Document:

Exhibit 10.28

 

EXHIBIT 10.28

PRICEWATERHOUSECOOPERS PLACE

OFFICE LEASE

BETWEEN

ONTREA INC.

- AND -

ELECTRONIC ARTS (CANADA), INC.

1

 

OFFICE LEASE

TABLE OF CONTENTS

	 	 	 
	ARTICLE I — PREMISES — TERM AND USE	 	
4
	SECTION 1.01 GRANT AND PREMISES	 	
4
	SECTION 1.02 TERM	 	
4
	SECTION 1.03 CONSTRUCTION OF PREMISES	 	
4
	SECTION 1.04 USE AND CONDUCT OF BUSINESS	 	
6
	ARTICLE II — RENT	 	
6
	SECTION 2.01 COVENANT TO PAY	 	
6
	SECTION 2.02 NET RENT	 	
6
	SECTION 2.03 PAYMENT OF OPERATING COSTS	 	
6
	SECTION 2.04 PAYMENT OF TAXES	 	
6
	SECTION 2.05 PAYMENT OF ESTIMATED TAXES AND OPERATING COSTS	 	
7
	SECTION 2.06 ADDITIONAL RENT	 	
9
	SECTION 2.07 RENT PAST DUE	 	
9
	SECTION 2.08 UTILITIES	 	
9
	SECTION 2.09 ADJUSTMENT OF AREAS	 	
9
	SECTION 2.10 NET LEASE	 	
9
	SECTION 2.11 DEPOSIT	 	
10
	SECTION 2.12 ELECTRONIC DATA INTERCHANGE	 	
10
	ARTICLE III — CONTROL OF BUILDING	 	
10
	SECTION 3.01 LANDLORD’S SERVICES	 	
10
	SECTION 3.02 ALTERATIONS BY LANDLORD	 	
11
	SECTION 3.03 SECURITY	 	
11
	ARTICLE IV — ACCESS AND ENTRY	 	
11
	SECTION 4.01 RIGHT OF EXAMINATION	 	
11
	SECTION 4.02 RIGHT TO SHOW PREMISES	 	
12
	SECTION 4.03 ENTRY NOT FORFEITURE	 	
12
	ARTICLE V — MAINTENANCE, REPAIRS AND ALTERATIONS	 	
12
	SECTION 5.01 MAINTENANCE BY LANDLORD	 	
12
	SECTION 5.02 MAINTENANCE BY TENANT; COMPLIANCE WITH LAWS	 	
13
	SECTION 5.03 USE OF HAZARDOUS SUBSTANCES	 	
13
	SECTION 5.04 REMOVAL OF HAZARDOUS SUBSTANCES	 	
13
	SECTION 5.05 TENANT’S ALTERATIONS	 	
13
	SECTION 5.06 REPAIR WHERE TENANT AT FAULT	 	
15
	SECTION 5.07 REMOVAL OF IMPROVEMENTS AND FIXTURES	 	
15
	SECTION 5.08 LIENS	 	
15
	SECTION 5.09 NOTICE BY TENANT	 	
15
	SECTION 5.10 FAILURE BY TENANT TO REPAIR	 	
15
	SECTION 5.11 NOT TO OVERLOAD FLOORS	 	
16
	ARTICLE VI — INSURANCE AND INDEMNITY	 	
16
	SECTION 6.01 TENANT’S INSURANCE	 	
16
	SECTION 6.02 INCREASE IN INSURANCE PREMIUMS	 	
17
	SECTION 6.03 CANCELLATION OF INSURANCE	 	
17
	SECTION 6.04 LOSS OR DAMAGE	 	
18
	SECTION 6.05 LANDLORD’S INSURANCE	 	
18
	SECTION 6.06 INDEMNIFICATION OF THE LANDLORD	 	
18
	SECTION 6.07 WAIVER OF SUBROGATION	 	
19
	ARTICLE VII — DAMAGE AND DESTRUCTION	 	
19
	SECTION 7.01 NO ABATEMENT	 	
19
	SECTION 7.02 DAMAGE TO PREMISES	 	
19

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	SECTION 7.03 RIGHTS OF TERMINATION	 	
19
	SECTION 7.04 DESTRUCTION OF BUILDING	 	
20
	SECTION 7.05 ARCHITECT’S CERTIFICATE	 	
20
	ARTICLE VIII — ASSIGNMENT, SUBLETTING AND TRANSFERS	 	
21
	SECTION 8.01 ASSIGNMENTS, SUBLEASES AND TRANSFERS	 	
21
	SECTION 8.02 LANDLORD’S RIGHTS	 	
22
	SECTION 8.03 CONDITIONS OF TRANSFER	 	
23
	SECTION 8.04 CHANGE OF CONTROL	 	
24
	SECTION 8.05 NO ADVERTISING	 	
24
	SECTION 8.06 MERGER	 	
24
	SECTION 8.07 ASSIGNMENT BY LANDLORD	 	
24
	ARTICLE IX – DEFAULT	 	
24
	SECTION 9.01 DEFAULT AND REMEDIES	 	
24
	SECTION 9.02 DISTRESS	 	
26
	SECTION 9.03 RIGHT OF POSSESSION	 	
26
	SECTION 9.04 LANDLORD MAY PERFORM COVENANTS	 	
26
	SECTION 9.05 INJUNCTION	 	
26
	SECTION 9.06 DAMAGES AND COSTS	 	
27
	SECTION 9.07 ALLOCATION OF PAYMENTS	 	
27
	SECTION 9.08 SURVIVAL OF OBLIGATIONS	 	
27
	SECTION 9.09 PAYMENTS AND TERMINATION	 	
27
	SECTION 9.10 REMEDIES OF LANDLORD CUMULATIVE	 	
27
	ARTICLE X — STATUS STATEMENT, ATTORNMENT AND SUBORDINATION	 	
27
	SECTION 10.01 STATUS STATEMENT	 	
27
	SECTION 10.02 SUBORDINATION	 	
27
	SECTION 10.03 ATTORNMENT	 	
28
	SECTION 10.04 EXECUTION OF DOCUMENTS	 	
28
	ARTICLE XI – PARKING	 	
28
	SECTION 11.01 PARKING	 	
28
	ARTICLE XII — GENERAL PROVISIONS	 	
28
	SECTION 12.01 RULES AND REGULATIONS	 	
28
	SECTION 12.02 DELAY	 	
28
	SECTION 12.03 OVERHOLDING	 	
29
	SECTION 12.04 WAIVER	 	
29
	SECTION 12.05 EXPROPRIATION	 	
29
	SECTION 12.06 FIRE DRILLS	 	
29
	SECTION 12.07 ENERGY CONSERVATION	 	
29
	SECTION 12.08 REGISTRATION	 	
30
	SECTION 12.09 ACCORD AND SATISFACTION	 	
30
	SECTION 12.10 NOTICES	 	
30
	SECTION 12.11 SUCCESSORS	 	
30
	SECTION 12.12 JOINT AND SEVERAL LIABILITY	 	
30
	SECTION 12.13 CAPTIONS AND SECTION NUMBERS	 	
31
	SECTION 12.14 EXTENDED MEANINGS	 	
31
	SECTION 12.15 PARTIAL INVALIDITY	 	
31
	SECTION 12.16 ENTIRE AGREEMENT	 	
31
	SECTION 12.17 GOVERNING LAW	 	
31
	SECTION 12.18 TIME OF THE ESSENCE	 	
31
	SECTION 12.19 QUIET ENJOYMENT	 	
31
	SECTION 12.20 INDEMNITY AGREEMENT/LETTER OF CREDIT	 	
31
	SECTION 12.21 SPECIAL PROVISIONS	 	
32
	SECTION 12.22 TELEPHONE AND COMPUTER SYSTEMS	 	
32
	SECTION 12.23 EXECUTION	 	
33
	SECTION 12.24 ARBITRATION	 	
33

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THIS LEASE is dated as of the 7th day of October, 2002.

B E T W E E N:

ONTREA INC.

(“Landlord”)

- and -

ELECTRONIC ARTS (CANADA), INC.

(“Tenant”)

ARTICLE I  — PREMISES — TERM AND USE

Section 1.01 Grant and Premises

In consideration of the performance by the Tenant of its obligations under this
Lease, the Landlord leases the Premises to the Tenant for the Term and grants
to the Tenant the Access Easement throughout the Term. The Premises will be
located on the 17th, 18th , 19th and 20th floors of the Building and are shown
cross-hatched in red on the floor plan attached as Schedule “B”. The Rentable
Area of the Premises is approximately Fifty-One Thousand, Eight Hundred and
Seventy-Eight (51,878) square feet. “Access Easement” means an easement in
favour of the Tenant, its employees and invitees over those portions of the
Complex necessary to enable the Tenant, its employees and invitees to gain
access to the Premises and the Parking Facilities on a twenty-four (24) hour
basis, seven (7) days a week (subject to compliance with the Landlord’s
reasonable security requirements and except in the event of emergencies) which
shall include those portions as designated by the Landlord from time to time,
as available for common access and egress of occupants of the Building such as
driveways, walkways, hallways, elevators and exits and entrances.

Section 1.02 Term

The Term of this Lease is ten (10) years from the Commencement Date to and
including the date being ten (10) years thereafter (the “Expiry Date”).

Section 1.03 Construction of Premises

On the Possession Date the Tenant shall actively commence and thereafter
diligently conduct and complete the Tenant’s Work within the Fixturing Period.
The Tenant shall not be entitled to exclusive occupation of the Premises until
the Landlord’s Work is completed. Subject to the foregoing, the Tenant shall
be allowed to occupy and commence business in the Premises during the Fixturing
Period provided that the Landlord and the Tenant are in receipt of all required
permits as contemplated herein for its Leasehold Improvements, Trade Fixtures
and its occupancy. The Tenant shall be subject to and shall comply with all
the terms and conditions of this Lease during the Fixturing Period except that
no Basic Rent or Additional Rent shall be payable by the Tenant prior to the
Commencement Date. Without limiting the generality of the foregoing, the
Tenant shall, subject to the payment of the Allowance, promptly upon being
invoiced therefor, pay for all costs necessary to complete the Tenant’s Work.

The Landlord shall provide, at its cost, the following base building work
described in Appendix “1” attached hereto (the “Base Building Standards”) prior
to the Possession Date.

At the option of the Tenant, the Tenant shall be entitled either before or
after the Possession Date, at the Tenant’s sole cost and expense, remove the
suspended ceiling, insulation from HVAC ducts and lighting system within the
Premises, as directed by the Tenant, to all applicable building code
requirements, including redirecting the sprinkler heads if required. Any
material so removed shall be the property of the Tenant to dispose with as it
sees fit.

The Tenant shall be responsible for the installation and maintenance of its
telephones, computers and special communications equipment.

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The Tenant shall complete the Tenant’s Work in strict accordance with the plans
and specifications for such work prepared by architects and engineers
previously approved in writing by the Landlord. All Tenant’s Work shall be
done in a good and workmanlike manner. The Tenant’s Work shall not be
commenced until the requirements hereof have first been met and the Landlord’s
written approval as required herein has been obtained. All of the provisions
of Section 5.05 will be applicable to the initial Tenant’s Work. In addition
to the foregoing: (a) the Tenant will be permitted to install one or more
internal stairwells in the Premises, at the Tenant’s cost. Stairwells can be
located in most areas of the floor plate, provided the opening in the floor
plate is between beams. Final locations are also subject to the prior written
approval of the Landlord. Subject to the limitations of the municipal fire
building and fire codes and the prior written approval of the Landlord, the
Tenant shall have the right to improve the common building stairwells which may
include new paint, flooring and lights; and (b) subject to all applicable
municipal fire and building codes, the Tenant shall have the right, at its sole
cost and expense, to install skylights on the 20th floor ceiling. The exact
number and locations will be mutually agreed upon between the Tenant and the
Landlord. In connection with all of the foregoing, the Landlord will not
unreasonably withhold or delay any of the required approvals.

The Landlord will contribute up to $0.10 (plus goods and services taxes) per
square foot of Rentable Area of the Premises toward the cost of the Tenant’s
space plan of the Premises and in this regard, the Landlord shall reimburse the
Tenant for such amount forthwith upon obtaining satisfactory written evidence
from the Tenant of the costs incurred in connection with the space plan.

The Tenant shall be responsible for the preparation of all space plan services
with respect to any improvements to the Premises over and above the Landlord’s
Work. The Tenant shall also submit to the Landlord working drawings of the
proposed Tenant’s Leasehold Improvements, which drawings must be approved by
the Landlord prior to the commencement of any such work, such approval not to
be unreasonably delayed or withheld. For greater certainty, the Landlord shall
respond to a Tenant’s request for approval as soon as reasonably possible and
in any event within 5 Business Days.

It is the Tenant’s responsibility to secure all the necessary building permits
and approvals required by the City of Vancouver for any Leasehold Improvements
and/or Trade Fixtures. Such permits must be secured before any such work shall
commence on the Premises. The Tenant shall also be responsible for making
application for a certificate of occupancy as required by the City of Vancouver
as it applies to the Premises and its Leasehold Improvements. The Landlord
confirms that it has secured or will secure all necessary permits and approvals
required to construct the Base Building Standards prior to completion of the
same at its sole cost and expense.

The provisions (if any) of the Lease Proposal relating to construction of the
Premises and delay in availability of the Premises for occupancy by the Tenant
shall remain in effect and shall not merge upon the execution of this Lease.
The Tenant shall abide by the provisions of this Lease and the tenant leasehold
improvement manual supplied by the Landlord for any construction it proposes to
do prior to or upon occupancy of the Premises, and any renovations to the
Premises after it takes occupancy. The Tenant agrees to accept the Premises in
their current “as is” condition, subject to any Landlord’s Work expressly set
out in this Lease.

Provided the Tenant is Electronic Arts (Canada), Inc., or any Permitted
Transferee, and is not in default under the terms of the Lease, the Landlord
will pay the Tenant a leasehold improvement allowance of $57.00 per square foot
of the Rentable Area of the Premises, plus all applicable goods and services
taxes (the “Allowance”). Ninety percent (90%) of the Allowance will be paid to
the approved contractor in instalments as agreed between the Landlord, the
Tenant and the approved contractor, on submission of the contractor’s invoices
duly certified as correct by the Tenant’s architect and that the specified work
has been carried out.

The remaining ten percent (10%) of the Allowance will be paid forthwith after
the expiry of the forty-five (45) day lien period, provided no liens have been
registered in respect of the Tenant’s leasehold improvements. The Tenant
acknowledges that the Allowance is to be applied towards the cost of
construction of the Tenant’s leasehold improvements, including wiring. To the
extent that the Allowance exceeds the cost of construction, such extra amount
will be applied by the Landlord to the Net Rent and Operating Costs as the same
become due and payable by the Tenant under this Lease. The Tenant agrees to
provide invoices documenting the cost of construction.

The Landlord will complete the Landlord’s Work in a good and workmanlike
manner. The Landlord will use its reasonable commercial efforts to enforce all
construction warranties and guarantees in respect of the Landlord’s Work.

5

 

Section 1.04 Use and Conduct of Business

The Premises shall be used only for general office uses and the development of
inter-active entertainment software and for no other purpose. The Tenant
shall conduct its business in the Premises in a reputable and first class
manner. The Tenant acknowledges and agrees that it is only one of many tenants
in the Complex and that it shall conduct its business in the Premises in a
manner consistent with the best interests of the Building and the Complex. If
the Tenant is a corporation, the Tenant will be either incorporated or
extra-provincially registered in the Province and will remain in good standing
during the Term with the Registrar of Companies for the Province with respect
to filing annual reports. If the Tenant is a partnership it will be formed or
extra-provincially registered in the Province and will remain in good standing
therein.

ARTICLE II  — RENT

Section 2.01 Covenant to Pay

	(a)	 	Except as otherwise expressly provided in this Lease, the Tenant shall
pay Rent from the Commencement Date without prior demand and without any
deduction, abatement, setoff or compensation. If the Commencement Date is
not on the first day of a calendar month, or the period of time from the
Commencement Date to the end of the first Fiscal Year during the Term, is
less than 12 calendar months, or the period of time from the last Fiscal
Year end during the Term to the end of the Term is less than 12 calendar
months, then Rent for such month and such periods shall be pro-rated on a
per diem basis, based upon a period of 365 days.
	 
	(b)	 	All Rent payable hereunder shall be paid by the Tenant to the Landlord,
without prior demand therefor, at its address set out in Section 12.10 or
at such other place as the Landlord may designate in writing from time to
time.

Section 2.02 Net Rent

Except as otherwise expressly provided for in this Lease, the Tenant shall pay
Net Rent in the sum per annum, payable in equal consecutive monthly
installments
in advance on the first day of each calendar month of the Term as follows:

	 	 	 
	Years 1 – 5:	 	
$29.00 per square foot of Rentable Area of the Premises per annum; and
	Years 6 – 10:	 	
$31.00 per square foot of Rentable Area of the Premises per annum.

As soon as reasonably possible after completion of construction of the
Premises, the Landlord shall measure the Rentable Area of the Premises and
shall calculate the Rentable Area of the Premises and Rent shall be adjusted
accordingly.

Section 2.03 Payment of Operating Costs

The Tenant shall pay to the Landlord the Tenant’s Proportionate Share of Operating Costs.

Section 2.04 Payment of Taxes

	(a)	 	The Tenant shall pay when due all Tenant’s Taxes If the Tenant’s Taxes
is payable by the Landlord only to a relevant taxing authority, the Tenant
shall pay the amount thereof to the Landlord or as it directs. If no
separate tax bills for Tenant’s Taxes are issued with respect to the
Tenant or the Premises, the Landlord may allocate Tenant’s Taxes charged,
assessed or levied against the Building or the Lands to the Tenant on the
basis of the Tenant’s Proportionate Share. If Tenant’s Taxes are
eliminated by the Province or the city in which the Building is located,
and Taxes are increased the Tenant will pay an equitable share of Taxes
attributable to the Premises to the extent that Taxes attributable to the
Premises are increased as a consequence of the elimination of Tenant’s
Taxes. The Tenant shall indemnify and keep indemnified the Landlord from
and against payment for all losses, costs, charges and expenses occasioned
by or arising from any and all Tenant’s Taxes, and any such losses, costs,
charges and expenses suffered by the Landlord may be collected by the
Landlord as Rent with all rights of distress and otherwise as reserved to
the Landlord in respect of Rent in arrears. The Tenant further covenants
and agrees that upon request of the Landlord, the Tenant shall promptly
deliver to the Landlord for inspection, receipts for payment of all
Tenant’s Taxes which were due and payable up to 1 month

6

 

	 	 	prior to the request, and in any event will furnish to the Landlord if
requested by the Landlord any evidence of payment satisfactory to the
Landlord by a date being no later than thirty (30) days after the same
have become payable in each year covering payments for the preceding year.
	 
	(b)	 	The Landlord shall have the right from time to time to reasonably
allocate and re-allocate Taxes among the Building and other various
components of the Complex (unless such portion of the Complex does not
pertain to the Building, the Lands or any portion of the Parking
Facilities). It is understood and agreed that Taxes may include an
allocation to and within the Building of property taxes and any other
amounts referred to above which are levied, rated, charged or assessed
against or upon the Complex generally or those portions which the Landlord
determines are not exclusive to the Building but which serve or benefit
the Building and the tenants thereof together with any other component or
components of the Complex and the tenants or invitees thereof.
	 
	(c)	 	Subject to Section 2.05 hereof, the Tenant shall promptly pay to the
Landlord or the relevant taxing authority, as the Landlord may direct, not
later than the due date thereof, its Proportionate Share of the Taxes
allocated to the Total Rentable Area of the Building by the Landlord.
	 
	(d)	 	If the Landlord obtains a written statement from the assessment or taxing
authorities indicating that as a result of any construction or
installation of improvements in the Premises, or any act or election of
the Tenant, the estimated monthly Taxes payable by the Tenant under
Section 2.05(a) do not accurately reflect the Tenant’s proper share of
Taxes for the calendar year, the Landlord may require the Tenant to pay
such greater or lesser monthly amount as is determined by the Landlord,
acting reasonably.
	 
	(e)	 	The Landlord may: contest any Taxes and appeal any assessments with
respect thereto; withdraw any such contest or appeal; and agree with the
taxing authorities on any settlement or compromise with respect to Taxes.
The Tenant will co-operate with the Landlord in respect of any such
contest or appeal and will provide the Landlord with all relevant
information, documents and consents required by the Landlord in connection
with any such contest or appeal. The Tenant will not contest any Taxes or
appeal any assessments related thereto without the Landlord’s prior
written consent, which consent will not be unreasonably withheld or
delayed.
	 
	(f)	 	The Tenant shall promptly deliver to the Landlord on request, copies of
assessment notices, tax bills and other documents received by the Tenant
relating to Taxes and Tenant’s Taxes and receipts for payment of Taxes and
Tenant’s Taxes payable by the Tenant.
	 
	(g)	 	Notwithstanding any other provisions of this Lease to the contrary, the
Tenant shall pay, without duplication, to the Landlord or to the
appropriate taxing authority if required by the Landlord, as and when
required by law, all Other Taxes not required to be paid by the Tenant
directly to the taxing authority (except to the extent that the Landlord
is entitled to a rebate or credit with respect thereto), it being the
intention of the parties that the Landlord shall, without duplication, be
fully reimbursed by the Tenant for any and all Other Taxes. The amount of
Other Taxes so payable by the Tenant shall be calculated by the Landlord
on the basis that the Building is the only property of the Landlord and
that the only credits, set offs, exemptions or deductions available to the
Landlord are those to which the Landlord is entitled to by virtue of the
purchase of goods and services for the Building (but not by virtue of the
purchase of the Building itself). The amounts payable by the Tenant
hereunder as Other Taxes, shall be deemed not to be Rent, but the Landlord
shall have all the same remedies for and rights of recovery of such
amounts as it has for recovery of Rent.

Section 2.05 Payment of Estimated Taxes and Operating Costs

	(a)	 	The amount of Taxes and Operating Costs may be reasonably estimated by
the Landlord for such period as the Landlord reasonably determines from
time to time, and the Tenant agrees to pay to the Landlord the amounts so
estimated in equal instalments, in advance, on the first day of each month
during such period, provided that in respect of the Taxes such period
shall be a calendar year and the amount of Taxes so estimated shall be
payable in twelve (12) equal monthly instalments in advance.
Notwithstanding the foregoing, when bills for all or any portion of the
amounts of Operating Costs so estimated are received, the Landlord may
bill the Tenant for the Tenant’s Proportionate Share thereof after
crediting against such amounts any monthly payments of estimated Taxes and
Operating Costs previously made by the Tenant and the Tenant shall pay the
Landlord the amounts so billed.

7

 

	(b)	 	Within a reasonable time (not to exceed 180 days) after the end of the
Fiscal Year for which such estimated payments have been made, the Landlord
shall submit to the Tenant a statement showing the calculation of the
Tenant’s share of Taxes and Operating Costs together with a report from
the Landlord’s auditor as to the total amount of Operating Costs. If:

	 	(i)	 	the amount the Tenant has paid is less than the amounts
due, the Tenant shall pay such deficiency to the Landlord; or
	 
	 	(ii)	 	the amount paid by the Tenant is greater than the amounts
due, the Landlord shall pay such excess to the Tenant.
	 

	 	 	 	The obligations contained in this Section 2.05(b) shall survive for a
period of three (3) years (with respect to Operating Costs) and six (6)
years (with respect to Taxes) after the expiration or earlier termination
of the Term. Failure of the Landlord to render any statement of Taxes or
Operating Costs shall not prejudice the Landlord’s right to render such
statement thereafter or with respect to any other period. The rendering
of any such statement shall also not affect the Landlord’s right to
subsequently render an amended or corrected statement.

	(c)	 	If the time or method of collection of Taxes by the municipal,
provincial, parliamentary, or other authority shall become different from
the time or method of collection of Taxes which exists at the date of the
execution of this Lease, the Landlord shall have the right to change the
time or method of the collection of the Tenant’s Proportionate Share of
Taxes such that the Tenant’s Proportionate Share of Taxes for the calendar
year shall be fully paid to the Landlord by such time or times as the
Taxes are due and owing to the municipal, provincial, parliamentary or
other authority.
	 
	(d)	 	Whenever any part or parts of the Operating Costs and/or Taxes are, in
the reasonable opinion of the Landlord, attributable to certain premises
or classes of premises in the Building, the Landlord may attribute such
part or parts thereof to such premises or classes of premises respectively
(the “Designated Premises”). If and whenever the Premises constitute all
or a part of the Designated Premises with respect to any such part or
parts of the Operating Costs and/or Taxes, the Tenant’s share (the
“Share”) thereof shall be a fraction thereof, the numerator of which is
the Rentable Area of the Premises or the part thereof within the
Designated Premises and the denominator of which is the Rentable Area of
the Designated Premises.
	 
	(e)	 	The Landlord may at any time and from time to time change the
commencement and termination dates of any Fiscal Year, so long as the
Tenant is not unduly prejudiced by any such change.
	 
	(f)	 	The Tenant’s Proportionate Share of the Operating Costs (but not Taxes)
shall be capped at a maximum of $5.89 per square foot for 2003 Fiscal
Year, and in 2004 Fiscal Year and 2005 Fiscal Year, any increase on
account of such Tenant’s Proportionate Share of the Operating Costs (but
not Taxes) shall be limited to a maximum of three (3%) percent cumulative
compound increase from the previous year.
	 
	(g)	 	The Tenant shall have the right, at its option and at its own expense
throughout the Term, to review and/or audit the Landlord’s year-end Taxes
and Operating Cost statements, provided that the Tenant’s audit right in
respect of any fiscal period must be exercised within six (6) months after
receipt by the Tenant of the Landlord’s statement of Additional Rent for
such fiscal period, the Tenant and its representatives must keep all
information obtained strictly confidential unless required for court or
arbitration purposes, and the Tenant must give the Landlord at least
thirty (30) days’ written notice of its intention to conduct a review or
audit. In the event of a dispute as to the amount of the Tenant’s
Proportionate Share of Operating Costs or Taxes payable (which the Tenant
shall inform the Landlord of in writing within twelve (12) months after
the statement to which such Operating Costs and Taxes relate has been
submitted), a report by the auditor of the Landlord shall be provided by
the Landlord to the Tenant. If the Tenant fails to object to such report
within thirty (30) days after the receipt thereof it will be deemed to
have approved the report. If the Tenant objects to such report within
thirty (30) days after the receipt thereof, the dispute shall be
determined by a single arbitrator pursuant to the Commercial Arbitration
Act of British Columbia.

8

 

Section 2.06 Additional Rent

Except as otherwise provided in this Lease, all Additional Rent shall be
payable by the Tenant to the Landlord within 5 Business Days after written
demand.

Section 2.07 Rent Past Due

All Rent past due shall bear interest from the date on which the same became
due until the date of payment at 3% per annum in excess of the prime interest
rate for commercial demand loans announced from time to time by any Canadian
chartered bank designated by the Landlord. Such interest shall be calculated
on a daily basis and compounded monthly from the time such amounts first become
due and payable until such amounts and all interest thereon are paid in full by
the Tenant to the Landlord.

Section 2.08 Utilities

	(a)	 	The Tenant shall pay to the Landlord, or as the Landlord directs, all
gas, electricity, water, steam and other utility charges applicable to the
Premises on the basis of the Rentable Area of the Premises unless
separately metered as contemplated in Section 2.08(c) below in which event
such utility charges shall be based on the Tenant’s actual consumption.
Charges for utilities shall be payable in advance on the first day of each
month at a basic rate determined by the Landlord’s engineers. The
Landlord, acting reasonably, shall be entitled to allocate to the Premises
an additional charge, as determined by the Landlord’s engineer, for any
supply of utilities to the Premises in excess of those covered by such
basic charge. If any utility rates or related taxes or charges are
increased or decreased during the Term, such charges shall be equitably
adjusted by the Landlord, acting reasonably.
	 
	(b)	 	The Landlord shall have the exclusive right to replace bulbs, tubes and
ballasts in the lighting system in the Premises, on either an individual
or a group basis. The Tenant shall pay the cost of such replacement on
the first day of each month or at the option of the Landlord upon demand.

Section 2.09 Adjustment of Areas

The exact Rentable Area of the Premises shall be subject to verification in
writing by the Architect, at the Tenant’s expense, in accordance with the BOMA
American National Standard ANSI Z65.1-1980 (Reaffirmed 1989) method of floor
measurement for office buildings in Canada. The actual Rentable Area shall be
adjusted to reflect the final area of the Premises as measured and all Rent
shall be adjusted accordingly.

The Landlord may from time to time re-measure the Rentable Area of the Premises
or re-calculate the Rentable Area of the Premises and may re-adjust the Net
Rent and/or the Tenant’s Proportionate Share of Additional Rent accordingly.
The effective date of any such re-adjustment shall:

	(a)	 	in the case of an adjustment to the Rentable Area resulting from a change
in the aggregate Rentable Area of all office premises on the floor on
which the Premises are situated, the date on which such change occurred;
and,
	 
	(b)	 	in the case of a correction to any measurement or calculation error, be
the date as of which such error was introduced in the calculation of Rent.

Any necessary adjusting payment will be made by the party responsible for that
payment forthwith upon the amount of the adjusting payment being determined.

Section 2.10 Net Lease

This Lease is a completely net lease to the Landlord, except as expressly
herein set out. The Landlord is not responsible for any expenses or outlays of
any nature arising from or relating to the Premises, or the use or occupancy
thereof, or the contents thereof or the business carried on therein, except as
expressly herein set out. The Tenant shall pay all charges, impositions and
outlays of every nature and kind relating to the Premises, except as expressly
herein set out.

9

 

Section 2.11 Deposit

     Intentionally Deleted

Section 2.12 Electronic Data Interchange

     Intentionally Deleted

ARTICLE III  — CONTROL OF BUILDING

Section 3.01 Landlord’s Services

	(a)	 	The Landlord shall provide climate control to the Premises during Normal
Business Hours to maintain a temperature adequate for normal occupancy for
office purposes and subject to the generation of an average amount of heat
from illumination and business machines, except during the making of
repairs, alterations or improvements, provided that the Landlord shall
have no liability for failure to supply climate control service when
stopped as aforesaid or when prevented from doing so by repairs, or causes
beyond the Landlord’s reasonable control.
	 
	(b)	 	Upon prior notice from the Tenant (which, for greater certainty, may be
same day notice), the Landlord shall operate the climate systems beyond
the Normal Business Hours subject to the Tenant paying the incremental
charge therefor at market rates as an additional service at the prevailing
market hourly rate, which may be adjusted by the Landlord from
time-to-time, provided, however, and notwithstanding the foregoing, the
Landlord’s standard hourly rate shall be deemed to be in first Lease Year
$10.50/hr per floor if applicable to the HVAC system being operated with
respect to one floor only, and which amount shall decrease by $1.00 per
hour for each additional floor of the Premises with respect to which such
after hours HVAC is then being operated, and each year thereafter shall be
increased by a maximum amount equal to the percentage increase in the CPI
for such year. The Landlord shall provide to the Tenant throughout the
Term (at the Tenant’s expense) with access to additional 24 hours
auxiliary cooling capacity in accordance with the needs of the Tenant’s
business provided the same may be satisfied by the capacity described in
the Base Building Standards.
	 
	(c)	 	Subject to the Rules and Regulations, the Landlord shall provide elevator
service, including freight elevator service, during Normal Business Hours
for use by the Tenant in common with others, except when prevented by
repairs. The Landlord will operate at least one passenger elevator for
use by tenants at all times except in the case of fire or other
emergencies.
	 
	(d)	 	The Landlord will provide cleaning services in the Building consistent
with the standards of a first class office building (excluding interior
glass areas and areas used exclusively for computer equipment) provided
that the Tenant at the end of each business day shall provide access to
the persons performing the janitor services and leave the Premises in a
reasonably clean and tidy condition. The Tenant hereby agrees that the
Landlord shall have no responsibility or liability whatsoever for any act
or omission on the part of the person, persons, or corporation employed to
perform the cleaning services, save and except in the case of the
negligence of the Landlord.
	 
	(e)	 	Subject to Section 2.08, the Landlord shall make available to the
Premises electricity for normal lighting and miscellaneous power
requirements and, in normal quantities gas, water, and other public
utilities generally made available to other tenants of the Building by the
Landlord.
	 
	(f)	 	The Tenant shall not install any equipment or systems that will exceed,
or overload the capacity or interfere with the normal operation of the
heating, ventilating or air-conditioning or any other service or facility
in the Building and agrees that if any equipment or systems installed by
the Tenant requires additional heating, ventilating or air-conditioning
equipment or any other service or facility, as determined by the Landlord
acting reasonably, the same shall be installed at the Tenant’s expense.
If installation of any equipment, fixture or system or the removal of any
ceiling on or at the Premises by the Tenant necessitates rebalancing or
readjustment of the heating, ventilating and air-conditioning system by
the Landlord, the same will be performed by the Landlord at the Tenant’s
sole expense. The Tenant shall not, without the Landlord’s prior written
consent in each instance, which consent shall not be unreasonably withheld
or delayed, connect any equipment, fixtures, systems or appliances (other
than normal office electrical fixtures, computers, typewriters,

10

 

	 	 	word processors, small office machines and
lamps) to the Building’s electric distribution
system or make any alteration or addition to the
electric system of the Premises.

Section 3.02 Alterations by Landlord

The Landlord may:

	(a)	 	alter, add to, subtract from, construct improvements to, rearrange, on
and construct additional facilities adjoining or near the Building and the
Complex;
	 
	(b)	 	relocate the facilities and improvements comprising the Building (other
than the Premises) or erected on the Lands,;
	 
	(c)	 	do such things on, or in the Lands or Complex as required to comply with
any laws, by-laws, regulations, orders or directives affecting the Lands
or any part of the Complex; and
	 
	(d)	 	do such other things on or in the Lands or Complex as the Landlord,
acting reasonably and in the use of good business judgment determines to
be advisable;

provided that notwithstanding anything contained in this Section, access to the
Premises shall at all times be available from the elevator lobbies of the
Building.

For greater certainty, the Landlord shall use its reasonable commercial efforts
to exercise its rights under this section, to the extent possible in the
circumstances, in such manner so as to minimize interference with the Tenant’s
use and enjoyment of the Premises.

The Landlord shall, subject to the foregoing, not be in breach of its covenant
for quiet enjoyment or liable for any loss, costs or damages, whether direct or
indirect, incurred by the Tenant due to any of the foregoing, save and except
in the case of negligence or wilful misconduct by the Landlord, and in no
circumstances shall there be an abatement or reduction of Rent.

Section 3.03 Security

The Landlord acknowledges that security in respect of the Premises is a
significant issue for the Tenant. In this regard, the Landlord agrees that the
Tenant may at its option, hire its own cleaning and janitorial staff for the
Premises. In such event, the Landlord covenants and agrees to ensure that the
cleaning and janitorial staff for the Building will not have access to the
Premises. If the Tenant exercises its right to have its own cleaning and
janitorial staff, then the Tenant shall not be required to pay its
Proportionate Share of the cleaning and janitorial costs incurred by the
Landlord in respect of the Premises, and such costs will not be included in the
calculation of “Operating Costs” hereunder.

The Landlord agrees that it will during the Term and any extension term
co-operate fully with the Tenant in respect of the Tenant’s security issues and
concerns both with respect to the Premises and the Building as a whole. In
this regard, the Landlord and its employees, agents, servants, contractors and
subcontractors shall not under any circumstances (other than in an emergency)
enter the Premises without the proper written notice as herein required and,
subject to the foregoing, without providing to the Tenant a reasonable
opportunity to have a representative of the Tenant accompany the Landlord. The
Tenant will provide the Landlord with the name and contact information for its
representative prior to taking occupancy of the Premises.

ARTICLE IV  — ACCESS AND ENTRY

Section 4.01 Right of Examination

The Landlord shall be entitled at all reasonable times, and after having given
the Tenant at least twenty-four (24) hours prior written notice, (and at any
time without prior notice in case of emergency but subject to the Landlord
notifying the Tenant as soon as reasonably possible after such entry) to enter
the Premises to examine them; to make such repairs, alterations or improvements
in the Premises or the Building as the Landlord, acting reasonably, considers
necessary or desirable, to have access to underfloor ducts and access panels to
mechanical shafts; to check, calibrate, adjust and balance controls and other
parts of the heating, air conditioning, ventilating and climate control
systems; and for any

11

 

other purpose necessary to enable the Landlord to perform its obligations or
exercise its rights under this Lease or in the administration of the Building
or other improvements on the Lands, provided always that in each instance the
Landlord shall provide to the Tenant the reasonable opportunity to be
accompanied by a representative of the Tenant. The Tenant shall not obstruct
any pipes, conduits or mechanical or electrical equipment so as to prevent
reasonable access thereto. The Landlord shall use its reasonable commercial
efforts to exercise its rights under this Section, to the extent possible in
the circumstances, in such manner so as to minimize interference with the
Tenant’s use and enjoyment of the Premises.

If the Tenant is not present to open and permit an entry into the Premises at
any time when for a proper reason an entry is necessary or permissible, after
reasonable notice as herein provided has been given to the Tenant (subject to
the right to enter in the case of an emergency without prior notice (but
subject to the Landlord notifying the Tenant as soon as reasonably possible
after such entry), the Landlord or its agents may enter by a master key or
card, or may forcibly enter, without rendering the Landlord or its agents
liable therefor and without affecting this Lease. Nothing in this Section
shall be deemed to impose any obligation on the Landlord.

Section 4.02 Right to Show Premises

The Landlord and its agents have the right to enter the Premises at all
reasonable times and on reasonable written notice during Normal Business Hours
to show them to prospective purchasers, or Mortgagees or prospective
Mortgagees, and, during the last six months of the Term (or the last six months
of any renewal term if this Lease is renewed), to prospective tenants. The
Tenant shall be provided the reasonable opportunity to have a representative of
the Tenant in attendance during any such showing.

Section 4.03 Entry not Forfeiture

No entry into the Premises or anything done therein by the Landlord pursuant to
a right granted by this Lease shall constitute a breach of any covenant for
quiet enjoyment, or (except where expressed by the Landlord in writing) shall
constitute a re-entry or forfeiture, or an actual or constructive eviction.
The Tenant shall have no claim for injury, damages or loss suffered as a result
of any such entry or thing, except in the case of negligence or wilful
misconduct by the Landlord in the course of such entry, but the Landlord shall
in no event be responsible for the acts or negligence of any Persons providing
cleaning services in the Building.

ARTICLE V  — MAINTENANCE, REPAIRS AND ALTERATIONS

Section 5.01 Maintenance By Landlord

	(a)	 	The Landlord covenants to keep the following in good repair as a prudent
owner of a first class office building:

	 	(i)	 	the structure of the Building including exterior walls
and roofs;
	 
	 	(ii)	 	the mechanical, electrical and other base building
systems; and
	 
	 	(iii)	 	the entrance, lobbies, plazas, stairways, corridors,
parking areas (including the Parking Facilities) and other
facilities (including any other portion of the Complex applicable
to the Building) from time to time provided for use in common by
the Tenant and other tenants of the Building.
	 

	 	 	 	If such maintenance or repairs are required by law due to the business
carried on by the Tenant, then the full cost of such maintenance and
repairs plus the Overhead Charge shall be paid by the Tenant to the
Landlord.

	(b)	 	The Landlord shall not be responsible for any damages caused to the
Tenant by reason of failure of any equipment or facilities serving the
Building, save and except if such failure is due to the Landlord’s
negligence or wilful misconduct and provided the Landlord diligently
completes such repairs in a good and workmanlike manner, or delays in the
performance of any work for which the Landlord is responsible under this
Lease. The Landlord, acting reasonably, shall have the right to stop,
interrupt or reduce any services, systems or utilities provided to, or
serving the Building or Premises to perform repairs, alterations or
maintenance or to comply with laws or regulations, or requirements of its
insurers, or for causes beyond the Landlord’s reasonable control or as a
result of the Landlord exercising its rights under Section 3.02. The
Landlord shall not be in breach of its covenant for quiet enjoyment,
provided the Landlord shall use its reasonable commercial efforts

12

 

	 	 	to exercise its rights under this section, to the extent possible in
the circumstances, in such manner so as to minimize interference
with the Tenant’s use and enjoyment of the premises, or liable for
any loss, costs or damages, whether direct or indirect, incurred by
the Tenant due to any of the foregoing, save and except in the case
of the negligence of or wilful misconduct by the Landlord, and the
Landlord shall use its reasonable commercial efforts to restore the
services, utilities or systems so stopped, interrupted or reduced as
soon as reasonably possible.

Section 5.02 Maintenance by Tenant; Compliance with Laws

	(a)	 	The Tenant shall at its sole cost repair and maintain the Premises
(exclusive of base building mechanical and electrical systems) all to a
standard consistent with a first class office building, with the exception
only of those repairs which are the obligation of the Landlord under this
Lease, subject to Article VII. The Landlord may enter the Premises at
all reasonable times, and after having given the Tenant at least
twenty-four (24) hours prior written notice (and at any time in case of
emergency but subject to the Landlord notifying the Tenant as soon as
possible after such entry) and the reasonable opportunity to have a
representative of the Tenant in attendance (other than in connection with
any circumstance which constitutes an emergency), to view their condition
and the Tenant shall maintain and keep the Premises in good and
substantial repair according to notice in writing, reasonable wear and
tear excepted, but failure to give notice shall not relieve the Tenant
from any of its obligations. At the expiration or earlier termination of
the Term, the Tenant shall surrender the Premises to the Landlord in as
good condition and repair as the Tenant is required to maintain the
Premises throughout the Term.
	 
	(b)	 	The Tenant shall, at its own expense, promptly comply with all laws,
by-laws, government orders and with all reasonable requirements or
directives of the Landlord’s insurers affecting the Premises or their use,
repair or alteration.
	 
	(c)	 	The Tenant agrees that it shall at its cost be responsible to provide for
the cleaning of all carpets (excluding daily vacuuming) and window
coverings in the Premises by a professional cleaning service at reasonable
intervals.
	 
	(d)	 	The Tenant shall not commit, or permit to be committed, waste upon the
Premises, Building or any other part of the Complex or the fixtures and
equipment thereof or any nuisance or other thing that may disturb the
quiet enjoyment of any other tenant in the Complex, whether or not the
nuisance arises out of the use of the Premises by the Tenant for a purpose
permitted by this Lease.

Section 5.03 Use of Hazardous Substances

The Tenant shall not use the Premises or permit them to be used, to generate,
utilize, manufacture, refine, treat, transport, store, handle, transfer,
produce or process Hazardous Substances.

Section 5.04 Removal of Hazardous Substances

The Tenant shall, upon expiration or termination of this Lease or any renewal
thereof, promptly remove all Hazardous Substances used or brought onto the
Premises by the Tenant or those acting under its authority or control. For
greater certainty, the foregoing obligation of the Tenant shall include,
without limitation, the responsibility to remove any Hazardous Substances which
have as a result of the operations of the Tenant, or any other person acting
under its authority or control, become affixed to, permeated within or
accumulated on or within the Building or other structures forming part of the
Complex.

Section 5.05 Tenant’s Alterations

	(a)	 	No Alterations shall be made to the Premises without the Landlord’s
written approval, which approval shall not be unreasonably withheld or
delayed. The Tenant shall submit to the Landlord details of the proposed
work including 4 sets of detailed drawings and specifications prepared by
qualified architects or engineers conforming to good engineering practice.
All such Alterations shall be performed:

13

 

	 	(i)	 	at the sole cost of the Tenant;
	 
	 	(ii)	 	by contractors and workmen approved by the Landlord,
acting reasonably, whose labour affiliations are compatible with
others employed by the Landlord and its contractors;
	 
	 	(iii)	 	in a good and workmanlike manner;
	 
	 	(iv)	 	strictly in accordance with drawings and specifications
approved by the Landlord;
	 
	 	(v)	 	in accordance with all reasonable insurance requirements
of the Landlord;
	 
	 	(vi)	 	subject to the reasonable regulation, supervision, control and inspection of the Landlord;
	 
	 	(vii)	 	subject to such indemnification against liens and expenses as the Landlord reasonably requires; and
	 
	 	(viii)	 	in accordance with all applicable laws, by-laws and government orders.

	 	 	The Landlord’s reasonable cost incurred with respect to the Tenant’s
Alterations including, without limitation, the cost of approving,
supervising and inspecting all such work shall be paid by the Tenant.
	 
	(b)	 	If the Alterations would affect the structure of the Building or any of
the electrical, plumbing, mechanical, heating, ventilating or air
conditioning systems or other base building systems, such work shall at
the option of the Landlord be performed by the Landlord at the Tenant’s
cost. On completion of such work, the cost of the work (including the
reasonable fees of any architectural and engineering consultants) plus the
Overhead Charge shall be paid by the Tenant to the Landlord.
Notwithstanding any other provision of this Lease, no repairs,
replacements, alterations, additions, or improvements to the Premises by
or on behalf of the Tenant shall be permitted which may weaken or endanger
the structure or adversely affect the condition or operation of the
Premises, the Building, or any portion thereof, or any other portion of
the Complex or any mechanical or electrical system or facility thereof, or
diminish the value thereof. The Tenant shall not, except in the
installation of its usual trade fixtures or other work to be performed by
it in accordance with the provisions of this Lease, cut or drill into,
nail or otherwise attach or secure any fixture, sign, apparatus or
equipment to any part of the Premises without first obtaining the
Landlord’s written consent, which consent shall not be unreasonably
withheld or delayed.
	 
	(c)	 	If the Tenant installs Leasehold Improvements, or makes Alterations which
depart from the Building standard and which restrict access to any
Building system or to any structural element of the Building by the
Landlord or by any person or corporation authorized by the Landlord or
which restricts the installation of the leasehold improvements of any
other tenant in the Building, then the Tenant shall be responsible for all
costs incurred by the Landlord in obtaining access to such Building
system, or in installing such other tenant’s leasehold improvements and
the Tenant shall, at the request of the Landlord, remove any obstruction
in a manner acceptable to the Landlord, failing which the Landlord may
remove the same and the Tenant will pay, or reimburse the Landlord for,
the cost of such removal and for any replacement or restoration of such
Leasehold Improvement or Alteration. Any repairs, replacements,
alterations, additions or improvements made by the Tenant without the
prior written consent of the Landlord or which are not made in accordance
with the drawings and specifications approved by the Landlord shall, if
requested by the Landlord, be promptly removed by the Tenant at the
Tenant’s expense and the Premises restored to their previous condition.
In the event the Tenant fails to comply with any such request of the
Landlord, the Landlord shall be entitled on not less than ten (10)
Business Days’ prior written notice, or in the case of an emergency
forthwith without prior notice (but with subsequent notice as soon as
reasonably possible thereafter), and the reasonable opportunity to have a
representative of the Tenant in attendance (other than in connection with
any circumstances which constitute an emergency), to enter upon the
Premises and restore the same to their previous condition at Tenant’s sole
cost and expense.
	 
	(d)	 	The Tenant shall provide the Landlord with as-built drawings of any
Alterations by it for the Landlord’s records.

14

 

Section 5.06      Repair Where Tenant at Fault

Notwithstanding any other provisions of this Lease but subject to the waiver of
subrogation set out in Section 6.07 hereof, if the Building or any other
portion of the Complex is damaged or destroyed or requires repair, replacement
or alteration as a result of the act or omission of the Tenant, its employees,
agents, invitees, licensees, contractors or others for whom it is in law
responsible, the cost of the resulting repairs, replacements or alterations
plus the Overhead Charge shall be paid by the Tenant to the Landlord.

Section 5.07      Removal of Improvements and Fixtures

All Leasehold Improvements (other than Trade Fixtures) shall immediately upon
their placement become the Landlord’s property without compensation to the
Tenant but the Landlord shall be under no obligation to repair, maintain or
insure the same, such matters being the sole responsibility of the Tenant in
accordance with the provisions of this Lease. Except as otherwise agreed by
the Landlord in writing, no Leasehold Improvements shall be removed from the
Premises by the Tenant either during or at the expiry or sooner termination of
the Term except that:

	(a)	 	the Tenant may, during the Term, in the usual course of its business,
remove its Trade Fixtures, provided that the Tenant is not in default
under this Lease; and
	 
	(b)	 	the Tenant shall, at the expiration or earlier termination of the Term,
at its sole cost, remove its Trade Fixtures in the Premises, failing
which, at the option of the Landlord, the Trade Fixtures shall become the
property of the Landlord and may be removed from the Premises and sold or
disposed of by the Landlord in such manner as it deems advisable.
	 
	 	 	No other property of the Landlord in or comprising the Premises or any
other part of the Building may be removed by the Tenant under any
circumstances.

Section 5.08      Liens

The Tenant shall promptly pay before delinquency for all materials supplied and
work done or caused to be done in respect of the Premises so as to ensure that
no lien is registered against any portion of the Lands or Building or against
the Landlord’s or Tenant’s interest therein. If a lien is registered or filed,
the Tenant shall discharge it at its expense forthwith, failing which the
Landlord may at its option discharge the lien by paying the amount claimed to
be due into court or directly to the lien claimant and the amount so paid and
all expenses of the Landlord including legal fees (on a solicitor and client
basis) shall be paid by the Tenant to the Landlord. The Tenant will not grant
any security interest in the Leasehold Improvements without the prior written
consent of the Landlord, in the Landlord’s unfettered discretion, and will
promptly cause the discharge of any financing statement or notice which may be
filed in respect of such security interest under any statute, unless such
statement or notice is in favour of the Landlord.

Section 5.09      Notice by Tenant

The Tenant shall notify the Landlord of any accident, defect, fire, damage or
deficiency in any part of the Premises, the Complex or the Building, which
comes to the attention of the Tenant, its employees or contractors
notwithstanding that the Landlord may have no obligation in respect thereof.
If the Landlord has an obligation in respect of such defect, damage or
deficiency, the Landlord will forthwith remedy and repair same.

Section 5.10      Failure by Tenant to Repair

If the Tenant refuses or neglects to repair or maintain the Premises or
complete such other work with respect thereto promptly or properly as required
under this Lease and to the reasonable satisfaction of the Landlord, or fails
to comply with the provisions of Section 5.05(b), the Landlord may, acting
reasonably, on not less than ten (10) Business Days’ prior written notice to
the Tenant, or in the case of an emergency forthwith without notice, undertake
the repairs or restoration in a good and workmanlike manner without liability
to the Tenant for any loss or damage that may occur to the Tenant’s
merchandise, fixtures, or other property or to the Tenant’s business by reason
thereof, and upon completion thereof, the Tenant shall pay the Landlord
forthwith upon demand, as Rent, the costs of making the repairs or restoration
plus the Overhead Charge. The Tenant agrees that the making of any repairs or
restoration by the Landlord pursuant to this Section 5.10 is not a re-entry or
a breach of any covenant for quiet enjoyment contained in this Lease and shall
not relieve the Tenant from the obligation to maintain and repair the Premises.

15

 

Section 5.11      Not to Overload Floors

The Tenant covenants that it shall not bring upon the Premises any machinery,
equipment or thing that by reason of its weight, size or use might damage the
Building and shall not at any time overload the floors of the Premises by any
machinery, equipment or thing. If overloading occurs and damage ensues, the
Tenant shall forthwith, at the option of the Landlord, repair the damage or pay
the Landlord the cost of making it good, plus the Overhead Charge, upon demand
as Rent. In the event of any dispute as to whether any machinery, equipment or
thing will or will not overload the floors of the Premises or whether such
machinery, equipment or thing may be brought upon the Premises, the decision of
the Architect shall be final and binding.

ARTICLE VI  — INSURANCE AND INDEMNITY

Section 6.01      Tenant’s Insurance

	(a)	 	The Tenant shall maintain the following insurance throughout the Term at
its sole cost:

	 	(i)	 	“All Risks” (including flood and earthquake) property
insurance with reasonable deductibles, naming the Landlord, the
owners of the Lands and Building and the Mortgagee as additional
insured parties, containing a waiver of any subrogation rights
which the Tenant’s insurers may have against the Landlord and
against those for whom the Landlord is in law responsible (and the
Tenant hereby waives its rights of subrogation against the
Landlord and those for whom it is in law responsible), and (except
with respect to the Tenant’s chattels) incorporating the
Mortgagee’s standard mortgage clause. Such insurance shall insure
property of every kind owned by the Tenant or for which the Tenant
is legally liable located on or in the Building including, without
limitation, Leasehold Improvements, in an amount equal to not less
than 100% of the full replacement cost thereof, subject to a
stated amount co-insurance clause;
	 
	 	(ii)	 	Commercial general liability insurance which includes the
following coverages: owners protective; personal injury;
occurrence property damage; and employers and blanket contractual
liability, such coverage to include the activities and operations
conducted by the Tenant and any other person on the Premises, and
by the Tenant and any other person performing work on behalf of
the Tenant and those for whom the Tenant is in law responsible in
any other part of the Building. Such policies shall contain
inclusive limits of not less than $5,000,000, provide for cross
liability and severability of interests, and name the Landlord as
an additional insured;
	 
	 	(iii)	 	Automobile liability insurance on a non-owned form
including contractual liability, and on an owner’s form covering
all licensed vehicles operated by or on behalf of the Tenant,
which insurance shall have inclusive limits of not less than
$5,000,000 and accident benefits coverage;
	 
	 	(iv)	 	Extra expense or business interruption insurance in such
amount as will reimburse the Tenant for extra costs and expenses
incurred by the Tenant and for direct and indirect loss of
earnings attributable to all perils insured against in Subsection
6.01(a)(i) and other perils commonly insured against by prudent
tenants operating under similar circumstances or losses
attributable to the prevention or obstruction of access to the
Premises or the Building as a result of such perils; and
	 
	 	(v)	 	Any other form of insurance which the Tenant or the
Landlord, acting reasonably, or the Mortgagee, acting reasonably,
requires from time to time in form, in amounts and for risks
against which a prudent tenant would insure.

	(b)	 	All policies referred to in this Section 6.01 shall:

	 	(i)	 	name the Landlord, any Mortgagee, any owner or any other
Person (having an insurable interest) designated by the Landlord
(acting reasonably) as additional insured;
	 
	 	(ii)	 	be taken out with insurers having a financial rating of A.M. Best A-VII or better;
	 
	 	(iii)	 	be in a form reasonably satisfactory to the Landlord;

16

 

	 	(iv)	 	contain a severability of interest clause and a cross-liability clause;
	 
	 	(v)	 	be non-contributing with, and shall apply only as primary
and not as excess to any other insurance available to the
Landlord;
	 
	 	(vi)	 	not be invalidated as respects the interests of the
Landlord or the Mortgagee by reason of any breach of or violation
of any warranty, representation, declaration or condition; and
	 
	 	(vii)	 	contain an undertaking by the insurers to notify the
Landlord in writing not less than 30 days prior to any material
change, cancellation or termination.

	 	 	Certificates of insurance issued by the Tenant’s insurers, shall be
delivered to the Landlord prior to the Commencement Date and from time to
time, forthwith upon request. If the Tenant fails to take out or to keep
in force any insurance referred to in this Section 6.01 or should any such
insurance not be approved by either the Landlord or the Mortgagee, acting
reasonably, and should the Tenant not commence to diligently rectify (and
thereafter proceed to diligently rectify) the situation within 48 hours
after written notice by the Landlord to the Tenant (stating, if the
Landlord or the Mortgagee, from time to time, does not approve of such
insurance, the reasons therefor) the Landlord has the right without
assuming any obligation in connection therewith, to effect such insurance
at the sole cost of the Tenant and all outlays by the Landlord shall be
paid by the Tenant to the Landlord without prejudice to any other rights
or remedies of the Landlord under this Lease.

Section 6.02      Increase in Insurance Premiums

The Tenant shall not keep or use in the Premises any article or do anything
which may be prohibited by any insurance policy in force from time to time
covering the Premises, the Building or the Complex. If:

	(a)	 	the conduct of business in, or use or manner of use of the Premises;
	 
	(b)	 	or any acts or omissions of the Tenant in the Complex or any part
thereof;

cause or result in any increase in premiums for any insurance carried by the
Landlord with respect to the Complex, the Tenant shall pay any such increase in
premiums.

In determining whether increased premiums are caused by or result from the use
or occupancy of the Premises, a schedule issued by the organization computing
the insurance rate on the Building or the Complex showing the various
components of such rate, shall be conclusive evidence of the items and charges
which make up such rate.

Section 6.03      Cancellation of Insurance

If any insurer under any insurance policy covering any part of the Complex or
any occupant thereof cancels or threatens to cancel its insurance policy or
reduces or threatens to reduce coverage under such policy by reason of the use
or occupation of the Premises by the Tenant or by any Transferee, or by anyone
permitted by the Tenant to be upon the Premises, the Tenant shall remedy such
condition within three (3) Business Days written notice after written notice
thereof by the Landlord. If the Tenant fails to remedy the condition giving
rise to cancellation, threatened cancellation, reduction, or threatened
reduction of coverage within three Business Days after written notice thereof
by the Landlord, the Landlord may, at its option, either:

	(a)	 	enter the Premises and remedy the condition giving rise to the
cancellation or reduction or threatened cancellation or reduction, and the
Tenant shall pay to the Landlord the cost thereof plus the Overhead Charge
on demand as Rent; or
	 
	(b)	 	failing the ability of the Landlord to remedy such condition on a timely
basis, re-enter the Premises forthwith and thereupon the provisions of
Article IX shall apply.

The Tenant agrees that the Landlord shall not be liable for damage or injury
caused to property of the Tenant or others located on the Premises as a result
of the entry or wilful misconduct, save and except if caused by the negligence
or wilful misconduct of the Landlord, and that such entry by the Landlord is
not a re-entry or a breach of any covenant for

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quiet enjoyment contained in this Lease except to the extent caused by the
negligence of the Landlord or those for whom it is in law responsible.

Section 6.04      Loss or Damage

The Landlord shall not be liable for any death or injury arising from or out of
any occurrence in, upon, at, or relating to the Lands, the Building or the
Complex or damage to property of the Tenant or of others located on the
Premises or elsewhere in the Complex, nor shall it be responsible for any loss
of or damage to any property of the Tenant or others from any cause, except to
the extent that any such death, injury, loss or damage results from the
negligence of the Landlord, its agents, employees, contractors, or others for
whom it may, in law, be responsible. Without limiting the generality of the
foregoing, the Landlord shall not be liable for any injury or damage to Persons
or property resulting from fire, explosion, falling plaster, falling ceiling
tile, falling fixtures, steam, gas, electricity, water, rain, flood, snow or
leaks from any part of the Premises or from the pipes, sprinklers, appliances,
plumbing works, roof, windows or subsurface of any floor or ceiling of the
Building or from the street or any other place or by dampness or by any other
cause whatsoever, save and except if caused by the negligence or wilful
misconduct of the Landlord. The Landlord shall not be liable for any such
damage caused by other tenants or Persons on the Lands or in the Building or
the Complex or by occupants of adjacent property thereto, or the public. All
property of the Tenant kept or stored on the Premises shall be so kept or
stored at the risk of the Tenant only and the Tenant releases and agrees to
indemnify the Landlord and save it harmless from any claims arising out of any
damage to the same including, without limitation, any subrogation claims by the
Tenant’s insurers.

Section 6.05      Landlord’s Insurance

The Landlord shall throughout the Term carry: (a) “all risks” insurance
(including earthquake) on the Building and the Parking Facilities (excluding
the foundations and excavations) and the machinery, boilers and equipment in or
servicing the Building and owned by the Landlord or the owners of the Building
(excluding any property which the Tenant and other tenants are obliged to
insure under Section 6.01 or similar sections of their respective leases) on a
full replacement cost basis; (b) commercial general liability insurance with
respect to the Building and the Parking Facilities in such amounts as would be
maintained from time to time by a prudent Landlord; and (c) such other form or
forms of insurance as would be carried by a prudent owner or as the Landlord or
the Mortgagee reasonably considers advisable. Such insurance shall be in such
reasonable amounts and with such reasonable deductibles as would be carried by
a prudent owner of a reasonably similar building, having regard to size, age
and location. Notwithstanding the Landlord’s covenant in this Section and
notwithstanding any contribution by the Tenant to the cost of the Landlord’s
insurance premiums, the Tenant acknowledges and agrees that: (a) subject to
the mutual waier of subrogation set out in Section 6.07 hereof, the Tenant is
not relieved of any liability arising from or contributed to by its negligence
or its wilful act or omissions; (b) no insurable interest is conferred upon the
Tenant under any insurance policies carried by the Landlord; and (c) the Tenant
has no right to receive any proceeds of any insurance policies carried by the
Landlord.

Section 6.06      Indemnification of the Landlord

Notwithstanding any other provision of this Lease, and save and except if
caused by the negligence or wilful misconduct of the Landlord, the Tenant shall
indemnify the Landlord and save it harmless from all loss (including loss of
Net Rent and Additional Rent) claims, actions, damages, liability and expense
in connection with loss of life, personal injury, damage to property or any
other loss or injury whatsoever arising out of a breach of this Lease by the
Tenant, or any occurrence in, upon or at the Premises, or the occupancy or use
by the Tenant of the Premises or any part thereof, or occasioned wholly or in
part by any act or omission of the Tenant or by anyone permitted to be on the
Premises by the Tenant or its assignees and sublessees, and its and their
servants, employees, agents, contractors, officers, licensees, concessionaires,
clients, customers or anyone permitted by the Tenant to be on the Premises or
in the Complex or anyone for whom the Tenant is responsible in law. If the
Landlord shall, without fault on its part, be made a party to any litigation
commenced by or against the Tenant, then the Tenant shall protect, indemnify
and hold the Landlord harmless in connection with such litigation. The
Landlord may at its option, participate in or if it determines, acting
reasonably, that the matter is of a material nature to the Landlord or the
Building, assume carriage of any litigation or settlement discussions relating
to the foregoing, or any other matter for which the Tenant is required to
indemnify the Landlord under this Lease.

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Section 6.07      Waiver of Subrogation

	(a)	 	Every policy of insurance maintained or required to be maintained by the
Tenant under this Lease in respect of the Premises will contain a waiver
of subrogation clause; and
	 
	(b)	 	Every policy of insurance maintained or required to be maintained by the
Landlord with respect to the Building (and/or Parking Facilities) will
contain a waiver of subrogation clause.

ARTICLE VII — DAMAGE AND DESTRUCTION

Section 7.01       No Abatement

If the Premises or Building are damaged or destroyed in whole or in part by
fire or any other occurrence, this Lease shall continue in full force and
effect and there shall be no abatement of Rent except as provided in this
Article VII.

Section 7.02      Damage to Premises

If the Premises are at any time destroyed or damaged as a result of fire or any
other casualty required to be insured against by the Landlord under this Lease
or otherwise insured against by the Landlord and not caused or contributed to
by the Tenant, then the following provisions shall apply:

	(a)	 	if the Premises are rendered untenantable only in part, the Landlord
shall diligently repair the Premises to the extent only of its obligations
under Section 5.01 and Net Rent shall abate proportionately to the portion
of the Premises rendered untenantable from the date of destruction or
damage until the Landlord’s repairs have been completed;
	 
	(b)	 	if the Premises are rendered wholly untenantable, the Landlord shall
diligently repair the Premises to the extent only of its obligations
pursuant to Section 5.01 and Net Rent shall abate entirely from the date
of destruction or damage until the Landlord’s repairs have been completed;
	 
	(c)	 	if the Premises are not rendered untenantable in whole or in part, the
Landlord shall diligently perform such repairs to the Premises to the
extent only of its obligations under Section 5.01, but in such
circumstances Net Rent shall not terminate or abate;
	 
	(d)	 	upon being notified by the Landlord that the Landlord’s repairs have been
substantially completed, the Tenant shall diligently perform all repairs
to the Premises which are the Tenant’s responsibility under Section 5.02,
and all other work required to fully restore the Premises for use in the
Tenant’s business, in every case at the Tenant’s cost and without any
contribution to such cost by the Landlord, whether or not the Landlord has
at any time made any contribution to the cost of supply, installation or
construction of Leasehold Improvements in the Premises;
	 
	(e)	 	nothing in this Section shall require the Landlord to rebuild the
Premises in the condition which existed before any such damage or
destruction so long as the Premises as rebuilt will have reasonably
similar facilities to those in the Premises prior to such damage or
destruction, having regard, however, to the age of the Building at such
time; and
	 
	(f)	 	nothing in this Section shall require the Landlord to undertake any
repairs having a cost in excess of the insurance proceeds actually
received by the Landlord with respect to such damage or destruction.

Section 7.03      Rights of Termination

	(a)	 	Notwithstanding Section 7.02, if the damage or destruction which has
occurred in the Premises is such that in the reasonable opinion of the
Landlord the Premises cannot be rebuilt or made fit for the purposes of
the Tenant within 90 days of the happening of the damage or destruction,
the Landlord may, at its option, terminate this Lease on notice to the
Tenant given within 30 days after such damage or destruction. If such
notice of termination is given, Rent shall be apportioned and paid to the
date of such damage or destruction and the Tenant shall immediately
deliver vacant possession of the Premises in accordance with the terms of
this Lease.

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	(b)	 	Notwithstanding the provisions of Section 7.02, if the proceeds of
insurance recoverable by the Landlord as a result of any damage in the
Premises are insufficient to pay the costs of repair and replacement
pursuant to Section 7.02 (other in an immaterial respect) the Landlord may
terminate this Lease upon 30 days’ notice in writing to the Tenant. The
Tenant shall surrender the Premises to the Landlord within 30 days after
delivery of its notice of termination and Rent shall be apportioned and
paid to the date on which the Tenant delivers vacant possession of the
Premises.
	 
	(c)	 	Notwithstanding Section 7.02, if the damage and destruction which has
occurred in the Premises is such that in the reasonable opinion of the
Architect, the Premises cannot be rebuilt or be made fit for the purposes
of the Tenant within 180 days of the happening of the damage or
destruction, then the Landlord will, subject to Section 7.03(a), provide
the Tenant with other premises comparable to the Premises having regard to
size, age and location within the downtown core of the City of Vancouver
on a temporary basis until such time as the Premises have been rebuilt as
contemplated, failing which the Tenant may, at its option, elect to
terminate this Lease by giving to the Landlord notice of termination and
thereupon Net Rent, Additional Rent and any other payment for which the
Tenant is liable under this Lease shall be apportioned and paid to the
date of such termination and the Tenant shall immediately deliver vacant
possession of the Premises to the Landlord in accordance with the terms of
this Lease.

Section 7.04      Destruction of Building

	(a)	 	Notwithstanding any other provision of this Lease and specifically
notwithstanding the provisions of Section 7.03, if

	 	(i)	 	35% or more of the Total Rentable Area of the Building or
the Parking Facilities is destroyed or damaged by any cause; or
	 
	 	(ii)	 	portions of the Building or Lands which affect access or
services essential thereto are damaged or destroyed by any cause;
and,

	 	 	in the reasonable opinion of the Landlord, cannot be reasonably repaired
within 180 days after the occurrence of the damage or destruction; then,
the Landlord may at its option, to be exercised by notice to the Tenant
given within sixty (60) days after such damage or destruction, terminate
this Lease. In the case of such election, the Term and the tenancy hereby
created shall expire upon the thirtieth (30th) day after such notice is
given, without indemnity or penalty payable by, or any other recourse
against the Landlord and neither the Landlord nor the Tenant shall be
bound to repair. The Tenant shall surrender the Premises to the Landlord
within 30 days after delivery of its notice of termination and Rent shall
be apportioned and paid to the date on which the Tenant delivers vacant
possession of the Premises, subject to any abatement to which the Tenant
may be entitled under Section 7.02.
	 
	(b)	 	If the Landlord is entitled to, but does not elect to terminate this
Lease under Section 7.04(a), the Landlord shall, following such damage or
destruction, diligently repair if necessary that part of the Building and
the Parking Facilities damaged or destroyed, but only to the extent of the
Landlord’s obligations under section 5.01 and under the terms of the
various leases for premises in the Building and exclusive of any tenant’s
responsibilities with respect to such repair. If the Landlord elects to
repair the Building and the Parking Facilities, the Landlord may do so in
accordance with plans and specifications other than those used in the
original construction of the Building , provided such plans and
specifications are materially similar to the original plans and
contemplate an office building of similar quality and standard.

Section 7.05      Architect’s Certificate

The certificate of the Architect shall bind the parties as to:

	(a)	 	the percentage of the Total Rentable Area of the Building and the Parking
Facilities damaged or destroyed;
	 
	(b)	 	whether or not the Premises are rendered untenantable and the percentage
of the Premises rendered untenantable;

20

 

	(c)	 	the date upon which either the Landlord’s or Tenant’s work of
reconstruction or repair is completed or substantially completed and the
date when the Premises are rendered tenantable; and
	 
	(d)	 	the state of completion of any work of the Landlord or the Tenant.

ARTICLE VIII — ASSIGNMENT, SUBLETTING AND TRANSFERS

Section 8.01       Assignments, Subleases and Transfers

The Tenant shall not enter into, consent to, or permit (whether voluntarily,
involuntarily or by operation of law) any Transfer without the prior written
consent of the Landlord in each instance, which consent shall not be
unreasonably withheld but shall be subject to the Landlord’s rights under
Section 8.02. Any transfer without such consent shall be void and shall, at
the option of the Landlord, constitute a default that shall entitle the
Landlord to terminate this Lease. Any such consent by the Landlord shall not
release the Tenant from any of the Tenant’s obligations hereunder or be deemed
to be a consent to any subsequent hypothecation, assignment, subletting,
occupation or use by another person. Notwithstanding any statutory provision
to the contrary and without limiting the other instances in which it may be
reasonable for the Landlord to withhold its consent, it shall not be considered
unreasonable for the Landlord to take into account the following factors in
deciding whether to grant or withhold its consent:

	(a)	 	whether such Transfer is in violation or in breach of any covenants or
restrictions made or granted by the Landlord to other tenants or occupants
or prospective tenants or occupants of the Building;
	 
	(b)	 	whether in the Landlord’s opinion, the financial background, business
history and capability of the proposed Transferee is satisfactory; and,
	 
	(c)	 	the proposed assignee or sublessee is a governmental or quasi
governmental department, agency or consulate;
	 
	(d)	 	in the Landlord’s reasonable judgment, the use of the Premises by the
proposed assignee or sublessee would involve occupancy by other than
primarily general office personnel or otherwise in violation of Section
10.01 of this Lease, would involve any alterations which would lessen the
value of the leasehold improvements in the Premises, would require
increased services, including increased load on elevator services, by the
Landlord or alter the reputation or character of the Complex;
	 
	(e)	 	in the Landlord’s reasonable judgment, the proposed assignee or sublessee
does not have a good reputation in the community as a tenant of property;
	 
	(f)	 	the use of the Premises by the proposed assignee or subtenant will
violate any applicable law, by-law or regulation;
	 
	(g)	 	there is continuing an Event of Default by the Tenant under this Lease;
	 
	(h)	 	other than in the case of a Permitted Subletting, in the case of a
subletting of less than the entire Premises, if the subletting would
result in the division of any one floor of the Premises into more than
three subparcels or, in any circumstance, would require access to be
provided through space leased or held for lease to another tenant or
improvements to be made outside of the Premises; or
	 
	(i)	 	the Landlord does not receive sufficient information from the Tenant of
the proposed assignee or subtenant to enable it to make a determination
concerning the matters herein set out.

Consent by the Landlord to any Transfer if granted shall not constitute a
waiver of the necessity for such consent to any subsequent Transfer. This
prohibition against Transfer shall include a prohibition against any Transfer
by operation of law and no Transfer shall take place by reason of the failure
of the Landlord to give notice to the Tenant within 20 days as required by
Section 8.02 hereof. Notwithstanding anything to the contrary herein
contained, the Tenant may not assign this Lease while any Rent is in arrears
hereunder or while any other Event of Default exists hereunder. Before making
any assignment of this Lease the Tenant will pay all Rent in arrears and will
remedy any Event of Default which then exists or will cause any Event of
Default to cease to exist.

21

 

The Tenant acknowledges that the Landlord shall not be liable to the Tenant in
damages where, in giving good faith consideration to any request of the Tenant
hereunder, and acting reasonably, it withholds its consent to a proposed
assignment or sublease.

Notwithstanding anything contained in this Lease to the contrary (including
without limitation, the definition of “Transfer”), the Tenant may assign this
Lease or sublet or license the whole or any part of the Premises, without the
consent of the Landlord to (a “Permitted Transferee”):

	 	(i)	 	an Affiliate of the Tenant, in which case the Tenant will
continue to be liable to the Landlord for payment of Rent payable
by the Tenant to the Landlord under this Lease; and
	 
	 	(ii)	 	to a successor of the Tenant by amalgamation, merger or
other corporate reorganization.

Any such assignment or sublease is hereinafter referred to as a “Permitted
Transfer”. The Tenant agrees to provide the Landlord with written notice as
soon as reasonably possible following a Permitted Transfer.

In addition, the Landlord consents to the use and occupation of a portion of
the Premises by Black Box Games Ltd. and any assignment, sublet or license in
whole or in part of the Premises to a successor of the Tenant by reason of the
amalgamation, merger or other corporate reorganization of the Tenant and Black
Box shall not require consent of the Landlord. In no event shall the Tenant be
released from its obligations hereunder by virtue of a Permitted Transfer. In
addition to the foregoing, the Tenant shall be entitled at any time to sublease
up to two (2) floors to subtenants provided that the subleases are for terms of
equal to or less than five (5) years (inclusive of all renewals and any further
subleases to the same subtenant or any Person related to such subtenant) (each
such subletting, a “Permitted Subletting”) without
Section 8.02(b) or Section 8.02(c) being applicable thereto.

Section 8.02      Landlord’s Rights

If the Tenant intends to effect a Transfer, the Tenant shall give prior notice
to the Landlord of such intent specifying the identity of the Transferee, the
type of Transfer contemplated, the portion of the Premises affected thereby,
and the financial and other terms of the Transfer, and shall provide such
financial, business or other information relating to the proposed Transferee
and its principals as the Landlord or any Mortgagee requires, together with
copies of any documents which record the particulars of the proposed Transfer.
The Landlord shall, within 20 days after having received such notice and all
requested information, notify the Tenant either that:

	(a)	 	it consents or does not consent to the Transfer in accordance with the
provisions and qualifications of this Article VIII or it is withholding
its consent in accordance with the provisions of this Article VIII; or
	 
	(b)	 	it elects to cancel this Lease as to the whole or the part of the
Premises included in the proposed Transfer, as the case may be, of the
Premises affected by the proposed Transfer, in preference to giving such
consent; or
	 
	(c)	 	it elects to take over the position of the proposed Transferee with
respect to the Transfer such that the Landlord becomes the assignee or
subtenant, as the case may be, of the Tenant on the financial terms set
out in the notice.

If the Landlord elects to terminate this Lease it shall stipulate in its notice
the termination date of this Lease, which date shall be no less than 30 days
nor more than 90 days following the giving of such notice of termination. If
the Landlord elects to terminate this Lease, the Tenant shall notify the
Landlord within 10 days thereafter of the Tenant’s intention either to refrain
from such Transfer or to accept termination of this Lease or the portion
thereof in respect of which the Landlord has exercised its rights. If the
Tenant fails to deliver such notice within such 10 days or notifies the
Landlord that it accepts the Landlord’s termination, this Lease will as to the
whole or affected part of the Premises, as the case may be, be terminated on
the date of termination stipulated by the Landlord in its notice of
termination. If the Tenant notifies the Landlord within 10 days that it
intends to refrain from such Transfer, then the Landlord’s election to
terminate this Lease shall become void.

If the Landlord terminates this Lease or sublets from the Tenant any portion of
the Premises proposed to be sublet by the Tenant, the Landlord may, if it
elects, enter into a new lease covering the Premises or a portion thereof or,
in the case of a sublet from the Tenant, the sublet portion, with the intended
assignee or subtenant on such terms as the Landlord and such person may agree,
or enter into a new lease covering the Premises or a portion thereof or in the
case

22

 

of a sublet from the Tenant, the sublet portion, with any other person; and in
such event, the Tenant shall not be entitled to any portion of the profit, or
rents, if any, which the Landlord may realize on account of such termination
and reletting. The Landlord’s exercise of its aforesaid option shall not be
construed to impose any liability upon the Landlord with respect to any real
estate brokerage commission(s) or any other costs or expenses incurred by the
Tenant in connection with its proposed subletting or assignment other than the
cost of constructing any necessary demising walls in connection therewith.

Section 8.03      Conditions of Transfer

The following terms and conditions apply in respect of a Transfer:

	(a)	 	If there is a permitted Transfer, the Landlord may collect Rent from the
Transferee and apply the net amount collected to the Rent payable under
this Lease but no acceptance by the Landlord of any payments by a
Transferee shall be deemed a waiver of the Tenant’s covenants or any
acceptance of the Transferee as tenant or a release from the Tenant from
the further performance by the Tenant of its obligations under this Lease.
The Tenant hereby assigns as security for performance of its obligations
hereunder to the Landlord all of the Tenant’s right, title and interest in
and to any:

	 	(i)	 	sublease hereafter granted and all security for,
guarantees of, indemnities in respect of, the observance and
performance thereof and all proceeds of insurance to which the
Tenant may become entitled thereunder; and
	 
	 	(ii)	 	any assignment of security for, guarantees of,
indemnities in respect of an assignment of this Lease, or any
rights hereunder for the observance and performance of the
assignee thereunder.

	 	 	Any consent by the Landlord shall be subject to the Tenant and Transferee
executing an agreement in form and substance acceptable to the Landlord,
acting reasonably, with the Landlord agreeing that the Transferee will be
bound by all of the terms of this Lease (other than in respect of a
sublease in which event the Transferee shall only have to agree to be
bound by the applicable terms of this Lease and to pay the rent payable
pursuant to the applicable sublease) and, except in the case of a
sublease, that the Transferee will be so bound as if it had originally
executed this Lease as tenant.
	 
	(b)	 	Notwithstanding any Transfer permitted or consented to by the Landlord,
including a Transfer to the Landlord pursuant to Section 8.02(c), the
Tenant shall remain liable under this Lease and shall not be released from
performing any of the terms of this Lease.
	 
	(c)	 	The net and additional rent payable by the Transferee shall not be less
than the Rent payable by the Tenant under this Lease as at the effective
date of the Transfer (including any increases provided for in this Lease)
and if the rent and additional rent to be paid by the Transferee under
such Transfer exceeds the Rent payable under this Lease, the amount of
such excess shall be paid by the Tenant to the Landlord. If the Tenant
receives from any Transferee, either directly or indirectly, any
consideration other than rent or additional rent for such Transfer, either
in the form of cash, goods or services (other than the proceeds of any
financing as the result of a Transfer involving a mortgage, charge or
similar security interest in this Lease) the Tenant shall forthwith pay to
the Landlord an amount equivalent to such consideration less the
reasonable costs paid by the Tenant for additional improvements installed
in the portion of the Premises subject to such assignment or sublease by
the Tenant at the Tenant’s sole cost and expense for the specific assignee
or subtenant in question, reasonable legal costs, leasing and marketing
costs, real estate commissions and demolition costs paid by the Tenant in
connection with such assignment or sublease. The Tenant and the
Transferee shall execute any agreement required by the Landlord to give
effect to the foregoing terms. In determining the amounts to be deducted
in each monthly payment period in respect of the Tenant’s costs of
assigning or subleasing, such costs shall be applied to the first excess
payments due to the Landlord. Notwithstanding the foregoing, this
paragraph shall not apply to Permitted Subletting.
	 
	(d)	 	Notwithstanding the effective date of any permitted Transfer as between
the Tenant and the Transferee, all Rent for the month in which such
effective date occurs shall be paid in advance by the Tenant so that the
Landlord will not be required to accept partial payments of Rent for such
month from either the Tenant or Transferee.

23

 

	(e)	 	If a Transfer occurs as a result of the Landlord’s election pursuant to
Section 8.02(c), the Landlord will apply the Rent payable by the Landlord,
as Transferee, to the Rent payable under this Lease but otherwise the
Tenant will not be released from its covenants under this Lease or from
further performance of its obligations under this Lease and the Tenant
will enter into an agreement with the Landlord setting out the terms of
such Transfer.
	 
	(f)	 	Any document evidencing any Transfer permitted by the Landlord, or
setting out any terms applicable to such Transfer or the rights and
obligations of the Tenant or Transferee thereunder including a Transfer
under Section 8.02(c), or any amendment of this Lease pursuant to Section
8.03(a)(ii), shall be prepared by the Landlord or its solicitors and all
associated reasonable legal costs shall be paid by the Tenant.

Section 8.04      Change of Control

If the Tenant is at any time a corporation or partnership, any actual or
proposed Change of Control in such corporation or partnership shall be deemed
to be a Transfer and subject to all of the provisions of this Article VIII.
The Tenant shall make available to the Landlord or its representatives all of
the relevant corporate or partnership records, as the case may be, for
inspection at all reasonable times, in order to ascertain whether any Change of
Control has occurred.

Section 8.05      No Advertising

The Tenant shall not advertise that the whole or any part of the Premises are
available for a Transfer and shall not permit any broker or other Person to do
so unless the text and format of such advertisement and the publications in
which such advertisement is to be placed are approved in writing by the
Landlord, which approval shall not be unreasonably withheld or delayed. No
such advertisement shall contain any reference to the rental rate of the
Premises.

Section 6.06      Merger

The voluntary or other surrender of this Lease by the Tenant, or the sublease
of space by the Tenant to the Landlord pursuant to this Article, or the
cancellation of this Lease by mutual agreement of the Tenant and the Landlord
shall not work as a merger, but shall, at the Landlord’s option, terminate all
or any subleases and subtenancies or operate as an assignment to the Landlord
of all or any subleases or subtenancies. The Landlord’s option hereunder shall
be exercised by written notice to the Tenant and all known sublessees or
subtenants in the Premises or any part thereof.

Section 8.07      Assignment By Landlord

The Landlord shall have the unrestricted right to sell, lease, convey or
otherwise dispose of all or any part of the Building or Lands or this Lease or
any interest of the Landlord in this Lease. To the extent that the purchaser
or assignee from the Landlord assumes the obligations of the Landlord under
this Lease, the Landlord shall thereupon and without further agreement be
released of all liability under this Lease. If the Landlord shall sell or
otherwise dispose of any portion of the Parking Facilities used by the Tenant
separately from the Building, the Landlord shall ensure that the Tenant
continues to have access to such portions of the Parking Facilities for the
purposes of its parking contemplated in Section 11.01 hereof, failing which the
Landlord shall relocate the Tenant’s parking spaces to another location where
it can provide such rights on terms acceptable to the Tenant, acting
reasonably.

ARTICLE IX – DEFAULT

Section 9.01       Default and Remedies

If and whenever an Event of Default occurs, then without prejudice to any other
rights which it has pursuant to this Lease or at law, the Landlord shall have
the following rights and remedies, which are cumulative and not alternative:

	(a)	 	to re-enter the Premises or any part thereof in the name of the whole and
the same to have again, repossess, and enjoy as of the Landlord’s former
estate, anything herein contained to the contrary notwithstanding;
	 
	(b)	 	to terminate this Lease, with or without notice to the Tenant, whether or
not the Landlord has, with respect to the same or another Event of
Default, previously elected or pursued a right or remedy which is
inconsistent with termination of this Lease. Upon notice of termination
hereunder, this Lease and the Term hereof shall terminate and come to an
end as fully and completely as if such date were the day herein definitely
fixed for the end and expiration of this Lease and such Term, all Rent
payable under this Lease shall immediately

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	 	 	become due, any amounts paid by the Landlord to the Tenant hereunder as an
inducement or improvement allowance shall immediately become repayable by
the Tenant to the Landlord in accordance with subsection Section 9.01(g)
and the Tenant shall then quit and surrender the Premises to the Landlord
and, notwithstanding any statute, rule of law or decision of any courts to
the contrary, the Tenant shall remain liable to the Landlord as set forth
hereinafter.
	 
	(c)	 	to enter the Premises as agent of the Tenant and to relet (either in the
name of the Landlord or otherwise) the Premises for whatever term, and on
such terms as the Landlord in its discretion may determine and to receive
the Rent therefor and as agent of the Tenant to take possession of any
property of the Tenant on the Premises, to store such property at the
expense and risk of the Tenant or to sell or otherwise dispose of such
property in such manner as the Landlord may see fit without notice to the
Tenant; to make alterations to the Premises to facilitate their reletting;
and the making of such alterations or decorations shall not operate or be
construed to release the Tenant from any liability to the Landlord
hereunder; and to apply the proceeds of any such sale or reletting first,
to the payment of any expenses incurred by the Landlord with respect to
any such reletting or sale; second, to the payment of any indebtedness of
the Tenant to the Landlord other than Rent; and third, to the payment of
Rent in arrears; with the residue to be held by the Landlord and applied
in payment of future Rent as it becomes due and payable. The Tenant shall
remain liable for any deficiency to the Landlord. If any reletting
extends for a period beyond the end of the Term, such reletting shall not
constitute a termination of this Lease, but a reletting as agent of the
Tenant up to the end of the Term and a letting thereafter by the Landlord
for its own account;
	 
	(d)	 	to remedy or attempt to remedy any default of the Tenant under this Lease
for the account of the Tenant and to enter upon the Premises for such
purposes. No notice of the Landlord’s intention to perform such covenants
need be given the Tenant unless expressly required by this Lease. The
Landlord shall not be liable to the Tenant for any loss, injury or damage
caused by acts of the Landlord in remedying or attempting to remedy such
default and the Tenant shall pay to the Landlord all reasonable expenses
incurred by the Landlord in connection with remedying or attempting to
remedy such default;
	 
	(e)	 	to recover from the Tenant all damages, and expenses incurred by the
Landlord as a result of any breach by the Tenant. The Tenant shall pay to
the Landlord, on demand, if the Landlord has terminated or cancelled this
Lease, liquidated damages for the failure of the Tenant to observe and
perform its covenants under this Lease, which damages shall be the worth
at the time of termination of the excess of the amount of Rent reserved in
this Lease for the remainder of the Term over the then rental value of the
Premises for the remainder of the Term, established by reference to the
terms and conditions upon which the Landlord relets them, if such
reletting is accomplished within a reasonable time after termination of
this Lease, and otherwise with reference to all market and other relevant
circumstances, such Rent and rental value being reduced to present worth
at an interest rate determined by the Landlord on the basis of the
Landlord’s reasonable estimates and assumptions of fact.
	 
	 	 	The refusal or failure of the Landlord to relet the Premises or any part
or parts thereof shall not release or affect the Tenant’s liability for
liquidated damages hereunder. In computing such liquidated damages there
shall be added to the said amount, such reasonable expenses as the
Landlord may incur in connection with reletting, such as court costs,
legal fees and disbursements on a solicitor and client basis, brokerage
and management fees and commissions, costs of putting and keeping the
Premises in good order and costs of preparing the Premises for reletting
as herein provided. The Landlord shall in no event be liable in any way
whatsoever for the failure to relet the Premises, or in the event that the
Premises are relet, for failure to collect the rent thereof under such
reletting. Any such liquidated damages shall be paid by the Tenant to the
Landlord immediately upon demand therefor.
	 
	 	 	The Tenant shall pay to the Landlord, on demand, all reasonable expenses
of the Landlord in connection with the terminating, re-entering, reletting
or collection of sums due or payable by the Tenant or realizing upon
assets seized, including brokerage expenses, legal fees and disbursements
on a solicitor and client basis, the expense of keeping the Premises in
good order and repairing and maintaining the same or preparing the
Premises for reletting;
	 
	(f)	 	to recover from the Tenant the full amount of the current month’s Rent
together with the next 3 months’ instalments of Rent, all of which shall
accrue on a day-to-day basis and shall immediately become due and payable
as accelerated rent.

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	(g)	 	if this Lease has been terminated in accordance with Section 9.01(b), to
recover from the Tenant the unamortized portion of any leasehold
improvement allowance or inducement paid or given by the Landlord under
the terms of this Lease or the Lease Proposal, calculated from the date
which is the later of the date of payment by the Landlord or the
Commencement Date, on the basis of an assumed rate of depreciation on a
straight line basis to zero over the initial Term of this Lease.

Section 9.02      Distress

Notwithstanding any provision of this Lease or any provision of applicable
legislation, none of the goods and chattels of the Tenant on the Premises at
any time during the Term shall be exempt from levy by distress for Rent in
arrears, and the Tenant waives any such exemption and further releases the
Landlord of the obligation of proving or identifying such goods. If the
Landlord makes any claim against the goods and chattels of the Tenant by way of
distress, this provision may be pleaded as an estoppel against the Tenant in
any action brought to test the right of the Landlord to levy such distress.

Section 9.03      Right of Possession

Upon the occurrence of an Event of Default, or if the notice of termination
provided for in Section 9.01 herein shall have been given and this Lease shall
be terminated, then, in addition and without prejudice to all other remedies of
the Landlord contained herein or at law, the Landlord may in each instance and
without notice re-enter the Premises and terminate all services to be provided
to the Tenant hereunder, including but not limited to the furnishing of
utilities, and upon such re-entry, either by force or otherwise, and by summary
proceedings or otherwise, in accordance with applicable laws, dispossess the
Tenant or any other occupant of the Premises, and remove their effects,
improvements, trade fixtures, furnishings and personal property and repossess
and enjoy the Premises, together with all alterations, additions and
improvements, all without being liable to prosecution or damages therefor.
Upon any lawful re-entry by the Landlord hereunder, the Landlord may remove and
sell the Tenant’s effects, improvements, trade fixtures, furnishings and
personal property from the Premises, any rule of law or equity to the contrary
notwithstanding and may apply the proceeds thereof to all Rent and other
amounts to which the Landlord is then entitled under this Lease. Any such sale
may be effected in the discretion of the Landlord by public auction 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 entire discretion may decide.

Section 9.04      Landlord May Perform Covenants

Upon the occurrence of an Event of Default or if the Tenant shall otherwise
fail to perform any of the covenants or obligations of the Tenant under this
Lease, the Landlord may, without notice to the Tenant, unless notice is
otherwise required hereunder and only after the expiry of any applicable cure
period, in addition to its rights under Section 9.01 and without prejudice to
any other rights of the Landlord hereunder or at law, from time to time and at
its discretion, perform or cause to be performed any of the covenants or
obligations of the Tenant and for that purpose may do such things as may be
requisite, including without limitation, entering upon the Premises on not less
than 5 days prior written notice to the Tenant, or without notice in the case
of an emergency, and do such things upon or in respect of the Premises as the
Landlord may consider requisite or necessary. All expenses incurred and
expenditures made by or on behalf of the Landlord under this Section 9.04 plus
the Overhead Charge shall be paid by the Tenant upon presentation of a bill
therefor as Rent. The Landlord shall have no liability to the Tenant for loss
or damages resulting from such action by the Landlord, save and except for the
Landlord’s negligent acts and wilful misconduct, nor shall such action be
deemed a re-entry or breach of the covenant of quiet enjoyment.

Section 9.05      Injunction

In the event of any breach or threatened breach by the Tenant of any of the
covenants or provisions hereof, the Landlord shall have the immediate right of
injunction and the right to invoke any remedy allowed at law or in equity, as
if re-entry, summary proceedings and other remedies were not herein provided
for. No re-entry by the Landlord will be construed as an election on its part
to terminate this Lease unless a written notice of that intention is given to
the Tenant. Mention in this Lease of any particular remedy shall not preclude
the Landlord from any other remedies under this Lease, now or hereafter
existing at law or in equity.

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Section 9.06      Damages and Costs

The Tenant shall, without duplication, pay to the Landlord all damages and
reasonable costs (including, without limitation, all legal fees on a solicitor
and his client basis) incurred by the Landlord in enforcing or interpreting the
terms of this Lease (provided the Landlord’s position is correct), or with
respect to any matter or thing which is the obligation of the Tenant under this
Lease, or in respect of which the Tenant has agreed to insure, or to indemnify
the Landlord.

Section 9.07      Allocation of Payments

The Landlord may at its option apply sums received from the Tenant against any
amounts due and payable by the Tenant under this Lease in such manner as the
Landlord sees fit regardless of any designation or instructions to the
contrary.

Section 9.08      Survival of Obligations

If the Tenant has failed to fulfil its obligations under this Lease with
respect to the payment of Rent, the maintenance, repair and alteration of the
Premises and removal of improvements and fixtures from the Premises during or
at the end of the Term, such obligations and the Landlord’s rights in respect
thereto shall remain in full force and effect notwithstanding the expiration,
surrender or sooner termination of the Term.

Section 9.09      Payments and Termination

No payments of money by the Tenant to the Landlord after the expiration or
other termination of the Term or after the giving of any notice (other than a
demand for payment of money) by the Landlord to the Tenant, shall reinstate,
continue or extend the Term or make ineffective any notice given to the Tenant
prior to the payment of such money. After the service of notice or the
commencement of an action or distraining proceedings, or after final judgment
granting the Landlord possession of the Premises, the Landlord may receive and
collect any Rent due under the Lease, and the payment thereof shall not make
ineffective any notice, or in any manner affect any pending suit or proceedings
or any judgment theretofore obtained.

Section 9.10      Remedies of Landlord Cumulative

No reference to or exercise of a specific right or remedy by the Landlord shall
preclude the Landlord from or prejudice it in exercising another right or
pursuing another remedy or maintaining any action to which it may otherwise be
entitled either by law or in equity. No such remedy shall be exclusive or
dependent upon any other such remedy, but the Landlord may from time to time
exercise any one or more of such remedies independently or in combination.

ARTICLE X — STATUS STATEMENT, ATTORNMENT AND SUBORDINATION

Section 10.01       Status Statement

Within 10 days after written request by the Landlord, the Tenant shall deliver
in a form supplied by the Landlord a statement or estoppel certificate to the
Landlord or such assignee or mortgagee as may be designated by the Landlord, as
to the status of this Lease, including as to whether this Lease is unmodified
and in full force and effect (or, if there have been modifications that this
Lease is in full force and effect as modified and identifying the modification
agreements); the amount of Net Rent and Additional Rent then being paid and the
dates to which same have been paid; whether or not there is any existing or
alleged default by either party with respect to which a notice of default has
been served and if there is any such default, specifying the nature and extent
thereof; and any other matters pertaining to this Lease to the best of the
Tenant’s knowledge and belief as to which the Landlord shall reasonably request
such statement or certificate.

Section 10.02      Subordination

This Lease and all rights of the Tenant shall, subject to any Mortgagee
agreeing to execute and deliver to the Tenant a non-disturbance agreement on
terms and conditions satisfactory to the Tenant, acting reasonably, be subject
and subordinate to any and all Mortgages and any ground, operating, overriding
or underlying leases, from time to time in existence against the Lands and
Building. On request, the Tenant shall, subject to the foregoing, acknowledge
in

27

 

writing the subordination of this Lease and its rights under this Lease to any
and all such Mortgages and leases and to all advances made under such
Mortgages. The form of such acknowledgement of subordination shall be as
required by the Landlord or any Mortgagee or the lessee under any such lease.

Section 10.03      Attornment

The Tenant shall promptly, on request, attorn to any Mortgagee, or to the
owners of the Building and Lands, or the lessor under any ground, operating,
overriding, underlying or similar lease of all or substantially all of the
Building made by the Landlord or otherwise affecting the Building and Lands, or
the purchaser on any foreclosure or sale proceedings taken under any Mortgage,
and shall recognize such Mortgagee, owner, lessor or purchaser as the Landlord
under this Lease.

Section 10.04       Execution of Documents

Intentionally Deleted.

ARTICLE XI – PARKING

Section 11.01       Parking

The Tenant will be entitled to license from the Landlord, from the date (the
“Parking Occupancy Date”) it takes occupancy of the Premises for the purpose of
conducting business and receipt by the Landlord of all permits required in
connection therewith throughout the Term and any renewals, or expansion, or
extensions thereof up to sixty (60) unreserved and ten (10) reserved parking
permits for the Parking Facilities serving the Complex at the prevailing rates
charged from time to time by the parking facility operator. The Tenant shall
notify the Landlord in writing by no later than March 31, 2003 as to the actual
number of reserved and unreserved parking permits it will require for the Term.
The Tenant shall be entitled, after the expiry of the second year of the Term
on a quarterly basis, to reduce the number of unreserved and reserved parking
stalls on a pro-rata basis by giving the Landlord 30 days prior written notice,
provided that the Tenant will at all times licence at least fifty (50) parking
stalls in the aggregate. In addition, if the Tenant reduces its number of
parking stalls below that determined as at March 31, 2003, the Tenant shall be
entitled, subject to availability, to increase on a quarterly basis, on no less
than thirty (30) days notice, its number of reserved and unreserved parking
stalls up to a maximum of that initially licenced by the Tenant. The reserved
stalls will be located in the parking facility comprising 250 Howe Street and
Granville Square only, adjacent to one another to the extent possible, and
located in a prime area of the parkade, and subject to the right of other
tenants, in a location nearest to the Building access door. The Landlord
shall, upon giving the Tenant reasonable written notice, have the right to
relocate on a temporary basis the reserved parking permits from time to time to
comparable locations in the Parking Facilities. All reserved parking stalls
shall be provided with a name plate indicating the personalized name and
“reserved” and installed by the Landlord at no cost to the Tenant.

The Landlord reserves the right to make such Rules and Regulations with respect
to the use of the Parking Facilities as the Landlord deems advisable from time
to time. The Tenant shall use the Parking Facilities at its sole risk.

ARTICLE XII — GENERAL PROVISIONS

Section 12.01       Rules and Regulations

The Tenant shall comply with all Rules and Regulations, and amendments thereto,
adopted by the Landlord, from time to time, including those set out in Schedule
“D”. To the extent of any conflict between the terms of the Rules and
Regulations and the terms of the balance of this Lease, the terms of the
balance of this Lease shall prevail. Such Rules and Regulations may
differentiate between different types of businesses in the Building, and the
Landlord shall have no obligation to enforce any Rule or Regulation or the
provisions of any other lease against any other tenant, and the Landlord shall
have no liability to the Tenant with respect thereto and shall not be liable to
the Tenant for violation of the same by any other tenant, its servants,
employees, agents, assigns or licensees.

Section 12.02      Delay

Except as expressly provided in this Lease, whenever the Landlord or Tenant is
delayed in the fulfilment of any obligation under this Lease (other than the
payment of Rent and surrender of the Premises on termination) by an

28

 

unavoidable occurrence which is beyond the reasonable control (except a delay
caused by lack of funds or other financial reason) of the party delayed in
performing such obligation, then the time for fulfilment of such obligation
shall be extended during the period in which such circumstances operate to
delay the fulfilment of such obligation.

Section 12.03      Overholding

If the Tenant remains in possession of the Premises after the end of the Term
with the written consent of the Landlord (which consent shall not be
unreasonably or arbitrarily withheld, it being acknowledged that it is
reasonable for the Landlord to withhold consent if it has leased or is actively
leasing the Premises) but without having executed and delivered a new lease or
an agreement extending the Term, there shall be no tacit renewal of this Lease,
and the Tenant shall be deemed to be occupying the Premises as a Tenant from
month to month at a monthly Net Rent payable in advance on the first day of
each month equal to 125% for the first 60 days and then thereafter 150% of the
monthly amount of Net Rent payable during the last month of the Term, and
otherwise upon the same terms as are set forth in this Lease, so far as these
are applicable to a monthly tenancy.

Section 12.04      Waiver

The waiver by the Landlord or the Tenant of a breach of a term, covenant or
condition herein contained must be in writing and shall not be deemed to be a
waiver of any continuing or subsequent breach of the same or another term,
covenant or condition herein contained. No waiver shall be inferred from or
implied by anything done or omitted by the Landlord or the Tenant. The
subsequent acceptance of Rent by the Landlord shall not be deemed to be a
waiver of a preceding breach by the Tenant of a term, covenant or condition of
this Lease, other than the failure of the Tenant to pay the particular Rent
accepted.

Section 12.05      Expropriation

If at any time during the Term, the whole or any part of the Premises, or a
substantial or material portion of the Building or Complex rendering continuing
occupancy of the Premises impractical shall be taken by any lawful power or
authority by the right of expropriation, the Landlord may, at its option, give
notice to the Tenant terminating this Lease on the date when the Tenant or
Landlord is required to yield up possession thereof to the expropriating
authority. Upon such termination, or upon termination by operation of law, as
the case may be, the Tenant shall immediately surrender the Premises and all of
its interest therein, and the Rent shall abate and be apportioned to the date
of termination and the Tenant shall forthwith pay to the Landlord the
apportioned Rent which may be due to the Landlord to such date. The Tenant
shall have no claim upon the Landlord for the value of its property or the
unexpired Term, but the parties shall each be entitled to separately advance
their claims for compensation for the loss of their respective interest in the
Premises and the parties shall be entitled to receive and retain such
compensation as may be awarded to each respectively. If an award of
compensation made to the Landlord specifically includes an award for the
Tenant, the Landlord shall account therefor to the Tenant.

Section 12.06      Fire Drills

The Landlord may from time to time conduct fire drills and emergency
procedures, test emergency procedures, and test fire alarms and other emergency
devices without being in breach of its covenant of quiet enjoyment. The Tenant
shall participate, and shall cause its employees and invitees to participate,
in such drills and procedures without holding the Landlord liable for any
damage, injury, or loss caused thereby.

Section 12.07      Energy Conservation

The Tenant covenants with the Landlord to cooperate with the Landlord and to
comply with all regulations, orders, laws and requirements passed by any
governmental authorities or other agencies having jurisdiction respecting
energy conservation in relation to the use, occupancy, maintenance and
operation of the Building or the Parking Facilities, or any part thereof. The
Tenant shall, at its cost, comply with all reasonable requests and demands of
the Landlord made with a view to energy conservation. Any costs the Landlord
incurs in an effort to promote energy conservation in the Building or the
Parking Facilities and complying with such regulations, orders, laws and
requirements in the Building or the Parking Facilities shall be added to
Operating Costs in the financial year of the Landlord or portion thereof that
such expenditures are incurred. The Landlord shall not be liable as a result
of being compelled to undertake any action or work to comply with any such
regulations, orders, laws and requirements even where the same results in a
reduction,

29

 

change, or elimination in heating, ventilation or air-conditioning in the
Premises, Building or Complex, or any part thereof, or any other service or
utility provided by the Landlord.

Section 12.08      Registration

Neither the Tenant nor anyone claiming under the Tenant shall register this
Lease or any Transfer without the prior written consent of the Landlord
provided, however, that the Tenant shall have the right to register a short
form of this Lease for the purposes of giving notice of this Lease provided
that: (i) the Tenant obtains the prior written approval of the Landlord as the
form and content of such document, which approval shall not be unreasonably
withheld or delayed; and (ii) the cost of preparing any plans required for the
preparation and registration of such document shall be borne by the Tenant.
Subject to the foregoing the Tenant hereby waives any right which the Tenant
may have to require the Landlord to deliver in registrable form or to provide a
plan of the Premises acceptable to the land title office or other office of
public record for registration or filing purposes.

Section 12.09      Accord and Satisfaction

No payment by the Tenant or receipt of the Landlord of a lesser amount than the
monthly instalment of Net Rent and Additional Rent herein stipulated will be
deemed to be other than on account of the earliest stipulated monthly
instalment of Net Rent and Additional Rent, nor will an endorsement or
statement on a cheque or in a letter accompanying a cheque or payment as Rent
be deemed an acknowledgement of full payment or an accord and satisfaction, and
the Landlord may accept a cheque or payment without prejudice to the Landlord’s
right to recover the balance of the Rent or pursue any other remedy. No
payment of Rent hereunder made by any third party and accepted by the Landlord
will constitute or in any way be interpreted to be the consent or
acknowledgement by the Landlord to an assignment or subletting by the Tenant.

Section 12.10      Notices

Any notice, consent or other instrument which may be or is required to be given
under this Lease shall be in writing and shall be delivered in person or sent
by facsimile or by registered mail postage prepaid, addressed: (a) if to the
Landlord: c/o The Cadillac Fairview Corporation Limited, 20 Queen Street West,
5th Floor, Toronto, Ontario, M5H 3R4, Attention: Executive Vice President,
Property Management, facsimile no. (416) 598-8222, with a copy to the Building
Manager, and (b) if to the Tenant, at the Premises to the attention of the
Chief Financial Officer with a copy to Bull, Housser & Tupper, Barristers &
Solicitors, 3000-1055 West Georgia Street, Vancouver, B.C. V6E 3R3, facsimile
no. (604) 641-4949, (Attention: George Burke. Any such notice or other
instrument shall be deemed to have been given and received on the day upon
which personal delivery or any facsimile delivery is made if during normal
business hours on a Business Day, failing which, it shall be deemed to be
received on the next following Business Day or, if mailed, then 3rd Business
Day following the date of mailing. Either party may give notice to the other
of any change of address and after the giving of such notice, the address
therein specified is deemed to be the address of such party for the giving of
notices. If postal service is interrupted or substantially delayed, all
notices or other instruments shall be delivered in person.

Section 12.11      Successors

The rights and liabilities created by this Lease extend to and bind the
successors and assigns of the Landlord and the heirs, executors, administrators
and permitted successors and assigns of the Tenant. No rights, however, shall
enure to the benefit of any Transferee unless the provisions of Article VIII
are complied with.

Section 12.12      Joint and Several Liability

If there is at any time more than one Tenant or more than one Person
constituting the Tenant, their covenants shall be considered to be joint and
several and shall apply to each and every one of them. If the Tenant is or
becomes a partnership, each Person who is a member, or shall become a member,
of such partnership or its successors shall be and continue to be jointly and
severally liable for the performance of all covenants of the Tenant pursuant to
this Lease, whether or not such Person ceases to be a member of such
partnership or its successor.

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Section 12.13      Captions and Section Numbers

The captions, section numbers, article numbers and table of contents appearing
in this Lease are inserted only as a matter of convenience and in no way affect
the substance of this Lease.

Section 12.14      Extended Meanings

The words “hereof”, “hereto” and “hereunder” and similar expressions used in
this Lease relate to the whole of this Lease and not only to the provisions in
which such expressions appear. This Lease shall be read with all changes in
number and gender as may be appropriate or required by the context.

Section 12.15      Partial Invalidity

All of the provisions of this Lease are to be construed as covenants even
though not expressed as such. If any such provision is held or rendered
illegal or unenforceable it shall be considered separate and severable from
this Lease and the remaining provisions of this Lease shall remain in force and
bind the parties as though the illegal or unenforceable provision had never
been included in this Lease.

Section 12.16      Entire Agreement

This Lease and the Schedules and riders, if any, attached hereto and the Lease
Proposal, set forth the entire agreement between the Landlord and Tenant
concerning the Premises and there are no agreements or understandings between
them other than as are herein set forth. Subject to Section 12.01, this Lease
and its Schedules and riders may not be modified except by agreement in writing
executed by the Landlord and Tenant. In the event of any inconsistency between
the provisions of this Lease and the provisions of the Lease Proposal, the
provisions of this Lease shall prevail. Acceptance of, or acquiescence in, a
course of performance rendered under any prior agreement between the parties or
their officers, employees, representatives, agents or affiliates shall not be
relevant or admissible to determine the meaning of any of the terms of this
Lease. Except as herein otherwise provided, no subsequent alteration,
amendment, change or addition, to this Lease shall be binding upon the Landlord
or the Tenant unless reduced to writing and signed by them.

Section 12.17      Governing Law

This Lease shall be construed in accordance with and governed by the laws of the Province of British Columbia.

Section 12.18       Time of the Essence

Time is of the essence of this Lease.

Section 12.19       Quiet Enjoyment

If the Tenant pays Rent, fully observes and performs all of its obligations
under this Lease, and there has been no Event of Default which remains
outstanding, the Tenant shall be entitled to peaceful and quiet enjoyment of
the Premises for the Term without interruption or interference by the Landlord
or any Person claiming through the Landlord.

Section 12.20      Indemnity Agreement/Letter of Credit

The Tenant agrees that by no later than December 1, 2002 it shall either: (i)
cause the Indemnifier to execute and deliver to the Landlord an indemnity
agreement in form attached as Schedule “E” hereto, subject to reasonable
negotiation between the Landlord and the Indemnifier, with respect to this
Lease and any and all renewals hereof (the “Indemnity Agreement”); or (ii)
deliver to the Landlord a Letter of Credit in the amount of $5,000,000 as
security for any and all obligations of the Tenant hereunder or otherwise with
respect to the Premises at any time after the occurrence of a Trigger Event.
Subject to the Tenant not then being in default hereunder, the amount of the
Letter of Credit shall amortize over a 10 year period on a straight-line basis.
For greater certainty, if the Tenant desires to cause the Indemnifier to
execute and deliver the Indemnity Agreement and if the Landlord and the Tenant
cannot agree on the form of such indemnity agreement, each acting reasonably,
within a reasonable period thereafter, the Tenant shall be obliged to deliver
the Letter of Credit.

31

 

The Tenant shall: (i) forthwith notify the Landlord of the occurrence of any
Trigger Event; and (ii) until a Trigger Event shall have occurred, provide to
the Landlord upon written request within 60 days of the end of each Lease Year,
an officer’s certificate of the Tenant certifying that no Trigger Event has
occurred, together with all necessary evidence to support such conclusion.

Section 12.21      Special Provisions

The Landlord and the Tenant confirm for greater certainty that the provisions
set forth in Schedule “F” hereto form an integral part of this Lease.

Section 12.22      Telephone and Computer Systems

The Tenant will be responsible for its own telephone installation and any
related charges or repair bills to telephone communications equipment.
Throughout the Term of the Lease, the Landlord shall use commercially
reasonable efforts to ensure that multiple, non-exclusive competitive
telecommunications service providers are available to all tenants within the
Building.

The parties understand that the Building contains one or more rooms where the
fibre optic and telephone equipment for the Building is situated (hereinafter
referred to as the “Riser Rooms”) and the Tenant agrees that all Riser Rooms
shall be for the sole and exclusive use of the Landlord. The Tenant shall
subject to the terms hereinafter set forth, not use the equipment contained in
the Riser Rooms, install or instruct the installation of any additional
equipment, whether telephone equipment, fibre optic equipment or otherwise,
without first obtaining the Landlord’s written consent to same, which consent
may not be unreasonably withheld, including the payment of an additional fee,
the amount of which shall be at market rates. If the Landlord elects to retain
a riser manager (the “Riser Manager”), the Tenant will, to the extent directed
by the Landlord: (i) recognize the Riser Manager as the duly authorized
representative of the Landlord; (ii) abide by all policies, directions and
decisions of the Riser Manager, provided such policies, directions and
decisions do not materially adversely affect or interfere with the manner in
which the Tenant conducts its business; (iii) pay directly to the Riser Manager
its reasonable charges for services provided directly to the Tenant including,
but not limited to, the cost of reviewing plans and specifications, inspecting
work performed on behalf of the Tenant and supervision of the work; and (iv)
pay a pro-rated share of the charges and fees reasonably paid by the Landlord
to the Riser Manager for riser management services and such charges and fees
will constitute part of the Operating Costs.

The Landlord may elect to provide existing and future telecommunications
service providers with access to the Building in order to provide service to
tenants of the Building, and may provide a central distribution system (a
“CDS”) in the Building for use by providers of telecommunications services. To
the extent the Landlord determines the CDS will include a main cross connection
point for use by telecommunications service providers utilizing the Building,
the main cross connection point will serve as the prime demarcation point for
service providers, including the Tenant and as the origination point of the
CDS. The telephone closet cross connection block on each floor of the Building
will serve as the secondary demarcation point, and as the termination point of
the CDS on that floor, and the Landlord may charge all or any of such service
providers (including the Tenant) a fee or fees in connection with all matters
relating to the CDS.

Subject to the foregoing, the Tenant may utilize a telecommunication service
provider of its choice with Landlord’s prior written consent, which consent the
Landlord may not unreasonably withhold or delay and subject to the following:

	(a)	 	the service provider shall execute and deliver Landlord’s standard form
of license agreement which shall include a provision for Landlord to
receive compensation for the use of the space for the service provider’s
equipment and materials;
	 
	(b)	 	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, interruption or loss of telecommunication service;
	 
	(c)	 	Landlord must first reasonably determine that there is sufficient space
in the risers of the Building for the installation of the service
provider’s equipment and materials;
	 
	(d)	 	Tenant shall indemnify and hold harmless Landlord for all losses, claims,
demands, expenses, and judgments against Landlord caused by or arising out
of, either directly or indirectly, any acts or omissions by the service
provider; and

32

 

	(e)	 	Tenant shall incorporate in its agreement with its service provider a
provision granting the Tenant the right to terminate the service provider
agreement if required to do so by the Landlord as a result of any default
by the service provider of the obligations contemplated herein or in the
service provider agreement or as a result of such service provider’s acts
or omissions detrimentally impacting upon the operation of the CDS or upon
any other tenant’s service provider, the Landlord or its Riser Manager, in
each case as determined by the Landlord, acting reasonably, and subject to
the foregoing, Landlord shall have the right at any time from time to time
during the Term to require Tenant at its expense to exercise the
termination right and to contract for telecommunication service with a
different service provider.

As part of the Tenant’s Work, the Tenant shall be responsible for the costs
associated with the supply and installation of telephone, computer and other
communication equipment and systems related wiring within the Premises to the
boundary of the 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 Landlord’s standard
form of license agreement.

Landlord shall supply space in risers in the Building and space on floor(s) of
the Building in which the Premises are located, the location of which shall be
designated by Landlord in its discretion, to telecommunication service
providers who have entered into Landlord’s standard form of license agreement
for the purpose, without any cost or expense to 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 Premises at a point designated by Landlord.

Landlord shall have the right to assume control of cables and other
telecommunication equipment in the Building (excluding the Premises) and may
designate them as part of the Common Areas.

Section 12.23      Execution

If the Tenant is a corporation, the Tenant confirms and agrees that this Lease
has been executed by its authorized signatories and that if only one signatory
has signed this Lease, the Tenant is authorized by its articles of
incorporation or other constating documents to execute leases by such sole
authorized signatory and if this Lease is not executed under seal by the
Tenant, the Tenant is authorized by its articles of incorporation or other
constating documents to execute leases without a seal.

Section 12.24      Arbitration

Save and except as otherwise specifically provided in the Lease, whenever there
is a dispute between the parties to this Lease, either the Landlord and the
Tenant may deliver to the other written notice requiring arbitration. If the
Landlord and the Tenant are unable to agree on an arbitrator within five (5)
days after the date of receipt of such notice, either party may apply to the
superior court of competent jurisdiction of the Province of British Columbia
for the appointment of a single arbitrator under the provisions of the
commercial arbitration or arbitration legislation then in force in the
Province. The Landlord and the Tenant will irrevocably authorize and instruct
the arbitrator to determine the dispute without bias toward or against either
party. Any submission to arbitration will be deemed to be a submission under
the commercial arbitration legislation then in force in the Province of British
Columbia, except that any limitation on the remuneration of the arbitrator will
not apply. The arbitrator’s determination of the dispute will be conclusive
and binding on the Landlord and the Tenant. Costs will be awarded in the
arbitrator’s discretion. Each of the Landlord and the Tenant will co-operate
with the arbitrator fully and expeditiously.

33

 

IN WITNESS WHEREOF the Landlord and Tenant have duly executed this Lease.

	 	 	 	 	 
	 	
ONTREA INC	 
	 	 	 	 	 
	 	 	 	(Landlord)	 
	 	 	 	 	 
	 	 	Per:	   /s/ John. M. Sullivan	 
	 	 	 	
	 
	 	 	 	Authorized Signature	 
	 	 	Per:	 	 
	 	 	 	
	 
	 	 	 	Authorized Signature	 
	 	 	 	 	 
	 	ELECTRONIC ARTS (CANADA), INC	 
	 	 	 	 	 
	 	 	 	(Tenant)	 
	 	 	 	 	 
	 	 	Per:	   /s/ Howard Donaldson	 
	 	 	 	
	 
	 	 	 	Authorized Signature	 
	 	 	Per:	 	 
	 	 	 	
	 
	 	 	 	Authorized Signature	 
	 	 	 	 	 
	 	I/We have authority to bind the corporation.	 

34

 

SCHEDULE “A” — LEGAL DESCRIPTION

Those lands in Vancouver, British Columbia, legally described as:

Parcel Identifier:       023 166 371

Lot 3

District Lot 541 and of the Public Harbour of Burrard Inlet

Group 1

New Westminster District

Plan LMP 23953

 

 

SCHEDULE “B” — FLOOR PLAN OF THE PREMISES

 

 

SCHEDULE “C” — DEFINITIONS

In this Lease and in the Schedules to this Lease:

	1.	 	“Additional Rent” means all sums of money or charges required to be paid
by the Tenant under this Lease (except Net Rent) whether or not the same
are designated “Additional Rent” or are payable to the Landlord or
otherwise.
	 
	2.	 	“Affiliate” has the meaning ascribed thereto in the Business Corporations
Act (Canada).
	 
	3.	 	“Alterations” means all repairs, replacements, improvements or
alterations to the Premises by the Tenant.
	 
	4.	 	“Architect” means the architect or engineer from time to time named by
the Landlord.
	 
	5.	 	“Building” means the multi-storey building known municipally as 250 Howe
Street, Vancouver, British Columbia and generally as
“PricewaterhouseCoopers Place” which forms part of the Complex, including
the roof thereof and including all premises rented or intended to be
rented therein, whether for office, retail, banking or other purposes; and
facilities serving the Building or having utility in connection therewith,
as determined by the Landlord, whether or not located directly under the
Building, which areas and facilities may include, without limitation,
internal malls, sidewalks and plazas, exhibit areas, storage and
mechanical areas, janitor rooms, mail rooms, telephone, mechanical and
electrical rooms, stairways, escalators, elevators, truck and receiving
areas, driveways, parking facilities, loading docks and corridors and
includes all other buildings, structures or improvements relating thereto
and erected on or about the Lands from time to time, including, without
limitation, any lands, structures, easements or appurtenances to or in
favour of the Lands used as part of or in connection with the Building,
all outside areas, landscaped areas, roadways and driveways, ramps,
outside and covered parking areas and walkways, existing or to be
constructed from time to time, in, under or upon the Lands and any
additions, expansions and improvements made thereon.
	 
	6.	 	“Business Day” means any day of the week other than a Saturday, Sunday or
any statutory holiday in either of the Provinces of Ontario or British
Columbia.
	 
	7.	 	“Capital Tax” is an amount determined by multiplying each of the
“Applicable Rates” by the “Building Capital” and totalling the products.
“Building Capital” is the amount of capital which the Landlord determines,
without duplication, is invested from time to time by the Landlord, the
owners, or all of them, in doing all or any of the following: acquiring,
developing, expanding, redeveloping and improving the Lands and Building.
Building Capital will not be increased by any financing or refinancing
except to the extent that the proceeds are invested directly as Building
Capital. An “Applicable Rate” is the capital tax rate specified from time
to time under any statute of Canada and any statute of the Province which
imposes a tax in respect of the capital of corporations. Each Applicable
Rate will be considered to be the rate that would apply if none of the
Landlord or the owners employed capital outside of the Province.
	 
	8.	 	“Change of Control” means, in the case of the Tenant, the transfer or
issue by sale, assignment, subscription, transmission on death, mortgage,
charge, security interest, operation of law or otherwise, of any of the
Tenant’s shares, voting rights or interest which would result in any
change in the ownership of the Tenant.
	 
	9.	 	“Commencement Date” means May 1, 2003. Provided, however, that if the
Possession Date should be delayed beyond November 15, 2002, the
Commencement Date shall be extended by each day that the Possession Date
is so delayed.
	 
	10.	 	“Complex” means the multi-use commercial development located on and in
the area of the Lands which is comprised of the Building, the office
building and parking facilities known as Granville Square, the office,
retail and parking developments known as The Station and Waterfront
Centre, the Parking Facilities and all other buildings, improvements and
facilities relating thereto from time to time.
	 
	11.	 	“CPI” shall mean (a) the Consumer Price Index (All Items for Regional
Cities, base year 1992=100) for Vancouver, or if there is no Consumer
Price Index for that city, for the city in Canada nearest the Building for
which there is a Consumer Price Index published by Statistics Canada (or
by a successor or other governmental agency, including a provincial
agency), or (b) if the Consumer Price Index is no longer published, an
index

 

 

	 	 	published in substitution for the Consumer Price Index or any replacement
index designated by the Landlord. If a substitution is required, the
Landlord will make the necessary conversions. If the base year for the
Consumer Price Index (or the substituted or replacement index) is changed
by Statistics Canada (or by its successor or other governmental agency)
the Landlord will make the necessary conversion. If any calculation is
required to be made under this Lease based on CPI as at a particular date
or for a particular period and the CPI for such date or period is not
available as at the time the calculation is required to be made, the
Landlord shall be entitled to estimate the CPI for the purposes of such
calculation, subject to adjustment following the CPI for the relevant date
or period becoming available.
	 
	12.	 	“Designated Premises” shall have the meaning ascribed thereto in Section
2.05(d).
	 
	13.	 	“Environmental Laws” means all applicable federal, provincial and
municipal laws, regulations, by-laws, standards, requirements, ordinances,
codes, policies, guidelines, orders, notices, permits or directives, or
parts thereof, pertaining to protection, conservation, utilization,
impairment or degradation of the environment in effect as of the date
hereof and as may be brought into effect or amended at a future date.
	 
	14.	 	An “Event of Default” shall occur whenever:

	 	(a)	 	any Rent is in arrears and is not paid within seven (7)
Business Days after written demand by the Landlord;
	 
	 	(b)	 	the Tenant has breached any of its obligations in this Lease
(other than the payment of Rent) and: (i) fails to remedy such
breach within fifteen (15) days (or such shorter period as may be
expressly provided in this Lease); or (ii) if such breach cannot be
reasonably remedied within fifteen (15) days or such shorter period,
the Tenant fails to commence to remedy such breach within such
fifteen (15) days or shorter period or thereafter fails to proceed
diligently to remedy such breach to completion; in either case after
notice in writing from the Landlord;
	 
	 	(c)	 	the Tenant or any Indemnifier becomes bankrupt or insolvent or
takes the benefit of any statute for bankrupt or insolvent debtors or
makes any proposal, assignment or arrangement with its creditors, or
any steps are taken or proceedings commenced by any Person for the
dissolution, winding-up or other termination of the Tenant’s
existence or the liquidation of its assets;
	 
	 	(d)	 	any execution, attachment or similar process shall be issued
against the Tenant or any encumbrancer shall take any action or
proceeding whereby any of the improvements, trade fixtures,
furnishings or personal property on the Premises or any portion
thereof shall be taken or attempted to be taken by someone other than
the Tenant, unless such execution, attachment or similar process,
action or proceeding be set aside, vacated, discharged or abandoned
within 10 days after its commencement;
	 
	 	(e)	 	an order shall be made or an effective resolution passed for
the winding-up or liquidation of the Tenant or the surrender or
forfeiture of its charter;
	 
	 	(f)	 	a trustee, receiver, receiver/manager or like Person is
appointed with respect to all or part of the business or assets of
the Tenant or any Indemnifier;
	 
	 	(g)	 	the Tenant makes a sale in bulk of all or a substantial portion
of its assets other than in conjunction with a Transfer approved by
the Landlord;
	 
	 	(h)	 	this Lease or any of the Tenant’s assets are taken under a writ
of execution;
	 
	 	(i)	 	the Tenant purports to make a Transfer other than in compliance
with the provisions of this Lease;
	 
	 	(j)	 	the Tenant abandons or attempts to abandon the Premises or
disposes of its goods so that there would not after such disposal be
sufficient goods of the Tenant on the Premises subject to distress to
satisfy Rent for at least 3 months, or the Premises become vacant and
unoccupied for a period of 10 consecutive Business Days or more
without the consent of the Landlord;

2

 

	 	(k)	 	any insurance policies covering any part of the Building or any
occupant thereof are actually or threatened to be cancelled or
adversely changed as a result of any use or occupancy of the
Premises;
	 
	 	(l)	 	if the Tenant shall default in the full and timely performance
of any covenant of this Lease and any such default shall be repeated
2 times in any Lease Year, notwithstanding that such defaults may
have been cured within the period after notice has been provided
pursuant to Subsections (a) or (b) hereof;
	 
	 	(m)	 	if an Event of Default as defined in this paragraph occurs with
respect to any lease or agreement under which the Tenant occupies
other premises in the Building; or
	 
	 	(n)	 	if the Tenant or any Indemnifier is a corporation and at any
time during the Term does not remain in good standing with the
applicable governmental authority and such failure is not remedied
within a reasonable period of time.

	15.	 	“Fiscal Year” means (i) the period of time commencing on the Commencement
Date and ending on the last day of the next ensuing October; and (ii)
thereafter the period of time commencing on the first day of November and
ending on the last day of the next ensuing October, or (iii) the fiscal
period designated by the Landlord from time to time.
	 
	16.	 	“Fixturing Period” means the period commencing on Possession Date and
ending at 11:59 p.m. on the day preceding the Commencement Date.
	 
	17.	 	“Hazardous Substance” means any substance or material whose discharge,
release, use, storage, handling or disposal is regulated, prohibited or
controlled, either generally or specifically, by any governmental
authority pursuant to or under any Environmental Laws, including, but not
limited to, any contaminant, pollutant, deleterious substance, or material
which may impair the environment, petroleum and other hydrocarbons and
their derivatives and by-products, dangerous substances or goods,
asbestos, gaseous, solid and liquid waste, special waste, toxic substance,
hazardous or toxic chemical, hazardous waste, hazardous material or
hazardous substance, either in fact or as defined in or pursuant to any
Environmental Laws.
	 
	18.	 	“Indemnifier” means Electronic Arts, Inc., its successors and assigns.
	 
	19.	 	“Landlord” means the party named as landlord on the first page of this
Lease, and those for whom it is responsible in law.
	 
	20.	 	“Landlord’s Work” means the items of work to be completed by the Landlord
with respect to the Premises as described in the Lease Proposal and as
described in this Lease.
	 
	21.	 	“Lands” means the lands situated in the City of Vancouver in the Province
of British Columbia on which the Building will be constructed, as more
particularly described in Schedule “A”, or as such lands may be expanded
or reduced from time to time by the Landlord.
	 
	22.	 	“Lease” or
“lease” means this document as originally signed, sealed and
delivered or as amended from time to time, which amendments shall be in
writing, signed, sealed and delivered by both the Landlord and the Tenant.
	 
	23.	 	“Lease Proposal” means the offer to lease dated the 30th day of August,
2002, as amended, between the Landlord and the Tenant with respect to the
Premises.
	 
	24.	 	“Lease Year” means the twelve (12) month period commencing on the
Commencement Date unless the Commencement Date is not the first day of the
month in which case it will commence on the first day of the month
immediately following the Commencement Date, and each twelve (12) month
period thereafter.
	 
	25.	 	“Leasehold
Improvements” mean leasehold improvements in the Premises
determined according to common law, and shall include, without limitation,
all fixtures, improvements, installations, alterations and additions from
time to time made, erected or installed in the Premises by or on behalf of
the Tenant or any previous occupant of the Premises, including signs and
lettering, partitions, doors and hardware, however affixed and whether or
not movable, all mechanical, electrical and utility installations and all
carpeting and drapes with the

3

 

	 	 	exception only of furniture and equipment not in the nature of fixtures.
For greater certainty, under no circumstances whatsoever shall Leasehold
Improvements include any Trade Fixtures.
	 
	26.	 	“Letter of Credit” means an irrevocable, unconditional and transferable
letter of credit in favour of the Landlord (including, without limitation,
a requirement that such Letter of Credit shall either automatically renew
or shall provide that if it is not renewed at least 30 days prior to its
expiry, Landlord may draw thereon and such Letter of Credit shall provide
for partial drawings thereunder) issued by one of the five largest
Canadian chartered banks listed in Schedule 1 to the Bank Act (Canada) and
shall otherwise be in such form and substance as is satisfactory to the
Landlord, acting reasonably.
	 
	27.	 	“Mortgage” means any and all mortgages, charges, debentures, security
agreements, trust deeds, hypothecs or like instruments resulting from
financing, refinancing or collateral financing (including renewals or
extensions thereof) made or arranged by the Landlord of its interest in
all or any part of the Building or Lands.
	 
	28.	 	“Mortgagee” means the holder of, or secured party under, any Mortgage and
includes any trustee for bondholders.
	 
	29.	 	“Net Rent” means the annual rent payable by the Tenant under Section
2.02.
	 
	30.	 	“Normal Business Hours” means the hours from 7:00 a.m. to 6:00 p.m. (or
7:00 p.m. where such definition applies to the hours of operation of the
HVAC systems) on Mondays through Fridays and the hours from 8:00 a.m. to
1:00 p.m. on Saturday, unless any such day is a statutory holiday, legal
or civic holiday in British Columbia.
	 
	31.	 	“Operating Costs” means for any period designated by the Landlord any
amounts paid or payable whether by the Landlord or by others on behalf of
the Landlord for maintenance, operation, repair, replacement to and
administration of the Lands and Building, including without limitation the
fitness centre (which shall be deemed to be $0.19 per square foot in this
first lease year), the conference centre and the Parking Facilities, or
reasonably and fairly allocated by the Landlord to the Lands and Building
and portions of the Complex and for services provided generally to tenants
of the Building, calculated as if the Building were 100% occupied by
tenants during the Term, including without limitation or duplication:

	 	(a)	 	the cost of insurance which the Landlord is obligated or
permitted to obtain under this Lease and any deductible amount
applicable to any claim made by the Landlord under such insurance;
	 
	 	(b)	 	the cost of security, janitorial, cleaning, landscaping, window
cleaning, garbage removal and snow removal services, the cost of
providing loudspeakers, public address and musical broadcasting
systems and providing fire protection and detection systems,
communications systems and connections;
	 
	 	(c)	 	the cost of heating, ventilating and air-conditioning;
	 
	 	(d)	 	the cost of fuel, steam, water, electricity, telephone and
other utilities used in the maintenance, operation or administration
of the Building, including the replacement of building standard
electric bulbs, tubes, starters and ballasts; including charges and
imposts related to such utilities to the extent such costs, charges
and imposts are not recovered from other tenants;
	 
	 	(e)	 	on-site management office expenses of operation (or to the
extent there is no on-site management offices, a portion of the
operating expenses of the off-site management office bearing
responsibility for, inter alia, the Building determined by the
Landlord on an equitable basis), and salaries, wages and other
amounts paid or payable for all personnel involved in the repair,
maintenance, operation, management, security, supervision or cleaning
of the Building, including fringe benefits, employment and worker’s
compensation insurance premiums, pension plan contributions and other
employment costs and the cost of engaging contractors for the repair,
maintenance, security, supervision or cleaning of the Building;
	 
	 	(f)	 	auditing, accounting, legal and other professional and
consulting fees and disbursements;

4

 

	 	(g)	 	the costs:

	 	(i)	 	of repairing, operating and maintaining the
Building and the equipment serving the Building and of all
replacements and modifications to the Building or such
equipment, including those made by the Landlord in order to
comply with laws or regulations affecting the Building;
	 
	 	(ii)	 	incurred by the Landlord in providing and
installing energy conservation equipment or systems and life
safety systems;
	 
	 	(iii)	 	incurred by the Landlord to make alterations,
replacements or additions to the Building intended to reduce
operating costs, improve the operation of the Building or
maintain its operation as a first class office building; and,
	 
	 	(iv)	 	incurred to replace machinery or equipment which by
its nature requires periodic replacement;

	 	 	 	all to the extent that such costs are fully chargeable in the Fiscal
Year in which they are incurred in accordance with sound accounting
principles;

	 	(h)	 	the cost of the rental of all equipment, supplies, tools,
materials and signs;
	 
	 	(i)	 	all costs incurred by the Landlord in administering, contesting
or appealing taxes or related assessments including legal, appraisal
and other professional fees, and administration and overhead costs;
	 
	 	(j)	 	Capital Tax (unless the Landlord is Ontrea Inc. and Ontrea Inc.
continues to be exempt from the payment of Capital Tax), any Tenant’s
Taxes which may be imposed on the Landlord, or its managing agents,
by reason of its operation of the Building and water rates, special
licence fees or levies for the Building other than Taxes, Other Taxes
and Tenant’s Taxes;
	 
	 	(k)	 	depreciation or amortization of the costs referred to in
paragraph 31(g) above as determined by the Landlord in accordance
with sound accounting principles, if such costs (in accordance with
sound accounting principles) have not been charged fully in the
Fiscal Year in which they are incurred;
	 
	 	(l)	 	interest calculated at 2 percentage points above the average
daily prime bank commercial lending rate charged during such rental
year by any Canadian chartered bank designated from time to time by
the Landlord upon the undepreciated or unamortized balance of the
costs referred to in paragraph 31(k); and
	 
	 	(m)	 	an administrative overhead charge equal to 15% of the aggregate
of all of the foregoing costs and amounts.

	 	 	“Operating Costs” in respect of the Complex which the Landlord determines
are not exclusive to the Building but which serve or benefit the Building
and the tenants or invitees thereof (including, without limitation, the
Parking Facilities), will be allocated by the Landlord amongst the various
components of the Complex in accordance with reasonable, equitable and
current practices relevant to multi-use commercial developments adopted by
the Landlord on a basis consistent with the benefits derived by the
components of the Complex and having regard to the nature of the
particular cost and expense being allocated. For greater certainty, no
cost will be allocated to the Building if the tenants of the Building or
the users of the Parking Facility do not derive any benefit from such
cost
	 
	 	 	Operating Costs shall exclude or have deducted from them as the case may
be, all as calculated in accordance with Canadian generally accepted
accounting principles consistently applied:

	 	(aa)	 	all amounts which otherwise would be included in Operating
Costs which are recovered by the Landlord from tenants (other than
under sections of their leases comparable to Section 2.03 of this
Lease);

5

 

	 	(bb)	 	such of the Operating Costs as are recovered from insurance
proceeds, warranties or guarantees, to the extent such recovery
represents reimbursements for costs previously included in Operating
Costs;
	 
	 	(cc)	 	interest on debt and capital retirement of debt;
	 
	 	(dd)	 	ground rent payable by the Landlord to the owner of the Lands
under any ground lease of the Lands;
	 
	 	(ee)	 	commissions and other expenses payable in connection with the
marketing and leasing of the Building including the cost of any
leasehold improvement allowance or other inducement paid to tenants
of the Building; and
	 
	 	(ff)	 	the amount of any goods and services tax (“G.S.T.”) paid or
payable by the Landlord on the purchase of goods and services
included in Operating Costs which may be available to the Landlord as
a credit in determining the Landlord’s net tax liability or refund on
account of G.S.T.

	32.	 	“Other Taxes” means any and all goods and services tax, sales tax,
multi-stage tax, value added tax, consumption tax or any other similar
taxes, levies, duties and assessments (other than income taxes) imposed on
the Landlord, the Tenant or both of them with respect to:

	 	(i)	 	any or all amounts payable by the Tenant to the Landlord
as Rent; and
	 
	 	(ii)	 	this Lease, or services supplied or provided by the
Landlord in accordance with the terms of this Lease,

	 	 	which Other Taxes shall be determined and paid by the Tenant in accordance
with the provisions of Article II, but not including any goods and
services taxes that the Tenant has agreed to pay pursuant to this Lease.
	 
	33.	 	“Overhead Charge” means a sum equal to 15% of the applicable cost
incurred representing the Landlord’s overhead.
	 
	34.	 	“Parking Facilities” means the parking facility forming part of the
Complex which is located on both the Lands and lands adjacent thereto or
within 300 feet thereof, which are owned or controlled by the Landlord and
which serve the Complex.
	 
	35.	 	“Person” means any person, firm, partnership or corporation, or any group
or combination of persons, firms, partnerships or corporations.
	 
	36.	 	“Possession Date” means the date that construction of the Building and
the Landlord’s Work with respect to the Premises has been completed to the
extent required to permit the Tenant to commence the Tenant’s Work and the
Tenant has been provided possession of the whole of the Premises for such
purposes, it being acknowledged that the Landlord shall not be required to
provide to the Tenant the cross-over corridors until December 9, 2002 and
that, subject to the foregoing, if the Landlord’s Work has been completed
to the state described above, the Possession Date shall be deemed to have
occurred.
	 
	37.	 	“Premises” means the premises leased to the Tenant described in Section
1.01 and includes Leasehold Improvements in such premises.
	 
	38.	 	“Proportionate Share” means a fraction which has as its numerator the
Rentable Area of the Premises and as its denominator the Total Rentable
Area of the Building, but in the case of calculating the Tenant’s share of
Taxes and Operating Costs means a fraction which has its numerator the
Rentable Area of the Premises and as its denominator the aggregate of the
Rentable Area of each floor in the Building used or intended to be used
for office purposes, calculated as if each floor is occupied by one tenant
and making the same exclusions as set out in Paragraph 50 below.
	 
	39.	 	“Province” means the province in which the Building is located.
	 
	40.	 	“Rent” means the aggregate of Net Rent and Additional Rent.

6

 

	41.	 	“Rentable Area” means with reference to the Premises or any other
premises in the Building means the area of the Premises, or such other
premises, expressed in square feet in accordance with the BOMA American
National Standard ANSI Z65.1-1980 (Reaffirmed 1989) method of floor
measurement for office buildings in Canada, as contemplated in Section
2.09.
	 
	42.	 	“Revenues” means, in connection with the Tenant, the Tenant’s revenues
for its fiscal year recognized based on product development expenses
incurred on behalf of Electronic Arts Inc. on a cost plus basis or as
determined in accordance with generally accepted accounting principles,
whichever is greater.
	 
	43.	 	“Rules and Regulations” means the rules and regulations adopted and
promulgated by the Landlord from time to time pursuant to Section 12.01.
The Rules and Regulations existing as at the Commencement Date are those
set out in Schedule “D”.
	 
	44.	 	“Share” shall have the meaning ascribed thereto in Section 2.05(d).
	 
	45.	 	“Taxes” means all taxes, levies, charges, local improvement rates and
assessments whatsoever, (including but not limited to, any present or
future commercial concentration tax or levy and every other tax, rate,
duty, levy or assessment charged or assessed based upon the floor area of
a building or any part or parts thereof) assessed or charged against the
Building and the Lands or any part thereof by any lawful taxing authority
and including any amounts assessed or charged in substitution for or in
lieu of any such taxes, but excluding only such taxes as capital gains
taxes, corporate, income, profit or excess profit taxes to the extent such
taxes are not levied in lieu of any of the foregoing against the Building
or Lands or the Landlord in respect thereof. Taxes shall in every
instance be calculated on the basis of the Total Rentable Area of the
Building being fully assessed and taxed at prevailing commercial tax rates
for occupied space for the period for which Taxes are being calculated.
Provided, however, that if there is any local improvement, charge or
assessment which has directly resulted by virtue of any redevelopment
initiated by the Landlord of any portion of the Complex (other than the
Building, the Lands and/or the Parking Facilities) which does not result
in a benefit to any tenant in the Building, such local improvement, charge
or assessment shall be excluded from the determination of “Taxes” for the
purposes of this Lease.
	 
	46.	 	“Tenant” means the party named as tenant on the first page of this Lease,
and those for whom it is responsible in law.
	 
	47.	 	“Tenant’s Taxes” means all business, sales, machinery or other taxes,
rates, duties, assessments, licence fees and other charges levied, charged
or imposed by any competent authority with respect to the business
operations of the Tenant or the equipment and facilities of the Tenant or
other occupant of the Premises on or in the Premises and in respect of the
Tenant’s use or occupation of the Premises and every business carried on
therein (including every subtenant or licensee), whether imposed on the
Landlord or Tenant.
	 
	48.	 	“Tenant’s Work” means all items of work, other than the Landlord’s Work,
which are necessary to properly complete the Premises ready for use and
occupancy of the Tenant for the purpose of its business.
	 
	49.	 	“Term” means the period of time set out in Section 1.02.
	 
	50.	 	“Total Rentable Area of the Building” means the aggregate of the Rentable
Area of each floor in the Building intended for office or retail use as if
each floor is occupied by one tenant, all as determined by the Architect.
The Total Rentable Area of the Building shall: (a) exclude the main
telephone, mechanical, electrical and other utility rooms and enclosures,
public lobbies on the ground floor, and other public space common to the
entire Building; and, (b) be adjusted by the Architect from time to time
to take account of any structural, functional or other change affecting
the same.
	 
	51.	 	“Trade Fixtures” means trade fixtures as determined at common law and
shall include without limitation, speciality millwork, shelving,
partitions, speciality lighting fixtures, telecommunications equipment,
facilities, systems and all related accessories, any heating, ventilating
and air-conditioning equipment which is not part of or linked to the
Building system, all computer equipment (including without limitation,
server and network closets, servers, desktops, network equipment and
facilities, monitors, printers, and fax machines), all security equipment
and systems (including cameras, recorders and related accessories), in
each case which is not linked into the Building systems, all video, audio
and multi-media equipment and systems, and certain other “built-in”

7

 

	 	 	electronic equipment and facilities, in each case which is not linked into
the Building systems but for greater certainty, shall not include:

	 	(a)	 	heating, ventilating or air conditioning systems, facilities
and equipment in or serving the Premises, which are part of the
Building system;
	 
	 	(b)	 	floor covering affixed to the floor of the Premises;
	 
	 	(c)	 	building standard light fixtures;
	 
	 	(d)	 	internal stairways and doors; and,
	 
	 	(e)	 	any fixtures, facilities, equipment or installations installed
by or at the expense of the Landlord pursuant to this Lease or
otherwise.

	52.	 	“Transfer” means an assignment of this Lease in whole or in part, a
sublease of all or any part of the Premises (whether by the Tenant or by a
subtenant), any transaction whereby the rights of the Tenant under this
Lease or the rights of any subtenant to the Premises or any part thereof
are transferred to another, any transaction by which any right of use or
occupancy of all or any part of the Premises is conferred upon anyone, any
mortgage, charge or encumbrance of this Lease or the Premises or any part
thereof or other arrangement under which either this Lease or the Premises
become security for any indebtedness or other obligations and includes any
transaction or occurrence whatsoever (including, but not limited to,
expropriation, receivership proceedings, seizure by legal process and
transfer by operation of law), which has changed or might change the
identity of the Persons having lawful use or occupancy of any part of the
Premises or which creates a security interest in any part of the Premises,
including without limitation, any of the Leasehold Improvements.
	 
	53.	 	“Transferee” means the Person or Persons to whom a Transfer is or is to
be made.
	 
	54.	 	“Trigger Event” means any one of the following circumstances having
occurred:

	 	(a)	 	the Tenant shall cease to employ more than five hundred (500)
full-time or part-time employees;
	 
	 	(b)	 	the Tenant’s Revenues shall be less than Thirty Million Dollars
(Cdn $30,000,000); and
	 
	 	(c)	 	if less than 51% of any class of shares in the capital of the
Tenant shall cease to be owned by the Indemnifier.

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SCHEDULE “D” — RULES AND REGULATIONS

1. Life Safety

	 	(a)	 	The Tenant shall not do or permit anything to be done in the
Premises, or bring or keep anything therein which may damage the
Complex or which will in any way increase the risk of fire or the
rate of fire insurance on the Building or on property kept therein,
or obstruct or interfere with the rights of other tenants or in any
way injure or annoy them or the Landlord, or violate or act at
variance with the laws relating to fires or with regulations of the
Fire Department, or with any insurance upon the Lands or Building or
in any part thereof, or violate or act in conflict with any
statutes, rules and ordinances governing health standards or with
any other statute or municipal by-law.
	 
	 	(b)	 	No inflammable oils or other inflammable, dangerous or
explosive materials save those approved in writing by the Landlord’s
insurers shall be kept or permitted to be kept in the Premises.

	2.	 	Security

	 	(a)	 	The Landlord shall permit the Tenant and the Tenant’s
employees and all Persons lawfully requiring communication with them
to have the use, during Normal Business Hours in common with others
entitled thereto, of the main entrance and the stairways, corridors,
elevators, escalators, or other mechanical means of access leading
to the Building and the Premises. At times other than during Normal
Business Hours the Tenant and the employees of the Tenant shall have
access to the Building and to the Premises only in accordance with
the Rules and Regulations and shall be required to satisfactorily
identify themselves and to register in any book which may at the
Landlord’s option be kept by the Landlord for such purpose. If
identification is not satisfactory, the Landlord is entitled to
prevent the Tenant or the Tenant’s employees or other Persons
lawfully requiring communication with the Tenant from having access
to the Building and to the Premises. In addition, the Landlord is
not required to open the door to the Premises for the purpose of
permitting entry therein to any Person not having a key to the
Premises. Each tenant shall be responsible for all persons
authorized to have access to the Building and shall be liable to the
Landlord for all their acts while in the Building. When security
service is in effect during non-business hours entrances, deliveries
and exits shall be made via designated entrances and the Landlord
may require all persons to sign a register on entering and leaving
the Building;
	 
	 	(b)	 	The Tenant shall not place or cause to be placed any
additional locks or bolts of any kind upon any doors or windows of
the Premises without the approval of the Landlord nor shall any
changes whatsoever be made to existing locks or the mechanics
thereof, except by Landlord, at its option. Two keys shall be
supplied to the Tenant for each entrance door to the Premises and
all locks shall be Building standard to permit access by the
Landlord’s master key. If additional keys are required, they must
be obtained from the Landlord at the cost of the Tenant. Keys or
other means of access for entrance doors to the Building will not be
issued without the written authority of the Landlord. The Tenant
will lock all entrance doors in the Premises and close all windows
when not in use. If without the Landlord’s consent, the Tenant
installs any locks incompatible with the building master locking
system:

	 	 	(A)  the Landlord, without abatement of Rent, shall be relieved of
any obligation under this Lease to provide any service to the
affected area which requires access thereto;
	 
	 	 	(B)  the Tenant shall indemnify the Landlord against any expense as
a result of forced entry thereto which may be required in an
emergency; and
	 
	 	 	(C)  the Tenant shall, at the end of the Term and in any event upon
the Landlord’s request, remove such locks at the Tenant’s expense.

 

	3.	 	Housekeeping

	 	(a)	 	The Tenant shall permit window cleaners to clean the windows
of the Premises during Normal Business Hours and will keep the
inside of all glass in the doors and windows of the Premises clean.
	 
	 	(b)	 	The Tenant shall not place any debris, garbage, trash or
refuse or permit same to be placed or left in or upon any part of
the Lands or Building outside of the Premises, other than in a
location provided by the Landlord specifically for such purposes,
and the Tenant shall not allow any undue accumulation of any debris,
garbage, trash or refuse in or outside of the Premises. If the
Tenant uses perishable articles or generates wet garbage, the Tenant
shall provide refrigerated storage facilities suitable to the
Landlord. When required by a governmental authority having
jurisdiction, the Tenant shall provide, within the Premises,
facilities or accommodation for garbage and waste and its disposal
and pick-up, as required.
	 
	 	(c)	 	The Tenant shall not place or maintain any supplies, or other
articles in any vestibule or entry of the Premises, on the adjacent
footwalks or elsewhere on the exterior of the Premises or elsewhere
on the Lands or Building.
	 
	 	(c)	 	The sidewalks, entrances, passages, escalators, elevators and
staircases shall not be obstructed or used by the Tenant, its
agents, servants, contractors, invitees or employees for any purpose
other than ingress to and egress from the Premises and the Building.
The Landlord reserves entire control of all parts of the Lands and
Building employed for the common benefit of the tenants and without
restricting the generality of the foregoing, the sidewalks,
entrances, corridors and passages not within the Premises,
washrooms, lavatories, air conditioning closets, fan rooms,
janitor’s closets, electrical closets and other closets, stairs,
escalators, elevator shafts, flues, stacks, pipe shafts and ducts
and shall have the right to place such signs and appliances therein,
as it deems advisable, provided that ingress to and egress from the
Premises is not unduly impaired thereby.
	 
	 	(d)	 	The Tenant will not permit the parking of delivery vehicles
so as to interfere with the use of any driveway, walkway, parking
area, mall or other facilities in the Building.
	 
	 	(e)	 	The Tenant shall not cause or permit: any waste or damage to
the Premises; any overloading of the floors or the utility,
electrical or mechanical facilities of the Premises; any nuisance in
the Premises; or any use or manner of use causing a hazard or
annoyance to other occupants of the Building or to the Landlord.

	4.	 	Receiving, Shipping, Movement of Articles

	 	(a)	 	The Tenant shall not receive, load, unload or ship articles
of any kind except through facilities and designated doors and at
hours designated by the Landlord from time to time and under the
supervision of the Landlord. The Tenant shall promptly pay or cause
to be paid to the Landlord the cost of repairing to the satisfaction
of the Landlord any damage in the Building caused by any person
making such deliveries.
	 
	 	(b)	 	Hand trucks, carryalls or similar appliances shall only be
used in the Building with the consent of the Landlord and shall be
equipped with rubber tires, slide guards and such other safeguards
as the Landlord requires.
	 
	 	(c)	 	The Tenant, its agents, servants, contractors, invitees or
employees, shall not bring in or take out, position, construct,
install or move any safe, business machinery or other heavy
machinery or equipment or anything liable to injure or destroy any
part of the Building, including the Premises, without first
obtaining the consent in writing of the Landlord. In giving such
consent, the Landlord shall have the right in its sole discretion,
to prescribe the weight permitted and the position thereof, the use
and design of planks, skids or platforms, and to distribute the
weight thereof. All damage done to the Building, including the
Premises, by moving or using any such heavy equipment or other
office equipment or furniture shall be repaired at the expense of
the

2

 

	 	 	 	Tenant. The moving of all heavy equipment or other office
furniture shall occur only by prior
arrangement with the Landlord. The cost of such moving shall be
paid by the Tenant. Safes and other heavy office equipment and
machinery shall be moved through the halls and corridors only in a
manner expressly approved by the Landlord. No freight or bulky
matter of any description will be received into any part of the
Building, including the Premises, or carried in the elevators
except during hours approved by the Landlord.

	5.	 	Prevention of Injury to Premises

	 	(a)	 	It shall be the duty of the Tenant to assist and co-operate
with the Landlord in preventing injury to the Premises.
	 
	 	(b)	 	The Tenant shall not deface or mark any part of the Building,
including the Premises, and shall not drive nails, spikes, hooks or
screws into the walls, floors, ceilings or woodwork of any part of
the Building, including the Premises, or bore, drill or cut into the
walls, floors, ceilings or woodwork of any part of the Building
including the Premises, in any manner or for any reason.
Notwithstanding the foregoing, the Tenant shall be entitled to hang
pictures within the Premises.
	 
	 	(c)	 	If the Tenant desires telegraphic or telephonic connections,
the Landlord, in its sole discretion, may direct the electricians as
to where and how the wires are to be introduced. No gas pipe or
electric wire will be permitted which has not been ordered or
authorized by the Landlord. No outside antenna of any nature shall
be allowed on any part of the Premises without authorization in
writing by the Landlord.

	6.	 	Windows
	 
	 	 	Except for the proper use of Landlord approved blinds and drapes (which
the Tenant shall be required to provide in accordance with the Building
standard), the Tenant shall not cover, obstruct or affix any object or
material to any of the skylights and windows that reflect or admit light
into any part of the Building, including, without limiting the generality
of the foregoing, the application of solar films.
	 
	 	 	The Tenant will use all reasonable efforts to cause all windows and all
sun control units on all windows exposed to the sun in the Premises to be
kept closed at all times when the air conditioning system of the Building
is in operation and will abide by all reasonable rules and regulations
which the Landlord may from time to time find necessary to make for the
proper and efficient operation thereof.
	 
	7.	 	Washrooms

	 	(a)	 	The Landlord shall permit the Tenant and the employees of the
Tenant in common with others entitled thereto, to use the washrooms
on the floor of the Building on which the Premises are situated or,
in lieu thereof, those washrooms designated by the Landlord, save
and except when the general water supply may be turned off from the
public main or at such other times when repair and maintenance
undertaken by the Landlord shall necessitate the non-use of the
facilities.
	 
	 	(b)	 	The water closets and other apparatus shall not be used for
any purposes other than those for which they were intended, and no
sweepings, rubbish, rags, ashes or other substances shall be thrown
into them. Any damage resulting from misuse shall be borne by the
Tenant by whom or by whose agents, servants, invitees, or employees
such damage is caused.
	 
	 	(c)	 	The Tenant shall not be permitted to change any of the
specifications or designs relating to the washrooms.

	8.	 	Use of Premises

	 	(a)	 	No one shall use the Premises for sleeping apartments,
lodging or residential purposes, or for the storage of personal
effects or articles other than those required for business purposes,
or for any illegal purpose.

3

 

	 	(b)	 	No cooking or heating of any foods or liquids (other than the
heating of water or coffee in coffee makers or kettles or heating by
microwave ovens, stoves, toasters or toaster ovens) shall be
permitted in the Premises without the written consent of the
Landlord, which consent will not be unreasonably withheld or
delayed. For greater certainty, the Tenant shall be entitled to
have dishwashers at the Premises.
	 
	 	(c)	 	The Tenant shall not install or permit the installation or
use of any machine dispensing goods for sale in the Premises or the
Building (other than food and drink dispensing machines for the use
of the Tenant’s employees) or rendering services or providing,
however operated, entertainment or permit the delivery of any food
or beverage to the Premises (other than the serving of prepared
catered foods) without the written approval of the Landlord or in
contravention of the Rules and Regulations.
	 
	 	(d)	 	The Tenant shall not permit or allow any odours, vapours,
steam, water, vibrations, noises or other undesirable effects to
emanate from the Premises or any equipment or installation therein
which, in the Landlord’s opinion, are objectionable or cause any
interference with the safety, comfort or convenience of the Building
to the Landlord or the occupants and tenants thereof or their
agents, servants, invitees or employees.

	9.	 	Canvassing, Soliciting, Peddling
	 
	 	 	Canvassing, soliciting and peddling in or about the Lands and Building
are prohibited.
	 
	10.	 	Bicycles
	 
	 	 	No bicycles or other vehicles shall be brought within any part of the
Lands or Building other than to the locations identified by the Landlord
within the Parking Facilities without the consent of the Landlord.
	 
	11.	 	Animals and Birds
	 
	 	 	No animals or birds shall be brought into any part of the Lands or
Building without the consent of the Landlord.
	 
	12.	 	Signs and Advertising
	 
	 	 	The Tenant shall not paint, affix, display or cause to be painted,
affixed or displayed, any sign, picture, advertisement, notice, lettering
or decoration on any part of the outside of the Building or in the
interior of the Premises which is visible from the outside of the
Building. The Landlord will prescribe a uniform pattern and location of
identification signs for tenants to be placed on the outside of (or
beside, as the case may be) the interior door leading to the Premises
shall be: (i) installed by the Landlord at the Tenant’s sole cost and
expense; (ii) consistent with the uniform pattern, size and design
prescribed by the Landlord; (iii) the property of the Landlord and shall
be maintained by the Landlord throughout the Term at the Tenant’s sole
cost and expense; and (iv) removed by the Landlord (or, at the Landlord’s
option, by the Tenant) at the sole cost and expense of the
Tenant. All
damage caused by the removal of such sign shall be promptly repaired by
the party that removed the sign, at the Tenant’s sole cost and expense.
The Tenant’s obligation to observe and perform this covenant shall
survive the expiration of the Term or earlier termination of the Lease.
	 
	13.	 	Directory Board
	 
	 	 	The Tenant shall be entitled at its expense to have its name shown upon
the directory board in the main lobby of the Building and in the elevator
lobby on the floor on which the Premises are located (if the Premises are
located on a multi-tenant floor). The Landlord shall design the style of
such identification and shall determine the number of spaces available on
the directory board(s) for each tenant. The directory board(s) shall be
located in an area designated by the Landlord.

4

 

	14.	 	Smoking
	 
	 	 	The Tenant acknowledges and agrees that the Landlord shall have the right
to designate non-smoking areas in any portion of the Building and the
Complex, including the Premises.

5

 

SCHEDULE “E” — INDEMNITY AGREEMENT

THIS INDEMNITY is dated the 6th day of December, 2002.

B E T W E E N :

ONTREA INC.

(the “Landlord”)

OF THE FIRST PART

- and -

ELECTRONIC ARTS, INC.

(the “Indemnifier”)

OF THE SECOND PART

In order to induce the Landlord to enter into the Lease (the “Lease”) dated the
7th day of October, 2002, and made between the Landlord and Electronic Arts
(Canada), Inc. as Tenant and for other good and valuable consideration, the
receipt and sufficiency whereof is hereby acknowledged, the Indemnifier hereby
makes the following indemnity and agreement (the “Indemnity”) with and in
favour of the Landlord:

	1.	(a)	 	The Indemnifier hereby agrees with the Landlord that at all times
during the Term of the Lease and any extensions or renewals thereof or
overholding by the Tenant under the Lease, it will (i) after any default
by the Tenant under the Lease, make the due and punctual payment of all
Rent, monies, charges and other amounts of any kind whatsoever payable
under the Lease by the Tenant whether to the Landlord or otherwise; (ii)
effect prompt and complete performance and observance of all and singular
the terms, covenants and conditions contained in the Lease on the part of
the Tenant to be kept, observed and performed; and (iii) indemnify and
save harmless the Landlord from any loss, costs or damages arising out of
any failure by the Tenant and the Indemnifier to pay the aforesaid Rent,
monies, charges and other amounts of any kind whatsoever payable under the
Lease or resulting from any failure by the Tenant and the Indemnifier to
observe or perform any of the terms, covenants and conditions contained in
the Lease.
	 
	 	(b)	 	The Indemnifier’s covenants and obligations set out in
paragraph (a) above will not be affected by any disaffirmance,
disclaimer, repudiation, rejection, termination or unenforceability
of the Lease by any Person other than the Landlord, or by any other
event or occurrence which would have the effect at law of
terminating any obligations of the Tenant prior to the termination
of the Lease whether pursuant to court proceedings or otherwise and
no surrender of the Lease to which the Landlord has not provided its
written consent (all of which are referred to collectively and
individually in this Indemnity as an “Unexpected Termination”), and
the occurrence of any such Unexpected Termination shall not reduce
the period of time in which the Indemnifier’s covenants and
obligations hereunder apply, which period of time includes, for
greater certainty, that part of the Term of the Lease and any
extensions or renewals thereof which would have followed had the
Unexpected Termination not occurred.

	2.	 	This Indemnity is absolute, unconditional and irrevocable and the
obligations of the Indemnifier and the rights of the Landlord under this
Indemnity shall not be prejudiced, waived, released, discharged,
mitigated, impaired or affected by (a) any extension of time, indulgences
or modifications which the Landlord extends to or makes with the Tenant in
respect of the performance of any of the obligations of the Tenant (or any
other obligated Person) under the Lease; (b) any waiver by or failure of
the Landlord to enforce any of the terms, covenants and conditions
contained in the Lease; (c) any Transfer under Article VIII of the Lease
by the Tenant or by any trustee, receiver, liquidator or any other Person;
(d) any consent which the Landlord gives to any such Transfer; (e) any
amendment to the Lease or any waiver by the Tenant of any of its rights
under the Lease; (f) the expiration of the Term; or (g) any Unexpected
Termination (as that term is defined in Section 1(b) above). The
obligations of the Indemnifier are as primary obligor and not as a
guarantor of the Tenant’s obligations.

-6-

 

	3.	 	The Indemnifier hereby expressly waives notice of the acceptance of this
Indemnity and all notice of non-performance, non-payment or non-observance
on the part of the Tenant of the terms, covenants and conditions in the
Lease. Notwithstanding the foregoing but without prejudicing the
foregoing, any notice which the Landlord desires to give to the
Indemnifier shall be sufficiently given if delivered to the Indemnifier,
or, if mailed, by prepaid registered mail addressed to the Indemnifier at
the Premises, or, at the Landlord’s option, at the address, if any, set
forth above and every such notice is deemed to have been given upon the
day it was delivered, or if mailed, forty-eight (48) hours after the date
it was mailed. Despite what is stated above, the Indemnifier acknowledges
that if its address is stipulated as a post office box or rural route
number, then notice will be considered to have been sufficiently given to
the Indemnifier if delivered or sent by registered mail to the Premises
or, where notice cannot be given in person upon the Premises, by posting
the notice upon the Premises. The Indemnifier may designate by notice in
writing a substitute address for that set forth above and thereafter
notice shall be directed to such substitute address. If two or more
Persons are named as Indemnifier, such notice given hereunder or under the
Lease shall be deemed sufficiently given to all such Persons if delivered
or mailed in the foregoing manner to any one of such Persons.
	 
	4.	 	If an Event of Default has occurred under the Lease or a default under
this Indemnity, the Indemnifier waives any right to require the Landlord
to (a) proceed against the Tenant or pursue any rights or remedies against
the Tenant with respect to the Lease; (b) proceed against or exhaust any
security of the Tenant held by the Landlord; or (c) pursue any other
remedy whatsoever in the Landlord’s power. The Landlord has the right to
enforce this Indemnity regardless of the acceptance of additional security
from the Tenant and regardless of any release or discharge of the Tenant
by the Landlord or by others or by operation of any law.
	 
	5.	 	Without limiting the generality of the foregoing, the liability of the
Indemnifier under this Indemnity is not and is not deemed to have been
waived, released, discharged, impaired or affected by reason of the
release or discharge of the Tenant in any receivership, bankruptcy,
winding-up or other creditors’ proceedings or any Unexpected Termination
(as that term is defined in Section 1(b) above) and shall continue with
respect to the periods prior thereto and thereafter, for and with respect
to the Term as if an Unexpected Termination or any receivership,
bankruptcy, wind-up or other creditors’ proceedings had not occurred, and
in furtherance hereof, the Indemnifier agrees, upon any such Unexpected
Termination or any receivership, bankruptcy, wind-up or other creditors’
proceedings, that the Indemnifier shall, at the option of the Landlord,
exercisable at any time after such Unexpected Termination or any
receivership, bankruptcy, wind-up or other creditors’ proceedings, become
the Tenant of the Landlord upon the same terms and conditions as are
contained in the Lease, applied mutatis mutandis. The liability of the
Indemnifier shall not be affected by any failure of the Landlord to
exercise this option, nor by any repossession of the Premises by the
Landlord provided, however, that the net payments received by the Landlord
after deducting all costs and expenses of repossessing and reletting the
Premises shall be credited from time to time by the Landlord against the
indebtedness of the Indemnifier hereunder and the Indemnifier shall pay
any balance owing to the Landlord from time to time immediately upon
demand.
	 
	6.	 	No action or proceedings brought or instituted under this Indemnity and
no recovery in pursuance thereof shall be a bar or defence to any further
action or proceeding which may be brought under this Indemnity by reason
of any further default or default hereunder or in the performance and
observance of the terms, covenants and conditions contained in the Lease.
	 
	7.	 	No modification of this Indemnity shall be effective unless it is in
writing and is executed by both the Indemnifier and two authorized
representatives of the Landlord.
	 
	8.	 	The Indemnifier shall, without limiting the generality of the foregoing,
be bound by this Indemnity in the same manner as though the Indemnifier
were the Tenant named in the Lease.
	 
	9.	 	If two or more individuals, corporations, partnerships or other business
associations (or any combination of two or more thereof) execute this
Indemnity as Indemnifier, the liability of each such individual,
corporation, partnership or other business association hereunder is joint
and several. In like manner, if the Indemnifier named in this Indemnity
is a partnership or other business association, the members of which are
by virtue of statutory or general law, subject to personal liability, the
liability of each such member is joint and several.

-7-

 

	10.	 	All of the terms, covenants and conditions of this Indemnity extend to
and are binding upon the Indemnifier, his, her or its heirs, executors,
administrators, successors and assigns, as the case may be, and enure to
the benefit of and may be enforced by the Landlord, the owner or owners
from time to time (other than the Landlord) of the freehold or leasehold
title of the Building and any Mortgagee.
	 
	11.	 	The expressions “Building”, “Event of Default”, “Landlord”, “Tenant”,
“Rent”, “Term”, and “Premises” and other terms or expressions where used
in this Indemnity, respectively, have the same meaning as in the Lease.
	 
	12.	 	The use of words in the singular or plural, or with a particular gender,
shall not limit the scope or exclude the application of any provision of
this Indemnity to such person or persons or circumstances as the context
otherwise permits.
	 
	13.	 	The undersigned, as Indemnifier, hereby represents and warrants to and
covenants and agrees with the Landlord that:

	 	(a)	 	notwithstanding the foregoing or any performance in whole or
in part by the Indemnifier of the covenants of this Indemnity, the
Indemnifier shall not, except at the option of the Landlord, have
any entitlement to occupy the Premises or otherwise enjoy the
benefits of the Tenant under this Lease;
	 
	 	(b)	 	the Indemnifier has full power and authority to enter into
this Indemnity and to perform the Indemnifier’s obligations
contained herein;
	 
	 	(c)	 	this Indemnity is valid and binding upon the Indemnifier and
enforceable against the Indemnifier in accordance with its terms;
and
	 
	 	(d)	 	in entering into this Indemnity the Indemnifier, if a
corporation, is not contravening any provisions of the Company Act
or the Business Corporations Act of the province in which the
Building is located or the Canada Business Corporations Act, as the
case may be, as these Acts may be amended from time to time, or any
statute that replaces or supersedes those Acts.

	14.	 	If a part of this Indemnity or the application of it to any Person
hereunder or circumstance is to any extent held or rendered invalid,
unenforceable or illegal, that part:

	 	(a)	 	is independent of the remainder of this Indemnity and is
severable from it, and its invalidity, unenforceability or
illegality does not affect, impair or invalidate the remainder of
this Agreement; and
	 
	 	(b)	 	continues to be applicable to and enforceable to the fullest
extent permitted by law against any Person hereunder and
circumstance, except those as to which it has been held or rendered
invalid, unenforceable or illegal.

	15.	 	The Indemnifier agrees to execute such further assurances in connection
with this Indemnity as the Landlord may reasonably require.
	 
	16.	 	This Indemnity shall be construed in accordance with the laws of the
Province in which the Building is located.
	 
	17.	 	This Indemnity is the sole agreement between the Landlord and the
Indemnifier relating to the indemnity and there are no other written or
verbal agreements or representations relating thereto. This Agreement may
not be amended except in writing and signed by the Indemnifier and two
authorized representatives of the Landlord.
	 
	18.	 	If the Indemnifier is a corporation, the Indemnifier confirms and agrees
that this Indemnity has been executed by its authorized signatories and
that if only one signatory has signed this Indemnity, the Indemnifier is
authorized by its articles of incorporation or other constating documents
to execute

-8-

 

	 	 	indemnities by such sole authorized signatory and if this Indemnity is
not executed under seal by the Indemnifier, the Indemnifier is authorized
by its articles of incorporation or other constating documents to execute
indemnities without a seal.
	 
	19.	 	Wherever in this Indemnity reference is made to either the Landlord or
the Tenant, the reference is deemed to apply also to the heirs, executors,
administrators, successors and assigns of the Landlord and the heirs,
executors, administrators, permitted successors, and permitted assigns of
the Tenant. Any assignment by the Landlord of any of its interests in the
Lease operates automatically as an assignment to such assignee of the
benefit of this Indemnity.
	 
	20.	 	Notwithstanding anything else herein contained to the contrary, the
Landlord shall, subject to Section 1(b) hereof, not make a demand on the
Indemnifier for any payment hereunder until a Trigger Event (as defined in
the Lease) and a default under the Lease has occurred.
	 
	21.	 	“Trigger Event” means any one of the following circumstances having
occurred:

	 	(a)	 	the Tenant shall cease to employ more than five hundred
(500) full-time or part-time employees;
	 
	 	(b)	 	the Tenant’s Revenues shall be less than Thirty Million
Dollars (Cdn $30,000,000); and
	 
	 	(c)	 	if less than 51% of any class of shares in the capital of the
Tenant shall cease to be owned by the Indemnifier

	 	 	IN WITNESS WHEREOF the Landlord and the Indemnifier have signed and
sealed this Indemnity.

	 	 	 	 	 	 	 	 
	SIGNED, SEALED AND DELIVERED	 	 	)	 	 	ONTREA INC.
	in the presence of:	 	 	)	 	 	 	 
	 	 	 	)	 	 	Per:	 /s/John. M. Sullivan
	 	 	 	)	 	 	 	

	 	 	 	)	 	 	 	Authorized Signature
	 	 	 	)	 	 	 	 
	 	 	 	)	 	 	Per:	 
	 	 	 	 	 	 	 	

	 	 	 	)	 	 	 	Authorized Signature
	 	 	 	)	 	 	 	 
	 	 	 	)	 	 	I/We have authority to bind the corporation.
	 	 	 	)	 	 	 	 
	 	 	 	)	 	 	ELECTRONIC ARTS, INC.
	 	 	 	)	 	 	 	 
	 	 	 	)	 	 	Per:	/s/ David L. Carbone
	 	 	 	)	 	 	 	

	 	 	 	)	 	 	 	Authorized Signature
	 	 	 	)	 	 	 	 
	 	 	 	)	 	 	Per:	 
	 	 	 	 	 	 	 	

	 	 	 	)	 	 	 	Authorized Signature
	 	 	 	)	 	 	 	 
	 	 	 	)	 	 	I/We have authority to bind the corporation.
	 	 	 	)	 	 	 	 

-9-

 

SCHEDULE “F” — SPECIAL PROVISIONS

	1.	 	Moving Allowance

Provided the Tenant is Electronic Arts (Canada), Inc. or any Permitted
Transferee and is not in default under the terms of the Lease, the Landlord
will provide the Tenant with a moving allowance (the “Moving Allowance”) of
$5.00 per square foot of Rentable Area of the Premises, plus all applicable
goods and services taxes. The Moving Allowance will be paid to the Tenant on
the earlier of: (i) the Tenant having commenced to carry on its business from
the Premises, or from any portion thereof; and (ii) the Commencement Date.

	2.	 	Signage

Provided that the Tenant has under lease no less than three (3) full floors in
the Building and subject to obtaining the prior written approval of the
Landlord to any such signage, which approval shall not be unreasonably withheld
or delayed, the Tenant shall have the right during the Term and any renewal
thereof to have signage at three of the following four locations (the “Signage
Options”): (i) place exterior podium signage at the base of the Building
adjacent to the entrance; (ii) subject to obtaining the approval of
PricewaterhouseCoopers, Building top signage (2 sides); (iii) subject to
obtaining the approval of PricewaterhouseCoopers (“PWC”), a lit sign projecting
onto the sidewalk outside the Building; and (iv) one sign on the Building (not
including Building top signage pursuant to item (ii) above) or on a podium
facing the plaza. It is understood “Signage Options” (i) and (iv) do not
require the approval of PWC. The Tenant shall notify the Landlord which three
Signage Options it elects to pursue within 30 days of execution of this Lease
by the parties. The Landlord agrees that if a Signage Option is unavailable as
a result of the inability of the Landlord to obtain PWC’s approval thereto (to
the extent required) or the necessary municipal approvals, the Tenant shall be
entitled to select another signage option in a location to be agreed upon by
the Landlord and the Tenant, both acting reasonably, it being acknowledged that
any such signage option will be subject to any existing signage rights of PWC.
For greater certainty, if PWC does not consent to the Signage Options described
in clauses (ii) and (iii) above, the only Signage Options the Tenant shall be
entitled to are those Signage Options set out in clauses (i) and (iv) above
and, in addition, the Tenant shall be entitled, subject to obtaining all
municipal approvals, another signage option in a location to be agreed upon by
the Landlord and the Tenant, both acting reasonably. The Tenant shall also be
entitled to have customized elevator buttons for each floor leased and up to
seven (7) listings on the directory board signage. All signage will utilize
the name “Electronic Arts” or it’s abbreviated symbols. All such signage shall
comply with the Landlord’s design criteria for the Building and all local
municipal requirements and approvals. The signage shall be installed and
maintained at the Tenant’s sole cost and expense. At the expiry or early
termination of the Lease term, the signage shall at the Tenant’s expense, be
removed by either the Tenant or the Landlord, at the Landlord’s option, and any
damage caused to the Building and/or the Lands by such removal shall be the
responsibility of the Tenant.

	3.	 	Amenity Space

The Landlord shall confirm that the following services/amenities are available
to the Tenant and its staff in the Complex at no charge (unless otherwise
provided for herein) during the Term or any renewals thereof:

	 	(i)	 	Common area conference room; and
	 
	 	(ii)	 	Fitness Centre.

	4.	 	Right of First Offer

Provided the Tenant is Electronic Arts (Canada), Inc. or any Permitted
Transferee and the Tenant is not then in default under the Lease, and subject
to existing rights as of the date hereof of other tenants in the Building under
their respective leases, the Tenant shall have an ongoing right of first offer
at any time during the Term or any extension of the Term to lease any space
which becomes vacant and available for lease in the Building.

If and when the space becomes vacant and available for lease, the Landlord
shall, subject to the foregoing, deliver to the Tenant a written notice,
indicating the date when the space designated therein (the “Designated Space”)
shall be available for occupancy by the Tenant (the “Designated Date”) and
offer to lease the Designated Space to the Tenant on the same terms and
conditions as this Lease save and except that: (i) the basic rent, any tenant
allowances, tenant

 

 

inducements and rent free periods (taking into account the
time remaining on the balance of the Term) shall be at the then prevailing market terms for similar quality space in similar quality buildings; and (ii) the expiry date shall be co-terminous with the expiry date
hereunder for the balance of the Premises. If the Tenant elects to lease the
Designated Space as aforesaid, the Tenant shall deliver written notice to the
Landlord of its intention to do so within five (5) Business Days of receipt of
the Landlord’s notice. The parties hereto shall enter into a lease amending
agreement for the Designated Space on the same terms as the Lease subject to
the foregoing exceptions. If the parties cannot agree on any of the fair
market rent, tenant allowances, tenant inducements and/or rent free periods,
such matter shall be determined by arbitration in accordance with the
Commercial Arbitration Act of British Columbia.

	5.	 	Termination Right

Provided that the Tenant is Electronic Arts (Canada), Inc. or any Permitted
Transferee and is not then in default under the terms of the Lease, the Tenant
will have the right to terminate this Lease effective on or after the 5th
anniversary of the Commencement Date by providing the Landlord with a minimum
of twelve (12) months prior written notice (the “Termination Notice”). The
Tenant will pay to the Landlord, within thirty (30) days prior to the date of
termination, the unamortized portion (as at the effective date of such
termination) of the Allowance, Moving Allowance, brokerage fees in respect of
this Lease transaction, and all other costs and expenses directly or indirectly
incurred by the Landlord in connection with the Lease Takeover (less any
sublease rent received), based on a 9% per annum interest rate.

	6.	 	Rights to Extend

Provided that:

	 	(i)	 	Electronic Arts (Canada), Inc., or any Permitted
Transferee, has, at all times during the initial Term and any
Extended Term, leased the Premises;
	 
	 	(ii)	 	the Tenant has given written notice to the Landlord not
less than nine (9) months prior to the expiration of the initial
Term (or the current Extended Term, as applicable) of its
intention to exercise its within right to extend the Term and in
such written notice identifies the particular premises to which
its right to extend relates; and
	 
	 	(iii)	 	the Tenant is not in default under this Lease at the date
of its exercise of the particular right to extend,

then subject to the provisions hereinafter set out, the Tenant shall have the
right to extend the Term of this Lease as it pertains to all or a portion of
the Premises and any additional premises leased by the Tenant for two (2)
periods of five (5) years (each such extension period being referred to as an
“Extended Term”). The following terms shall apply

	 	(1)	 	each such Extended Term shall commence on the
expiration of the initial Term or the then current Extended
Term in effect for the Premises, as applicable, and this Lease
and all of its terms shall continue in full force and effect
during such Extended Term in relation to the Premises, except
as otherwise modified expressly below;
	 
	 	(2)	 	any inducements (including rent-free periods or
fixturing periods), leasehold improvement allowances or other
payments payable to the Tenant shall be at the prevailing
market terms;
	 
	 	(3)	 	the Tenant will accept the Premises in an “as is”
condition with no work to be performed by the Landlord unless
otherwise agreed to by the parties;
	 
	 	(4)	 	the Tenant shall not have any further right to
extend the Term following the exercise, if any, of its second
right to extend set out above;
	 
	 	(5)	 	during each Extended Term, Net Rent for the
Premises shall be the fair market Net Rent, calculated on a
net effective basis, as agreed to between the parties at the
date (the

-2-

 

	 	 	 	“Calculation Date”) which is three (3) months prior
to the expiration of the initial Term or the then current Extended Term (as applicable) for
similarly improved premises of similar size, quality and
location in buildings of a similar size, quality and location
in the City of Vancouver and, for greater certainty, in
determining the net effective fair market Net Rent, account
shall be taken of the existence of any inducements or
leasehold improvement allowances or other payments payable by
the Landlord to the Tenant. Failing agreement by the 30th
day prior to the commencement of any renewal term Net Rent
shall be determined by a single arbitrator under the
Commercial Arbitration Act of British Columbia;
	 
	 	(6)	 	the Landlord and the Tenant will execute and
deliver a lease extension agreement (in form satisfactory to
the Tenant and its solicitors, each acting reasonably) in
order to confirm the terms of the foregoing extensions, but
the Tenant shall be deemed to have exercised its right to
extend on the terms referred to herein whether or not such
extension agreement is executed and delivered; and
	 
	 	(7)	 	if the Tenant fails to provide written notice to
the Landlord of its intention to exercise its right to extend
in accordance with paragraph (ii) above, then the within
rights to extend shall then be null and void and of no further
force or effect in their entirety.

	7.	 	Lease Takeover

The Landlord acknowledges that the Tenant’s wholly-owned subsidiary, Black Box
Games Ltd., presently operates the business operations to be relocated to the
Premises demised by this Lease in certain premises (the “Existing Premises”)
comprising the 20th floor in the building municipally known as 505 Burrard
Street, Vancouver, British Columbia pursuant to a lease dated April 25, 2001
(the Tenant’s “Existing Lease”), between Black Box Games Ltd., as tenant, and
Bentall Properties Ltd. and the Great-West Life Assurance Company
(collectively, the “505 Landlord”), as landlord. As an inducement to enter
into this Lease, the Landlord covenants and agrees with the Tenant that
effective the Takeover Date (as hereinafter defined), the Tenant shall assign
(including an assumption and indemnity from the Landlord for matters arising
after the date of assignment and the indemnity from the Tenant with respect to
matters arising prior to date of the assignment) the Existing Lease to the
Landlord (the “Lease Takeover”).

The “Takeover Date” means the date upon which the last of the following shall
have occurred:

	 	(i)	 	the date of execution and delivery of this Lease by the
Tenant;
	 
	 	(ii)	 	the date of occupancy by the Tenant of the Premises and the
commencement of the conduct of business therefrom; and
	 
	 	(iii)	 	the Commencement Date.

The Tenant represents and warrants that it has delivered to the Landlord a true
copy of the Existing Lease which sets forth all of its rights and obligations
with respect to the Existing Premises and which is in full force and effect and
unamended and in good standing. The term of the Existing Lease expires on
August 31, 2007, and the current base rent is $223,326.00 per annum and the
current estimated monthly additional rent for 2002 is $14.42 per square foot.
The Tenant agrees to use reasonable commercial efforts to obtain from the 505
Landlord an estoppel certificate (the “Estoppel Certificate”) certifying as to
all of the foregoing by no later than the Takeover Date.

The Tenant shall vacate the Existing Premises on or before the Takeover Date
and shall leave them in good repair in the condition required by the Existing
Lease.

	8.	 	APPROVALS

Unless otherwise expressly provided herein to the contrary, all approvals
required hereunder by the Tenant from the Landlord shall not be unreasonably
withheld or delayed by the Landlord.

-3-

 

	9.	 	GOODS AND SERVICES TAX

All amounts referred to in this lease are quoted prior to inclusion of goods
and services taxes.

	10.	 	CONFIDENTIALITY

The Landlord and the Tenant will use all reasonable commercial efforts to keep
confidential, and to cause its employees, officers, agents, contractors and
consultants to keep confidential, the terms and conditions of this Lease and,
in connection with the Landlord, all financial information with respect to the
Tenant and its business. Notwithstanding the foregoing, the Landlord shall be
entitled to disclose such information in connection with any financing or sale
of the Building or of any other portion of the Complex.

-4-EXHIBIT 4.4

                             THE VALSPAR CORPORATION
                             1991 STOCK OPTION PLAN
                      AS AMENDED THROUGH DECEMBER 11, 2002

1.   PURPOSES OF THE PLAN
     --------------------

     The purposes of the 1991 Stock Option Plan (the "Plan") are (i) to enhance
     the ability of The Valspar Corporation (the "Company") and its subsidiary
     companies to attract and retain superior personnel and (ii) to stimulate
     and reward their interest and initiative. The Plan is designed to enable
     key officers and employees, and certain other key individuals who perform
     services for the Company, to contribute to the Company's strategic
     performance objectives by making such individuals eligible to receive
     options to purchase common stock of the Company as provided herein. Subject
     to the provisions of the Plan, options may contain such terms and
     conditions as shall be required so as to be either nonqualified stock
     options or incentive stock options as defined in Section 422 of the
     Internal Revenue Code of 1986, as amended (the "Code"). Subject to such
     limits as may be imposed by existing or future laws or by the Plan,
     nonqualified stock options or incentive stock options or both may be
     granted to eligible individuals.

2.   STOCK SUBJECT TO THE PLAN
     -------------------------

     Shares to be issued under the Plan shall be common stock of the Company
     (par value $.50 per share) ("common stock"), not to exceed a maximum of
     10,000,000 shares, and may be unissued shares or reacquired shares. If any
     options granted under the Plan expire or terminate without having been
     exercised in full, such unpurchased shares shall be available for other
     option grants. If shares of common stock are delivered as full or partial
     payment upon exercise of an option, the number of shares so delivered shall
     again be available for other option grants.

3.   ADMINISTRATION
     --------------

     The Plan shall be administered by a committee (the "Committee"), appointed
     from time to time by the Company's Board of Directors (the "Board"),
     consisting of not less than two members of the Board. Each Committee member
     shall be (a) non-employee director within the meaning of Rule 16b-3 under
     the Securities Exchange Act of 1934 (the "Exchange Act") or any successor
     Rule and (b) an outside director within the meaning of Section 162(m) of
     the Internal Revenue Code of 1986, as amended, and the rules and
     regulations thereunder. Except as provided below, the Committee shall
     determine from time to time (i) the individuals to whom grants will be
     made; (ii) the number of shares to be granted; and (iii) the terms and
     provisions of each option (which need not be identical). Except as provided
     below, each grant shall be in such form and content as the Committee shall
     determine.

     The Committee may from time to time adopt rules for carrying out the Plan
     and for its interpretation and construction which rules shall be final,
     conclusive and binding on all parties. All determinations of the Committee
     shall be made by a majority of the Committee. Any determination reduced to
     writing and signed by all members shall be as effective as if it had been
     made by a majority vote at a duly constituted meeting.

     The Company's Chief Executive Officer may, on a discretionary basis and
     without Committee review or approval, grant options to purchase up to 5,000
     shares each to new employees of the Company who are not officers of the
     Company. Such discretionary option grants shall not exceed 25,000 shares in
     total in any fiscal year. Subject to the foregoing limitations, the Chief
     Executive Office shall determine from time to time (i) the new employees to
     whom grants will be made, (ii) the number of shares to be granted, and
     (iii) the terms and provisions of each option (which need not be
     identical).

<PAGE>

4.   ELIGIBILITY
     -----------

     Options will be granted only to salaried officers and employees of the
     Company or of a subsidiary (as defined in Section 425 of the Code) and to
     any other individual who performs services for the Company and contributes
     to its strategic performance objectives, including, without limitation,
     members of the Board of Directors, consultants and advisors ("Optionee");
     provided, however, that a consultant or advisor shall not be eligible to
     receive stock options hereunder unless such consultant or advisor renders
     bona fide services to the Company or a subsidiary and such services are not
     in connection with the offer or sale of securities in a capital-raising
     transaction.

     Notwithstanding any other provisions of the Plan, the maximum number of
     shares of Common Stock that may be covered by option grants to a person
     covered by Section 162(m) of the Code during any fiscal year shall be
     500,000 shares.

5.   OPTION PRICE
     ------------

     The exercise price of each option shall be not less than 100% of the fair
     market value of the common stock at the closing price on the day preceding
     the date that such option is granted.

6.   EXERCISE OF OPTION
     ------------------

     The Committee may prescribe at the time of grant that the option will be
     exercisable in full or in installments at any time or from time to time.
     Optionee is not required to exercise options in the sequential order that
     the options were granted. An option shall be exercised by written notice in
     a form designated by the Company accompanied by full payment of the
     purchase price. All or part of the purchase price may be paid by surrender
     (or deemed surrender through attestation) of previously acquired shares of
     common stock which has been owned for more than six months on the date of
     surrender valued at the fair market value at the closing price on the day
     preceding the date of exercise. Until an option is exercised and the stock
     certificate issued, the Optionee shall have no rights as a stockholder with
     respect to such option.

7.   WITHHOLDING OF TAXES
     --------------------

     Upon exercise of an option, the Optionee shall (i) pay cash, (ii) surrender
     previously acquired shares of common stock or (iii) authorize the
     withholding of shares from the shares issued upon exercise of an option for
     all taxes required to be withheld.

8.   NON-TRANSFERABILITY
     -------------------

     Except as otherwise provided by the Committee, Options shall not be
     transferable, voluntarily or involuntarily, except by will or applicable
     laws of descent and distribution. Only the Optionee or Optionee's legal
     representative or guardian or a permitted transferee may exercise the
     option.

9.   DILUTION OR OTHER ADJUSTMENTS
     -----------------------------

     The number of shares subject to the Plan, the outstanding options and the
     exercise price may be adjusted by the Committee as it deems equitable in
     the event of stock split, stock dividend, recapitalization,
     reclassification or similar event to prevent dilution or enhancement of
     option rights.

10.  MERGERS, ACQUISITION OR OTHER REORGANIZATION
     --------------------------------------------

     The Committee may make provision, as it deems equitable, for the protection
     of Optionees with grants of outstanding options in the event of (a) merger
     of the Company into, or the acquisition of substantially all of the stock
     or assets of the Company by, another entity; or (b) liquidation; or (c)
     other reorganization of the Company.

<PAGE>

11.  CHANGE OF CONTROL
     -----------------

Upon any Change of Control, each outstanding option shall immediately become
exercisable in full for the remainder of its term without regard to any vesting
or installment exercise provisions then applicable to the option. This section
applies to all options outstanding under this Plan as of June 16, 1999, as well
as to all options granted under this Plan thereafter. For purposes of this Plan,
the term "Change of Control" means any of the following:

     A.   Any individual, entity or group becomes a beneficial owner (as defined
          in Rule 13d-3 of the Securities Exchange Act of 1934), directly or
          indirectly, of 20% or more of the voting stock of the Company;

     B.   The persons who were directors of the Company immediately prior to any
          contested election or series of contested elections, tender offer,
          exchange offer, merger, consolidation, other business combinations, or
          any combination of the foregoing cease to constitute a majority of the
          members of the Board of Directors of the Company immediately following
          such occurrence;

     C.   Any merger, consolidation, reorganization or other business
          combination where the individuals or entities who constituted the
          Company's shareholders immediately prior to the combination will not
          immediately after the combination own at least 50% of the voting
          securities of the business resulting from the combination;

     D.   The sale, lease, exchange or other transfer of all or substantially
          all the assets of the Company to any individual, entity or group not
          affiliated with the Company;

     E.   The liquidation or dissolution of the Company; or

     F.   The occurrence of any other event by which the Company no longer
          operates as an independent public company.

12.  AMENDMENT OF THE PLAN
     ---------------------

     The Plan may be amended, suspended or discontinued in whole or in part at
     any time and from time to time by the Board, provided, however, that no
     amendment to increase the number of shares with respect to which options
     may be granted, or to increase materially the benefits accruing to
     Optionees, or to materially modify the requirements as to eligibility,
     shall be effective without stockholder approval where the failure to obtain
     such approval would adversely affect the compliance of the Plan with Rule
     16b-3 under the Exchange Act or successor rule and with other applicable
     law, including the Code. No amendment of the Plan shall adversely affect in
     a material manner any right of any Optionee with respect to a prior grant
     without such Optionee's written consent.

13.  DURATION OF THE PLAN
     --------------------

     The Amended Plan shall become effective as of December 11, 2002, subject to
     stockholder approval, to increase the total number of shares reserved for
     issuance upon exercise of options to be granted under the Plan. Incentive
     Stock Options may be granted from time to time during a period of ten (10)
     years from the effective date of the Amended Plan. Nonqualified stock
     options may be granted from time to time from the effective date until the
     Plan is discontinued or terminated by the Board.

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