Document:

Exhibit 10.18

 

Exhibit 10.18

CROSS ROADS, VANCOUVER, B.C.

OFFICE LEASE

	 	 	 
	BETWEEN:

	 	BROADWAY EQUITIES INC. AND
	 

	 	PCI CROSS ROADS DEVELOPMENTS INC.
	 
	 	 
	 

	 	(TOGETHER THE “LANDLORD”)
	 
	 	 
	AND:

	 	LULULEMON ATHLETICA INC.
	 
	 	 
	 

	 	(THE “TENANT”)

 

 

OFFICE LEASE

This Lease made as of the 14th day of July, 2006,

BETWEEN:

     BROADWAY EQUITIES INC. AND PCI CROSS ROADS DEVELOPMENTS INC.

     (together the “Landlord”)

AND:

     LULULEMON ATHLETICA INC.

     (the “Tenant”)

IN CONSIDERATION of the mutual covenants hereinafter contained, the Landlord and the Tenant hereby
agree as follows:

ARTICLE 1

BASIC TERMS, SPECIAL PROVISIONS, DEFINITIONS AND
SCHEDULES

1.1. Basic Provisions

The following is a summary of some of the salient terms of this Lease. For details of the
terms and meanings of the terms referred to below, reference should be had to the balance of
the Lease. This Section 1.1 is for convenience and if a conflict occurs between the
provisions of this Section 1.1 and any other provision of this Lease, the other provisions
of this Lease shall govern.

	 	 	 
	     (a)      Premises:

	 	Suite 600, 507 West Broadway, Vancouver, British Columbia
	 
	 	 
	     (b)      Rentable Area of Premises:

	 	Approximately ±80,000 square feet of Rentable Area
on the top five (5) floors of the Office Component as shown outlined in heavy black on
the floor plan attached as Schedule “A” and a license for 1,000 square feet of storage
area (the “Storage Area”) on P1 or P2 level of the Parking Facility of the Office
Component in a location to be mutually agreed to by the parties.
	 
	 	 
	     (c)      Commencement Date:

	 	The later of January 1, 2009 and the date immediately
following the expiry of the Fixturing Period.

 

 

	 	 	 
	     (d)      Term:

	 	Ten (10) years commencing on the Commencement Date.
	 
	 	 
	     (e)      Base Rent and License Fee:
	 	 

          (i) Base Rent for Office Area:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Lease Year	 	Per Square Foot	 	Per Annum	 	Per Month
	 
	Years 1 —5
	 	$	27.50	 	 	$	2,200,000.00	 	 	$	183,333.33	 
	Years 6— 10
	 	$	29.50	 	 	$	2,360,000.00	 	 	$	196,666.67	 

          (ii) License Fee for Storage Area:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Gross Fee	 	Gross Fee	 	Gross Fee
	Lease Year	 	Per Square Foot	 	Per Annum	 	Per Month
	 
	Years 1 —5
	 	$	15.00	 	 	$	15,000.00	 	 	$	1,250.00	 
	Years 6— 10
	 	$	17.50	 	 	$	17,500.00	 	 	$	1,458.33	 

	 	 	 
	     (f)      Permitted Use:

	 	Use as office space and such other lawful uses as allowable
under the applicable zoning bylaws for the Premises, provided that the Premises shall
not be used for the purpose of any bank, treasury branch, trust, investment dealer,
insurance or stock broker, acceptance or loan corporation or any organization engaged
in the business of accepting money on deposit or lending money or any similar business
which would in the view of the Royal Bank of Canada (the “Bank”) be competitive with
the business to be carried on in the premises occupied by the Bank, or for the
installation or operation of any electronic or mechanical equipment, devices or
machines by which any banking transaction, operation or function may be available to
the public, except such as may be installed or operated by the Bank.
	 
	 	 
	     (g)      Deposit:

	 	An initial deposit of $50,000.00 including GST already paid, plus an
additional deposit of $294,500.00 plus GST, payable by the Tenant on or before the day
immediately preceding the first day of the Fixturing Period, both deposits to be
applied towards the first monthly installments of Base Rent payable by the Tenant
hereunder until applied in full.

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	     (h)      Occupancy Costs:

	 	The Occupancy Costs for the Fiscal Year 2008 are estimated to
be $17.75 per square foot of Rentable Area of the Premises per annum and are subject to
change in each subsequent Fiscal Year in accordance with Section 4.9.
	 
	 	 
	     (i)      Renewal Term:

	 	Two (2) renewal terms of five (5) years each.
	 
	 	 
	     (j)      Parking:

	 	A minimum of one hundred and five (105) parking stalls, based on a
ratio of one (1) parking stall per seven hundred eighty (780) square feet of Rentable
Area of the Premises, to be located in the Parking Facility of the Office Component, as
more particularly described in Section 12 of Schedule “H”. The parking charges per
stall shall be as follows:
	 
	 	 
	 

	 	(i)  for Lease Years 1 — 3 of the Term, at a rate of
$140.00 per month (the “Base Parking Rate”),
being $1,680.00 per annum; and

	 
	 	 
	 

	 	(ii) thereafter, at a rate equal to the Base Parking
Rate multiplied by a fraction which has as its
numerator the Consumer Price Index (for the City
of Vancouver as published by Statistics Canada)
(the “CPI”) for the first month of the then
current Lease Year and as its denominator the
CPI for the first month of the first Lease Year
of the Term.

	 	 	 
	     (k)     Addresses for Service:
	 
	 	 
	               (i)     to the Tenant:
	 
	 	 
	                         Address:

	 	2285 Clark Drive
	 

	 	Vancouver, B.C.
	 

	 	V5N 3G9
	 

	 	Attention: Christopher Ng
	                         Facsimile No.:

	 	604-874-6124

	 
	               (ii)     to the Landlord:
	 
	 	 
	                         Address:

	 	1700— 1030 West Georgia Street

Vancouver, B.C.

V6E 2Y3

Attention: Dan Turner
	                         Facsimile No.:

	 	604-688-2328

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	     (l)     Special Provisions:

	 	See Schedule “H”
	 
	 	 
	     (m)     Indemnifier:

	 	Not Applicable

	1.2.	 	Definitions
	 
	 	 	In this Lease:

	 	(a)	 	“Additional Rent” means all monies payable under this Lease, whether or not
designated as Additional Rent, to be paid by the Tenant to the Landlord, save and
except Base Rent;
	 
	 	(b)	 	“Architect” means such firm of professional architects, engineers, surveyors,
space planners and interior designers as the Landlord may select from time to time
engaged for preparation of construction drawings for the Development or for general
supervision of architectural and engineering aspects and operations thereof or for the
measurement of the Development of part or parts thereof and includes any consultant(s)
from time to time appointed by the Landlord or Architect whenever such consultant(s) is
acting within the scope of his appointment and specialty;
	 
	 	(c)	 	“Article” means an article of this Lease and “Section” means a section of this
Lease;
	 
	 	(d)	 	“Base Building Construction Costs” means all costs to construct the Office
Component including the Parking Area in accordance with the Plans and Specifications;
	 
	 	(e)	 	“Base Building Works” means the construction of the Office Component (excluding
the Initial Leasehold Improvements) in accordance with the Plans and Specifications and
shall include the work described in Schedule “G” attached hereto as Landlord’ s Work;
	 
	 	(f)	 	“Base Rent” means the amount payable by the Tenant to the Landlord as set forth
in Section 1.1(e) in respect of each year of the Term or any portion thereof in
accordance with Sections 4.1 and 4.5;
	 
	 	(g)	 	“Capital Tax” means an amount allocated by the Landlord, acting reasonably, to
the Office Component in respect of taxes, rates, duties and assessments presently or
hereafter levied, rated, charged or assessed from time to time upon the Landlord and
payable by the Landlord (or any corporation acting on behalf of the Landlord) on
account of the capital that the Landlord has invested in the Office Component. Capital
Tax shall be allocated:

	 	(i)	 	as if the amount of such tax were that amount due if the Office
Component were the only property of the Landlord; and

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	 	(ii)	 	on the basis of the Landlord’s reasonable determination
of the amount of capital attributable to the Office Component.

Capital Tax also means the amount of any capital or place of business tax levied by
any government or other applicable taxing authority against the Landlord with
respect to the Office Component whether known as Capital Tax or by any other name.

	 	(h)	 	“Commencement Date” means the date set forth in Section 1.1(c);
	 
	 	(i)	 	“Common Areas” means at any time those portions of the Office Component which
are not leased to or occupied or designated or intended by the Landlord to be leased to
or occupied by tenants of the Office Component arid are provided or designated by the
Landlord from time to time to be used in common in such manner as the Landlord may,
acting reasonably, permit, by the Landlord, the Tenant, and other tenants (or by
sublessees, agents, employees, customers or licensees) of the Office Component, whether
or not the same are open to the general public, and shall include any areas used by the
Landlord for the maintenance of the Office Component and any building services and
facilities, fixtures, chattels, systems, decor, signs, facilities, or landscaping
contained therein or maintained or used in connection therewith, roofs, driveways,
parking areas, common loading, receiving and service areas, transportation systems,
truck ways, platforms, ramps, garden and landscaped areas, common entrances and
corridors, all open and enclosed malls, courts, skywalks, galleries and arcades,
stairways, passageways, sidewalks, exterior pedestrian walks, public seating and
service areas, service and fire corridors, utility, equipment and service rooms
including, without limitation, electrical, telephone, meter, valve, mechanical, mail,
storage, transformer and janitor rooms, music, fire prevention and fire detection,
alarm, security and communication systems and equipment, and all other common, public
or tenant conveniences or appurtenances thereto located in the Office Component and not
leased or occupied or designated or intended by the Landlord to be leased or occupied
by tenants of the Office Component, general signs including pylon, entrance, exit,
directional and traffic control signs, lighting systems and equipment, columns, pipes,
electrical, plumbing, drainage, sprinkler, mechanical and all other installations,
systems, equipment or services located in which serve, or are related to the Office
Component not installed for the exclusive use of any individual tenant, and shall be
deemed to include any public facility in respect of which the Landlord is from time to
time subject to obligations in its capacity as owner or tenant of the Lands and/or
Office Component. All expenses incurred by the Landlord in maintenance and operation
of Common Areas shall be included in the definition of “Operating Expenses” set forth
in, and subject to the terms of, Schedule “C”;
	 
	 	(j)	 	“Common Patio” has the meaning given in Section 12 of Schedule “H”;
	 
	 	(k)	 	“Deposit” means the amount set forth in Section 1.1(g), to be dealt with by the
Landlord in accordance with Section 4.10;

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	 	(l)	 	“Development” means a multi-use development to be constructed on the
Development Lands, consisting of the Residential Component, the Retail Component, the
Office Component, the Parking Facility and the Shared Development Facilities;
	 
	 	(m)	 	“Development Lands” means the lands described in Schedule “B” attached hereto;
	 
	 	(n)	 	“Environmental Claim” means all claims, losses, costs, expenses, fines,
penalties, payments and/or damages (including, without limitation, all solicitors’ fees
on a solicitor and client basis) relating to, arising out of, resulting from or in any
way connected with the presence of any Hazardous Substance at the Premises or the said
Lands or Office Component, including, without limitation, all costs and expenses of any
investigation, remediation, restoration or monitoring of the Premises, the Lands or the
Office Component and/or any property adjoining or in the vicinity of the said Lands or
the Office Component required or mandated by Environmental Law;
	 
	 	(o)	 	“Environmental Law” means any law, bylaw, order, ordinance, ruling, regulation,
certificate, approval, policy, guideline, consent or directive of any applicable
federal, provincial or municipal government, governmental department, agency or
regulatory authority or any Court of competent jurisdiction, as well as any common law
obligations or requirements, relating to environmental or health and safety matters
and/or regulating the generation, import, storage, distribution, labeling, sale, use,
handling, transport or disposal of any Hazardous Substance which may be in force from
time to time;
	 
	 	(p)	 	“Exclusive Patio” has the meaning given in Section 12 of Schedule “H.”
	 
	 	(q)	 	“Fiscal Year” means a twelve (12) month period (all or part of which falls
within the Term) from time to time determined by the Landlord, at the end of which the
Landlord’s books in respect of the Office Component are balanced for auditing or
taxation purposes;
	 
	 	(r)	 	“Fixturing Period” has the meaning given in Section 2 of Schedule “H”;
	 
	 	(s)	 	“Force Majeure” means any Acts of God, strikes, lockouts, or other industrial
relations disturbances, act of the Queen’s enemies, sabotage, war, blockades,
insurrections, riots, epidemics, lightning, earthquakes, floods, storms, fires,
washouts, nuclear and radiation activity or fallout, arrests and restraints of’ rules
and people, civil disturbances, explosions, breakage of or accident to machinery or
stoppage thereof for emergency maintenance or repairs, inability to obtain labor,
materials or equipment, any government restriction or legislative, administrative or
judicial action which has been resisted in good faith by all reasonable legal means,
inability to obtain approvals from any municipality, government authority or public or
private regulated utility, any act, omission or event, whether of the kind herein
enumerated or otherwise not within the control

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	 	 	 	of the affected party, and which, by the exercise of due diligence such party could
not have prevented, but inadequacy of insurance proceeds, financial inability or the
lack of suitable financing on the part of such party shall be deemed not to
constitute Force Majeure;

	 	(t)	 	“Hazardous Substance” means:

	 	(i)	 	any materials or substances declared or deemed to be hazardous,
deleterious, caustic, dangerous, a dangerous good, toxic, a contaminant, a
waste, a source of contaminant, a pollutant or toxic under any Environmental
Law;
	 
	 	(ii)	 	any solid, liquid, gas or odor or combination of any of them
that, if emitted into the air, would create or contribute to the creation of a
condition of the air that:

	 	(A)	 	endangers the health, safety or welfare of
persons or the health of animal life;
	 
	 	(B)	 	interferes with normal enjoyment of life or
property; or
	 
	 	(C)	 	causes damage to plant life or to property;
arid

	 	(iii)	 	any substance which is hazardous to the environment, including
persons or property and includes, without limiting the generality of the
foregoing, the following:

	 	(A)	 	radioactive materials;
	 
	 	(B)	 	explosives;
	 
	 	(C)	 	any substance that, if added to any water,
would degrade or alter or form part of a process of degradation or
alteration of the quality of that water to the extent that it is
detrimental to its use by man or by any animal, fish or plant;

	 	(u)	 	“Indemnifier” means the Person named as such in the Basic Terms and who has
executed or agreed to execute the Indemnity Agreement in the Landlord’s standard form,
or who otherwise guarantees the Tenant’s obligations under this Lease, if applicable;
	 
	 	(v)	 	“Initial Leasehold Improvements” means the leasehold improvements that the
Landlord and the Tenant have agreed that the Landlord will carry out in respect of the
Premises pursuant to the Working Drawings and excludes, for greater certainty, any of
the Tenant’s Work;
	 
	 	(w)	 	“Landlord’s Covenants” means all of the terms, covenants and conditions of this
Lease on the part of the Landlord to be observed and performed;

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	 	(x)	 	“Landlord’s Employees” means the Landlord’s directors, officers, employees,
servants, agents and those for whom the Landlord is responsible at law;
	 
	 	(y)	 	“Landlord’s Work” means the construction of the Base Building Works and the
Initial Leasehold Improvements in accordance with the Plans and Specifications and the
Working Drawings, respectively;
	 
	 	(z)	 	“Lands” means the lands described in Schedule “B” attached hereto and the
improvements, equipment and facilities erected thereon or situate therein from time to
time, including, without limitation, the Office Component, the Retail Component, the
Parking Facility and the Shared Development Facilities;
	 
	 	(aa)	 	“Lease” means this Lease, any schedules and riders attached hereto, and every
properly executed instrument which by its terms amends, modifies or supplements this
Lease;
	 
	 	(bb)	 	“Lease Year” means successive twelve (12) month periods with the first Lease
Year commencing on the Commencement Date and succeeding Lease Years commencing on each
anniversary of such date;
	 
	 	(cc)	 	“Leasehold Improvements” means all fixtures, improvements, installations,
alterations and additions from time to time made, erected or installed by or on behalf
of the Tenant, or any previous occupant of the Premises, in the Premises and by or on
behalf of other tenants in other premises in the Office Component (including the
Landlord if an occupant of the Office Component), including all partitions and hardware
however affixed, and whether or not movable, all mechanical, electrical and utility
installations and all carpeting and drapes, with the exception only of furniture and
equipment not of the nature of a fixture;
	 
	 	(dd)	 	“License Fee” means the license fee payable by the Tenant in respect of the
Storage Area as set forth in Section 1.1(e) in respect of each year of the Term or any
portion thereof;
	 
	 	(ee)	 	“Normal Business Hours” has the meaning given in Section A.1 in the Rules and
Regulations in Schedule “D” attached hereto;
	 
	 	(ff)	 	“Occupancy Costs” has the meaning given in Schedule “C” attached hereto and is
payable by the Tenant to the Landlord under Section 4.3;
	 
	 	(gg)	 	“Office Component” means that portion of the Lands and the Development intended
for use as office premises including all improvements therein, thereto, thereon or
thereunder and every enlargement thereof and every addition thereto even though
separated therefrom and includes, without limiting the generality of the foregoing:

	 	(i)	 	the Common Areas;

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	 	(ii)	 	all buildings, structures, improvements, heating, ventilating,
air conditioning, mechanical, sprinkler, electrical and other equipment,
machinery, fixtures and systems; and
	 
	 	(iii)	 	water, gas, sewage, telephone and other communication
facilities and systems and electrical power systems and. utilities systems.
equipment, machinery and fixtures,

comprised therein, belonging thereto, connected therewith or used in the operation
thereof, and now or hereafter constructed, erected, and installed therein and
thereon by the Landlord;

	 	(hh)	 	“Operating Expenses” shall mean all costs, which shall be incurred by the
Landlord for the complete maintenance, repair, replacement, operating and
administration of the Office Component and the Lands, such as are in keeping with
maintaining the standard of a similar office tower, as more particularly described in
Schedule “C”;
	 
	 	(ii)	 	“Parking Facility” means those parts of the Lands which are allocated for the
parking of motor vehicles for customers and clients of the Tenant, other tenants and
members of the public, and all means of access and egress thereto and therefrom;
	 
	 	(jj)	 	“Permitted Use” means the use described in Section 1.1(f);
	 
	 	(kk)	 	“Plans and Specifications” means the preliminary and approximate plans and
specifications, which are approximate, for the Base Building Works (excluding the
Initial Leasehold Improvements) described in Schedule “G” attached hereto, the
Renderings as more particularly described in Schedule “J’ and the floor plans attached
as Schedule “A” hereto, all as supplemented or amended from time to time in accordance
with this Lease;
	 
	 	(ll)	 	“Premises” means those premises identified in Section 1.1(a) and shown outlined
in heavy black on the plan attached hereto as Schedule “A” and includes, without
limitation, the Storage Area;
	 
	 	(mm)	 	“Project Schedule” means the construction schedule for the Office Component
approved by the Landlord from time to time after consulting with the Tenant’s
Consultant;
	 
	 	(nn)	 	“Proportionate Share” means a fraction which has as its numerator the Rentable
Area of the Premises (excluding the Storage Area) and which has as its denominator the
Rentable Area of the Office Component;
	 
	 	(oo)	 	“Real Estate Taxes” means:

	 	(i)	 	any form of assessment (including any “special” assessment),
property tax, license fee, license tax, business license fee, business license
tax,

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machinery tax, business improvements association assessment, including those
for parking facilities, local improvement assessment, commercial rental tax,
levy, charge, penalty or tax, imposed by any authority having the direct
power to tax, including any city, county, provincial or federal government,
or any, school, agricultural, lighting, water drainage or other improvement
or special district thereof, against the Premises or the Office Component or
the Lands and the improvements therein or thereon or any legal or equitable
interest of the Landlord in any of the foregoing;

	 	(ii)	 	any assessment, tax, fee, levy or charge in substitution,
partially or totally, of or in addition to any assessment, tax, fee, levy or
charge previously included within the definition of Real Estate Taxes which may
be imposed by governmental agencies;
	 
	 	(iii)	 	all business taxes and other taxes, if any, from time to time
payable by the Landlord with respect to the Common Areas;
	 
	 	(iv)	 	Capital Tax as it relates to or is attributable by the Landlord
to the Office Component; and
	 
	 	(v)	 	all costs incurred by the Landlord contesting or appealing the
Real Estate Taxes (including, without limitation, legal, appraisal and other
professional fees and costs and administration and overhead costs).

Real Estate Taxes shall not include the Landlord’s income, franchise, inheritance or
estate taxes.

	 	(pp)	 	“Reciprocal Easement and Support Agreement” means any easement or other
agreement to which the Landlord is party which provide, inter alia, for the provision,
maintenance, management, operation and use of any Shared Development Facilities, and
the allocation of costs with respect to same among the Retail Component, the Office
Component and the Residential Component;
	 
	 	(qq)	 	“Rendering(s)” means those certain drawings dated August 2005 prepared by Busby
Perkins and Will, copies of which are attached hereto as Schedule “J”;
	 
	 	(rr)	 	“Rent” means the aggregate of all amounts payable by the Tenant to the Landlord
under this Lease and includes, without limitation, the License Fee payable by the
Tenant hereunder;
	 
	 	(ss)	 	“Rentable Area” of the Premises, the Office Component or any portion thereof
means the area of the Premises, the Office Component or any portion thereof, as
applicable, measured in accordance with the ANSI BOMA 265.1 — 1996 standard method of
floor measurement for office buildings;
	 
	 	(tt)	 	“Residential Component” means that parcel of land to be subdivided from the
Development Lands which will contain the residential units that form part of the
Development;

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	 	(uu)	 	“Retail Component” means that part of the Development which contains retail
premises;
	 
	 	(vv)	 	“Rules and Regulations” or “rules and regulations” means, as and where
applicable, the rule and regulations attached as Schedule “D”.
	 
	 	(ww)	 	“Shared Development Facilities” means any improvement, easement, facility or
amenity which forms part of the Development or which is appurtenant thereto, and is
used or may be used by the Office Component tenants, and either or both of the tenants
or occupants of the Retail Component or the Residential Component in accordance with
the terms of any Reciprocal Easement and Support Agreement, including but not limited
to, the landscaped area or the podium level of the Development and easements for
ingress to and egress from the Office Component;
	 
	 	(xx)	 	“Storage Area” means the storage area as set out in Section 1.1(b);
	 
	 	(yy)	 	“Substantial Performance” or “Substantially Performed” means the later of the
date the Landlord’s Architect has delivered a certificate to the Landlord and the
Tenant certifying the entire Development (including the Residential Component) has been
substantially completed and the date the Landlord delivers to the Tenant an occupancy
permit from the City of Vancouver lawfully permitting the Tenant to occupy and use the
Premises;
	 
	 	(zz)	 	“Taxing Authority” means any duly constituted governmental authority, whether
federal, provincial, municipal, or otherwise legally empowered to impose taxes, rates,
assessments, or charges, or other charges in lieu thereof, on, upon or in respect of
the Landlord, the Lands, the Retail Component, the Residential Component or the Office
Component;
	 
	 	(aaa)	 	“Tenant’s Consultant” means the representative appointed by the Tenant by
notice in writing to the Landlord (or a replacement consultant appointed by the Tenant,
providing no less than ten (10) business days’ written notice to the Landlord), who
shall be the Tenant’s representative with respect to the construction of the Base
Building Works and the Initial Leasehold Improvements;
	 
	 	(bbb)	 	“Tenant’s Covenants” means all of the terms, covenants and conditions of this
Lease on the part of the Tenant to be observed and performed;
	 
	 	(ccc)	 	“Tenant’s Employees” means the Tenant’s directors, officers, employees,
servants, agents and those for whom the Tenant is responsible at law;
	 
	 	(ddd)	 	“Tenant’s Work” means the work, if any, to be performed by the Tenant as
described in Section 14 of Schedule “G” as Tenant’s Work;
	 
	 	(eee)	 	“Term” means the period of time set out in Section 1.1(d) and Section 3.1;
	 
	 	(fff)	 	“Transfer” has the meaning given in Section 12.1;

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	 	(ggg)	 	“Utilities” means electricity, oil, gas, power, telephone, water, and all
other utilities; and
	 
	 	(hhh)	 	“Working Drawings” means the detailed and completed plans and specifications
for the Initial Leasehold Improvements including all space plan services with respect
to Initial Leasehold Improvements approved by the Landlord pursuant to Section 15 of
Schedule “G.”

	1.3.	 	Schedules
	 
	 	 	The following schedules are attached to this Lease and are incorporated as part of this
Lease by reference thereto:

	 	 	 
	          Schedule “A”

	 	Floor Plan
	 

	 	Additional Space
	          Schedule “A2”

	 	Patio Area
	          Schedule “B”

	 	Legal Description
	          Schedule “C”

	 	Occupancy Costs — Office Component
	          Schedule “D”

	 	Rules and Regulations
	          Schedule “E”

	 	Loading Management Plan
	          Schedule “F”

	 	Tenant Improvement Guidelines
	          Schedule “G”

	 	Landlord’s Work and Tenant’s Work
	          Schedule “H”

	 	Special Provisions
	          Schedule “I”

	 	Landscaping
	          Schedule “J”

	 	Rendering(s)

ARTICLE 2

GRANT OF LEASE

	2.1.	 	Grant

In consideration of the rents, covenants and agreements hereinafter reserved and contained
on the part of the Tenant to be paid, observed and performed, the Landlord hereby demises
and leases the Premises to the Tenant, and the Tenant hereby leases and accepts the Premises
from the Landlord, to have and to hold during the Term and any renewals thereof, subject to
the terms and conditions of this Lease.

	2.2.	 	Quiet Enjoyment

The Landlord covenants to provide the Tenant with quiet enjoyment and possession of the
Premises during the Term and any renewals thereof, subject to the terms and conditions of
this Lease.

	2.3.	 	Covenants of the Landlord and the Tenant

The Landlord covenants to observe and perform all of the terms and conditions to be observed
and performed by the Landlord under this Lease including the terms and conditions contained
in the Schedules hereto. The Tenant covenants to pay the Rent

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when due under this Lease, and to observe and perform all of the terms and conditions to be
observed and performed by the Tenant under this Lease including the terms and conditions
contained in the Schedules hereto.

	2.4.	 	Use of Common Areas

The Tenant shall have the right (in common with others entitled thereto) to the use of the
Common Areas, provided that the Landlord shall have the right to make all such changes,
improvements, alterations and additions as the Landlord may, from time to time decide in
respect of the Common Areas, including, without limitation, the right to change the location
and layout of any parking areas, The use of all Common Areas shall be subject to the
provisions of this Lease and to the reasonable rules and regulations made by the Landlord
with respect thereto from time to time.

	2.5.	 	Net Lease

The Tenant acknowledges and agrees that except as otherwise provided in this Lease, and
except for exclusions to Operating Expenses and Real Estate Taxes, the Base Rent payable
under this Lease is absolutely net to the Landlord and (except as otherwise provided herein)
that:

	 	(a)	 	the Landlord is not responsible for any costs, charges, expenses or outlays of
any nature whatsoever arising from or relating to the Premises, or the use or occupancy
thereof, or the contents thereof, or the business carried on therein;
	 
	 	(b)	 	the Tenant shall pay all costs, charges, expenses and outlays of every nature
whatsoever arising from or relating to the Premises or the use or occupancy thereof, or
the contents thereof, or the business carried on therein;
	 
	 	(c)	 	the Landlord shall not be called upon, nor shall the Landlord be obligated, to
perform any work on or to the Premises or to correct any condition relating to or
arising out of the Premises unless otherwise expressly provided for in this Lease; and
	 
	 	(d)	 	the Landlord, in its discretion (in accordance with reasonable commercial
principles and practices), will allocate to the tenants of the Development any costs
and Real Estate Taxes relating to any Shared Development Facilities and other costs
incurred by the Landlord as a result of cost sharing among the various components of
the Development, including, but not limited to, the Parking Facility, among the users
of such facilities and components.

ARTICLE 3

TERM AND POSSESSION

	3.1.	 	Term

Notwithstanding Sections 3.2 and 3.3, the Term of this Lease shall be as set forth in
Section 1.1(d) unless terminated earlier as provided in this Lease.

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	3.2.	 	Early Occupancy

Provided the Tenant is not in default, if the Tenant begins to conduct business in all or
any portion of the Premises before the Commencement Date, subject to Section 1 of Schedule
“H”, no Rent or Occupancy Costs shall be payable until the Commencement Date. Except where
clearly inappropriate, the provisions of this Lease shall otherwise be applicable during
such period.

	3.3.	 	Delayed Possession

If the Landlord is delayed in delivering possession of all or any portion of the Premises to
the Tenant on or before the Commencement Date, then unless such delay is principally caused
by or attributable to the Tenant, its servants, agents or independent contractors, the date
on which the Premises are to be made available to the Tenant and the obligation of the
Tenant to pay Rent and Occupancy Costs shall be postponed for a period equal to the duration
of the delay. Subject to Section 5 of Schedule “H” attached hereto, this Lease shall not be
void or voidable, nor shall the Landlord be liable to the Tenant for any loss or damage
resulting from any delay in delivering possession of the Premises to the Tenant, and the
deferment of the obligation of the Tenant to pay Rent and Occupancy Costs shall be accepted
by the Tenant as full compensation for any such delay. If any delay in the completion of
the Landlord’s Work is attributable to the Tenant, its servants, agents or independent
contractors, the obligation of the Tenant to pay Rent and Occupancy Costs shall not be
deferred.

	3.4.	 	Acceptance of Premises

Taking possession of all or any portion of the Premises by the Tenant shall be conclusive
evidence as against the Tenant that the Premises or such portion thereof are in satisfactory
condition on the date of taking possession, subject only to latent defects and to
deficiencies (if any) listed in writing in a notice delivered by the Tenant to the Landlord
pursuant to Section 9 of Schedule “G” attached hereto.

ARTICLE 4

RENT AND OCCUPANCY COSTS

	4.1.	 	Base Rent

Subject to Section 1 of Schedule “H” attached hereto, the Tenant shall pay to the Landlord
Base Rent for the Premises as set forth in Section 1.1(e).

	4.2.	 	Adjustment of Base Rent based on Measurement of Rentable Area

The Premises shall be measured by the Architect within sixty (60) days after the
Commencement Date at the Landlord’s discretion, and the Architect’s certificate, as to the
Rentable Area of the Premises, shall be conclusive. The Landlord shall deliver a copy of
the Architect’s certificate to the Tenant forthwith upon receipt thereof and the Rent shall
be appropriately adjusted, if necessary, retroactively to the Commencement Date.

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	4.3.	 	Occupancy Costs

The Tenant shall pay to the Landlord, at the times and in the manner provided in Section
4.5, the Occupancy Costs determined under Schedule “C” attached hereto.

	4.4.	 	Other Charges

The Tenant shall pay to the Landlord, at the times and in the manner provided in this Lease
or, if not so provided, as reasonably required by the Landlord, all amounts (other than that
payable under Section 4.1 or Section 4.3) which are payable by the Tenant to the Landlord
under this Lease as Rent, including, but not limited to the License Fee as set forth in
Section 1.1(e) and the parking charges set forth in Section 1.1(j).

	4.5.	 	Manner of Payment of Rent

The Tenant shall deliver to the Landlord on or before the Commencement Date an executed
authorization and a voided cheque to enable the Landlord to draw or issue a debit to the
Tenant’s designated bank account at the designated branch of the Tenant’s bank or financial
institution. Each monthly debit shall be made on the first day of the month in an amount
equal to the monthly Base Rent and Occupancy Costs payment and any ancillary agreement such
as, without limitation, parking or storage agreements, as it may be adjusted from time to
time in accordance with the terms of this Lease. The Tenant shall not terminate the
authorization for the Landlord to draw or issue a debit to the Tenant’s bank account.
Should the Tenant change banks or financial institutions or branches within the same bank or
financial institution during the Term of this Lease, then the Tenant shall deliver a new
executed authorization and voided cheque to enable the Landlord to draw or issue a debit to
the new account of the Tenant for payment of monthly Base Rent and Occupancy Costs payment.
The Tenant further covenants and agrees to pay promptly, when billed, any amounts due under
the terms of this Lease that are not specifically covered by the foregoing monthly debits.
In the event that any debit issued by the Landlord and any cheque issued by the Tenant shall
not be honored by the Tenant’s bank or financial institution for any reason, then, in
addition to any other remedies the Landlord may have, the Tenant shall pay to the Landlord,
upon request $100.00 for each occurrence which amount represents the estimated costs of
processing the dishonored debit or cheque and re-debiting the Tenant’s account or processing
a replacement cheque.

	4.6.	 	Payment of Rent— General

All amounts payable by the Tenant to the Landlord under this Lease shall be deemed to be
Rent and shall be payable and recoverable as Rent in the manner herein provided, and the
Landlord shall have all rights against the Tenant for default in any such payment as in the
case of arrears of Rent. Rent shall be paid to the Landlord, without deduction or set-off,
except as otherwise specifically provided in this Lease, in legal tender of the jurisdiction
in which the Office Component is located, at the address of the Landlord set forth in this
Lease, or to such other person or at such other address as the Landlord may

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from time to time designate in writing. The Tenant’s obligation to pay Rent shall survive
the expiration or earlier termination of this Lease.

	4.7.	 	No Deduction or Set-off

The Tenant shall not under any circumstances be entitled to deduct from or set off from the
Rent payable hereunder any amounts that the Tenant may claim to be entitled to from the
Landlord. All disputes with respect to amounts the Tenant wishes to claim from the Landlord
shall be settled as a matter separate from the Tenant’s obligation to pay Rent.

	4.8.	 	Partial Month’s Rent

If the Commencement Date is a day other than the first day of a calendar month, the
installment of Rent payable on the Commencement Date shall be that proportion of Rent which
the number of days from the Commencement Date to the last day of the month in which the
Commencement Date falls bears to three hundred sixty-five (365). If the Term ends on a day
other than the last day of a calendar month, the installment of Rent payable on the first
day of the last calendar month of the Term shall be that proportion of Rent which the number
of days from the first day of such last calendar month to the last day of the Term bears to
three hundred sixty-five (365).

	4.9.	 	Occupancy Costs Payments

	 	(a)	 	Prior to the Commencement Date and prior to the beginning of each Fiscal Year
thereafter, the Landlord shall compute and deliver to the Tenant a bona fide estimate
in writing of the Occupancy Costs for the next ensuing Fiscal Year or portion thereof,
if applicable. Without further notice or demand, the Tenant shall pay to the Landlord
the amount of the Occupancy Costs in equal monthly installments, in advance, over the
Fiscal Year or portion thereof, simultaneously with the Tenant’s payments on account of
Base Rent.
	 
	 	(b)	 	The Landlord shall keep proper and sufficient records and accounts of all
Occupancy Costs and shall deliver to the Tenant at the Tenant’s request, as soon as
practicable following the end of each Fiscal Year, a written statement, setting out in
reasonable detail the amount of Occupancy Costs for such Fiscal Year. If the total
monthly installments of Occupancy Costs actually paid by the Tenant to the Landlord
during the Fiscal Year is lower than the amount of the Occupancy Costs payable for the
Fiscal Year under Schedule “C”, the Tenant shall pay to the Landlord the difference
within thirty (30) days after the date on which such statement is received by the
Tenant, without interest, and if the total monthly installments of Occupancy Costs
actually paid by the Tenant to the Landlord during the Fiscal Year is greater than the
amount of Occupancy Costs payable for the Fiscal Year under Schedule “C”, the Landlord
shall credit the difference, against the Tenant’s rental account for the current Fiscal
Year and the monthly installments payable in respect of same shall be reduced
accordingly.
	 
	 	(c)	 	Neither party may claim a re-adjustment in respect of Occupancy Costs for a
Fiscal Year if based upon any error of computation or allocation except by notice

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	 	 	 	delivered to the other party within six (6) months after the date of delivery of the
statement. In no event shall any examination or other dispute permit the Tenant to
delay payment of Occupancy Costs as required by this Article.

	 	(d)	 	The Tenant shall have the right, at its sole cost and expense, to audit
Landlord’s Real Estate Taxes and Operating Expenses statements once per calendar year
upon giving the Landlord written notice of its desire to so inspect the Landlord’s
statements.

	4.10.	 	Deposit

	 	(a)	 	The Landlord acknowledges receipt from the Tenant of the initial amount of the
Deposit as set forth in Section 1.1(g) as partial consideration for this Lease. The
Tenant covenants and agrees to pay the additional amount of the Deposit as set forth in
Section 1.1(g) on or before the day immediately preceding the first day of the
Fixturing Period. The entire amount of the Deposit shall be held and applied by the
Landlord without liability for interest in accordance with Section 1.1(g).
	 
	 	(b)	 	The Landlord may deliver the Deposit to any purchaser of the Landlord’s
interest in the Office Component, and provided the Deposit is applied to Base Rent in
accordance with this Lease, the Landlord shall thereby be discharged of any further
liability with respect to such Deposit. The Landlord may commingle the Deposit with
its own funds and shall not hold the Deposit as a trustee.

	4.11.	 	No Deemed Satisfaction

No payment by the Tenant or receipt by the Landlord of a lesser amount than any installment
of payment of the Rent due shall be deemed to be other than on account of the amount due,
and no endorsement or statement on any check or payment of Rent shall be deemed an accord
and satisfaction. The Landlord may accept such check or payment without prejudice to the
Landlord’s right to recover the balance of such installment or payment of Rent, or pursue
any other remedies available to the Landlord.

	4.12.	 	Confidential Information

	 	(a)	 	The Tenant shall, upon request, provide the Landlord with such information as
to the Tenant’s financial standing and corporate organization as the Landlord
reasonably requires, save and except to the extent contrary to law or not permitted at
law. Failure of the Tenant to comply with the Landlord’s request herein shall
constitute a default to which Article 20 applies.
	 
	 	(b)	 	The Landlord shall keep any statement or other information acquired hereunder
strictly confidential and shall not use or permit the same to be used for any purpose
except on a confidential basis:

	 	(i)	 	for the purpose of obtaining and securing, from time to time as
may be required by the Landlord, mortgage or other financing of the Office
Component or part thereof;

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	 	(ii)	 	for the purpose of full disclosure of the affairs and
operations of the Office Component to a prospective purchaser; and
	 
	 	(iii)	 	for other bona fide matters relating directly or indirectly to
the tenancy hereby created.

ARTICLE 5

TAXES

	5.1.	 	Landlord’s Taxes

The Landlord shall pay Real Estate Taxes before delinquency (subject to participation by the
Tenant by payment of Occupancy Costs under Section 4.3) (except for the Tenant’s taxes under
Sections 5.2 and 5.3), which are imposed, levied, assessed or charged by any governmental or
quasi-governmental authority having jurisdiction and which is payable by the Landlord in
respect of the Term upon or on account of the Lands or the Office Component.

	5.2.	 	Tenant’s Taxes

The Tenant shall pay or remit before delinquency every tax, assessment, license or privilege
fee, excise, gross receipts or sales tax and other charge, however described, which is
imposed, levied, assessed or charged by any governmental or quasi-governmental authority
having jurisdiction and which is payable in respect of the Term upon or on account of:

	 	(a)	 	operations at, occupancy of, or conduct of business from the Premises by or
with the permission of the Tenant; and
	 
	 	(b)	 	fixtures or personal property in the Premises which do not belong to the
Landlord, including without limitation, taxes on equipment and machinery of the Tenant,

to the extent that they are not included in Real Estate Taxes.

	5.3.	 	Real Estate Taxes

The Tenant shall pay to the Landlord, as part of the Occupancy Costs as set forth in this
Lease, in each and every year during the Term, its Proportionate Share of all Real Estate
Taxes as outlined in Schedule “C”, and as allocated by the Landlord in accordance with
Section 5.6.

	5.4.	 	Goods and Services Taxes

The Tenant specifically acknowledges and agrees that as part of its Occupancy Costs payable
pursuant to Section 4.3 hereof, the Tenant shall pay to the Landlord any multi-stage sales,
sales, use, consumption, value-added or other similar taxes imposed by the Government of
Canada, or by any provincial or local government upon the Landlord or the Tenant or in
respect of this Lease, the payments made by the Tenant (whether Base

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Rent, Occupancy Costs, Real Estate Taxes or otherwise) for the goods and services provided
by the Landlord hereunder including, without limitation, the rental of the Premises or
administrative services provided to the Tenant or to tenants generally.

	5.5.	 	Right to Contest

The Landlord and the Tenant shall each have the right to contest in good faith the validity
or amount of any tax, assessment, license fee, excise fee and other charge which it is
responsible to pay under this Article 5, provided that no contest by the Tenant may involve
the possibility of forfeiture, sale or disturbance of the Landlord’s interest in the
Premises and that upon the final determination of any contest by the Tenant, the Tenant
shall immediately pay and satisfy the amount found to be due, together with any costs,
penalties and interest.

	5.6.	 	Allocation of Real Estate Taxes

The Real Estate Taxes payable by the Tenant shall be those allocated by the Landlord to the
Premises in the following manner.

	 	(a)	 	if a separate allocation of Real Estate Taxes is issued by the relevant Taxing
Authority with respect to the Office Component and the Common Areas or any leasable
area located in the Office Component then such separate assessment shall be used by the
Landlord in determining the Real Estate Taxes attributable to the Premises and such
allocation shall be conclusive and binding between the parties; or
	 
	 	(b)	 	if a separate allocation of Real Estate Taxes is not issued by the relevant
Taxing Authority pursuant to Section 5.6(a), the Landlord may from time to time request
that the Taxing Authority provide the Landlord with the working paper and notes used by
the Taxing Authority for the purposes of determining the Real Estate Taxes for the
Office Component and the Common Areas and the Landlord shall make a reasonable
allocation of such Real Estate Taxes to the Premises using such working paper and notes
as a guideline, provided however, that the Landlord shall have sole discretion to
allocate the Real Estate Taxes based on another reasonable method of determination
which the Landlord in its sole discretion shall choose. In making such allocation the
Landlord may take into account the economic rent and the capitalization rate
attributable to the Premises as determined by the Taxing Authority in such working
paper and notes, which the Tenant acknowledges, with respect to the economic rent, may
be greater than the Base Rent payable under this Lease, and which the Tenant further
acknowledges, with respect to the capitalization rate, may be a capitalization rate
that is lower than that determined by the Tenant, and may also take into account all
improvements constructed in or on the Premises by the Tenant and/or the Landlord, and
the allocation determined by the Landlord will be conclusive and binding between the
parties; or

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	 	(c)	 	in the event that neither a separate allocation of the Real Estate Taxes
pursuant to Section 5.6(a) or the working paper and notes from the Taxing Authority
pursuant to Section 5.6(b) are available, the Landlord shall determine, acting
reasonably, the portion of the Real Estate Taxes attributable to the Office Component
and the Common Areas or any leasable area located in the Office Component using such
reasonable method of determination which the Landlord, in its sole discretion, shall
choose, and such determination shall be conclusive and binding between the parties.

	5.7.	 	Real Estate Taxes Separate Tax Assessment

If Real Estate Taxes are assessed separately against the Premises, the following provisions
shall apply:

	 	(a)	 	Payment of Taxes. The Tenant shall pay to the Landlord, as Additional
Rent, in each and every year during the Term, an amount equal to that portion of Real
Estate Taxes separately assessed against the Premises. The Tenant agrees to provide
the Landlord, within ten (10) days after receipt by the Tenant, with a copy of all
separate tax bills and separate notices of assessment for the Premises and all such
other information in connection therewith as the Landlord may reasonably require. If
the Landlord requires the Tenant to pay Real Estate Taxes directly to the relevant
taxing Authority, the Tenant shall promptly deliver to the Landlord receipts evidencing
the payment of all such Real Estate Taxes and furnish such other information in
connection therewith as the Landlord reasonably requires.
	 
	 	(b)	 	Taxes on Common Areas. Where the separate assessment levied or made
against the Premises does not include a portion of the assessment with respect to
Common Areas, the Tenant shall, in addition, and without duplication, pay its
Proportionate Share of the Real Estate Taxes that have been separately assessed against
the Common Areas to the extent they are not included in the Operating Expenses.

	5.8.	 	Alternate Methods of Taxation

If, during the Term, the method of taxation is altered so that the whole or any part of the
Real Estate Taxes now levied, rated, assessed or imposed on real estate and improvements are
levied, assessed, rated or imposed wholly or partially as a capital levy or on the rents
received or otherwise, or if any tax, assessment, levy, imposition or charge, in lieu
thereof shall be imposed upon the Landlord, then all such taxes, assessments, levies,
impositions and charges shall be included within the Tenant’s obligation to pay its
Proportionate Share of Real Estate Taxes as set out in this Article.

	5.9.	 	Pro-Rata Adjustment

If any taxation year during the Term of this Lease is less than twelve (12) calendar months,
the Tenant’s share of Real Estate Taxes shall be subject to a per diem pro-rata adjustment.

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	5.10.	 	Appeal of Real Estate Tax Assessment

	 	(a)	 	The Landlord may defer payment of Real Estate Taxes relating to the Lands, or
any part thereof, or defer compliance with any statute, law, bylaw, regulation or
ordinance in connection with the levying of any such Real Estate Taxes, in each case,
to the fullest extent permitted by law, so long as it shall diligently prosecute any
contest, appeal or assessment on which such tax is based. The Tenant shall co-operate
with the Landlord in respect of any such contest, appeal or assessment and shall
provide the Landlord with all relevant information, documents and consents reasonably
required by the Landlord.
	 
	 	(b)	 	If the Real Estate Taxes are separately assessed for the Premises, the Tenant
may, with the prior written consent of the Landlord, appeal or contest the assessment
of Real Estate Taxes in respect of the Premises, in each case, to the fullest extent
permitted by law, so long as it shall diligently prosecute any contest, appeal or
assessment on which such tax is based. If the Tenant obtains the Landlord’s written
consent, the Tenant will deliver to the Landlord whatever security for the payment of
Real Estate Taxes the Landlord considers advisable and will keep the Landlord informed
of its progress from time to time and upon the request of the Landlord.
	 
	 	(c)	 	If any Real Estate Taxes in respect of the Premises or any other part of the
Development Lands are greater than they otherwise would have been by reason of the
Tenant having appealed or contested any assessment of Real Estate Taxes in respect of
the Premises pursuant to this Section 5.10:

	 	(i)	 	the Tenant shall be responsible for and pay the full amount of
such increase in respect of both the period to which the appeal or contest
relates and to any subsequent tax periods which commence during the Term or any
renewal thereof in addition to all other Real Estate Taxes otherwise payable by
the Tenant;
	 
	 	(ii)	 	the Tenant shall pay any such increase attributable to the
Tenant whether relating to the Premises or any other premises within the
Development Lands as and when the same are due and owing as part of the
Occupancy Costs as set forth in this Lease.

The Tenant further covenants and agrees to indemnify and save the Landlord harmless
from and against any and all costs, expenses, losses, claims, suits, actions or
other liabilities arising from or in connection with the increase in any Real Estate
Taxes in respect of the Development Lands or any part thereof attributable to the
Tenant’s appeal or contesting of the Real Estate Taxes pursuant to this Section
5.10.

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ARTICLE 6

ADDITIONAL CHARGES

	6.1.	 	Administration Fee

	 	(a)	 	The Landlord may charge a fifteen percent (15%) administration fee:

	 	(i)	 	for services performed for the exclusive benefit of the Tenant
at the Tenant’s express written request and not otherwise required to be
performed or provided by the Landlord under this Lease, including, without
limitation, providing supervisory, inspection, security and maintenance
services, reviewing plans and specifications and other services in excess of
the services required to be provided by the Landlord pursuant to this Lease
(and specifically excluding any such services in connection with the Landlord’s
Work, the Tenant’s Work or the Initial Leasehold Improvements);
	 
	 	(ii)	 	for costs incurred and paid by the Landlord due to the Tenant’s
actions or inactions contrary to the terms of this Lease, including payment of
penalties incurred as a result of the Tenant’s use of the Premises or the
Office Component, and third party invoices properly payable by the Tenant;
	 
	 	(iii)	 	for reasonable professional fees (which are based on time only
and not a percentage of costs) paid for environmental or structural engineers,
space planners or architects required solely in connection with the Tenant’s
operations or alterations in the Premises after the Commencement Date (and
specifically excluding any such fees paid for engineers, space planners,
architects or other consultants in connection with the Landlord’s Work, the
Tenant’s Work or the Initial Leasehold Improvements) and not otherwise required
to be paid for by the Landlord under this Lease as Landlord’s Work or
otherwise; and
	 
	 	(iv)	 	for legal fees and related costs incurred by the Landlord in
enforcing the Terms of this Lease.

	 	(b)	 	This administration fee shall be charged without duplication. Where this Lease
specifically provides for an administration fee for additional services, no further fee
shall be charged hereunder.
	 
	 	(c)	 	The administration fee is due and payable as Rent.

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ARTICLE 7

USE OF PREMISES

	7.1.	 	Use

The Premises shall be used and occupied only for the Permitted Use or for such other
purposes as the Landlord may specifically authorize in writing.

	7.2.	 	Discontinuance of Unacceptable Use

Any business, conduct or practice promulgated, carried on or maintained by the Tenant,
whether through advertising or selling procedures or otherwise, which in the opinion of the
Landlord, acting reasonably, may harm or tend to harm the business or reputation of the
Landlord or reflect unfavorably on the Office Component or the Landlord or which may tend to
confuse, mislead, deceive or be fraudulent to the public, shall be immediately discontinued
by the Tenant at the request of the Landlord.

	7.3.	 	Compliance with Laws

The Premises shall be used and occupied in a safe, careful and proper manner so as not to
contravene any present or future governmental or quasi-governmental laws in force or
regulations or orders. If due solely to the Tenant’s use of the Premises, improvements to
the Premises are necessary to comply with any of the foregoing or with the requirements of
insurance carriers, the Tenant shall pay the entire cost thereof.

	7.4.	 	Abandonment

The Tenant shall not abandon the Premises at any time during the Term without the Landlord’s
written consent.

	7.5.	 	Nuisance

The Tenant shall not cause or maintain any nuisance in or about the Premises, and shall keep
the Premises free of debris, rodents, vermin and anything of a dangerous, noxious or
offensive nature or which could create a fire hazard (through undue load on electrical
circuits or otherwise) or undue vibration, heat, noise, or odor.

	7.6.	 	Security

The Tenant shall take all reasonable security measures as are necessary to protect and
safeguard the Premises and its contents. The Tenant shall repair, at its sole cost, or the
Tenant shall reimburse the Landlord for the cost of repair of any and all damage caused to
the Office Component or the Premises resulting from burglary or other unlawful entry to the
Premises.

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ARTICLE 8

SERVICES, MAINTENANCE, REPAIR AND ALTERATIONS BY LANDLORD

	8.1.	 	Operation of Office Component

During the Term the Landlord shall operate and maintain the Office Component in accordance
with standards from time to time prevailing for similar office buildings in the area in
which the Office Component is located and, subject to participation by the Tenant by payment
of Occupancy Costs under Section 4.3 shall provide the services set out in Sections 8.2 and
8.3.

	8.2.	 	Services to Premises

The Landlord shall arrange for the provision of:

	 	(a)	 	Air Conditioning. The Landlord will furnish air conditioning and
heating (but not any special air conditioning or heating as may be required with
respect to the operation of computer equipment or any other equipment to be installed
in the Premises) to the Premises of a standard as established by custom and practice
for similar office buildings in the City of Vancouver, between the hours of 7:00 a.m.
and 6:00 p.m. on weekdays and between the hours of 7:00 a.m. and 1:00 p.m. on
Saturdays, and excluding Sundays and all public holidays (the
“Hours of Operation”).
Upon reasonable prior written notice from the Tenant, not to be less than 72 hours, the
Landlord shall furnish air conditioning to the Premises after the Hours of Operation,
but only at the expense of the Tenant at the Landlord’s fixed hourly fee as determined
from time to time by the Landlord acting reasonably.
	 
	 	(b)	 	Cleaning. The Landlord will provide cleaning and janitorial services,
including waste removal and exterior window cleaning to the Premises to standards
consistent with the maintenance of similar office buildings;
	 
	 	(c)	 	Electric Current. The Landlord (subject to its ability to obtain same
from its principal suppliers) will cause the Premises to be supplied with electric
current for normal lighting and small business machines therein, for which current the
Tenant shall pay its Proportionate Share;
	 
	 	(d)	 	Lighting. Replacement of building standard fluorescent tubes, light
bulbs and ballasts as required from time to time as a result of normal usage;
	 
	 	(e)	 	Maintenance. Maintenance, repair, and replacement as set out in
Section 8.3; and
	 
	 	(f)	 	Telecommunications. The Tenant acknowledges and agrees that all
telephone and telecommunications services desired by the Tenant shall be ordered and
utilized at the sole expense of the Tenant. Unless the Landlord otherwise requests or
consents in writing, such consent not to be unreasonably withheld, all the Tenant’s
telecommunications equipment shall be and remain solely in the

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Premises or, only with the written approval of the Landlord, the telephone closet(s)
on the floor(s) on which the Premises are located, in accordance with reasonable
rules and regulations adopted by the Landlord from time to time. Unless otherwise
specifically agreed to in writing, the Landlord shall have no responsibility for the
maintenance of the Tenant’s telecommunications equipment, including wiring, nor for
any wiring or other infrastructure to which the Tenant’s telecommunications
equipment may be connected. The Tenant agrees that, to the extent any such service
is interrupted, curtailed or discontinued, the Landlord shall have no obligation or
liability with respect thereto and it shall be the sole obligation of the Tenant at
its expense to obtain substitute service. In the event that the Tenant wishes at
any time to utilize the services of a telephone or telecommunications provider whose
equipment is not then servicing the Office Component no such provider shall be
permitted to install its lines or other equipment within the Office Component
without first securing the prior written approval of the Landlord not to be
unreasonably withheld. Such approval shall not be deemed any kind of warranty or
representation by the Landlord, including, without limitation, any warranty or
representation as to the suitability, competence, or financial strength of the
provider. Without limitation of the foregoing standard, it shall be reasonable for
the Landlord to refuse to give its approval unless all of the following conditions
are satisfied to the Landlord’s satisfaction:

	 	(i)	 	the Landlord shall incur no expense whatsoever with respect to
any aspect of the provider’s provision of its services, including without
limitation, the costs of installation, materials and services;
	 
	 	(ii)	 	prior to commencement of any work in or about the Office
Component by the provider, the provider shall supply the Landlord with such
written indemnities, insurance, financial statements, and such other items as
the Landlord reasonably determines to be necessary to protect its financial
interests and the interests of the Office Component relating to the proposed
activities of the provider;
	 
	 	(iii)	 	the provider agrees to abide by such rules and regulations,
building and other codes, job site rules and such other requirements as are
reasonably determined by the Landlord to be necessary to protect the interests
of the Office Component, the tenants in the Office Component and the Landlord,
in the same or similar manner as the Landlord has the right to protect itself
and the Office Component with respect to proposed alterations;
	 
	 	(iv)	 	the Landlord reasonably determines that there is sufficient
space in the Office Component for the placement of all of the provider’s
equipment and materials;
	 
	 	(v)	 	the provider agrees to abide by the Landlord requirements, if
any, that the provider use existing Office Component conduits and pipes or use
contractors approved by the Landlord;

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	 	(vi)	 	the Landlord receives from the provider such compensation as is
reasonably determined by the Landlord to compensate it for space used in the
Office Component for the storage and maintenance of the provider’s equipment,
for the fair market value of a provider’s access to the Office Component, and
the costs which may reasonably be expected to be incurred by the Landlord;
	 
	 	(vii)	 	the provider agrees to deliver to the Landlord detailed “as
built” plans immediately after the installation of the provider’s equipment is
complete; and
	 
	 	(viii)	 	all of the foregoing matters are documented in a written license agreement
between the Landlord and the provider, the form and content of which is
satisfactory to the Landlord, acting reasonably.

In the event that telecommunications equipment, wiring and facilities or satellite
and antennae equipment of any type installed by or at the request of any other
tenant on the roof or elsewhere within or in the Office Component causes
interference to equipment used by the Tenant, the Tenant shall use reasonable
efforts, and shall co-operate with the Landlord and other parties, to promptly
eliminate such interference. In the event that the Landlord, the Tenant and the
other parties are unable to do so, the Landlord will use its reasonable efforts to
cause such other tenants to substitute alternative equipment that remedies the
situation.

	8.3.	 	Office Component Services

The Landlord shall provide in the Office Component:

	 	(a)	 	Access. The Landlord will permit the Tenant and the Tenant’s employees
and visitors to have the use during Normal Business Hours in common with others of the
main entrance and the stairways, corridors and elevators leading to the Premises. At
times other than Normal Business Hours, the Tenant and the Tenant’s employees and
visitors shall have reasonable access to the Office Component and to the Premises and
use of the elevators in accordance with the Rules and Regulations. The Landlord may
from time to time make temporary or long term changes to the Office Component security
and Office Component access procedures without any compensation to the Tenant for loss
of business, lost time or inconvenience. In times of actual or possible terrorist or
other significant threat to property or life safety, the Landlord may cause the Office
Component to be locked, evacuated or closed until such threat or action has reasonably
passed. The Tenant shall ensure that its staff and invitees follow all security
procedures and processes as are deemed necessary by the Landlord.
	 
	 	(b)	 	Basic Services. Heat, ventilation, air conditioning, lighting,
electric power, running water, and janitor service in the Common Areas;

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	 	(c)	 	Directory. A general directory board on which the Tenant shall be
entitled to have its name shown, but the Landlord shall have exclusive control thereof
and of the area thereon to be allocated to each tenant;
	 
	 	(d)	 	Elevators. Elevator or escalator service (if applicable) for access to
and egress from the Premises;
	 
	 	(e)	 	Fitness Centre. If installed by the Landlord, employees of the Tenant
shall be entitled to use of the fitness centre subject to compliance with the rules and
regulations established by the Landlord from time to time in respect of the fitness
centre;
	 
	 	(f)	 	Loading Dock. The Tenant shall have the right of use, in common with
other tenants, of the loading dock during Normal Business Hours and, subject to
appropriate security arrangements being made and the Landlord’s approval being
obtained, after Normal Business Hours. The Tenant shall not use the elevators in the
Office Component for the purposes of moving chattels except outside Normal Business
Hours and with the prior consent of the Landlord not to be unreasonably withheld;
	 
	 	(g)	 	Maintenance. Repair, and replacement as set out in Section 8.4;
	 
	 	(h)	 	Security. The Landlord shall provide security usual for a building of
this type; and
	 
	 	(i)	 	Washrooms. Domestic hot and cold (or temperate) running water and
necessary supplies in washrooms located in the Common Areas sufficient for the normal
use thereof by occupants in the Office Component.

	8.4.	 	Maintenance. Repair and Replacement

The Landlord shall operate, maintain, repair and replace the systems, facilities and
equipment necessary for the proper operation of the Office Component and for provision of
the Landlord’s services under Sections 8.2 and 8.3 (except such as may be specifically
installed by or be the property of the Tenant), and shall be responsible for and shall
expeditiously maintain and repair the foundations, structure and roof of the Office
Component as would a prudent owner of a similar development in Vancouver, B.C., provided
that:

	 	(a)	 	if all or part of such systems, facilities and equipment are destroyed, damaged
or impaired, the Landlord shall have a reasonable time in which to complete the
necessary repair or replacement, and during that time shall be required only to
maintain such services as are reasonably possible in the circumstances;
	 
	 	(b)	 	the Landlord may temporarily discontinue such services or any of them at such
times as may be necessary due to causes beyond the reasonable control of the Landlord;

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	 	(c)	 	the Landlord shall use reasonable diligence in carrying out its obligations
under this Section, but except as expressly provided otherwise in this Lease, there
shall be no allowance to the Tenant by way of diminution of rent, or otherwise, and no
liability on the part of the Landlord by reason of inconvenience, annoyance or injury
to the business arising from the happening of the event which gives rise to the need
for any repairs, alterations, additions or improvements or from making of any repairs,
alterations, additions or improvement in or to any portion of the Office Component or
the Premises, or in and to the fixtures, appurtenances and equipment thereof. The
Landlord agrees to use all reasonable commercial efforts to do any work in such a
manner as not to unreasonably interfere with or impair the Tenant’s use of the
Premises;
	 
	 	(d)	 	no reduction or discontinuance of such services under this Section shall be
construed as an eviction of the Tenant or (except as specifically provided in this
Lease) release the Tenant from any obligation of the Tenant under this Lease; and
	 
	 	(e)	 	nothing contained in this Section shall derogate from the provisions of Article
17.

	8.5.	 	Additional Services

	 	(a)	 	If from time to time as requested in writing by the Tenant and to the extent
that it is reasonably able to do so the Landlord shall provide in the Premises services
in addition to those set out in Sections 8.2 and 8.3, provided that the Tenant shall
within ten (10) days of receipt of any invoice for any such additional service pay the
Landlord therefor at such reasonable rates as the Landlord may from time to time
establish plus an administrative fee as set forth in Section 6.1.
	 
	 	(b)	 	The Tenant shall not without the Landlord’s written consent, such consent not
to be unreasonably withheld, install in the Premises equipment (including telephone
equipment) that generates sufficient heat to affect the temperature otherwise
maintained in the Premises by the air conditioning system as normally operated, unless
the Tenant provides its own supplementary air-conditioning units. If, notwithstanding
the foregoing, the Tenant’s equipment in the Premises materially and adversely affects
the temperature otherwise maintained in the Premises by the Landlord’s air-conditioning
system as normally operated, the Landlord may install supplementary air conditioning
units, facilities or services in the Premises, or modify its air conditioning systems,
as may in the Landlord’s reasonable opinion be required to maintain proper temperature
levels and the Tenant shall pay the Landlord within thirty (30) days of receipt of any
invoice for the cost thereof, including installation, operation and maintenance expense
plus an administrative fee of fifteen percent (15%) of the cost thereof in accordance
with Section 6.1.
	 
	 	(c)	 	If the Landlord shall from time to time reasonably determine that the use of
electricity or any other utility or service in the Premises is disproportionate to the
use thereof by other tenants, the Landlord may separately charge the Tenant for the
excess costs attributable to such disproportionate use. The Landlord or the

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	 	 	 	Tenant may install and maintain at the Tenant’s expense, metering devices for
checking the use of any such utility or service in the Premises.

	8.6.	 	Alteration by the Landlord

The Landlord may from time to time:

	 	(a)	 	make repairs, replacements, changes or additions to the structure, systems,
facilities and equipment in the Premises where necessary to serve the Premises or other
parts of the Office Component;
	 
	 	(b)	 	make changes in or additions to any part of the Office Component not in or
forming part of the Premises; and
	 
	 	(c)	 	change or alter the Development and/or Office Component services or facilities,
the location of driveways, sidewalks or other Common Areas, and to extend the existing
Development and/or Office Component or erect new buildings or extend existing buildings
above the Premises or other rentable premises or Common Areas of the Development and/or
Office Component, or add new Common Areas to or on the Development and/or Office
Component,

provided that in doing so the Landlord shall not materially disturb or interfere with the
Tenant’s use of the Premises and operation of its business any more than is reasonably
necessary in the circumstances and shall use all reasonable efforts to minimize such
interference and shall repair any damage to the Premises caused thereby.

	8.7.	 	Access by the Landlord

Subject to the Tenant’s reasonable security requirements, the Tenant shall permit the
Landlord to enter the Premises outside Normal Business Hours, and during Normal Business
Hours in case of an emergency or where such will not unreasonably disturb or interfere with
the Tenant’s use of the Premises and operation of its business, to examine, inspect, and
show the Premises to persons wishing to lease them or to purchase the Office Component, to
provide services or make repairs, replacements, changes or alterations as set out and
subject to other provisions of this Lease, and to take such steps, as the Landlord, acting
reasonably, may deem necessary for the safety, improvement or preservation of the Premises
or the Office Component. The Landlord shall whenever possible consult with or give
reasonable notice to the Tenant prior to such entry, but no such entry shall constitute an
eviction or entitle the Tenant to any abatement of Rent.

	8.8.	 	Notice of Letting and Inspection by Prospective the Tenants

At any time within one hundred eighty (180) days prior to the expiry or sooner termination
of this Lease, provided the Tenant has not exercised a right of renewal hereunder for a
further renewal term, or at any time when the Tenant is in arrears of Rent after notice that
is not being disputed bona fide by the Tenant equal to an amount greater than one (1)
month’s Rent for more than thirty (30) days:

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	 	(a)	 	the Landlord may place upon the Premises signage indicating that the Premises
are for rent, and the Tenant shall not remove or obscure such signage or permit the
same to be removed or obscured;
	 
	 	(b)	 	subject to the Tenant’s reasonable security requirements, any prospective
tenant or its representative may inspect the Premises and all parts thereof at all
reasonable hours if accompanied by the Landlord or its agent or agents, or
unaccompanied on production of a written request signed by the Landlord or its agent or
agents.

	8.9.	 	Energy Conservative and Security Policies

The Landlord shall be deemed to have observed and performed those things required to be
observed and performed pursuant to the terms of this Lease, including those relating to the
provision of Utilities and services, if in doing so it acts in accordance with a directive,
policy or request of a governmental or quasi-governmental authority, having the force of
law, serving the public interest in the field of energy conservation or security.

	8.10.	 	The Landlord’s Work

It is understood and agreed that the Tenant has entered into this Lease on the express
understanding that the Landlord’s Work, as defined in Schedules “F’ and “G” attached hereto
in respect of the Premises, is limited to the scope delineated as such in Schedules “F” and
“G” attached hereto. It is further understood and agreed that all other improvements to the
Premises constitute the Tenant’s Work as defined in Schedules “F” and “G” attached hereto
and shall be performed at the sole expense of the Tenant in accordance with the terms of the
Lease.

ARTICLE 9

MAINTENANCE, REPAIR, ALTERATIONS AND

IMPROVEMENTS BY TENANT

	9.1.	 	Condition of Premises

Except to the extent that the Landlord is specifically responsible therefor under this
Lease, the Tenant shall maintain the Premises and all improvements therein in good order and
condition, including:

	 	(a)	 	repainting and redecorating the Premises and cleaning drapes and carpets at
reasonable intervals as needed;
	 
	 	(b)	 	making repairs, replacements and alterations as needed, including those
necessary to comply with the requirements of any governmental or quasi-governmental
authority having jurisdiction, of all fixtures and things which at any time during the
Term of this Lease are located or erected in or upon the Premises (including but not
limited to signs, the inside and the outside of the ground floor windows, partitions
and doors, lighting, wiring, plumbing, and electrical fixtures), such

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	 	 	 	repair and maintenance to be made by the Tenant when, where and so often as needed
shall be, always excepting only:

	 	(i)	 	reasonable wear and tear;
	 
	 	(ii)	 	repairs required to be made by the Landlord pursuant to Section
8.4; and
	 
	 	(iii)	 	repairs necessitated by damage from hazards against which the
Landlord is required to insure hereunder.

The cost of any repair, decoration, maintenance, amendment or replacement required to be
made in or to any portion of the Office Component directly as a result of any act or
omission of the Tenant, its employees, servants, agents or licensees shall be paid in full
by the Tenant except reasonable wear and tear and except to the extent insured against or
required to be insured against by the Landlord.

	9.2.	 	Failure to Maintain Premises

If the Tenant fails to perform any obligation under Section 9.1 and such default is not
remedied after notice as required in Section 20.1, then the Landlord may enter the Premises
and perform such obligation without liability to the Landlord for any loss or damage to the
Tenant thereby incurred and the Tenant shall pay the Landlord for the cost thereof, plus
fifteen percent (15%) of such costs for overhead and supervision, within ten (10) days of
receipt of the Landlord’s invoice therefor.

	9.3.	 	Alterations by the Tenant

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

	 	(a)	 	comply with the requirements of the Landlord’s insurer and any governmental or
quasi-governmental authority having jurisdiction;
	 
	 	(b)	 	comply with the requirements set forth in Schedule “F’ attached hereto;
	 
	 	(c)	 	be made only with the prior written consent of the Landlord after detailed
plans and specifications therefor have been submitted to the Landlord, such consent not
to be unreasonably withheld;
	 
	 	(d)	 	equal or exceed the then current standard for the Office Component;
	 
	 	(e)	 	be carried out only by persons selected by the Tenant and approved in writing
by the Landlord, such approval not to be unreasonably withheld. Such persons shall be
compatible with others employed by or through the Landlord directly or indirectly
including the Landlord’s other tenants, contractors and subcontractors and their trade
union affiliations; and

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	 	(f)	 	if required by the Landlord, the Tenant shall deliver to the Landlord before
commencement of the work, performance and payment bonds as well as proof of workers’
compensation and public liability and property damage insurance coverage, with the
Landlord named as an additional insured, in amounts, with companies, and in form
satisfactory to the Landlord, acting reasonably, which shall remain in effect during
construction.

	9.4.	 	Increase in Property Taxes or Insurance

Any increase in property taxes or fire or casualty insurance premiums for the Office
Component attributable to such change, addition or improvement shall be borne by the Tenant.

	9.5.	 	Work Done by the Landlord

In the event the Tenant requires any of the following work, it shall be carried out by the
Landlord at the Tenant’s sole expense pursuant to an agreement in writing:

	 	(a)	 	all approved work relating to heating, cooling, ventilation, exhaust, control,
electrical distribution and life safety systems;
	 
	 	(b)	 	all approved work on the roof of the Office Component including the
installation of telecommunications equipment;
	 
	 	(c)	 	patching of the Office Component standard fireproofing;
	 
	 	(d)	 	any drilling, cutting, coring and patching for conduit, pipe sleeves, chases,
duct equipment, or openings in the floors, walls, columns or roofs of the Office
Component which is approved by the Landlord; and
	 
	 	(e)	 	installation of approved modifications to the sprinkler system.

	9.6.	 	Ownership of Improvements

All improvements to the Premises, whether installed or constructed by the Tenant, except for
trade fixtures, shall become the property of the Landlord when constructed or installed, and
the Tenant will be solely responsible for insuring, repairing and maintaining such
improvements at the Tenant’s sole expense. The Tenant shall not be required to remove any
such improvements at the expiry or earlier termination of the Term.

	9.7.	 	Trade Fixtures and Personal Property

The Tenant may install in the Premises its usual first class trade fixtures and personal
property appropriate for the Tenant’s business in a proper manner, provided that:

	 	(a)	 	no such installation shall interfere with or damage the mechanical or
electrical systems or the structure of the Office Component;

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	 	(b)	 	the charge for the cost of any and all damages to the Office Component
resulting from such installation will be paid by the Tenant;
	 
	 	(c)	 	such installation does not contravene the provisions of this Lease;
	 
	 	(d)	 	the Tenant will remove from the Premises, immediately upon notice from the
Landlord, any safes, machinery, equipment, article or thing that by reason of its
weight, size or use might, in the opinion of the Landlord, damage the Premises and will
not at any time overload the floors of the Premises. If damage is caused to the Office
Component or any part thereof by any machinery, equipment article or thing by
overloading, or by any act, neglect or misuse on the part of the Tenant or any person
in law responsible the Tenant shall forthwith repair the same; and
	 
	 	(e)	 	if the Tenant is not then in default, the Tenant shall have the right during or
at the expiration of this Lease to remove such trade fixtures and personal property.
The Landlord may, at its option, require removal of the Tenant’s cabling, wiring, trade
fixtures and personal property from the Premises, at the Tenant’s cost, at the expiry
or earlier termination of the Term. In either event, the Tenant shall make good any
damage or injury caused to the Premises or the Office Component by reason of such
removal.

	9.8.	 	Builder’s Liens

The Tenant shall promptly pay all of its contractors and suppliers and shall do any and all
things necessary so as to minimize the possibility of a lien attaching to the Lands and
should any such lien be made or filed, the Tenant shall discharge it within thirty (30) days
following the date that the Tenant becomes aware of such registration, provided however that
the Tenant may contest the validity of any such lien and in so doing shall obtain an order
of a court of competent jurisdiction discharging the lien from the title to the Lands by
payment into Court or by furnishing to the Landlord security satisfactory to the Landlord in
nature and amount against all loss or damage which the Landlord might suffer or incur
thereby. if the Tenant shall fail to discharge any lien within the time period above, then
in addition to any other right or remedy of the Landlord, the Landlord may, but it shall not
be so obligated, discharge the lien by paying the amount claimed to be due into Court and
the amount paid by the Landlord together with all costs and expenses including solicitor’s
fees (on a solicitor and his client basis) incurred for the discharge of the lien shall be
due and payable by the Tenant to the Landlord as Additional Rent on demand.

	9.9.	 	Signs

Without limiting the provisions of Sections 10 and 11 of Schedule “H” attached hereto, the
Tenant has the right to have its name displayed on the main lobby directory board for the
Office Component, on the floor lobby directory board, if any, on each floor on which the
Premises are located and on the main door to the Premises, all such signs to be at the
Tenant’s expense and to be under the exclusive control of the Landlord and to conform to the
uniform pattern of identification signs for tenants of the Office Component prescribed

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by the Landlord. If the Premises constitute one or more full floors of the Office
Component, the Tenant has the right to have a sign displaying the name of the Tenant in the
elevator lobby of each such floor, at the Tenant’s expense, provided that the Landlord has
approved the design of the sign, such approval not to be unreasonably withheld. Subject to
Sections 10 and 11 of Schedule “H” attached hereto, the Tenant shall not paint, display,
inscribe, place or affix any sign, picture, advertisement, notice, lettering or direction on
any part of the outside of the Office Component or visible from the outside of the Office
Component, nor shall the Tenant paint, display, inscribe, place or affix any sign, picture,
advertisement, notice, lettering or direction on the outside of the Premises or inside the
Premises but visible from the outside without written consent of the Landlord. The Tenant
at the termination of this Lease shall remove any such signs or other advertising material,
and the Tenant shall promptly repair any and all damage caused by its installation or
removal. The cost of such sign and installation and erection thereof shall be borne
entirely by the Tenant.

ARTICLE 10

INSURANCE

	10.1.	 	Landlord’s Insurance

During the Term, the Landlord shall provide and keep in force or cause to be provided and
kept in force (subject to participation by the Tenant by payment of Occupancy Costs) the
following insurance:

	 	(a)	 	all risk insurance in respect of the Office Component and fixed improvements on
the Lands and all rentable premises including the Premises to full replacement cost,
but excluding tenant’s fixtures and leasehold improvements installed or constructed by
or for tenants including the Tenant;
	 
	 	(b)	 	loss of rental income insurance for a period not exceeding one (1) year;
	 
	 	(c)	 	if any boilers or pressure vessels are operated in the Office Component other
than in any rentable premises therein, boiler and pressure vessel insurance with
respect thereto;
	 
	 	(d)	 	comprehensive general business liability insurance with respect to the
operation of the Office Component for personal injury or death and damage to property
of others; and
	 
	 	(e)	 	such other forms of insurance as would be carried by a prudent owner of a
reasonably similar office building, having regard to size, age and location.

All policies of property insurance shall contain a waiver of any rights of subrogation that
the Landlord’s insurers may have against the Tenant or those for whom the Tenant is
responsible in law.

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	10.2.	 	Licensed Insurers

Insurance effected by the Landlord under this Article 10 shall be with insurers duly
licensed to transact insurance in British Columbia, shall, subject to Section 10.1(a), be
subject to such reasonable deductibles and exclusions, and otherwise be upon such terms and
conditions as a prudent owner of a similar sized, mixed use building in Vancouver, B.C.,
would determine as being reasonable and sufficient.

	10.3.	 	Insurable Interest

Notwithstanding any contribution by the Tenant to the cost of insurance required by this
Lease to be placed and maintained by the Landlord, the Tenant acknowledges and agrees that
no insurable interest is conferred upon the Tenant under any policies of insurance placed
and maintained by the Landlord, and the Tenant is not entitled to receive any proceeds of
any such insurance policies, but that shall not diminish or prejudice all other rights of
the Tenant under this Lease.

	10.4.	 	Tenant’s Insurance

During the Term, the Tenant shall take out and maintain at its own expense:

	 	(a)	 	public liability and property damage insurance including personal injury,
contractual and non-owned automobile liabilities and owners’ and contractors’
protective insurance coverage with respect to the Premises and the Tenant’s use of the
Common Areas and facilities, 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 Office Component. Such policies shall be
written on a comprehensive basis with inclusive limits of not less than $5,000,000.00
for any one occurrence or such higher limits as the Landlord shall reasonably require.
All such policies must contain a severability of interest clause and a cross liability
clause, and shall be primary and shall not call into contribution any other insurance
available to the Landlord or any mortgagee of the Lands;
	 
	 	(b)	 	insurance upon property of every description and kind owned by the Tenant, or
for which the Tenant is legally liable with in the Premises, or installed by or on
behalf of the Tenant within the Office Component, including, but not limited to
furniture, fittings, alterations, partitions, floor coverings, fixtures and anything in
the nature of a leasehold improvement, in the amount of the full replacement cost
thereof, with coverage against all risks including water damage from any cause
whatsoever, and collapse;
	 
	 	(c)	 	insurance for replacement of all glass in the Premises for any damage howsoever
caused;
	 
	 	(d)	 	insurance for all damages sustained due to burglary of the Premises;

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	 	(e)	 	business interruption insurance in such amounts as will reimburse the Tenant
for direct or indirect loss of earnings attributable to all perils commonly insured
against by prudent tenants including, but not limited to, prevention of access to the
Premises as a result of perils insured against under this Lease and the disruption in
the supply of Utilities and other essential services to the Premises or the Office
Component; and
	 
	 	(f)	 	any other form of insurance that the Tenant, or the Landlord, acting
reasonably, requires in amounts and for insurance risk against which a prudent tenant
would insure.

Policies for fire and liability insurance shall be in a form and with an insurer acceptable
to the Landlord, acting reasonably, shall require at least thirty (30) days’ written notice
to the Landlord of termination or material alteration of the policy during the Term and
shall waive any right of subrogation against the Landlord, its agent and mortgagee, and
cause the Landlord, its agent and mortgagee to be named as an additional insured in such
policies of insurance. If requested by the Landlord, the Tenant shall from time to time
promptly deliver to the Landlord, certified copies or other evidence of such policies, and
evidence satisfactory to the Landlord that all premiums thereon have been paid and the
policies are in full force and effect.

	10.5.	 	Placement of the Tenant’s Insurance by the Landlord

If the Tenant fails to take out, renew or keep in force any of the policies of insurance
required to be taken out and maintained by the Tenant under Section 10.4 and does not remedy
such default promptly after notice from the Landlord, the Landlord may do so as agent of the
Tenant and the Tenant shall reimburse the Landlord any amount so paid by the Landlord as
agent of the Tenant together with a fifteen percent (15%) administration fee promptly upon
demand by the Landlord.

ARTICLE 11

INJURY TO PERSON OR PROPERTY

	11.1.	 	Indemnity by the Tenant

The Tenant shall indemnify and hold harmless the Landlord from and against every demand,
claim, cause of action, judgment and expense, and all losses and damage arising from:

	 	(a)	 	any injury or damage to the person or property of the Tenant, any other tenant
in the Office Component or to any other person rightfully in the Office Component,
where the injury or damage is caused by negligence or willful misconduct in the
Development of the Tenant, its agents, servants or employees, or any other person for
whom the Tenant is in law responsible, or results from violation of laws or ordinances,
governmental orders of any kind or of the provisions of this Lease by any of the
foregoing;

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	 	(b)	 	any loss or damage, however caused, to books, records, files, money,
securities, negotiable instruments or papers in or about the Premises;
	 
	 	(c)	 	any injury or damage not specified above to the person or property of the
Tenant, its agents, servants or employees, or any other person entering upon the
Premises under express or implied invitation of the Tenant, where the injury or damage
is caused by any reason other than the negligence or willful misconduct of the
Landlord, its agents, servants, or employees.

If the Landlord shall, without fault on its part, be made a party to any litigation
commenced by or against the Tenant for which the Tenant is responsible to indemnify the
Landlord, then the Tenant shall protect, indemnify and hold the Landlord harmless and shall
pay all costs, expenses and reasonable legal fees incurred or paid by the Landlord in
connection with such litigation. The foregoing provisions of this Section 11.1 shall not
apply to demands, claims, causes of action, judgments, expenses, losses or damages:

	 	(i)	 	arising as a result of and to the extent of the negligence and
willful misconduct of the Landlord, its agents, servants, contractors,
licensees, invitees or anyone for whom the Landlord is responsible in law; or
	 
	 	(ii)	 	required to be insured against by the Landlord pursuant to this Lease.

	11.2.	 	Subrogation

The provisions of this Section 11.1 are subject to the waiver of any right of subrogation
against the Landlord in the Tenant’s insurance.

ARTICLE 12

ASSIGNMENT AND SUBLETTING

	12.1.	 	Assignment or Subletting

	 	(a)	 	The Tenant will not assign, transfer, sublet, part with or share possession or
set over or permit the Premises to be occupied or used by a licensee or concessionaire
or otherwise by any act or deed permit the Premises or any part of them to be assigned,
transferred, set over or sublet (individually and collectively, a
“Transfer”) unto any
persons, firm, partnership or corporation whomsoever except with consent of the
Landlord, such consent not to be unreasonably withheld.
	 
	 	(b)	 	If the Tenant desires to assign this Lease or sublet the Premises or any
portion thereof to a named third party (the “Transferee”), the Tenant shall first
provide the Landlord with any information the Landlord may reasonably require,
including a true copy of the agreement to assign or sublet (the “Transfer Agreement”),
evidence as to the responsibility, reputation, financial standing and business of the
Transferee, and a completed credit check application in the Landlord’s form,
(collectively the “Transfer Information”), together with a

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	 	 	 	check payable to the Landlord in the sum of $750.00, being the administration fee of
responding to the Tenant’s request.

	 	(c)	 	Notwithstanding anything to the contrary herein contained, the Landlord, in its
absolute discretion, may arbitrarily withhold its consent to any assignment or sublet
where the proposed transferee is a governmental authority, body or entity or Crown
corporation.

	12.2.	 	Assumption

The consent of the Landlord if granted pursuant to the provisions of this Article 12 in
respect of an assignment of this Lease may be conditional upon the Transferee executing and
delivering an agreement to the Landlord agreeing to be bound by the terms of the Lease.

	12.3.	 	Improvements at the Tenant’s Cost

In the event any sublease made pursuant to this Article 12, the Tenant shall bear the cost
of all improvements (including, without limiting the generality of the foregoing, all
demising walls, entrance doors, mechanical and electrical modifications) necessary to
separate the area to be sublet from the remainder of the Premises.

	12.4.	 	Tenant’s Obligations Continue

No assignment or disposition by the Tenant of this Lease or of any interest under this Lease
shall relieve the Tenant or Indemnifier (if any), from the performance of its covenants,
obligations or agreements under this Lease.

	12.5.	 	No Deemed Consent

The Landlord’s consent to any Transfer shall not be effective unless given by the Landlord
in writing, and no such consent shall be deemed or presumed by any act or omission of the
Landlord other than consent in writing, nor shall any consent be deemed to be a consent to
any future Transfer by the Tenant or by any Transferee. Without limiting the generality of
the foregoing, the Landlord may receive Rent and any other amounts from any Transferee and
apply the net amount received to the Rent and other amounts payable pursuant to this Lease,
and the receipt or acceptance of such amounts shall not be deemed to be a waiver of the
Landlord’s rights under this Article 12 nor an acceptance of or consent to any such
Transfer.

	12.6.	 	Subsequent Assignments

The Landlord’s consent to an assignment, transfer or subletting (or use or occupation of the
Premises by any other person) shall not be deemed to be a consent to any subsequent
assignment, transfer, subletting, use or occupation.

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	12.7.	 	Change in Corporate Control

If the sale, assignment, transfer or other disposition of any of the issued and outstanding
capital stock of the Tenant (or of any successor or assignee of the Tenant which is a
corporation) shall result in changing the control of the Tenant such sale, assignment,
transfer or other disposition shall be deemed an assignment of this Lease and shall be
subject to all of the provisions of this Lease with respect to assignments by the Tenant,
provided, however, that the Landlord’s consent shall not be required to an assignment or
transfer of issued and outstanding capital stock of the Tenant:

	 	(a)	 	to a corporation controlled by or subject to the same control as the assignor
or transferor; or
	 
	 	(b)	 	if the Tenant is a public corporation whose shares are traded and listed on any
recognized stock exchange in Canada or in the United States; or
	 
	 	(c)	 	to a member or members of the family of the assignor or transferor, or
	 
	 	(d)	 	in the case of devolution through death;

so long as in either case prior to or as soon as reasonably possible thereafter, the
Landlord has received assurances satisfactory to the Landlord that there will be a
continuity of the existing management of the Tenant, and of its business practices and
policies notwithstanding any such sale, transfer or other disposition of controlling shares.
For the purpose of this Section 12.7, “control” of any corporation shall be deemed to be
vested in the person or persons owning more than fifty percent (50%) of the voting power for
the election of the board of directors of such corporation and a “member or members” of the
family of any assignor shall include his spouse, parents, brothers or sisters and issue.

	12.8.	 	Securing Loan

The Tenant will not mortgage by way of an assignment or sublease, this Lease or the
leasehold estate crated by this Lease, without the prior written consent of the Landlord,
such consent not to be unreasonably withheld. The provisions of Sections 12.1, 12,2, 12.3,
12.5, 12.7, 12.12, 12.13, 12.14, 12.15, and 12.16 shall not apply to any mortgaging by way
of an assignment or sublease referred to in this Section 12.8.

	12.9.	 	Unamended Lease Terms

If the Tenant receives the Landlord’s written consent to a Transfer under the provisions of
this Article 12, the Tenant, the Landlord and proposed the Transferee specifically agree
that notwithstanding anything to the contrary contained herein, all terms, covenants and
conditions of this Lease shall remain as herein specified including, without limitation, the
provisions of this Lease relating to the use, unless such Sections are specifically amended
in writing between the Tenant, the proposed Transferee and the Landlord.

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	12.10.	 	No Advertising
	 
	 	 	The Tenant shall not advertise the whole or any part of the Premises or this Lease for the
purpose of a Transfer and shall not print, publish, post, display or broadcast any notice or
advertisement to that effect and shall not permit any broker or other person to do any of
the foregoing, unless the complete text and format of any such notice, advertisement or
offer is first approved in writing by the Landlord, such approval not to be unreasonably
withheld. Without in any way restricting or limiting the Landlord’s right to refuse any
text or format on other reasonable grounds, the text or format proposed by the Tenant shall
not contain any reference to the rental rate of the Premises.
	 
	12.11.	 	Assignment and Subletting without Consent
	 
	 	 	Notwithstanding Sections 12.1, 12.2, 12.5, 12.7, 12.8, 12.12, 12.13, 12.14, 12.15, and
12.16, so long as the Tenant is not in default under the terms of this Lease, the Tenant
shall not require the Landlord’s consent, and the Landlord shall not have the right to
terminate this Lease or to receive any Excess Rent pursuant to Section 12.12, in the
following circumstances:

	 	(a)	 	in connection with any assignment of this Lease or subletting of all or part of
the Premises to any Person that is an Affiliate of the Tenant;
	 
	 	(b)	 	in connection with any assignment of this Lease or subletting of all or part of
the Premises to any Person as a result of any merger, amalgamation or other
reorganization involving the Tenant that does not result in a change in control of the
Tenant;
	 
	 	(c)	 	in connection with any assignment of this Lease or subletting of all or part of
the Premises to the purchaser of a majority of the Tenant’s retail stores in Canada
operating under the trade name “Lululemon”, provided that such assignee or sublessee
shall carry on the same business as is permitted to be carried on by the Tenant
pursuant to this Lease and there remains a continuity of business practices and
policies and mode and style of operation of the Tenant, notwithstanding such purchase;
and
	 
	 	(d)	 	in connection with any assignment of this Lease or subletting of all or part of
the Premises or change in control of the Tenant as part of a transaction in which the
Tenant or any Affiliate of the Tenant completes an underwritten public offering of its
securities, provided that there is continuity in the business carried on in the
Premises pursuant to this Lease and there remains a continuity of business practices
and policies and mode and style of operation of the business carried on in the
Premises, notwithstanding such transaction;

	 	 	        provided in each case that:

	 	(e)	 	the assignee or transferee, if applicable, executes and delivers to the
Landlord an agreement directly with the Landlord agreeing to be bound by the terms of
this Lease; and

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	 	(f)	 	the Landlord receives written notice of such assignment, subletting or other
transaction within thirty (30) days after the occurrence of same.

	 	 	For the purposes of this Section, “Affiliate” means any Person that directly or indirectly
through one or more intermediaries controls, or is controlled by, or is under common control
with another Person; and “Person” means and includes any individual, corporation, limited
partnership, general partnership, joint stock company, limited liability corporation, joint
venture, association, company, trust, bank, trust company, pension fund, business trust or
other organization, whether or not a legal entity.
	 
	12.12.	 	Excess Rent
	 
	 	 	If the Landlord consents in writing to an assignment or sublease as contemplated herein, the
Tenant may complete such assignment or sublease subject to fifty percent (50%) of all
“Excess Rent”, as hereinafter defined, derived from such assignment or sublease shall be
payable to the Landlord. The Excess Rent shall be deemed to be and shall be paid by the
Tenant to the Landlord as Rent. The Tenant shall pay the Excess Rent to the Landlord
immediately as and when such Excess Rent is received by the Tenant. As used herein, “Excess
Rent” means the amount by which the total money and other economic consideration to be paid
by the assignee or subtenant as a result of an assignment or sublease, whether denominated
as rent or otherwise, exceeds, in the aggregate, the total amount of Base Rent and
Additional Rent which the Tenant is obligated to pay to the Landlord under this Lease,
pro-rated for the portion of the Premises being assigned or sublet subject to such
assignment or sublease, reasonable costs for additional improvements installed in the
portion of the Premises subject to such assignment or sublease, at the Tenant’s sole cost
and expense, for the specific assignee or subtenant in question, reasonable leasing costs
(such as brokers’ commissions and the fees payable to the Landlord under Section 12.1(b))
paid by the Tenant in connection with such assignment or sublease, and the amount of Base
Rent and Additional Rent the Tenant is obligated to pay the Landlord under this Lease,
pro-rated for the portion of the Premises being assigned or sublet, that is not occupied or
used by the Tenant until the date of such assignment or sublease. In determining the
amounts to be deducted from Excess Rent in each monthly payment period in respect of the
Tenant’s costs of assigning or subleasing, such costs shall be amortized without interest
over the Term (in the case of an assignment) or term of the sublease (in the case of a
sublease) on a straight line basis.
	 
	12.13.	 	Landlord’s Rights
	 
	 	 	If the Tenant requests consent to a Transfer of all of the Premises for the balance of the
Term, the Landlord shall have the right to terminate this Lease as set out in Section 12.14.
	 
	12.14.	 	Termination by the Landlord
	 
	 	 	The Landlord’s termination rights set out in Section 12.13 shall be exercised by giving
written notice to the Tenant within fourteen (14) days of receipt by the Landlord of the
request for consent, the Transfer Information and the administration fee, and the

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	 	 	termination date shall be the date stipulated in the Landlord’s notice which shall in no
event be less than sixty (60) days nor more than ninety (90) days following the giving of
such notice by the Landlord.
	 
	12.15.	 	Withdrawal of the Tenant Request
	 
	 	 	If the Landlord exercises its right to terminate the Lease pursuant to Sections 12.13 and
12.14, the Tenant may withdraw its request for a Transfer and shall advise the Landlord of
its intention to withdraw such request within fourteen (14) days after receipt of the
Landlord’s notice. The Tenant shall not under any circumstances be entitled to a refund of
the administration fee.
	 
	12.16.	 	Consent to Assignment or Subletting
	 
	 	 	If the Landlord does not exercise its rights set out in Section 12.13, the Tenant may sublet
the Premises or assign this Lease, as applicable, to the Transferee on the terms and
conditions contained in the Transfer Agreement, subject to the consent of the Landlord being
first obtained, which consent may not be unreasonably withheld, but which may be conditional
upon, in the case of an assignment of this Lease, the Transferee executing and delivering an
agreement to the Landlord agreeing to be bound by the terms of the Lease.

ARTICLE 13

SURRENDER

	13.1.	 	Possession
	 
	 	 	At the expiration or earlier termination of the Term, the Tenant shall peaceably surrender
and yield up to the Landlord the Premises and all improvements made, constructed, erected or
installed in the Premises in accordance with its covenants to maintain and repair the
Premises. The Tenant shall surrender all keys for the Premises to the Landlord at the place
then fixed for payment of Rent, and shall inform the Landlord of all combinations of locks,
safes and vaults, if any, in the Premises.
	 
	13.2.	 	Tenant’s Failure to Remove and Repair
	 
	 	 	Subject to the Landlord exercising its option set out in Section 9.7(e), should the Tenant
fail to remove any trade fixtures, cabling, wiring, and personal property from the Premises
or to repair the Premises prior to the expiry or earlier termination of the Term of this
Lease then the Landlord may, at its option, remove trade fixtures, goods or chattels of the
Tenant of any kind and repair any damage caused to the Premises by their removal at the
Tenant’s expense and may dispose of same in any manner which the Landlord sees fit without
compensation of any kind whatsoever to the Tenant, all in accordance with Section 20.3.
	 
	13.3.	 	Merger
	 
	 	 	The voluntary or other surrender of the Lease by the Tenant or the cancellation of the Lease
by mutual agreement of the Tenant and the Landlord shall not constitute a merger,

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	 	 	and shall at the Landlord’s option terminate all or any subleases. The Landlord’s option
hereunder shall be exercised by notice to the Tenant and all known sublessees or subtenants
in the Premises or any part thereof.
	 
	13.4.	 	Payments After Termination
	 
	 	 	No payments of money by the Tenant to the Landlord after the expiration or earlier
termination of the Term or after 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 payments of such money. After the
service of notice or the commencement of a suit, or after final judgment granting the
Landlord possession of the Premises, the Landlord may receive and collect any sums of Rent
due under this Lease, and the payment thereof shall not make ineffective any notice, or in
any manner affect any pending suits or any judgment therefor obtained.

ARTICLE 14

HOLDING OVER

	14.1.	 	Month-to-Month Tenancy
	 
	 	 	If, with the Landlord’s written consent, the Tenant remains in possession of the Premises
after the expiration or other termination of the Term without any further written agreement
with the Landlord allowing it to do so, the Tenant shall be deemed to be occupying the
Premises on a month-to-month tenancy only, at a monthly rental equal to 125% of the Base
Rent payable by the Tenant in the last month of the Term or such other rental as is stated
in such written consent, and such month-to-month tenancy may be terminated by the Landlord
or the Tenant on the last day of any calendar month by delivery of at least thirty (30)
days’ advance written notice of termination to the other.
	 
	14.2.	 	Tenancy at Sufferance
	 
	 	 	If, without the Landlord’s written consent, the Tenant remains in possession of the Premises
after the expiration or other termination of the Term, the Tenant shall be deemed to be
occupying the Premises upon a tenancy at sufferance only, at a monthly rental equal to two
times the Rent determined in accordance with Article 4. Such tenancy at sufferance may be
terminated by the Landlord at any time by notice of termination to the Tenant and by the
Tenant on the last day of any calendar month by at least thirty (30) days’ advance written
notice of termination to the Landlord.
	 
	14.3.	 	General
	 
	 	 	Any month-to-month tenancy or tenancy at sufferance hereunder shall otherwise be subject to
all other terms and conditions of the Lease except any right of renewal and nothing
contained in this Article 14 shall be construed to limit or impair any of the Landlord’s
rights of re-entry or eviction or constitute a waiver thereof.

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ARTICLE 15

RULES AND REGULATIONS

	15.1.	 	Purpose
	 
	 	 	The rules and regulations set forth in Schedule “D” attached hereto have been adopted by the
Landlord for the safety, benefit and convenience of all tenants and other persons in the
Office Component. The rules and regulations may differentiate between different types of
businesses in the Office Component, but the Landlord shall not discriminate against the
Tenant in the establishment or enforcement of the rules and regulations. All such rules and
regulations shall be deemed to be incorporated into and form part of this Lease, provided
that if there is a conflict between such rules and regulations and the other provisions of
this Lease, such other provisions of this Lease shall in all cases prevail.
	 
	15.2.	 	Observance
	 
	 	 	The Tenant shall, at all times, comply with, and shall cause its employees, agents,
licensees and invitees to comply with, such rules and regulations attached hereto as
Schedule “D” hereto and such further and other reasonable rules and regulations and
amendments and changes thereto as may be made by the Landlord and notified to the Tenant by
mailing a copy thereof to the Tenant. All such rules and regulations now or hereafter in
force shall be read as forming part of this Lease, subject to Section 15.1.
	 
	15.3.	 	Non-compliance
	 
	 	 	The Landlord shall use its reasonable commercial efforts to secure compliance by all tenants
and other persons with such rules and regulations from time to time in effect, but shall not
be responsible to the Tenant for failure of any person to comply with such rules and
regulations.
	 
	15.4.	 	Loading and Unloading
	 
	 	 	The delivery and shipping of merchandise, supplies, fixtures, and other materials or goods
of whatsoever nature to or from the Premises and all loading, unloading, and handling
thereof shall be done only at such times, in such areas, by such means, and through such
elevators, entrances, malls and corridors as are designated by the Landlord and in
accordance with the rules and regulations set forth in Schedule “D” attached hereto, and in
accordance with the Landlord’s Loading Management Plan, as may be amended from time to time,
a copy of which is attached hereto as Schedule “E.”

ARTICLE 16

EXPROPRIATION

	16.1.	 	Taking of Premises
	 
	 	 	If during the Term or any renewal thereof all of the Premises shall be taken for any public
or quasi-public use under any statute or by right or expropriation, or purchases under

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	 	 	threat of such taking, this Lease shall automatically terminate on the date on which the
expropriating authority takes possession of the Premises (the “date of such taking”).
	 
	16.2.	 	Partial Taking of Office Component
	 
	 	 	If during the Term only part of the Office Component is taken or purchased as set out in
Section 16.1, then:

	 	(a)	 	if in the reasonable opinion of the Landlord substantial alteration or
reconstruction of the Office Component is necessary or desirable as a result thereof,
whether or not the Premises are or may be affected, the Landlord shall have the right
to terminate this Lease by giving the Tenant at least thirty (30) days’ written notice
of such termination, and
	 
	 	(b)	 	if more than twenty percent (20%) of the number of square feet in the Premises
is included in such taking or purchase, the Tenant shall have the right to terminate
this Lease by giving the other at least thirty (30) days’ written notice thereof.

	 	 	If either party exercises its right of termination hereunder, this Lease shall terminate on
the date stated in the notice, provided however, that no termination pursuant to notice
hereunder may occur later than sixty (60) days after the date of such taking.

	16.3.	 	Surrender
	 
	 	 	On any such date of termination under Sections 16.1 or 16.2, the Tenant shall immediately
surrender to the Landlord the Premises and all interest therein under this Lease. The
Landlord may re-enter and take possession of the Premises and remove the Tenant therefrom,
and the Rent shall abate on such date in respect of the portion taken. After such
termination, and on notice from the Landlord stating the Rent then owing, the Tenant shall
forthwith pay the Landlord the Rent then owing.
	 
	16.4.	 	Partial Taking of Premises
	 
	 	 	If any portion of the Premises (but less than the whole thereof) is so taken, and no rights
of termination herein conferred are timely exercised, the Term of the Lease shall expire
with respect to the portion so taken on the date of such taking. In such event the Rent
payable hereunder with respect to such portion so taken shall abate on such date, and the
rent thereafter payable with respect to the remainder not so taken shall be adjusted pro
rata by the Landlord in order to account for the resulting reduction in the number of square
feet in the Premises.
	 
	16.5.	 	Awards
	 
	 	 	Upon any such taking or purchase, the Landlord and the Tenant shall each be entitled to
receive and retain the award or consideration for their respective interests for the
affected lands and improvements, and the Tenant shall not have or advance any claim against
the Landlord for the value of its property or its leasehold estate or the unexpired Term of
the Lease, or for costs of removal or relocation, or business interruption expense or any
other

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	 	 	 	damages arising out of such taking or purchase. Nothing herein shall give the Landlord any
interest in or preclude the Tenant from seeking and recovering on its own account from the
condemning authority any award or compensation attributable to the taking or purchase of the
Tenant’s leasehold estate, improvements, chattels or trade fixtures, or the removal or
relocation of its business. If any such award made or compensation paid to either party
specifically includes an award or amount for the other, the party first receiving the same
shall promptly account therefor to the other.

ARTICLE 17

DAMAGE BY FIRE OR OTHER CASUALTY

	17.1.	 	Limited Damage to Premises
	 
	 	 	If all or part of the Premises are rendered untenantable by damage from fire or other
casualty which, in the reasonable opinion of the Landlord’s Architect, can be substantially
repaired under applicable laws and government regulations within one hundred and eighty
(180) days from the date of such casualty (employing normal construction methods without
overtime or other premium), the Landlord and the Tenant, as the case may be, according to
the nature of the damage and their respective obligations to repair, shall repair the damage
with all reasonable diligence.
	 
	17.2.	 	Major Damage to Premises
	 
	 	 	If all or part of Premises are rendered untenantable by damage from fire or other casualty
which, in the reasonable opinion of the Landlord’s Architect, cannot be substantially
repaired under applicable laws and governmental regulations within one hundred and eighty
(180) days from the date of such casualty (employing normal construction methods without
overtime or other premium), either the Landlord or the Tenant may elect to terminate this
Lease as of the date of such casualty by written notice delivered to the other not more than
ten (10) days after receipt of the Landlord’s Architect’s opinion, failing which the
Landlord or the Tenant, as the case may be, according to the nature of the damage and their
respective obligations under this Lease, shall repair such damage with all reasonable
diligence.
	 
	17.3.	 	Abatement
	 
	 	 	If all or part of the Premises are damaged by fire or other casualty, the Rent payable by
the Tenant hereunder shall be proportionately reduced to the extent that the Premises are
thereby rendered unusable by the Tenant in its business, from the date of such casualty
until five (5) days after completion by the Landlord of the repairs to the Premises (or part
thereof) rendered untenantable) or until the Tenant again uses the Premises (or part
thereof) rendered untenantable in its business, whichever first occurs.
	 
	17.4.	 	Major Damage to Office Component
	 
	 	 	If, during the Term of this Lease or any renewal thereof, the Office Component shall be
damaged or destroyed by hazards against which the Landlord is required to insure under the
provisions of this Lease or by any other casualty whatsoever, to an extent such that,

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	 	 	according to the reasonable estimate of the Landlord, the cost of repairing or rebuilding
the Office Component exceeds twenty-five percent (25%) of the replacement cost of the Office
Component (excluding foundations and excavations), then the Landlord may, by notice in
writing to the Tenant, elect within ten (10) days after receipt of the Landlord’s
Architect’s opinion under Section 17.2, either to repair such damage or destruction
(including any such demolition and reconstruction as the Landlord’s Architect may recommend
in the overall interests of the Office Component) or to terminate this Lease and in the case
of termination the Tenant shall deliver up possession of the Premises to the Landlord within
thirty (30) days after delivery of the notice of termination, and, subject to Section 17.3,
the Rent shall be apportioned and paid to the date upon which possession has been delivered
up.

	17.5.	 	Limitation on the Landlord’s Liability
	 
	 	 	Except as specifically provided in this Article 17, there shall be no reduction of Rent and
the Landlord shall have no liability to the Tenant by reason of any injury to or
interference with the Tenant’s business or property arising from fire or other casualty,
howsoever caused, or from the making of any repairs resulting therefrom in or to any portion
of the Office Component or the Premises.

ARTICLE 18

TRANSFERS BY LANDLORD

	18.1.	 	Sale, Conveyance and Assignment
	 
	 	 	Nothing in this Lease shall restrict the right of the Landlord to sell, convey, assign or
otherwise deal with the Lands or the Office Component, subject only to the rights of the
Tenant under this Lease.
	 
	18.2.	 	Effect of Sale, Conveyance or Assignment
	 
	 	 	Should the Landlord convey, lease or assign or otherwise divest itself of its interest in
the Lands and/or Office Component and to the extent that the transferee, lessee or assignee
thereof assumes the covenants and obligations of the Landlord herein (except to the extent
that any covenants and obligations of the Landlord under this Lease relate to the period
prior to the effective date of such conveyance, lease or assignment), the Landlord will be
relieved of its obligations under this Lease relating to the period from and after the
effective date of such conveying, leasing, assigning or divesting, and the Tenant shall
thereafter look solely to the Landlord’s successor in interest in and to this Lease. This
Lease shall not be affected by any such sale, conveyance or assignment, and the Tenant shall
attorn to the Landlord’s successor in interest thereunder.
	 
	18.3.	 	Subordination
	 
	 	 	Subject to Section 8 of Schedule “H” attached hereto, this Lease is and shall be subject and
subordinate in all respects to any and all mortgages and security interests now or hereafter
placed on the Office Component or Lands, and to all renewals, modifications, consolidations,
replacements and extensions thereof.

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	18.4.	 	Attornment
	 
	 	 	Subject to the non-disturbance agreement referred to in Section 8 of Schedule “H” attached
hereto, if the interest of the Landlord is transferred to any person (herein called the
“Purchaser”) by reason of foreclosure or other proceedings for enforcement of any such
mortgage, or by delivery of a deed in lieu of such foreclosure or other proceedings, the
Tenant shall immediately and automatically attorn to the Purchaser. Upon such attornment as
provided for in this Section 18.4, this Lease shall continue in full force and effect as a
direct lease between the Purchaser and the Tenant, upon all of the same terms, conditions
and covenants as are set forth in the Lease except that, after such attornment, the
Purchaser shall not be:

	 	(a)	 	liable for any act or omission of the Landlord occurring prior to such
attornment; or
	 
	 	(b)	 	subject to any offsets or defenses which the Tenant might have against the
Landlord arising prior to such attornment; or
	 
	 	(c)	 	bound by a prepayment by the Tenant of more than one (1) month’s installment of
Rent occurring prior to such attornment, unless such prepayment shall have been
expressly provided for in this Lease or approved in writing by the Purchaser or any
predecessor in interest except the Landlord.

	18.5.	 	Execution of Instruments
	 
	 	 	The subordination and attornment provisions of this Article 18 are subject to Section 8 of
Schedule “H” attached hereto. The Tenant, on request by and without cost to the Landlord or
any successor in interest, shall execute and deliver any and all instruments further
evidencing such subordination and (where applicable hereunder) attornment, subject to
Section 8 of Schedule “H” hereto.

ARTICLE 19

NOTICES, ACKNOWLEDGEMENTS, AUTHORITIES FOR ACTION

	19.1.	 	Notices
	 
	 	 	Any notice from one party to the other hereunder shall be in writing and shall be deemed
duly served if delivered personally or if delivered by facsimile to the party being served
at the address or facsimile number set forth below:

	 	 	 
	          (a)   if to the Landlord:

	 	Broadway Equities Inc. and

PCI Cross Roads Developments Inc.

c/o Warrington PCI Management

Suite 1700— 1030 West Georgia Street

Vancouver, B.C.

V6E 2Y3

Attention: Property Manager

Facsimile:  (604) 688-2328

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	                    with a copy to delivered concurrently to:
	 
	 	 
	 

	 	Koffman Kalef

Business Lawyers

19th Floor, 885 West Georgia Street

Vancouver, B.C.

V6C 3H4

Attention: Patrick J. Julian

Facsimile:  (604) 891-3788

	 
	 	 
	          (b)   if to the Tenant:

	 	Lululemon Athletica Inc.
	 

	 	2285 Clark Drive
	 

	 	Vancouver, B.C.
	 

	 	V5N 3G9
	 

	 	Attention: Christopher Ng
	 

	 	Facsimile:   (604) 874-6124

	 	 	or if delivered by courier addressed to the Tenant at the Premises (whether or not the
Tenant has departed from, vacated or abandoned the same), or to the Landlord at the address
set forth on page 1 of this Lease or any other place from time to time established for the
payment of Rent. Any notice shall be deemed to have been given at the time of personal
delivery or, if delivered by facsimile or by overnight courier, the next business day after
the date of delivery thereof. Either party shall have the right to designate by notice, in
the manner above set forth, a different address to which notices are to be delivered.
	 
	19.2.	 	Acknowledgement
	 
	 	 	Each of the parties hereto shall at any time and from time to time upon not less than ten
(10) days prior notice from the other execute, acknowledge and deliver a written statement
in such form as may be requested by the Landlord acting reasonably certifying:

	 	(a)	 	that this Lease is in full force and effect, subject only to such modification
(if any) as may be set out therein;
	 
	 	(b)	 	that the Tenant is in possession of the Premises and paying Rent as provided in
this Lease;
	 
	 	(c)	 	the dates (if any) to which Rent is paid in advance;
	 
	 	(d)	 	that there are not, to such party’s knowledge any uncured defaults on the part
of the other party hereunder, or specifying such defaults in any are claimed; and
	 
	 	(e)	 	such other matters as may be reasonably requested by the other party or its
mortgagee.

	 	 	 	Any such statement may be relied upon by any prospective transferee or encumbrancer of all
or any portion of the Office Component, or the leasehold estate under this Lease, or

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	 	 	 	any assignee of any such persons. If either party fails to timely deliver such statement,
such party shall be deemed to have acknowledged that this Lease is in full force and effect,
without modification except as may be represented by the other party, and that there are no
uncured defaults in the performance of such party.

	19.3.	 	Authorities for Action
	 
	 	 	The Landlord may act in any matter provided for herein by its property manager and any other
person who shall from time to time be designated by the Landlord by notice to the Tenant.
The Tenant shall designate in writing one or more persons to act on its behalf in any matter
provided for herein and may from time to time change, by notice to the Landlord, such
designation. In the absence of any such designation, the person or persons executing this
Lease for the Tenant shall be deemed to be authorized to act on behalf of the Tenant in any
matter provided for herein.

ARTICLE 20

DEFAULT

	20.1.	 	Events of Default
	 
	 	 	In the event of the happening of any one of the following events:

	 	(a)	 	the Tenant shall have failed to pay an installment of Base Rent or Additional
Rent or any other amount payable hereunder when due and such failure shall be
continuing for a period of more than three (3) days after notice is delivered by the
Landlord to the Tenant advising of such default; or
	 
	 	(b)	 	if any policy of insurance upon the Lands, the Office Component, or any part
thereof from time to time effected by the Landlord shall be cancelled or about to be
cancelled by the insurer by reason of the unlawful use or occupation of the Premises by
the Tenant or any assignee, subtenant or licensee of the Tenant or anyone permitted by
the Tenant to be upon the Premises and the Tenant after receipt of notice in writing
from the Landlord shall have failed to take such immediate steps in respect of such use
or occupation as shall enable the Landlord to reinstate or avoid cancellation (as the
case may be) of such policy of insurance; or
	 
	 	(c)	 	the Premises or any portion thereof shall, without the prior written consent of
the Landlord, be used or occupied by any other persons than the Tenant or its permitted
assigns or subtenants or for any purpose other than that for which they were leased or
occupied or by any persons whose occupancy is prohibited by this Lease and is not cured
as provided for in Section 20.1(h); or
	 
	 	(d)	 	the Premises shall be vacated or abandoned,, or remain unoccupied without the
prior written consent of the Landlord for fifteen (15) consecutive days or more while
capable of being occupied; or

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	 	(e)	 	the Tenant makes a bulk sale of its goods or removes or commences, attempts or
threatens to remove its goods, chattels, and equipment out of the Premises (other than
in the normal course of its business), and such execution, attachment or similar
process, action or proceeding is not set aside, vacated, discharged or abandoned within
fifteen (15) days after commencement; or
	 
	 	(f)	 	the balance of the Term of this Lease or any of the goods and chattels of the
Tenant located in the Premises, shall at any time be seized in execution or attachment,
and such execution, attachment or similar process, action or proceeding is not set
aside, vacated, discharged or abandoned within fifteen (15) days after commencement; or
	 
	 	(g)	 	the Tenant becomes insolvent or commits an act of bankruptcy or becomes
bankrupt or takes the benefit of any statute that may be in force for dissolution or
bankrupt or insolvent debtors or becomes involved in voluntary or involuntary
winding-up proceedings or if a receiver or a trustee, receiver or receiver manager or
agent or other like person shall be appointed for the business, property, affairs or
revenues of the Tenant, and such execution, attachment or similar process, action or
proceeding is not set aside, vacated, discharged or abandoned within fifteen (15) days
after commencement; or
	 
	 	(h)	 	the Tenant fails to observe, perform and keep each and every one of the
covenants, agreements, provisions, stipulations and conditions herein contained to be
observed, performed and kept by the Tenant (other than payment of Rent) including, but
not limited to, Sections 4.12., 8.8, 9.2, 9.8, 10.5, 20.1(c), 21.5 and Section 7 of
Schedule “B”, and persists in such failure after ten (10) days’ notice by the Landlord
requiring that the Tenant remedy, correct, desist or comply (or if any such breach
would reasonably require more than ten (10) days to rectify, unless the Tenant
commences rectification within ten (10) days’ notice period and thereafter promptly and
effectively and continuously proceeds with the rectification of the breach);

	 	 	it shall be deemed an “Event of Default” and the Landlord shall have the rights and remedies
set forth in this Article 20, all of which are cumulative and not alternatives and not to
the exclusion of any other or additional rights and remedies in law or equity available to
the Landlord by statute or otherwise. 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.
	 
	20.2.	 	Interest and Costs to Lease Space
	 
	 	 	The Tenant shall pay to the Landlord interest at a rate equal to five percent (5%) per annum
over the prime rate charged by the Landlord’s principal banker to the Landlord, calculated
and compounded monthly, upon all Rent required to be paid hereunder from the due date for
payment thereof until the same is fully paid and satisfied. The Tenant shall indemnify the
Landlord against all costs, charges (including legal fees) lawfully and reasonably incurred
in enforcing payment thereof, and in obtaining possession of the

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	 	 	Premises after an Event of Default or upon expiration or earlier termination of the Term of
this Lease, or in enforcing any covenant, provision or agreement of the Tenant herein
contained in respect of which an Event of Default has occurred.

	20.3.	 	Right of the Landlord to Perform Covenants
	 
	 	 	All covenants and agreements to be performed by the Tenant under any of the terms of this
Lease shall be performed by the Tenant, at the Tenant’s sole cost and expense, and without
abatement of Rent. If the Tenant shall fail to perform any act on its part to be performed
hereunder, and such failure shall continue after notice from the Landlord in accordance with
Section 20.1(h) for ten (10) days after such notice or any period after such notice allowed
by Section 20.1(h), the Landlord may (but shall not be obligated so to do) perform such an
act without waiving or releasing the Tenant from any of its obligations relative thereto,
and in so doing to make any payments due or alleged to be due by the Tenant to the third
parties and to enter upon the Premises to do any work or other things therein. All sums
paid or costs incurred by the Landlord in so performing such acts under this Section 20.3,
together with a fifteen percent (15%) administration fee shall be payable by the Tenant to
the Landlord on demand and shall be recoverable by the Landlord as Rent.
	 
	20.4.	 	Right to Distrain
	 
	 	 	Upon the occurrence of an Event of Default, at the option of the Landlord, the following
shall become fully and immediately due and payable by the Tenant and the Landlord may
immediately distrain for the same, together with any arrears then unpaid:

	 	(a)	 	the full amount of the current month’s and the next ensuing three (3) months’
installments of Base Rent; and
	 
	 	(b)	 	all expenses incurred by the Landlord in performing after an Event of Default
any of the Tenant’s obligations under this Lease, re-entering and re-letting,
collecting sums due or payable by the Tenant, effecting seizure and realizing upon
assets seized (including brokerage, legal fees and disbursements), and the expense of
keeping the Premises in good order, repairing the same and preparing them for
re-letting.

	 	 	Upon the occurrence of an Event of Default, the Landlord may seize and sell such goods,
chattels and equipment of the Tenant whether within the Premises or removed therefrom and
may apply the proceeds thereof to all Rent and other payments to which the Landlord is then
entitled under this Lease, and the Tenant waives or renounces the benefit of any present or
future law taking away or limiting the Landlord’s right of distress on the property of the
Tenant. 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. If any of the Tenant’s
property is disposed of as provided in this Section 20.4, ten (10) days’ prior notice to the
Tenant of disposition shall be deemed to be commercially reasonable.

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	20.5.	 	Right to Place Lien
	 
	 	 	If at any time there shall have occurred an Event of Default hereunder, the Landlord shall
have a lien on all stock in trade and inventory of the Tenant located in the Premises as
security against loss or damage resulting from any such default by the Tenant and such stock
in trade and inventory shall not be removed from the Premises by the Tenant until such
default is cured unless otherwise directed by the Landlord.
	 
	20.6.	 	Right to Terminate — General
	 
	 	 	Upon the occurrence of an Event of Default pursuant to Section 20.1, the Landlord has the
right to terminate this Lease forthwith by leaving upon the Premises or by affixing to an
entrance door to the Premises notice terminating the Lease and to immediately thereafter
cease to furnish any services hereunder and enter into and upon the Premises or any part
thereof in the name of the whole and the same to have again, repossess and enjoy as of its
former estate, anything in this Lease contained to the contrary notwithstanding. Upon the
giving by the Landlord of a notice in writing, terminating this Lease under Section 20.6 or
20.7, this Lease and the Term shall terminate, Rent and any other payments for which the
Tenant is liable under this Lease shall be computed, apportioned and paid in full to the
date of such termination forthwith, and there shall immediately become due and payable those
amounts payable pursuant to Section 20.11. Upon termination of this Lease and the Term, the
Tenant shall immediately deliver up possession of the Premises to the Landlord, and the
Landlord may forthwith re-enter and take possession of them.
	 
	20.7.	 	Right to Terminate — Accelerated Rent
	 
	 	 	The Landlord may terminate this Lease at its sole option if and whenever there is an Event
of Default pursuant to Sections 20.1(e) to 20.1(h). In the event that this Lease is
terminated pursuant to this Section 20.7 the Tenant shall, in addition to meeting all the
requirements of Section 20.6 forthwith pay to the Landlord Rent for three (3) months next
ensuing after the termination of this Lease as accelerated rent.
	 
	20.8.	 	Right to Re-enter
	 
	 	 	Upon the occurrence of an Event of Default pursuant to Section 20.1, the Landlord has the
right to enter the Premises, with or without cancelling the Lease, as agent of the Tenant
and as such agent to re-let them and to receive the rent therefor and as agent of the Tenant
to take possession of any furniture or other property thereon and upon giving ten (10) days’
written notice to the Tenant to store the same at the expense and risk of the Tenant or to
sell or otherwise dispose of the same at public or private sale without further notice and
to apply the proceeds thereof and any rent derived from re-letting the Premises upon account
of the Rent due and to become due under this Lease and the Tenant shall be liable to the
Landlord for the deficiency if any.

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	20.9.	 	Waiver of Exemption and Redemption
	 
	 	 	Notwithstanding anything contained in any statute now or hereafter in force limiting or
abrogating the right of distress, none of the Tenant’s goods, chattels or trade fixtures on
the Premises at any time during the continuance of the Term shall be exempt from levy by
distress for Rent in arrears where there is an Event of Default, and upon any claim being
made for such exemption by the Tenant or on distress being made by the Landlord this
agreement may be pleaded as an estoppel against the Tenant in any action brought to test the
right to levying upon any such goods as are named as exempted in any such statute, the
Tenant hereby waiving all and every benefit that could or might have accrued to the Tenant
under and by virtue of any such statute but for this Lease where there is an Event of
Default. The Tenant hereby expressly waives any and all rights of redemption granted by or
under any present or future laws in the event of the Tenant being evicted or dispossessed
for any cause, or in the event of the Landlord obtaining possession of the Premises, by
reason of the occurrence of an Event of Default.

	20.10.	 	Surrender
	 
	 	 	If and whenever the Landlord in consequence of an Event of Default is entitled to or does
reenter, the Landlord may terminate this Lease by giving notice thereof, and in such event
the Tenant shall forthwith vacate and surrender the Premises and shall surrender all keys
for the Premises to the Landlord at the place then fixed for payment of Rent, and shall
inform the Landlord of all combinations of locks, safes and vaults, if any, in the Premises.

	20.11.	 	Payments
	 
	 	 	If in consequence of an Event of Default, the Landlord shall re-enter or this Lease shall be
terminated hereunder, the Tenant shall pay to the Landlord on demand:

	 	(a)	 	Rent up to the time of re-entry or termination, whichever shall be the earlier,
plus accelerated rent as provided in Section 20.7 if that Section applies;
	 
	 	(b)	 	all expenses incurred by the Landlord in performing any of the Tenant’s
obligations under this Lease, re-entering or terminating and re-letting, collecting
sums due or payable by the Tenant, realizing upon assets seized, or otherwise
exercising its rights and remedies under this Article 20 including, but not limited to,
any tenant inducements or allowances, leasing commissions, legal fees (on a solicitor
and own client basis) and all disbursements, and the expense of keeping the Premises in
good order, repairing the same and preparing them for re-letting; and
	 
	 	(c)	 	as damages for the loss of income of the Landlord expected to be derived from
the Premises, the amounts (if any) by which the Rent which would have been payable
under this Lease exceeds the aggregate of any accelerated rent under Section 20.7 and
any payments received by the Landlord from other tenants in the Premises, payable on
the first day of each month during the period which would have constituted the
unexpired portion of the Term had it not been terminated, or at the

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	 	 	 	election of the Landlord by notice to the Tenant at or after re-entry or
termination, a lump sum amount equal to the Rent which would have been payable under
this Lease from the date of such election during the period which would have
constituted the unexpired portion of the Term had it not been terminated, reduced by
the rental value of the Premises for the same period, established by reference to
the terms and conditions upon which the Landlord re-lets them if such re-Letting is
accomplished within a reasonable period after termination, and otherwise established
by reference to all market and other relevant circumstances, Rent and rental value
being reduced to present worth at an assumed interest rate of ten percent (10%) on
the basis of the Landlord’s estimates and assumptions of fact which shall govern
unless shown to be erroneous.

ARTICLE 21

HAZARDOUS SUBSTANCES

	21.1.	 	Tenant’s Covenants
	 
	 	 	The Tenant covenants and agrees that it will:

	 	(a)	 	not bring or cause any Hazardous Substance to be brought onto the Lands or the
Office Component or the Premises except in compliance with Environmental Law;
	 
	 	(b)	 	comply at all times and require all those for whom the Tenant is in law
responsible to comply at all times with Environmental Law as it affects the Premises or
its use of and activities on the Lands or the Office Component;
	 
	 	(c)	 	give notice to the Landlord of the presence at any time during the Term of any
Hazardous Substance on the Premises (or the Lands or the Office Component if such
substance is in the control of the Tenant) together with such information concerning
such Hazardous Substance and its presence on the Premises or the Lands or the Office
Component as the Landlord may require;
	 
	 	(d)	 	give notice to the Landlord of any occurrence which might give rise to a duty
under Environmental Law by either the Tenant or the Landlord with respect to the
presence of any Hazardous Substance on the Premises (or the Lands or the Office
Component if the Hazardous Substance is in the control of the Tenant) including,
without limitation, notice of any discharge, release, leak, spill or escape into the
environment of any Hazardous Substance at, to or from the Premises (or the Lands or the
Office Component if the Hazardous Substance is in the control of the Tenant);
	 
	 	(e)	 	at the Landlord’s request provide the Landlord with copies of all of the
Tenant’s records with respect to the presence, storage, handling and disposal of
Hazardous Substances on the Premises (or the Lands or the Office Component if the
Hazardous Substance is in the control of the Tenant) including tank measurements,
policies and procedures and evidence of compliance therewith;

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	 	(f)	 	in any case where the Tenant has given notice as to the presence of a Hazardous
Substance at the Premises (or the Lands or the Office Component if the Hazardous
Substance is in the control of the Tenant), or is required to give such notice, or
where the Landlord has reasonable grounds to believe that any Hazardous Substance is
going to be or has been brought to the Premises or the Lands or the Office Component by
the Tenant or the Tenant’s Employees, to commission an environmental audit at the
Tenant’s expense when required by the Landlord to do so;
	 
	 	(g)	 	comply with any investigative, remedial or precautionary measures required
under Environmental Law or as reasonably required by the Landlord, be fully and
completely liable to the Landlord for any and all investigation, clean up, remediation,
restoration or monitoring costs or any costs incurred to comply with Environmental Law
or any request by the Landlord that such measures be taken with respect to the
Hazardous Substance brought onto the Lands by the Tenant or those for whom it is
responsible for at law;
	 
	 	(h)	 	provide access to the Premises for the Landlord or its agents to conduct an
environmental audit of the Premises, at the Tenant’s expense (if shown to be in
default), at least two (2) months prior to the expiry of the Term of this Lease.

	21.2.	 	Tenant’s Indemnity
	 
	 	 	The Tenant will indemnify, hold harmless and defend the Landlord, its respective directors,
officers, agents, employees, invitees, representatives, successors and assigns (herein,
collectively, the “Indemnified Parties”) from and against any and all losses, damages,
expenses, claims, suits, costs and demands of whatsoever nature including, but not limited
to any Environmental Claims, directly or indirectly incurred, sustained or suffered by or
asserted against any one or more of the Indemnified Parties and resulting from damages or
injuries, caused by or arising Out of any breach by the Tenant of these covenants,
warranties and representations, including any default, act, omission, negligence in whole or
in part, by those for whom in law the Tenant is responsible, except in all cases to the
extent insured against or required to be insured against by the Landlord under this Lease to
which the Tenant has contributed payment to as part of the Operating Expenses.

	21.3.	 	Inquiries by the Landlord
	 
	 	 	The Tenant hereby authorizes the Landlord to make inquiries from time to time of any
government or governmental agency with respect to the Tenant’s compliance with the
Environmental Law at the Premises, and the Tenant covenants and agrees that the Tenant will
from time to time provide to the Landlord such written authorization as the Landlord may
reasonably require in order to facilitate the obtaining of such information. The Landlord
or its agent may inspect the Premises from time to time without notice, in order to verify
the Tenant’s compliance with the Environmental Law and the requirements of this Lease
respecting Hazardous Substance. If the Landlord suspects that the Tenant is in breach of
any of its covenants herein, the Landlord and its agent shall be entitled to

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	 	 	conduct an environmental audit immediately, and the Tenant shall provide access to the
Landlord and its agent for the purpose of conducting an environmental audit. Such
environmental audit shall be at the Landlord’s expense, unless the Tenant is in default of
the provisions of Section 21.1 hereof, in which case:

	 	(a)	 	the Tenant shall be responsible and liable for the environmental audit and all
costs associated therewith, and
	 
	 	(b)	 	the Tenant shall forthwith remedy any problems identified by the environmental
audit, and shall ensure that it complies with all of its covenants herein.

Upon request by the Landlord from time to time, the Tenant shall provide to the Landlord a
certificate executed by a senior officer of the Tenant certifying ongoing compliance by the
Tenant with its covenants contained herein.

	21.4.	 	Ownership of Hazardous Substances
	 
	 	 	If the Tenant shall bring or create upon the property of the Premises or the Lands any
Hazardous Substance or if the conduct of the Tenant’s business shall cause there to be any
Hazardous Substance upon the Lands or the Premises then, notwithstanding any rule of law to
the contrary, such Hazardous Substance shall be and remain the sole and exclusive property
of the Tenant and shall not become the property of the Landlord notwithstanding the degree
of affixation of the Hazardous Substance or the goods containing the Hazardous Substance to
the Premises or the Lands and notwithstanding the expiry or earlier termination of this
Lease.

	21.5.	 	Landlord’s Remedies upon Default
	 
	 	 	Upon the occurrence of an Event of Default under this Article 21, subject to Section
20.1(h), in addition to the rights and remedies set forth elsewhere in this Lease, the
Landlord shall be entitled to the following rights and remedies:

	 	(a)	 	at the Landlord’s option, to terminate this Lease, and/or
	 
	 	(b)	 	to recover any and all damages associated with the material default, including
without limitation, in addition to any rights reserved or available to the Landlord in
respect of an early termination of this Lease, cleanup costs and charges, civil and
criminal penalties and fees, loss of business and sales by the Landlord and other
tenants of the Lands or the Office Component, any and all damages and claims asserted
by third parties and the Landlord’s solicitors’ fees and costs.

ARTICLE 22

RIGHT OF RENEWAL

	22.1.	 	First Renewal Term
	 
	 	 	If there is no subsisting Event of Default under Section 20.1 herein, and there has not been
an Event of Default more than twice during the Term, the Landlord shall at the

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	 	 	expiration of the Term, at the Tenant’s written request delivered to the Landlord in the
manner provided in this Lease not later than twelve (12) months prior to the expiration of
the Term, grant to the Tenant a renewal lease of the Premises for a further term of five (5)
years (the “First Renewal Term”) from the expiration of the Term, upon all of the covenants,
agreements, conditions, and provisos contained in this Lease except this covenant for
renewal and any provisions for Landlord’s Work, any tenant improvement allowance, free rent,
or inducements, of any kind, and except the Base Rent to be paid during the First Renewal
Term.

	22.2.	 	Second Renewal Term
	 
	 	 	The renewal lease for the First Renewal Term shall contain a further right of renewal for a
term of five (5) years from the expiration of the First Renewal Term (the “Second Renewal
Term”) in the same form and upon the same covenants, agreements, conditions, and provisos
contained in this Lease, except for any further right of renewal and any provisions for
Landlord’s Work, any tenant improvement allowance, free rent, or inducements, of any kind,
and except that the time for the Tenant to give its written request to exercise its right to
renew shall be not later than twelve (12) months prior to the expiration of the First
Renewal Term, and except the Base Rent to be paid during the Second Renewal Term.

	22.3.	 	Base Rent
	 
	 	 	The Base Rent for the First Renewal Term and the Second Renewal Term, as the case may be,
shall be the then-fair market rent for the Premises, being the rent which would be paid for
the Premises in their then-current condition (excluding only the value of the Leasehold
Improvements and the Tenant’s Work and any other improvements installed at the cost of the
Tenant) as between persons dealing in good faith and at arm’s length. if the Landlord and
the Tenant have not mutually agreed on the amount of the Base Rent at least nine (9) months
prior to the commencement of the First Renewal Term or the Second Renewal Term, as the case
may be, then Base Rent for the applicable renewal term shall be decided by binding
arbitration under Section 22.5. Until the Base Rent has been determined as provided herein,
the Tenant shall pay the monthly Rent in effect immediately before the commencement of the
applicable renewal term and upon the determination of the Base Rent the Landlord and the
Tenant shall make the appropriate adjustments without interest.

	22.4.	 	No Further Right of Renewal
	 
	 	 	The Landlord and the Tenant acknowledge and agree that, pursuant to Sections 22.1 and 22.2,
the Tenant is given the option of renewing the Term only for two (2) renewal terms of five
(5) years each, and at the expiration of the two (2) renewal terms there shall be no further
right of renewal.

	22.5.	 	Arbitrators
	 
	 	 	If under the provisions of Section 22.3 the Landlord and the Tenant have failed to agree as
to the Base Rent payable for the Premises with respect to a renewal term by the date

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	 	 	specified in Section 22.3, the determination of the Base Rent shall be referred to a board
of three (3) arbitrators and the following shall apply:

	 	(a)	 	one arbitrator shall be appointed by each of the Landlord and the Tenant and a
third arbitrator shall be appointed in writing by the first two named arbitrators;
	 
	 	(b)	 	if the Landlord or the Tenant refuses or neglects to appoint an arbitrator
within thirty (30) days after the other serves a written notice upon the party so
refusing or neglecting to make that appointment, the arbitrator first appointed shall,
at the request of the party appointing him or her, proceed to determine the rent as if
he or she were a single arbitrator appointed by both the Landlord and the Tenant for
the purpose;
	 
	 	(c)	 	if two (2) arbitrators are so appointed within the time prescribed and they do
not agree within a period of ten (10) days from the date of appointment of the second
arbitrator upon the appointment of the third arbitrator, then upon the application of
either the Landlord or the Tenant, the third arbitrator shall be appointed by a Judge
of the Supreme Court of British Columbia;
	 
	 	(d)	 	the determination made by the arbitrators or the majority of them or by the
single arbitrator, as the case may be, shall be final and binding upon the Landlord and
the Tenant, and their respective successors and assigns;
	 
	 	(e)	 	each party shall pay the fees and expenses of the arbitrator appointed by it
and one-half of the fees and expenses of the single arbitrator if there is only one and
the third arbitrator if there are three; and
	 
	 	(f)	 	the provisions of this Section 22.5 shall be deemed to be a submission to
arbitration within the provisions of the Commercial Arbitration Act, R.S.B.C. 1996, c.
55, and any statutory modification or re-enactment thereof, provided that any
limitation on the remuneration of the arbitrators imposed by that legislation shall not
apply.

	22.6.	 	Exercise of Rights of Renewal
	 
	 	 	The exercise of the rights of renewal are solely within the control of the Tenant, and
nothing contained in this Lease obligates or requires the Landlord to remind the Tenant to
exercise the rights of renewal. The Landlord’s acceptance of any future rent for either
Renewal Term shall in no way be deemed a waiver of the Tenant’s requirement to give notice
within the time limit set out in Sections 22.1 or 22.2 for renewing the Term or the First
Renewal Term, as the case may be.

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ARTICLE 23

MISCELLANEOUS

	23.1.	 	Relationship of Parties
	 
	 	 	Nothing contained in this Lease shall create any relationship between the parties hereto
other than that of landlord and tenant, and it is acknowledged and agreed that the Landlord
does not in any way or for any purpose become a partner of the Tenant in the conduct of its
business, or a joint venturer or a member of a joint or common enterprise with the Tenant.

	23.2.	 	Applicable Law and Construction
	 
	 	 	This Lease shall be governed by and construed under the laws of the Province in which the
Office Component is located and the parties attorn to the exclusive jurisdiction of the
courts of such Province. The provisions of this Lease shall be construed as a whole
according to their common meaning and not strictly for or against the Landlord or the
Tenant. The words the Landlord and the Tenant shall include the plural as well as the
singular. Time is of the essence of the Lease and each of its provisions. The captions of
the Articles are included for convenience only, and shall have no effect upon the
construction or interpretation of this Lease.

	23.3.	 	Entire Agreement
	 
	 	 	There are no terms and conditions with respect to the Premises and the Office Component
which at the date of execution of this Lease are additional or supplemental to those set out
on the pages of this Lease, and in the Schedules which are attached hereto and which form
part of this Lease. This Lease contains the entire agreement between the parties hereto
with respect to the Premises and the Office Component. The Tenant acknowledges and agrees
that it has not relied upon any statement, representation, agreement or warranty with
respect to the Premises and the Office Component, except such as is set out in this Lease.
Delivery of an unsigned copy of this Lease to the Tenant, notwithstanding insertion of all
particulars in the Lease and presentation of any check or acceptance of any monies by the
Landlord given by the Tenant as a deposit, does not constitute an offer by the Landlord, and
no contractual or other legal right shall be created between the parties hereto until this
Lease has been fully executed by both parties and delivery has been made of an executed copy
of this Lease to the Tenant.

	23.4.	 	Amendment or Modification
	 
	 	 	Unless otherwise specifically provided in the Lease, no amendment, modification, or
supplement to this Lease shall be valid or binding unless set out in writing and executed by
the parties hereto in the same manner as the execution of this Lease.

	23.5.	 	Construed Covenants and Severability
	 
	 	 	All of the provisions of the Lease are to be construed as covenants and agreements as though
the word importing such covenants and agreements were used in each separate

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	 	 	Article hereof. Should any provision of this Lease be or become invalid, void, illegal or
not enforceable, it shall be considered separate and severable from the Lease and the
remaining provisions shall remain in force and be binding upon the parties hereto as though
such provision had not been included.

	23.6.	 	No Implied Surrender or Waiver
	 
	 	 	No provisions of this Lease shall be deemed to have been waived by a party unless such
waiver is in writing signed by that party. A waiver of a breach of any term or condition of
this Lease shall not prevent a subsequent act, which would have originally constituted a
breach, from having all the force and effect of any original breach. Failure of a party to
insist upon strict performance of any of the covenants or conditions of this Lease or to
exercise any right herein contained shall not be construed as a waiver or relinquishment for
the future of any such covenant, condition or right. The Landlord’s receipt of Rent with a
knowledge of a breach by the Tenant of any term or condition of the Lease shall not be
deemed a waiver of such term or condition. No act or thing done by the Landlord, the
Landlord’s Employees during the Term shall be deemed an acceptance of a surrender of the
Premises, and no agreement to accept a surrender of the Premises shall be valid, unless in
writing and signed by the Landlord and the Tenant. The delivery of keys to any of the
Landlord’s Employees shall not operate as a termination of the Lease or a surrender of the
Premises. No payment by the Tenant, or receipt by the Landlord, of a lesser amount than the
Rent due hereunder shall be deemed to be other than on account of the earliest stipulated
Rent, nor shall any endorsement or statement on any check or any letter accompanying any
check, or payment as Rent, be deemed an accord and satisfaction, and the Landlord may accept
such check or payment without prejudice to the Landlord’s right to recover the balance of
such Rent or pursue any other remedy available to the Landlord.

	23.7.	 	Liability Joint/Several
	 
	 	 	In the event there is more than one entity or person which or whom are parties constituting
the Landlord or the Tenant under this Lease, the obligation imposed upon the Landlord or the
Tenant, as the case may be, under this Lease shall be joint and several.

	23.8.	 	Unavoidable Delay
	 
	 	 	Save and except for the obligations of the Tenant as set forth in this Lease to pay Base
Rent, Occupancy Costs, increased rent or other monies to the Landlord and the Landlord’s
obligations to provide quiet enjoyment to the Tenant, if either party shall fail to meet its
obligations hereunder within the time prescribed and such failure shall be caused or
materially contributed to by Force Majeure, such failure shall be deemed not to be a breach
of the obligations of such party hereunder, and neither party shall be entitled to
compensation from the other for any inconvenience, nuisance or discomfort thereby
occasioned, provided that the party claiming Force Majeure shall use reasonable diligence to
put itself in a position to carry out its obligations hereunder, and the time for
performance of such obligations shall be extended by the length of time by which such
performance is delayed by Force Majeure.

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	23.9.	 	Survival of Obligations
	 
	 	 	If either party is in default of any of its obligations under this Lease at the time this
Lease expires or is terminated:

	 	(a)	 	such party shall remain fully liable for the performance of such obligations;
and
	 
	 	(b)	 	all of the other party’s rights and remedies in respect of such failure shall
remain in full force and effect,

all of which shall be deemed to have survived such expiration or termination of this Lease.
Every indemnity, exclusion or release of liability and waiver of subrogation contained in
this Lease or in any of the Tenant or the Landlord’s insurance policies shall survive the
expiration or termination of this Lease.

	23.10.	 	No Option
	 
	 	 	The submission of this Lease for examination does not constitute a reservation of or option
to lease for the Premises and this Lease becomes effective as a lease only upon execution
and delivery thereof by the Landlord and the Tenant and the execution and delivery to the
Landlord by the Indemnifier, if any, of an indemnity agreement.

	23.11.	 	References to Statutes
	 
	 	 	Any reference to a statute in this Lease includes a reference to all regulations made
pursuant to such statute, all amendments made to such statute and regulations in force from
time to time and to any statute or regulation which may be passed and which has the effect
of supplementing or superseding such statute or regulations.

	23.12.	 	Counterparts and Execution by Fax
	 
	 	 	This Lease may be executed by the parties in separate counterparts each of which when so
executed and delivered to all of the parties shall be deemed to be and shall be read as a
single Lease among the parties. In addition, execution of this Lease by any of the parties
may be evidenced by way of a facsimile or other electronic transmission of such party’s
signature (which signature may be by separate counterpart), or a photocopy of such facsimile
or electronic transmission, and such facsimile or electronic signature, or photocopy of such
facsimile or electronic signature, shall be deemed to constitute the original signature of
such party to this Lease.

	23.13.	 	No Contra Proferentem
	 
	 	 	This Agreement has been negotiated and approved by the parties and, notwithstanding any rule
or maxim of law or construction to the contrary, any ambiguity or uncertainty will not be
construed against either of the parties by reason of the authorship of any of the provisions
of this Agreement.

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	23.14.	 	Binding Effect
	 
	 	 	All rights and liabilities herein given to, or imposed upon, the respective parties hereto
shall extend to and bind the several respective heirs, executors, administrators, successors
and permitted assigns of the said parties. No rights, however, shall enure to the benefit
of any Transferee of a party unless the Transfer to such Transferee has been effected in
accordance with the provisions of this Lease.

IN WITNESS WHEREOF the Landlord and the Tenant have executed this Lease as of the day and year
first above written.

	 	 	 	 	 
	PCI CROSS ROADS DEVELOPMENTS INC.	 	 
	 
	 	 	 	 
	Per:
	 	/s/ Andrew Grant
	 

	 	 

Authorized Signatory
	 	 
	 
	 
	 	President
	 

	 	 

Name & Title
	 	 
	 

	 	I have the authority to bind the corporation	 	 
	 
	 	 	 	 
	BROADWAY EQUITIES INC.	 	 
	 
	 	 	 	 
	Per:
	 	/s/ Robert J. Proud
	 

	 	 

Authorized Signatory
	 	 
	 
	 
	 	Executive Vice President and
Secretary
	 

	 	 

Name & Title
	 	 
	 

	 	I have the authority to bind the corporation	 	 
	 
	 	 	 	 
	LULULEMON ATHLETICA INC.	 	 
	 
	 	 	 	 
	Per:
	 	/s/ Christopher Ng
	 

	 	 

Authorized Signatory
	 	 
	 
	 	 	 	 
	 
	 

	 	 

Name & Title
	 	 
	 

	 	I/We have the authority to bind the corporation	 	 

-63-Exhibit 10.19

 

Exhibit 10.19

WAREHOUSE LEASE AGREEMENT

BROADWAY TECH CENTRE, 

VANCOUVER’S BUSINESS CAMPUS

VANCOUVER, B.C.

BETWEEN

2725312 CANADA INC.

(THE LANDLORD)

AND

LULULEMON ATHLETICA INC.

(THE TENANT)

 

 

WAREHOUSE LEASE AGREEMENT

BROADWAY TECH CENTRE,

VANCOUVER’S BUSINESS CAMPUS

VANCOUVER, B.C.

LEASE AGREEMENT made the 21st day of October, A.D. 2004.

2725312 CANADA INC.,

a body corporate, having its head office at

Suite 1800, Four Bentall Celifre

1055 Dunsmuir Street, in the City of Vancouver,

in the Province of British Columbia, V7X 1B1.

(hereinafter called the Landlord’)

OF THE FIRST PART

AND:

LULULEMON ATHLETICA INC., a body corporate,

having a head office address of 1945 McLean Avenue,

Vancouver, British Columbia V5N 3J7

(hereinafter called the “Tenant”)

OF THE SECOND PART

               WHEREAS the Landlord is the registered owner of that certain parcel of land and such buildings
situated on the same in the City of Vancouver, in the Province of British Columbia commonly known
as BROADWAY TECH CENTRE, VANCOUVER’S BUSINESS CAMPUS having legal descriptions as set out in
Schedule “A” to this agreement (the “Lands”); and

               WHEREAS the Tenant has agreed to lease space in a building on the Lands which will comprise
the area more particularly hereinafter set forth for the term and at the rental and subject to the
terms, covenants, conditions and agreements hereinafter contained;

               Witnesses that in consideration of the rents, covenants, agreements and conditions hereinafter
reserved and contained on the part of the Tenant to be respectively paid, kept, observed and
performed, the Landlord hereby demises and leases unto the Tenant the Premises pursuant to the
following terms and conditions:

 

 

ARTICLE 1

DEFINITIONS

In this Lease, in addition to further definitions, the following expressions shall have the
following meanings:

	1.1.	 	ADDITIONAL RENT
	 
	 	 	“Additional Rent” means payments which the Tenant is required to make to the Landlord
pursuant to this Lease in addition to Gross Rent.
	 
	1.2.	 	ADDITIONAL SERVICES
	 
	 	 	“Additional Services” means the services and supervision supplied by the Landlord from time
to time to the Tenant and which are additional to the normal operation and maintenance of
the Property and other services which the Landlord has agreed to supply pursuant to the
provisions of this Lease and to like provisions of other leases within the
Group of Buildings (defined below). For such Additional Services the Tenant shall pay a
reasonable charge together with a fifteen percent (15%) service fee to the Landlord or his
assigns. Any disputes shall be settled conclusively by the Landlord’s independent chartered
accountant.
	 
	1.3.	 	BUILDING, GROUP OF BUILDINGS AND SUB-GROUP OF BUILDINGS
	 
	 	 	“Building” means the building and related improvements in which the Premises are located,
which Building is outlined in red on the plan attached to this
agreement as Schedule “B”;
	 
	 	 	“Group of Buildings” means all buildings or related improvements now or hereafter built upon
the Lands such buildings presently as shown on the plan attached to this agreement as
Schedule “B”;
	 
	 	 	“Sub-group of Buildings” means buildings or related improvements within the Group of
Buildings as designated by the Landlord from time to time as separate from other buildings
in the Group of Buildings for the purposes of calculating Operating Costs (defined below)
for that Sub-group of Buildings chargeable to the Tenant as Additional Rent.
	 
	1.4.	 	COMMON AREAS
	 
	 	 	“Common Areas” means all areas of the Property, as may be designated by the Landlord from
time to time, including without limitation, corridors, electrical rooms, and other
facilities for the use of all tenants.
	 
	1.5.	 	INSURED DAMAGE
	 
	 	 	“Insured Damage” means the part of any damage occurring to the Premises for which the
Landlord is responsible of which the cost of repair is actually recoverable by the

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	 	 	Landlord
under a policy of insurance in respect of fire and other perils from time to time effected
by the Landlord.
	 
	1.6.	 	LANDS
	 
	 	 	“Lands” means those lands described in Schedule “A” to this Agreement
	 
	1.7.	 	LANDLORD’S ARCHITECT
	 
	 	 	“Landlord’s Architect” means the independent architect, or engineer or quantity surveyor
selected by the Landlord from time to time for the purposes of making determinations
hereunder.
	 
	1.8.	 	LEASE
	 
	 	 	“Lease”, “hereof”, “herein”, “hereunder” and similar expressions mean or refer to this Lease
and includes all other Schedules attached hereto, and any amendments thereof made from time
to time by the parties in writing.
	 
	1.9.	 	LEASEHOLD IMPROVEMENTS
	 
	 	 	“Leasehold Improvements’ means all fixtures, improvements, installations, alterations and
additions from time to time made, erected or installed by or on behalf of the Tenant or any
previous tenant of the Premises with the exception of trade fixtures or furniture and
equipment not of the nature of fixtures, and includes all wall-to-wall carpeting (whether or
not supplied by the Landlord), and all window coverings.
	 
	1.10.	 	NORMAL BUSINESS HOURS
	 
	 	 	“Normal Business Hours” means the hours from 8:00 am. to 6:00 p.m., Monday to Friday,
inclusive, and 8:00 a.m. to 1:00 p.m. Saturday of each week, statutory holidays excepted.
	 
	1.11.	 	PREMISES
	 
	 	 	“Premises” means that portion of the main floor Building shown outlined in red on the Plan
attached to this agreement as Schedule “C” hereto. The exterior face of the Building is
expressly excluded from the Premises and reserved to the Landlord.
	 
	1.12.	 	PRIME RATE
	 
	 	 	“Prime Rate” means that rate of interest announced from time to time by the main branch in
the city in which the Building us situate, of the Toronto-Dominion Bank, as a reference rate
then in effect for determining interest rates on Canadian Dollar denominated commercial
loans made in Canada,

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	1.13.	 	PROPERTY
	 
	 	 	“Property” means the Lands and Group of Buildings referred to herein and all other
improvements on the Lands as arc from time to time existing thereon.
	 
	1.14.	 	PROPORTIONATE SHARE
	 
	 	 	“Proportionate Share” means the percentage of the Tenant’s Rentable Area within the total
rentable area of the Building.
	 
	1.15.	 	RENT
	 
	 	 	“Rent” means the Gross Rent and the Additional Rent.
	 
	1.16.	 	RENTABLE AREA
	 
	 	 	“Rentable Area” as further defined herein shall refer to all floor area measured irons the
predominant building wall in the case of exterior walls (without deduction for vestibules,
entrances or other recessed areas inside the building line) and to the centre of partitions
that separate the Premises from adjoining premises or Common Areas (without deduction for
columns, ducts, projections or other structural elements necessary to the Building), to
which shall be added a pro rata share of the Common Areas as defined above within the
Building in which the Rentable Area is located.
	 
	1.17.	 	TERM
	 
	 	 	“Term” means the term of the Lease set forth in Article 3.1 and any extension thereof and
any period of permitted overholding

ARTICLE 2

PREMISES AND INTENT

	2.1.	 	PREMISES
	 
	 	 	The Rentable Area of the Premises known as Main Floor, 2955 Hebb Street, Vancouver, B.C. is
approximately thirty two thousand four hundred (32,400) square feet subject to final
determination by the Landlord’s Architect. the measurement prepared by the Landlord’s
Architect shall be final and binding upon the parties hereto as to such Rentable Area.
	 
	2.2.	 	INTENT
	 
	 	 	The Landlord and the Tenant acknowledges and agrees that this Lease shall be a completely
gross lease for the Tenant except as expressly herein set out and the Tenant shall not be
responsible during the Term hereof for any costs, charges, expenses and outlays of any
nature whatsoever arising from or relating to the Premises, or the contents thereof, except
as expressly herein set out, and without limiting the generality of the foregoing, the
Landlord shall be liable for the payment of all charges, impositions and

-4-

 

	 	 	expenses of every
nature and kind relating to the Premises and the contents thereof; except as expressly
herein set out including Operating Costs and Taxes as defined herein.

ARTICLE 3

TERM

	3.1.	 	TERM
	 
	 	 	The Term of this Lease shall be for three (3) years and shall commence on the 1st day of
February, 2005 (the “Commencement Date.”) In the event the Premises should not be ready for
occupancy by Commencement Date for any reason, the Commencement Date shall remain that as
aforesaid, however the Landlord may extend the date of delivery and in such a case agrees to
credit Rent to the Tenant calculated on a per diem basis for each day that the Tenant is not
in occupation until the date that the Premises are ready for occupation, the Tenant begins
Leasehold Improvements or otherwise occupies the
Premises. The Landlord shall not be liable or responsible for any claims, damages or
liabilities in connection therewith or by reason thereof.

ARTICLE 4

DEPOSIT AND RENT

	4.1.	 	SECURITY DEPOSIT
	 
	 	 	Prior to or concurrently with the execution and return of this Lease by the Tenant, the
Tenant shall pay to the Landlord’s agent Bentall Real Estate Services Limited Partnership
the sum of Forty Three Thousand Three hundred Thirty Five Dollars ($43,335.00) as a deposit.
The deposit is comprised of the first month’s Gross Rent plus goods and services tax being
Twenty One Thousand Six Hundred Sixty Seven Dollars and Fifty Cents ($21,667.50) and Twenty
One Thousand Six Hundred Sixty Seven Dollars and Fifty Cents ($21,667.50) as a further
deposit to the Landlord to stand as security for the payment by Tenant of any and all
present and future debts and liabilities of the Tenant to the Landlord in connection with
its obligations arising under this Lease for the term of the Lease (the “Debts, Liabilities
and Obligations”). The agent of the Landlord is hereby authorized by the Tenant to deliver
such deposit to the Landlord and need not hold it in trust as stakeholder. The Landlord
shall not be required to keep the deposit separate from its general funds. In the event the
Landlord shall from time to time apply any or all of such deposit towards payment of the
Debts, Liabilities and Obligations, the Tenant shall, from time to time at the request of
the Landlord, forthwith pay to the Landlord such sum to bring the amount of the said deposit
up to its original amount. In the event of the Landlord disposing of its interest in this
Lease, the Landlord shall credit the deposit to its successor and thereupon shall have no
liability to the Tenant to repay the security deposit to the Tenant. If the Tenant shall
from time to time fail to observe, perform and pay its Debts, Liabilities and Obligations in
accordance with the terms of this Lease, the Tenant hereby authorizes the landlord to apply
all or part, as the case may be of such security deposit to rectify such failure. Subject
to the foregoing and to the Tenant not being in default under this Lease, the Landlord shall
repay the security deposit to the Tenant without interest within ninety (90) days at the end
of the Term or sooner termination of

-5-

 

	 	 	the Lease provided that all Debts, Liabilities and
Obligations of the Tenant to the Landlord are paid and performed in full, failing which the
Landlord may, on notice to the Tenant, elect to retain the security deposit and to apply it
in reduction of the Debts, Liabilities and Obligations and the Tenant shall remain fully
liable to the Landlord for payment and performance of the remaining Debts, Liabilities and
Obligations. Notwithstanding the foregoing, if the Tenant fails to execute and deliver this
Lease, in a mutually agreeable form, within ten (10) days of receipt from the Landlord or
fails to take possession of the Premises by the Commencement Date, the Landlord may, at its
sole option, terminate this Lease, whereupon the deposit shall be retained by the Landlord
as liquidated damages on account of the Tenant’s default and not as a penalty.
	 
	 	 	The deposit includes goods and services tax of seven percent (7%).
	 
	4.2.	 	GROSS RENT
	 
	 	 	From and after Commencement Date, the Tenant shall pay a gross annual rent (herein called
“Gross Rent”) in the sum of two hundred forty three thousand dollars ($243,000.00) per year
calculated on the basis of seven dollars and fifty cents ($7.50) per square foot of Rentable
Area of the Premises per annum. Such Gross Rent, together with any adjustment of rent
provided for herein then in effect, shall be due and payable in twelve (12) equal
installments on the first day of each calendar month during the initial Term of this Lease
and any extensions or renewals thereof, and the Tenant hereby agrees to so pay such Gross
Rent to the Landlord at the Landlord’s address as provided herein (or such other address as
may be designated by the Landlord from time to time) monthly in advance without demand. If
the Term of this Lease as heretofore established commences on other than the first day of a
month or terminates on other than the last day of a month, then the installment or
installments so prorated shall be paid in advance. Goods and services tax of seven percent
(7%) shall be added to any Gross Rent amounts payable.
	 
	4.3.	 	ADDITIONAL RENT
	 
	 	 	From and after Commencement Date, the Tenant shall pay as Additional Rent the costs of
janitorial and garbage services and all utilities consumed within the Premises, including
electricity, gas and water and all other sums to be paid by the Tenant hereunder, and the
Landlord shall have the same remedies for default for the payment of Additional Rent as are
available to the Landlord in the case of default in the payment of Gross Rent. All
Additional Rent amounts shall include goods and services tax of seven percent (7%).
	 
	 	 	It is agreed between the Landlord and the Tenant that the electricity utility consumption
will not be separately metered. It is further agreed between the Landlord and the Tenant
that the Tenant’s electricity consumption will be calculated on the basis of the fixture and
plug load count multiplied by the hours of operation multiplied by the prevailing market
rate of cost per kilowatt hour, which prevailing market rate may change from time to time.
Such total amount will be averaged on an annual basis and charged monthly.

-6-

 

	 	 	To measure gas and water consumed within the Premises, the Landlord shall install at its
expense a separate meter. The Tenant shall pay directly to the Landlord, as invoiced, all
amounts associated with the gas and water consumed within the Premises.
	 
	4.4.	 	DIRECT ASSESSMENT
	 
	 	 	The Tenant covenants to pay promptly when billed, all taxes, rates, duties or charges levied
imposed or assessed on its personal property, its use or occupation of the Premises, the
business carried on therein, all fixtures, equipment, machinery of the Tenant therein or
from time to time levied, imposed or assessed in the future in lieu thereof; and Taxes
levied, imposed or assessed on all Leasehold Improvements in the Premises.
	 
	4.5.	 	LANDLORD TAX OBLIGATION
	 
	 	 	The Landlord covenants with the Tenant, subject to the provisions of Articles 4.3 and 4.7 to
pay the Taxes promptly when due. The Landlord shall have the right to appeal any taxes
assessed or levied against the Property or the Premises but shall not be obligated to so do.
	 
	4.6.	 	AMOUNTS PAST DUE
	 
	 	 	If the Tenant fails to pay, when the same is due and payable, any Gross Rent, any Additional
Rent or any other amounts payable by the Tenant under this Lease, such unpaid amounts shall
bear interest from the due date thereof to the date of payment at a rate per annum which is
six (6) percentage points above the Prime Rate.
	 
	4.7.	 	GST, SALES TAX AND VALUE-ADDED TAX
	 
	 	 	Notwithstanding anything herein contained to the contrary, the Tenant shall pay to the
Landlord an amount equal to any and all goods and services taxes, sales taxes, value-added
taxes, business transfer taxes, or any other taxes imposed on the Landlord with respect to
Rent payable by the Tenant to the Landlord under this Lease, or in respect of the rental of
space under this Lease, whether characterized as a goods and services tax, sales tax,
value-added tax, business transfer tax, or otherwise (herein called “Sales Tax”), it being
the intention of the parties that Landlord shall be fully reimbursed by the Tenant with
respect to any and all Sales Tax at the full tax rate applicable from time to time in
respect of the Rent or the rental of space, without reference to any tax credits available
to the Landlord. The amount of the Sales Tax so payable by the Tenant shall be calculated
by the Landlord in accordance with the applicable legislation and shall be paid to the
Landlord at the same time as the amounts to which such Sales Tax apply are payable to the
Landlord under the terms of this Lease or upon demand at such other time or times as the
Landlord from time to time determines. Despite any other section or clause in this Lease,
the amount payable by the Tenant under this paragraph shall be deemed not to be Rent, but
the Landlord shall have all of the same remedies for and recovery of such amount as it has
for recovery of Gross Rent under this Lease.

-7-

 

	4.8.	 	WAIVER OF CLAIM AND SETOFF
	 
	 	 	The Tenant hereby waives and renounces any and all existing and future claim, counterclaims,
setoffs and compensation against any Rent and agrees to pay such Rent regardless of any
claim, setoff or compensation which may be asserted by the Tenant or on its behalf.
	 
	4.9.	 	RECEIPTS, ETC.
	 
	 	 	Whenever requested by the Landlord the Tenant shall deliver to it receipts for payments of
all taxes, rates, duties, levies and assessments payable by the Tenant pursuant to Section
4.7(a) hereof and furnish such other information in connection therewith as the Landlord may
reasonably require.

ARTICLE 5

TENANT’S COVENANTS

The Tenant covenants with the Landlord as follows:

	5.1.	 	OCCUPANCY
	 
	 	 	From the date that the Premises are ready for occupation, and throughout the Term to
continuously occupy the Premises and to carry on therein the business comprising the
Permitted Use subject to the terms herein.
	 
	5.2.	 	RENT
	 
	 	 	To pay the Rent hereby reserved, and all other sums payable hereunder to the Landlord,
promptly on the days and at the times and in the manner specified herein, without demand,
deduction or set-off.
	 
	5.3.	 	PERMITTED USE
	 
	 	 	To use the Premises only for the purpose of storing and the distribution of clothing, fabric
and store fixtures, and not to use or permit to be used the Premises or any part thereof for
any other purpose or business whatsoever without the written consent of the Landlord.
	 
	 	 	Notwithstanding anything to the contrary herein contained, but subject to the Tenant:

	 	(a)	 	being in occupancy and not in default; and
	 
	 	(b)	 	obtaining and submitting copies to the Landlord, at least thirty (30) days
prior to December 22 in each year of the Term, of all necessary licenses, permits and
approvals front the City of Vancouver and any other authority having jurisdiction over
the temporary business to be conducted from the Premises (as hereinafter described),

-8-

 

then the Tenant shall be permitted to conduct the retail sale of its merchandise from the
Premises during the period December 22 to December 26 in each year of the Term.

	5.4.	 	WORK AND NUISANCE
	 
	 	 	Not to commit or permit any waste or damage to the Premises including the Leasehold
Improvements and trade fixtures therein, any nuisance therein or any use or manner of use
causing annoyance to other tenants and occupants of the Group of Buildings and not to use or
permit to be used any part of the Premises for any trade or business which is, in the
opinion of the Landlord, dangerous, noxious or offensive; not cause or suffer or permit any
oil or grease or any harmful, objectionable, dangerous, poisonous or explosive matter or
substance to be discharged into the Premises or the Property; and not to place any objects
on or otherwise howsoever obstruct the heating or air conditioning vents within the
Premises.
	 
	5.5.	 	FLOOR LOADS
	 
	 	 	Not to place a load upon any portion of any floor of the Premises which exceeds the floor
load which the area of such floor being loaded was designed to carry having regard to the
loading of adjacent areas and that which is allowed by code. The Landlord reserves the
right to prescribe the weight and position of all safes and heavy installation which the
Tenant wishes to place in the Premises, so as to distribute properly the weight thereof and
the Tenant shall pay for all costs incurred by the Landlord and the Landlord’s Architect in
making such assessment. The Tenant shall repair any damage done in the Premises or the
Building by reason of any excessive weight placed in the Premises or excessive vibration
caused in the Premises.
	 
	5.6.	 	INSURANCE RISKS
	 
	 	 	Not to do, omit to do or permit to be done upon the Premises anything which would or might
cause Landlord’s cost of insurance (whether fire, liability or other) to be increased (and,
without waiving the foregoing prohibition the Landlord may demand, and the Tenant shall pay
to the Landlord upon demand, the amount of any such increase of cost caused by anything so
done or omitted or permitted to be done or omitted) or which would or might cause any policy
of insurance to be subject to cancellation or refusal of placement or renewal.
	 
	5.7.	 	NOXIOUS FUMES, ODORS AND ENVIRONMENTAL MATTERS
	 
	 	 	To use the Premises so that noxious or objectionable fumes, vapors and odors will not occur
beyond the extent to which they are discharged or eliminated by means of the flues and other
devices provided in the Building by the Landlord and shall prevent any such noxious or
objectionable fumes, vapors and odors from entering into the air conditioning or being
discharged into other vents or flues of the Building or annoying any of the tenants in the
Building. Any discharge of fumes, vapors and odors shall be permitted only during such
period or periods, to such extent, in such conditions and in such manner as directed by the
Landlord from time to time.

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	 	 	The Tenant covenants with the Landlord that it will not bring upon, permit or use any
substance, defined or designated as a hazardous or toxic waste, hazardous or toxic material,
a hazardous, toxic or radioactive substance or other similar term, by any applicable
federal, provincial, municipal or local statute, regulation, by-law or ordinance now or
hereafter in effect, or any substance or materials, the use or disposition of which is
regulated by any such statute, regulation, by-law or ordinance (hereinafter called “Toxic
Materials”) in, on or under the Premises or Property and the Tenant will promptly comply
with all statutes, regulations, by-laws and ordinances, and with all orders, decrees or
judgments of governmental authorities or courts having jurisdiction, relating to the use,
collection, storage, treatment, control, removal or cleanup of Toxic Materials in, on, or
tinder the Premises or Property if the Premises or Property become contaminated with Toxic
Materials as a result of operations or activities on the Premises or Property, or
incorporated in any improvements thereon.
	 
	 	 	The Landlord may, but shall not be obliged to, enter upon the Premises and the Property and
take such actions and incur such costs and expenses to effect such compliance as it deems
advisable and the Tenant shall reimburse the Landlord on demand for the fill amount of all
costs and expenses incurred by the Landlord in connection with such compliance activities.
The Tenant will indemnify and hold the Landlord harmless against any and all losses,
damages, costs, expenses and liabilities suffered or incurred by the Landlord by reason of a
breach of any of the representations, warranties and covenants aforesaid which indemnity
shall survive any release or discharge of this Lease.
	 
	 	 	The Landlord represents and warrants to the Tenant, with the intent that such representation
and warranty is true as of the date the Offer to Lease was executed by the Landlord, being
October 4, 2004, to the best of the Landlord’s knowledge and information, the Building does
not contain any Toxic Materials. If, notwithstanding the foregoing, it is discovered that
the Building contains Toxic Materials, and that the same were not brought thereon by the
Tenant or those for whom the Tenant is in law responsible, then notwithstanding anything to
the contrary contained herein the Landlord shall be responsible for removal and disposal of
the same, such removal and disposal to be performed in conformity with all applicable
statutes, regulations, by-laws and ordinances, and with all orders, decrees or judgments of
governmental authorities or courts having jurisdiction, and at no cost to the Tenant.
	 
	5.8.	 	CONDITION
	 
	 	 	Not to permit, in the opinion of the Landlord, the Premises to become untidy, unsightly,
offensive or hazardous or permit unreasonable quantities of waste or refuse to accumulate
therein. The Tenant shall store all such garbage, refuse or other objectionable material
(including commercial garbage containers) outside the Premises in a neat and orderly fashion
and dispose of such garbage on a regular basis.
	 
	5.9.	 	BY-LAWS
	 
	 	 	To comply at its own expense with all municipal, federal, provincial, sanitary, fire,
building and safety statutes, laws, by-laws, regulations, ordinances, orders and

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	 	 	requirements pertaining to the operation and use of the Premises, the condition of the
Leasehold Improvements, trade fixtures, furniture and equipment. installed by the Tenant
therein and the making by the Tenant of any repairs, changes or improvements therein or any
other matter pertaining to the Premises or the Tenant as well as all rules and regulations
of the Canadian Board of Fire Underwriters, or any successor body and with the requirements
of all insurance companies having policies of any kind whatsoever in effect covering the
Building which are communicated to the Tenant.
	 
	5.10.	 	RULES AND REGULATIONS
	 
	 	 	To observe, and to cause its employees, invitees and all others over whom the Tenant can
reasonably be expected to exercise control to observe the Rules and Regulations attached as
Schedule “D” hereto, and such further and other reasonable Rules and Regulations and
amendments and changes therein as may hereafter be made by the Landlord of which
notice in writing shall be given to the Tenant and all such Rules and Regulations shall be
deemed to be incorporated into and form part of this Lease. For the enforcement of such
Rules and Regulations, the Landlord shall have available to it all remedies in this Lease
provided for a breach thereof and all legal remedies whether or not provided for in this
Lease, both at law and in equity. The Landlord shall not be responsible or liable to the
Tenant for the non-observance or violation by any other tenant of any such Rules and
Regulations or the non-enforcement as against other tenants of such Rules and Regulations or
any loss or damage arising out of the same,
	 
	5.11.	 	SURRENDER, OVERHOLDING
	 
	 	 	That upon the expiration or other termination of the Term of this Lease, the Tenant shall
quit and surrender the Premises in vacant and clean possession and in good order, repair,
decoration, and condition (subject to the exceptions to the Tenant’s repair obligations
contained in Article 8.2(a) hereof) and shall remove all its property therefrom, except as
otherwise provided in this Lease. The Tenant’s obligation to observe or perform this
covenant shall survive the expiration or other termination of the Term of this Lease. If
the Tenant shall continue to occupy the Premises after the expiration of this Lease without
further written agreement and without objection by the Landlord, the Tenant shall be a
month-to-month tenant at double the Gross Rent provided for herein (plus Additional Rent)
and (except as to length of tenancy) on and subject to the provisions and conditions herein
set out.
	 
	5.12.	 	SIGNS AND ADVERTISING
	 
	 	 	The Tenant shall be entitled to be included on the lobby directory signage and may install
identification signage on the door to the Premises.
	 
	 	 	The design and lettering of such sign on the door of the Premises and the manner and timing
of the installation thereof shall comply with the Landlord’s signage policy for the Building
and shall be subject to the Landlord’s approval. On the expiration or sooner termination of
the Term, such sign or signs shall be removed by the Tenant at its sole cost, risk and
expense and any damage caused by such removal shall forthwith be

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	 	 	repaired by the Tenant.
Except as aforesaid, the Tenant shall not paint, display, inscribe, place or affix any other
sign, symbol, notice or lettering of any kind anywhere outside the Premises (whether on the
outside or inside of the Building) or within the Premises so as to be visible from the
outside of the Premises.
	 
	5.13.	 	INSPECTION AND ACCESS
	 
	 	 	To permit the Landlord at any time and from time to time to enter and to have its authorized
agents, employees and contractors enter the Premises for the purpose of (i) inspection,
maintenance, making repairs, alterations or improvements to the Premises, adjoining premises
or the Building, or to have access to or make changes in utilities and services (including
underfloor and overhead ducts, air conditioning, heating, plumbing, electrical and telephone
facilities and access panels, all of which the Tenant agrees not to obstruct) and (ii) to
determine the electric light and power consumption by the Tenant in
the Premises and the Tenant shall provide free and unhampered access for such purposes, and
shall not be entitled to compensation for any inconvenience, nuisance and discomfort or loss
caused thereby, but the Landlord in exercising its rights hereunder shall proceed to the
extent reasonably possible so as to minimize interference with the Tenant’s use and
enjoyment of the Premises.
	 
	5.14.	 	EXHIBITING PREMISES
	 
	 	 	To allow the Landlord or its agents acting reasonably to enter and exhibit the Premises to
prospective tenants or purchasers of the Property or part thereof, the Building or the
Premises during Normal Business Hours during the Term hereof, and place upon the Premises a
notice of reasonable dimensions and reasonably placed stating that said Property or the
Premises are for sale or for let, which notice the Tenant shall not remove or obscure or
permit to be removed or obscured.
	 
	5.15.	 	NAME OF BUILDING
	 
	 	 	Not to refer to the Building by any name other than that designated from time to time by the
Landlord, nor to use such name for any purpose other than that of the business address of
the Tenant.
	 
	5.16.	 	ACCEPTANCE OF PREMISES
	 
	 	 	To examine the Premises before taking possession and the taking of possession shall be
conclusive evidence as against the Tenant that at the time thereof the Premises were in good
order and satisfactory condition and that all alterations, remodeling, decorating and
installation of equipment and fixtures required to be done by the Landlord have been
satisfactorily completed save only for such list in writing prepared by the Tenant during a
joint inspection by the Landlord and Tenant at the time of taking such possession. Any
dispute as to any aspects of the Landlord’s Work or completion or adequacy of the Building,
the Premises or any part thereof shall be determined by the Landlord’s Architect.

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	5.17.	 	NO AUCTION
	 
	 	 	The Tenant shall not at any time during the Term of this Lease, permit any sale by auction
to be held within the Premises or upon the Property or any part thereof.
	 
	5.18.	 	YARD, ENTRANCE, STAIRWAYS, PLATFORM, LOADING DOCK AND PARKING OBSTRUCTION
	 
	 	 	The Tenant shall, at its own expense, keep all entrance ways and all steps and platforms,
including loading docks, thereto clear of all snow, ice and debris. In the event that the
Tenant fails to clear such areas resulting in claim of injury or other damages to third
parties, other tenants or customers, such Tenant indemnifies and saves the Landlord harmless
for any such claim or damages.
	 
	 	 	The Tenant shall not place, nor suffer or permit its customers, invitees, licensees, agents
or servants to place any materials, including trucks, trailers, inventory, supplies,
containers or other storage devises, and debris of any kind (“Materials”), in the yard or
yards of the Property or the driveways, parking or Common Areas thereof and shall cause no
obstruction to vehicles operating on the said driveways, loading bays, parking or Common
Areas.
	 
	 	 	Trucks, Trailers, containers and other storage devices shall not be used for additional
storage facilities for the Tenant in the Common Areas, driveways, parking, loading or yard
areas. Loading areas are strictly for loading and unloading only. Any Materials deemed by
the Landlord to be obstructing the above mentioned areas shall be removed by the Landlord at
the Tenant’s sole expense. Prior to the removal of such Materials, the Landlord shall give
the Tenant twenty-four hours notice of the obstruction. In the event that Materials are in
the sole discretion of the Landlord obstructing an emergency response area or are placed in
a way hazardous to the other tenants or other users of the driveways, loading bays, parking
and Common Areas, the Landlord shall not be required to give any notice of such obstruction
and may remove the same immediately upon discovery.

ARTICLE 6

LANDLORD’S COVENANTS

The Landlord covenants with the Tenant as follows:

	6.1.	 	QUIET ENJOYMENT
	 
	 	 	That the Tenant paying the Rent hereby reserved at the times and in the manner aforesaid and
observing and performing each and every of the covenants, conditions, restrictions and
stipulations by the Tenant to be observed or performed shall and may peaceably and quietly
possess and enjoy the Premises for the Term hereby granted without any interruption from the
Landlord or any other person lawfully claiming by, through, or under it.

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	6.2.	 	LICENSE OVER COMMON AREAS
	 
	 	 	The Landlord hereby grants to the Tenant, its agents, employees, invitees and other persons
transacting business with it, during Normal Business Hours in common with all others
entitled thereto, a license to have the use of the Lands Common Areas as designated from
time to time by the Landlord, including without limitation the entrance to the Building,
stairways, corridors, loading docks, and lavatories; provided, however, that such use shall
be subject to all other provisions contained in this Lease and to the Landlord’s Rules and
Regulations referred to in Schedule “D” attached hereto, provided that outside of such
Normal Business Hours, the Tenant, its agents, employees, invitees and other persons
transacting business with it shall only have access in accordance with the standard security
procedures in effect for the Building.

ARTICLE 7

UTILITIES

The Landlord and Tenant further covenant and agree as follows:

	7.1.	 	UTILITIES
	 
	 	 	Subject to Article 4.3, the Tenant shall pay for the cost of all utilities provided for its
exclusive use in the Premises, including without restricting the generality of the foregoing
gas, water, electricity, telephone and communication service charges and/or rates relating
to services and/or utilities provided for the exclusive use of the Tenant in respect of the
Tenant’s occupation of the Premises and operation of its business carried on therein or
therefrom, including laboratory work and any special systems servicing its own computers or
any other machinery.
	 
	7.2.	 	EXCESS USE
	 
	 	 	Where the Tenant does not pay directly for utilities, the Landlord may from time to time
determine the Tenant’s utility consumption in the Premises upon whatever reasonable basis
may be selected by it. If the Landlord determines that the Tenant’s consumption is
disproportionate to the consumption of other tenants in the Building, the Landlord may
require the Tenant to install at the Tenant’s expense a meter for measurement or checking of
the Tenant’s consumption; and in that event the Tenant shall pay to the Landlord (or, as
required by law, directly to the supplier of the utilities) as and when due from time to
time any and all charges for such consumption which is disproportionate as aforesaid and
which the Landlord has required to be metered. The Landlord’s determination shall be
verified by an engineer selected by the Landlord (who may be an employee of the Landlord)
and being so verified shall be binding on the parties hereto.
	 
	7.3.	 	ENERGY CONSERVATION
	 
	 	 	The Tenant covenants with the Landlord:

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	 	(a)	 	that the Tenant will cooperate with the Landlord in the conservation of all
forms of energy in the Building, including without limitation the Premises, except
where the Tenant controls and pays for electrical, gas or other forms of energy
directly.
	 
	 	(b)	 	that the Tenant will comply with all Laws, by-laws, regulations and orders
relating to the conservation of energy and affecting the Premises or the Building;
	 
	 	(c)	 	that, if not an exception under (a), the Tenant will at its own cost and
expense comply with all reasonable requests and demands of the Landlord made with a
view to such energy conservation provided that such requests are made in accordance
with good management practice and would be made by a prudent owner of like property of
like age.

The
Landlord shall not be liable to the Tenant in any way for any loss, costs, damages or
expenses whether direct or consequential paid, suffered or incurred by the Tenant as a
result of any reduction in the services provided by the Landlord to the Tenant or to the
Building as a result of the Landlord’s compliance with such laws, by-laws, regulations or
orders.

ARTICLE 8

REPAIR, DAMAGE AND DESTRUCTION AND EXPROPRIATION

The landlord end Tenant further covenant and agree as follows:

	8.1.	 	LANDLORD’S REPAIRS
	 
	 	 	The Landlord covenants with the Tenant subject to Article 8.3(b) and Article 11.3 hereof and
except for reasonable wear and tear and damage not covered by insurance normally maintained
by prudent landlords, to repair and maintain the structural elements of the Building.
	 
	 	 	The Landlord shall provide and install to the Premises at the Landlord’s expense, in
accordance with building standards and in coordination with the Tenant’s Fixturing Period
(as defined in Article 15.11(a)), the following work (the “Landlord’s Work”):

	 	(a)	 	demising walls in the approximate location indicated on Schedule “C” hereto;
	 
	 	(b)	 	exit corridors and doors in accordance with applicable municipal building
codes;
	 
	 	(c)	 	ensure that the existing metal halide light fixtures within the Premises are in
proper working order;
	 
	 	(d)	 	to provide access to male and female washrooms in the location indicated on
Schedule “C”, and to ensure that such washrooms are in proper working order;
	 
	 	(e)	 	provide access to three (3) existing loading bays, as indicated on Schedule
“C”, and ensure that the existing loading doors and levelers for such loading bays are
in proper working order; and

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	 	(f)	 	ensure that the existing roof, plumbing, electrical, mechanical, including
heating and ventilating systems and structural components Of the Premises are in proper
working order and good repair from the Commencement Date to the expiry of the initial
Term.

The Landlord makes no representation or warranty with respect to the usability of any existing
phone lines and/or data cables within the Premises. The tenant, at its expense, shall be
responsible for all modifications required to reuse such phone lines and/or data cables.

	8.2.	 	TENANT’S REPAIRS
	 
	 	 	The Tenant. covenants with the Landlord:

	 	(a)	 	Subject to Article 8.3(b), to keep in a good and substantial state of repair
and decoration to at least the standard existing at the beginning of the Term, the
Premises including all Leasehold Improvements and all trade fixtures therein and all
glass therein:
	 
	 	(b)	 	that the Landlord may from time to time enter and view the state of repair, and
that the Tenant will repair according to notice in writing;
	 
	 	(c)	 	that if any part of the Building including without limitation the structure or
the structural elements of the Building, or the systems for the provision of utilities
or services fall into disrepair, or become damaged or destroyed through the negligence
or misuse of the Tenant or of its employees, invitees or others over whom the Tenant
can reasonably be expected to exercise control, the expense of repairs or replacements
thereto necessitated thereby, other than to the extent the same is recovered under a
policy of insurance required to be carried by the Landlord hereunder, shall be paid by
the Tenant at the Landlord’s actual cost plus fifteen percent (15%) thereof; and
	 
	 	(d)	 	that the Tenant wilt notify the Landlord immediately upon the Tenant becoming
aware of any defect in the Premises or of any other condition which may cause damage to
the Premises or the Building.

	8.3.	 	ABATEMENT AND TERMINATION
	 
	 	 	It is agreed between the Landlord and the Tenant that:

	 	(a)	 	In the event of partial destruction (as hereinafter defined) of the Premises by
fire, the elements or other cause or casualty, then in such event, it the destruction
is such, in the opinion of the Landlord’s Architect that the Premises cannot be used
for the Tenant’s business until repaired, the Gross Rent and Additional Rent shall
abate as hereinafter provided to the extent that the Landlord’s Insurance indemnifies
the Landlord.

	 	(i)	 	If the destruction is such that, in the opinion of the
Landlord’s Architect, the Premises may be partially used for the Tenant’s
business while the

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	 	 	 	repairs tire being made, then the Gross Rent and Additional
Rent shall abate in the proportion that the part of the Premises rendered
unusable bears to the whole of the Premises, PROVIDED ALWAYS that if the part
rendered unusable exceeds one-half (1/2) of the Rentable Area of the Premises
there shall be a total abatement of Gross Rent and Additional Rent until the
repairs have been made unless the Tenant, with the permission of the Landlord,
in fact uses the undamaged part in which case the Tenant shall pay
proportionate Gross Rent and Additional Rent for the part so used (being in the
sense proportion to the Gross Rent and Additional Rent, as the area in square
feet of the part of the Premises being used bears to the Rentable Area of the
Premises). “Partial destruction” shall mean any damage to the Premises less
that total destruction (as hereinafter defined), but which renders all or any
part of the Premises temporarily unfit for use by the Tenant for the Tenant’s
business. A certificate of the Landlord’s Architect as to whether the whole or
a part of the Premises is rendered unusable, and certifying the extent of the
part rendered unusable, shall be binding and conclusive upon
both Landlord and Tenant for the purposes hereof. If the partial
destruction is repaired within fifteen (15) days after the date of
destruction there shall be no abatement of Rent.
	 
	 	(ii)	 	in the event of partial destruction (as hereinbefore defined)
the Landlord shall, to the extent of proceeds of insurance it receives, repair
and restore the Premises according to the nature of the damage with all
reasonable diligence, except for improvements installed by or on behalf of the
Tenant which the Tenant shall repair and restore, in both cases, to
substantially the condition the Premises and those improvements were in
immediately before such destruction occurred, but to the extent that any part
of the Premises is not reasonably capable of use by reason of damage which the
Tenant is obligated to repair hereunder, any abatement of Rent to which the
Tenant is otherwise entitled hereunder shall not extend later than the time by
which, in the reasonable opinion of the Landlord, repairs by the Tenant ought
to have been completed with reasonable diligence. To the extent the landlord
receives proceeds of insurance respecting damage the Tennis! is to repair, the
Landlord will turn over those proceeds upon the Tenant completing such repair.

Notwithstanding anything herein otherwise contained, there shall be no abatement of Rent if
the damage is caused by willful act or neglect of the Tenant unless the Landlord receives
rent loss insurance proceeds with respect to such damage, and then only to the extent that
such insurance proceeds covers the loss of Rent.

	 	(b)	 	In the event of the total destruction (as hereinafter defined) of the Premises
by fire, the elements or other cause or casualty, then in such event the Landlord or
the Tenant may at its option, to be exercised within sixty (60) days of the date of
such total destruction, terminate this Lease effective from the date when such
destruction occurs. Upon the Landlord or the Tenant exercising such option the

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	 	 	 	Tenant
shall immediately surrender the Premises and all its interest therein to the Landlord
and the Tenant shall pay Gross Rent and Additional Rent to the time of such destruction
and the Landlord may re-enter and repossess the Premises discharged of this Lease. Upon
such termination the Tenant shall remain liable to the Landlord for all sums accrued
due to the Landlord pursuant to the terms hereof to the date of such destruction. If
the Landlord or the Tenant do not exercise its option of termination the provisions of
repair and restoration set forth in Article 8.3(a)(ii) shall apply. “Total destruction”
shall mean such damage to the Premises that renders same unfit for use by the Tenant
(or the Tenant’s business and which cannot reasonably be repaired within six (6) months
of the date of the destruction to the state wherein the Tenant could use substantially
all of the Premises for its business. A certificate of the Landlord’s Architect
certifying that “total destruction” has occurred shall be binding and conclusive upon
both Landlord and Tenant for the purposes hereof.

	 	(i)	 	Notwithstanding the foregoing provisions concerning total or
partial destruction of the Premises, in the event of total or partial
destruction of
the Building of which the Premises form a part (and whether or not the
Premises are destroyed) to such a material extent or of such a nature that
in the opinion of the Landlord the damage to the Building cannot be repaired
within one hundred and eighty (180) days from the date of destruction or the
Building must be or should be totally or partially demolished, whether to be
reconstructed to whole or in part or not, then the’ Landlord may, at Its
option (to be exercised within sixty (60) days from the date of total or
partial destruction) give notice to the Tenant that this Lease is terminated
with effect from the date stated in the notice. If the Tenant is able
effectively to use the Premises after the destruction, such date of
termination shall be not less than thirty (30) days from the date of the
notice. If the Tenant is unable effectively to use the Premises after the
destruction, the date given in the notice shall be the date of termination.
Upon such termination, the Tenant shall immediately surrender the Premises
and all its interest therein to the Landlord and the Gross Rent and
Additional Rent shall abate and be apportioned to the date of termination
and the Tenant shall remain liable to the Landlord for all sums accrued due
pursuant to the terms hereof to the date of termination. The Landlord’s
Architect shall determine whether the Premises can or cannot be effectively
used by the Tenant and his certificate thereon shall be binding and
conclusive upon both Landlord and Tenant for the purposes hereof.
	 
	 	(ii)	 	In none of the cases aforesaid shall the Tenant have any claims
upon the Landlord for any damages sustained by it nor shall the Landlord be
obligated to rebuild the Building or any part thereof in accordance with the
original plans and specifications therefor. No damages, compensation or claim
whatsoever shall be payable by the Landlord for inconvenience, loss of business
or annoyance or other loss or damage whatsoever arising from the occurrence of
any such damage or destruction of the Premises or of the Building and/or the
repair or restoration thereof.

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	8.4.	 	EXPROPRIATION
	 
	 	 	If the Premises are acquired or condemned by any authority having power for such acquisition
or condemnation for any public or quasi-public use or purpose, then and in that event the
term of this Lease shall cease from the date of such entry by such authority. If only a
portion of the Premises is so acquired or condemned then this Lease shall cease and
terminate at the Landlord’s option and if such option is not exercised by the Landlord an
equitable adjustment of Gross Rent and Additional Rent payable by the Tenant for the
remaining portion of the Premises shall be made. If only a portion of the Premises is
expropriated so that the Tenant is no longer able to carry on its business referred to in
Article 5.3 in the Premises remaining, this Lease shall cease and terminate at the option of
the tenant. In either event, however, and whether all or only a portion of the Premises so
acquired or condemned, nothing herein contained shall prevent the Landlord or the Tenant or
both from recovering damages from such authority for the value of their respective interest
or for such other damages and expenses allowed by law.

ARTICLE 9

LICENSES, ASSIGNMENTS AND SUBLETTINGS

The Landlord and Tenant further covenant and agree as follows:

	9.1.	 	LICENSES
	 
	 	 	The Tenant shall not suffer or permit any part of the Premises to be used or occupied by any
persons other than the Tenant, any assignees or subtenants permitted under Article 9.2 and
the employees of the Tenant and any such permitted assignee or subtenant, or suffer or
permit any part of the Premises to be used or occupied by any licensee or concessionaire, or
suffer or permit any persons to be upon the Premises other than the Tenant, such permitted
assignees or subtenants and their respective employees, customers and others having lawful
business with them.
	 
	9.2.	 	ASSIGNMENTS AND SUBLETTINGS

	 	(a)	 	The Tenant shall not assign or mortgage this Lease or sublet the whole or any
part of the Premises unless it shall have first requested and obtained the consent in
writing of the Landlord thereto. Any request for such consent shall be in writing and
shall be accompanied by a true copy of any offer to take an assignment or sublease
which the Tenant may have received as well as a copy of the proposed assignment or
sublease or mortgage and the Tenant shall furnish to the Landlord all information
available to the Tenant or requested by the Landlord as to the business and financial
responsibility and standing of the proposed assignee or subtenant.
	 
	 	(b)	 	If the Landlord consents to the Tenants request for consent to assign, mortgage
or sublet, which consent may not be unreasonably withheld, or if a consent to assign,

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	 	 	 	mortgage or sublet is obtained by order of a Court of competent jurisdiction, the
Tenant shall assign, mortgage or sublet, as the case may be, only upon the terms
submitted to the Landlord as aforesaid and not otherwise, PROVIDED THAT no such
assignment, mortgaging or subletting shall:

	 	(i)	 	in any manner or extent release or relieve the Tenant from the
performance or observance of any of its covenants or obligations hereunder
including, without limiting the generality of the foregoing, the performance or
observance of the covenants and obligations hereunder required to be performed
or observed during any renewal or extension of the Term in accordance with the
provisions of this Lease, notwithstanding that such renewal or extension arises
after the date of such assignment, mortgaging or subletting arid
notwithstanding that the Rent is increased for such period of renewal or
extension;
	 
	 	(ii)	 	in the case of an assignment or subletting, be made other than
to responsible persons, firms, partnerships or bodies corporate who undertake
by agreement in writing with the Landlord to perform and observe the
obligations of the Tenant hereunder;
	 
	 	(iii)	 	be made unless the Tenant is not in default of any of its
obligations under this Lease;
	 
	 	(iv)	 	in the case of an assignment or subletting, be made to any
person, firm, partnership or body corporate who intends to or does use the
Premises for any business or use which is prohibited hereunder or which the
Landlord is obliged to restrict by reason of any other lease or contract
relating to the Building, or any use, purpose or business (other than the
Permitted Use) to which the Landlord in its entire discretion may object; and

PROVIDED THAT no such mortgage shall:

	 	(i)	 	be made unless the mortgagee covenants to pay to the Landlord
all sums payable by the Tenant hereunder (including all arrears) during any
period the mortgagee actually or constructively occupies the Premises and to
otherwise perform and observe the obligations of the Tenant hereunder during
any such period; and
	 
	 	(ii)	 	unless the mortgagee covenants that any assignment or sublease
it may wish to make shall be subject to all the same terms affecting an
assignment or subletting made by the Tenant,

	 	(c)	 	The Landlord’s consent to any assignment or sublease shall not be or operate as
a consent to any further assignment or sublease; and the Landlord’s prior consent in
writing shall be required for each and every assignment or sublease.
	 
	 	(d)	 	Notwithstanding any prior provisions of this Article 9.2 to the contrary, after
the Landlord receives request for consent to an assignment or subletting and the

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	 	 	 	required information related thereto in writing, it shall have the option, to be
exercised by written notice within thirty (30) days after the receipt of such request
and information, to terminate this Lease and the term hereof on not less than thirty
(30) days and not more than ninety (90) days notice to the Tenant. If the Landlord
elects to terminate this Lease as aforesaid, the Tenant shall have the right, to be
exercised by written notice to the Landlord within fifteen (15) days after receipt of
such notice of termination, to withdraw the request for consent to the proposed
assignment or subletting, in which ease the Tenant shall not proceed with such
assignment or subletting, the notice of termination shall be null and void and this
Lease shall continue in full force and effect in accordance with its terms.
	 
	 	(e)	 	If the Tenant is a corporation, other than a corporation the shares of which
are listed on any recognized stock exchange, effective control of the corporation shall
not be changed directly or indirectly by a sale, encumbrance or other disposition of
shares or otherwise howsoever without the Tenant first obtaining the written consent of
the Landlord; provided that the Landlord’s consent shall not be required for any sale
or other disposition of shares by present shareholders to and between themselves or in
the event of any transmission of shares on death or by
operation of law and provided further that the Landlord’s consent shall not be
unreasonably withheld where control of the Tenant is to pass to a subsidiary or
parent of the Tenant.
	 
	 	(f)	 	Whether or not the Landlord consents to any request of the Tenant for an
assignment, subletting or mortgage, the reasonable costs incurred by the Landlord in
considering and processing the request for consent and in completing any of the
documentation involved in implementing such assignment, subletting or mortgage shall be
for the Tenant’s account and payable forthwith on demand by the Tenant to the Landlord.
	 
	 	(g)	 	The Landlord may sell, transfer, lease, mortgage, encumber or otherwise deal
with the Property or any portion thereof or any interest of the Landlord therein, in
every case without the consent of the Tenant, and without restriction, and to the
extent that any purchaser, transferee or lessee from the Landlord has become bound by
and covenanted to perform the covenants and obligations of the Landlord under this
Lease, the Landlord shall without further written agreement be freed and relieved of
liability upon such covenants and obligations.

ARTICLE 10

FIXTURES AND IMPROVEMENTS

The Landlord and Tenant further covenant and agree as follows:

	10.1.	 	INSTALLATION OF FIXTURES & IMPROVEMENTS

	 	(a)	 	The Tenant will not make, erect, install or alter any Leasehold Improvements or
trade fixtures in the Premises without having requested and obtained
the Landlord’s
prior written approval, which the Landlord shall not unreasonably withhold.

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	 	(b)	 	In making, erecting, installing or altering any Leasehold improvements or trade
fixtures the Tenant will not alter or interfere with any installations which have been
made by the Landlord without the prior written approval of the Landlord, and in no
event shall alter or interfere with or affect the structural elements or the strength
or outside appearance of the Building, or the mechanical, electrical, plumbing and
climate control systems if any or the window coverings installed on exterior windows.
	 
	 	(c)	 	The Tenant’s request for any approval hereunder shall be in writing and
accompanied by an adequate description of the contemplated work and, where appropriate,
working drawings and specifications therefor. Any out-of-pocket expense incurred by
the Landlord in connection with any such request for approval shall be deemed incurred
by way of an Additional Service. All work to be performed in the Premises shall be
performed by competent contractors and subcontractors of whom the Landlord shall have
approved (such approval not to be unreasonably withheld, but provided that the Landlord
may require that the Landlord’s contractors and subcontractors be engaged for any
mechanical or electrical work) and by workmen whose labor affiliations are compatible
with
those of workmen employed by the Landlord and its contractors and subcontractors.
At the option of the Landlord, all such work shall be subject to inspection by and
the reasonable supervision of the Landlord, as an Additional Service, and shall be
performed in accordance with any reasonable conditions or regulations imposed by the
Landlord (including without limitation the examination by the Landlord’s Architect
or other experts of the detailed drawings and specifications as an Additional
Service and contractor’s liability insurance in reasonable amounts) and completed in
a good workmanlike manner in accordance with the description of the work approved by
the Landlord.

	10.2.	 	LIENS AND ENCUMBRANCES ON FIXTURES AND IMPROVEMENTS
	 
	 	 	In connection with the making, erection, installation, or alteration of Leasehold
Improvements and trade fixtures and all other work or installations made by or for the
Tenant in the Premises the Tenant shall comply with all the provisions of the applicable
provincial legislation in respect of builders’ lien and worker’s compensation and other
statutes from tune to time applicable thereto (including any provision requiring or enabling
the retention of portions of any sums payable by way of holdbacks) and except as to any such
holdback shall promptly pay all accounts relating thereto. The Tenant will not create or
cause to be created or permit any mortgage, conditional sale agreement, lease or other
encumbrance in respect of the Leasehold Improvements to attach to the Premises or the
Building or any part thereof. If and whenever any builders’ or other lien for work, labor,
services or materials supplied to or for the Tenant or for the cost of which the Tenant may
be in any way liable or claims therefor shall arise or be filed or any such mortgage,
conditional sale agreement, lease or other encumbrance shall attach, the Tenant shall within
four (4) days after receipt of notice thereof procure the discharge

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	 	 	thereof, including any
certificate of lis pendens registered in respect of any lien, by payment or giving security
or in such other manner as may be required or permitted by law, and failing which the
Landlord may in addition to all other remedies hereunder avail itself of its remedy under
Article 13.1 and may make any payments required to procure the discharge of any such liens
or encumbrances, and shall be reimbursed by the Tenant as provided in Article 13.1, and its
right to reimbursement shall not be affected or impaired if the Tenant shall then or
subsequently establish or claim that any lien or encumbrance so discharged was without merit
or excessive or subject to any abatement, set-off or defense.
	 
	10.3.	 	TENANT’S GOODS
	 
	 	 	The Tenant covenants that it will not sell, dispose of or remove any of the trade fixtures,
goods or chattels of the Tenant from or out of the Premises during the Term without the
consent of the Landlord, unless the Tenant is substituting new trade fixtures, goods or
chattels of equal value or is bona fide disposing of individual items which have become
excess for the Tenant’s purposes in the normal course of its business. The Tenant further
covenants that it will at all times have and retain full legal and beneficial ownership of
its trade fixtures, goods and chattels and will not permit them to be or become subject to
any lien, mortgage, charge, encumbrance or title retention agreements except such as are
bona
fide incurred for the purpose of financing the purchase of such trade fixtures, goods or
chattels.
	 
	10.4.	 	REMOVAL OF FIXTURES AND IMPROVEMENTS
	 
	 	 	All Leasehold Improvements in or upon the Premises installed or affixed by the Tenant shall
immediately upon termination of this Lease be and become the Landlord’s property without
compensation therefor to the Tenant. Except to the extent herein or otherwise expressly
agreed by the Landlord in writing, no Leasehold Improvements, trade fixtures, furniture or
equipment shall be removed by the Tenant from the Premises either during or at the
expiration or sooner termination of the Term, except that (a) the Tenant, if not in default
hereunder, may at the end of the Term remove its trade fixtures, furniture and equipment;
and (b) the Tenant shall at the end of the Term remove such of its trade fixtures,
furniture, and equipment (including its computer/telephone equipment and all related wiring
and cabling) and Leasehold Improvements installed by it as the Landlord shall require to be
removed. For greater certainty and clarity, the Tenant covenants and agrees to remove any
of its wiring/cabling from the Premises as the Landlord shall require to be removed. The
Tenant shall, in the case of every removal either during or at the end of the Term, make
good any damage caused to the Premises and/or the Building by the installation and removal.

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ARTICLE 11

INSURANCE, LIABILITY AND INDEMNITY

	11.1.	 	LANDLORD’S INSURANCE
	 
	 	 	The Landlord covenants to, throughout the Term, provide and keep in force or cause to be
provided and kept in force:

	 	(a)	 	fire insurance (including standard extended coverage endorsement perils and
leakage from fire protective devices) or alternatively at Landlords option, all risk
insurance in respect of the Building and its fixed improvements including all rentable
premises including the Premises but excluding tenant’s fixtures and (except to the
extent that the Landlord elects to insure them) Leasehold Improvements installed or
constructed by tenants including the Tenant;
	 
	 	(b)	 	loss of rental income insurance relating to rental abatement contemplated in
Article 8.3;
	 
	 	(c)	 	if any boilers or pressure vessels are operated in the Building other than in
any rentable premises therein, boiler and pressure vessel insurance with respect
thereto;
	 
	 	(d)	 	comprehensive general business liability insurance with respect to the
operation of the Building for personal and bodily injury or death and damage to
property of others; and
	 
	 	(e)	 	insurance against any other occurrences and in such amounts as the Landlord may
deem prudent.

Insurance effected by the Landlord under this clause shall be with insurers duly licensed to
transact insurance in British Columbia and shall be in amounts which the Landlord shall from
time to time determine as being reasonable and sufficient, shall be subject to such
reasonable deductibles and exclusions as the Landlord may determine and shall otherwise be
upon such terms and conditions as the Landlord shall from time to time determine as being
reasonable and sufficient.

	11.2.	 	TENANT’S INSURANCE
	 
	 	 	The Tenant covenants to, throughout the Term, provide and keep in force:

	 	(a)	 	fire insurance (including standard extended coverage endorsement perils,
leakage from fire protective devices and water damage generally) in respect of the
Tenant’s fixtures, furniture, equipment, inventory and stock-in-trade, the Tenant’s
Leasehold Improvements and such other property in or forming part of the Premises (not
being property which the Landlord is bound to insure pursuant to Article 11.1) as the
Landlord may from time to time require;

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	 	(b)	 	plate and other glass insurance or hereby acknowledges an obligation to replace
with like kind and quality;
	 
	 	(c)	 	if any boiler or pressure vessel is operated in the Premises, boiler and
pressure vessel insurance with respect thereto;
	 
	 	(d)	 	comprehensive general business liability insurance with respect to the business
carried on in or from the Premises and the use and occupancy thereof for personal and
bodily injury or death and damage to property of others; and
	 
	 	(e)	 	Tenant’s legal liability insurance and such other forms of insurance including
business interruption insurance as the Landlord may reasonably require.

Insurance effected by the Tenant under this clause shall be with insurers duly licensed to
transact insurance in British Columbia, shall be in amounts which the Landlord shall from
time to time determine as being reasonable and sufficient (and, without limiting the
generality of the foregoing, in the case of insurance wider paragraphs (a), (b) and (c)
shall be on a full replacement cost basis subject only to such deductibles and exclusions as
the Landlord may approve and in the case of insurance under paragraph (d) shall have
original limits not less than $2,000,000 in respect of any one accident or occurrence),
shall permit the release of the Landlord from certain liability as set out in Article 11.3,
shall include the Landlord as an additional named insured, and shall otherwise be upon such
terms and conditions as the Landlord shall from time to time require as being reasonable and
sufficient. At the request of the Landlord the Tenant shall file with the Landlord such
copies of current policies or certificates or other proofs as may be required to establish
the Tenant’s insurance coverage in effect from time to time and the payment of premiums
thereon, and if the Tenant fails to insure or pay premiums or to file satisfactory proof
thereof as so required, the Landlord may without notice to the Tenant effect such insurance
and recover any premiums paid therefor from the Tenant on demand. All such policies of
insurance shall contain an undertaking by the insurance
company to notify the Landlord in writing thirty (30) days prior to any material change in
any such policies. To the extent applicable, the Tenant agrees to use the proceeds of
insurance to restore the Premises to the condition existing immediately prior to any loss or
damage.

	11.3.	 	LIMITATION OF LANDLORD’S LIABILITY
	 
	 	 	The Landlord shall not be liable or in any way responsible to the Tenant in respect of any
loss, injury or damage suffered by the Tenant or its employees, invitees or licensees, or
others unless resulting from the negligence of the Landlord but in no event shall the
Landlord be liable for loss, injury or damage:

	 	(a)	 	to any property of the Tenant or others from theft, damage or any other cause;
	 
	 	(b)	 	caused to any persons or property by fire, explosion, falling plaster, escaping
steam or gas, electricity, water, rain or snow, or leaks from any part of the Building
or from any pipes, appliances or plumbing work therein, or by dampness;

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	 	(c)	 	caused by other tenants or occupants or persons or the public in or about the
Premises or other rentable premises or elsewhere in the Building, or caused by
operations in the conduct of any private or public work;
	 
	 	(d)	 	of the nature of indirect or consequential loss, injury or damage of any nature
whatsoever including without limitation matters affected by interruptions in the supply
of water, electricity, heating, air conditioning and other utilities; or
	 
	 	(e)	 	that is required to be insured by the Tenant under the provisions of Article
11.2.

In addition to and without limiting the generality of the foregoing, notwithstanding
anything to the contrary herein contained or at law, the liability of the Landlord hereunder
(or of each of the companies comprising the Landlord, if more than one) shall, in every
case, be several and not either joint or joint and several and shall be limited to liability
for a portion of the total liability equal to such companies’ respective ownership
proportions from time to time in the Property. For greater certainty, but without limiting
the generality of the foregoing, in no case and under no circumstances shall any assets of
the Landlord (or any of them, if more than one company comprises the Landlord) be called
into contribution or found or held to be attachable as a result of any breach, default or
liability by the Landlord hereunder, other than the interest of the Landlord (or each such
company comprising the Landlord) in the Property from time to time.

	11.4.	 	INDEMNITY
	 
	 	 	Notwithstanding any other provision of this Lease to the contrary the Tenant shall be liable
to the Landlord for and shall hold harmless and indemnify the Landlord from and against:
	 
	 	 	all costs, liabilities, claims, damages, expenses, suits or actions (including, without
limiting the generality of the foregoing, direct losses, costs, damages and expenses of the
Landlord, including solicitor-client costs) resulting from:

	 	(a)	 	any breach, violation, or non-performance of any covenant, condition or
agreement in this Lease set forth and contained on the part of the Tenant to be
fulfilled, kept, observed or performed;
	 
	 	(b)	 	any damage to property, including property of the Landlord, occasioned by the
operation of the Tenant’s business on, or the Tenant’s occupation of, the Premises or
arising out of any work done by, or any act, neglect, or omission of, the Tenant or its
employees, agents, contractors, invitees, concessionaires, or licensees in or about the
Building;
	 
	 	(c)	 	any injury to person or persons, including death at any time resulting
therefrom, occasioned by the operation of the Tenant’s business on, or the Tenant’s
occupation of, the Premises or arising out of any work done by, or any act, neglect, or
omission of; the Tenant or its employees, agents, contractors, invitees,
concessionaires, or licensees in or about the Building;

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such covenant of the Tenant to survive the expiration or sooner termination of the Term,
notwithstanding anything herein to the contrary.

ARTICLE 12

SUBORDINATION, ATTORNMENT, REGISTRATION AND CERTIFICATES

The Tenant agrees with the Landlord that:

	12.1.	 	SUBORDINATION AND ATTORNMENT
	 
	 	 	This Lease shall, at the option of the Landlord or the mortgagee under any mortgage or the
trustee under any trust deed or trust indenture, now or hereafter existing, (such mortgagee
or trustee being in this Article 12.1 called the “Holder” and such mortgage or trust deed or
trust indenture being called the “Security”) affecting the Lands or Building, exercisable at
any time and from time to time by the Landlord or such Holder, be either subject and
subordinate to such Security and accordingly not binding upon such Holder or, alternatively,
prior to such Security and binding upon such Holder. On request at any time and from time
to time, the Tenant shall either postpone and subordinate this Lease with the intent and
effect that this Lease and all rights of the Tenant shall be subject to the rights of such
Holder as fully as if the Security, regardless of when made, had been made prior to the
making of this Lease or, alternatively, to attorn to such Holder and become bound to it as
its tenant of the Premises for the then unexpired residue of the Term and upon the terms and
conditions contained in this Lease, in each case as the Landlord or such Holder may require,
without limiting the foregoing (and notwithstanding that any of previous attornment or
subordination in favor of such Holder shall have been given) the Tenant shall execute
promptly the appropriate instrument of postponement and subordination or alternatively the
right instrument of attornment, as the case may be, in order to give effect to the
foregoing.
	 
	 	 	At the written request of the Tenant, the Landlord shall use reasonable commercial efforts
to obtain a non-disturbance agreement in favor of the Tenant from any Holder, provided the
form of such agreement is acceptable to the Holder and the Landlord and further provided
that the Tenant is responsible for the costs of obtaining such an agreement.
	 
	12.2.	 	REGISTRATION
	 
	 	 	The Tenant will not register this Lease in the Land Title Office.
	 
	 	 	Notwithstanding the foregoing, the Tenant shall have the right to register a short form of
this Lease, in a fonts and content to be approved by the Landlord, acting reasonably,
provided the Tenant covenants and agrees to execute and deliver to the Landlord a
registrable discharge of such short form lease forthwith upon this Lease expiring or
otherwise being terminated (such covenant of the Tenant to survive the expiration or
termination of this Lease), and further provided that all costs related to the preparation
and registration of such short form of lease (including the cost of preparing any survey
plans which may be required and all fees and taxes payable as a result of such registration)
shall be borne solely by the Tenant.

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	12.3.	 	ESTOPPEL CERTIFICATES
	 
	 	 	The Tenant shall within ten (10) days of receipt of notice in writing from Landlord execute
and deliver to the Landlord and if required by the Landlord, to any mortgagee (including any
trustee under a trust deed or trust indenture) designated by the Landlord a confirmation in
writing as to the status of this Lease, including as to whether it is in full force and
effect, is modified or unmodified, confirming the rental payable hereunder and the state of
the accounts between the Landlord and Tenant, the existence or non-existence of defaults,
the Rentable Area of the Premises, and any other matters pertaining to this Lease as to
which the Landlord shall request confirmation. Such certificate to be substantially in the
form attached hereto as Schedule “E”.

ARTICLE 13

REMEDIES OF LANDLORD AND TENANT’S DEFAULT

The Landlord and Tenant further covenant and agree as follows:

	13.1.	 	REMEDYING BY LANDLORD, NON-PAYMENT AND INTEREST
	 
	 	 	In addition to all rights and remedies of the Landlord available to it in the event of any
default hereunder by the Tenant either by any other provision of this Lease or by statute or
common law, the Landlord:

	 	(a)	 	shall have the right (but shall not be obligated to) at all times to remedy or
attempt to remedy any default of the Tenant, and in so doing may make any payments due
or alleged to be due by the Tenant to third parties and may enter upon the Premises to
do work or other things therein, and in such event all expenses of the Landlord in
remedying or attempting to remedy such default shall be payable by the Tenant to the
Landlord forthwith upon demand, together with a fee for supervision for carrying out
the Tenant’s obligations in an amount equal to fifteen
percent (15%) of the cost of repairs or other work carried out by or under the
supervision of the Landlord which amount shall be in addition to the incurred costs
of such work together with interest at a rate of six percent (6%) per annum above
the Prime Rate from time to time on the aggregate of the foregoing from the date
funds were expended by the Landlord until actual payment thereof by the Tenant;
	 
	 	(b)	 	may recover as Additional Rent all sums paid or expenses incurred hereunder by
the Landlord, which ought to have been paid or incurred by the Tenant, or for which the
Landlord hereunder is entitled to reimbursement from the Tenant, and any interest owing
to the Landlord hereunder by any and all remedies available to it for the recovery of
Gross Rent in arrears;
	 
	 	(c)	 	if the Tenant shall fail to pay any Rent or other amount from time to time
payable by it to the Landlord hereunder promptly when due, shall be entitled to
interest thereon at a rate of six percent (6%) per annum above the Prime Rate from time
to time from, except where interest commences to accrue earlier pursuant to Article
13.1(a), the date upon which the same was due until actual payment thereof.

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	13.2.	 	REMEDIES CUMULATIVE
	 
	 	 	The Landlord may from time to time resort to any or all of the rights and remedies available
to it in the event of any default hereunder by the Tenant, either by any provision of this
Lease or by statute or the general law, all of which rights and remedies are intended to be
cumulative and not alternative, and the express provisions hereunder as to certain rights
and remedies are not to be interpreted as excluding any other or additional rights and
remedies available to the Landlord by statute or the general law.
	 
	13.3.	 	RIGHT OF RE-ENTRY ON TERMINATION
	 
	 	 	If this Lease shall have become terminated pursuant to any provision hereof, or if the
Landlord shall have become entitled to terminate this Lease and shall have given notice
terminating it pursuant to any provision hereof, then and in every such case it shall be
lawful for the Landlord thereafter to enter into and upon the Premises or any part thereof
in the name of the whole and the same to have again, repossess and enjoy as of its former
estate.
	 
	13.4.	 	RE-ENTRY AND TERMINATION
	 
	 	 	If and whenever the Landlord becomes entitled to or does re-enter the Premises under any
provision of this Lease, the Landlord, in addition to all other rights and remedies, shall
have the right to terminate this Lease forthwith by leaving upon the Premises notice in
writing of such termination, and in such event the Tenant shall forthwith vacate and
surrender the Premises.
	 
	13.5.	 	RIGHTS ON RE-ENTRY
	 
	 	 	Whenever the Landlord becomes entitled to re-enter upon the Premises under any provision of
this Lease, the Landlord in addition to all other rights it may have shall have the right to
enter the Premises, as agent of the Tenant, either by force or otherwise without being
liable for any loss or damage occasioned thereby and to relet them and to receive the rent
therefor and as the agent of the Tenant to take possession of any furniture or other
property thereon and to sell the same at public or private sale without notice and to apply
the proceeds thereof and any rent derived from reletting the Premises, after deducting its
costs of conducting such sale and its cost of reletting, upon account of the Rent due and to
become due under this Lease and the Tenant shall be liable to the Landlord for the
deficiency, if any.
	 
	13.6.	 	DISTRESS
	 
	 	 	The Tenant waives and renounces the benefit of any present or future law taking away or
limiting the Landlord’s right of distress on the property of the Tenant and, notwithstanding
any such law, the Landlord may seize and sell the Tenant’s goods and chattels, excepting for
records and reports of a confidential nature, whether within the Premises or removed
therefrom and apply the proceeds of such sale upon Rent and all other amounts outstanding
including the cost of the seizure and sale in the same manner as might have been done if
such law had not been passed. The Tenant further agrees that

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	 	 	if it leaves the Premises
leaving any Rent or other amounts provided to be paid under this Lease unpaid, the Landlord,
in addition to any remedy otherwise provided at law or in equity, may seize the goods and
chattels of the Tenant at any place to which the Tenant or any other person may have removed
them from the Premises in the same manner as if such goods and chattels had remained upon
the Premises. For the purposes of making any such distress the Landlord, by itself, its
agents and bailiffs may break open any door or window and enter upon the Premises at any
time after Rent or other monies shall accrue due.
	 
	13.7.	 	PAYMENT OF RENT, ETC., ON TERMINATION
	 
	 	 	If the Landlord shall re-enter and this Lease shall be terminated as provided for herein,
then the Tenant shall pay to the Landlord on demand:

	 	(a)	 	Rent up to the time of re-entry or termination whichever shall be the later
plus accelerated Rent as herein provided;
	 
	 	(b)	 	all other amounts payable hereunder until such time;
	 
	 	(c)	 	such expenses as the Landlord may incur or have incurred in connection with
re-entering or terminating and reletting, or collecting sums due or payable by the
Tenant or realizing upon assets seized including brokerage, legal fees and
disbursements (on a solicitor-client basis), and the expense of keeping the Premises in
good order, repairing the same and preparing them for reletting; and
	 
	 	(d)	 	as liquidated damages for the loss of Rent and other income of the Landlord
expected to be derived from the Lease during the period which would have constituted
the unexpired portion of the Term had it not been terminated, the amount, if any, by
which the rental value of the Premises for such period established by reference to the
terms and provisions of this Lease exceeds the rental value of the Premises for such
period established by reference to the terms and provisions 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. Rental value is to be computed in each case by reducing to
present worth at an interest rate equal to the then current Prime Rate all Rent and
other amounts to become payable for such period and where the ascertainment of amounts
to become payable requires it, the Landlord may make estimates and assumptions of fact
which shall govern unless shown to be unreasonable or erroneous.

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ARTICLE 14

CANCELLATION OF INSURANCE AND EVENTS TERMINATING LEASE

The Landlord and Tenant further covenant and agree as follows:

	14.1.	 	CANCELLATION OF INSURANCE
	 
	 	 	If any policy of insurance upon the Building from time to time effected by the Landlord
shall be cancelled or be about to be cancelled by the insurer or an insurer shall refuse or
decline to place or renew insurance by reason of the use or occupation of the Premises by
the Tenant or any assignee, subtenant or licensee of the Tenant or anyone permitted by the
Tenant to be upon the Premises and the Tenant after receipt of notice in writing from the
Landlord shall have failed to take such immediate steps in respect of such use or occupation
as shall enable the Landlord to reinstate, renew, replace or avoid cancellation of (as the
case may be), such policy of insurance, without limitation to any other right or remedy of
the Landlord under this Lease, the Landlord may at its option, at any time and without
notice enter upon the Premises and remove the said use or condition in which event the
Tenant shall forthwith on demand pay to the Landlord the cost to the Landlord related to
such removal together with a supervisory fee of fifteen percent (15%) of such cost and with
interest on the aggregate of the foregoing from the date funds were expended by the Landlord
until actual payment thereof.
	 
	14.2.	 	DEFAULT
	 
	 	 	If and whenever:

	 	(a)	 	the Rent hereby reserved, or any part thereof, be not paid when due, or there
is non-payment of any other sum which the Tenant is obligated to pay under any
provisions hereof, and in either case such default shall continue for ten (10) days
after notice by the Landlord requiring the Tenant to rectify the same; or
	 
	 	(b)	 	the Term or any goods, chattels, equipment or other personal property of the
Tenant shall at any time be taken or be exigible in execution or attachment or if a
writ of execution shall issue against the Tenant, or the Tenant shall attempt or
threaten to move its goods, chattels or equipment out of the Premises (other than in
the ordinary course of its business or as permitted hereunder) or shall, for a period
of ten (10) consecutive days (without the prior written consent of the Landlord) fail
to conduct business from the Premises; or
	 
	 	(c)	 	the Premises shall be vacated or abandoned or remain unoccupied for fifteen
(15) days or more while capable of being occupied; or
	 
	 	(d)	 	the Tenant shall become insolvent or commit an act of bankruptcy or become
bankrupt or take the benefit of any Act that may be in force for bankrupt or insolvent
debtors or, if the Tenant is a corporation, become involved in a winding up proceeding
or other proceeding for the termination of its corporate existence or if a receiver
shall be appointed for the business, property, affairs or revenues of the Tenant or if
any governmental authority should take possession of the business or property of the
Tenant or the Tenant shall make a general assignment for the benefit of creditors; or

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	 	(e)	 	without the written consent of the Landlord, the Premises shall be used by any
persons other than the Tenant or its permitted assigns or sub-tenants or for any
purpose other than that for which they were leased, or shall be occupied by any person
whose occupancy is prohibited by this Lease; or
	 
	 	(f)	 	the Tenant shall assign or sublet or purport to assign or sublet any portion or
all of the Term or the Premises without the written consent of the Landlord or control
of the Tenant, if a corporation, is changed without the prior written consent of the
Landlord, in either case as required pursuant to Article 9; or
	 
	 	(g)	 	the Tenant shall fail to remedy any condition giving rise to cancellation,
threatened cancellation, reduction or threatened reduction of army insurance policy on
the Property or any part thereof within twenty four (24) hours after notice thereof by
the Landlord; or
	 
	 	(h)	 	the Tenant shall breach or fail to observe or perform any other of the
covenants, agreements, provisions, stipulations and conditions herein to be observed,
performed and kept by the Tenant and shall persist in such failure for ten (10) days
after notice by the Landlord requiring that the Tenant remedy, correct, desist or
comply (or in the case of any such breach which reasonably would require more than ten
(10) days to rectify unless the Tenant shall commence rectification within the said ten
(10) day period and thereafter promptly and diligently and continuously proceed with
the rectification of the breach);

then and in any of such cases, at the option of the Landlord, the full amount of the current
month’s and the next three (3) months’ monthly Rent shall immediately become due and payable
and the Landlord may without notice or any form of legal process forthwith re-enter upon and
take possession of the Premises or any part thereof in the name of the whole and remove and
sell the Tenant’s goods, chattels and equipment therefrom any rule of law or equity to the
contrary notwithstanding; and the Landlord may seize and sell such goods, chattels and
equipment of the Tenant as are in the Premises or at any place to which the Tenant or any
other person may have removed them in the same manner as if they had remained and been
distrained upon the Premises; and such sale may be effected in the discretion of the
Landlord either by public auction or by private treaty, 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.

ARTICLE 15

MISCELLANEOUS

The Landlord and Tenant further covenant and agree as follows:

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	15.1.	 	NOTICES
	 
	 	 	All notices, demands, requests, consents, approvals and other instruments required or
permitted to be given pursuant to the terms of this Lease shall be in writing and shall be
deemed to have been properly given if personally served or sent by registered mail (postage
prepaid with return receipt requested) or sent by telegram with report of delivery to the
Landlord or the Tenant at the addresses hereinbefore set forth or in the case of the Tenant
at the Premises in lieu of the address hereinbefore set forth.
	 
	 	 	Provided, however, that such address may be changed upon five (5) business days written
notice thereof, similarly given, to the other party.
	 
	 	 	The date of receipt of any such notice, demand, request, consent, approval or other
instrument shall be deemed to be as follows:

	 	(a)	 	in the case of personal service, the date of service;
	 
	 	(b)	 	in the case of registered mail, the fifth (5th) business day following the date
of delivery to the post office, provided, however, that in the event of an interruption
of normal mail service receipt shall be deemed to be the fifth (5th) business day
following the date on which normal mail service is restored;
	 
	 	(c)	 	in the case of telegram, the business day next following the day of sending.

Any notices required or permitted to be given by the Landlord pursuant to the terms of this
Lease may be served by the Landlord, its lawyer or its managing agent.

	15.2.	 	ENTIRE AGREEMENT
	 
	 	 	The Tenant acknowledges that there are no covenants, representations, warranties, agreements
or conditions expressed or implied relating to this Lease or the Premises save
as expressly set out in this Lease and the offer to Lease preceding this Lease. This Lease
may not be modified except by an agreement in writing executed by the Landlord and the
Tenant.
	 
	15.3.	 	AREA DETERMINATION
	 
	 	 	In the event that any calculation or determination by the Landlord of the Rentable Area of
any premises (including the Premises) of the Building is disputed or called into question,
it shall be calculated or determined by the Landlord’s Architect, whose certification shall
be conclusive, the cost of such remeasurement to be paid by and borne by the party so
disputing or calling into question the previous calculation or determination. The Landlord
may at any time convert all measurements relating to this Lease to metric measurements and
the Lease shall be appropriately modified.

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	15.4.	 	SUCCESSORS AND ASSIGNS, INTERPRETATION
	 
	 	 	This Lease and everything herein contained shall enure to the benefit of and be binding upon
the successors and assigns of the Landlord and the heirs, executors, administrators,
successors and permitted assigns of the Tenant. References to the Tenant shall be read with
such changes in gender as may be appropriate, depending on whether the Tenant is a male or
female person or a firm or corporation, and if the Tenant is more than one person or entity,
the covenants of the Tenant shall be deemed joint and several. If the Landlord sells the
Landlord’s interest in the Lands the Landlord shall be released from all obligations,
responsibilities and liabilities under this Lease arising after the date of such sale, to
the extent that the purchaser of the Landlord’s interest assumes the same.
	 
	15.5.	 	FORCE MAJEURE
	 
	 	 	Save and except for the obligations of the Tenant as set forth in this Lease to pay Gross
Rent, Additional Rent, Rent and any other monies required to be paid to the Landlord, if
either party shall fail to meet its obligations hereunder within the time prescribed, and
such failure shall be caused or materially contributed to by any cause beyond the reasonable
control of such party (but lack of funds on the part of such party shall be deemed not to be
a force majeure), such failure shall be deemed not to be a breach of the obligations of such
party hereunder but such party shall use reasonable diligence to put itself in a position to
carry out its obligations hereunder, and the time for fulfillment of such obligation shall
be extended for the period in which such circumstance operates to delay or prevent the
fulfillment thereof and the other party to this Lease shall not be entitled to compensation
for any inconvenience, nuisance or discomfort thereby occasioned.
	 
	15.6.	 	WAIVER
	 
	 	 	Failure of the Landlord to insist upon strict performance of any of the covenants or
conditions of this Lease or to exercise any right or option herein contained shall not be
construed as a waiver or relinquishment of any such covenant, condition, right or option,
but the same shall remain in full force and effect. The Tenant undertakes and agrees, for
itself and for any person claiming to be a subtenant or assignee, that the acceptance by
the Landlord of any Rent from any person other than the Tenant shall not be construed as a
recognition of any rights not herein expressly granted, or as a waiver of any of the
Landlord’s rights, or as an admission that such person is, or as a consent that such person
shall be deemed to be, a subtenant or assignee of this Lease, irrespective of whether the
Landlord or said person claims that such person is a subtenant or assignee of this Lease.
The Landlord may accept Rent from any person occupying the Premises at any time without in
any way waiving any right under this Lease.
	 
	15.7.	 	GOVERNING LAW, COVENANTS, SEVERABILITY
	 
	 	 	This Lease is being executed and delivered, and shall be performed in the Province of
British Columbia in which the Building is located, and the laws of such Province shall
govern the validity, construction, enforcement and interpretation of this Lease. The

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	 	 	exclusive venue for any application or court action brought in respect of this Lease shall
lie with the courts of the Province of British Columbia in which the Building is located,
and the parties hereto exclusively attorn to the jurisdiction of such courts.
	 
	 	 	The Landlord and the Tenant agree that all of the provisions of this Lease are to be
construed as covenants and agreements as though the words importing such covenants and
agreements were used in each separate section hereof. Should any provision or provisions of
this Lease be illegal or not enforceable, it or they shall be considered separate and
severable from the Lease and its remaining provisions shall remain in force, and be binding
upon the parties hereto as though the said provision or provisions had never been included.
	 
	15.8.	 	HEADINGS, CAPTIONS
	 
	 	 	The headings and captions appearing in this Lease have been inserted for convenience of
reference only and in no way define, limit or enlarge the scope or meaning of this Lease or
of any provisions hereof.
	 
	15.9.	 	TIME FOR PAYMENT
	 
	 	 	Unless otherwise expressly provided in this Lease, all amounts (other than Rent) required to
be paid by the Tenant to the Landlord pursuant to this Lease shall be payable on demand at
the place designated by the Landlord for payment of Rent and if not so paid within ten (10)
days of such demand be treated as Rent in arrears.
	 
	15.10.	 	TIME OF ESSENCE
	 
	 	 	Time shall be of the essence of this Lease.
	 
	15.11.	 	SPECIAL PROVISIONS

	 	(a)	 	The Tenant acknowledges and agrees that it is accepting possession of the
Premises in “as is, where is” condition except that the Landlord shall provide and
install to the Premises at the Landlord’s expense those items set out in Article 8.1.
	 
	 	 	 	The Tenant shall be responsible for its own improvements to the Premises and
shall have a Rent free period (the “Fixturing Period”) commencing the day next
following the final execution of this Lease and ending January 31, 2005, for the
purposes of fixturing, modifying and occupying the Premises for the Tenant’s day to
day business (the “Tenant’s Work”). Should the Tenant require additional utilities,
additional heating, ventilation or air conditioning (“HVAC”) because of the nature
of its business, in excess of those already provided to the Premises, then the
Tenant shall be responsible for the cost of installing and/or supplying such
additional utilities or HVAC, professionally designed and supervised, subject to the
Landlord’s prior approval. The Tenant’s Work is subject to the Landlord’s prior
written approval and shall be made in accordance with the Broadway Tech Centre
Tenant Guidelines manual. It is understood that the Landlord’s’ contractor shall be
utilized for all changes to the mechanical,

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	 	 	 	electrical and life safety systems. All
costs associated with the Tenant’s Work shall be borne solely by the Tenant,
including design and consultants’ fees. The Tenant will be responsible for
obtaining all necessary approvals and building permits from regulatory authorities
for the commencement and completion of the Tenant’s Work. No Tenant’s Work shall
commence until the Landlord receives proof of the Tenant’s insurance. All terms of
this Least shall be applicable from the dale the Tenant takes possession of the
Premises save for the payment of Rent which shall be payable as of the Commencement
Date.
	 
	 	(b)	 	During the Term it is understood and agreed between the parties that the Tenant
may expand into all or a portion of the premises adjacent to the Premises (the
“Expansion Premises”) comprising a total Rentable Area of approximately 21,000 square
feet, as indicated on Schedule “C” attached hereto, on the following conditions:

	 	(i)	 	The Expansion Premises shall be divided into five (5) separate
1 x 7 grid sections containing a Rentable Area of approximately 4,200 square
feet each and identified as sections A, B, C, D and E on Schedule “C”
attached hereto.
	 
	 	(ii)	 	The Tenant shall expand first into section A, second into
section B, third into section C, fourth into section D and fifth into section E
until the Expansion Premises are fully occupied. It is agreed that prior to
the Tenant expanding into any section of the Expansion Premises, as aforesaid,
the Tenant shall notify the Landlord in writing of the particular section of
the Expansion Premises which is required and the date upon which such section
shall be occupied.
	 
	 	(iii)	 	The Rent for each section of the Expansion Premises is equal
to Rent payable on the existing Premises, as expanded from time to time, on a
per square foot basis and shall commence on the day tile Tenant occupies such
section and shall continue for the balance of the Term.
	 
	 	(iv)	 	It is understood that there will be no demising walls
constructed between the existing Premises and sections A, B, C, D and E of the
Expansion Premises.
	 
	 	(v)	 	Until such time as the Tenant expands into each section of the
Expansion Premises, the Tenant covenants and agrees to be responsible to keep
such unoccupied sections of the Expansion Premises in broom clean condition.
	 
	 	(vi)	 	The existing Premises together with those sections of the
Expansion Premises the Tenant occupies in accordance with the aforementioned
conditions, shall collectively form the Premises. The Tenant covenants and
agrees to execute any document or instrument which the Landlord reasonably
requires under tills provision, including but not limited to the Landlord’s
form of amending agreement prepared by the Landlord incorporating
such sections of the Expansion Premises.

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It is agreed between the Landlord and the Tenant that commencing February 1, 2006, the
Tenant shall be responsible for the payment of Rent on the whole of the Expansion Premises
regardless of whether or not the Tenant is occupying and conducting business in the whole of
the Expansion Premises and that the Premises shall be comprised of the existing Premises and
the Expansion Premises.

	 	(c)	 	The Tenant shall deliver to the Landlord prior to the Commencement Date and
thereafter on or before December 31st of each year throughout the Term, a series of
post dated checks for the estimated monthly Gross Rent payable for the following 12
months of the Term. In the event that the Rentable Area of the Premises changes during
the year in accordance with Article 15.11(b), the Tenant shall provide the Landlord
with replacement post dated checks in the appropriate monthly amount of Gross Rent for
the balance of the year.
	 
	 	(d)	 	Throughout the Term, the Landlord shall make available for the Tenant, to use
at its option, ten (10) parking stalls in the designated parking lot. Monthly rental
for the said parking stalls shall be based on the prevailing monthly rental rate, which
is currently $45.00 per parking stall per month plus applicable taxes, which monthly
rental rate may be adjusted by the Landlord from time to time.
	 
	 	(e)	 	If the Landlord shall desire to take down the Building, or any part thereof, at
any time after December 31, 2007, it may terminate this Lease by giving to the Tenant
twelve (12) months’ prior written notice of its intention to do so, whereupon the Term
hereby granted shall absolutely cease and terminate on the date set out in such notice,
and the Tenant covenants with the Landlord that It shall, on the day so fixed, deliver
up possession of the Premises to the Landlord without cost or damage to the Landlord
and pay the proportion of Rent up to the date of giving up possession as aforesaid.
	 
	 	(f)	 	The Tenant, provided it has not been in material default during the Term, shall
have one option to extend the Term of this lease for a further period of two (2)
years (the “Extended Term”), such option to be exercised upon twelve (12) months’
written notice to the Landlord, prior to the expiry of the initial Term, not to be
given sooner than eighteen (18) months prior to the expiry of the initial Term. The
Extended Term shall be on the same terms and conditions as the initial Term except
for Gross Rent, any free rent allowance, fixturing period, tenant improvement
allowance or other incentive or inducement and except for this option to extend.

     The Gross Rent payable by the Tenant during the Extended Term shall be negotiated and
agreed upon between the parties prior to the commencement of the Extended Term based on the
prevailing fair market Gross Rent at the commencement of the Extended Term for similarly
improved premises of similar size, quality, use and location in warehouse buildings of a
similar size, quality and location in Vancouver,

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British Columbia. Failing such agreement,
then within two (2) months prior to the commencement of the Extended Term Gross Rent shall
be determined by arbitration under the provisions of the Commercial Arbitration Act (British
Columbia) and in accordance with this clause provided that the Gross Rent payable shall not
in any case be less than payable by the Tenant during the last year of the initial Term.

	 	(g)	 	The Tenant agrees to keep the terms and conditions of this Lease strictly
confidential. For clarity, if the terms herein are disclosed to another party, save
only to the Tenant’s lawyers, accountants, consultants or as imposed by law, then in
addition to any other rights or remedies the Landlord may have, the Tenant shall, at
the Landlord’s sole option, be considered in default under the terms of this Lease.

IN WITNESS WHEREOF, the Landlord and Tenant have executed this lease the day and year first above
written.

	 	 	 	 	 
	LANDLORD:

2725312 Canada, Inc.

 	 	 
	Per: 	 	/s/
illegible	 
	 	 	(Authorized Signatory) 	 
	 
	 	 	 
	Per: 	 	/s/
illegible	 
	 	 	(Authorized Signatory) 	 
	 	 	 
	 
	TENANT:

 	 	 
	Per: 	 	/s/
illegible	 
	 	 	(Authorized Signatory) 	 
	 
	 	 	 
	Per: 	 	/s/
Brian Bacon	 
	 	 	(Authorized Signatory) 	 
	 	 	 
	 

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SCHEDULE “A”

THE LANDS

	 	 	 
	Civic:

	 	2955 Hebb Street, Vancouver, B.C.
	 
	 	 
	Legal:

	 	PID: 024-662-348
	 

	 	Lot 1 Except Part in Plan LMP49647
	 

	 	Section 36
	 

	 	Town of Hastings Suburban Lands
	 

	 	Plan LMP 44003

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