Hereinafter Called the LANDLORD

1

LEASE

BETWEEN



hereinafter called the LANDLORD

AND



hereinafter called the TENANT

WHICH PARTIES have declared as follows:

WHEREASthe LANDLORD is the owner of a Building bearing civic address , in the province of Québec.

WHEREAS the TENANT wishes to lease part of the Building from the LANDLORD for the purposes of its business, subject to the terms and conditions of the Lease.

WHEREAS the LANDLORD has agreed to lease to the TENANT the premises designated hereinafter, subject to the terms and conditions stipulated in the Lease.

WHEREAS the LANDLORD has entered into certain undertakings with the Business Development Bank of Canada (hereinafter called the “BDC”) and has undertaken to fulfil certain requirements and obligations in order to avoid any default. The LANDLORD is therefore obliged to require that certain conditions be met by the TENANT.

NOW THEREFORE, the parties agree as follows:

ARTICLE1

PREAMBLE

The preamble shall form an integral part of this Lease.

1.DEFINITIONS

The following terms and expressions when used in the Lease shall have the following meanings unless otherwise required by the context:

1.1.“Base Building Installations”

The installations supplied by the Landlord.

1.2.“BDC”

Business Development Bank of Canada.

1.3.“Building”

The building described in Section3.1.

1.4.“Common Areas and Facilities”

All of the Building’s interior and exterior common areas and facilities, excluding however, the Total Leasable Area. ***OPTIONAL: For instance, without limiting the generality of the foregoing, such areas and facilities shall include sidewalks, landscaped areas, receiving and shipping areas, public washrooms, fire alarm systems, heating, ventilating and airconditioning systems, plumbing systems, drains, including accessories, installations and compartments for such systems, permanent staircases, signage, maintenance equipment, and all common areas, facilities and space or items of equipment provided by or designated by the Landlord for the use or benefit of the Tenant, its employees, customers and other persons invited into the premises by the Tenant, in common with others who may be entitled to the use or benefit of such areas, facilities and equipment.

1.5.“Lease”

The agreement of lease signed as of the date hereof and all schedules that may be attached thereto to form an integral part thereof.

1.6.“Leasehold Improvements”

All improvements, installations and additions made to the premises from time to time by or on behalf of the Tenant, such as, without limiting the generality of the foregoing, all permanent partitions, lighting fixtures, carpeting, interior and exterior signs and all items that can be moved without damage to the premises, excluding however, furniture, movable partitions, equipment and trade fixtures owned by the Tenant and used for purposes of its business.

1.7.“Lease Year”

A period of twelve (12) months commencing on  and ending on , as determined by the Landlord for purposes of calculating Operating Expenses. The Landlord reserves the right to change the Lease Year at any time during the term of the Lease.

1.8.“Operating Expenses”

The aggregate of all expenses reasonably incurred by the Landlord and that are attributable, in accordance with generally recognized accounting principles, to the maintenance, operation, repair and supervision of the Building. Without limiting the generality of the foregoing, such expenses may include the following:

1.8.1.Salaries, wages and benefits for the employees assigned to maintain, operate, repair and supervise the Common Areas and Facilities;

1.8.2.Costs of operating, repairing, maintaining, replacing and inspecting machinery, equipment and other systems for heating, ventilating, airconditioning, steam, plumbing, lighting, emergency generators and fire alarms; the costs of fuel; costs of parts and labour; and structural and architectural maintenance;

1.8.3.Costs of snow removal, garbage removal, supervision and security, window washing and cleaning of walls as well as cleaning of the Common Areas and Facilities;

1.8.4.Costs of any alterations or additions to the Building and its equipment and supplies where, in the opinion of the Landlord, such expenses are likely to reduce Operating Expenses;

1.8.5.Total annual depreciation of capital and interest on unamortized capital at a rate equal to the lending rate then granted or likely to be granted to the Landlord by its bankers, from time to time, with respect to the costs of machinery, equipment, supplies, repairs, replacements, alterations and improvements which in the Landlord’s reasonable opinion have a viable economic life longer than a single Lease Year and where the costs have not already been allocated to the Tenant;

1.8.6.Costs of all insurance premiums paid by the Landlord relating directly or indirectly to the Building, including, inter alia, insurance against fire and other casualties, public liability insurance, boiler and machinery insurance, rental insurance and workers’ compensation insurance.

1.9.“Proportionate Share”

A fraction having as its numerator the leasable area of the premises and as its denominator the Total Leasable Area, namely  percent.

1.10.“Taxes”

All taxes, impositions, levies and contributions, whether municipal, provincial, federal or otherwise, imposed now or hereafter on the Landlord in respect of the Building for any calendar year. The total taxes so paid by the Landlord shall include, without duplication or limitation, school taxes, municipal and urban community taxes, taxes on the leasehold improvements of the Building, taxes based on rental value and all services taxes payable by the tenants and all expenses incurred by the Landlord to contest same or negotiate same with the public authorities. Taxes shall not include taxes on the income of the Landlord to the extent such income taxes are not charged in replacement of taxes, impositions, levies or contributions imposed on the Landlord in respect of the Building.

1.11.“Total Leasable Area”

The aggregate leasable area expressed in  square feet  metres, of all areas designated by the Landlord for leasing, whether temporarily or permanently.

2.INTENT

The parties agree that all amounts to be paid and all obligations which are not herein expressly stated to be the Landlord’s responsibility shall be deemed to be a debt or obligation of the Tenant, which shall be responsible for paying or performing same, as the case may be, at its own expense.

3.PREMISES

3.1.Description of Premises

The Landlord hereby leases to the Tenant, who accepts, with a guarantee of peaceful enjoyment, the portion of the Building designated hereinafter, located on the  floor, consisting of an area of , and bearing the following civic address: .

***OPTIONAL

LEGAL DESCRIPTION



3.2.Area of Premises

The area of the premises shall be determined in accordance with BOMA (Building Owners and Managers Association International) ANSI Z65.11996 measurement standards approved on June7, 1996 by the American National Standard Institute Inc.

At any time during the term of the Lease, the Landlord (or the Tenant, at its own expense) shall be entitled to have the area of the premises measured by the architect, land surveyor or other professional designated by the Landlord.

3.3.Adjustment of Rent

If, pursuant to the certificate issued by such architect or other professional, the area of the premises should vary from that stipulated herein, the minimum rent and additional rent shall be adjusted as of the date of issuance of such certificate.

3.4.Work

The Tenant shall be solely responsible for the costs of all work, alterations and improvements that it may require, subject to the provisions of the Lease.

***OPTIONAL

3.5.Taking of Possession For Purposes of Fixturing

If the Tenant takes possession of the premises for purposes of fixturing prior to the commencement date of the Lease, with the Landlord’s written authorization, it shall comply with all provisions hereof, except for the obligation to pay minimum rent and, without limiting the generality of the foregoing, the Tenant shall be responsible for any and all damages resulting from its acts or omissions or those of its contractors, sub-contractors, agents and employees.

3.6.Notice of Defects

The Tenant shall notify the Landlord, within ten (10) days of the date of taking of possession, of any defects, faults or imperfections that it has observed in the premises which prevent or restrict the Tenant’s use of the premises. Should the Tenant not so notify the Landlord within such notice period, the Tenant shall be deemed in all respects to have accepted the premises as is, without further obligation on the part of the Landlord.

4.TERM

The Lease shall be for a term of  year(s), commencing on  and expiring on .

5.RENT

The rent shall consist of minimum rent and additional rent as follows:

5.1.Minimum Rent

The Tenant shall pay as minimum rent:



5.2.Additional Rent

The Tenant shall pay as additional rent:



5.2.1.Operating Expenses and Taxes

The Proportionate Share of the Operating Expenses and Taxes. For the first calendar year this cost is estimated at approximately  dollars per square  foot  metre.

5.2.2.Electrical Consumption

The Tenant’s monthly electrical consumption determined in accordance with a reading of the check meter installed in the premises.

5.3.Payment of Additional Rent

The Tenant shall pay the additional rent hereinabove described to the Landlord on a monthly basis in advance together with the instalments of minimum rent. For the purposes of this Section, the Landlord shall, prior to  of each year, or as it deems appropriate, prepare an estimate of Operating Expenses and Taxes for the following Lease Year and it shall give written notice thereof to the Tenant. The monthly instalments of additional rent for the following Lease Year shall be based on such estimate.

***OPTIONAL

The Landlord shall deliver to the Tenant within thirty (30) days of receipt of a written request and as soon as possible after the end of each Lease Year, but no earlier than one hundred and twenty (120) days after the end of each Lease Year, a certificate issued by the Landlord’s auditors establishing the amount of the Operating Expenses and Taxes for such Lease Year.

At the end of each Lease Year, it is expressly agreed that in the event that, due to a variation in the costs described above, the amount payable by the Tenant is greater than the amount of the instalments already paid therefor, the Tenant shall remit the difference to the Landlord, and in the event the amount payable is less than the amount so paid, the Landlord shall return the excess to the Tenant within thirty (30) days of the issuance of a statement of account or credit note, as the case may be.

***OPTIONAL

5.4.Lease Commencing on a Day Other Than the First Day of the Month

Should the Lease not commence on the first day of the month, the minimum rent and additional rent shall be prorated based on the number of days of occupancy in such month versus the number of days in the month, and the first invoice for minimum rent and additional rent shall cover one complete month and the part of the month during which the premises were occupied. The payment that the Tenant shall have made upon signature of the offer to lease shall be deducted from the amount of such invoice.

5.5.Reimbursement of Expenses Incurred by the Landlord

Any expenses incurred by the Landlord to obviate a breach of the Tenant’s obligations shall constitute additional rent and shall be payable at the same time as the next instalment of minimum rent following receipt of a notice from the Landlord regarding the existence of any such additional rent.

5.6.Terms of Payment

Rent shall be paid when due. The Tenant shall send its payments to the Landlord at  or at such other address as the Landlord may indicate to the Tenant in writing.

5.7.Waiver of Offset

The Tenant waives any claim or offset now or in future, which it or others acting on its behalf might claim against any rent or other amounts payable hereunder, and the Tenant agrees to pay all rents and other amounts in their entirety under all circumstances. The Tenant agrees that all amounts that is has paid or that it owes to the Landlord may be allocated against all amounts owing hereunder, at the Landlord’s option, notwithstanding any instructions to the contrary. No endorsement on any cheque or any statement contained in a letter accompanying a cheque shall constitute deemed consent or acceptance, and the Landlord may accept any payment without prejudice to its rights under the Lease or at law.

5.8.Overdue Instalments

The Landlord shall be entitled to charge interest on all overdue rent or any other overdue amount payable under the Lease  (including amounts payable for the promotion and advertising fund), at an annual rate equal to the average base prime rate as determined daily by the BDC, plus four percent (4%), until such amounts have been paid, without prejudice to its other rights and remedies.

6.USE OF PREMISES

6.1.Use of Premises by the Tenant

The Tenant shall use the premises solely for the purposes of  and it shall operate such business throughout the term of the Lease.

6.2.Prohibited Uses

The Landlord shall be entitled to enjoin the Tenant to cease selling any item, merchandise or goods, or supply any services or carry on any business which, in the Landlord’s sole and absolute discretion, are not consistent with normal use and occupancy of the premises by the Tenant or which are likely to diminish the value of the Building, as mentioned above, and the Tenant shall immediately comply with the Landlord’s requirements.

Without limiting the generality of the foregoing, the Tenant shall neither use nor permit nor tolerate the use of the premises or any part thereof for any one or more of the following activities:

6.2.1.Any sale or business which, due to the sales methods, quality of operation or merchandise would, in the Landlord’s opinion, prejudice the other tenants as a whole or the reputation of the retail area;

6.2.2.Any misleading, unethical or immoral sales or advertising practices;

6.2.3.Any activities involving sexual exploitation or that are inconsistent with standards of conduct or appropriateness generally accepted by society, including, in particular, entertainment, products or services of an explicit sexual nature, any illegal activities or related activities, any enterprise carrying on business with countries proscribed by the Government of Canada, any enterprise operating night clubs, bars, cabarets, casinos, bingo halls, gambling machines, discotheques and the like as stand-alone or exclusive operations.

If the BDC becomes aware of the existence of a prohibited use, it shall be entitled to terminate the Lease and its opinion shall be final and without appeal.

6.3.The Tenant shall not change the use, destination or nature of the premises without the written consent of the BDC.

*** OPTIONAL

7.PARKING AND USE OF COMMON AREAS AND FACILITIES

7.1.Parking

The Lease entitles the Tenant to use  parking spaces for its employees, free of charge, and parking spaces for visitors.

7.2.Control of Common Areas and Facilities

All of the Common Areas and Facilities supplied by the Landlord from time to time shall be at all times subject to the Landlord’s exclusive control and administration, and accordingly the Landlord shall be entitled from time to time to establish, amend and implement reasonable rules of conduct and regulations for the Common Areas and Facilities. The Landlord shall be entitled to install, maintain and operate electrical installations in the Common Areas and Facilities; to change the area, location and arrangement of the Common Areas and Facilities; to close off or prohibit access to or use of the Common Areas and Facilities, in whole or in part, for purposes of maintenance or repair, acting diligently; and to do all things that the Landlord may deem appropriate, using good business judgment, in order to improve the convenience of the Common Areas and Facilities for the tenants, their directors, agents, employees and customers, and the use to be made thereof by such persons.

8.SERVICES

8.1.Services Provided to Tenant

Electricity, heating, ventilating and airconditioning.

8.2.Installation of Trade Fixtures

The Tenant shall install fixtures for purposes of its business which shall be its own property and shall be standard equipment for the use for which they are intended, without causing any damage to the structure or the heating, ventilating and airconditioning systems, plumbing systems, electrical systems and mechanical equipment in the premises or the Building.

8.3.Use of Service Installations

The Tenant agrees not to install any equipment that exceeds the capacity of the Base Building Installations and agrees that if any such equipment should require additional Base Building Installations, it shall be installed in accordance with plans and specifications approved by the Landlord, at the Tenant’s expense.

The Tenant shall comply with the requirements of any authorities having jurisdiction over the operation of the heating, ventilating and airconditioning equipment and related systems located in the premises. Any amounts payable in this regard shall be deemed to constitute additional rent.