thereof, any registered or beneficial holder of units (a
“Unitholder”) or any annuitant under a plan of which a Unitholder acts as a trustee or carrier,
or any officers, employees or agents of the REIT and resort shall not be had to, nor shall
recourse or satisfaction be sought from, any of the foregoing or the private property of any of
the foregoing, but the Project only shall be bound by such obligations and recourse or
satisfaction may only be sought from the revenue of the Project.

 

 

15.10 Notice - Any notice required or contemplated by any provision of this Lease shall
be given in writing and delivered either: (i) personally; (ii) by prepaid courier service; (iii)
by facsimile with confirmation of transmission; or (iv) by registered mail, postage prepaid; and
if to the Landlord at the Landlord’s local office as specified in Item 1(a) of the Term Sheet,
with a copy to the Landlord’s head office address as specified in Item 1(b) of the Term Sheet
and if to the Tenant at the Leased Premises (whether or not the Tenant has departed from,
vacated or abandoned the same), or, at the Landlord’s option, to the Tenant’s head office
address as specified in item 2 of the Term Sheet. Notwithstanding the provision of any statute
or law relating thereto, service by means of electronic mail of any notice required to be given
in writing by either party hereto pursuant to this Lease shall not constitute good and effective
service.

Any notice shall be considered to have been given or made: (i) if delivered personally or by
prepaid courier, on the day of delivery; (ii) if sent by facsimile and received on or before
4:30 p.m. local time for the recipient, on the day of transmission; (iii) if sent by facsimile
and received after 4:30 p.m. local time for the recipient, on the next Business Day following);
or (iv) if sent by registered mail, 3 Business Days following the date upon which it was mailed.
Either party may from time to time by notice in writing to the other designate another address
or addresses in Canada as the address to which notices are to be sent. If the postal service is
interrupted or substantially ‘delayed or threatened to be interrupted or delayed, any notice
shall only be delivered by one of the alternate methods stated above.

If two or more Persons are named as, or bound to perform the obligations of, the Tenant
hereunder, notice given as herein provided to any one of the Persons constituting the Tenant or
so bound shall be deemed to be notice simultaneously to all Persons constituting the Tenant and
to all Persons so bound. Any notice given to the Indemnifier or the Tenant shall be deemed to
have been given simultaneously to the other of them and to all Persons bound by their
obligations hereunder.

15.11 Delegation of Authority - The Landlord’s Agent may act on behalf of the Landlord
in any manner provided for herein. The Tenant acknowledges that, if this Lease has been executed
for and on behalf of, in the name of and with the authority of the Landlord by the Landlord’s
Agent, the covenants and agreements of the Landlord are obligations of the Landlord and its
successors and assigns only and are not obligations personal to or enforceable against the
Landlord’s Agent in its own right.

15.12 Relationship of Parties - Nothing contained in this Lease shall create any
relationship between the parties hereto other than that of landlord and tenant and, if
applicable, indemnifier.

15.13 Governing Law. - This Lease shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the laws of the province in which the
Project is situated and the laws of Canada applicable therein and shall be subject to the
exclusive jurisdiction of the courts of the province in which the Project is situated.

15.14 Amendment or Modification - No amendment, modification or supplement to this Lease
shall be valid or binding unless set out in writing and executed by the Landlord and the Tenant
with the same degree of formality as the execution of this Lease.

15.15 Legal and Administration Costs  - The Tenant shall indemnify the Landlord against
all legal fees on a solicitor and client or substantial indemnity basis and disbursements
incurred by the Landlord or by the Landlord’s Agent in connection with the negotiation,
preparation and execution of any renewal, amendment, assignment, cancellation, approval or
consent in connection with this Lease, including the Landlord’s reasonable administration
charges. All such costs and charges shall be paid by the Tenant to the Landlord forthwith upon
demand.

15.16 Construction - All of the provisions of this Lease are to be construed as covenants
and agreements. If any provision of this Lease is illegal or unenforceable, it shall be considered
separate . and severable from the remaining provisions of this Lease, which shall remain in force
and be binding as though the provision had never been included. Any language or wording in this
Lease which has been struck out shall be deemed not to have ever been included herein and shall
not be considered in construing or interpreting any other provision of this Lease, nor shall there
be any implication that by the deletion of any language or wording, the parties hereto intended to
state the opposite of the struck out language or wording.

15.17 Captions and Headings - The captions and headings contained in this Lease are for
convenience of reference only and are not intended to limit, enlarge or otherwise affect the
interpretation of the Articles, Sections or parts hereof to which they apply.

15.18 Interpretation - In this Lease, “herein”, “hereof”, “hereunder”, “hereafter” and
similar expressions refer to this Lease and not to any particular Article, Section or other
portion thereof unless there is something in the subject matter or context inconsistent
therewith. Wherever necessary or appropriate in this Lease, the plural shall be interpreted as
singular, the masculine gender as feminine or neuter and vice versa; and when there are two or
more parties bound by the Tenant’s covenants herein contained, their obligations shall be joint
and several. If the Tenant is a

 

 

partnership, each Person who is presently a member of such partnership and each Person who
becomes a member of any successor partnership shall be and continue to be liable jointly and
severally for the performance of the obligations of this Lease, whether or not such Person
ceases to be a member of such partnership or successor partnership and after the partnership
ceases to exist.

15.19 Time of the Essence - Time shall be of the essence hereof and no extension or
variation of this Lease shall operate as a waiver of this provision.

15.20 Successors and Assigns - Subject to specific provisions contained in this Lease to
the contrary, this Lease shall enure to the benefit of and be binding upon the successors and
assigns of the Landlord and the heirs, executors and administrators and the permitted successors
and assigns of the Tenant.

15.21 Counterparts - This Lease may be executed in counterparts and the counterparts
together shall constitute an original.

15.22 Further Schedules - Any additional covenants, agreements and conditions forming
part of this Lease will be attached as Schedule E and the Tenant agrees with the Landlord to
comply with the provisions of Schedule E. If an Indemnifier is a party hereto, the form of
Indemnity Agreement to be executed by the Indemnifier and the Landlord as a separate agreement
will be attached as Schedule F.

15.23 Independent Legal Advice - The Tenant and the Indemnifier each acknowledge that
the Landlord hereby advises each of the Tenant and the Indemnifier to obtain advice from
independent legal counsel prior to signing this Lease and/or the Indemnity Agreement. The Tenant
and the Indemnifier further acknowledge that any information provided by the Landlord is not to
be construed as legal, tax or any other expert advice and the Tenant and the indemnifier are
cautioned not to rely on any such information without seeking legal, tax or other expert advice.

The Landlord and the Tenant understand, acknowledge and agree that this Lease has been freely
negotiated by both parties and that, in any dispute or contest over the meaning, interpretation,
validity or enforceability of this Lease or any of its terms or conditions, there shall be no
inference, presumption or conclusion drawn whatsoever against either party by virtue of that
party having drafted this Lease or any portion thereof.

15.24 No Offer - The Landlord will not. be deemed to have made an offer to the Tenant by
furnishing an unexecuted copy of this Lease with particulars inserted. Notwithstanding that a
Security Deposit or payment of advance Rent is received by the Landlord when this Lease is
received by the Landlord for execution, no contractual or other right will exist between the
Landlord and the Tenant with respect to the Leased Premises until the Landlord, the Tenant and
the Indemnifier, if any, have executed and delivered this Lease and any required Indemnity
Agreement.

15.25 Landlord’s Security Interest

(1) As security for the Tenant’s performance of its obligations under this Lease, including but
not limited to the payment of Rent and GST, the Tenant grants to the Landlord by way of security
interest, mortgage, pledge, charge, assignment and hypothec a continuing security interest (the
“Security Interest”) in the Tenant’s present and future undertaking and all of its present and
after acquired personal property and assets including without limitation the assets described in
Schedule G attached hereto and forming part hereof and all goods (including inventory), trade
fixtures and other personal property of the Tenant located from time to time on the Leased
Premises and any Leasehold Improvements which the Tenant effects on or in respect of the Leased
Premises (collectively the “Collateral”). The Tenant may however, prior to the occurrence of an
Event of Default, sell or dispose of its inventory to its customers in the ordinary course of
business, in accordance with the terms and conditions of this Lease, without the consent of the
Landlord. The Tenant will promptly execute additional documents and will provide additional
information required by the Landlord from time to time in connection with the Security Interest.
The Tenant authorizes the Landlord to file a financing statement and any other form of document
required in connection with the Security Interest to perfect, protect or preserve its Security
Interest. The Landlord’s Security Interest is in addition to and not in lieu of its right of
distress.

(2) The Landlord may enforce its Security Interest upon the occurrence of an Event of Default in
the manner outlined in Schedule G attached hereto and forming part hereof or in any other manner
available at law or in equity.

(3) The grant of the Security Interest shall not effect or result in a merger of any rights or
interests of any party hereto.

(4) To the extent permitted by law, the Tenant hereby waives its right to receive a copy of any
financing statement, financing change statement or verification statement relating to the
Security Interest.

 

 

(5) The Landlord and the Tenant acknowledge that they have not agreed to postpone the time for
attachment of the Security Interest with respect to existing Collateral, and that the Security
Interest shall attach to after acquired Collateral as soon as the debtor has rights in such
Collateral.

15.26 Survival of Covenants and Indemnities - All Obligations of the Tenant which arise
during the Term pursuant to this Lease and which have not been satisfied at the end of the Term
and all indemnities of the Tenant contained in this Lease shall survive the expiration or other
termination of this Lease.

15.27 Exculpatory Provisions - In all provisions of this Lease containing a release,
indemnity or other exculpatory language in favour of the Landlord, reference to the Landlord
includes reference also to the Landlord’s Agent and nominee (if any) and any Person for whom
any one or more of them is in law responsible and the directors, officers and employees of the
Landlord, the Landlord’s Agent and nominee (if any) and any Person for whom they are in law
responsible (including the agents of any of them) while acting in the ordinary course of their
employment (collectively the “Released Persons”), it being understood and agreed that, for the
purposes of this Section 15.27, the Landlord is deemed to be acting as the agent or trustee on
behalf of and for the benefit of the Released Persons solely to the extent necessary for the
Released Persons to take the benefit of this Section 15.27.

15.28 Brokerage Commissions - The Tenant covenants that no act of the Tenant has given
rise nor shall give rise to any Claims against the Landlord for any brokerage commission,
finder’s fee or similar fee in respect of this Lease. The Tenant hereby indemnifies and agrees
to hold the Landlord harmless from any Claims for such commission or fees with respect to this
Lease except any which were directly contracted for by the Landlord.

15.29 Covenants to be Performed at Landlord’s Option Where any provision in this Lease
gives the Landlord the option of having the Landlord or the Tenant perform the covenants set
out in such provision, the Tenant shall perform such covenants unless the Tenant is otherwise
directed by way of written notice from the Landlord.

15.30 Radiation Only if the Landlord believes on reasonable grounds that radiation is
or has been used or created by the Tenant or any Person permitted by the Tenant to be in the
Leased Premises, shall this Section 15.30 apply to the Tenant.

 

 

`

The Tenant agrees, if so requested by the Landlord, to conduct at its own expense a survey
by an accredited firm of consultants acceptable to the Landlord to determine the level of
radiation in the Leased Premises, and if such levels are in excess of those allowable
under Environmental Laws and set by the applicable regulatory authorities governing
radiation, the Tenant agrees, at its own cost and expense and on terms and conditions
approved by the Landlord, to reduce the level of radiation to a level allowable under
Environmental Laws and set by such applicable regulatory authorities.

IN WITNESS WHEREOF the parties hereto have executed this Lease as of the .date first set
forth above.

	 	 	 	 	 
	APPROVAL	 	LANDLORD:
	BRANCH Jan 8/05	 	CORDOVA EQUITIES INC.,
	 	 	by its agents MORGUARD INVESTMENTS LIMITED
	 
	 	 	 	 
	 

	 	By :
	 	/s/ MICHAEL WALKER
	 

	 	 	 	 
	 

	 	 	 	Name: MICHAEL WALKER
	 

	 	 	 	Title: AUTHORIZED SIGNATORY
	 
	 	 	 	 
	 

	 	By :	 	 
	 

	 	 	 	/s/ J. I. JOHNSTON
	 

	 	 	 	 
	 

	 	 	 	Name: J. I. JOHNSTON
	 

	 	 	 	Title: AUTHORIZED SIGNATORY
	 
	 	 	 	 
	 	 	We have authority to bind the Corporation

	 	 	 	 	 	 	 
	WITNESS to signatures to Tenant :	 	TENANT:
	 	 	 	 	SEA BREEZE POWER CORP.
	 
	 	 	 	 	 	 
	signature:

	 	

	 	By :	 	/s/ PAUL B. MANSON
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: PAUL B. MANSON
	 

	 	 	 	 	 	Title: PRESIDENT
	print name:

	 	

	 	 	 	 
	 
	 	 	 	 	 	 
	address:

	 	 	 	By :	 	/s/ EUGENE HODGSON
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	Name: EUGENE HODGSON
	 

	 	 	 	 	 	Title: VICE PRESIDENT
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	occupation:
	 	 	 	 	 	 
	 	 	 	 	I/We have authority to bind the Corporation
	 

	 	

	 	 	 	 

 

 

SCHEDULE
A

PLAN SHOWING
LEASED PREMISES

 

 

SCHEDULE Al

LEGAL DESCRIPTION OF LAND

	 	 	 
	Firstly:

	 	PID:006-974-848 Lot
	 

	 	A
	 

	 	Block 14
	 

	 	District Lot 541
	 

	 	Plan 20201
	 
	 	 
	Secondly:

	 	PID: 006-979-530 Lot
	 

	 	B
	 

	 	Block 14
	 

	 	District Lot 541
	 

	 	Plan 20200

 

 

SCHEDULE B

DEFINITIONS

“Article”, “Item”, “Schedule”, “Section” and “Subsection” mean the specified article, item,
schedule, section or subsection, as the case may be, of this Lease.

“Basic Rent” means the amount set out in Item 8 of the Term Sheet payable by the Tenant to the
Landlord in respect of each year of the Term.

“Bio-Medical Waste” shall mean and include the following:

(a) (I) surgical waste including all materials discarded from surgical procedures, including
but not limited to, disposable gowns, soiled dressings, sponges, casts, lavage tubes,
drainage sets, underpads and surgical gloves;

(ii) pathological waste including all human tissues and anatomical parts which emanate
from surgery, obstetrical procedures, autopsy and laboratory;

iii) biological waste including blood and blood products, excretions, exudates,
secretions, suctionings and other body fluids including solid/liquid waste from renal
dialysis;

(iv) isolation waste including all waste emanating from the care or treatment of a
patient on any type of isolation or precaution except reverse (protective) isolation;

(v) . cultures and stocks of etiologic agents and associated biologicals including,
without limitation, specimen cultures, cultures and stocks of etiologic agents, wastes
from production of biologicals and serums, and discarded live and attenuated vaccines;

(vi) laboratory waste which has come in contact with pathogenic organisms, including but
not limited to, culture dishes, devices used to transfer, inoculate and mix cultures,
paper and cloth which has come in contact with specimens or cultures;

(vii) animal carcasses exposed to pathogens in research, their bedding and other waste
from such animals;

(viii) sharps, including any discarded article that may cause punctures or cuts,
including but not limited to, needles, IV tubing with needles attached, scalpel blades,
glassware, and syringes that have been removed from their original sterile containers;
and

(ix) any other wastes identified as infectious or similar wastes in any other applicable
federal, provincial or municipal laws, regulations and guidelines; and

(b) “Chemotherapy Waste” (also known as antineoplastic or cytotoxic waste) means and
includes discarded items, including but not limited to, masks, gloves, gowns, empty IV
tubing bags, vials, syringes and other contaminated materials which have been contaminated
by chemotherapeutic drugs or antineoplastic agents; and

(c) any waste defined as bio-medical waste under any applicable law or regulation.

“Building” means the buildings, structures and improvements from time to time during the Term .
erected in, upon or under the Land municipally identified in. Item 3 of the Term
Sheet and all. alterations and additions thereto and replacements thereof.

“Business Day” means any day which is not a Saturday, Sunday or a statutory holiday observed in
the province in which the Project is situated.

“Capital Tax” means the applicable amount of any tax or taxes including but not limited to
Large Corporations Tax payable based upon or computed by reference to the paid-up capital or
place of business of the Landlord as determined for the purposes of such tax or taxes; provided
that for the purposes hereof, the “applicable amount” of such tax or taxes shall mean the amount
thereof that would be payable if the Project were the only establishment of the Landlord in the
jurisdiction of the taxing authority or if any other establishment of the Landlord therein were
located outside that jurisdiction.

“Claims” means claims, losses, actions, suits, proceedings, causes of action, demands, damages
(direct, indirect, consequential or otherwise), judgments, executions, liabilities,
responsibilities, costs, charges, payments and expenses including, without limitation, any
professional, consultant and legal fees on a solicitor and client or substantial indemnity basis
and any associated disbursements.

“Collateral” has the meaning ascribed in Section 15.25.

 

 

“Commencement Date” means the first day of the Term as specified in Item 7(a) of the Term Sheet.

‘Common Elements means the areas, facilities, utilities, improvements, equipment and
installations (collectively, “elements”) in the Project that, from time to time, are not
intended to be leased to tenants of the Project (including, without limitation, elements within
rentable premises that are intended for the benefit of tenants of the Project and their
invitees and employees) or are designated from time to time as Common Elements by the Landlord
and includes access roads, driveways and parking areas and facilities.

“Consultants” means any reference in this Lease to the Landlord’s accountant, auditor,
architect, surveyor or other consultant shall be deemed to be such duly qualified consultant
appointed by the Landlord in its absolute discretion for the purposes of this Lease or of any
provision hereof; and they will act in accordance with this Lease and the principles and
standards of their professions. In determining any cost allocation the Landlord may rely on,
and the parties shall be bound by, the decision or determination of the Landlord’s Consultants.

“Environmental Laws” shall include any domestic and foreign federal, provincial, municipal or
local laws, statutes, regulations, ordinances, guidelines, policies, judge made laws or common
laws and any orders of a court or governmental authority, relating in any way to the natural or
human environment (including land, surface water, groundwater, and real, personal, moveable and
immoveable property), public or occupational health and safety, and the manufacture,
importation, handling, use, reuse, recycling, transportation, storage, disposal, elimination
and treatment of a substance, hazardous or otherwise.

“Event of Default” means any of the following events:

	(a)	 	all or any part of the Rent hereby reserved is not paid when due;
	 
	(b)	 	the Term or any goods, merchandise, stock in trade, chattels or equipment of the Tenant or

any Indemnifier is or are seized or taken or exigible in execution or in attachment or if a
creditor takes possession thereof or if a writ of execution is issued against the Tenant or
any Indemnifier;
	 
	(c)	 	the Tenant or any Indemnifier or any Person bound to perform the obligations of the
Tenant in this Lease either as guarantor or indemnifier or as one of the parties
constituting the Tenant takes any steps in furtherance of or suffers any order to be made
for its winding-up or other termination of its corporate existence or becomes insolvent or
commits an act of bankruptcy or becomes bankrupt or takes the benefit of any statute that
may be in force for bankrupt or insolvent debtors or becomes involved in voluntary or
involuntary winding-up proceedings or if a receiver or receiver/manager shall be appointed
for all or any part of the business, property, affairs or revenues of the Tenant or such
Indemnifier or Person;
	 
	(d)	 	the Tenant makes a bulk sale of its goods or moves or commences, attempts or threatens
to move its goods, chattels and equipment, or any of them, out of the Leased Premises
(other than in the normal course of its business) or ceases to conduct business in the
Leased Premises;
	 
	(e)	 	the Tenant fails to move into or take possession of the Leased Premises or vacates or
abandons the Leased Premises in whole or in part or fails to actively carry on business
therein;
	 
	(f)	 	a report or statement required from the Tenant under this Lease is materially false or
misleading except if it results from an innocent clerical error as determined by the
Landlord;
	 
	(g)	 	any policy of insurance taken out by either the Landlord or the Tenant with respect to
the Project shall be cancelled by reason of any act or omission of the Tenant;
	 
	(h)	 	the Tenant enters into a Transfer except in compliance with the provisions of this Lease; or
	 
	(i)	 	the Tenant or any indemnifier or any Person bound to perform the obligations of the
Tenant pursuant to this Lease either as guarantor or indemnifier or as one of the parties
constituting the Tenant fails to observe, perform and keep each and every covenant,
agreement, provision, stipulation and condition herein contained to be observed, performed
and kept by the Tenant or the Indemnifier, including observance and performance of the
rules and regulations, (other than payment of Rent) and persists in the failure after 10
days’ written notice by the Landlord requiring the Tenant to remedy, correct, desist or
comply (or if any breach would reasonably require more than 10 days to rectify, unless the
Tenant commences rectification within the 10 day notice period and thereafter promptly,
effectively and continuously proceeds with the rectification of the breach.

“Expropriated”, “Expropriating” and “Expropriation” .have the meanings ascribed in Section
10.06.

 

 

“Fiscal Year” means a period, from time to time determined by the Landlord, all or part of which
falls within the Term, at the end of which the Landlord’s accounts in respect of the Project are
balanced for auditing or bookkeeping purposes. Such period shall be 12 months except when the
Landlord designates a new date. upon which the fiscal year shall end.

“GST” means goods and services tax, being that tax payable pursuant to Parts VIII and
IX of the Excise Tax Act, as amended and re-enacted from time to time, and other like taxes
levied from time to time and includes any blended sales tax which combines GST and provincial
sales tax.

“Indemnifier” means the Person, if any, so identified in the Term Sheet and who has signed this
Lease as Indemnifier.

“Indemnity Agreement” means the agreement attached as Schedule F.

“Land” means those lands legally described in Schedule Al as same may be expanded or contracted
from time to time.

“Landlord’s Agent” means the Person retained by the Landlord from time to time to operate or
manage the Project which, as of the date of this Lease, is Morguard Investments Limited.

“Lease” means this lease, the Term Sheet, and all Schedules attached hereto which are referred
to in this lease and every properly executed instrument which by its terms amends, modifies or
supplements this lease.

“Leased Premises” means those premises in the Building which are described and identified in
Item 4 of the Term Sheet and which are marked in a distinguishing manner on the plan attached as
Schedule A.

“Leasehold Improvements” means:

	(a)	 	all improvements, fixtures, installations, alterations and additions from time to time
made, erected or installed to or in the Leased Premises, in addition to, beyond or
replacing the base building standards, including all partitions however affixed (including
moveable and demountable partitions), millwork and affixed wall units, internal stairways,
doors, hardware, light fixtures, carpeting and other applied floor finishes, and heating,
ventilating and air conditioning equipment and other building services not forming part of
the Landlord’s base building equipment and services; and
	 
	(b)	 	alterations, improvements and equipment made or installed for the exclusive benefit of
the Tenant elsewhere in the Project;

in either case whether or not installed by or on behalf of the Tenant and whether or not
installed during the Term including, without limitation, all fixtures (except trade fixtures) in
the Leased Premises.

“Mortgagee” has the meaning ascribed in Section 13.04.

“Operating Casts” means in respect of any Fiscal Year the total of all costs, expenses and
amounts, incurred or accrued in that Fiscal Year for or with respect to ownership, management,
operation, maintenance, repair, upkeep, insurance, supervision, decoration, cleaning and
upgrading of the Project and the determination and allocation of such costs, expenses and
amounts, whether incurred or accrued by or on behalf of the Landlord or by or on behalf of the
Landlord’s Agent including, without limitation and without duplication:

A. Inclusions - if provided by the Landlord (subject to certain exclusions and
deductions as hereinafter set out):

	(a)	 	the cost of providing and maintaining security, landscaping, gardening and snow and
refuse removal;
	 
	(b)	 	the cost of heating, air conditioning and ventilating the Building and investigating and
remedying air quality and moisture issues and issues related thereto, if any;
	 
	(c)	 	the cost of providing hot and cold or tempered water, electricity (including lighting)
and all other utilities to all parts of the Project not otherwise paid by tenants;
	 
	(d)	 	the cost of providing janitor, window cleaning and general cleaning services including
supplies to all parts of the Project including all premises leased to tenants of the
Project;
	 
	(e)	 	the cost of, replacement of building standard. fluorescent tubes, light bulbs and
ballasts in the Leased Premises and the costs of cleaning, maintaining and servicing of the
electrical light fixtures in the Leased Premises if not separately invoiced pursuant to
Section 7.02;

 

 

	(f)	 	the cost of all insurance taken out and maintained by the Landlord under Article
9:00 and the cost of any deductible amount paid by the Landlord in connection with a
claim under its insurance;
	 
	(g)	 	the rental or lease cost of all rented or leased equipment acquired for the operation or
maintenance of the Project;
	 
	(h)	 	accounting costs incurred in connection with the Project including computations required
for the imposition of charges to tenants and audit fees incurred for the determination of
any costs hereunder and the reasonable costs of collecting and enforcing payment of such
charges;
	 
	(I)	 	the cost of all equipment acquired for operation or maintenance of the Project if
expensed fully in the Fiscal Year in which such equipment is acquired;
	 
	(j)	 	if expensed fully in the Fiscal Year in which the expense is incurred, the cost of any
improvement, replacement, repair or alteration whether with respect to buildings,
improvements, equipment, fixtures or otherwise and whether on-site or off-site which, in
the opinion of the Landlord, is necessary to reduce or limit increases in Operating Costs
or is required by the Landlord’s insurance carriers or by any changes in the laws, rules,
regulations or orders of any governmental authority having jurisdiction, including those
necessary to comply with energy conservation, pollution and environmental control
standards and the costs of any procedures required with respect thereto;
	 
	(k)	 	the cost of investigating; testing, monitoring, removing, enclosing, encapsulating or
abating any Pollutants which are in or about the Project or any part thereof or which have
entered the environment from the Project, if the Landlord is required to do so or if, in
the Landlord’s opinion, it is harmful or hazardous to any Person or to the Project or any
part thereof or to the environment;
	 
	(I)	 	the cost of repairs and replacements to or in respect of the Project including those
resulting from normal wear and tear and otherwise and including those necessary with
respect to the window coverings, decorations, elevators and escalators (if any), roof or
any Parking Facilities;
	 
	(m)	 	the cost of repairs, replacements and improvements to systems in the Project including,
without limitation, the heating, ventilating, air conditioning and energy-saving and
security systems and devices;
	 
	(n)	 	at the Landlord’s election (such election to be evidenced by the method of calculating
Operating Costs for each Fiscal Year), either amortization, in an amount determined by the
Landlord’s accountant, of the cost (whether incurred before or during the Term and whether
or not incurred by the party constituting the Landlord at any time or its predecessor in
title or interest) of any repair, replacement, decoration or improvement of the Project
not expensed within the Fiscal Year in which the expenditure was incurred and of all
equipment required for the operation and maintenance of the Project not included within
Operating Costs for the Fiscal Year in which the expenditure occurred in accordance with
Subsections (i) and (j) above, or depreciation in an amount determined by the Landlord’s
accountant based on the cost (whether incurred before or during the Term and whether or
not incurred by the party constituting the Landlord at any time or its predecessor in
title or interest) of any of those items which the Landlord in its absolute discretion has
elected to treat as capital in nature together with, in each case, an amount equal to
interest at the Prime Rate plus 1.5% per annum on the undepreciated or unamortized amount
thereof;
	 
	(o)	 	the amount of all salaries, wages and fringe benefits paid to or for the benefit of
employees and others engaged either full-time or part-time in the operation or maintenance
of the Project;
	 
	(p)	 	amounts paid for service contracts with independent contractors;
	 
	(q)	 	the cost of energy audits, conservation studies and other, measures taken to conserve
energy or reduce costs or liability;
	 
	(r)	 	the cost of renting, operating and maintaining Project signs and providing directional
signage;
	 
	(s)	 	all other expenses of every nature incurred in connection with the maintenance and
operation of the Project;
	 
	(t)	 	the cost of direct supervision attributable to any of the above;

 

 

	(u)	 	the fair rental value of space in the Building occupied by the Landlord, its
manager or personnel in connection with the Services; and
	 
	(v)	 	any Capital Tax imposed upon the Landlord; provided that if the Capital Tax payable by the
Landlord in this connection is for a period not coinciding with the Fiscal Year, the
amount of
the Capital Tax included in Operating Costs in each Fiscal Year shall be that amount
payable
by the Landlord accruing during the Fiscal Year;

plus a management fee equal to that amount paid to the Landlord’s Agent in respect of
management of the Project or any part thereof or the Landlord’s reasonable charges in lieu
thereof if the Landlord elects to self manage the Project or any part thereof, which fee
shall be in keeping with the industry standard.

B. Exclusions Operating Costs shall exclude, without duplication and without limiting
the generality of the foregoing, and except to the extent expressly included above:

	(a)	 	debt service;
	 
	(b)	 	major structural repairs;
	 
	(c)	 	costs determined by the Landlord from time to time to be fairly allocable to the
correction of initial construction faults or initial maladjustments in operating
equipment, but only to the extent that such costs are recovered from the contractor or
others responsible;
	 
	(d)	 	any ground rent payable by the Landlord in respect of a lease of the Land or part
thereof; and
	 
	(e)	 	tenant improvement allowances, leasing commissions and leasing costs.
	 
	C.	 	Deductions - There shall be deducted from Operating Costs:
	 
	(a)	 	the proceeds of insurance recovered by the Landlord applicable to damage, the cost
of repair of which was included in the calculation of Operating Costs paid by’ the
Tenant; and
	 
	(b)	 	amounts recovered as a result of direct charges to the Tenant and other tenants to
the extent that the cost thereof was included in the calculation of Operating Costs.

“Parking Facilities” means that part of the Project containing parking facilities with
vehicular access thereto including, without limitation, parking spaces, ramps, circulation
space, vehicular entrances and exits, the structural elements thereof and services,
facilities and systems contained in or servicing such parking facilities.

“Person” means an individual, partnership, firm, corporate entity, trust, government or any
department or agency thereof or any combination of them.

“Pollutants” means any substance which is regulated by or which would be considered a
contaminant, pollutant, waste or deleterious or hazardous substance under Environmental Laws,
or which is or may be hazardous to persons or property or detrimentally affect property value
and includes, without limiting in any way the generality of the foregoing:

	(a)	 	radioactive materials;
	 
	(b)	 	explosives;
	 
	(c)	 	any substance that, if added to any air, land and/or water, would degrade or alter
or form part . of a process of degradation or alteration of the quality of that air,
land and/or water, to the extent that it is detrimental to its use by human beings or by
any animal or plant;
	 
	(d)	 	any solid, liquid, gas, microorganism, mould, sound, vibration, ray, heat,
radiation, odour or combinations of any of them that is likely to alter the quality of
the environment (including air, land and water) in any way or the presence of which in
the environment is prohibited by regulation or is likely to affect the life, health,
safety, welfare or comfort of human beings or animals or to cause damage to or otherwise
impair the quality of soil, vegetation, wildlife or property;
	 
	(e)	 	toxic substances;
	 
	(f)	 	substances declared to be hazardous or toxic under any law or regulation now or
hereafter enacted or promulgated by any governmental or municipal authority having
jurisdiction over the Landlord, the Tenant, the Leased Premises or the Project of which the
Leased Premises form a part;

 

 

	(g)	 	any substance, the use or transportation of which or the release of which into the
environment is prohibited, regulated, controlled or licensed under Environmental Laws;
	 
	(h)	 	anything contaminated by any Pollutants; and
	 
	(i)	 	Bio-Medical Waste.

“Prime Rate” means the rate of interest per annum established from time to time by The Bank of
Nova Scotia (or such other bank being one of the 5 largest Canadian chartered banks measured
by assets as the Landlord may designate from time to time) at its head office in Toronto,
Ontario as the reference rate of interest to determine interest rates it will charge on
Canadian dollar loans to its Canadian customers and which it refers to as its “prime rate”.

“Project” means the Land and Building and Includes, without limitation, all Common Elements.

“Property Tax Year” means the 12 month period set by the municipal taxing authorities as the
period for and over which Property Taxes and, where applicable, business taxes are assessed,
charged and payable by the owner or occupant of the Project or Leased Premises respectively,
whether on a calendar or fiscal year or any other basis.

“Property Taxes” means all taxes, rates, levies, duties and assessments whatsoever whether
municipal, school, provincial, parliamentary or otherwise levied, charged, imposed or assessed
against the Project or upon the Landlord in respect, thereof or from time to time
levied, charged, imposed or assessed in the future in lieu thereof or in addition thereto,
including, without limitation, those levied, charged, imposed or assessed for education,
school and local improvements and all business taxes, if any, from time to time payable by the
Landlord or levied against the Landlord on account of its ownership of, or interest in, or the
operation of the Project; and all costs and expenses incurred by the Landlord in good faith in
contesting, resisting or appealing any such taxes, rates, duties, levies or assessments
including, without limitation, legal fees on a solicitor and client or substantial indemnity
basis and other professional fees and interest and penalties on deferred payments, but
excluding income or profits taxes upon the income of the Landlord. If any portion of the
Project is assessed or taxed other than at the prevailing commercial assessment rates and mill
rates due to the occupancy of any tenants or the nature of any tenant’s operation, then the
amount of such taxes, rates, levies, duties or assessments shall be adjusted to be an amount
equal to the amount which would have been incurred had such portion of the Project been
assessed and taxed at the prevailing commercial assessment rates and mill rates throughout the
entire period for which the calculation is being made. Any tax levied on commercial property
or other like tax based on the area or use of the Project or the Leased Premises or any tax on
rent imposed in lieu of the foregoing taxes are included herein. Property Taxes shall not
include any Business Taxes payable by the Tenant pursuant to Section 8.02 and any similar
Taxes levied or assessed separately against other rentable premises in the Project.

“Rent” means the aggregate of all amounts payable by the Tenant to the Landlord under this
Lease. Provided that any and all amounts so payable which are collectible by the Landlord as
agent of a taxing authority and which are Taxes imposed by that authority on the Tenant are
included in Rent so as to determine the Landlord’s rights and remedies in the case of delay or
failure to pay the same notwithstanding that the same do not accrue to the Landlord as rent
hereunder.

“Rentable Area” means the area of the Leased Premises, the Building or any part thereof as
determined by the Landlord and which may be adjusted from time to time to give effect to any
structural or functional change and any change in the leasing pattern in the Building, and
which shall be calculated in accordance with the BOMA ANSI standards specified in Item 5 of
the Term Sheet (except to the extent altered by this definition) as follows:

	(a)	 	in the case of premises occupying the whole of one or more floors, the Rentable Area
of such premises shall be determined by measuring to and from the inside finish of
permanent outer Building walls or from the glass line, whichever extends further, but
shall not include stairs and elevator shafts (except stairs and elevators exclusively
serving the Tenant where the Leased Premises consist of more than one floor), flues,
stacks, pipe shafts and vertical ducts with their enclosing wall. Washrooms, air
conditioning equipment rooms, fan rooms, janitors’ closets, electrical closets and other
closets serving that floor or floors shall be included in the Rentable Area of such
premises. No deductions shall be made for columns and projections necessary to the
Building;
	 
	(b)	 	in the case of premises occupying part of a floor, the Rentable Area of such premises
shall be determined by measuring from and to whichever of the following form the
boundaries of such premises: the inside finish of permanent outer Building walls or from
the glass line, whichever extends further; the centre of partitions which separate such
premises from adjoining premises or public and/or service areas; and the office side of
the corridor walls or other permanent partitions, without in any case, deduction for
columns and projections necessary to the Building, and includes washrooms, air
conditioning equipment rooms, fan rooms, janitors’ closets, electrical closets and other
closets within and serving the Leased

 

 

	 	 	Premises exclusively, but does not include stairs and elevator shafts supplied by the
Landlord for use in common with other tenants, and flues, stacks, pipe shafts or
vertical ducts with their enclosing walls within the Leased Premises; the Rentable Area
as so determined shall have added thereto a portion of the area of the public and/or
service areas on such floor which, without limitation, shall include corridors, elevator
lobbies, washrooms, air conditioning equipment rooms, fan rooms, janitors’ closets,
electrical closets and other closets serving that floor. The portion of such area of the
public and/or service areas so added shall be that portion from time to time which the
Rentable Area of such premises bears to the Rentable Area of all premises leased or set
aside from time to time for leasing by the Landlord on that floor (including such
premises).

“Security Deposit” has the meaning ascribed in Section’ 4.02.

“Security Interest” has the meaning ascribed in Section
15.25.

“Service(s)” means those activities, personnel, facilities, systems and supplies required for
the complete decoration, repair, administration, replacement, maintenance, improvement and
operation of the Project.

“Taxes” means comprehensively all various classes and types of taxes, rates, levies, fees,
duties, charges and assessments from whatever source arising and levied, rated, imposed,
assessed, conferred or chargeable against the Project, the Leased Premises or in respect of the
occupancy and activity carried on therein or on account of the Landlord’s ownership of or
interest in the Project or on account of rents payable with respect therefor and includes
Property Taxes, business taxes or any like tax or other amount levied or assessed in lieu of, in
addition to, or in substitution therefor, whether or not similar to or of the foregoing
character and whether or not in existence on the date hereof, together with an administrative
charge for allocation of Taxes and all costs and expenses incurred by the Landlord in good faith
in contesting, resisting or appealing any such taxes, rates, duties, levies or assessments
including, without limitation, legal fees on a solicitor and client or substantial indemnity
basis and other professional fees and interest and penalties on deferred payments, but excluding
income or profits taxes upon the income of the Landlord.

“Tenant’s Occupancy Costs” means for each Fiscal Year the Tenant’s Proportionate Share of the
Operating Costs and the Tenant’s Proportionate Share of Taxes, in each case for that Fiscal
Year.

“Tenant’s Proportionate Share” means that proportion that the Rentable Area of the Leased
Premises bears to the Total Rentable Area of the Building.

“Term” means the period of time set out in Item 7 of the Term Sheet unless sooner terminated.

“Term Sheet” means the pages identified as Term Sheet attached to this Lease; and all
information and particulars contained therein shall form part of this Lease.

“Total Rentable Area of the Building” means the total Rentable Area of the Building located at
or above grade level.

“Transfer” means:

	(a)	 	an assignment, sublease, licensing or other disposition by the Tenant of this Lease or
any interest therein or any interest in the Leased Premises (whether or not by operation of
law) or in a partnership that is the Tenant under this Lease, or a mortgage or charge
(floating or. otherwise) or other encumbrance of or upon this Lease by the Tenant, except a
Transfer that, occurs on the death of the Transferor;
	 
	(b)	 	a parting with or sharing of possession of all or part of the Leased Premises; and
	 
	(c)	 	a transfer or issue by sale, assignment, bequest, inheritance, operation of law or other
disposition, or by subscription, of all or part of the corporate shares of the Tenant which
results in a change in the effective voting control of the Tenant (unless the Tenant is a
corporation whose shares are traded on a stock exchange in Canada or the United States of
America or is a subsidiary of such a corporation).

“Transferor” and “Transferee” have meanings corresponding to the definition of “Transfer”. In
the case of a Transfer described in item (c) of the definition of Transfer, the Transferor is
the Person that has or would have effective voting control before the Transfer and the
Transferee is the Person that has or would have effective voting control after the Transfer. The
singular and plural forms of defined words and phrases shall have corresponding meanings.

 

 

SCHEDULE C

RULES AND REGULATIONS

	1.	 	Definition - in these rules and regulations, ‘Tenant” includes the employees,
servants, agents, invitees, subtenants and licensees of the Tenant and others over whom the
Tenant can reasonably be expected to exercise its control.
	 
	2.	 	Common Elements - The Landlord reserves entire control of the Common Elements and
will maintain them in such manner as it deems best for the benefit of the tenants
generally. The Landlord reserves the right to restrict and regulate the use of the Common
Elements by the Tenant and by persons making deliveries to the Tenant.
	 
	3.	 	Smoking - Smoking is not permitted in the Common Elements, except as may be
otherwise designated. The Landlord shall have the right, in its sole discretion, to
determine whether any designated smoking area shall be established, and the size and
location of any such area.
	 
	4.	 	Obstructions - The sidewalks, driveways, entrances, vestibules, passages,
corridors, halls, elevators and stairways shall not be encumbered or obstructed by the
Tenant or be used by it for any purpose other than for entrance to and exit from the Leased
Premises.
	 
	5.	 	Deliveries — The Tenant shall not permit the parking of delivery vehicles so as to
interfere with the use of any driveway, walkway, parking area or other Common Elements. The
Tenant shall ensure that deliveries of materials and supplies to the Leased Premises are
made through such entrances, elevators and corridors and at such times as may from time to
time be designated by the Landlord and shall promptly pay or cause to be paid to the
Landlord the cost of repairing any damage in or to the Building caused by any person making
such deliveries. The Landlord reserves the right to remove at the expense and risk of the
owner any vehicle not using designated “vehicle standing” areas.
	 
	6.	 	Security - The Landlord may from time to time adopt appropriate systems and
procedures for the security and safety of the Building including restricting access during
non-business hours and the Tenant shall comply with the Landlord’s reasonable requirements
relating thereto.
	 
	7.	 	Locks - No additional locks or bolts of any kind shall be placed by the Tenant
upon any of the doors or windows of the Leased Premises, nor shall any changes whatsoever
be made to existing locks or the mechanics thereof except by the Landlord at its option.
The Tenant 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 at the Tenant’s expense. Upon termination of this Lease, the Tenant
shall surrender to the Landlord all keys to the Leased Premises and any other parts of the
Building together with any parking passes or other devices permitting entry,
	 
	8.	 	Antennae - The Tenant shall not mount or place an antenna or aerial of any nature
on the exterior of the Leased Premises or Building.
	 
	9.	 	Garbage - The handling and disposal of garbage shall comply with arrangements
prescribed by the Landlord from time to time. No disproportionate or abnormal quantity of
waste material shall be allowed to accumulate in the Leased Premises and the cost of
removal or clearing of quantities in excess of such normally provided service may be
charged to the Tenant.
	 
	10.	 	Repairs, Alterations and Improvements - The Tenant shall carry out repairs,
maintenance, alterations and improvements in the Leased Premises only during times agreed
to in advance by the Landlord and in a manner which will not interfere with the rights of
other tenants in the Building.
	 
	11.	 	Maintenance - The Tenant shall provide adequate facilities and means to prevent
the soiling of walls, floors and carpets in and abutting the Leased Premises whether by
shoes, overshoes, any acts or omissions of the Tenant or otherwise.
	 
	12.	 	Installations and Wiring - The Tenant shall not mark, paint, drill into or in any
way deface the walls, ceilings, partitions, floors or other parts of the Leased Premises
and the Building except with the prior written consent of the Landlord and as it may
direct. If the Tenant desires electrical or communications connections, the Landlord
reserves the right to direct qualified persons as to where and how the wires should be
introduced, and without such directions, no boring or cutting for wires will be permitted.
No gas pipe or electric wire will be permitted which has not been ordered or authorized in
writing by the Landlord. .

 

 

	13.	 	Heating, Air Conditioning and Plumbing Systems - The Tenant shall not attempt
any repairs, alterations or modifications to the heating, air conditioning or plumbing
systems.
	 
	14.	 	Water Fixtures - The Tenant shall not use the plumbing facilities for any other
purpose than that for which they are constructed, and no foreign substance of any kind shall
be thrown therein, and the Tenant shall pay the cost of any breakage, stoppage or damage
resulting from a violation of this provision.
	 
	15.	 	Personal Use of Leased Premises - The Leased Premises shall not be used for
residential, lodging or sleeping purposes or for the storage of personal effects or property
not required for business purposes as permitted under this Lease.
	 
	16.	 	Solicitations - The Landlord reserves the right to restrict or prohibit canvassing,
soliciting or peddling in the Building.
	 
	17.	 	Heavy Articles - The Tenant shall not, in the Leased Premises or the Building, bring
in, take out, position, construct, install or move anything liable to injure or destroy any
part of the Building including, without limiting the generality of the foregoing,
any safe, business machinery or other heavy machinery or equipment without the prior written
consent of the Landlord. In giving such consent, the Landlord shall have the right, in its
sole discretion, to prescribe the permitted weight and the position thereof, and the use and
design of planks, skids or platforms required to distribute the weight thereof. All damage
done to the Building by moving or using any such heavy equipment or machinery shall be
repaired at the expense of the Tenant. The moving of all heavy equipment or other machinery
shall occur only by prior arrangement with the Landlord.
	 
	18.	 	Bicycles, Animals - The Tenant shall not bring any animals, except for guide dogs,
into the Building and shall not permit bicycles or other vehicles inside or on the sidewalks
outside the Building except in areas designated from time to time by the Landlord for such
purposes.
	 
	19.	 	Furniture and Equipment - The Tenant shall ensure that furniture, equipment and
fixtures being moved into or out of the Leased Premises are moved through such entrances,
elevators and corridors and at such times as may from time to time be designated by the
Landlord and shall promptly pay or cause to be paid to the Landlord the cost of repairing any
damage in the Building caused thereby.
	 
	20.	 	Heating / Cooling - The Tenant shall not use any means of heating or cooling the
Leased Premises other than that provided by or specifically otherwise permitted in writing by
the Landlord.
	 
	21.	 	Undue Electrical Loads, Heat, Vibration - No material or equipment which could cause
undue loads on electrical circuits or undue vibration, heat or noise shall be brought into
the Building or used therein by or on behalf of the Tenant and no machinery or tools of any
kind shall be affixed to or used in the Leased Premises without the prior written consent of
the Landlord.
	 
	22.	 	Fire Regulations - No Tenant shall do or permit anything to be done in the Leased
Premises or bring or keep anything therein which will in any way increase the risk of fire,
or obstruct or interfere with the rights of other tenants, or violate or act at variance with
the laws relating to fires or with the regulations of the fire department or the board of
health. The Tenant shall cooperate in any fire drills and shall participate in all fire
prevention or safety programs designated by the Landlord.
	 
	23.	 	Flammable Materials - No flammable oils or other flammable, dangerous or explosive
materials shall be kept or permitted to be kept in the Leased Premises.
	 
	24.	 	Food and Beverages - Only persons approved from time to time by the Landlord may
prepare, solicit orders for, sell, serve or distribute foods or beverages in the Building or
use the elevators, corridors or other Common Elements for any such purpose. The Tenant shall
not permit in the Leased Premises the use of equipment for the preparation, serving, sale,
distribution or dispensing of food and beverages except with the prior written consent of the
Landlord and in accordance with arrangements approved by the Landlord.
	 
	25.	 	Notice of Accidents - The Tenant shall give immediate notice to the Landlord in case
of fire or accident in the Leased Premises or in the Building, or in case of defects therein
or in any fixtures or equipment thereof, notwithstanding the Landlord may have no obligations
with respect thereto.
	 
	26.	 	Janitorial Services - The Tenant shall not use or engage any person or persons other
than the janitor or janitorial contractor of the Landlord for the purpose of any cleaning of
the Leased Premises, except with the prior written consent of the Landlord.

 

 

	27.	 	Dangerous or Immoral Activities - The Tenant shall not make any use of the
Leased Premises which could result in risk or injury to any person, nor shall the Leased
Premises be used for any immoral or criminal purpose.
	 
	28.	 	Proper Conduct - The Tenant shall not perform any acts or carry on any practice which
may damage the Common Elements or be a nuisance to any other tenant in the Project.
	 
	29.	 	Additional Rules and Regulations - The Landlord shall have the right to make such
other and further reasonable rules and regulations as in its sole judgment may from time to
time be necessary or of benefit for the safety, care, cleanliness and appearance of the
Project and for the preservation of good order therein.

 

 

SCHEDULE D

LANDLORD’S WORK

NOT APPLICABLE

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SCHEDULE E

ADDITIONAL COVENANTS, AGREEMENTS AND CONDITIONS (if any)

1. Other Deposit

The amount of $25,798.96 shall be held by the Landlord, without interest, as a deposit to
be applied on account towards the first month’s gross rent including GST coming due under
the Lease.

2. Special Equipment

The Tenant shall be responsible for the installation, operation and maintenance of any
special equipment required by its occupancy, including telephone, computers and
communication(s) facilities.

3. Signage

The Landlord will install Building standard signage for the Tenant. No other signage, other
than the Building standard signage shall be permitted without the Landlord’s prior written
approval.

4. Parking

The Landlord shall license to the Tenant 2 reserved parking stalls in the parking garage in
the Building during the Term of the Lease at the prevailing rates established by the
Landlord or its parking contractor plus provincial sales tax and GST. The foregoing monthly
rate shall be adjusted from time to time to the then current monthly rate charged by the
Landlord or its parking contractor for parking space in the garage of the Building.

THE AREA BELOW INTENTIONALLY LEFT BLANK

 

 

SCHEDULE F

FORM OF INDEMNITY AGREEMENT (if applicable)

NOT APPLICABLE

THE AREA BELOW INTENTIONALLY LEFT BLANK

 

 

SCHEDULE G

     SECURITY INTEREST — REMEDIES ON DEFAULT

TENANT:

ADDRESS OF LEASED PREMISES:

DATE:

1.
  ;  If the Security Interest becomes enforceable, the Landlord may, at its option:

	(a)	 	appoint any Person as receiver of all or any part of the Collateral. The word
“receiver” as used in this section 1 includes both a receiver and a receiver and manager.
The Landlord may, from time to time, remove or replace any appointed receiver, or may
institute proceedings in any court of competent jurisdiction for the appointment of a
receiver or for the sale of all or any part of the Collateral. Any receiver will have and
may exercise all rights and powers conferred upon the Landlord under this Lease together
with such other rights and powers which such receiver may have at law or in equity. Any
receiver will be considered to be the agent of the Tenant so far as the responsibility
for the receiver’s acts is concerned and the Landlord will not be responsible for any act
or omission on the part of the receiver, whether wilful, negligent, imprudent or
otherwise;
	 
	(b)	 	take such steps as it considers necessary or desirable to obtain possession of all or
any part of the Collateral and the Tenant agrees that the Landlord may, by its servants,
agents or receiver, at any time during the day or night and without prior notice, enter
the Leased Premises where the Collateral may be found for the purpose of taking
possession of or removing or immobilizing the Collateral or any part of it;
	 
	(c)	 	in connection with the realization of the Collateral, carry on all or any part of the
business and undertaking of the Tenant and may enter upon, occupy and use all or any part
of the property owned or used by the Tenant (including the Collateral) for such time as
the Landlord sees fit, free of charge, and neither the Landlord nor any agent or receiver
appointed by the Landlord will be liable to the Tenant for any negligent or imprudent act
or omission in so doing or in respect of any rent, charges, depreciation or damages in
connection with such actions;
	 
	(d)	 	seize, collect, realize, borrow money on the security of, sell, obtain payment for,
give valid receipts and discharges for, release to third parties or otherwise deal with
or dispose of the Collateral or any part of it in the manner, upon the terms and
conditions and at the time or times as may seem to it advisable, without notice to the
Tenant. The mode, terms and conditions of disposition of the Collateral or any part of it
will be in the sole discretion of the Landlord and it will be deemed to be commercially
reasonable for the Landlord to dispose of the Collateral or any part of it in the
ordinary course of its business. Without limiting any other rights the Landlord may have,
the Landlord may. purchase all or any part of the Collateral at a private
sale, auction, tender, public sale or any other mode of disposition;
	 
	(e)	 	charge on its own behalf and pay to others reasonable sums for expenses incurred and
for services rendered (including legal fees on a solicitor and client or substantial
indemnity basis and fees for receivers, managers, accountants and other professionals) in
connection with the Landlord’s realizing or preparing to realize on the Collateral
(including without limitation obtaining advice in preparation for or otherwise in respect
of such realization) or otherwise dealing with the Collateral in accordance with the
provisions of this Lease and all such sums will be payable by the Tenant to the Landlord
on the earlier of demand and payment of any such sum by the Landlord, and will be secured
by the Security Interest; or
	 
	(f)	 	if it deems it necessary for the proper realization of all or any part of the
Collateral, pay any claim, lien, security interest or other encumbrance that may exist or
be threatened against the Collateral, and the amount paid, together with all costs and
expenses of the Landlord incurred in that connection, will be payable by the Tenant to
the Landlord on the earlier of demand and payment thereof by the Landlord, and will be
secured by the Security Interest.

None of the foregoing remedies shall be exclusive of or dependent on any other remedy, but any
one or more of such remedies may be exercised from time to time independently or in
combination.

2. The Landlord will have the right to postpone indefinitely the sale of the Collateral or any
part of it and shall further have the right, pending that sale, to lease the Collateral or any
part of it to any

 

 

person for any period as the Landlord in its absolute discretion deems necessary in order to
recover or to attempt to recover any indebtedness secured by the Security Interest.

3. The Landlord will not be liable or accountable for any failure to realize or otherwise deal
with the Collateral or any part of it and will not be bound to institute proceedings for the
purpose of effecting any of the foregoing or for the purpose of preserving any rights of the
Landlord, the Tenant or any other person in respect of the Collateral.

4. All monies received or collected by the Landlord in respect of the Collateral may be applied
and reapplied as the Landlord deems fit.

 

 

SCHEDULE H

CONTENTS OF LEASED PREMISES

The following Schedule H is referred to in Section 9.05, Environmental Issues, in this Lease.

All contents and materials, other than standard office furnishings and supplies, stored in the
Leased Premises are as follows:

(please include, in detail, all materials, Pollutants, including but not limited to,
chemicals and related items that are used and/or stored in the Leased Premises)

 

NONE

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