1. BASIC

1.1 TERMS, SCHEDULES, AND DEFINITIONS

BASIC TERMS

1.2 SCHEDULES

1.3 DEFINITIONS

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2. PREMISES

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3. TERM

3.1 TERM

3.2 COMMENCEMENT DATE OF LEASED PREMISES

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4. RENT

4.1 RENT

4.2 PAYMENT OF RENT

4.3 RENT FOR IRREGULAR PERIODS

4.4 WAIVER OF SET-OFFS

4.5 APPLICATION OF PAYMENTS

4.6 NET LEASE

4.7 SECURITY DEPOSIT

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5. TENANT'S COVENANTS

5.1 RENT

5.2 OCCUPANCY AND PERMITTED USE

5.3 WASTE AND NUISANCE

5.4 INSURANCE RISKS

5.5 CLEANLINESS

5.6 COMPLIANCE WITH LAWS

5.7 INSTALLATIONS

5.8 RULES AND REGULATIONS

5.9 OVERHOLDING

5.10 SIGNS

5.11 INSPECTION AND ACCESS

5.12 SHOWING LEASED PREMISES

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6. LANDLORD'S COVENANTS

6.1 QUIET ENJOYMENT

6.2 INTERIOR CLIMATE CONTROL

6.3 ELEVATORS

6.4 ENTRANCES, LOBBIES, AND OTHER COMMON AREAS

6.5 WASHROOMS

6.6 JANITORIAL SERVICE OF COMMON AREA

6.7 MAINTENANCE OF COMMON AREAS

6.8 BUILDING DIRECTORY

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7. REPAIR, DAMAGE, AND DESTRUCTION

7.1 LANDLORD'S REPAIRS

7.2 TENANT'S REPAIRS

7.3 ABATEMENT AND TERMINATION

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8. TAXES AND OPERATING COSTS

8.1 LANDLORD'S TAX OBLIGATIONS

8.2 TENANT'S TAX OBLIGATIONS

8.3 GOODS AND SERVICES TAX (GST)

8.4 TENANT'S TAX COST

8.5 POSTPONEMENT OF PAYMENT OF TAXES

8.6 RECEIPTS FOR PAYMENT

8.7 COMPUTING OPERATING COSTS

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9. UTILITIES AND ADDITIONAL SERVICES

9.1 UTILITIES

9.2 ADDITIONAL SERVICES

9.3 ADDITIONAL UTILITIES

9.4 ENERGY CONSERVATION

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10. ASSIGNMENT AND SUBLETTING

10.1 LICENSES, ASSIGNMENTS AND SUBLETTINGS

10.2 ASSIGNMENT AND SUBLETTING

10.3 TERMS OF CONSENT

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11. FIXTURES AND IMPROVEMENTS

11.1 INSTALLATION OF FIXTURES AND IMPROVEMENTS

11.2 LIENS AND ENCUMBRANCES ON FIXTURES AND IMPROVEMENTS

11.3 REMOVAL OF FIXTURES AND IMPROVEMENTS

11.4 ALTERATIONS BY LANDLORD

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12. INSURANCE AND LIABILITY

12.1 LANDLORD'S INSURANCE

12.2 TENANT'S INSURANCE

12.3 INSURANCE TERMS

12.4 TENANT'S CONTRACTOR'S INSURANCE

12.5 LANDLORD'S RIGHT TO INSURE

12.6 ACTS CONFLICTING WITH INSURANCE

12.7 INDEMNITY BY TENANT

12.8 INDEMNITY BY LANDLORD

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13. SUBORDINATION, ATTORNMENT, REGISTRATION, AND CERTIFICATES

13.1 SALE OR FINANCING OF BUILDING

13.2 SUBORDINATION AND ATTORNMENT

13.3 REGISTRATION

13.4 CERTIFICATES

13.5 ASSIGNMENT BY LANDLORD

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14. OCCURRENCE OF DEFAULT

14.1 UNAVOIDABLE DELAY

14.2 NO ADMISSION

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15. TENANT'S DEFAULT, REMEDIES OF LANDLORD, AND SURRENDER

15.1 REMEDYING BY LANDLORD, NON-PAYMENT, AND INTEREST

15.2 REMEDIES CUMULATIVE

15.3 RIGHT OF RE-ENTRY ON DEFAULT

15.4 TERMINATION AND RE-ENTRY

15.5 CERTAIN CONSEQUENCES OF TERMINATION AND RE-ENTRY

15.6 WAIVER OF DISTRESS AND BANKRUPTCY

15.7 RE-LETTING AND SALE OF PERSONALTY

15.8 SURRENDER ON TERMINATION

15.9 TENANT’S RIGHT TO TERMINATE

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16. MISCELLANEOUS

16.1 NOTICES

16.2 EXTRANEOUS AGREEMENTS

16.3 TIME OF ESSENCE

16.4 AREA DETERMINATION

16.5 SUCCESSORS AND ASSIGNS

16.6 FRUSTRATION

16.7 WAIVER

16.8 GOVERNING LAW AND SEVERABILITY

16.9 CAPTIONS

16.10 ACCEPTANCE

16.11 DEPOSIT

16.12 EXPROPRIATION

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17. SPECIAL PROVISIONS

17.1 OPTION TO EXTEND

17.2 PARKING

17.3 TENANCY IMPROVEMENT ALLOWANCE

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Schedule "A" FLOOR PLAN OF THE LEASED PREMISES

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Schedule "B" DEFINITIONS

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OFFICE LEASE AGREEMENT

AT THE CITY OF LANGFORD YMCA/YWCA RECREATION CENTRE

THIS LEASE, dated as of ________________________ is made by the Landlord and Tenant named below who, in consideration of the covenants in this Lease, agree as follows:

1. Basic, Schedules, and Definitions

1.1 Basic Terms

(a) Landlord:
Address of Landlord:

(b) Tenant:
Address of Tenant:
City of Langford
2nd Floor, 877 Goldstream Avenue
Langford, BC V9B 2X8

Victoria Conservatory of Music
900 Johnson Street
Victoria, BC V8V 3N4
Attention: Nathan Medd
Email: ceo@vcm.bc.ca

(c) Leased Premises: Civically referred to as Suite 210, 1319 Westhills Drive, Victoria, BC, located on the fourth (4th) floor of the Building as approximately shown on the attached Schedule "A".

(d) Rentable Area: approximately three thousand, sixty-eight square feet (3,068 ft2) subject to adjustment per the Lease.

(e) Term: commences on the Commencement Date and expires on the date that is Five (5) years after the Commencement Date.
Commencement Date: See section 3.2

(f) Annual Base Rent:

(g) Permitted Use: The Leased Premises shall be used and occupied for the purpose of teaching, studying and performing music and music therapy and hosting the associated musical performances and fundraising events and for no other purposes without the Landlord's prior written approval.

(h) Option to Extend: See section 17.1

(i) Security Deposit: $8,898.37. See section 4.7.

The foregoing Basic Terms are approved by the parties. Each reference in this Lease to any of the Basic Terms will be construed to include the above provisions as well as all of the additional terms and conditions of the applicable sections of this Lease where such Basic Terms are more fully described.

1.2 Schedules

All Schedules to this Lease are incorporated into and form an integral part of this Lease.

1.3 Definition

In this Lease, the words, phrases and expressions set out in Schedule B are used with the meanings defined in Schedule "B".

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2. Premises:

In consideration of the rents, covenants, and agreements reserved and contained on the part of the Tenant to be paid, observed, and performed, the Landlord demises and leases to the Tenant, and the Tenant leases from the Landlord, the Leased Premises.

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3. Term

3.1 Term

The Term of this Lease is the period set out in subclause 1.1(e).

3.2 Commencement Date

The Commencement Date of the Leased Premises shall be March 1, 2026.

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4. Rent

4.1 Rent

Payment of Rent shall commence on the Commencement Date and shall continue to be paid monthly for the remainder of the Term. The Tenant will pay the Landlord for the Leased Premises, at the office of the Landlord's building manager, or as the Landlord may direct in writing, during the Term in lawful money of Canada without any set-off, abatement, compensation, or deduction whatsoever on the days and at the times specified in this Lease, Rent that will include the aggregate of the sums specified in subclauses (a) and (b):

(a) Annual Base Rent
Annual Base Rent in the amount per year set out in subclause 1.1(f) for each respective Lease Year, subject to the adjustment provisions of subclause 4.2(c); and

(b) Additional Rent
The aggregate of the following:
(i) the Tenant's Share of Tax Cost;
(ii) the Tenant's Share of Operating Costs; and
(iii) the other amounts, charges, costs, and expenses as are required to be paid by the Tenant to the Landlord under this Lease in addition to Annual Base Rent.

4.2 Payment of Rent

The Rent will be paid by the Tenant as follows:

(a) Annual Base Rent
The Annual Base Rent will be paid in equal consecutive monthly instalments in advance on the first day of each month during the Term starting on the Commencement Date. Where the Commencement Date is the first day of a month the instalment will be in respect of that month. Thereafter, subsequent monthly instalments will be paid in advance on the first day of each ensuing calendar month during the Term.

(b) Additional Rent Payments
The amount of any or all of the items of Additional Rent under subclause 4.1(b) that the Tenant is to pay may be estimated by the Landlord for the calendar year or portion of it as the Landlord may determine. The Tenant agrees to pay to the Landlord the amount of the estimate in monthly instalments in advance in amounts and during the period specified by the Landlord on the dates and at the times for payment of the Annual Base Rent. The Landlord may make its estimates so that the Tenant's share of Additional Rent will be payable to the Landlord prior to the time the Landlord is obliged to pay the costs in respect of which the Additional Rent is payable. The Landlord may submit to the Tenant at any time during a period a re-estimate of the amount of Additional Rent payable by the Tenant under subclause 4.1(b) and a revised monthly instalment amount. As soon as reasonably possible, but in any case not more than 120 days after the end of the calendar year for which the estimated payments have been made, the Landlord will make a final determination of Tax Cost, Operating Costs, and other amounts under 4.1(b)(iii) for the calendar year and notify the Tenant of the actual amount required to be paid as Additional Rent. If necessary, an adjustment will be made between the parties and any money owing by or to one party will be paid or credited within 30 days of such notice. The Tenant will be entitled to audit the amount of Additional Rent calculated by the Landlord and should the Tenant exercise this right to audit the Landlord will make available the records reasonably required for this purpose at the Landlord's office. If, after conducting an audit, the Tenant disagrees with the Landlord's determination the matter will be resolved by the Landlord's accountant whose decision is final.
In any event, the Tenant shall not claim a re-adjustment in respect of Operating Costs or Property Taxes or other items of Additional Rent estimated by the Landlord or the share payable by the Tenant on account thereof except by written notice given to the Landlord within six months after delivery of the Statement, stating the particulars of the claim for re-adjustment.

(c) Basis of Determining Rent
The Tenant acknowledges that the Annual Base Rent is calculated on the basis of the Rentable Area of the Leased Premises, being as set out in subclause 1.1(d) and at the rate set out in subclause 1.1(f) for each square foot of Rentable Area.

(d) Post-dated Cheques/Electronic Payment
If requested by the Landlord from time to time, the Tenant will provide to the Landlord without prejudice to any other right or remedy of the Landlord a series of cheques, post-dated to the respective due dates of payments, for the amounts of the Rent and estimates on account of it that are periodically payable under this Lease. If requested by the Landlord, the Tenant will arrange payment electronically through its financial institution.

4.3 Rent for Irregular Periods

All Rent reserved in this Lease will be deemed to accrue from day to day, and if for any reason it becomes necessary to calculate Rent for irregular periods of less than one year an appropriate pro-rata adjustment will be made on a daily basis in order to compute Rent for the irregular period.

4.4 Waiver of Set-offs

The Tenant hereby waives and renounces any and all existing and future claims, set-offs, and compensation against any Rent and agrees to pay the Rent regardless of any claim, set-off, or compensation that may be asserted by the Tenant or on its behalf.

4.5 Application of Payments

All payments by the Tenant to the Landlord under this Lease will be applied toward such amounts then outstanding under this Lease as the Landlord determines and the Landlord may subsequently alter the application of any payment.

4.6 Net Lease

The Tenant acknowledges and agrees that this Lease will be a completely net lease for the Landlord except as otherwise expressly provided in the Lease, and that the Landlord is not responsible during the Term for any costs, charges, expenses, and outlays of any nature whatsoever arising from or relating to the Leased Premises and Common Area. Except as otherwise provided in the specific provisions in this Lease, the Tenant will pay all charges, impositions, and costs of every nature and kind relating to the Leased Premises and Common Area whether or not referred to in this Lease and whether or not within the contemplation of the Landlord or the Tenant, and the Tenant covenants with the Landlord accordingly.

4.7 Security Deposit

The Tenant acknowledges that the Landlord shall collect from the Tenant the sum set out in subclause 1.1 (i) ii to be held as a security deposit to secure the Tenant's performance of its obligations hereunder. If at any time during the Term the Tenant fails to observe or perform any of its obligations under this Lease, the Landlord may, in addition to its other rights under this Lease or at law or in equity, apply the security deposit, or so much thereof as is necessary, to compensate the Landlord on account of loss or damage the Landlord has suffered by reason of the Tenant's breach. If the Landlord so applies the whole or part of the deposit, the Tenant will remit to the Landlord forthwith on demand a sum equal to the amount so applied by the Landlord. No interest is payable to the Tenant on any amount held by the Landlord.

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5. TENANT'S COVENANTS

The Tenant covenants with the Landlord as follows:

5.1 Rent

To pay the Rent on the days and in the manner provided in this Lease and to pay all other amounts, charges, costs, and expenses as are required to be paid by the Tenant to the Landlord or to others under this Lease.

5.2 Occupancy and Permitted Use

To take possession of the Leased Premises on the Commencement Date and to occupy and commence to carry on operations in all or substantially all of the Leased Premises, to use the Leased Premises only for the purpose specified in subclause 1.1(g) and not to use or permit the Leased Premises to be used for any other purpose. To not exceed applicable Building Code limits for occupancy and to avoid occupancy levels which would excessively impact the Landlord's HVAC system and other utility systems.

5.3 Waste and Nuisance

Not to commit or permit any waste or injury to the Building or the Leased Premises including the Leasehold Improvements and the fixtures in them; any overloading of the floors; any conduct that impedes or, in the opinion of the Landlord acting reasonably, could impede the business of any other occupant of the Building or that constitutes or, in the opinion of the Landlord acting reasonably, could constitute a nuisance to the Landlord, any other occupant of the Building, or anyone else; or any other use or manner of use that annoys or interferes with the operations of any other occupant of the Building or, in the opinion of the Landlord acting reasonably, may have an adverse impact on the reputation of the Building.

5.4 Insurance Risks

Not to do, omit to do, or permit to be done or omitted to be done upon the Leased Premises or Common Area anything that would cause the Landlord's cost of insurance to be increased (and, without waiving the foregoing prohibition, the Landlord may demand, and the Tenant will pay to the Landlord upon demand, the amount of any increase or cost caused by anything so done or omitted to be done) or that will cause any policy of insurance to be subject to cancellation.

5.5 Cleanliness

Not to permit the Leased Premises or Common Area to become untidy, unsightly, or hazardous, jeopardize public health and safety or permit unreasonable quantities of waste or refuse to accumulate in them, and at the end of each day to leave the Leased Premises and Common Area in a condition so as to reasonably facilitate the performance of the Landlord's janitorial and cleaning services referred to in clause 6.6.

5.6 Compliance with Laws

To comply at its own expense with all municipal, provincial, and federal sanitary, fire, and safety laws, bylaws, regulations, and requirements pertaining to the operation and use of the Leased Premises and Common Area, the condition of the Leasehold Improvements, fixtures, furniture, and equipment installed in them, and the making by the Tenant of any repairs, changes or improvements in them.

5.7 Installations

To permit the Landlord during the Term, at the Tenant's cost, to install any equipment in or make alterations to the Leased Premises necessary to comply with the requirements of any statute, law, bylaw, ordinance, order, or regulation referred to in clause 5.6 and imposed after completion of the original construction of the Building, provided that any such work will be done in such a manner as to minimize the disruption to the Tenant's operation of the same work. To permit ingress and egress to and from the Leased Premises by the Landlord or by other tenants of the Landlord or by their respective employees, servants, workers, and invitees, by use of fire exit doors in case of fire or emergency.

5.8 Rules and Regulations

To observe, and to cause its employees, invitees, and others over whom the Tenant can reasonably be expected to exercise control to observe the Rules and Regulations attached as Schedule "C", and the further and other reasonable rules and regulations and amendments and changes to them as may hereafter be made by the Landlord, which changes will be made in consultation with the Tenant and to the mutual satisfaction of the Landlord and Tenant; and all the Rules and Regulations will be deemed to be incorporated into and form part of this Lease.

5.9 Overholding

That if the Tenant continues to occupy the Leased Premises after the expiration of this Lease without any further written agreement and without objection by the Landlord, the Tenant will be a monthly tenant at a monthly base rent equal to 125% of the monthly instalment of Annual Base Rent payable by the Tenant as provided in section 4 during the last month of the Term and (except as to length of tenancy) subject to the provisions and conditions of this Lease.

5.10 Signs

Not to paint, display, inscribe, place, or affix any sign, symbol, notice, or lettering of any kind anywhere outside the Leased Premises (whether on the outside or inside of the Building) or within the Leased Premises so as to be visible from the outside of the Leased Premises, without the prior written approval of the Landlord. The Landlord may install the sign, as an Additional Service at the cost of the Tenant.

5.11 Inspection and Access

To permit the Landlord from time to time to enter and to have its authorized agents, employees, and contractors enter the Leased Premises for the purpose of inspection, window cleaning, maintenance, providing janitorial service, or making repairs, alterations, or improvements to the Leased Premises or the Building, or to have access to utilities and services or to determine the electric light and power consumption by the Tenant in the Leased Premises during normal building operations. The Tenant will provide free and unimpeded access for this purpose, and is not entitled to compensation for any inconvenience, nuisance, or discomfort, but the Landlord in exercising its rights will endeavor to minimize interference with the Tenant's use and enjoyment of the Leased Premises.

5.12 Showing Leased Premises

To permit the Landlord and its authorized agents and employees to show the Leased Premises to prospective tenants during Normal Operating Hours of the last nine months of the Term.

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6. Landlord’s Covenants

The Landlord covenants with the Tenant as follows:

6.1 Quiet Enjoyment

Provided the Tenant pays the Rent and performs its other covenants in this Lease, the Tenant will and may peaceably possess and enjoy the Leased Premises for the Term hereby granted, without any interruption or disturbance from the Landlord or its assigns, or any other person or persons lawfully claiming by, from, through, or under the Landlord unless as otherwise provided herein.

6.2 Interior Climate Control

To provide to the Leased Premises during Normal Operating Hours, and as an Additional Service outside of Normal Operating Hours, by means of one or more separate systems for heating, cooling, filtering, and circulating air and processed air in the quantities, at the temperatures as will maintain in the Leased Premises conditions of reasonable temperature and comfort in accordance with good standards of interior climate control generally pertaining at the date of this Lease applicable to similar buildings based on the permitted occupancy of the premises. The Landlord will have no responsibility for any inadequacy of performance of the system unless the Landlord is negligent in maintaining or operating the system. The Tenant acknowledges that the comfort of the Tenant will be reduced if the Leased Premises include installed partitions or other installations in locations that interfere with the proper operation of the said systems or if window coverings on exterior windows are not fully closed while the windows are exposed to direct sunlight. The Tenant agrees that the Landlord will have no responsibility to provide for the removal of smoke, dust, or odours originating from within the Leased Premises.

6.3 Elevators

Subject to the supervision of the Landlord, to furnish for use by the Tenant and its employees, invitees, customers and clients, in common with others so entitled passenger elevator service to the Leased Premises, and to furnish for the use of the Tenant in common with others so entitled at reasonable intervals and during the Normal Operating Hours, and as an Additional Service outside of the Normal Operating Hours, elevator service to the Leased Premises for the carriage of furniture, equipment, deliveries, and supplies, provided that if the elevators become inoperative or damaged or destroyed the Landlord will have a reasonable time within which to repair the damage or replace the elevator. The Landlord will repair or replace it as soon as reasonably possible, but is not liable for indirect or consequential damages or other damages for personal discomfort or illness during the period of repair or replacement.

6.4 Entrances, Lobbies, andOther Common Areas

To permit the Tenant and its employees and invitees, in common with others so entitled, to have the use during Normal Operating Hours of the common entrances, lobbies, stairways, and corridors of the Building giving access to the Leased Premises (subject to the Rules and Regulations in Schedule "C" and the other reasonable limitations as the Landlord may from time to time impose).

6.5 Washrooms

To permit the Tenant and its employees and invitees in common with others so entitled to use the washrooms in the Building on the floor on which the Leased Premises are situate.

6.6 Janitorial Service of Common Area

To cause when reasonably necessary from time to time the floors of the Common Area to be swept and cleaned, the windows on the exterior of the Leased Premises to be cleaned, and the other janitorial services to be provided as are commonly provided in comparable buildings, but with the exception of the obligation to cause the work to be done, the Landlord will not be responsible for any act of omission or commission on the part of the persons employed to perform the work. The janitorial work will be done at the Landlord's direction without interference by the Tenant, its agents, or employees.

6.7 Maintenance of Common Areas

To cause the elevators, common entrances, lobbies, stairways, corridors, washrooms, and other parts of the Building from time to time provided for common use and enjoyment to be swept, cleaned, and otherwise properly maintained.

6.8 Building Directory

To Landlord will maintain a directory in the main entrance lobby of the Building and will list on the directory the name of the Tenant and the suite or floor number(s) of the Leased Premises.

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7. Repair, Damage, And Destruction

7.1 Landlord's Repairs

(1) The Landlord covenants with the Tenant:

(a) subject to subclause 7.3(b), to keep in a good and reasonable state of repair, and consistent with the general standards of buildings of similar age and character:
(i) the Building (other than the Leased Premises and premises of other tenants) including the foundation, roof, exterior walls including glass or window portions, the systems for interior climate control, the elevators, entrances, stairways, corridors, lobbies, and washrooms from time to time provided for use in common by the Tenant and other tenants of the Building and the systems provided for bringing utilities to the Leased Premises; and
(ii) the structural members or elements of the Leased Premises; and

(b) to repair defects in construction performed or installations made by the Landlord in the Leased Premises and Insured Damage so long as the Tenant has notified the Landlord a) of Landlord construction defects within sixty (60) days of the Commencement Date, b) of defects in any Landlord installation within sixty (60) days from the date of Landlord installation and/or c) within ninety (90) days of date of the Tenant incurring any Insured Damage.

7.2 Tenant's Repairs

(1) The Tenant covenants with the Landlord:

(a) subject to subclause 7.3(b), to keep in a good and reasonable state of repair and consistent with the general standards of buildings of similar age and location, the Leased Premises including all Leasehold Improvements and all trade fixtures and all glass in them other than glass portions of exterior walls, but with the exception of structural members or elements of the Leased Premises, defects in construction performed or installations made by the Landlord and Insured Damage;
(b) that the Landlord may enter and view the state of repair, that the Tenant will repair according to notice in writing, and that the Tenant will leave the Leased Premises in a good and reasonable state of repair, subject always to the exceptions referred to in subclause (a); and
(c) that if any part of the Building including the systems for interior climate control and for the provision of utilities, is in disrepair, damaged, or destroyed through the negligence or misuse of the Tenant or its employees, invitees, or others over which the Tenant can reasonably be expected to exercise control, the Tenant will reimburse the Landlord for the expense of repairs or replacements, promptly upon demand.

7.3 Abatement and Termination

If the Leased Premises or the Building is damaged and

(a) if the damage is such that the Leased Premises or any substantial part of them are rendered not reasonably capable of use and occupancy by the Tenant for the purposes of its occupation for any period in excess of 10 days,
(i) unless the damage was caused by the fault or negligence of the Tenant or its employees, invitees, or others under its control, from and after the date of occurrence of the damage and until the Leased Premises are again reasonably capable of use and occupancy as specified, Rent will abate from time to time in proportion to the part or parts of the Leased Premises not reasonably capable of use and occupancy, and
(ii) unless this Lease is terminated as provided, the Landlord or the Tenant, as the case may be (according to the nature of the damage and their respective obligations to repair as provided in clauses 7.1 and 7.2) will repair the damage with all reasonable diligence, but to the extent that any part of the Leased Premises is not reasonably capable of use and occupancy by reason of damage that the Tenant is obligated to repair under this Lease, any abatement of Rent to which the Tenant is otherwise entitled under this Lease will not extend later than the time by which, in the reasonable opinion of the Landlord, repairs by the Tenant ought to have been completed with reasonable diligence; and

(b) if either:
(i) the Leased Premises; or
(ii) premises, whether of the Tenant or other tenants of the Building, comprising in the aggregate 25% or more of the Rentable Area of the Building
are substantially damaged or destroyed by any cause to the extent such that in the reasonable opinion of the Landlord they cannot be repaired or rebuilt (based on standard hours of construction work) within 240 days after the occurrence of the damage or destruction, the Landlord, at its option, exercisable by written notice to the Tenant given within 60 days after the occurrence of the damage or destruction, may terminate this Lease, and neither the Landlord nor the Tenant will be bound to repair as provided in clauses 7.1 and 7.2. The Tenant will instead deliver up possession of the Leased Premises to the Landlord with reasonable expedition and within 60 days after delivery of the notice of termination. The Rent will be apportioned and paid to the date upon which possession is delivered up (but subject to any abatement to which the Tenant may be entitled under subclause 7.3(a) by reason of the Leased Premises having been rendered in whole or in part not reasonably capable of use and occupancy), but otherwise the Landlord or the Tenant as the case may be (according to the nature of the damage and their respective obligations to repair as provided in clauses 7.1 and 7.2) will repair the damage with reasonable diligence.

7.4 Service Interruptions

The Tenant acknowledges to the Landlord that the operation of systems and the availability of facilities may be interrupted from time to time in cases of accident and emergency, in order to carry out maintenance, repairs, alterations, replacements, and upgrading, or for any other reasonable reason required by the Landlord. During periods of interruption, any obligation of the Landlord to provide access to the systems and facilities or common areas of the Building will be suspended and clause 14.1 will apply.

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8. Taxes And Operating Costs

8.1 Landlord's Tax Obligations

The Landlord covenants with the Tenant, subject to clause 8.2, to pay to the taxing authority or authorities having jurisdiction, all Taxes.

8.2 Tenant's Tax Obligations

The Tenant covenants with the Landlord:

(a) to pay when due, all taxes, business taxes, business licence fees, and other taxes, rates, duties or charges levied, imposed, or assessed by lawful authority in respect of the use and occupancy of the Leased Premises by the Tenant, or the equipment, machinery, or fixtures brought in by or belonging to the Tenant, or to anyone occupying the Leased Premises with the Tenant's consent, or from time to time levied, imposed, or assessed in the future in addition or in lieu of, and to pay to the Landlord upon demand the portion of any tax, rate, duty, or charge levied or assessed upon the Lands and Building that is attributable to any equipment, machinery, or fixtures on the Leased Premises that are not the property of the Landlord or that may be removed by the Tenant;
(b) to pay promptly to the Landlord when demanded or otherwise due hereunder all Taxes in respect of all Leasehold Improvements in the Leased Premises.

8.3 Goods and Services Tax (GST)

The Tenant will pay to the Landlord GST in accordance with the applicable legislation at the same time as the amounts to which GST apply are payable to the Landlord under the terms of this Lease or upon demand at other time or times as the Landlord may determine. The Landlord will provide the Tenant with its GST registration number. Notwithstanding any other provision of this Lease, the amount payable by the Tenant under this clause will be deemed not to be Rent, but the Landlord will have the same remedies for and rights of recovery of the amount as it has for recovery of Rent under this Lease.

8.4 Tenant's Tax Cost

(1) After the commencement of the Term of this Lease and prior to the commencement of each fiscal period determined by the Landlord that commences during the Term, the Landlord may estimate the Tax Cost and the Tenant's share, or any instalment on account of the Tax Cost, to become due on any date during the ensuing fiscal period or (if applicable) portion of it, the amount of it that will be payable by the Tenant, and notify the Tenant in writing of the estimate.

(2) If the Tenant has overpaid the Tenant's Share of the Tax Cost, the Landlord will refund any excess paid, but if any balance remains unpaid, the Landlord will fix monthly instalments for the then remaining balance of the fiscal period or portion of it so that, after giving credit for instalments paid by the Tenant in respect of the calendar year, the entire Tenant's Share of Tax Cost will be fully payable prior to the time the Landlord is obliged to pay the Taxes in respect of which the Tenant's Share of Tax Cost is payable.

(3) If for any reason the Tax Cost is not finally determined within a fiscal period or portion of it, the parties will make the appropriate readjustment when the Tax Cost becomes finally determined.

(4) The Landlord and the Tenant acknowledge that Taxes in respect of the Building may be payable during the course of a year as prepayment for the Taxes accruing due in respect of the year, and if the Term ends during a year, the appropriate adjustment will be made under clause 4.3.

(5) Any report of the Landlord's accountant acting reasonably as to the Tax Cost will be conclusive as to the amount for any period to which the report relates.

8.5 Postponement of Payment of Taxes

The Landlord may postpone payment of any Taxes payable by it under clause 8.1 to the extent permitted by law if prosecuting in good faith any appeal against the assessment of the Lands and Building for Taxes or the imposition of Taxes.

8.6 Receipts for Payment

Whenever requested by the Landlord, the Tenant will deliver to it receipts for payment of all taxes, rates, duties, levies, and assessments payable by the Tenant under subclauses 8.2(a) and (b) and furnish other related information reasonably required by the Landlord.

8.7 Computing Operating Costs

In computing Operating Costs:

(c) If less than 100% of the Rentable Area of the Building is completed or occupied during any period for which a computation must be made, the amount of Operating Costs will be increased by the amount of the additional costs determined by the Landlord, that would have been incurred had 100% of the Rentable Area of the Building been completed or occupied during that period, provided that the foregoing shall not result in the amount the Tenant pays as its Proportionate Share of such Operating Costs being greater than it would be if the Building was fully occupied and completed;
(d) where the Landlord determines, acting reasonably but in its sole discretion, that any item(s) of Operating Costs are provided only to or for the benefit of a portion of the Building, then the Landlord shall be entitled, but not obligated, to allocate the cost of those item(s) over such portion of the Building and adjust the Tenant's Operating Cost payment based on such allocation;
(e) if the Building is comprised of different categories of leaseable premises, the Landlord shall be entitled, but not obligated, to allocate Operating Costs among the various categories on the basis of such factors as the Landlord determines to be relevant and to adjust the Tenant's Operating Cost payment based on such allocation; and

if any facilities, services or utilities
i. for the operation, administration, management, repair and maintenance of the Building are provided from another building or other buildings owned or operated by Landlord or its manager;
ii. for the operation, administration, management, repair and maintenance of another building or other buildings owned or operated by the Landlord or its manager are provided from the Building; or
iii. are otherwise shared between the Building and another building or other buildings, the costs, charges and expenses of such items shall be allocated by the Landlord, between the Buildings and other buildings on reasonable basis.

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9. Utilities and Additional Services

9.1 Utilities

The Landlord will furnish ducts for bringing telephone and other telecommunication services to the Leased Premises and will provide water to washrooms available for the Tenant’s use in common with other so entitled.

9.2 Additional Services

If the Tenant requires any janitorial or cleaning services to the Leased Premises additional to those required to be provided by the Landlord under clause 6.7, or wishes to move furniture or equipment or make repairs or alterations within the Leased Premises, or requires other service in the Leased Premises, the Landlord, at its option, by way of Additional Services, may provide or have its designated agents or contractors provide the service at then prevailing market commercial rates. The cost of Additional Services provided will be paid to the Landlord by the Tenant from time to time promptly upon receipt of invoices for them from the Landlord. The Cost of Additional Services charged directly to the Tenant and other tenants will be credited in computing Operating Costs to the extent that it would otherwise have been included.

9.3 Additional Utilities

Upon request by the Tenant, the Landlord may agree from time to time to supply additional heating, ventilating, and air-conditioning, electricity, or other services to the Leased Premises and Common Area above those normally provided to tenants of the Building or outside Normal Operating Hours. The Tenant will pay to the Landlord in the manner in which Operating Costs is paid any additional costs of the Landlord that may arise in respect of the use by the Tenant of the Leased Premises for hours that do not coincide with Normal Operating Hours for the Leased Premises and Common Area generally or that may arise in respect of additional heating, ventilating, and air-conditioning, electricity, and other services that are arranged to be provided to the Tenant over and above those normally provided to tenants of the Building or outside of Normal Operating Hours, together with the Landlord's reasonable administrative costs in respect of managing, administering, and billing for the services. The Landlord reserves the right to install at the Tenant's expense meters to check the Tenant's consumption of electricity, water, or other utilities.

9.4 Energy Conservation

The Tenant covenants with the Landlord that

(a) the Tenant will cooperate with the Landlord in the conservation of all forms of energy in the Building, including without limitation the Leased Premises;
(b) the Tenant will comply with all laws, bylaws, regulations, and orders relating to the conservation of energy and affecting the Leased Premises or the Building;
(c) at its own cost and expense, the Tenant will comply with all reasonable requests and demands of the Landlord made with a view to energy conservation; and
(d) any and all costs and expenses paid or incurred by the Landlord in complying with the laws, bylaws, regulations, and orders, so far as the same apply to or are reasonably apportioned to the Building by the Landlord will be included in Operating Costs and the Tenant will pay these costs as part of the Operating Costs.

The Landlord is not liable to the Tenant in any way for any loss, costs, damages, or expenses, whether direct or consequential, paid, permitted, or incurred by the Tenant as a result of any reduction in the services provided by the Landlord to the Tenant or to the Building as a result of the Landlord's compliance with the laws, bylaws, regulations, or orders for energy conservation.

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10 Assignment And Subletting

10.1 Licenses, Assignments, And Subletting

The Tenant will not permit any part of the Leased Premises to be used or occupied by any persons other than the Tenant or any subtenants or assignees permitted under this section 10, or permit any part of the Leased Premises to be used or occupied by any licensee, franchisee, or concessionaire, or permit any persons to be upon the Leased Premises other than the Tenant, the permitted subtenants and assignees, and their respective employees, customers, members, clients and others lawfully on the Leased Premises.

10.2 Assignment and Subletting

(1) Other than as provided in section 10.2, the Tenant will not assign this Lease or sublet the whole or any part of the Leased Premises, unless it has
(a) received or procured a valid written offer to take an assignment or sublease that is not inconsistent with, and the acceptance of which would not breach any provision of this Lease if this clause is complied with, and that the Tenant has determined to accept subject to this clause being complied with, and
(b) first requested and obtained the consent in writing of the Landlord.

(2) Any request for such consent will be in writing and accompanied by a true copy of the offer.

(3) The Tenant will furnish to the Landlord all information available to the Tenant and requested by the Landlord as to the responsibility, reputation, financial standing, and experience of the proposed assignee or subtenant.

(4) Within 30 days after the receipt by the Landlord of the Tenant's request for consent and of all information the Landlord has requested under this clause (and if no information has been requested, within 30 days after receipt of the request for consent) the Landlord shall advise the Tenant in writing whether the Tenant's request is approved, such approval not to be unreasonably withheld. Where the Landlord does not advise the Tenant within the said thirty (30) days, the Landlord will be deemed to have approved the assignment or sub-let.

(5) If the Landlord consents to any proposed assignment or subletting, the Tenant will assign or sublet, as the case may be, only upon the terms set out in the offer submitted to the Landlord as specified and not otherwise.

(6) As a condition of the Landlord's consent, the assignee or subtenant, as the case may be, will agree (and will be deemed to have agreed) with the Landlord to observe the obligations of the Tenant under this Lease as they relate to the space assigned or sublet (except, in the case of a sublease, the Tenant's covenant to pay Rent) by entering into an assumption agreement with the Landlord and the Tenant, in the Landlord's then standard form, and will pay the Landlord's then current processing charge and solicitor's fees and disbursements for preparing the agreement.

(7) The Tenant further agrees that if the Landlord consents to any assignment or subletting, the Tenant will be responsible for and will hold the Landlord harmless from any and all capital costs for Leasehold Improvements and all other expenses, costs, and charges with respect to or arising out of any assignment or subletting.

(8) Notwithstanding any consent being given by the Landlord and the assignment or subletting being effected, the Tenant will remain bound to the Landlord for the fulfilment of all the terms, covenants, conditions, and agreements in this Lease.

(9) Any consent by the Landlord to any assignment or subletting will not constitute a waiver of the requirement for consent by the Landlord to any subsequent assignment or subletting by either the Tenant or any assignee or subtenant.

10.3 Terms of Consent

(1) If the Landlord consents in writing to an assignment or sublease as contemplated in section 10.3, the Tenant may complete the assignment or sublease subject to the following covenants and conditions:

(a) no assignment or sublease will be valid and no assignee or subtenant will take possession of the Leased Premises or any part of them until an executed duplicate original of the assignment or sublease has been delivered to the Landlord; and

(b) all Excess Rent, as defined, derived from the assignment or sublease will be payable to the Landlord. The Excess Rent will be deemed to be and will be paid by the Tenant to the Landlord as Rent. The Tenant will pay the Excess Rent to the Landlord immediately as and when the Excess Rent is receivable by the Tenant.

(2) As used in this section, Excess Rent means the amount by which the total money and other economic consideration to be paid by the assignee or subtenant as a result of an assignment or sublease, whether denominated as rent or otherwise, exceeds, in the aggregate, the total amount of Annual Base Rent and Additional Rent that the Tenant is obligated to pay to the Landlord under this Lease, pro-rated for the portion of the Leased Premises being assigned or sublet, less the reasonable costs paid by the Tenant for additional improvements installed in the portion of the Leased Premises subject to the assignment or sublease by the Tenant at the Tenant's sole cost and expense for the specific assignee or subtenant in question, reasonable leasing costs paid by the Tenant in connection with the assignment or sublease, and the amount of Annual Base Rent and Additional Rent the Tenant is obligated to pay the Landlord under this Lease, pro-rated for the portion of the Leased Premises being assigned or sublet that is not occupied or used by the Tenant, until the date of the assignment or sublease.

(3) In determining the amounts to be deducted from Excess Rent in each monthly payment period in respect of the Tenant's costs of assigning or subleasing, the costs will be amortized without interest over the Term (in the case of an assignment) or term of the sublease (in the case of a sublease) on a straight line basis.

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11 Fixtures And Improvements

11.1 Installation of Fixtures and Improvements

(1) The Tenant will not make, erect, install, or alter any Leasehold Improvements or trade fixtures in the Leased Premises, any safe or special lock in the Leased Premises, or any apparatus for illumination, air-conditioning, cooling, heating, refrigerating, or ventilating the Leased Premises, without having requested and obtained the Landlord's prior written approval, which the Landlord will not unreasonably withhold.

(2) In making, erecting, installing, or altering any Leasehold Improvements or trade fixtures, the Tenant will comply with the tenant construction guidelines as established by the Landlord from time to time, will obtain all required building and occupancy permits, will not alter or interfere with any installations that have been made by the Landlord without the prior written approval of the Landlord, and will not alter or interfere with window coverings installed by the Landlord on exterior windows.

(3) The Tenant's request for any approval under this clause will be in writing and accompanied by a reasonably detailed description of the contemplated work and, where appropriate, plans, working drawings, and specifications of the work.

(4) Any out-of-pocket expense incurred by the Landlord in connection with any approval will be deemed incurred by way of Additional Services.

(5) All work to be performed in the Leased Premises will be performed by competent contractors and subcontractors of whom the Landlord will have approved (the approval not to be unreasonably withheld, but provided that the Landlord may require that the Landlord's contractors and subcontractors be engaged for any mechanical or electrical work) and by workers whose labour union affiliations are compatible with those workers employed by the Landlord and its contractors and subcontractors.

(6) All work will be subject to inspection by and the reasonable supervision of the Landlord as an Additional Service and will be performed in accordance with any reasonable conditions or regulations imposed by the Landlord and completed in good and workmanlike manner in accordance with the description of the work approved by the Landlord.

11.2 Liens and Encumbrances on Fixtures and Improvements

(1) In connection with the making, erection, installation, or alteration of Leasehold Improvements and trade fixtures, and all other work or installations made by or for the Tenant in the Leased Premises, the Tenant will
(a) comply with all of the provisions of the Builders Lien Act, S.B.C. 1997, c. 45, as amended or substituted from time to time (including any provision requiring or enabling the retention of portions of any sums payable by way of holdbacks),
(b) permit the Landlord to take all steps to enable the Landlord to obtain the benefit of the provisions of the Builders Lien Act, and, except as to any lawful holdback, will promptly pay all accounts relating to those provisions.

(2) Except for equipment over which the Tenant had prior to the initial lease granted a security interest, and any equipment over which a security interest is granted due to the equipment being financed, The Tenant will not create any mortgage, conditional sale agreement, general security agreement under the Personal Property Security Act, R.S.B.C. 1996, c. 359, as amended or substituted from time to time, or other encumbrance in respect of its Leasehold Improvements or trade fixtures, or permit any such mortgage, conditional sale agreement, general security agreement under the Personal Property Security Act, or other encumbrance to attach to the Leased Premises.

(3) If and when any builders' or other lien for work, labour, services, or materials supplied to or for the Tenant or for the cost of which the Tenant may be in any way liable or claims for such a lien arise or are filed or any such mortgage, conditional sale agreement, general security agreement under the Personal Property Security Act, or other encumbrance attaches, the Tenant will within 20 days after receipt of notice of it procure the discharge of it, including any certificate of action registered in respect of any lien, by payment or giving security or in such other manner as may be required or permitted by law, and failing which the Landlord may in addition to all other remedies under this Lease avail itself of its remedy under clause 15.1. The Landlord may make any payments required to procure the discharge of any of the liens or encumbrances, and will be entitled to be reimbursed by the Tenant as provided in clause 15.1, and its right to reimbursement will not be affected or impaired if the Tenant then or subsequently establishes or claims that any lien or encumbrance so discharged was without merit or excessive or subject to any abatement, set-off, or defense.

(4) The Tenant acknowledges that the Lands may be subject to registered charges and encumbrances and that the Landlord may register other charges and encumbrances. The Landlord will give the Tenant notice of any charges or encumbrances and any terms of which the Tenant must comply. The tenant must comply with the Landlord's obligations under any charges and encumbrances.

11.3 Removal of Fixtures and Improvements

(1) All Leasehold Improvements in or upon the Leased Premises will immediately upon affixation be and become the Landlord's property without compensation to the Tenant. Except as otherwise expressly agreed by the Landlord in writing, no Leasehold Improvements, trade fixtures, furniture, or equipment will be removed by the Tenant from the Leased Premises either during or at the expiration of the Term, except that:
(a) the Tenant may at the end of the Term remove its trade fixtures;
(b) the Tenant will at the end of the Term remove the Leasehold Improvements and trade fixtures which the Landlord requires to be removed; and
(c) the Tenant will remove its furniture and equipment at the end of the Term, and also during the Term where furniture or equipment has become excess for the Tenant's purposes or the Tenant is substituting new furniture and equipment.

(2) Notwithstanding anything else in this clause 11.3, where the Landlord gives the Tenant notice of early termination of this Agreement, the Tenant may not remove any trade fixtures, furniture or equipment without the Landlord's consent.

(3) The Tenant will, in the case of every removal during or at the end of the Term, or upon early termination by the Landlord, immediately make good any damage caused to the Leased Premises by the removal.

11.4 Alterations by Landlord

The Landlord reserves the right from time to time to:

11.4.1 make any deletions, changes, and additions to the equipment, appliances, pipes, plumbing, wiring conduits, ducts, shafts, structures, and facilities of every kind throughout the Building, including the Leased Premises;
11.4.2 alter the location and nature of common areas of the Building, including Service Areas, make reductions to it, erect additions to it, and extend any part of it; and
11.4.3 make alterations and additions to the Building.

and in exercising any of the rights, the Landlord will take reasonable steps to minimize any interference caused to the Tenant's operations in the Leased Premises, but by exercising its rights, the Landlord will not be deemed to have constructively evicted the Tenant or otherwise to be in breach of this Lease, nor will the Tenant be entitled to any abatement of rent or other compensation from the Landlord.

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12 Insurance and Liability

12.1 Landlord's Insurance

The Landlord will take out and keep in force, all risks, property insurance on the Building, and such other forms of insurance as the Landlord reasonably considers necessary. In spite of any contribution by the Tenant to the Landlord's insurance through the Operating Costs, the Tenant is not relieved of any liability arising from its acts, fault, negligence, or omissions, and no insurable interest is conferred on the Tenant under the Landlord's policies, nor does the Tenant have the right to receive any proceeds under the policies nor be deemed to have insured (for which purpose it will be a co-insurer, if and to the extent that it will not have insured) the Building and all improvements and installations made by the Landlord in the Leased Premises, except to the extent hereinafter specified, in respect of perils and to amounts and on terms and conditions that from time to time are insurable at a reasonable premium and that are normally insured by reasonably prudent owners of properties similar to the Building, as from time to time determined at reasonable intervals (but that need not be determined more often than annually) by insurance advisors selected by the Landlord, and whose written opinion will be conclusive. Upon the request of the Tenant from time to time the Landlord will furnish a statement as to the perils in respect of which and the amounts to which it has insured the Building. The Landlord may maintain such other insurance in such amounts and upon such terms as would normally be carried by a prudent owner.

12.2 Tenant's Insurance

The Tenant, at its expense, will provide and maintain in force during the Term, the following insurance:

12.2.1 Commercial General Liability insurance concerning the Leased Premises and the Tenant's business, of not less than five million ($5,000,000), or in such other amount as may be reasonably required by the Landlord; the insurance will include, without limitation, liability for personal injury or death, contractual liability, property damage, and contingent employer's liability, and will name the Landlord as additional insured's;
12.2.2 All Risks (including flood, sewer back-up, water damage, earthquake, and sprinkler leakage) property insurance on insurable property including merchandise, furniture, fixtures, equipment, and leasehold improvements, to full replacement value, with a deductible approved by the Landlord;
12.2.3 Insurance for all glass and plate glass on the Leased Premises, whether installed by the Landlord, or the Tenant;
12.2.4 Broad comprehensive boiler and machinery insurance on all objects owned or operated by the Tenant, or others on behalf of the Tenant, on the Leased Premises with deductibles not exceeding $1,000;
12.2.5 All Risks Tenant's legal liability insurance for the actual cash value of the Leased Premises;
12.2.6 Business Interruption insurance providing coverage for eighteen (18) months loss of insurable gross earnings, or profit; and
12.2.7 Any other form of insurance, and with whatever higher limits that the Landlord may reasonably require.

12.3 Insurance Terms

Any policy of insurance under clause 12.2, will name the Landlord as additional insured, contain a waiver of subrogation against the Landlord, and contain a clause requiring the insurer not to cancel, or change the insurance, without first giving the Landlord 30 days prior written notice, and further, to provide the Landlord with copies of the insurance policies required by this Lease.

12.4 Tenant's Contractor's Insurance

The Tenant will require any contractor performing work on the Leased Premises, to carry and maintain, at no expense to the Landlord, Commercial General Liability insurance and other insurance in amounts, and on terms reasonably determined by the Landlord, and to provide the Landlord with satisfactory proof of that insurance from time to time.

12.5 Landlord's Right to Insure

If the Tenant does not provide, or maintain in force, the insurance required under this Lease, or provide proof of the insurance when requested by the Landlord, the Landlord may take out the necessary insurance, and pay the premiums, and the Tenant will pay to the Landlord, as Additional Rent, the amount of such premium on the next succeeding Rent payment date.

12.6 Acts Conflicting with Insurance

The Tenant will not do, or permit to be done, any act or thing that may render void, or conflict with any policy of insurance, including any applicable regulations of fire insurance underwriters, by which the Leased Premises or the Building are insured.

12.7 Indemnity by Tenant

The Tenant will indemnify the Landlord, and save it harmless from and against all claims, actions, damages, liabilities, costs, and expenses, in connection with loss of life, personal injury, or damage to property arising from any occurrence on the Lease Premises, or occupancy, or use of the premises occasioned wholly, or in part, by an act or omission of the Tenant, its officers, employees, agents, customers, contractors, or other invitees. The provisions of this clause will survive the expiry or sooner termination of this Lease.

12.8 Indemnity by Landlord

The Landlord will indemnify the Tenant, and save it harmless from and against all claims, actions, damages, liabilities, costs, and expenses, in connection with loss of life, personal injury, or damage to property arising from any occurrence on the Leased Premises, or occupancy, or use of the premises occasioned wholly, or in part, by an act or omission of the Landlord, its officers, employees, agents, customers, contractors, or other invitees. The provisions of this clause will survive the expiry or sooner termination of this Lease.

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13 Subordination, Attornment, Registration, And Certificates

The Tenant agrees with the Landlord that:

13.1 Sale or Financing of Building

The rights of the Landlord under this Lease may be mortgaged, charged, transferred, or assigned to a purchaser or purchasers, or to a mortgagee or trustee for bond holders, and in the event of a sale or of default by the Landlord under any mortgage, trust deed, or trust indenture and the purchaser, mortgagee, or trustee, as the case may be, duly entering into possession of the Building or the Leased Premises, the Tenant agrees to attorn to and become the tenant of such purchaser or purchasers , mortgagee, or trustee under the terms of this Lease.

13.2 Subordination and Attornment

(1) If required by any mortgagee or the holder of any trust deed or trust indenture, this Lease and all rights of the Tenant under this Lease will be subject and subordinate to all mortgages, trust deeds, or trust indentures now or hereafter existing that may now or hereafter affect the Building and to all renewals, modifications, consolidations, replacements, and extensions of them.

(2) The Tenant, whenever required by any mortgagee (including any trustee under a trust deed or trust indenture), will attorn to the mortgagee as the tenant upon all of the terms of this Lease. The Tenant agrees to execute and deliver promptly whenever requested by the Landlord or by the mortgagee an instrument of subordination or attornment, as the case may be, as may be required of it, and if the Tenant fails to do so within seven days after receiving the instrument, the Tenant irrevocably and conclusively authorizes the Landlord to complete, execute, and deliver the instrument on behalf of, in the name of, and as agent of, the Tenant.

13.3 Registration

The Landlord will not be obliged to deliver this Lease to the Tenant in registrable form.

13.4 Certificates

(1) The Tenant agrees with the Landlord that the Tenant will promptly whenever requested by the Landlord execute and deliver to the Landlord and, if required by the Landlord, to any mortgagee (including any trustee under a trust deed or trust indenture) or prospective purchaser (as designated by the Landlord) a certificate in writing as to the status of this Lease at that time, including as to whether it is in full force and effect, is modified or unmodified, confirming the Rent payable under this Lease and the state of the accounts between the Landlord and Tenant, the existence or non-existence of defaults, and any other matters pertaining to this Lease as to which the Landlord requests a certificate.

(2) If the Tenant fails to do so within fifteen days after the Tenant receives the form of certificate, the Tenant irrevocably and conclusively authorizes the Landlord to complete, execute, and deliver the certificate on behalf of, in the name of, and as agent of, the Tenant.

13.5 Assignment by Landlord

If the Landlord sells the Building or a portion of it containing the Leased Premises or the Landlord assigns this Lease or any interest of the Landlord under this Lease, and to the extent that the purchaser or assignee has assumed the covenants and obligations of the Landlord under this Lease, the Landlord, without further written agreement, will be freed and relieved of liability upon the covenants and obligations.

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14 Occurrence Of Default

14.1 Unavoidable Delay

Except as otherwise expressly provided in this Lease, if and whenever and to the extent that either the Landlord or the Tenant is prevented, delayed, or restricted in the fulfilment of any obligations under this Lease in respect of the supply or provision of any service or utility, the making of any repair, the doing of any work or any other thing (other than the payment of Rent) by reason of civil commotion, war-like operation, invasion, rebellion, hostilities, sabotage, strike, or work stoppage, or being unable to obtain any material, service, utility, or labour required to fulfil such obligation or by reason of any statute, law, or regulation of or inability to obtain any permission from any governmental authority having lawful jurisdiction preventing, delaying, or restricting the fulfilment, or by reason of other unavoidable occurrence other than lack of funds, the time for fulfilment of the obligation will be extended during the period in which the circumstance operates to prevent, delay, or restrict the fulfilment of it, and the other party to this Lease is not be entitled to compensation for any inconvenience, nuisance, or discomfort thereby occasioned, nor will Rent abate; but nevertheless the Landlord will use reasonable efforts to maintain services essential to the use and enjoyment of the Leased Premises.

14.2 No Admission

The acceptance of any Rent from or the performance of any obligation under this Lease by a person other than the Tenant will not be construed as an admission by the Landlord of any right, title, or interest of such person as a subtenant, assignee, transferee, or otherwise in the place and stead of the Tenant.

14.3 Part Payment

The acceptance by the Landlord of a part payment of any sums required to be paid under this Lease will not constitute waiver or release of the right of the Landlord to payment in full of such sums.

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15 Tenant’s Defaults, Remedies Of Landlord, Surrender, and Termination

15.1 Remedying by Landlord, Non-payment, and Interest

In addition to all the rights and remedies of the Landlord available to it for the Tenant's default under this Lease, either by any other provision of this Lease or by statute or the general law, the Landlord:

(a) may remedy or attempt to remedy any default of the Tenant, and in so doing may make any payments due or alleged to be due by the Tenant to third parties and may enter upon the Leased Premises to do any work or other things in them, and all expenses of the Landlord in remedying or attempting to remedy the default together with an administrative charge equal to 15% of the total of the expenses will be payable by the Tenant to the Landlord promptly upon demand;
(b) has the same rights and remedies in the event of any non-payment by the Tenant of any amounts payable by the Tenant under any provision of this Lease as in the case of non-payment of Rent;
(c) if the Tenant fails to pay any Rent promptly when due, is entitled, if it demands it, to interest at a rate of 3% per annum in excess of the Prime Rate; and
(d) is entitled to be reimbursed by the Tenant, and the Tenant will promptly pay the Landlord, the amount of all costs and expenses (including, without limitation, legal costs on a solicitor-and-own-client basis) incurred by the Landlord in connection with the default or in efforts to enforce any of the rights, or to seek any of the remedies, to which the Landlord is or may be entitled under this Lease.

15.2 Remedies Cumulative

The Landlord may resort to any or all of the rights and remedies available to it in the event of any default under this Lease by the Tenant, either by any provision of this Lease or by statute or the general law, all of which rights and remedies are intended to be cumulative and not alternative, as the express provisions under this Lease as to certain rights and remedies are not to be interpreted as excluding any other or additional rights and remedies available to the Landlord by statute or the general law.

15.3 Right of Re-entry on Default

If and whenever

(a) the Rent or other moneys payable by the Tenant or any part thereof, whether lawfully demanded or not, are unpaid and the Tenant has failed to pay the Rent or other moneys within five days after the Landlord has given to the Tenant notice requiring the payment; or
(b) the Tenant breaches or fails to observe and perform any of the covenants, agreements, provisos, conditions, rules, or regulations and other obligations on the part of the Tenant to be kept, observed, or performed under this Lease and the breach or failure continues for 10 days after the Landlord has given the Tenant notice of it; or
(c) without the written consent of the Landlord the Leased Premises are used by any persons other than the Tenant, its invitees, members, licensees, or its permitted assigns or subtenants or for any purpose other than that for which the Leased Premises were leased or occupied by any persons whose occupancy is prohibited by this Lease; or
(d) the Leased Premises are vacated or abandoned or remain unoccupied for 15 days or more while capable of being occupied; or
(e) any of the goods and chattels of the Tenant are at any time seized in execution or attachment; or
(f) a receiver or receiver-manager is appointed for the operation or property of the Tenant; or
(g) the Tenant makes any assignment for the benefit of creditors or any bulk sale, becomes bankrupt or insolvent or takes the benefit of any statute now or hereafter in force for bankrupt or insolvent debtors or (if a corporation) takes any steps or permits any order to be made for its winding-up or other termination of its corporate existence; or
(h) any policy of insurance upon the Building from time to time effected by the Landlord is cancelled or about to be cancelled by the insurer by reason of the use or occupation of the Leased Premises by the Tenant or any assignee, subtenant, or licensee of the Tenant or anyone permitted by the Tenant to be upon the Leased Premises and the Tenant after receipt of notice in writing from the Landlord fails to take the immediate steps in respect of the use or occupation as enables the Landlord to reinstate or avoid cancellation of (as the case may be) the policy of insurance; or
(i) the Landlord becomes entitled to terminate this Lease or to re-enter the Leased Premises under any provision of it;

in every case the Landlord may enter into and upon the Leased Premises or any part of them in the name of the whole and the same to have again, repossess, and enjoy as of its former estate, anything in this Lease to the contrary notwithstanding. The Landlord may use the force as it may deem necessary for the purpose of gaining admittance to and re-taking possession of the Leased Premises, and the Tenant releases the Landlord from all actions, proceedings, claims, and demands whatsoever for and in respect of any forcible entry or any loss or damage in connection with it.

15.4 Termination and Re-entry

If and whenever the Landlord becomes entitled to re-enter upon the Leased Premises under any provision of this Lease, the Landlord, in addition to all other rights and remedies, may terminate this Lease by giving to the Tenant or by leaving on the Leased Premises notice in writing of such termination. Thereupon, this Lease and the Term will terminate, and the Tenant will immediately deliver up possession of the Leased Premises to the Landlord.

15.5 Certain Consequences of Termination and Re-entry

If the Landlord re-enters the Leased Premises or if this Lease is terminated by reason of any event set out in clause 15.3, then without prejudice to the Landlord's other rights and remedies:

(a) the provisions of this Lease that relate to the consequences of termination, and the provisions of this Lease as they apply with respect to acts, events, and omissions that occurred prior to the termination, will all survive such termination;
(b) in addition to the payment by the Tenant of Rent and other payments for which the Tenant is liable under this Lease, Rent for the current month and the next ensuing three months will immediately become due and be paid by the Tenant or the person then controlling the Tenant's affairs; and
(c) the Tenant or person then controlling the affairs of the Tenant will pay to the Landlord on demand the reasonable expenses the Landlord has incurred, and a reasonable estimate by the Landlord of expenses the Landlord expects to incur, in connection with the re-entering, terminating, re-letting, collecting sums due or payable by the Tenant, and storing and realizing upon assets seized, including without limitation brokerage fees, legal fees, and disbursements, the expenses of cleaning and making and keeping the Leased Premises in good order, and the expenses of repairing the Leased Premises and preparing them for re-letting.

15.6 Waiver of Distress and Bankruptcy

(1) The Tenant waives the benefit of any present or future statute taking away or limiting the Landlord's right of distress and covenants and agrees that despite any statute none of the goods and chattels of the Tenant on the Leased Premises at any time during the Term will be exempt from levy by distress for rent in arrears.

(2) The Tenant will not sell, dispose of, or remove any of the fixtures, goods, or chattels of the Tenant from or out of the Leased Premises during the Term without the consent of the Landlord, unless the Tenant is substituting new fixtures, goods, or chattels of equal value or is disposing of individual items that have become excess for the Tenant's purposes; and the Tenant will be the owner of its fixtures, goods, and chattels and will not permit them to become subject to any lien, mortgage, charge, or encumbrance.

(3) Without the Landlord's consent the Tenant will not resiliate or disclaim, or attempt to resiliate or disclaim this Lease in any bankruptcy, insolvency, reorganization, or other proceeding or court application, and, if required by the Landlord, waives in favour of the Landlord the benefit of s. 65.2 of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 as amended, and any provision of similar import.

15.7 Re-letting and Sale of Personalty

Whenever the Landlord becomes entitled to re-enter upon the Leased Premises under any provision of this Lease, the Landlord, in addition to its other rights, will have the right as agent of the Tenant to enter the Leased Premises and re-let them (for a term or terms shorter or longer than the balance of the Term, granting reasonable concessions in connection therewith), and to receive the rent for them, and as the agent of the Tenant to take possession of any furniture or other property on them, and to sell it at public or private sale without notice, and to apply the proceeds and any rent derived from re-letting the Leased Premises upon account of the Rent due and to become due under this Lease, and the Tenant will be liable to the Landlord for the deficiency, if any.

15.8 Surrender on Termination

(1) Immediately upon the termination of this Lease, whether by effluxion of time or otherwise, the Tenant will vacate and deliver up possession of the Leased Premises in a neat and tidy state and in good and substantial repair in accordance with the Tenant's obligation under this Lease to repair the Leased Premises, but subject to the Tenant's rights and obligations in respect of removal in accordance with clause 11.3.

(2) At the same time the Tenant will surrender to the Landlord at the place then fixed for the payment of Rent all keys and other devices that provide access to the Leased Premises, the Building, or any part of them and will inform the Landlord of all combinations to locks, safes, and vaults, if any, in the Leased Premises.

15.9 Tenant’s Right to Terminate

Notwithstanding anything in this Lease to the contrary, the Tenant may terminate this Lease at any time during the Term by giving the Landlord not less than six (6) months’ prior written notice of its intention to terminate. Upon the expiration of such notice period, the Lease will terminate, and the Tenant will vacate and deliver possession of the Leased Premises in accordance with the surrender provisions of this Lease. The Tenant will remain responsible for all obligations under this Lease up to the termination date.

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16 Miscellaneous

16.1 Notices

(1) Any notice required or contemplated by any provision of this Lease will be given in writing, and:

(a) if to the Landlord, either delivered to an officer of the Landlord or delivered or mailed (by prepaid registered mail) to the Landlord at the address set out in subclause 1.1(a), or if the Landlord has given the Tenant notice of another address in Canada to which notices to the Landlord under this Lease are to be given, then to the last address of which the Tenant has been given notice; or electronically to the e-mail address given by the Landlord; and

(b) if to the Tenant, either delivered to the Tenant personally (or to an officer of the Tenant), delivered or mailed (by prepaid registered mail) to the Tenant at the Leased Premises or electronically to the e-mail address given by the tenant.

(2) Every notice will be deemed to have been given when delivered or, if mailed as provided, on the third business day after the day of mailing in Canada. If there is a mail strike, slowdown, or other labour dispute that might affect delivery of the notice between the time of mailing and the actual receipt of notice, the notice will only be effective if actually delivered.

16.2 Extraneous Agreements

(1) The Tenant acknowledges that there are no covenants, representations, warranties, agreements, or conditions expressed or implied relating to this Lease or the Leased Premises except as expressly set out in this Lease and in any agreement to lease in writing between the Landlord and the Tenant pursuant to which this Lease has been executed. If there is a conflict between the terms of this Lease and the agreement to lease, the terms of this Lease will prevail.

(2) This Lease is the entire agreement between the parties and may not be modified except by an agreement in writing executed by the Landlord and the Tenant.

16.3 Time of Essence

Time is of the essence of this Lease.

16.4 Area Determination

The Rentable Area of any premises (including the Leased Premises) or the Building will be determined by the Landlord's subject matter expert from time to time appointed for the purpose. The determination will be conclusive.

16.5 Successors and Assigns

(1) This Lease and everything in it will enure to the benefit of and be binding upon the successors and assigns of the Landlord and its heirs, executors, and administrators and the permitted successors and permitted assigns of the Tenant.

(2) References to the Tenant will be read with the changes in gender as may be appropriate, depending upon whether the Tenant is a male or female person or a firm or corporation.

(3) If the Tenant is comprised of more than one person or entity, then each person and entity is jointly and severally bound by the representations, warranties, agreements, and covenants of the Tenant and any notice given or deemed to have been given at any time to any person or entity will be deemed to have been given at the same time to each other person and entity.

16.6 Frustration

Despite the occurrence or existence of any event or circumstance or the non-occurrence of any event or circumstance, and so often and for so long as the same may occur or continue that, but for this clause, would frustrate or void this Lease, and notwithstanding any statutory provision to the contrary, the obligations and liabilities of the Tenant will continue in full force and effect as if the event or circumstance had not occurred or existed.

16.7 Waiver

(1) No condoning, excusing, or overlooking by the Landlord or Tenant of any default, breach, or non-observance by the Tenant or the Landlord at any time or times in respect of any covenant, proviso, or condition in this Lease will operate as a waiver of the Landlord's or the Tenant's rights under this Lease in respect of any continuing or subsequent default, breach, or non-observance or so as to defeat or affect in any way the rights of the Landlord or the Tenant in this Lease in respect of any continuing or subsequent default or breach.

(2) No acceptance of rent by the Landlord subsequent to a default by the Tenant (whether or not the Landlord knows of the default) will operate as a waiver by the Landlord, and no waiver will be inferred from or implied by anything done or omitted by the Landlord or the Tenant except an express waiver in writing.

16.8 Governing Law and Severability

(1) This Lease will be governed by and construed in accordance with the laws in force in British Columbia. The venue of any proceedings taken in respect of or under this Lease will be Victoria, BC as long as the venue is permitted by law. The Tenant will consent to any application by the Landlord to change the venue to Victoria, BC of any proceedings taken elsewhere.

(2) The Landlord and the Tenant agree that all the provisions of this Lease are to be construed as covenants and agreements as though the words importing the covenants and agreements were used in each separate clause of it. If any provision or provisions of this Lease are found to be illegal or not enforceable, it or they will be considered separate and severable from the Lease and its remaining provisions will remain binding upon the parties as though the illegal or unenforceable provision or provisions had never been included.

16.9 Captions

The captions in this Lease have been inserted as a matter of convenience and for reference only and do not define, limit, or enlarge the scope or meaning of this Lease or of any provision of it.

16.10 Acceptance

The Tenant accepts this Lease of the Leased Premises, to be held by it as Tenant, and subject to the conditions, restrictions, and covenants specified in this Lease.

16.11 Expropriation

(1) If at any time during the Term, the interest of the Tenant under this Lease or the whole or any part of either the Leased Premises or any other part of the Building is taken by any lawful power or authority by the right of expropriation, the Landlord, at its option, may give notice to the Tenant terminating this Lease on the date when the Tenant or Landlord is required to yield up possession to the expropriating authority.

(2) Upon such termination, or upon termination by operation of law, as the case may be, the Tenant will immediately surrender the Leased Premises and all its interest in them, Rent will abate and be apportioned to the date of termination, the Tenant will promptly pay to the Landlord the apportioned Rent and all other amounts that may be due to the Landlord up to the date of termination, and clause 15.8 will apply.

(3) The Tenant will have no claim upon the Landlord for the value of its property or the unexpired Term of this Lease, but the parties may separately advance their claims for compensation for the loss of their respective interests in the Leased Premises. The parties will each be entitled to receive and retain the compensation as may be awarded to each respectively.

(4) If an award of compensation made to the Landlord specifically includes an award for the Tenant, the Landlord will account for it to the Tenant.

(5) In this clause the expropriation includes a sale by the Landlord to an authority with powers of expropriation, in lieu of or under threat of expropriation.

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17 Special Provisions

17.1 Option to Extend

Provided the Tenant has performed all of the Tenant's covenants and is not in material default under any of the terms of the Lease, then the Tenant, on giving written notice to the Landlord not earlier than twelve (12) months nor later than six (6) months prior to the last day of the then current term of the Lease, shall have the right to renew the Lease for one (1) renewal term of five (5) years upon the same terms and conditions as contained in the Lease, excluding any provisions for free rent, bonuses, leasehold improvements, inducements and Minimum Rent. Unless agreed otherwise by the parties in writing, there shall be no provision in the renewal agreement(s) for further renewal beyond the renewal term provided for in this contract. The renewal term shall commence on the day immediately succeeding the last day of the then current term of the Lease and shall end at midnight on the day immediately preceding the fifth anniversary of the first day of the then current renewal term, unless sooner terminated in accordance with the provisions of the Lease. The Minimum Rent payable during the renewal term shall be at the then current fair market rental rates for the Premises (provided that the annual Minimum Rent payable during the renewal term shall not be less than the annual Minimum Rent payable during the last year of the preceding term).

17.2 Parking

The tenant may lease from the Landlord underground parking stalls as constructed in the Building, the number of and cost of which are to be determined by the parties. The Tenant covenants to pay to the Landlord the monthly parking fee for the stalls (which may be different for different types of stalls) as adjusted by the Landlord from time to time and will, at the Landlord's request, enter into the Landlord's standard parking stall licence agreement in respect of the stalls.

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IN WITNESS WHEREOF the parties have executed this Lease.

CITY OF LANGFORD, by its authorized signatories:

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Mayor:

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Chief Administrative Officer:

Date: ____________________________

VICTORIA CONSERVATORY OF MUSIC, by its authorized signatories:

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Name:

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Name:

Date: ____________________________

Nathan Medd
January 12, 2026
Michael McEvoy

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SCHEDULE “A” FLOOR PLAN OF THE LEASED PREMISES

See attached page

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SCHEDULE "B" DEFINITIONS

To Lease of Premises at Langford, British Columbia
In this Lease:

Additional Rent per 4.1(b)

Additional Services means the services and supervision supplied by the Landlord and referred to in clause 9.2 or in any other provision of this Lease as Additional Services; any other services that from time to time the Landlord supplies to the Tenant and that are additional to other services that the Landlord has agreed to supply under this Lease and to like provisions of other leases of the Building, or that the Landlord may elect to supply as included within the standard level of services available to tenants generally arid in addition to those normally supplied; the provision of labour and supervision in connection with the moving of any furniture or equipment of the Tenant; the making of any repairs or alterations for the Tenant; and the provision to the Tenant or the Leased Premises of maintenance or other services not normally furnished to tenants or other leasable premises generally; and "Additional Service" means any such service.

Annual Base Rent means the annual rent specified in subclause 1.1(f) and payable by the Tenant as specified in subclause 4.1(a).

Basic Terms means those terms set out in clause 1.1, some of which are more particularly defined in this Schedule.

Building means the Lands and the building and all other structures, improvements, facilities and appurtenances that have been or will be constructed on the Lands (above, at or below grade), including the Building systems and the Common Areas, all as may be altered, expanded, reduced or reconstructed from time to time.

Common Area means those areas, facilities, improvements, installations and equipment in or around the Building existing from time to time that: (i) are neither rented nor designated nor intended by the Landlord to be rented: and (ii) are provided or designated from time to time by the Landlord for use in common by the Landlord, the Tenant, other tenants of the Building or their sublessees, agents, employees, customers, invitees or licensees, whether or not those areas are open to the general public or to all tenants of the Building including, without limitation, the Building Systems, entrances, lobbies, access and service corridors, stairways, indoor and outdoor walkways (both open and enclosed), malls, courts and arcades (both open and enclosed), public seating areas and facilities, public washrooms, indoor and outdoor landscaping and landscaped areas, passageways or tunnels leading to any public walkway or other facilities or to other buildings or concourses, mailrooms, electrical, telecommunications, cable, meter, valve, mechanical, storage and janitor rooms, telecommunication and electrical risers, shipping and receiving areas and loading docks, package or passenger pick-up areas, waste disposal or recycling facilities, public parking facilities, driveways, laneways and ramps and sidewalks, parks and other municipal facilities for which the Landlord directly or indirectly is subject to obligations in its capacity as owner of the Building or an interest in it, all as may be altered, expanded, reduced, reconstructed or relocated from time to time.

Cost of Additional Services means in the case of Additional Services provided by the Landlord a reasonable charge made for them by the Landlord that will not exceed the cost of obtaining such services from independent contractors, and in the case of Additional Services provided by independent contractors the Landlord's total cost of providing Additional Services to the Tenant including the cost of all labour (including salaries, wages, and fringe benefits) and materials and other direct expenses incurred, the cost of supervision and other indirect expenses capable of being allocated to them (the allocation to be made upon a reasonable basis) and all other out-of-pocket expenses made in connection with them including amounts paid to independent contractors, plus an administration fee equal to 15% of each component thereof.

Current Market Rent means that rent that would be paid for improved office space in buildings of similar age and location in Langford, BC as between persons dealing in good faith and at arm's length, without reduction for any cash payment, leasehold improvement allowance, rent-free period or other inducement.

Goods and Services or Harmonized Tax means and includes any and all goods and services taxes, sales taxes, value added taxes, business transfer taxes, or any other taxes imposed on the Landlord or the Tenant from time to time in respect of the Rent payable by the Tenant to the Landlord under this Lease or the rental of the Leased Premises or the provision of any goods, services, or utilities whatsoever by the Landlord to the Tenant under this Lease, whether characterized as a goods and services tax, sales tax, value added tax, business transfer tax, or otherwise.

Insured Damage means that part of any damage occurring to any portion of the Leased Premises for which the Landlord is responsible, of which the entire cost of repair is actually recoverable by the Landlord under a policy of insurance in respect of fire and other perils from time to time effected by the Landlord, or, if and to the extent that the Landlord has not insured and is deemed to be a co-insurer or self-insurer under clause 12.1, would have been recoverable had the Landlord effected insurance in respect of perils, to amounts and on terms for which it is deemed to be insured.

Lands means that parcel of land, in Langford, BC legally described as PID 029-892-449, LOT A SECTION 87 ESQUIMALT DISTRICT PLAN EPP58443

Landlord means the corporation executing this Lease and includes its successors and assigns. In the definition of Operating Costs, references to "Landlord" include the owner of the Lands and Building as registered in the applicable land title office and any and all beneficial owners of the Lands and Building.

Lease Year means, in the case of the first Lease Year, the period beginning on the Commencement Date and terminating 12 months from the last day of the calendar month in which the Commencement Date occurs (except that if the Commencement Date occurs on the first day of a calendar month, the first Lease Year will terminate on the day prior to the first anniversary of the Commencement Date) and, in the case of each subsequent Lease Year, means each 12-month period after the first Lease Year.

Leased Premises per subclause 1.1 (c), containing the aggregate number of square feet, more or less, of Rentable Area that is set out in subclause 1.1(d) and having the approximate location and configuration shown outlined on the plan(s) attached as Schedule "A".

Leasehold Improvements mean all fixtures, improvements, installations, alterations, and additions now or from time to time made, erected, or installed, whether by the Tenant, the Landlord or anyone else, in the Leased Premises or in other premises in the Building with the exception of trade fixtures and furniture and equipment not of the nature of fixtures, but includes all partitions however fixed (including movable partitions) and includes all wall-to-wall carpeting with the exception of carpeting laid over vinyl tile or other finished floor and affixed so as to be readily removable without damage.

Normal Operating Hours means the hours from 8:00 a.m. to 9:00 p.m. Monday to Saturday and from 8:00 am to 6:00 pm Sundays and Holidays inclusive.

Operating Costs mean, subject to the exclusions and deductions set out below, the total, without duplication, of the costs, expenses, fees, rentals, disbursements, and outlays (in this definition referred to collectively as "costs") of every kind paid, payable, or incurred by or on behalf of the Landlord on an accrual basis consistent with generally accepted accounting principles and fully chargeable in the year in which they were incurred (except as expressly set out below) in accordance with generally accepted accounting principles in the maintenance, repair, operation, administration, and management of the Lands and Building. Without limiting the generality of the foregoing, Operating Costs will include:

(1) all salaries, wages, fringe benefits, paid to or for all personnel, including supervisory personnel and managers, to the extent that they are employed by the Landlord (or a person with whom it does not deal at arm's length) in connection with the maintenance, repair, operation, administration, or management of the Lands and Building or any part of them, and amounts paid to professionals and independent contractors, including any management companies, for any services provided in connection with the maintenance, repair, operation, administration, or management of the Lands and Building or any part of them;

(2) costs of providing security, supervision, traffic control, janitorial, landscaping, window cleaning, waste collection, disposal and recycling, and snow removal services, and the costs of machinery, supplies, tools, equipment, and materials used in connection with the operation, administration, or management of the Lands and Building or any rentals of them;

(3) costs of providing electric light and power, fuel, water, telephone, steam, gas, sewage disposal, and other utilities, and costs of replacing Building-standard electric light fixtures, ballasts, tubes, starters, lamps, light bulbs, and controls;

(4) costs of all insurance that the Landlord is obligated or permitted to obtain under this Lease;

(5) sales, goods and services, and excise or other taxes on goods and services provided by or on behalf of the Landlord in connection with the maintenance, repair, operation, administration, or management of the Building net of input tax credits, refunds, or rebates (to the extent the Landlord receives and uses them);

(6) taxes levied against the Lands and Building to the extent not charged to the Tenant under subclauses 4.1(b) and 8.2(b) and to other tenants of the Building under lease provisions similar to subclauses 4.1(b) and 8.2(b); and costs (including legal and other professional fees and interest and penalties on deferred payments) incurred by the Landlord in contesting, resisting, or appealing any Taxes;

(7) capital tax, if applicable, being the applicable amount (as hereinafter defined) of any tax or taxes imposed on the Landlord by any governmental authority based upon or computed by reference to the paid-up capital or place of business of the Landlord as determined for the purposes of the tax or taxes; and for the purpose of this paragraph the phrase "applicable amount" of the tax or taxes means the amount of tax that would be payable if the Lands and Building were the only property of the Landlord, and the portion as the Landlord allocates, acting reasonably, to the Lands and Building of any large corporations tax, minimum corporate tax, or other tax imposed on the Landlord by any governmental authority to the extent the tax is not actually credited against any income tax payable by the Landlord;

(8) a reasonable amount, as determined by the Landlord from time to time, of costs incurred by or on behalf of tenants in the Building with whom the Landlord may have agreements whereby in respect of their premises those tenants perform any cleaning, maintenance, or other work or services that, if directly incurred by the Landlord, would have been included in Operating Costs;

(9) costs of repairs, alterations, and replacements to the Building (including those required to comply with applicable laws or the requirements of the Landlord's insurers that become effective or are imposed after substantial completion of the original construction of the relevant structure) except as excluded herein, to the extent reasonably allocated by the Landlord to any fiscal period; and amortization of the cost of any repairs, alterations, or replacements except to the extent charged in accordance with the foregoing provisions of this paragraph, in the case of each item of repair, alteration, or replacement to be calculated on a straight line basis over the period the Landlord determines is reasonable having regard to the nature of the repair, alteration, or replacement, or 15 years, whichever is less;

(10) depreciation (excluding depreciation on the costs of original components of the electrical, mechanical, and other systems installed as part of the original construction of the Building) of the costs of machinery, equipment, facilities, furniture, furnishings, systems, and property (in this paragraph called "machinery") installed in or used in connection with the Building (except to the extent that the costs are charged fully in the fiscal period in which they are incurred):
(a) if a principal purpose of the machinery is to conserve energy, reduce the cost of other items included in Operating Costs, or comply with applicable laws or requirements of the Landlord's insurers that become effective or are imposed after substantial completion of the Building, or the machinery is used for normal maintenance of the Building; or
(b) if, as in the case of the electrical, mechanical, and other systems, the machinery by its nature requires periodic or substantial replacement; in the case of each item of machinery to be calculated on a straight line basis over its useful life or 15 years, whichever is less;

(11) interest on the unamortized or undepreciated portion of the costs referred to in paragraphs (9) and (10) of this definition, calculated monthly, from the date on which the relevant costs were incurred, at an annual rate of interest that is 0.5% above the Prime Rate in effect on the first day of the fiscal period in which the relevant costs were incurred (the applicable rate of interest to be adjusted by the Landlord on the first day of each fiscal period to the annual rate of interest that is 0.5% above the Prime Rate then in effect);

(12) the fair market rental value (having regard to rent being charged for similar rentable space including additional rent for operating costs and property taxes) of space not already included in Rentable Area used by the Landlord, acting reasonably, in connection with the maintenance, repair, and operation of the Lands and Building; and

(13) management fees or management agent fees and administrative charges of a management company, if any, for the Lands and Building or any part of it or, if the Landlord chooses to manage the Lands and Building or any part of it through itself or through a company or other person with whom it does not deal at arm's length, a management fee to the Landlord in an amount comparable to that which would be charged by a first-class real estate management company for management of similar buildings but in any event no greater than 5% of gross rent;

excluding therefrom the following (except as specifically included above):

(14) depreciation;
(15) capital costs of constructing the Building, of replacements of parts of the Building, and of additions to the Building to comply with all bylaws, regulations, and orders made by any governmental authority with respect to the Building and the operating systems of the Building;
(16) debt service costs;
(17) any taxes on the income or profits of the Landlord to the extent they are not imposed in lieu of Taxes;
(18) costs incurred by the Landlord in leasing the Building, including commissions and advertising costs;
(19) costs of correcting defects in or inadequacy of the initial design or construction of the building, cost of repairs covered by warranty and costs of repairs necessitated by structural defects;
(20) costs to benefit or as a result of specific tenant(s), including but not limited to costs of repairs, alterations or improvements of the premises of other tenant(s);
(21) depreciation, interest and principal amounts on capital costs, mortgages, ground rent and other debt costs, if any;
(22) legal fees, space planner's fees, real estate broker's leasing commission, lease take-over costs, advertising and marketing expenses, costs of improving, renovating or inducing tenants into the Building and all other leasing expenses;
(23) unrecovered expenses directly resulting from the negligence of the Landlord, its agents, servants or employees or any bad debt loss, rent loss or reserves for bad debts or rent loss;
(24) repairs to the footings, foundations, structural columns and beams, structural subfloors, bearing walls, exterior walls and windows, and roofs of the Building made within the first two years after substantial completion of the Building to remedy construction or design defects identified by the Landlord's architect;
(25) costs associated with the operation of the business of the entity which constitutes the Landlord as the same are distinguished from the costs of operation of the building including accounting and legal matters, costs of defending any lawsuits with any mortgagee (except as the actions of the Tenant may be an issue), costs of selling, syndicating, financing mortgaging or hypothecating any of the Landlord's interest in the building, costs of any disputes between the Landlord and its employees (if any), disputes of Landlord with building management, or fees or costs paid in connection with disputes with other tenants;
(26) the salaries and benefits of any officers above the level of building managers of the Landlord, if any;
(27) attorney's and lawyer's fees, accounting fees and expenditures incurred with negotiations, disputes and claims of other tenants or occupants of the building or with other third parties;
(28) fines, penalties and interest thereon except if the fines, penalties and/or interest are the direct result of the tenant;
(29) taxes, tax assessments or fees incurred in connection with the development of the building. In addition, income taxes and wealth taxes shall be excluded from operating costs;
(30) any damage or loss resulting from any casualty which the Landlord covenanted to insure against or necessitated by the negligence or wilful misconduct of the Landlord including but not limited to any repair, rebuilding or other work necessitated by condemnation, fire, windstorm or other insured casualty or hazard;
(31) the amount of any sales tax, goods and services tax, value added tax or any similar tax ("Sales Tax") paid or payable by the Landlord on the purchase of goods and services included in operating costs which are available to and claimed by the Landlord as a credit in determining the Landlord's next tax liability or refund on account of Sales Tax but only to the extent the Sales Tax is included in the operating costs;
(32) cost of acquiring sculptures, paintings and other objects of art; and deducting therefrom the following:

(33) net recoveries by the Landlord from the tenants of the Building in respect of and to the extent (but only to the extent) of costs that have been charged as Operating Cost, other than recoveries from the Tenant under paragraph 4.1(b)(ii) and from other tenants under lease provisions similar to paragraph 4.1(b)(ii);
(34) net insurance proceeds received by the Landlord to the extent (but only to the extent) that such proceeds reimburse the Landlord for costs that have been charged as Operating Costs;
(35) net recoveries by the Landlord in respect of warranties or guarantees relating to the construction of the Building to the extent (but only to the extent) that the repair costs in respect of the work covered by the warranties or guarantees have been charged as Operating Costs;
(36) amounts paid by the operator, if any, of the parking garage forming part of the Building to the extent (but only to the extent) of costs that have been charged as Operating Costs, or, if there is no operator, the costs that the Landlord determines, acting reasonably, would normally be paid by an operator, such as the costs of sweeping and providing attendants and the operator's standard equipment;
(37) and in computing Operating Costs, if less than 100% of the Rentable Area of the Building is completed or occupied during any period for which a computation must be made, the amount of Operating Costs will be increased by the amount of the additional costs determined by the Landlord, acting reasonably, that would have been incurred had 100% of the Rentable Area of the Building been completed or occupied during that period.

Prime Rate means the rate of interest declared from time to time by the main branch in Victoria, British Columbia of the Royal Bank of Canada to the Landlord as the annual rate of interest used by the bank as its reference rate in setting interest rates for commercial loans in Canadian dollars in Canada and commonly referred to by the bank as its "prime rate" and, if and during any period when no rate is declared by the bank, means 18% per annum.

Rent includes the Annual Base Rent, Additional Rent, and all other sums payable by the Tenant to the Landlord under this Lease except for goods and services tax payable by the Tenant.

Rentable Area, whether in the case of a whole floor of the Building or in the case of premises comprising part of a floor of the Building, will be determined by the Landlord's architect or land surveyor according to the American National Standard Method for Measuring Floor Areas in Office Buildings ANSI/BOMA 265.1-2010 Office Standard as published by the Building Owners and Managers Association International and in effect at the Commencement Date.

Service Areas mean the area of corridors, elevator lobbies, service elevator lobbies, refuse areas, washrooms, air-cooling rooms, fan rooms, janitor's closets, telephone, meter, mechanical, and electrical closets, and other closets on the floor serving the Leased Premises and other premises on the floor if the floor is a multiple-tenancy floor.

Taxes mean all taxes, rates, duties, levies, and assessments whatsoever, whether municipal, parliamentary, or otherwise, that are levied, imposed, or assessed against or in respect of the Building, the Lands, or upon the Landlord in respect of them, or that are from time to time levied, imposed, or assessed in the future in addition or in lieu thereof, including those levied, imposed, or assessed for education, schools, and local improvements, and includes all costs and expenses (including legal and other professional fees and interest and penalties on deferred payments) incurred by the Landlord in contesting, resisting, or appealing any taxes, rates, duties, levies, or assessments, but excludes taxes and licence fees in respect of any business carried on by tenants and occupants of the Building and taxes upon the income of the Landlord to the extent the taxes are not levied in lieu of taxes, rates, duties, levies, and assessments against the Building or the Lands or upon the Landlord in respect of them.

Tax Cost for any calendar year means an amount equal to the aggregate, without duplication, of all Taxes in respect of the calendar year.

Tenant's Share means the fraction, the numerator of which is the Rentable Area of the Leased Premises and the denominator of which is the Total Rentable Area.

Term means the term of this Lease specified in subclause 1.1(e) and any renewal or extension of it and any period of permitted overholding.

Total Rentable Area means the total Rentable Area of the Building, whether rented or not, calculated as nearly as possible as if the Building were entirely occupied by tenants renting whole floors. The Common Area in the Building will be excluded from the foregoing calculation. The calculation of the Total Rentable Area, whether rented or not, will be adjusted from time to time to give effect to any structural change in the Building.

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SCHEDULE "C" RULES AND REGULATIONS

The Tenant will observe the following Rules and Regulations (as amended, modified, or supplemented from time to time by the Landlord as provided in the Lease):

(1) The Tenant will not use or permit the use of the Leased Premises in such manner as to create any objectionable noises, odours, or other nuisance or hazard, or breach any applicable provisions of municipal bylaw or other lawful requirements applicable to them or any requirements of the Landlord's insurers, will not permit the Leased Premises to be used for cooking (except with the Landlord's prior written consent) or for sleeping, will keep the Leased Premises tidy and free from rubbish, will deposit rubbish in receptacles that are either designated or clearly intended for waste, and will leave the Leased Premises at the end of each day of operation in a condition so as to facilitate the performance of the Landlord's janitorial services in the Leased Premises.

(2) The Tenant will not abuse, misuse, or damage the Leased Premises or any of the improvements or facilities in them, and in particular will not deposit rubbish in any plumbing apparatus or use it for other than purposes for which it is intended, and will not deface or mark any walls or other parts of the Leased Premises.

(3) Except for fund-raising activities, the Tenant will not perform, patronize, or (to the extent under its control) permit any canvassing, soliciting, or peddling in the Building, may install in the Leased Premises vending machines dispensing refreshments or merchandise, and will not permit food or beverages to be brought to the Leased Premises except by the means, at the times, and by the persons as authorized by the Landlord.

(4) The entrances, lobbies, elevators, staircases, and other facilities of the Building are for use only for access to the Leased Premises and other parts of the Building and the Tenant will not obstruct or misuse the facilities or permit them to be obstructed or misused by its agents, employees, invitees, or others under its control.

(5) The Tenant may not move any heavy equipment or any safe into or about the Building unless the consent of the Landlord is first obtained and unless all due care is taken. The equipment will be moved on or in the appropriate steel-bearing plates, skids, or platforms and subject to the Landlord's direction, and at the times, by the means, and by the persons as the Landlord has approved. No furniture, freight, or bulky matter of any description will be moved in or out of the Leased Premises or carried in the elevators except during the hours the Landlord has approved. Hand-trucks and similar appliances will be equipped with rubber tires and other safeguards approved by the Landlord, and will be used only by prior arrangement with the Landlord.

(6) The Tenant will permit and facilitate the entry of the Landlord, or those designated by it, into the Leased Premises for the purpose of inspection, repair, window cleaning, and the performance of other janitorial services, and will not permit access to main header ducts, janitorial and electrical closets, and other necessary means of access to mechanical, electrical, and other facilities to be obstructed by the placement of furniture or otherwise. The Tenant will not place any additional locks or other security devices upon the doors of the Leased Premises without the prior written approval of the Landlord and subject to any conditions imposed by the Landlord for the maintenance of necessary access.

(7) The Landlord may require that all or any persons entering and leaving the Building at any time other than the Normal Operating Hours satisfactorily identify themselves and register in books kept for the purpose, and may prevent any person from entering the Leased Premises unless provided with a key to them and a pass or other authorization from the Tenant in a form satisfactory to the Landlord, and may prevent any person removing any goods from them without written authorization.

(8) The Tenant will refer to the Building only by the name from time to time designated by the Landlord for it and will use the name only for the address of the Leased Premises and not for any promotion or other purpose, except after consultation with the Landlord.

The Tenant will not interfere with window coverings, if any, installed upon exterior windows, and will close or (if the window coverings are remotely controlled) permit to be closed the window coverings during the hours from dusk to dawn as the Landlord may require, and will not install or operate any interior drapes installed by the Tenant so as to interfere with the exterior appearance of the Building.

The foregoing Rules and Regulations, as from time to time amended, are not necessarily of uniform application, but may be waived in whole or in part in respect of other tenants without affecting their enforceability with respect to the Tenant and the Leased Premises, and may be waived in whole or in part with respect to the Leased Premises without waiving them as to future application to the Leased Premises, and the imposition of Rules and Regulations will not create or imply an obligation of the Landlord to enforce them or create any liability of the Landlord for their non-enforcement.