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HomeMy WebLinkAbout95-184 1 THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON BY-LAW #95- 184 Being a By-law to authorize the execution of an offer to Lease Agreement between the Corporation of the Municipality of Clarington and 760719 Ontario Limited o/a Apogee Productions in respect of a lease of the premises known as the Orono Armories, Park Street, Orono, Ontario. THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON HEREBY ENACTS AS FOLLOWS: 1. THAT the Mayor and Clerk are hereby authorized -to execute on behalf of the Corporation of the Municipality of Clarington with the Corporation Seal, an Offer to Lease Agreement between 760719 Ontario Limited and Said Corporation; and 2. THAT this agreement attached hereto as Schedule "B" form part of this By-law. By-law read a first and second time this 11th day of December 1995 By-law read a third time and finally passed this 11th .day of December 1995 Mayor Cler .� t THIS LEASE dated as of the 1st day of December, 1995 in pursuance of the Short Forms of Leases Act. BETWEEN: The Corporation of the Municipality of Clarington (hereinafter called the "Landlord") - and 760719 Ontario Limited O/A Apogee Productions (hereinafter called the "Tenant") WHEREAS the Landlord has agreed to lease to the Tenant and the Tenant has agreed to lease from the Landlord the lands and premises, including (i) the front office (the "Front Office") containing approximately 1,097 square feet located in and (ii) the Front Office and the balance of the building containing a total of approximately 3,953 square feet (the "Building") known as Orono Armouries, Park Street, Hamlet of Orono, Municipality of Clarington, Regional Municipality of Durham (the 'Premises"). NOW THEREFORE THIS LEASE WITNESSES that in consideration of the rents, covenants and agreements hereinafter reserved and contained on the part of the Landlord and the Tenant, the Landlord leases to the Tenant, and the Tenant leases from the Landlord, the Premises on the following terms and conditions: 1. Term (a) The Tenant shall have and hold as tenant for a term of three (3) years commencing December 1, 1995 and ending November 30, 1998 (hereinafter called the "Term") that portion of the Premises comprising (i) the Front Office for the period commencing December 1, 1995 until April 30, 1996 and (ii) the Building from May 1, 1996 until the Lease is terminated. (b) If the Tenant shall not be in default under this Lease the Tenant shall have the right to extend the Term for a further period of three (3) years (the "Extension Term"). Such right shall be exercisable by written notice from the Tenant to the Landlord given no later than 180 days before the expiration of the initial Term. The Extension Term shall be on the same terms and conditions as contained herein save and except that there shall be no further right of extension of the Term or Extension Term. 2. use The Tenant shall continuously occupy the Premises throughout the Term, subject to and in accordance with the provisions of this Lease, solely for uses permitted by law and for no other use or purpose. The Tenant shall not commit or suffer or permit to be committed (i) any waste or damage, disfiguration or injury to the Premises or the improvements, installations, fixtures and equipment thereon and (ii) any nuisance in, at or on the Premises. r -2- The Tenant shall not do or permit anything to be done that results in the cancellation or threatened cancellation or the reduction of coverage under or threatened reduction of coverage under any insurance policy on the Premises or any part of it. 3. Basic Rent During the Term, the Tenant shall pay to the Landlord annual minimum rent ('Basic Rent") in an amount equal to (i) Two Hundred and Five Dollars and Sixty-Nine Cents ($205.69) per month during the first six (6) months of the Term and (ii) Seven Hundred and Forty- One Dollars and Eighteen Cents per month subject to increase as provided herein for the balance of the Term. Basic Rent shall be payable in monthly instalments, each payable on the first day of each month;provided that should the Term commence or terminate on a date other than the first day of a month, the Tenant shall pay to the Landlord for that month a pro rata portion of said monthly payment. Basic Rent shall be considered as accruing from day to day and where it becomes necessary for any reason to calculate rent for an irregular period of less than one year or less than one calendar month, an appropriate apportionment and adjustment shall be made. On the 1st day of December of each year of the Term or Extension Term, as the case may be, after the commencement thereof the Basic Rent shall increase to an amount equal the Basic Rent for the previous month by a fraction which has as its numerator the Consumer Price Index(Ontario) (the "C.P.I.") for the preceding April and as its denominator the C.P.I. for April twelve (12) months prior. The Landlord shall advise the Tenant in writing no later than the 1st of June of each year as to the amount of such increase in Basic Rent. 5. Net Lease The Tenant acknowledges, covenants and agrees that, except as herein expressly set out, it is intended that this Lease and the rentals herein provided to be paid shall be completely net and carefree to the Landlord. All amounts required to be paid by the Tenant hereunder (whether to the Landlord or third parties) shall be additional rent and all additional rent shall be payable and recoverable as Basic Rent, but 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 Basic Rent. 6. Taxes, Utilities and Operating Costs The Tenant shall, as additional rent, in each and every year during the Term, be responsible for and pay and discharge promptly when due: (a) all taxes (including, without limitation, realty taxes, local improvement rates and business taxes), rates, duties and assessments that may be levied, rated, charged or assessed against the Premises; and (b) all charges for public utilities, including water, gas, oil, electrical power or energy, light, heat, air conditioning, telephone, steam or hot water used upon or in respect of the Premises or for fittings, machines, apparatus, meters or other things leased in respect thereof, and for all work or services performed by any corporation or commission in connection with such public utilities. The Tenant shall have the right to contest by appropriate legal proceedings the validity of any tax, rate, including local improvement rates, assessment or other charges referred to in this Section provided that, in so doing, the Tenant shall not cause or permit any liens or encumbrances to be filed or arise against the Premises. r IF -3- Without limiting the foregoing, during the Term, the Tenant shall be responsible for and shall pay promptly when due, as Additional Rent, without limiting the obligations of the Tenant under this Lease, the aggregate of all expenses and costs of every kind, without duplication, incurred by or on behalf of the Landlord or Tenant with respect to and for the operation, maintenance and repairs Premises and all insurance relating to the Premises, including, without limitation, all costs in respect of the following: (a) ventilating, air-conditioning and humidity control of the Premises; (b) cleaning, janitorial services, window cleaning and sewage and waste removal; (c) maintenance of all outside areas, including snow and ice removal; and (d) maintenance,repairs and replacements in respect of the Premises excluding structural and heating equipment maintenance, repairs and replacements. The Tenant shall (i) provide the Landlord within ten (10) days after receipt of same any tax bills, assessments,utility charges and other notices regarding the foregoing and (ii)promptly deliver to the Landlord receipts evidencing the payment of all of the foregoing. If received by the Landlord, the Landlord shall promptly deliver to the Tenant any such tax bills, assessments, utility charges and other notices regarding the foregoing. 7. Repairs and Maintenance The Tenant hereby accepts the Premises on an"as is"basis. The Tenant, at its own expense, shall maintain and keep the Premises and every part thereof(including, without limitation, all electrical, mechanical, plumbing; air conditioning, sprinklers and all other mechanical equipment on the Premises excepting all heating equipment), in good working order and condition and promptly make all needed maintenance, repairs and replacements as would a prudent owner of similar premises (reasonable wear and tear and damage by fire,lightning and tempest and structural defects only excepted). The Tenant shall keep the Premises clean and in such condition as a prudent owner would do. If structural repairs or replacements to the roof, foundation or load bearing walls or the heating equipment of the Premises are required during the Term, then the Landlord shall be obligated, at its expense, to effect such repairs or replacements. The Tenant covenants with the Landlord to leave the Premises in as good repair as the Premises were at the commencement of the Term. 8. Alterations (a) If the Tenant, during the Terms of this Lease or any renewal of it, desires to make any alterations or additions to the Premises, including but not limited to: erecting partitions, attaching equipment, and installing necessary furnishings or additional equipment of the Tenant's business, the Tenant may do so at his own expense, at any time and from time to time, if the following conditions are met: (i) before undertaking any alteration or addition the Tenant shall submit to the Landlord a plan showing the proposed alterations or additions and the Tenant shall not proceed to make any alteration or addition unless the Landlord has approved the plan, and the Landlord shall not unreasonably or arbitrarily withhold its approval and items included in the plan which are regarded by the Tenant as "Trade Fixtures" shall be designated as sun on the plan; and (ii) any and all alterations or additions to the Premises made by the Tenant must comply with all applicable building code standards and by-laws of the municipality in which the Premises are located. I i -4- (b) The Tenant shall be responsible for and pay the cost of any alterations, additions, installations or improvements that any governing authority, municipal, provincial or otherwise, may require to be made in, on or to the Premises. (c) No sign, advertisement or notice shall be inscribed, painted or affixed by the Tenant, or any other person on the Tenant's behalf, on any part of the inside or outside of the building in which the Premises are located unless the sign,, advertisement or notice has been approved in every respect by the Landlord. (d) All alterations and additions to the Premises made by or on behalf of the Tenant, other than the Tenant's Trade Fixtures, shall immediately become the property of the Landlord without compensation to the Tenant. (e) The Tenant agrees, at his own expense and by whatever means may be necessary, immediately to obtain the release or discharge of any encumbrance that may be registered against the Landlord's property in connection with any additions or alterations to the Premises made by the Tenant or in connection with any other activity of the Tenant. 9. Insurance and Indemnification (a) The Tenant covenants to keep the Landlord indemnified against all claims and demands whatsoever by any person, whether in respect of damage to person or property, arising out of or occasioned by the maintenance, use or occupancy of the Premises or the subletting or assignment of same or any part thereof. And the Tenant further covenants to indemnify the Landlord with respect to any encumbrance on or damage to the Premises occasioned by or arising from the act, default, or negligence of the Tenant, its officers, agents, servants, employees, contractors, customers, invitees or licensees and the Tenant agrees that the foregoing indemnity shall survive the termination of this Lease notwithstanding any provisions of this Lease to the contrary. (b) The Tenant shall carry: (i) insurance in his own name to provide coverage with respect to the risk of business interruption to an extent sufficient to allow the Tenant to meet his ongoing obligations to the Landlord and to protect the Tenant against loss of revenues; (ii) insurance in his own name insuring against the risk of damage the Premises and to the Tenant's property within the Premises caused by fire or other perils and the policy shall provide for coverage on a replacement cost basis to protect the Tenant's stock-in-trade, equipment, Trade Fixtures, decorations and improvement; and (iii) public liability and property damage insurance in which policy the Landlord shall be a named insured and the policy shall include a cross-liability endorsement; and the Tenant shall provide the Landlord with a copy of the policy certified by the insurer. 10. Damage and Destruction If the Premises are destroyed or damaged by fire, lightning, tempest or other casualty, then and in every such event if, in the opinion of the Landlord's architect, the damage or destruction of such Building renders the whole or any substantial part of the said Building l i -5_ unfit for occupancy or impossible or unsafe for use and occupancy or impossible for the Tenant to continue to carry on its business, either the Landlord or the Tenant may at its option, terminate this Lease by giving to the other notice in writing of such termination, in which event, this Lease and the Term shall cease and be at an end as of the date of such destruction or damage, and the rent and all other payments for which the Tenant is liable under the terms of this Lease shall be apportioned and paid in full to the date of such destruction or damage; 11. Quiet Enjoyment The Landlord covenants with the Tenant for quiet enjoyment. r t -6- 12. Government Requirements The Tenant shall, at its sole cost and expense, during the Term: (a) observe and comply with all applicable governmental laws and regulations including, without limitation, federal and provincial legislative enactments, Building by-laws, and other governmental or municipal regulations which relate to the Premises or the partitioning, equipment, operation and use thereof and to the making of any repairs, replacements, alterations, additions, changes, substitutions or improvements of or to the Premises. The Tenant shall comply with all police, fire and sanitary regulations imposed by any federal, provincial or municipal authorities, or made by insurance underwriters and shall observe all governmental and municipal regulations and other requirements governing the conduct of any business conducted in the Premises; (b) obtain all necessary permits, licenses and approvals relating to the use and occupancy of the Premises and the conduct of business therein; and (c) carry out all modifications, alterations or changes to the Premises and the Tenant's conduct of business in or use of the Premises which are required by any such authorities. The Tenant shall indemnify and hold the Landlord harmless against any penalty or fine imposed for any violation of any law, by-law or regulation by the Tenant or those for whom the Tenant is in law responsible. 13. Default The following events ("Events of Default") shall be deemed a default (a"default")under this Lease: (a) If the Tenant fails to pay any instalment of Basic Rent promptly when due or additional rent hereunder ("Additional Rent") no later than five (5) days following the respective due date; (b) If the Tenant fails to observe or perform any other term, covenant, condition or obligation under this Lease that is capable of remedy other than a default in the payment of Basic Rent or Additional Rent, and such default remains unremedied after thirty (30) days following written notice from the Landlord to the Tenant specifying such default and requiring the Tenant to remedy the default; (c) If the Tenant fails to observe and perform any other term, covenant, condition or obligation under this Lease that is not capable of remedy other than a default in the payment of Basic Rent or Additional Rent and the Tenant receives written notice from the Landlord specifying such default; (d) If the Tenant makes an assignment for the benefit of its creditors generally, or if the Tenant is declared bankrupt or insolvent, or if a petition in bankruptcy is filed against the Tenant, or if the Tenant files an assignment in bankruptcy or takes or attempts to take the advantage of any legislation for relief of bankrupt or insolvent debtors, or if a receiver or a receiver and manager is appointed for all or a portion of the Tenant's property, or if any steps are taken or any action or proceedings are instituted by the Tenant or by any other party including,without limitation, any court or governmental body of competent jurisdiction for the dissolution, winding-up or liquidation of the Tenant or its assets,unless such proceeding be set aside,discharged or abandoned within fourteen (14) days. For the purposes of this Subsection, r -7 '"Tenant" shall mean the Tenant and any person carrying on business in or occupying the whole or any part of the Premises; (e) If, the Tenant makes or attempts to make any bulk sale of any of its assets situated in the Premises in contravention of the provisions of this Lease, or if the Tenant sells, disposes, removes or attempts to remove from the Premises a part of its trade fixtures, furniture, improvements, chattels or goods other than in the normal course of business so that there would not in the event of such sale, disposal or removal be sufficient trade fixtures, furniture, improvements, chattels or goods of the Tenant on the Premises subject to distress to satisfy all rent due or accruing hereunder for a period of at least twelve (12) months; or (f) If the Premises becomes and remains vacant for a period of five (5) consecutive days. Upon an Event of Default, the full amount of Basic Rent and Additional Rent then owing and the current month's Basic Rent and Additional Rent together with the next ensuing three (3) months instalments of Basic Rent and Additional Rent shall immediately become due and payable unless the Landlord gives written notice to,the Tenant to the contrary. 14. Right of Re-Entry Upon an Event of Default and at the option of the Landlord, the Landlord, in addition to any other remedy or right it may have, and without notice or any form of legal process, may forthwith re-enter upon and take possession of the Premises without thereby terminating this Lease and remove and sell the Tenant's goods, chattels, equipment and trade fixtures therefrom, any rule of law or equity to the contrary notwithstanding. The Landlord may seize and sell such goods, chattels, equipment and trade fixtures of the Tenant as are in the Premises and may apply the proceeds thereof to all rent and other payments to which the Landlord is then entitled under this Lease. Any such sale may be effected in the discretion of the Landlord by public auction or otherwise, and either in bulk or by individual item, or partly by one means and partly by another, all as the Landlord in its sole discretion may decide. If any of the Tenant's property is disposed of as provided in this Section, ten (10) days prior notice to the Tenant of disposition shall be deemed to be commercially reasonable. 15. Right of Termination In addition to all rights and remedies of the Landlord available to it by any provision of this Lease or given by law to the Landlord, the Tenant agrees that upon an Event of Default the Landlord shall have the right to terminate this Lease upon notice in writing to the Tenant. Upon such notice, this Lease shall terminate immediately without the necessity of any legal proceeding whatsoever. The Tenant shall thereupon within three (3) days quit and surrender the Premises to the Landlord, or if not yet in possession, the Tenant shall no longer have any right to possession of the Premises, and the Landlord, its agents and servants, shall have the right to enter the Premises and dispossess the Tenant and remove any persons or property therefrom without the necessity of legal proceeding whatsoever and without being liable to the Tenant therefor in damages, or otherwise. 16. Right to Re-Let etc. If the Landlord re-enters pursuant to the provisions of either this Lease or any applicable law, the Landlord, without limiting its right to recover damages, may either terminate this Lease under this section or it may from time to time without terminating the Tenant's obligations under this Lease, make any alterations and repairs considered necessary by the Landlord to facilitate a reletting, and relet the Premises or any part thereof as agent of the Tenant for such term or terms and at such rental or rentals and upon such other terms and conditions as the Landlord in its reasonable discretion considers advisable. Upon each -8- reletting, all rent and other moneys received by the Landlord from the reletting will be applied (i) to the payment of indebtedness other than rent due hereunder from the Tenant to the Landlord (ii) to the payment of costs and expenses of the reletting including brokerage fees, legal fees and costs of the alterations and repairs and (iii) to the payment of rent due and unpaid hereunder. The residue, if any, will be held by the Landlord and applied in payment of future rent as it becomes due and payable. If the rent received from the reletting during a month is less than the rent to be paid during that month by the Tenant, the Tenant shall pay the deficiency to the Landlord. The deficiency shall be calculated by the Landlord and paid monthly in advance on or before the first day of every month by the Tenant. No re-entry by the Landlord shall be construed as an election on its part to terminate this Lease unless a written notice of that intention is given to the Tenant. Despite a reletting without termination, the Landlord may elect at any time to terminate this Lease for a previous breach. 17. Damages If the Landlord shall terminate this Lease as provided herein the Tenant shall pay fo the Landlord on demand, rent hereunder up to the time of re-entry or termination, whichever shall be the later. 18. Separate Remedies The Landlord may from time to time resort to any or all of the rights and remedies available to it upon an Event of Default, either by any provision of this Lease or by statute or the general law, all of which rights and remedies are intended to be cumulative and not alternative and may be exercised generally or in combination. 19. Waiver (a) Notwithstanding anything contained in any statute now or hereafter in force limiting or abrogating the right of distress, none of the goods, chattels or trade fixtures of the Tenant on the Premises at any time during the Term shall be exempt from levy by distress for rent in arrears, and if any claim is made for such exemption by the Tenant or if a distress is made by the Landlord or if any action is brought to test the right of the Landlord to levy upon any such goods as are so exempted, this Lease may be pleaded as an estoppel against the Tenant, the Tenant hereby waiving each and every benefit that could or might have accrued to the Tenant under and by virtue of any such statute but for this Lease. (b) Failure of the Landlord to insist upon the performance of any covenant or condition of this Lease or to exercise any right or option contained in this Lease shall not be construed as a waiver or relinquishment of any such covenant, condition, right or option or of any subsequent breach of the same. No variation or waiver of any covenant or condition of this Lease shall be valid unless in writing and signed by duly authorized persons on behalf of the Landlord. 20. Covenants Every obligation of the Landlord or the Tenant expressed in this Lease, even though not expressed as a covenant, shall be a covenant for all purposes. The Tenant acknowledges that it shall have no right to any benefit of division or discussion. 21. Time of Essence Time shall be of the essence in all respects hereunder. -9- 22. Enforceability If any term, covenant or condition of this Lease or the application thereof to any person or circumstance is to any extent held or rendered invalid, unenforceable or illegal, the remainder of this Lease or the application of such term, covenant or condition to persons or circumstances other than those with respect to which it is held invalid, unenforceable or illegal is not affected thereby and continues to be applicable and enforceable to the fullest extent permitted by law. 23. Notices Any notice that one party hereto may desire or be required to give to the other party hereto shall for all purposes be deemed to have been sufficiently and properly given, if delivered personally or forwarded by registered mail and addressed in'the case of the Landlord to: 40 Temperance Street, Bowmanville, Ontario, L1C 3A6 and in the case of the Tenant to the Premises and shall be presumed to have been received on the date of delivery, if delivered personally, or if forwarded by registered mail on the third business day following such mailing. Any notice shall be in writing, except as expressly otherwise provided herein, and shall be given only by delivery as aforesaid in the event of postal interruption. 24. Parking Spaces Subject to the agreement of the Orono Community Recreation Centre Board the Landlord shall provide two (2) parking spaces for the exclusive use of the Tenant. 25. Enurement This Lease and everything herein contained shall enure to the benefit of and be binding upon the parties hereto their successors and permitted assigns respectively. IN WITNESS WHEREOF the parties have duly executed and unconditionally delivered this Lease as of the date first above written. 26. Option to Purchase The Landlord hereby grants to the Tenant a right and option to purchase the Premises during the period of the initial Term and a further period of sixty(60) days following the conclusion of the initial Term such option to be exercised: (i) only if the Tenant shall not be in default hereunder; (ii) at purchase price of $88,400.00; and (iii) by written notice from the Tenant to the Landlord in the form of the agreement of purchase and sale annexed hereto and forming part of this Lease. r r -10' THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON And: 760719 ONTARIO LIMITED By: c/s And: r NOTE Insertions into Agreement of Purchase and Sale Purchaser: 760719 Ontario Limited O/A Apogee Production Purchase Price: $88,400.00. Deposit: $8,840.00 Date of Completion: 35 days following delivery of this Agreement of Purchase and Sale to the Vendor THIS LEASE dated as of the 1st day of December, 1995 in pursuance of the Short Forms of Leases Act. BETWEEN: The Corporation of the Municipality of Clarington (hereinafter called the "Landlord") - and - 760719 Ontario Limited O/A Apogee Productions (hereinafter called the "Tenant") WHEREAS the Landlord has agreed to lease to the Tenant and the Tenant has agreed to lease from the Landlord the lands and premises, including (i) the front office (the "Front Office") containing approximately 1,097 square feet located in and (ii) the Front Office and the balance of the building containing a total of approximately 3,953 square feet (the "Building") known as Orono Armouries, Park Street, Hamlet of Orono, Municipality of Clarington, Regional Municipality of Durham (the "Premises"). NOW THEREFORE THIS LEASE WITNESSES that in consideration of the rents, covenants and agreements hereinafter reserved and contained on the part of the Landlord and the Tenant, the Landlord leases to the Tenant, and the Tenant leases from the Landlord, the Premises on the following terms and conditions: 1. Term (a) The Tenant shall have and hold as tenant for a term of three (3) years commencing December 1, 1995 and ending November 30, 1998 (hereinafter called the "Term") that portion of the Premises comprising (i) the Front Office for the period commencing December 1, 1995 until April 30, 1996 and (ii) the Building from May 1, 1996 until the Lease is terminated. (b) If the Tenant shall not be in default under this Lease the Tenant shall have the right to extend the Term for a further period of three (3) years (the "Extension Term"). Such right shall be exercisable by written notice from the Tenant to the Landlord given no later than 180 days before the expiration of the initial Term. The Extension Term shall be on the same terms and conditions as contained herein save and except that there shall be no.further right of extension of the Term or Extension Term. 2. Use The Tenant shall continuously occupy the Premises throughout the Term, subject to and in accordance with the provisions of this Lease, solely for uses permitted by law and for no other use or purpose. The Tenant shall not commit or suffer or permit to be committed (i) any waste or damage, disfiguration or injury to the Premises or the improvements, installations, fixtures and equipment thereon and (ii) any nuisance in, at or on the Premises. r -2- The Tenant shall not do or permit anything to be done that results in the cancellation or threatened cancellation or the reduction of coverage under or threatened reduction of coverage under any insurance policy on the Premises or any part of it. 3. Basic Rent During the Term, the Tenant shall pay to the Landlord annual minimum rent ('Basic Rent") in an amount equal to (i) Two Hundred and Five Dollars and Sixty-Nine Cents ($205.69) per month during the first six (6) months of the Term and (ii) Seven Hundred and Forty- One Dollars and Eighteen Cents per month subject to increase as provided herein for the balance of the Term. Basic Rent shall be payable in monthly instalments, each payable on the first day of each month;provided that should the Term commence or terminate on a date other than the first day of a month, the Tenant shall pay to the Landlord for that month a pro rata portion of said monthly payment. Basic Rent shall be considered as accruing from day to day and where it becomes necessary for any reason to calculate rent for an irregular period of less than one year or less than one calendar month, an appropriate apportionment and adjustment shall be made. On the 1st day of December of each year of the Term or Extension Term, as the case may be, after the commencement thereof the Basic Rent shall increase to an amount equal the Basic Rent for the previous month by a fraction which has as its numerator the Consumer Price Index(Ontario) (the "C.P.I.") for the preceding April and as its denominator the C.P.I. for April twelve (12) months prior. The Landlord shall advise the Tenant in writing no later than the 1st of June of each year as to the amount of such increase in Basic Rent. 5. Net Lease The Tenant acknowledges, covenants and agrees that, except as herein expressly set out, it is intended that this Lease and the rentals herein provided to be paid shall be completely net and carefree to the Landlord. All amounts required to be paid by the Tenant hereunder (whether to the Landlord or third parties) shall be additional rent and all additional rent shall be payable and recoverable as Basic Rent, but 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 Basic Rent. 6. Taxes, Utilities and Operating Costs The Tenant shall, as additional rent, in each and every year during the Term, be responsible for and pay and discharge promptly when due: (a) all taxes (including, without limitation, realty taxes, local improvement rates and business taxes), rates, duties and assessments that may be levied, rated, charged or assessed against the Premises; and (b) all charges for public utilities, including water, gas, oil, electrical power or energy, light, heat, air conditioning, telephone, steam or hot water used upon or in respect of the Premises or for fittings, machines, apparatus, meters or other things leased in respect thereof, and for all work or services performed by any corporation or commission in connection with such public utilities. The Tenant shall have the right to contest by appropriate legal proceedings the validity of any tax, rate, including local improvement rates, assessment or other charges referred to in this Section provided that, in so doing, the Tenant shall not cause or permit any liens or encumbrances to be filed or arise against the Premises. s -3- Without limiting the foregoing, during the Term, the Tenant shall be responsible for and shall pay promptly when due, as Additional Rent, without limiting the obligations of the Tenant under this Lease, the aggregate of all expenses and costs of every kind, without duplication, incurred by or on behalf of the Landlord or Tenant with respect to and for the operation, maintenance and repairs Premises and all insurance relating to the Premises, including, without limitation, all costs in respect of the following: (a) ventilating, air-conditioning and humidity control of the Premises; (b) cleaning, janitorial services, window cleaning and sewage and waste removal; (c) maintenance of all outside areas, including snow and ice removal; and (d) maintenance,repairs and replacements in respect of the Premises excluding structural and heating equipment maintenance, repairs and replacements. The Tenant shall (i) provide the Landlord within ten (10) days after receipt of same any tax bills, assessments,utility charges and other notices regarding the foregoing and (ii)promptly deliver to the Landlord receipts evidencing the payment of all of the foregoing. If received by the Landlord, the Landlord shall promptly deliver to the Tenant any such tax bills, assessments, utility charges and other notices regarding the foregoing. 7. Repairs and Maintenance The Tenant hereby accepts the Premises on an"as is"basis. The Tenant, at its own expense, shall maintain and keep the Premises and every part thereof(including, without limitation, all electrical, mechanical, plumbing; air conditioning, sprinklers and all other mechanical equipment on the Premises excepting all heating equipment), in good working order and condition and promptly make all needed maintenance, repairs and replacements as would a prudent owner of similar premises (reasonable wear and tear and damage by fire, lightning and tempest and structural defects only excepted). The Tenant shall keep the Premises clean and in such condition as a prudent owner would do. If structural repairs or replacements to the roof, foundation or load bearing walls or the heating equipment of the Premises are required during the Term, then the Landlord shall be obligated, at its expense, to effect such repairs or replacements. The Tenant covenants with the Landlord to leave the Premises in as good repair as the Premises were at the commencement of the Term. 8. Alterations (a) If the Tenant, during the Terms of this Lease or any renewal of it, desires to make any alterations or additions to the Premises, including but not limited to: erecting partitions, attaching equipment, and installing necessary furnishings or additional equipment of the Tenant's business, the Tenant may do so at his own expense, at any time and from time to time, if the following conditions are met: (i) before undertaking any alteration or addition the Tenant shall submit to the Landlord a plan showing the proposed alterations or additions and the Tenant shall not proceed to make any alteration or addition unless the Landlord has approved the plan, and the Landlord shall not unreasonably or arbitrarily withhold its approval and items included in the plan which are regarded by the Tenant as "Trade Fixtures" shall be designated as sun on the plan; and (ii) any and all alterations or additions to the Premises made by the Tenant must comply with all applicable building code standards and by-laws of the municipality in which the Premises are located. -4- (b) The Tenant shall be responsible for and pay the cost of any alterations, additions, installations or improvements that any governing authority, municipal, provincial or otherwise, may require to be made in, on or to the Premises. (c) No sign, advertisement or notice shall be inscribed,painted or affixed by the Tenant, or any other person on the Tenant's behalf, on any part of the inside or outside of the building in which the Premises are located unless the sign,, advertisement or notice has been approved in every respect by the Landlord. (d) All alterations and additions to the Premises made by or on behalf of the Tenant, other than the Tenant's Trade Fixtures,shall immediately become the property of the Landlord without compensation to the Tenant. (e) The Tenant agrees, at his own expense and by whatever means may be necessary, immediately to obtain the release or discharge of any encumbrance that may be registered against the Landlord's property in connection with any additions or alterations to the Premises made by the Tenant or in connection with any other activity of the Tenant. 9. Insurance and Indemnification (a) The Tenant covenants to keep the Landlord indemnified against all claims and demands whatsoever by any person, whether in respect of damage to person or property, arising out of or occasioned by the maintenance, use or occupancy of the Premises or the subletting or assignment of same or any part thereof. And the Tenant further covenants to indemnify the Landlord with respect to any encumbrance on or damage to the Premises occasioned by or arising from the act, default, or negligence of the Tenant, its officers, agents, servants, employees, contractors, customers, invitees or licensees and the Tenant agrees that the foregoing indemnity shall survive the termination of this Lease notwithstanding any provisions of this Lease to the contrary. (b) The Tenant shall carry: (i) insurance in his own name to provide coverage with respect to the risk of business interruption to an extent sufficient to allow the Tenant to meet his ongoing obligations to the Landlord and to protect the Tenant against loss of revenues; (ii) insurance in his own name insuring against the risk of damage the Premises and to the Tenant's property within the Premises caused by fire or other perils and the policy shall provide for coverage on a replacement cost basis to protect the Tenant's stock-in-trade, equipment, Trade Fixtures, decorations and improvement; and (iii) public liability and property damage insurance in which policy the Landlord shall be a named insured and the policy shall include a cross-liability endorsement; and the Tenant shall provide the Landlord with a copy of the policy certified by the insurer. 10. Damage and Destruction If the Premises are destroyed or damaged by fire, lightning, tempest or other casualty, then and in every such event if, in the opinion of the Landlord's architect, the damage or destruction of such Building renders the whole or any substantial part of the said Building -$- unfit for occupancy or impossible or unsafe for use and occupancy or impossible for the Tenant to continue to carry on its business, either the Landlord or the Tenant may at its option,terminate this Lease by giving to the other notice in writing of such termination, in which event, this Lease and the Term shall cease and be at an end as of the date of such destruction or damage, and the rent and all other payments for which the Tenant is liable .under the terms of this Lease shall be apportioned and paid in full to the date of such destruction or damage; 11. Quiet Enjoyment The Landlord covenants with the Tenant for quiet enjoyment. -6- 12. Government Requirements The Tenant shall, at its sole cost and expense, during the Term: (a) observe and comply with all applicable governmental laws and regulations including, without limitation, federal and provincial legislative enactments, Building by-laws, and other governmental or municipal regulations which relate to the Premises or the partitioning, equipment, operation and use thereof and to the making of any repairs, replacements, alterations, additions, changes, substitutions or improvements of or to the Premises. The Tenant shall comply with all police, fire and sanitary regulations imposed by any federal, provincial or municipal authorities, or made by insurance underwriters and shall observe all governmental and municipal regulations and other requirements governing the conduct of any business conducted in the Premises; (b) obtain all necessary permits, licenses and approvals relating to the use and occupancy of the Premises and the conduct of business therein; and (c) carry out all modifications, alterations or changes to the Premises and the Tenant's conduct of business in or use of the Premises which are required by any such authorities. The Tenant shall indemnify and hold the Landlord harmless against any penalty or fine imposed for any violation of any law, by-law or regulation by the Tenant or those for whom the Tenant is in law responsible. 13. Default The following events ("Events of Default") shall be deemed a default (a"default")under this Lease: (a) If the Tenant fails to pay any instalment of Basic Rent promptly when due or additional rent hereunder ("Additional Rent") no later than five (5) days following the respective due date; (b) If the Tenant fails to observe or perform any other term, covenant, condition or obligation under this Lease that is capable of remedy other than a default in the payment of Basic Rent or Additional Rent, and such default remains unremedied after thirty (30) days following written notice from the Landlord to the Tenant specifying such default and requiring the Tenant to remedy the default; (c) If the Tenant fails to observe and perform any other term, covenant, condition or obligation under this Lease that is not capable of remedy other than a default in the payment of Basic Rent or Additional Rent and the Tenant receives written notice from the Landlord specifying such default; (d) If the Tenant makes an assignment for the benefit of its creditors generally, or if the Tenant is declared bankrupt or insolvent, or if a petition in bankruptcy is filed against the Tenant, or if the Tenant files an assignment in bankruptcy or takes or attempts to take the advantage of any legislation for relief of bankrupt or insolvent debtors, or if a receiver or a receiver and manager is appointed for all or a portion of the Tenant's property, or if any steps are taken or any action or proceedings are instituted by the Tenant or by any other party including, without limitation, any court or governmental body of competent jurisdiction for the dissolution, winding-up or liquidation of the Tenant or its assets,unless such proceeding be set aside, discharged or abandoned within fourteen (14) days. For the purposes of this Subsection, r ' -7- "Tenant" shall mean the Tenant and any person carrying on business in or occupying the whole or any part of the Premises; (e) If, the Tenant makes or attempts to make any bulk sale. of any of its assets situated in the Premises in contravention of the provisions of this Lease, or if the Tenant sells, disposes, removes or attempts to remove from the Premises a part of its trade fixtures, furniture, improvements, chattels or goods other than in the normal course of business so that there would not in the event of such sale, disposal or removal be sufficient trade fixtures, furniture, improvements, chattels or goods of the Tenant on the Premises subject to distress to satisfy all rent due or accruing hereunder for a period of at least twelve (12) months; or (f) If the Premises becomes and remains vacant for a period of five (5) consecutive days. Upon an Event of Default, the full amount of Basic Rent and Additional Rent then owing and the current month's Basic Rent and Additional Rent together with the next ensuing three (3) months instalments of Basic Rent and Additional Rent shall immediately become due and payable unless the Landlord gives written notice to-the Tenant to the contrary. 14. Right of Re-Entry Upon an Event of Default and at the option of the Landlord, the Landlord, in addition to any other remedy or right it may have, and without notice or any form of legal process, may forthwith re-enter upon and take possession of the Premises without thereby terminating this Lease and remove and sell the Tenant's goods, chattels, equipment and trade fixtures therefrom, any rule of law or equity to the contrary notwithstanding. The Landlord may seize and sell such goods, chattels, equipment and trade fixtures of the Tenant as are in the Premises and may apply the proceeds thereof to all rent and other payments to which the Landlord is then entitled under this Lease. Any such sale may be effected in the discretion of the Landlord by public auction or otherwise, and either in bulk or by individual item, or partly by one means and partly by another, all as the Landlord in its sole discretion may decide. If any of the Tenant's property is disposed of as provided in this Section, ten (10) days prior notice to the Tenant of disposition shall be deemed to be commercially reasonable. 15. Right of Termination I In addition to all rights and remedies of the Landlord available to it by any provision of this Lease or given by law to the Landlord, the Tenant agrees that upon an Event of Default the Landlord shall have the right to terminate this Lease upon notice in writing to the Tenant. Upon such notice, this Lease shall terminate immediately without the necessity of any legal proceeding whatsoever. The Tenant shall thereupon within three (3) days quit and surrender the Premises to the Landlord, or if not yet in possession, the Tenant shall no longer have any right to possession of the Premises, and the Landlord, its agents and servants, shall have the right to enter the Premises and dispossess the Tenant and remove any persons or property therefrom without the necessity of legal proceeding whatsoever and without being liable to the Tenant therefor in damages, or otherwise. 16. Right to Re-Let etc. If the Landlord re-enters pursuant to the provisions of either this Lease or any applicable law, the Landlord, without limiting its right to recover damages, may either terminate this Lease under this section or it may from time to time without terminating the Tenant's obligations under this Lease, make any alterations and repairs considered necessary by the Landlord to facilitate a reletting, and relet the Premises or any part thereof as agent of the Tenant for such term or terms and at such rental or rentals and upon such other terms and conditions as the Landlord in its reasonable discretion considers advisable. Upon each -8- reletting, all rent and other moneys received by the Landlord from the reletting will be applied (i) to the payment of indebtedness other than rent due hereunder from the Tenant to the Landlord (ii) to the payment of costs and expenses of the reletting including brokerage fees, legal fees and costs of the alterations and repairs and (iii) to the payment of rent due and unpaid hereunder. The residue, if any, will be held by the Landlord and applied in payment of future rent as it becomes due and payable. If the rent received from the reletting during a month is less than the rent to be paid during that month by the Tenant, the Tenant shall pay the deficiency to the Landlord. The deficiency shall be calculated by the Landlord and paid monthly in advance on or before the first day of every month by the Tenant. No re-entry by the Landlord shall be construed as an election on its part to terminate this Lease unless a written notice of that intention is given to the Tenant. Despite a reletting without termination, the Landlord may elect at any time to terminate this Lease for a previous breach. 17. Damages If the Landlord shall terminate this Lease as provided herein the Tenant shall pay to the Landlord on demand, rent hereunder up to the time of re-entry or termination, whichever shall be the later. 18. Separate Remedies The Landlord may from time to time resort to any or all of the rights and remedies available to it upon an Event of Default, either by any provision of this Lease or by statute or the general law, all of which rights and remedies are intended to be cumulative and not alternative and may be exercised generally or in combination. 19. Waiver (a) Notwithstanding anything contained in any statute now or hereafter in force limiting or abrogating the right of distress, none of the goods, chattels or trade fixtures of the Tenant on the Premises at any time during the Term shall be exempt from levy by distress for rent in arrears, and if any claim is made for such exemption by the Tenant or if a distress is made by the Landlord or if any action is brought to test the right of the Landlord to levy upon any such goods as are so exempted, this Lease may be pleaded as an estoppel against the Tenant, the Tenant hereby waiving each and every benefit that could or might have accrued to the Tenant under and by virtue of any such statute but for this Lease. (b) Failure of the Landlord to insist upon the performance of any covenant or condition of this Lease or to exercise any right or option contained in this Lease shall not be construed as a waiver or relinquishment of any such covenant, condition, right or option or of any subsequent breach of the same. No variation or waiver of any - covenant or condition of this Lease shall be valid unless in writing and signed by duly authorized persons on behalf of the Landlord. 20. Covenants Every obligation of the Landlord or the Tenant expressed in this Lease, even though not expressed as a covenant, shall be a covenant for all purposes. The Tenant acknowledges that it shall have no right to any benefit of division or discussion. 21. Time of Essence Time shall be of the essence in all respects hereunder. a r -9- 22. Enforceability If any term, covenant or condition of this Lease or the application thereof to any person or circumstance is to any extent held or rendered invalid, unenforceable or illegal, the remainder of this Lease or the application of such term, covenant or condition to persons or circumstances other than those with respect to which it is held invalid, unenforceable or illegal is not affected thereby and continues to be applicable and enforceable to the fullest extent permitted by law. 23. Notices Any notice that one party hereto may desire or be required to give to the other party hereto shall for all purposes be deemed to have been sufficiently and properly given, if delivered personally or forwarded by registered mail and addressed in'the case of the Landlord to: 40 Temperance Street, Bowmanville, Ontario, L1C 3A6 and in the case of the Tenant to the Premises and shall be presumed to have been received on the date of delivery, if delivered personally, or if forwarded by registered mail on the third business day following such mailing. Any notice shall be in writing, except as expressly otherwise provided herein, and shall be given only by delivery as aforesaid in the event of postal interruption. 24. Parking Spaces Subject to the agreement of the Orono Community Recreation Centre Board the Landlord shall provide two (2) parking spaces for the exclusive use of the Tenant. 25. Enurement This Lease and everything herein contained shall enure to the benefit of and be binding upon the parties hereto their successors and permitted assigns respectively. IN WITNESS WHEREOF the parties have duly executed and unconditionally delivered this Lease as of the date first above written. 26. Option to Purchase The Landlord hereby grants to the Tenant a right and option to purchase the Premises during the period of the initial Term and a further period of sixty (60) days following the conclusion of the initial Term such option to be exercised: (i) only if the Tenant shall not be in default hereunder; (ii) at purchase price of $88,400.00; and (iii) by written notice from the Tenant to the Landlord in the form of the agreement of purchase and sale annexed hereto and forming part of this Lease. -10- THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON By: C/S And: 760719 ONTARIO LIMITED By: c/S And: NOTE Insertions into Agreement of Purchase and Sale Purchaser: 760719 Ontario Limited O/A Apogee Production Purchase Price: $88,400.00. Deposit: $8,840.00 Date of Completion: 35 days following delivery of this Agreement of Purchase and Sale to the Vendor 9 , THIS LEASE dated as of the 1st day of December, 1995 in pursuance of the Short Forms of Leases Act. BETWEEN: The Corporation of the Municipality of Clarington (hereinafter called the "Landlord") - and - 760719 Ontario Limited O/A Apogee Productions (hereinafter called the "Tenant") WHEREAS the Landlord has agreed to lease to the Tenant and the Tenant has agreed to lease from the Landlord the lands and premises, including (i) the front office (the "Front Office") containing approximately 1,097 square feet located in and (ii) the Front Office and the balance of the building containing a total of approximately 3,953 square feet (the "Building") known as Orono Armouries, Park Street, Hamlet of Orono, Municipality of Clarington, Regional Municipality of Durham (the "Premises"). NOW THEREFORE THIS LEASE WITNESSES that in consideration of the rents, covenants and agreements hereinafter reserved and contained on the part of the Landlord and the Tenant, the Landlord leases to the Tenant, and the Tenant leases from the Landlord, the Premises on the following terms and conditions: 1. Term (a) The Tenant shall have and hold as tenant for a term of three (3) years commencing December 1, 1995 and ending November 30, 1998 (hereinafter called the "Term") that portion of the Premises comprising (i) the Front Office for the period commencing December 1, 1995 until April 30, 1996 and (ii) the Building from May 1, 1996 until the Lease is terminated. (b) If the Tenant shall not be in default under this Lease the Tenant shall have the right to extend the Term for a further period of three (3) years (the "Extension Term"). Such right shall be exercisable by written notice from the Tenant to the Landlord given no later than 180 days before the expiration of the initial Term. The Extension Term shall be on the same terms and conditions as contained herein save and except that there shall be no further right of extension of the Term or Extension Term. 2. uses The Tenant shall continuously occupy the Premises throughout the Term, subject to and in accordance with the provisions of this Lease, solely for uses permitted by law and for no other use or purpose. The Tenant shall not commit or suffer or permit to be committed (i) any waste or damage, disfiguration or injury to the Premises or the improvements, installations, fixtures and equipment thereon and (ii) any nuisance in, at or on the Premises. -2- The Tenant shall not do or permit anything to be done that results in the cancellation or threatened cancellation or the reduction of coverage under or threatened reduction of coverage under any insurance policy on the Premises or any part of it. 3. Basic Rent During the Term, the Tenant shall pay to the Landlord annual minimum rent ('Basic Rent") in an amount equal to (i) Two Hundred and Five Dollars and Sixty-Nine Cents ($205.69) per month during the first six (6) months of the Term and (ii) Seven Hundred and Forty- One Dollars and Eighteen Cents per month subject to increase as provided herein for the balance of the Term. Basic Rent shall be payable in monthly instalments, each payable on the first day of each month;provided that should the Term commence or terminate on a date other than the first day of a month, the Tenant shall pay to the Landlord for that month a pro rata portion of said monthly payment. Basic Rent shall be considered as accruing from day to day and where it becomes necessary for any reason to calculate rent for an irregular period of less than one year or less than one calendar month, an appropriate apportionment and adjustment shall be made. On the 1st day of December of each year of the Term or Extension Term, as the case may be, after the commencement thereof the Basic Rent shall increase to an amount equal the Basic Rent for the previous month by a fraction which has as its numerator the Consumer Price Index(Ontario) (the "C.P.I.") for the preceding April and as its denominator the C.P.I. for April twelve (12) months prior. The Landlord shall advise the Tenant in writing no later than the 1st of June of each year as to the amount of such increase in Basic Rent. 5. Net Lease The Tenant acknowledges, covenants and agrees that, except as herein expressly set out, it is intended that this Lease and the rentals herein provided to be paid shall be completely net and carefree to the Landlord. All amounts required to be paid by the Tenant hereunder (whether to the Landlord or third parties) shall be additional rent and all additional rent shall be payable and recoverable as Basic Rent, but 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 Basic Rent. 6. Taxes, Utilities and Operating Costs The Tenant shall, as additional rent, in each and every year during the Term, be responsible for and pay and discharge promptly when due: (a) all taxes (including, without limitation, realty taxes, local improvement rates and business taxes), rates, duties and assessments that may be levied, rated, charged or assessed against the Premises; and (b) all charges for public utilities, including water, gas, oil, electrical power or energy, light, heat, air conditioning, telephone, steam or hot water used upon or in respect of the Premises or for fittings, machines, apparatus, meters or other things leased in respect thereof, and for all work or services performed by any corporation or commission in connection with such public utilities. The Tenant shall have the right to contest by appropriate legal proceedings the validity of any tax, rate, including local improvement rates, assessment or other charges referred to in this Section provided that, in so doing, the Tenant shall not cause or permit any liens or encumbrances to be filed or arise against the Premises. -3- Without limiting the foregoing, during the Term, the Tenant shall be responsible for and shall pay promptly when due, as Additional Rent, without limiting the obligations of the Tenant under this Lease, the aggregate of all expenses and costs of every kind, without duplication, incurred by or on behalf of the Landlord or Tenant with respect to and for the operation, maintenance and repairs Premises and all insurance relating to the Premises, including, without limitation, all costs in respect of the following: (a) ventilating, air-conditioning and humidity control of the Premises; (b) cleaning, janitorial services, window cleaning and sewage and waste removal; (c) maintenance of all outside areas, including snow and ice removal; and (d) maintenance,repairs and replacements in respect of the Premises excluding structural and heating equipment maintenance, repairs and replacements. The Tenant shall (i) provide the Landlord within ten (10) days after receipt of same any tax bills, assessments, utility charges and other notices regarding the foregoing and (ii)promptly deliver to the Landlord receipts evidencing the payment of all of the foregoing. If received by the Landlord, the Landlord shall promptly deliver to the Tenant any such tax bills, assessments, utility charges and other notices regarding the foregoing. 7. Repairs and Maintenance The Tenant hereby accepts the Premises on an "as is"basis. The Tenant, at its own expense, shall maintain and keep the Premises and every part thereof(including, without limitation, all electrical, mechanical, plumbing; air conditioning, sprinklers and all other mechanical equipment on the Premises excepting all heating equipment), in good working order and condition and promptly make all needed maintenance, repairs and replacements as would a prudent owner of similar premises (reasonable wear and tear and damage by fire, lightning and tempest and structural defects only excepted). The Tenant shall keep the Premises clean and in such condition as a prudent owner would do. If structural repairs or replacements to the roof, foundation or load bearing walls or the heating equipment of the Premises are required during the Term, then the Landlord shall be obligated, at its expense, to effect such repairs or replacements. The Tenant covenants with the Landlord to leave the Premises in as good repair as the Premises were at the commencement of the Term. 8. Alterations (a) If the Tenant, during the Terms of this Lease or any renewal of it, desires to make any alterations or additions to the Premises, including but not limited to: erecting partitions, attaching equipment, and installing necessary furnishings or additional equipment of the Tenant's business, the Tenant may do so at his own expense, at any time and from time to time, if the following conditions are met: (i) before undertaking any alteration or addition the Tenant shall submit to the Landlord a plan showing the proposed alterations or additions and the Tenant shall not proceed to make any alteration or addition unless the Landlord has approved the plan, and the Landlord shall not unreasonably or arbitrarily withhold its approval and items included in the plan which are regarded by the Tenant as "Trade Fixtures" shall be designated as sun on the plan; and (ii) any and all alterations or additions to the Premises made by the Tenant must comply with all applicable building code standards and by-laws of the municipality in which the Premises are located. f i -4- (b) The Tenant shall be responsible for and pay the cost of any alterations, additions, installations or improvements that any governing authority, municipal, provincial or otherwise, may require to be made in, on or to the Premises. (c) No sign, advertisement or notice shall be inscribed,painted or affixed by the Tenant, or any other person on the Tenant's behalf, on any part of the inside or outside of the building in which the Premises are located unless the sign,. advertisement or notice has been approved in every respect by the Landlord. (d) All alterations and additions to the Premises made by or on behalf of the Tenant, other than the Tenant's Trade Fixtures, shall immediately become the property of the Landlord without compensation to the Tenant. (e) The Tenant agrees, at his own expense and by whatever means may be necessary, immediately to obtain the release or discharge of any encumbrance that may be registered against the Landlord's property in connection with any additions or alterations to the Premises made by the Tenant or in connection with any other activity of the Tenant. 9. Insurance and Indemnification (a) The Tenant covenants to keep the Landlord indemnified against all claims and demands whatsoever by any person, whether in respect of damage to person or property, arising out of or occasioned by the maintenance, use or occupancy of the Premises or the subletting or assignment of same or any part thereof. And the Tenant further covenants to indemnify the Landlord with respect to any encumbrance on or damage to the Premises occasioned by or arising from the act, default, or negligence of the Tenant, its officers, agents, servants, employees, contractors, customers, invitees or licensees and the Tenant agrees that the foregoing indemnity shall survive the termination of this Lease notwithstanding any provisions of this Lease to the contrary. (b) The Tenant shall carry: (i) insurance in his own name to provide coverage with respect to the risk of business interruption to an extent sufficient to allow the Tenant to meet his ongoing obligations to the Landlord and to protect the Tenant against loss of revenues; (ii) insurance in his own name insuring against the risk of damage the Premises and to the Tenant's property within the Premises caused by fire or other perils and the policy shall provide for coverage on a replacement cost basis to protect the Tenant's stock-in-trade, equipment, Trade Fixtures, decorations and improvement; and (iii) public liability and property damage insurance in which policy the Landlord shall be a named insured and the policy shall include a cross-liability endorsement; and the Tenant shall provide the Landlord with a copy of the policy certified by the insurer. 10. Damage and Destruction If the Premises are destroyed or damaged by fire, lightning, tempest or other casualty, then and in every such event if, in the opinion of the Landlord's architect, the damage or destruction of such Building renders the whole or any substantial part of the said Building ! 1J l -5- unfit for occupancy or impossible or unsafe for use and occupancy or impossible for the Tenant to continue to carry on its business, either the Landlord or the Tenant may at its option, terminate this Lease by giving to the other notice in writing of such termination, in which event, this Lease and the Term shall cease and be at an end as of the date of such destruction or damage, and the rent and all other payments for which the Tenant is liable under the terms of this Lease shall be apportioned and paid in full to the date of such destruction or damage; 11. Quiet Enjoyment The Landlord covenants with the Tenant for quiet enjoyment. f 1 -6- 12. Government Requirements The Tenant shall, at its sole cost and expense, during the Term: (a) observe and comply with all applicable governmental laws and regulations including, without limitation, federal and provincial legislative enactments, Building by-laws, and other governmental or municipal regulations which relate to the Premises or the partitioning, equipment, operation and use thereof and to the making of any repairs, replacements, alterations, additions, changes, substitutions or improvements of or to the Premises. The Tenant shall comply with all police, fire and sanitary regulations imposed by any federal, provincial or municipal authorities, or made by insurance underwriters and shall observe all governmental and municipal regulations and other requirements governing the conduct of any business conducted in the Premises; (b) obtain all necessary permits, licenses and approvals relating to the use and occupancy of the Premises and the conduct of business therein; and (c) carry out all modifications, alterations or changes to the Premises and the Tenant's conduct of business in or use of the Premises which are required by any such authorities. The Tenant shall indemnify and hold the Landlord harmless against any penalty or fine imposed for any violation of any law, by-law or regulation by the Tenant or those for whom the Tenant is in law responsible. 13. Default The following events ("Events of Default") shall be deemed a default (a"default")under this Lease: (a) If the Tenant fails to pay any instalment of Basic Rent promptly when due or additional rent hereunder ("Additional Rent") no later than five (5) days following the respective due date; (b) If the Tenant fails to observe or perform any other term, covenant, condition or obligation under this Lease that is capable of remedy other than a default in the payment of Basic Rent or Additional Rent, and such default remains unremedied after thirty (30) days following written notice from the Landlord to the Tenant specifying such default and requiring the Tenant to remedy the default; (c) If the Tenant fails to observe and perform any other term, covenant, condition or obligation under this Lease that is not capable of remedy other than a default in the payment of Basic Rent or Additional Rent and the Tenant receives written notice from the Landlord specifying such default; (d) If the Tenant makes an assignment for the benefit of its creditors generally, or if the Tenant is declared bankrupt or insolvent, or if a petition in bankruptcy is filed against the Tenant, or if the Tenant files an assignment in bankruptcy or takes or attempts to take the advantage of any legislation for relief of bankrupt or insolvent debtors, or if a receiver or a receiver and manager is appointed for all or a portion of the Tenant's property, or if any steps are taken or any action or proceedings are instituted by the Tenant or by any other party including, without limitation, any court or governmental body of competent jurisdiction for the dissolution, winding-up or liquidation of the Tenant or its assets,unless such proceeding be set aside,discharged or abandoned within fourteen (14) days. For the purposes of this Subsection, A -/- "Tenant" shall mean the Tenant and any person carrying on business in or occupying the whole or any part of the Premises; (e) If, the Tenant makes or attempts to make any bulk sale. of any of its assets situated in the Premises in contravention of the provisions of this Lease, or if the Tenant sells, disposes, removes or attempts to remove from the Premises a part of its trade fixtures, furniture, improvements, chattels or goods other than in the normal course of business so that there would not in the event of such sale, disposal or removal be sufficient trade fixtures, furniture, improvements, chattels or goods of the Tenant on the Premises subject to distress to satisfy all rent due or accruing hereunder for a period of at least twelve (12) months; or (f) If the Premises becomes and remains vacant for a period of five (5) consecutive days. Upon an Event of Default, the full amount of Basic Rent and Additional Rent then owing and the current month's Basic Rent and Additional Rent together with the next ensuing three (3) months instalments of Basic Rent and Additional Rent shall immediately become due and payable unless the Landlord gives written notice to,the Tenant to the contrary. 14. Right of Re-Enter Upon an Event of Default and at the option of the Landlord, the Landlord, in addition to any other remedy or right it may have, and without notice or any form of legal process, may forthwith re-enter upon and take possession of the Premises without thereby terminating this Lease and remove and sell the Tenant's goods, chattels, equipment and trade fixtures therefrom, any rule of law or equity to the contrary notwithstanding. The Landlord may seize and sell such goods, chattels, equipment and trade fixtures of the Tenant as are in the Premises and may apply the proceeds thereof to all rent and other payments to which the Landlord is then entitled under this Lease. Any such sale may be effected in the discretion of the Landlord by public auction or otherwise, and either in bulk or by individual item, or partly by one means and partly by another, all as the Landlord in its sole discretion may decide. If any of the Tenant's property is disposed of as provided in this Section, ten (10) days prior notice to the Tenant of disposition shall be deemed to be commercially reasonable. 15. Right of Termination I In addition to all rights and remedies of the Landlord available to it by any provision of this Lease or given by law to the Landlord, the Tenant agrees that upon an Event of Default the Landlord shall have the right to terminate this Lease upon notice in writing to the Tenant. Upon such notice, this Lease shall terminate immediately without the necessity of any legal proceeding whatsoever. The Tenant shall thereupon within three (3) days quit and surrender the Premises to the Landlord, or if not yet in possession, the Tenant shall no longer have any right to possession of the Premises, and the Landlord, its agents and servants, shall have the right to enter the Premises and dispossess the Tenant and remove any persons or property therefrom without the necessity of legal proceeding whatsoever and without being liable to the Tenant therefor in damages, or otherwise. 16. Right to Re-Let etc. If the Landlord re-enters pursuant to the provisions of either this Lease or any applicable law, the Landlord, without limiting its right to recover damages, may either terminate this Lease under this section or it may from time to time without terminating the Tenant's obligations under this Lease, make any alterations and repairs considered necessary by the Landlord to facilitate a reletting, and relet the Premises or any part thereof as agent of the Tenant for such term or terms and at such rental or rentals and upon such other terms and conditions as the Landlord in its reasonable discretion considers advisable. Upon each p -8- reletting, all rent and other moneys received by the Landlord from the reletting will be applied (i) to the payment of indebtedness other than rent due hereunder from the Tenant to the Landlord (ii) to the payment of costs and expenses of the reletting including brokerage fees, legal fees and costs of the alterations and repairs and (iii) to the payment of rent due and unpaid hereunder. The residue, if any, will be held by the Landlord and applied in payment of future rent as it becomes due and payable. If the rent received from the reletting during a month is less than the rent to be paid during that month by the Tenant, the Tenant shall pay the deficiency to the Landlord. The deficiency shall be calculated by the Landlord and paid monthly in advance on or before the first day of every month by the Tenant. No re-entry by the Landlord shall be construed as an election on its part to terminate this Lease unless a written notice of that intention is given to the Tenant. Despite a reletting without termination, the Landlord may elect at any time to terminate this Lease for a previous breach. 17. Damages If the Landlord shall terminate this Lease as provided herein the Tenant shall pay fo the Landlord on demand, rent hereunder up to the time of re-entry or termination, whichever shall be the later. 18. Separate Remedies The Landlord may from time to time resort to any or all of the rights and remedies available to it upon an Event of Default, either by any provision of this Lease or by statute or the general law, all of which rights and remedies are intended to be cumulative and not alternative and may be exercised generally or in combination. 19. Waiver (a) Notwithstanding anything contained in any statute now or hereafter in force limiting or abrogating the right of distress, none of the goods, chattels or trade fixtures of the Tenant on the Premises at any time during the Term shall be exempt from levy by distress for rent in arrears, and if any claim is made for such exemption by the Tenant or if a distress is made by the Landlord or if any action is brought to test the right of the Landlord to levy upon any such goods as are so exempted, this Lease may be pleaded as an estoppel against the Tenant, the Tenant hereby waiving each and every benefit that could or might have accrued to the Tenant under and by virtue of any such statute but for this Lease. (b) Failure of the Landlord to insist upon the performance of any covenant or condition of this Lease or to exercise any right or option contained in this Lease shall not be construed as a waiver or relinquishment of any such covenant, condition, right or option or of any subsequent breach of the same. No variation or waiver of any covenant or condition of this Lease shall be valid unless in writing and signed by duly authorized persons on behalf of the Landlord. 20. Covenants Every obligation of the Landlord or the Tenant expressed in this Lease, even though not expressed as a covenant, shall be a covenant for all purposes. The Tenant acknowledges that it shall have no right to any benefit of division or discussion. 21. Time of Essence Time shall be of the essence in all respects hereunder. -9- 22. Enforceability If any term, covenant or condition of this Lease or the application thereof to any person or circumstance is to any extent held or rendered invalid, unenforceable or illegal, the remainder of this Lease or the application of such term, covenant or condition to persons or circumstances other than those with respect to which it is held invalid, unenforceable or illegal is not affected thereby and continues to be applicable and enforceable to the fullest extent permitted by law. 23. Notices Any notice that one party hereto may desire or be required to give to the other party hereto shall for all purposes be deemed to have been sufficiently and properly given, if delivered personally or forwarded by registered mail and addressed in the case of the Landlord to: 40 Temperance Street, Bowmanville, Ontario, L1C 3A6 and in the case of the Tenant to the Premises and shall be presumed to have been received on the date of delivery, if delivered personally, or if forwarded by registered mail on the third business day following such mailing. Any notice shall be in writing, except as expressly otherwise provided herein, and shall be given only by delivery as aforesaid in the event of postal interruption. 24. Parking Spaces Subject to the agreement of the Orono Community Recreation Centre Board the Landlord shall provide two (2) parking spaces for the exclusive use of the Tenant. 25. Enurement This Lease and everything herein contained shall enure to the benefit of and be binding upon the parties hereto their successors and permitted assigns respectively. IN WITNESS WHEREOF the parties have duly executed and unconditionally delivered this Lease as of the date first above written. 26. Option to Purchase The Landlord hereby grants to the Tenant a right and option to purchase the Premises during the period of the initial Term and a further period of sixty (60) days following the conclusion of the initial Term such option to be exercised: (i) only if the Tenant shall not be in default hereunder; (ii) at purchase price of $88,400.00; and (iii) by written notice from the Tenant to the Landlord in the form of the agreement of purchase and sale annexed hereto and forming part of this Lease. -10- THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON By: And: c/s 760719 ONTARIO LIMITED By: c/s And: t 1 A NOTE Insertions into Agreement of Purchase and Sale Purchaser: 760719 Ontario Limited O/A Apogee Production Purchase Price: $88,400.00. Deposit: $8,840.00 Date of Completion: 35 days following delivery of this Agreement of Purchase and Sale to the Vendor THIS LEASE dated as of thic 1st clay of December, 1995 in per-nuance of the 5jDjr Forms of I {tse,9 BETWEEN: The Corporation of the Niunicip"llity of C1411-ingtoir (hereinafter called the "L<uidlord") - and - 760719 Ontario Limited 0/A Apogee Productions (hereinafter called the "Tenant") WHEREAS the Landlord has agreed to lease to the Tenant and the Tenant has agreed to lease from the Landlord the lands and premises, including (i) the front office (the "Front Office") containing approximately 1,097 square feet located in and (ii) the Front Office and the balance of the building containing a total of approximately 3,953 square feet Building") known as Orono Armouries, Park Street, Hamlet of Orono, Municipality(the Clarington, Regional Municipality of Durham (the "Premises"). of NOW THEREFORE THIS LEASE WITNESSES covenants and agreements hereinafter reserved and contained on the consider art n of the rents,of the and the Tenant, the Landlord leases to the Tenant, and the Tenant leases from tl Landlord, the Premises on the following terms and conditions: 'ie 1• Term (a) The Tenant shall have and hold as tenant for a term of three 3 ear December 1, 1995 and ending November 30, 1998 (hereinafter called them""Term'g that portion of the Premises comprising (i) the Front Office for the period commencing December 1. 1995 until P d 1, 1996 until the Lease is terminated. -�a 3o19ed (11 t uilding from May (b) If the Tenant shall not be in default under this Lease the� �1h�� to extend the 'T'erm for a further period of three 3 �errant shall have the right Such right shall be exercisable by written notice from the Tenant to to t}�re Land or) given no later than 180 days before the expiration of the initial Term. The Extension Term shall be on the same terms and conditions as contained herein save and except that there shall be no further ril;ht of extension of the 'Perm or• Extension Term,p 2. IL9 The Tenant shall continuously occupy the Premises throughout accordance with the provisions of this Lease, solely for es perm itted by laweand fordno in other use or purpose. The Tenant shall not commit or suffer or permit to be committed (i) any waste or disfiguration or injury to the Premises rrr Iht i►rrlrr'(rvcrircrrts, irr;,l,rlluliuu5 l'i.�ttdamage, eduil)nrcnt thereon curd (ill ary nrrisancc irt, at or on the I', rc.s and emises. r t -2- The Tenant shall not do or permit anything to be clone that resells in the cancellation or threatened cancellation or the reduction of coverage under or threatened reduction of coverage under any insurance policy on the Premises or any part of it. 3. Balsa During the Term, the Tenant shall pray to the Landlord annual minimum rent ("Basic Rent") in an amount equal to (i) Two hlundr•ed and live Dollar's and Sixty-Nine Cents ($205.69) per month during the first six (6) months of the Term and n Seven Hundred and Forty- One Dollars and Eighteen Cents per month subject to increase as provided herein for the balance of the Term. Basic Rent shall be payable in monthly instalments, each payable on the first day of each month; provided that should the Term commence or terminate on a date other than the first day of a month, the 'Tenant shall pay to the Landlord for that month a pro rata portion said monthly payment. p of Basic Rent shall be considered as accruing from day to day and where it becomes necessary for any reason to calculate rent for an irregular period of less than one year or less than one calendar month, an appropriate apportionment and adjustment shall be made. On the lst day of December of each year of the Term or Extension Term, as the case may be, after the commencement thereof the Basic Rent shall increase to an amount equal the Basic Rent for the previous month by a fraction which has as its numerator the Consumer Price Index (Ontario) (the "C.P.I.") for the preceding April and as its denominator for April twelve (12) months prior. The Landlord shall advise the Tenant nwritint no later than the 1st of June of each year as to the amount of such increase in Basic Rent. ter 5. Ne___t 1i�ease The Tenant acknowledges, covenants and agrees that, except as herein ex ressly set is intended that this Lease and the rentals herein provided to be paid shall be completely et, net and carefree to the Landlord, All amounts required to be paid by the Tenant hereunder (whether to the Landlord parties) shall be additional rent and all additional rent shall be payable and recoverable or third Basic Rent, but in the manner herein provided, and the Landlord shall have all rig as ht against the Tenant for default in any such payment as in the case of arrears of Basic Rent• 6• T xes ilities and nnnr atirt osts J ant shall, as additional rent, in each and every year during the Term, be responsible ii pay and discharge .promptly when due: a • P ble ( ) all trces (including, without limitation,. ., local improvement rates and business taxes), rates, duties and assessments that evied, rated, charged or assessed against the.Premises; and (b) all charges for ubliic including Nvater, ga.s, oil, electrical power or energy, light, heat, air conditionin e, steam or hot water used upon or in respect of the Premises g or for fittings, , apparatus, meters or other things (cased in respect thereof, and for all work or services performed by any corporation or commission in connection with such public utilities. The Tenant shall have the right to :.or:test by appropriate legal proceeding any tax, rate, including local improvement rates, assessment or other chargestreferreadato of this Section provided that, in so doing, the Tenant shall not cause or permit an li o to encumbrances to be filed or arise against the Prenuses. Y ens or -3- Without limiting the foregoing, during the Term, the Tenant shall be responsible for and shall pay promptly when due, as Additional Rent, without limiting the obligations of the Tenant tinder this Lease, OIC7 aggregate of all expenses and costs of every kind, without duplication, incurred by or on behalf of the Landlord or Tenant with respect to and for the operation, maintenance and repairs Premises and all insurance relating to the Premises, including, without limitation, all costs in respect of the following: (a) ventilating, air-conditioning and humidity control of the Premises; (b) cleaning, janitorial services, window cleaning and sewage , 1 1 waste removal; (c) maintenance of all outside areas, including snow 'Ind ice removal; and (d) maintenance, repairs and replacements in respect of the Premises excluding structural and heating equipment maintenance, repairs and replacements. The Tenant shall (i) provide the Landlord within ten (10) days after receipt of same an tax bills, assessments, utility charges and other notices regarding the foregoing and a promptly deliver to the Landlord receipts evidencing the payment of all of the foregoing( If received by the Landlord, the Landlord shall promptly deliver to the Tenant any such tax assessments, utility charges and other notices regarding the foregoing. bills, 7. Repairs and 1Vlaintenanc� The Tenant her accepts the Premises on an "as is" basis. The Tenant at it shall maintain and keep the Premises and every part thereof(includin ' wit s own expense, all'electrical, mechanical, plumbing; air conditioning, g, bout limitation, equipment on the Premises excepting all heating equipment), in good lworking ord apical condition and promptly make all needed maintenance, repairs and replacements and a prudent owner of similar prerrtiscs (reasonable wear and tear and damage by fire, lightning htnii g and tempest and structural defects only excepted). The Tenant shall keep the P� ng clean and in such conditi `as a prudent owner would do. If structural,,,,,,Q� P emises replacements to the roof foundation or load bearing walls or the h a repairs or Premises are required during the Term, then the Landlord shall be obligated, at seex expense, to effect such repairs or replacements. Tile Tenant covenants with the Landlord p se, the Premises in as good repair as the Premises were at the commencement of the Term. m, 8. Alterations (a) If the Tenant, during the Terms of this Lease or any renewal of it, desires any alterations ctr additions to the Premises includin e make partitions, attaching equipment, and installing b but nol limited to: erecting equipment of the Tenant's business, the Tenant may do so at his own furnishings e, pal time and from time to time, if the following conditions are met: p any (i) before undertaking any alteration or addition the Tenant shall submit to the Landlord a plan showing the Pt'OP used alterations or additions and the Tenant S11,111 not proceed to make any alteration or addition unless the Landlord has approved the plan, and the Landlord shall not unreasonably or arbitrarily withhold its approval and items included in the plan which are regarded by tile 'Tenant as "Trade Fixtures" shall be designated as sun on the plan; and (ii) any and all alterations or additions to the Premises made by the Tenant must comply with all applicable building code standards and by-laws of the murticip,llily in which flle Pfentises are' J()a{tccJ. (b) The Tenant shall be reshonsibla for and ptty the cos, of any alterations, additions installations or improvements that any governing authority, munici al otherwise, may require to be made in, on or to the Premises. P Provincial or (c) No sign, advertisement or notice shall be inscribed Painted or any other person on the Tenant's behalf, an any part of the f inside orloutside of the building in which the Premises are located unless the sign,, advertisement or notice has been approved in every respect by the Landlord. (d) All alterations and additions to the Premises made by or on behalf of the Tenant, other than the Tenant's Trade Fixtures, shall immediately become the property of th Landlord without compensation to the Tenant. (e) The Tenant agrees, at his own expense and by whatever means may be nece immediately to obtain the release or discharge of any encumbrance that mays be registered against the Landlord's property in connection with any additions or alterations to the Premises made by the Tenant or in connection with any other activity of the Tenant. 9.• Insurance andinde_�i ati n (a) The Tenant covenants to keep the Landlord indemnified against demands whatsoever by g nst all claims and } any person, whether in respect of damage to person or property, arising out of or occasioned by the maintenance, use or occupancy of the Premises or the subletting or assignment of same or any part thereof. A Tenant further covenants to indemnify the Landlord with respect to any encumbr the on or damage to the Premises occasioned by or arising from the act, default, negligence of the Tenant, its officers, agents, servants, employees, contractors customers, invitees or licensees and the Tenant agrees that the foregoing indemnity shall survive t}le termination of this Lease notwithstanding any provisions of this Lease to the contrary. (b) The Tenant shall carry; (i) insurance in his own name to provide coverage with respect business interruption to an extent sufficient to allow the Tenant to meet his ongoing obligations to the Landlord and to protect the Tenant against loss of revenues; insurance in his own name insuring against the risk of damage .*+W-to tile '1`enant's property within the Premises caused by fire or other perils and the policy shall provide for coverage on a replacement cost basis to protect the Tenant's stock-in-trade, equipment, Trade Fixtures, decorations and improvement; and rnt��rv✓►c�v��n(^ a�..I<<on •�.ol�Or^S- (iii) public liability and property damage insurances in which policy the Landlord shall be a named insured and the policy shall include a cross-liabilit endorsement; and the Tenant sh<►ll provide the Landlord with a copy of the Policy certified insurer. P Y by'the 10. Damage and Dcstru ion If the Premises are destroyed or damaged by fire, lightning, tempest or other casual and in every such event if, in the opinion of the Landlord's architect the tY� then destruction of such Building renders the whole or any substantial part of tile�said aB Building or wlding -5- unfit for occup,incy ar impossible or unsafe for use and occupancy or impossible for the Tenant to continue to carry on its business, either the Landlord or the Tenant may at its option, terminate this Lease by giving to the other notice in writing of such termination, in which event, this Lease and the Term shall cease and be at an end as of the date of such destruction or damage, and the rent and all other payments for which the Tenant is liable under the terms of this Lease shall be apportioned and paid in full to the date of such destruction or damage; 11. �luict 1?ninvntcnt The Landlord covenants with the Tenant for quiet enjoyment. t. "6- 12. overnmgnt Reauir m atus The Tenant shall, at its sole cost and expense, during the Term: (a) observe and comply with all applicable governmental laws and regulations in without limitation,. federal and provincial legislative enactments, Building by-laws, and other governmental or municipal r•cgulations which relate to the Premises or partitioning, 1 p p the g, ec ui ment Operation and use thereof and to the making of any repairs, replacements, alterations, additions, changes, substitutions or improvements of or to the Premises. The Tenant shall corrrply with all police, fire and sanitary regulations imposed by any federal, provincial or municipal authorities, or made by insurance underwriters and shall observe all governmental and municipal regulations and other requirements governing the conduct of any business conducted in the Premises; b) obtain all necessary permits, licenses and approvals relating to the use and occu an of the Premises and the conduct of business therein; and p cY (c) carry out all modifications, alterations or changes to the Premises and the Te n conduct of business in or, use of the Premises which are required by any such authorities.'- The Tenant shall indemnify and hold the Landlord harmless against any penalty or fine imposed for any violation of any law, by-law or regulation by the Tenant or those f the Tenant is in law responsible. or whom 13. Defaul The following events ("%ver7ts of I)cfault") shall be deemed tt default a "default")Lease: ( t ) under this (a) If the Tenant fails to pay any instalment of Basic Rent promptly when additional rent hereunder ("Additional Rent") no later than five (5) days or the respective due date; Y following (b) If the Tenant fails to observe or perform any Other covenant, condition obligation under this Lease that is capable of remedy other thanadefaultinth r payment of Basic pent or Additional Rent, and such default remains unremedied after thirty (30) days following written notice from the Landlord to the T specifying such default and requiring the Tenant to remedy-the default; enant (c) If the Tenant fails to Observe and perform any other term, covenant, condition or obligation under this Lease that is not capable of remedy other than a default in the payment of Basic Rent or Additional Rent and the Tenant receives written notice from the Landlord specifying such default; (d) If the Tenant makes an assign ment for the benefit of its creditors generally, Tenant is declared bankrupt or insolvent, or if a petition in bankrupt or if the against the Tenant, or if the 'Tenant files an assignment in bankruptcy or takes or attempts to take the advantage of any legislation for relief of bankrupt or insolvent debtors, or if a receiver or a receiver and manager is appointee) for all or a portion of the Tenant's property, or if any steps are taken or any action or proceedings are instituted by the Tenant or by any Other party including, without limitation, any g our or governmental body of competent jurrsdretion for the dissolution, winding-up or liquidation of the Tenant or its assets, unless such proceeding be set aside, discharged or abandoned within fourteen diiys. "'or the purposes of this Subsect�ed n, -7- "Tenant" shall mean the Tenant and any person carrying on business in or the whole or any part of the Premises; occupying (e) If, the Tenant makes or attempts to make any bulk sale of an in the Premise` in contravention of the provisions of this f•,c r�e its assets l ,s�tuated sells, disposes, removes or attempts to remove from the Pre mitics a art ti ant fixtures, furniture, improvements, chattels or goods other than in the normal course Of business so that there would not in the event of such sale, dis oral or removal sufficient trade fixtures, furniture, improvements, chattels or goods of tile 7 Tenant on the Premises subject to distress to satisfy all rent due or accruing hereunder for - period of at least twelve (12) months; or a (f) If the Premises becomes and remains vacant for a period of five (5 consecutive Upon an Event of Default, the full amount of Basic ) t i ve days. and the current month's Basic Rent and Additional Rent together twith he next owing three (3) months instalments of Basic Rent and Additional Rent shall immediately t ensuing due and payable unless the Landlord gives written notice to•the Tenant to the contrary. racy. trary. 14. R1Qht of Re.Ent . Upon an Event of Default and at the option of the Landlord, the Landlord in any other remedy or right it may have, and without notice or any form of lea addition to forthwith re-enter upon and take possession of the Premises without thereby Lease and remove and sell the Tenant's goods chattels, legal Process, may therefrom, any rule of law or equity to the contra notes Y erminating this otwi equipment and trade fixtures seize and sell such goods, chattels, equipment and trade fixtures of rthe Tenant Premises and may apply the proceeds thereof to al b The Landlord may Landlord is then entitled under this Lease. A11 such sale as are in the 1 rent and other payments to which the of the Landlord by public auction or otherwise, and either nabl k or by in the discretion partly by one means and partly by another, all as the Landlord in its sole di decide. If any of the Tenant s property is disposed Y individual item, or days prior notice to the Tenant of disposition shall discretion may P of as provided in this Section, ten (10) reasonable, be deemed to be commercially 15.' Riaht of Termin�rr,,,, In addition to all rights and remedies of the Landlord available to i Lease or given by law to the Landlord, the Tenant agrees that upon t nyEven of Don of this Landlord shall have the right to terminate this Lease upon notice in writing Default the Upon such notice, this Lease shall terminate immediately without the necessity the Tenant. proceeding whatsoever. The Tenant shall thereupon within three (3) days of any legal surrender the 1'remi�cs W the Landlord, or it' not yet in possession, the Tenant 1• and .longer have any right to possession of the Premises, and the Landlord its shall no servants, shall have the right to enter the Premises and dispossess the Tenant and remove any persons or property therefrom without the necessity of legal proceeding� agents and with being liable to the Tenant therefor in damages, or otherwise, dreg whatsoever and 16. Riaht to R�i,ct crw� If the Landlord re-enters pursuant to the provisions of either this Lease or an law, the Landlord, without limiting its right to recover damages, ma either terminate applicable Lease under this section or it may from time to time without terminating ermtnate this obligations under this Lease, make any alterations and repairs considered ne Landlord to facilitate a reletting, and relet the Premises the Tenant's Tenant for such term or terms and at such rental or rentals cessary by the or any part thereof as agent of the conditions as the Landlord in its reasonable discretion considers advisable. terms and Upon each -8- reletting, all rent and other moneys received by the Landlord from the reletting will be applied (i) to the payment of indebtedness other than rent due hereunder from the Tenant to the Landlord (ii) to the payment of costs and expenses of the reletting including brokerage fees, legal fees and costs of the alterations and repairs and (iii) to the payment of rent due and unpaid hereunder. The residue, if any, will be held by the Landlord and applied in payment of future rent as it becomes due and the reletting during a month is less than the rent to bc�ipiiid duringeth itt Month z eb th � Tenant, the Tenant shall pay the deficiency to the Landlord. The deficiency shall e calculated by the Landlord and paid monthly in advance on or before the: first da of every e month by the Tenant, No re-entry by the Landlord shall be construed as an election on its part to terminate this Lease unless a written notice of that intention is given to the Tenant. Despite a reletting without termination, the Landlord may elect at any time to terminate this Lease for a previous breach, s 17. DAM,,a If the Landlord shall terminate this Lease as provided herein the Tenant Landlord on demand, rent hereunder tip to the time of re-entry or temnati�onl whico the shall be the later, hever 18. &R.Uate Remc ices The Landlord may from time to time resort to ally or all Of the available to it upon an Event of Default, either by any provision of this�Lease or remedies or the general law, all of which rights and remedies are intended to be cumulative statute alternative and may be exercised generally or in combination. and not 19. W_aivgr (a) Notwithstanding anything contained in any statute now or hereafter in force or abrogating the right of distress, none of the goods, chattels or trade fixtures fti e Tenant on the Premises at any time during the Term shall be exempt from levy distress for rent in arrears, and if any claim is made for s p eVY by Tenant or if a distress is made by the Landlord or if any action is l rou exemption by the right of the Landlord to levy upon any such goods as are so exempted, this g to test the may be pleaded as an estoppel against the Tenant, the Tenant hereby waiving P s Lease and every benefit that could or might have accrued to the Tenant under and virtue of any such statute but for this Lease, �d by (b) Failure of the Landlord to insist upon the performance of any covenant of this Lease or to exercise any right or option contained in this Lease shall n oboe construed as a waiver or relinquishment of any such covenant, condition, right or option or of any subsequent breach of the same, No variation or waiver of covenant or condition of this Lease shall be valid unless in writing and signed by duly authorized persons on behalf of the Landlord. Y 20. CaUll an Every obligation of the Landlord or the Tenant expressed in this Lease even expressed as a covenant, shall be a covenant for all purposes. The Tenant acknowledges that it shall have no right to ally benefit of division or discussion, g 21. Tirnc of I___�sss�n�e Time shall be of the essence in all respects hereunder, -9- 22. E�nforc itit If any term, covenant or condition of this Lease or the application thereof to any person or circumstance is to any extent held or rendered invalid, unenforceable or illegal, the remainder of this Lease or the application of such term, covenant or condition to persons or circumstances other than those with respect to which it is held invalid, unenforceable or illegal is not affected thereby and continues to be applicable and enforcable to tl extent permitted by law, e to fullest 23. Notice Any notice that one party hereto may desire or be required to give to the other party hereto shall for all purposes be deemed to have b<;en sufficiently and proper) given, if delivered personally or forwarded by registered mail and addressed in'tile case of tile Landlord to: 40 Temperance Street, Bowmanville, Ontario, L1C 3A6 and in the case of the Tenant to the Premises and shall be presumed to have been received on the date of delivery, if delivered personally, or if forwarded by registered a third business day following such mailing, Any notice shall be in writing except sexo essly the otherwise provided herein, and shall be given only by delivery as aforesaid in the event of postal interruption. 24. P;trkinn , urtccs Subject to the agreement of the Orono Community Recreation Centre shall provide two (2) parking spaces for the exclusive use of the Tenant.oard the Landlord 25. Isnut� This Lease and everything herein contained shall enure to the benefit of and b upon the parties hereto their successors and permitted assigns respectively. a binding IN WITNESS WHEREOF the parties have duly executed and unconditional) delivered this Lease as of the date first above written. y 26. Ontign,�o Pt►; h The Landlord hereby grants to the Tenant a right and option to purchase the Premises during the period of the initial Term and a further period of sixty (60 da s following the conclusion of the initial Term such option to be exercised: ) y (i) only if the Tenant shall not be in default hereunder; at purchase' price of $88,400.00; 111(1 by written notice from the Tenant to the Landlord in the form agreement of purchase and sale annexed hereto and forming of the Lease, g part of this . F -l THE CORPORATION Or THE MUNICIPALITY OI, CLARINGTON r I3y: Diane am , Mayor And: / C/S r , Cleve 7607*19 ON A LIMITED Tay. c/s And: r NOTr Insertions into Agreement of Purchase and Sale Purchaser: 760719 Ontario Limited O/A Apogee Production Purchase Price: $88,400.00. Deposit: $8,840.00 Date of Completion: 35 days following delivery of this Agreement of Purchase and Sale to the Vendor APOGEE PRODUCTIONS Addendum #1 Subject: SD 95-3 Orono Armouries Three Year Lease with Option to Buy. 760719 Ont Ltd/Apogee Productions wishes to lease the Orono Armouries building in Orono. Initially we are prepared to occupy the existing vacant space on the southern end of the building, assuming that portion of the building that is currently used for museum artifacts storage as it becomes available. The building measures 3,953 sq. ft. We are willing to lease the entire building for $2.25 per sq. Ft. for a total yearly payment of $8,894.25. This lease total is incremental subject to the remainder of the building being vacated. The building requires a major investment in interior renovations, which we are prepared to undertake. To protect that investment we would anticipate being granted an option to buy the building at the 1994/1995 assessed value. The option to buy could be exercised at anytime during the three year lease or for sixty days following the three year period. Apogee would also hold an option to renew the lease for a following three years without an option to buy. During the term of the lease the municipality would undertake to keep the building envelope and heating equipment in good repair and provide two parking spaces in the area between the armouries and the Orono Town Hall Apogee Productions is a long term producer of broadcast and corporate video and multi media productions. W are currently developing Distance Learning programs for Na ' al and International distribution. P.O. BOX 406 ORONO ONTARIO LOB IMO PHONE 416 347 5815 FAX 905 983 6115 MUNICIPALITY OF larington T ONTARIO January 13, 1995 Apogee Productions 3480 Somerville Drive Orono, Ontario LOB i MO Dear Sir: RE: ADDENDUM #1 SD95-3, SALE OR ORONO ARMOURIES Please be advised of the following additions to the above noted Sale by Tender: Note: A total of 1,097 square feet of space (front office) is available immediately, with the total building (3,953 square feet) being available on or about May 1, 1996. Offers: The Municipality will consider offers to purchase and offers to lease with option to purchase at a faced price and on a date which is to be stipulated on i the tender submission. All tender submissions must be in accordance with this addendum. i Yours truly, Lou Ann Birkett, C,P.P., A.M.CT, Purchasing Manager Z.AB*1d CORPORATION OF THE MUNICIPALITY OF CLARINGTON 40 fEMPEFlANCE 9TReef • 8OWMANvILLE -ONTARIO• L f C 3A9 • ISW 623.33)9• FAX 623-1169 �lCYClCO P/�l11 zooci NOIDNISVID 69T6£Z9906TQ fb;£T 56i£i�TT Page 3 of 7 Tender SD95-3 AGREEMENT O PURCHAS AN SALE PURCHASER, ...7 �/'l�' I l �N, i / l C ( �'/'LI.,�-�c 9 C'i c 11 ...... ............... .. ........ ........... .........................................., offers to buy fr in VENDOR, ........CORPORATION OF THE MUNICIPALITY OF CLARINGTON, through Vendor's AGENT. ....................... N/A ....................:........ the following PROPERTY: fronting on the Northwest corner of Park and Church Streets, known Municipally as ORONO.in the MUNICIPALITY OF CLARINGTON and having a frontage of 50 FEET more or less by a depth of 100 FEET more or less and described as MUNICIPAL BUILDING (FORMER ARMOU IES), BRICK STRUCTURE (SEE ATTACHMENT "B" - LOCATION MAP, at a Purchase Price of ••••• • •••••••••••••..••••••.•..... Canadian Dollars ($Can ...............................) on the following terms: 1. Purchaser submits with this offer 10% OF THE TOTAL BID PRICE ...................................... Dollars ($•••••••••••••..••••.........••..•.•................) cash/cheque payable to Vendor's Agent as a deposit to be held by him in trust pending completion or other termination of this Agreement and to be credited towards the Purchase Price on completion. 2. Purchaser agrees to PAY BALANCE OR PURCHASE PRICE ON CLOSING SUBJECT TO USUAL ADJUSTMENTS. .. . . ............................................................................................................................. .................................................................................................................................... ....................................................................................................................... 3. Purchaser and Vendor agree that all existing fixtures are included in the purchase price except those listed hereunder: And that the following chattels are included in the purchase price........................... N/A .................... 4. Purchaser agrees that this'Offer shall be irrevocable by him until 11:59 p.m. on the 31th day of December, 1995, after which time, if not accepted, this Offer shall be null and void and the deposit shall be returned to Purchaser without interest or deduction. 5. This Agreement shall be completed on the ...TO BE NEGOTIATED... Upon completion, vacant possession of the property shall be given to Purchaser unless otherwise provided as follows: . ............................................................................................. 6. Purchaser shall be allowed ten (10) days next following the date of acceptance of this Offer to: examine the title to the property at his own expense, to satisfy himself that there are no outstanding work orders affecting the property, that its present use ........................................................................................................ .. . . . ...............................................................................................................................I..................... . . ............................................................................................................................................................... 7. Vendor and Purchaser agree that there is no condition, express or implied, representation or warranty of any kind that the future intended use of the property by Purchaser is or will be lawful except as may be specifically stipulated hereunder. .......CI-2COMMERCIAL (S1EI3 ATI•ACIIMEMI"'A" - ZONING MAP)............ 8. Purchaser acknowledges having inspected the property prior to submitting this Offer and understands that upon Vendor accepting this Offer there shall be a binding agreement of purchase and sale between Purchaser and Vendor. 9. Provided that the title to the property is good and free from all encumbrances except as aforesaid and except for any registered restrictions or covenants that run with the land providing that such are complied with and except for any minor easements to public utilities required for the supply of domestic utility services to the property, if within the link allowed for examining file title any valid objection to title, or to any outstanding work order, or to the fact the said present use may not lawfully be continued, or that the principal building may not be insured against risk of fire is made in writing to Vendor and which Vendor is unable or unwilling to remove, remedy or satisfy and which Purchaser will not waive, this Agreement, notwithstanding any intermediate acts or negotiations in respect of such objections, shall be at an end and all monies theretofore paid shall be returned without interest or deduction and Vendor and Vendor's Agent shall not be liable for any costs of damages. Save as to any valid objections so made by such day and except for any objection going to the root of the title, Purchaser shall be conclusively deemed to have accepted Vendor's title to the property. .. f Page 4of7 Tender SD95-3 10. Purchaser shall not call for the production of any title deed, abstract, survey or other evidence of title to the property except such as are in the possession or control of Vendor. Vendor agrees that, if requested by the purchaser, he will deliver any sketch or survey of the property in his possession or within his control to Purchaser as soon as possible and prior to the last day allowed for examining title. 11. All buildings on the property and all other things being purchased shall be and remain until completion at the risk of Vendor. Pending completion, Vendor shall hold all insurance policies, if any, and the proceeds thereof in trust for the parties as their interests may appear and in the event of substantial damage, Purchaser may either terminate this Agreement and have all monies theretofore paid returned without interest or deduction or else take the proceeds or any insurance and complete the purchase. 12. Provided that this Agreement shall be effective to create an interest in the property only if the subdivision control provisions of the Planning Act are complied with by Vendor on or before completion and Vendor hereby covenants to proceed diligently at his expense to obtain any necessary consent on or before completion. 13. Purchaser shall be credited towards the Purchase Price with the amount, if any, which it shall be necessary for Purchaser to pay to the Minister of National Revenue in order to satisfy Purchaser's liability in respect of tax payable by Vendor under the non-residency provisions of the Income Tax Act by reason of this sale. Purchaser shall not claim such credit if Vendor delivers on completion the prescribed certificate or his statutory declaration that lie is not then a non-resident of Canada. 14. Fire insurance shall be assigned to the Purchaser on closing subject to the consent of the insurer having been obtained to such assignment, and the vendor shall supply to the purchaser at least five (5) days before, the complelion date derails of any such policy to he so assigned. 15. Unearned fire insurance premiums of any policy to be assigned pursuant to paragraph 14 herein, rents, mortgage interest, taxes, local improvements, water and assessment rates and the cost of fuel shall be apportioned and allowed to the date of completion (the day itself to be apportioned to Purchaser). 16. The deed or transfer shall, save for the Land i ransfer Tax Affidavit, which shall be prepared and completed by the Purchaser, be prepared in registrable form at the expense of Vendor and the Mortgage at the expense of Purchaser. 17. Time shall in all respects be of the essence hereof provided that the time for doing or completing of any matter provided for herein may be extended or abridged by an agreement in writing signed by Vendor and Purchaser or by their respective solicitors who are hereby expressly appointed in this regard. 18. Any tender of documents or money hereunder may be made upon Vendor or Purchaser or their respective solicitors on the day for completion of this Agreement. Money may be tendered by bank draft or cheque certified by a chartered bank,trust company or Province of Ontario Savings Office. 19. This Agreement shall constitute the entire agreement between Purchaser and Vendor and there is no representation, warranty, collateral agreement or condition affecting this Agreement or the property or supported hereby other than as expressed herein in writing. This Agreement shall be read with all changes of gender or number required by the context. Page 5 of 7 Tender SD95-3 Dated at ... ... ... .......�....... ................. this ......./... . . day ! ' /6 / t .............................................1995. SIGNED, SEALED AND DELIVERED IN WITN S hereof I have hereunto set by i hand an se �. . Date: ........... 61.r (Purchaser) ............................................................... .................. I.......................................................... Date: .......... ............... (Purchaser) The undersigned accepted the above Offer and agrees with the Agent above named in consideration for his services in procuring the said Offer, to pay him on the date above fixed for cornpletion, a commission of .......%of an amount equal to the above mentioned sale price, which commission may be deducted from the deposit. I hereby irrevocably instruct my Solicitor to pay direct to the said Agent any unpaid balance. Datedat ............................................. ............ this .................. day of ........................................................... SIGNED, SEALED AND DELIVERED IN WITNESS whereof I have hereunto set by in the presence of: hand and seal ............................................................... .................. ........ ............................................. Date: ........... . . ............ (Vendor) ....................................I.......................... ................. ..... ............................................. Date: .................... (Vendor) The Undersigned Spouse of the Vendor hereby consents to the disposition evidenced herein pursuant to the provisions of the Family Law Reform Act, 1978, c.2, as the same may be amended from time to time. In consideration of the same of One Dollar ($1.00), the receipt of which from the Purchaser is hereby acknowledged, the undersigned spouse of the Vendor hereby agrees with the Purchaser that he/she will execute all necessary or incidental documents to give full force and effect to the sale evidenced herein. Witness ............................................................... .. .......................................................................... Date: ......................... Spouse ACKNOWLEDGEMENT I acknowledge receipt of my signed copy of this I acknowledge receipt of my signed copy of this accepted Agreement of Purchase and Sale, and accepted Agreement of Purchase and Sale, and direct my agent to forward a copy to my solicitor. direct my agent to forward a copy to my solicitor. ....................... .... Date Date .. ..... . ............... ................................ .................................................... ................................ Vendor Purchaser .........................I................Date ................................ .................. ...........0............. .Date...... . ....... ................................ Vendor Purchaser Address:...........-oo....................oo............................................... Address:...........,.......................:.............................................. TelephoneNo:.,......oo...............................................0................ Telephone No:......................................................................... Vendor's Solicitor:.................................................................. Purchaser's Solicitor:..............................................................