THE VACATION HOTEL SUITES AT THE OAK BAY BEACH HOTEL EARLY OCCUPANCY AGREEMENT
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1 THE VACATION HOTEL SUITES AT THE OAK BAY BEACH HOTEL EARLY OCCUPANCY AGREEMENT This Agreement is dated for reference, BETWEEN: AND: WHEREAS: JOANNE KRYSKI AND KIRBY KRYSKI (the Buyer BISON PROPERTIES LTD. ( Bison A. Bison is the developer of The Oak Bay Beach Hotel & Residences (the Hotel located at 1175 Beach Drive, Victoria, which includes The Vacation Hotel Suites at the Oak Bay Beach Hotel (the Hotel Suites ; B. Pursuant to a contract of purchase and sale between the Buyer, as purchaser and Bison, as seller dated March 15, 2011, as amended by an addendum dated November 25, 2011 (the Purchase Agreement, the Buyer agreed to purchase strata lot 17 in the Hotel Suites (the Vacation Hotel Suite on the terms and conditions set out therein, including that the Buyer s interest in the Vacation Hotel Suite shall be subject to the terms of the Hotel Operator Lease attached hereto as Schedule A (the Lease ; C. The Buyer is also a bondholder holding bonds payable by Bison in the principal amount of $200,000 (the Bond, issued pursuant to a Bond indenture dated November 2, 2009, (the Bond Indenture which provides that if a bondholder is a party to a purchase agreement for a strata lot at The Oak Bay Beach Hotel & Residences then: (i (ii (iii the Bond proceeds otherwise payable to such bondholder shall be paid to Bison and applied on account of the purchase price payable by such bondholder under such purchase agreement; any amounts payable by Bison under the bondholder s bonds and applied on account of the purchase price for the Vacation Hotel Suite shall be automatically set off against any amounts owing by the bondholder under its purchase agreement; and the bondholder shall be entitled to set off any amounts payable to it in respect of the bondholder s bonds against amounts payable by the bondholder under its purchase agreement; Bond Purchaser
2 - 2 - D. By extraordinary resolution approved by the Bondholders, the maturity date for bonds issued under the Bond Indenture has been extended to September 30, 2013; and E. The parties have amended the Purchase Agreement to extend the original Completion Date for completion of the purchase of the Vacation Hotel Suite to September 30, 2013, or such earlier date, as may be designated by Bison on fourteen days written notice delivered to the Buyer, however, Bison wishes to grant the Buyer certain rights to use the Vacation Hotel Suite before the closing of the purchase and sale of the Vacation Hotel Suite on the terms and conditions set out in this agreement (the Agreement. NOW THEREFORE THIS AGREEMENT WITNESSES that for and in consideration of the mutual covenants and agreements set out herein and for other good and valuable consideration the parties hereto covenant and agree as follows: 1. Definitions. Capitalized terms used in this Agreement and not defined herein will have the meanings ascribed thereto in the Purchase Agreement. 2. Right to Use Hotel Vacation Suite. Subject to the terms and conditions set out herein, commencing on the date hereof, (the Occupancy Date and in advance of the closing of the purchase and sale of the Vacation Hotel Suite, Bison will permit the Buyer to occupy and have personal use of the Vacation Hotel Suite and will permit the Buyer to use all facilities in the Hotel on the same basis as a guest of the Hotel for up to sixteen (16 weeks in any twelve (12 consecutive month period provided: (a (b not more than four (4 weeks of such use by the Buyer may be outside the November through March period pursuant to Oak Bay Zoning Bylaw 4320; and not more than three (3 weeks of such use by the Buyer may be during the period from and including May 1 st to and including September 30 th of each year (the Peak Season Period. 3. Booking Use of Vacation Hotel Suite. The Buyer will be entitled at any time to reserve use of the Vacation Hotel Suite. If the Buyer s reservation is made on less than ninety (90 days notice, the availability of the Vacation Hotel Suite will be subject to any reservations already booked by Bison for a guest of the Hotel. In order to have guaranteed use of the Vacation Hotel Suite, the Buyer must provide more than ninety (90 days notice to reserve the use of the Vacation Hotel Suite. If Bison wishes to reserve the use of the Vacation Hotel Suite more than ninety (90 days in advance, Bison must provide a written request to the Buyer to reserve the Vacation Hotel Suite for a guest. The Buyer will have ten (10 days from receipt of the request from Bison to advise if the Buyer wishes to use the Vacation Hotel Suite for any portion of the time requested by Bison and, if the Buyer provides such notice to Bison, Bison will reserve the Vacation Hotel Suite for the Buyer for the requested days. If the Buyer fails to reply to Bison s request within the ten (10 day period, the Buyer will be deemed to have elected not to use the Vacation Hotel Suite for the entire time period requested by Bison. 4. Designated Permitted Users. On or before January 2 nd, 2013, the Buyer will provide Bison with a list of the Buyer s immediate family members and five persons (the
3 - 3 - Permitted Users, including contact information for such persons, who may use the Buyer s Vacation Hotel Suite during the sixteen (16 week usage period set out in Section 2. Except for the persons listed as Permitted Users, the Buyer may not reserve the use of the Vacation Hotel Suite by any other person for the sixteen (16 week usage period. The Buyer may not charge the Permitted Users any fee or otherwise accept compensation for the use of the Vacation Hotel Suite. Bison may deny use of the Vacation Hotel Suite to any Permitted User paying the Buyer any fee or compensation for use of the Vacation Hotel Suite. 5. Utility and Amenity Fee. If the Buyer exercises its right to occupy and have personal use of the Vacation Hotel Suite, the Buyer will pay Bison a utility and amenity fee (the Utility and Amenity Fee for each day the Buyer or the Permitted Users use the Vacation Hotel Suite. At the time of entering into this Agreement, the Utility and Amenity fee for the Vacation Hotel Suite is equal to $ Bison reserves the right to adjust the Utility and Amenity Fee from time to time provided the adjustments reflect the actual costs incurred by Bison to provide utilities and amenity services to the Vacation Hotel Suite on a daily basis. The Utility and Amenity Fee will be invoiced to the Buyer at the end of the stay of the Buyer or Permitted User at the Hotel. 6. Standard Charges for Additional Services. If the Buyer exercises its right to occupy and have personal use of the Vacation Hotel Suite, the Buyer will be charged the normal hotel rates for room service, extra butler services, chefs in room, housekeeping services and for standard hotel services, including telephone charges, movie rentals and the minibar as if the Buyer was a guest of the Hotel. 7. Changeover Clean Fee. If the Buyer exercises its right to occupy and have personal use of the Vacation Hotel Suite, the Buyer will pay Bison a changeover clean fee (the Changeover Clean Fee at the end of each stay of the Buyer or the Permitted Users at the Hotel. The Changeover Clean Fee will be equal to the cost of cleaning the Vacation Hotel Suite after the Buyer or Permitted Users stay at the Vacation Hotel Suite is over. A Changeover Clean Fee will be payable at the end of each stay for a stay that is less than seven (7 days and, for stays longer than seven (7 days, there will be a Changeover Clean Fee every seven (7 days and after the end of the stay. At the time of entering into this Agreement, the Changeover Clean Fee is $30. Bison reserves the right to adjust the Changeover Clean Fee from time to time provided the adjustment reflects the actual costs incurred by Bison to clean the Vacation Hotel Suite. The Changeover Clean Fee will be invoiced to the Buyer at the end of each stay of the Buyer or the Permitted User at the Hotel. 8. End of Occupancy. The Buyer s right to occupy and use the Vacation Hotel Suite under the terms of this Agreement will end on the earlier of any following events (the End Date : (a (b the lapse of the Purchase Agreement; breach by the Buyer of the terms and conditions of the Purchase Agreement or of this Agreement;
4 - 4 - (c (d lawful termination of the Purchase Agreement; or the Possession Date (as defined in the Purchase Agreement, if Bison and the Buyer complete the purchase and sale of the Vacation Hotel Suite in accordance with the terms of the Purchase Agreement. 9. Amounts Payable By Bison to Buyer. On the Completion Date (as defined in the Purchase Agreement, for the period from the Occupancy Date to the Completion Date, Bison shall pay to the Buyer the greater of the following: (a (b the amount of Basic Rent which would have been payable to the Buyer for such period under Section 4.2 of the Hotel Operator Lease if the Buyer and Bison had completed the purchase and sale of the Vacation Hotel Suite on the Occupancy Date, as abated pursuant to Section 6.2 of the Hotel Operator Lease for the period of personal use of the Vacation Hotel Suite by the Buyer or Permitted Users; and the amount of Interest payable by Bison to the Buyer, as bondholder, under the terms of the Bond for such period. The Buyer hereby irrevocably authorizes and directs Bison to credit such amounts payable under this Section 9 to the Buyer on account of the purchase price payable by the Buyer under the Purchase Agreement and the parties agree that the closing statement of adjustments shall reflect such amounts. 10. General Covenants of Buyer. (a (b (c (d The Buyer shall strictly comply, and cause any person for whom it is in law responsible to comply, with the Strata bylaws and all applicable laws, regulations and bylaws of authorities having jurisdiction. The Buyer shall not alter the Vacation Hotel Suite, or any part thereof, in any manner whatsoever, including by way of altering fixtures or window coverings. The Buyer shall not create or allow others to create or contribute to any safety, fire or health hazards at or on the Vacation Hotel Suite, and shall promptly address any such issues or hazards that may arise. The Buyer acknowledges that its rights of occupancy hereunder will be subject to the terms of the Lease and the Lease will be registered against title to the Vacation Hotel Suite upon completion of the purchase and sale of the Vacation Hotel Suite pursuant to the Purchase Agreement. 11. Buyer Indemnity of Bison. The Buyer will indemnify, defend and save Bison harmless from and against any and all manner of actions or causes of action, damages, costs, loss, or expenses of whatever kind (including without limitation legal fees on a solicitor and client basis, which Bison may sustain, incur or be put to by reason of, as a result of, arising from or in connection with:
5 - 5 - (a (b (c any damage to the Vacation Hotel Suite, the Hotel, other Vacation Hotel Suites in the Hotel or property of third parties located in the Hotel arising from the negligence or wilful acts or omissions of the Buyer, Permitted Users or those for whom they are responsible at law before the purchase and sale of the Vacation Hotel Suite is completed; as a result of any personal injury or death to any person in or around the Vacation Hotel Suite or the Hotel arising from the negligence or wilful acts or omissions of the Buyer, Permitted Users or those for whom they are responsible at law before the purchase and sale of the Vacation Hotel Suite is completed; and the non-observance or non-performance by the Buyer, Permitted Users or those for whom they are responsible at law of any of the covenants, agreements, terms, conditions, and provisos contained in this Agreement to be observed and performed by the Buyer, and such liability to indemnify, defend and save harmless shall survive any termination of this Agreement or any renewal hereof. 12. No Amendment of Purchase Agreement. Except as expressly set out herein, this Agreement does not amend or alter the rights and obligations of the parties under the Purchase Agreement and time will remain of the essence under the Purchase Agreement. 13. Purchaser s Interest. The Buyer acknowledges that his, her or its interest is that of a purchaser under the Purchase Agreement, not that of a tenant under any tenancy agreement to which the Residential Tenancy Act (B.C. applies. 14. Modification. Any modification of this Agreement must be in writing and signed by all of the parties to be effective. 15. Joint and Several. If the Buyer consists of more than one person, the obligations of each person who is a Buyer are joint and several. 16. Waiver. The failure of Bison to insist upon strict performance of any obligation hereunder on the part of the Buyer to be kept, observed, or performed, or to exercise any right under this Agreement, will not be construed or operate as a waiver or relinquishment for the future of its right so to do and no waiver shall be inferred from or implied by anything done or omitted by Bison. 17. Time of the Essence. Time is of the essence of this Agreement. 18. Enurement. This Agreement is to enure to the benefit of, and is binding upon, the parties and their respective successors and permitted assigns. 19. Severability. If any of the provisions in this Agreement are for any reason held to be invalid, illegal or unenforceable in any respect, it is to be considered severed from this Agreement, and the remaining provisions of this Agreement will remain in full force and be binding upon the parties.
6 Applicable Law. This Agreement shall be construed in accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein. 21. Counterparts. This Agreement may be signed in counterparts with the same effect as if the parties had signed the same document, and will become effective when counterparts have been signed and unconditionally delivered by both parties. All counterparts will be construed together and evidence only one agreement. [Remainder of Page Left Intentionally Blank]
7 Signing by Facsimile or . This Agreement may be signed by the parties and transmitted by facsimile or other electronic means and if so signed and transmitted, this Agreement will be for all purposes as effective as if the parties signed and delivered an original copy of the Agreement. In witness whereof this Agreement has been executed and delivered by the parties as of the day and year first above written. BISON PROPERTIES LTD. Per: Name: Kevin Walker Title: President SIGNED, SEALED AND DELIVERED in the presence of: Witness Address Occupation Joanne Kryski SIGNED, SEALED AND DELIVERED in the presence of: Witness Address Occupation Kirby Kryski
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