LEASE AGREEMENT
Date: ____________________
made between:
[NAME OF LANDLORD]
- and -
[NAME OF TENANT]
TABLE OF CONTENTS
ARTICLE I - INTERPRETATION ............................................................................................................ 1
Section 1.01 Headings, etc. ........................................................................................................ 1
ARTICLE II - DEMISE, TERM, RENT..................................................................................................... 1
Section 2.01 Leased Premises .................................................................................................... 1
Section 2.02 Term ........................................................................................................................ 2
Section 2.03 Rent and Additional Rent .................................................................................... 2
Section 2.04 Interest on Amounts in Default ........................................................................... 2
Section 2.05 Other Charges........................................................................................................ 2
Section 2.06 Place of Payment of Rent ..................................................................................... 2
Section 2.07 Intent of Net Lease ................................................................................................ 3
Section 2.08 Obligation to Pay Rent Not to be Diminished ................................................... 3
ARTICLE III - USE OF LEASED PREMISES ......................................................................................... 3
Section 3.01 Use of Premises ..................................................................................................... 3
ARTICLE IV - INDEMNITY...................................................................................................................... 3
Section 4.01 Tenant’s Indemnity to Landlord ......................................................................... 3
Section 4.02 Landlord not to be Liable ..................................................................................... 4
ARTICLE V - INSURANCE PROVISIONS............................................................................................ 4
Section 5.01 Tenant’s Insurance ................................................................................................ 4
Section 5.02 Landlord’s Right to Demand Increased Insurance ........................................... 5
Section 5.03 Tenant’s Covenant to Maintain Insurance ......................................................... 5
Section 5.04 Tenant’s Covenant to Pay Premiums ................................................................. 5
Section 5.05 Landlord’s Right to Place Insurance ................................................................... 5
Section 5.06 Insurance No Limit of Liability ........................................................................... 5
Section 5.07 Proceeds of Insurance ........................................................................................... 6
Section 5.08 Substantial Damage .............................................................................................. 8
ARTICLE VI - ALTERATIONS AND REDEVELOPMENT ................................................................ 9
Section 6.01 Tenant’s Alterations .............................................................................................. 9
Section 6.02 Consent of Mortgagee to Alterations ............................................................... 10
ARTICLE VII - TENANT’S COVENANTS .......................................................................................... 10
Section 7.01 Tenant’s Covenant to Pay Rent ......................................................................... 10
Section 7.02 Obligation to Maintain Premises ...................................................................... 11
Section 7.03 Tenant’s Covenant to Repair ............................................................................. 11
Section 7.04 Tenant Responsible for Damage ....................................................................... 11
Section 7.05 Tenant not to Request Local Improvements .................................................... 11
Section 7.06 Easements and Rights-of-Way .......................................................................... 12
Section 7.07 Tenant to Comply with all Legal Requirements ............................................. 12
Section 7.08 Landlord Entitled to Inspect .............................................................................. 12
Section 7.09 Covenant to Discharge Liens ............................................................................. 12
Section 7.10 Covenant to Notify of Damage ......................................................................... 12
ARTICLE VIII - DEFAULT ...................................................................................................................... 13
Section 8.01 Events of Default ................................................................................................. 13
Section 8.02 Remedies of Landlord ........................................................................................ 13
Section 8.03 Re-Entry................................................................................................................ 14
Section 8.04 Action to Recover Possession ............................................................................ 15
Section 8.05 Landlord May Perform Covenants ................................................................... 15
Section 8.06 Collateral Security ............................................................................................... 15
Section 8.07 Appointment of Receiver ................................................................................... 17
ARTICLE IX - LIQUIDATION OR BANKRUPTCY ........................................................................... 18
Section 9.01 Acceleration of Rent............................................................................................ 18
ARTICLE X - LANDLORD’S COVENANTS AND MUTUAL COVENANTS .............................. 18
Section 10.01 Landlord’s Covenant for Quiet Enjoyment ................................................... 18
Section 10.02 Landlord not Required to Repair or Maintain .............................................. 18
Section 10.03 No Warranty of Title ........................................................................................ 18
ARTICLE XI - REVERSION TO LANDLORD .................................................................................... 18
Section 11.01 Surrender at Expiry of Term............................................................................ 18
Section 11.02 Removal of Chattels .......................................................................................... 19
ARTICLE XII - ASSIGNMENT AND SUBLETTING ......................................................................... 19
Section 12.01 No Assignment ................................................................................................. 19
Section 12.02 Subleases and Transfer ..................................................................................... 20
Section 12.03 Limitation ........................................................................................................... 20
ARTICLE XIII - EXTENSION OF TERM .............................................................................................. 20
Section 13.01 Option to Renew ............................................................................................... 20
ARTICLE XIV - ARBITRATION ............................................................................................................ 22
Section 14.01 Arbitration ......................................................................................................... 22
ARTICLE XV - EXPROPRIATION ......................................................................................................... 22
Section 15.01 Expropriation..................................................................................................... 22
ARTICLE XVI - STATEMENTS BY TENANT ..................................................................................... 23
Section 16. 01 Subordination to Mortgagee ........................................................................... 23
Section 16.02 Estoppel Certificate ........................................................................................... 23
ARTICLE XVII - MISCELLANEOUS PROVISIONS ......................................................................... 24
Section 17.01 Rights and Remedies not Restricted ............................................................... 24
Section 17.02 Transfer by Landlord........................................................................................ 24
Section 17.03 Notices ............................................................................................................... 24
Section 17.04 Independent Covenants .................................................................................. 24
Section 17.05 Enurement.......................................................................................................... 25
Section 17.06 Waiver ................................................................................................................ 25
Section 17.07 Force Majeure .................................................................................................... 25
Section 17.08 Allocation of Payments .................................................................................... 25
Section 17.09 Entire Agreement .............................................................................................. 25
Section 17.10 Time of the Essence ........................................................................................... 25
Section 17.11 No Option to Lease ........................................................................................... 26
Section 17.12 Month to Month Tenancy ................................................................................ 26
Section 17.13 Agreement not to Register Lease ................................................................... 26
Section 17.14 Governing Law .................................................................................................. 26
Section 17.15 Acceptance ......................................................................................................... 27
LEASE AGREEMENT
THIS LEASE made effective as of the ____ day of ____________, ____.
BETWEEN:
[LANDLORD], a body corporate incorporated pursuant to the laws of
the Province of ___________ and authorized to carry on business in the
said Province (the “Landlord”)
OF THE FIRST PART
- and -
[TENANT], a body corporate incorporated pursuant to the laws of the
Province of ___________ and authorized to carry on business in the said
Province (the “Tenant”)
OF THE SECOND PART
WITNESSETH THAT in consideration of the demise by and the covenants and agreements on the part of
the Landlord herein contained and the rent payable by and the covenants, agreements or obligations on
the part of the Tenant herein contained, the Landlord being registered as owner, subject, however, to such
mortgages and encumbrances as are notified by memorandum or endorsed on the existing certificates of
title of those lands defined in Section 2.01, has leased such lands to the Tenant and the Tenant has
accepted such lease, all on the terms herein set forth; and this Lease is made upon and subject to the
following covenants, agreements or obligations which each of the parties hereto respectively covenants
and agrees to keep, observe and perform to the extent that the same are binding or expressed to be
binding upon it.
ARTICLE I - INTERPRETATION
Section 1.01 Headings, etc.
Headings and captions of articles and sections are inserted for convenience of reference only and are not
to be considered when interpreting this Lease. All references in this Lease to articles, sections and other
sub-sections refer to the corresponding articles, sections and other sub-sections of this Lease and the
words “this Lease”, “herein”, “hereof”, “hereby”, “hereunder”, “hereinafter” and words of similar import
refer to this Lease as a whole and not to a particular article, section or sub-section of this Lease.
ARTICLE II - DEMISE, TERM, RENT
Section 2.01 Leased Premises
The Landlord does hereby demise and lease unto the Tenant all and singular those certain parcels of land
and premises (the “Leased Premises”) in the City of [city], in the Province of ___________ legally
described as:
[legal description of the premises]
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and all buildings situate on or subsequently constructed on the Leased Premises (the “Improvements”).
Section 2.02 Term
To have and to hold the Leased Premises and the Improvements for a term of _____ (___) years
commencing on the ______ day of ____________, ______ and expiring at midnight on the _____ day of
____________, _____ (the “Term”), subject to the provisions with respect to earlier termination hereinafter
contained.
Section 2.03 Rent and Additional Rent
Yielding and paying therefor, for each of the following years during the Term without any deduction, set-
off or abatement whatsoever the following rents:
(a) during each year of the Term, the sum of ____________________ DOLLARS ($___________) per
year of lawful money of Canada payable in advance in equal monthly installments of
____________________ DOLLARS ($___________) commencing on the ___ day of ________,
______.
(b) as additional rent all other amounts which the Tenant is required to pay or discharge under this
Lease together with all penalties, interests and costs and if the Tenant fails to pay or discharge
any such other amounts, the Landlord shall have the rights, powers and remedies provided
herein.
Section 2.04 Interest on Amounts in Default
When rent or any other amount payable hereunder by the Tenant to the Landlord is in arrears, such
amount shall bear interest from the date due until paid at the rate of interest per annum equal to ________
(______) percentage points in excess of the prime commercial rate of interest at which loans in Canadian
dollars are available at the main office in the City of _____________ of the
______________________________ (bank) to its most preferred commercial customers payable monthly or,
if such rate of interest shall become unlawful, at the maximum rate permitted by law. The Landlord shall
have all remedies for the collection of such interest if unpaid after demand as in the case of rent in arrears,
but this stipulation for interest shall not prejudice or affect any other remedies of the Landlord under this
Lease.
Section 2.05 Other Charges
Any sums, costs, expenses or other amounts from time to time due and payable by the Tenant to the
Landlord under the provisions of this Lease, including sums payable by way of indemnity and whether
expressed to be rent or not, may at the option of the Landlord be treated as and deemed to be rent, in
which event the Landlord shall have all remedies for the collection of such sums when in arrears as are
available to the Landlord for the collection of rent in arrears.
Section 2.06 Place of Payment of Rent
All rent, additional rent and charges payable hereunder shall be paid by the Tenant to the Landlord at its
offices at _____________________________________________________ or at such other place as the
Landlord may designate in writing from time to time, without any prior demand therefor, and shall be
payable in lawful money of Canada at par.
-3-
Section 2.07 Intent of Net Lease
It is the purpose and intent and agreement of the Landlord and the Tenant that annual rent payable to the
Landlord pursuant to Section 2.03 hereof shall be completely and absolutely payable under this Lease net
to the Landlord, and for this purpose the Tenant covenants with the Landlord that this Lease shall yield
net to the Landlord the annual rent specified in Section 2.03 of this Lease during the Term, free and clear
of all realty taxes, goods and services taxes, sales taxes, value added taxes, charges, rates, assessments,
expenses, costs, payments or outgoings of every nature whatsoever arising from or related to the Leased
Premises and the Improvements without abatement, deduction or set-off and under no circumstance or
condition whether now existing or hereafter arising or beyond the present contemplation of the parties
shall the Landlord be expected or obligated to make any payment of any kind whatsoever or be under
any obligation or liability hereunder or in respect of the Leased Premises except as herein otherwise
expressly set out and all such taxes, charges, rates, assessments, expenses, costs, payments and outgoings
of every kind and nature whatsoever relating to the Leased Premises and the Improvements which may
arise or become due during or in respect of the Term of this Lease shall be payable and be paid by the
Tenant, and the Tenant covenants to indemnify and save harmless the Landlord from and in respect of
any and all such taxes, charges, rates, assessments, expenses, costs, payments and outgoings.
Section 2.08 Obligation to Pay Rent Not to be Diminished
Except as provided in Section 5.08, the Tenant’s obligations to pay rent and all other sums payable by the
Tenant under the provisions of this Lease shall not be affected nor shall such rent or other payments abate
or be diminished in the event of damage to or destruction of the Improvements upon the Leased
Premises, regardless of the cause or extent thereof and the Tenant hereby waives the provisions of any
statute or rule of law to the contrary now or hereafter in effect, it being the intent of this Lease that the
Improvements shall be at the sole risk of the Tenant.
ARTICLE III - USE OF LEASED PREMISES
Section 3.01 Use of Premises
Subject to the provisions for redevelopment hereinafter contained, the Leased Premises and the
Improvements shall not be used for any purpose other than the operation and maintenance thereon of
________________________________ [insert description of tenant’s business] and shall be occupied in a
lawful manner.
ARTICLE IV - INDEMNITY
Section 4.01 Tenant’s Indemnity to Landlord
The Tenant shall indemnify and save harmless the Landlord from and against any and all claims,
demands, awards, judgments, actions and proceedings by whomsoever made, brought or prosecuted in
respect of loss, damage or destruction of property or personal injuries, including death, and from and
against any and all loss of, damage to or destruction of property and expenses and costs suffered or
incurred by the Landlord by reason of the act, omission, use and occupation of the Leased Premises and
the Improvements, negligence or misconduct of the Tenant and its assignees, and its and their servants,
agents, employees, invitees and licensees, or anyone permitted to be upon the Leased Premises and the
Improvements, or any of them, while in the course of exercising any right, licence or privilege or doing
anything which is required or permitted by reason of this Lease, except where caused by the negligence of
the Landlord, or those for whom the Landlord is responsible in law.
-4-
Section 4.02 Landlord not to be Liable
The Landlord shall not be liable for death or injury or damage to property of the Tenant or of others
located on the Leased Premises or within the Improvements, nor for the loss of or damage to any property
of the Tenant or of others by theft or otherwise from any cause whatsoever.
ARTICLE V - INSURANCE PROVISIONS
Section 5.01 Tenant’s Insurance
The Tenant shall acquire and maintain at all times during the currency of the Term the following
insurance, all in a form and issued by an insurance company or companies registered and licensed to
operate in the Province of ________________, satisfactory to the Landlord in its sole and unfettered
discretion:
(a) comprehensive general liability insurance against liability of the Landlord and the Tenant to third
parties and against the Tenant’s contractual liability to indemnify the Landlord under the terms
of this Lease, with inclusive limit of not less than FIVE MILLION ($5,000,000.00) DOLLARS for
each occurrence involving bodily injury (including death) and property damage, insuring the
Landlord and the Tenant, their respective employees, servants, agents, invitees or licensees and
any of them. Such insurance shall contain endorsements stating that:
(i) the Landlord and any mortgagee of the fee simple interest in the Leased Premises (the
“Mortgagee”) are included as a named insured as their interests may appear under the
policy;
(ii) the policy contains a “cross-liability” clause and a “severability of interest” clause;
(iii) the policy extends to cover the contractual obligations of the Tenant under the terms of
this Lease;
(iv) the insurers have received a copy of this Lease and are fully aware of the contractual
obligations of the Tenant; and
(v) such policy shall not be terminated, cancelled or materially altered unless written notice
of such termination, cancellation or material alteration is given by the insurers to the
Landlord at least thirty (30) clear days before the effective date thereof;
(b) “all risks” physical damage insurance, (excluding flood and earthquake), covering the
Improvements, (excluding the excavations, footings and foundations thereof) constructed and
maintained in, on, under or above the Leased Premises. Such insurance shall provide a limit of
not less than the replacement cost of the Improvements excluding the excavations, footings and
foundations thereof;
(c) boiler and pressure vessel and machinery breakdown insurance including all heating ventilation
and air-conditioning equipment, in an amount:
(i) not less than the replacement cost of all such equipment respecting damage thereto;
(ii) not less than the replacement cost of the Improvements (excluding the excavations,
footings and foundations thereof).
-5-
The insurance provided for in subsections 5.01(b) and (c) shall both contain endorsements stating
that:
(A) the policy contains a waiver of subrogation clause in favour of the Landlord and the
Mortgagee;
(B) the policy contains a breach of conditions clause providing a waiver in favour of the
Landlord and the Mortgagee of any breach of warranty clause such that the insurance
policies in question shall not be invalidated as respects their interest by reason of any
breach or violation of any warranties, representations, declarations, or conditions
contained in the policies; and
(C) such policy shall not be terminated, cancelled or materially altered unless written notice
of such termination, cancellation or material alteration is given by the insurers to the
Landlord at least thirty (30) clear days before the effective date thereof.
Section 5.02 Landlord’s Right to Demand Increased Insurance
The Tenant agrees with the Landlord that the amount of insurance provided for in this Article V may be
increased as requested by the Landlord, in its sole and unfettered discretion, or the Mortgagee during
each year of the Term and that the Landlord and the Mortgagee shall each be entitled to approve yearly
the amount of insurance placed by the Tenant. The Tenant covenants that it shall obtain such additional
insurance forthwith upon request by the Landlord or the Mortgagee.
Section 5.03 Tenant’s Covenant to Maintain Insurance
The Tenant covenants to comply with all insurers’ requirements and to maintain all insurance and
endorsements thereon in good standing.
Section 5.04 Tenant’s Covenant to Pay Premiums
The Tenant shall pay all premiums and costs of all insurance required to be effected by the Tenant under
any provision of this Lease and shall from the execution of this Lease by the Landlord and from time to
time file with the Landlord certified copies of insurance, renewal contracts and other documents sufficient
to show and establish accurately at all times the current provisions and status of policies in force and, in
particular, shall submit to the Landlord, before the expiration of every current policy, evidence of the
renewal of such policy or the issuance of a replacement policy and shall promptly notify the Landlord of
any cancellation or intended cancellation by any insurer of any policy or any circumstances known to the
Tenant materially affecting its coverage. The Tenant shall not cancel any policy of insurance without
obtaining insurance in substitution therefor satisfactory to the Landlord and the Mortgagee.
Section 5.05 Landlord’s Right to Place Insurance
If the Tenant defaults in any of its obligations under this Lease regarding insurance the Landlord may,
but shall not be obliged to, place any insurance at the cost and expense of the Tenant or pay any arrears of
premiums and any expense incurred by the Landlord shall be reimbursed to it by the Tenant on demand
together with interest thereon calculated in accordance with Section 2.04 hereof from the date of payment
until paid.
Section 5.06 Insurance No Limit of Liability
The Landlord and Tenant acknowledge and agree that the acquisition and maintenance of insurance as
required pursuant to this Lease shall in no manner whatsoever limit the liability of the Tenant.
-6-
Section 5.07 Proceeds of Insurance
It is the intention of the parties hereto and they hereby agree that the proceeds of any policies of insurance
referred to in subsection 5.01(b) hereof shall be payable as follows:
(a) where such insurance proceeds are less than FIFTY THOUSAND ($50,000.00) DOLLARS, they
shall be payable to the Tenant, who shall forthwith expend and apply them in rebuilding,
reinstating and repairing the Improvements as required by the provisions of this Lease and in
case such proceeds shall be insufficient for the purpose, the Tenant will make good any
deficiency;
(b) where such insurance proceeds are payable in an amount in excess of FIFTY THOUSAND
($50,000.00) DOLLARS but not exceeding ONE HUNDRED FIFTY THOUSAND ($150,000.00)
DOLLARS, they shall be paid to the Landlord or, at the option of the Tenant, to the Landlord and
any Mortgagee jointly, and the cost of rebuilding, reinstating and repairing the Improvements as
required by the terms of this Lease shall be borne by the Tenant. Payment for the work shall be
made to the Tenant in a lump sum on completion of the rebuilding, reinstating and repairing.
Subject to subclauses (c) and (d) hereof, any interest accrued on such proceeds shall be added to
such lump sum at the time of its payment to the Tenant and any surplus insurance monies
remaining after payment to the Tenant for such work shall be paid to the Tenant if it is not then in
default under this Lease;
(c) if the Tenant fails to effect such rebuilding, reinstating and repairing in accordance with the
provisions of this Lease within a reasonable time, the Landlord shall be entitled to effect the same
itself, retain any insurance monies against the cost and recover any balance from the Tenant; any
surplus insurance monies remaining after payment for such work shall be paid to the Tenant if it
is not then in default under this Lease;
(d) when, at the time of the occurrence of the damage or the completion of such rebuilding,
reinstating and repairing, the Tenant is in default to the Landlord under the terms of this Lease
but the Landlord has not elected to terminate the Lease, the Landlord shall be entitled out of any
insurance monies in its hands or in the hands of the Landlord and Mortgagee jointly to retain any
monies not paid over for the cost of such work on account towards the rectification of the
Tenant’s default;
(e) where such insurance proceeds exceed ONE HUNDRED FIFTY THOUSAND DOLLARS
($150,000.00) they shall be paid to a Canadian chartered bank or to a trust or loan company (the
“Trustee”) authorized to carry on business in the Province of __________________, designated
from time to time by the Landlord, of failing designation by the Landlord after seven (7) days
notice by the Tenant, the Trustee shall be designated by the Tenant and any Mortgagee jointly, to
be held by the Trustee in an interest bearing account in trust for the Landlord, the Tenant and any
Mortgagee, and for the purpose of insuring for the benefit of all such persons, that the proceeds
shall be applied to the repair, rebuilding, and reinstating of the Improvements and to be
disbursed in the manner set out in this subsection 5.07(e). Before any contract is entered into by
the Landlord, Tenant or Mortgagee for the carrying out of any repair work pursuant to this
subsection 5.07(e), copies of the estimates for any work and the contracts for the completion of the
work shall be submitted to such of the Landlord, Tenant and Mortgagee as shall not be parties to
such contracts. If the estimated cost of the work shall be greater than the total amount of any
insurance proceeds, an amount equal to the excess shall be deposited by the Tenant with the
Trustee before the work is commenced. The proceeds held in trust by the Trustee under this
subsection 5.07(e) as aforesaid shall be paid by the Trustee in installments from time to time as
the repair of the loss or damage is proceeded with, to the person entitled to such payments, as
follows:
-7-
(i) If the Tenant is not in default under this Lease and shall proceed with the repair of the
loss and damage in accordance with its obligations hereunder, such proceeds shall be
payable to the Tenant in installments on the basis of claims made by the Tenant in
accordance with the provisions of this paragraph. In claiming each payment from the
Trustee, the Tenant shall file with the Trustee:
(A) a certificate of the Tenant stipulating the estimated total cost of completing the
repair of the loss or damage to which the proceeds of insurance relate, stipulating
the amount expended to date by the Tenant upon such repair, that the repairs
made to the date of the certificate have been completed in good and
workmanlike manner and in compliance with all the provisions of this Lease, that
all accounts therefor have been paid except for the amounts which the Tenant is
required to retain by law under the provisions of applicable builders’ lien
legislation for the Province of ____________________________, and except for
payments to contractors employed upon the work and which the Tenant directs
the Trustee to pay directly to such contractors out of the payment being applied
for by the Tenant, and stipulating the estimated amount required to complete
such repairs and to pay any balance owed for repairs already completed;
(B) a certificate of the Tenant’s architect certifying that the contents of the said
certificate of the Tenant are accurate.
Upon receipt of such certificates the Trustee shall furnish copies by mail to the Landlord
and any Mortgagee. If any of the persons furnished with copies of certificates as aforesaid
shall file with the Trustee an objection to the making of any payment, and unless and
until such objection shall be waived by the person making it, the Trustee shall continue to
hold such proceeds until otherwise directed by a joint direction of the Landlord, Tenant
and any Mortgagee or by an order of a Court having jurisdiction (subject always to the
Trustee’s right to pay any moneys held by it into Court and relieve itself of the trust), but
if no notice of objection has been received within a period of fifteen (15) days after receipt
by the aforesaid parties of copies of the said certificates, then subject to the provisions of
applicable builders’ lien legislation for the Province of ____________________________,
the Trustee shall pay to the Tenant (or directly to contractors as aforesaid, if the Tenant
has so directed) the lesser of:
(1) the aggregate amount actually expended by the Tenant in the making of such
repairs as certified by the Tenant (but including payments directly to contractors
as aforesaid then to be made and previously made) less amounts previously paid
by the Trustee to or at the direction of the Tenant pursuant to this subsection
5.07(e) in respect of such repairs, or
(2) an amount such that the amount of proceeds which will be retained by the
Trustee after the making of such payment shall be equal to the estimated cost of
completing the then remaining repairs plus the amount retained or otherwise
then unpaid by the Tenant for work done to date, as established by the said
certificate of the Tenant but taking into account payments then being made to
contractors employed on the work as aforesaid.
When all repairs have been completed and fully paid for, and if the Tenant is not in
default under this Lease and has paid its share of all costs and expenses of the Trustee as
provided in subsection 5.07(e), and has filed certificates to the foregoing effect, and after
-8-
the Trustee has furnished copies of such certificates to the Landlord and others as above
provided, and after fifteen (15) days following receipt thereof have expired without
objection (all in the same manner as hereinbefore set forth) the Trustee shall release to the
Tenant any balance of proceeds of insurance in the hands of the Trustee pertaining to
such repair, subject always to the provisions of applicable builders’ lien legislation for the
Province of ____________________________.
(ii) If the Tenant is in default under any mortgage or other encumbrance of its leasehold
interest, but shall not otherwise have defaulted under this Lease (or, if it has so defaulted,
if the Landlord has elected not to exercise any of its rights under this Lease) and any
mortgagee or encumbrancee of the Tenant’s leasehold interest shall, as against the
Tenant, be entitled to possession of the Leased Premises and shall undertake and agree in
writing with the Landlord to perform the work of repair which the Tenant is obligated
hereunder to perform, and the work of repair has been completed by the mortgagee or
encumbrancee then the Trustee shall pay to the person or persons making such repairs on
filing certificates upon the same basis (mutatis mutandis) as provided herein, the proceeds
held in trust by the Trustee under subsection 5.07(e) in installments from time to time as
the repair and rebuilding of the loss or damage is proceeded with.
(iii) if the Tenant is in default under this Lease, but the Landlord has not elected to forfeit or
terminate this Lease in accordance with the provisions hereof, the Landlord may (but
shall not be obligated to) repair the loss or damage; and if and to the extent that the
Landlord incurs expense in repairing such loss or damage the Landlord shall be entitled
to receive the proceeds held in trust by the Trustee under subsection 5.07(e) in
installments from time to time as the repair or rebuilding of the loss or damage is
proceeded with, upon filing certificates and upon the same basis (mutatis mutandis) as
hereinbefore set out. Provided always however, that whenever the Landlord shall forfeit
or terminate this Lease in accordance with the provisions hereof, the Landlord shall be
entitled to receive all the remaining proceeds whether in the hands of the Trustee or paid
into Court.
The Tenant shall pay all costs and expenses of the Trustee referred to in subsection 5.07(e) and all
interest earned by proceeds on deposit with the Trustee shall be added to the proceeds held by
the Trustee and disposed of in accordance with subsection 5.07(e).
If a dispute occurs as to the application of the provisions of this subsection 5.07(e) such dispute
shall be subject to arbitration in accordance with Section 14.01 hereof.
Section 5.08 Substantial Damage
Notwithstanding the provisions of Section 5.07, if substantial damage occurs to the Improvements and the
Mortgagee, as a result of provisions contained in a mortgage granted to it by the Landlord, requires the
proceeds of insurance on the Improvements to be paid to the Mortgagee in reduction of the principal sum
due under such mortgage in lieu of using such proceeds to rebuild, reinstate and repair the
Improvements, and such proceeds are paid to the Mortgagee, the Tenant shall not be required to rebuild,
reinstate and repair the Improvements as required by the provisions of this Lease, and this Lease shall
terminate on the date that such insurance proceeds are paid to the Mortgagee.
-9-
ARTICLE VI - ALTERATIONS AND REDEVELOPMENT
Section 6.01 Tenant’s Alterations
(a) Except as expressly provided in this Lease, the Tenant shall not make or permit or suffer to be
made any changes, modifications or alterations to the Improvements or any part thereof, without
obtaining the prior written consent of the Landlord thereto, which consent may be unreasonably
withheld, provided the Tenant has fully complied with each and every one of the terms,
covenants and provisions of this Lease including the following:
(i) before requesting the Landlord’s consent, the Tenant shall submit to the Landlord in
duplicate, designs, plans and specifications (all in outline form) of the proposed changes,
modifications or alterations to the Improvements together with adequate evidence that
the proposed changes modifications or alterations to the Improvements have been
approved and all requisite and appropriate approvals, permits, licences and
authorizations therefor have been issued by all governmental and public authorities
having jurisdiction, and requirements in respect thereof have been met and satisfied;
(ii) the Tenant shall have obtained at its own cost and expense and deposited with the
Landlord a bond or bonds of a surety company authorized to do business in the Province
of ____________________ or other security satisfactory to the Landlord, all in a form and
according to terms and conditions acceptable to the Landlord in its sole and unfettered
discretion and in the amount of the estimated cost of the proposed changes, modifications
and alterations to the Improvements assuring to the Landlord the due completion of the
changes, modifications or alterations to the Improvements in a due, timely and good and
workmanlike manner in accordance with this Lease, and in accordance with the designs,
plans and specifications; and further assuring the full and complete payment of any and
all costs, expenses, liens and charges of every kind arising from or in connection with the
construction of the changes, modifications or alterations to the Improvements including
payment for labour and materials therefor. The performance bond or bonds shall provide
for completion of the changes, modifications or alterations to the Improvements
notwithstanding the expiration of the Term of this Lease; and
(iii) no changes, modifications or alterations to the Improvements and no improvements
subsequent to the commencement date of the Term shall materially adversely affect the
initial structure or lessen the value, usefulness, life or permanency thereof.
(b) Notwithstanding the provisions as to rebuilding, reinstating and repairing as set forth in Section
5.07 hereof, the Tenant shall have the right at any time during the Term to apply to the Landlord
for consent to the demolition of the Improvements and the erection of new Improvements and
such consent shall not be unreasonably withheld if all of the other provisions of subsection 6.01(a)
shall have been complied with. The Tenant will construct or erect or cause to be constructed or
erected and to prosecute or cause to be prosecuted to completion the new Improvements in a
diligent, substantial and workmanlike manner and as required by applicable legislation and in
accordance with the designs, plans and specifications thereof and therefor (all in outline form)
approved by the Landlord (subject to such reasonable variations or changes as the Landlord may
from time to time approve in writing, such approval not to be unreasonably withheld) and in the
construction and erection of the new Improvements, to do all acts and things required by and
perform the work in accordance with the laws, by-laws, orders and regulations of all relevant
public authorities having jurisdiction over such matters, whether federal, provincial or municipal.
(c) No approval of designs, plans and specifications shall make the Landlord or its officers, servants
or agents liable to the Tenant for the safety, adequacy, soundness or sufficiency of such
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construction by reason of the giving of such approval nor shall the giving of such approval
constitute a waiver by the Landlord of any duty or liability owed by the Tenant to the Landlord,
its officers, servants or agents by reason of this Lease or otherwise howsoever.
(d) The Landlord and any person or persons appointed by it may inspect the new Improvements or
any changes, modifications or alterations to the Improvements and materials used in their
construction at all reasonable times during the course of construction. If the materials used in the
new Improvements or any changes, modifications or alterations to the Improvements or the
location of the new Improvements or any changes, modifications or alterations to the
Improvements or any part thereof do not or does not conform with the approved designs, plans
and specifications (subject to any reasonable variations or changes approved as aforesaid),
written notice of any deficiency, defect or omission may be given forthwith by the Landlord to the
Tenant, and upon receipt of any such notice, the Tenant shall promptly take such action as may
be necessary to correct the deficiency, defect or omission.
Section 6.02 Consent of Mortgagee to Alterations
The Tenant acknowledges that notwithstanding Section 6.01, the Landlord may require the consent of the
Mortgagee to any changes, modifications or alterations to the Improvements, or to demolition of the
Improvements and the construction of new Improvements, and if the Mortgagee withholds its consent,
the Tenant shall be bound thereby and the Landlord shall not be deemed to be unreasonably withholding
its approval pursuant to Section 6.01.
ARTICLE VII - TENANT’S COVENANTS
Section 7.01 Tenant’s Covenant to Pay Rent
(a) The Tenant covenants with the Landlord to pay rent as provided in Section 2.03 hereof and all
other amounts due under this Lease as additional rent.
(b) During the Term hereof the Tenant shall pay or cause to be paid all taxes (including taxes for local
improvements), rates, duties and assessments (collectively referred to herein as the “taxes”) that
may legally be imposed, levied, rated, charged or assessed against the Leased Premises or any
part thereof and all Improvements, goods, chattels or facilities thereof owned or brought thereon
by the Tenant or anyone claiming under or through the Tenant directly to the governmental
authority entitled to receive the taxes and discharge as the taxes become due, to the extent that
the taxes are or can become a lien against the Leased Premises or the Improvements or charged to
the Landlord, and every tax, charge and licence fee in respect of any and every business carried
on thereon or in respect of the occupancy of the Leased Premises and the Improvements by the
Tenant and by and anyone permitted by the Tenant to be upon the Leased Premises, whether
such taxes, rates, duties, assessments, licence fees or other charges are imposed, levied, rated,
charged or assessed by any federal, provincial, municipal, metropolitan or other body, together
with all charges for electricity, gas, water and other rates in connection with such business or
occupancy and all other charges in respect of the Leased Premises and the Improvements.
(c) The Tenant shall indemnify and keep indemnified the Landlord from and against payment of all
loss, costs, charges and expenses occasioned by or arising from all such taxes, rates, duties,
assessments, licence fees or other charges and any and all taxes which may in the future be levied
in lieu of such taxes and all charges for electricity, gas, water and other rates in connection with
such business or occupancy and all other charges in respect of the Leased Premises and the
Improvements and any such loss, costs, charges and expenses suffered by the Landlord may be
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collected by the Landlord as rent with all rights of distress and otherwise as reserved to the
Landlord in respect of rent in arrears.
(d) The Tenant shall have the right and privilege of appealing assessments or applying for a
reduction of the amount of any taxes, rates, levies and assessments in respect of the Leased
Premises and the Improvements and may take such action in its own name or, if required and
upon agreeing to indemnify the Landlord in respect of such action and all costs relating thereto,
in the name of the Landlord and the Landlord hereby agrees to join in such proceedings. The
Tenant agrees to give to the Landlord notice of the commencement of any such proceedings and
to prosecute them with all due diligence and speed. Upon the Landlord receiving any assessment
notices relating to the Leased Premises and the Improvements, it shall forthwith send a copy
thereof to the Tenant.
Section 7.02 Obligation to Maintain Premises
The Tenant shall operate, manage and maintain the Improvements and the Leased Premises in a first class
condition including the general appearance and standard of the Improvements and the Leased Premises
as would a careful owner and (in addition to performing all its other covenants under this Lease) shall
properly and adequately supervise the Improvements and the Leased Premises, shall supply heating,
ventilation and air-conditioning and other necessary building services to the Improvements and shall
keep the Improvements and the Leased Premises neat, clean and in a good state of repair.
Section 7.03 Tenant’s Covenant to Repair
(a) During the Term the Tenant shall at all times keep and maintain at its cost and expense in such
order and condition and structurally sound as would a careful owner of the Leased Premises the
Improvements and shall, in the same manner and to the same extent as a careful owner, make
any and all necessary repairs and replacements, structural or otherwise, and keep the
Improvements fully useable for all the purposes for which the Improvements were erected and
constructed and in keeping with a high quality first class ___________________________ [insert
description of business]. The Tenant shall not commit or suffer to be committed any waste or injury
to the Leased Premises or the Improvements or any part thereof or use any of the same for any
illegal or unlawful purposes.
(b) If the Tenant neglects or fails after reasonable notice (or without notice in the case of an
emergency) to make such repairs, alterations or do such other work as may be reasonably
required by the Landlord and to keep and maintain the Improvements structurally sound and in
the state of repair required pursuant to this Lease, then the Landlord may make such repairs and
alterations and do such work at the expense of the Tenant.
Section 7.04 Tenant Responsible for Damage
The Tenant shall be responsible for any damage to the Leased Premises or the Improvements that may
occur during the Term and shall (unless otherwise expressly stated or provided herein) rebuild, repair
and reinstate the Improvements accordance with this Lease.
Section 7.05 Tenant not to Request Local Improvements
The Tenant shall not, without the prior written consent of the Landlord, request nor cause to be requested
by application or otherwise to any local authority, municipality other person, firm, business or
partnership the making of further improvements to the Leased Premises or to any adjoining lands which
if made would create a charge, levy or assessment upon the Leased Premises that would survive the
expiry or other termination of this Lease. The Tenant hereby agrees, if such improvements are made, to
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pay to the Landlord the full remaining amount of such charge, levy or assessment on the expiry or other
termination of this Lease.
Section 7.06 Easements and Rights-of-Way
It is understood by the Tenant that all or a portion of the Leased