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EXHIBIT 10.27
LANDLORD: N.H.D. DEVELOPMENTS LIMITED
TENANT: STAR BEDDING PRODUCTS (1986) LTD.
INDEMNIFIER: N/A
* See Schedule "D" for SPECIAL PROVISIONS
INDEX
PART 1 - DEMISE AND INTERPRETATION
1.2 Demise
1.2 Schedules
1.3 Basic Principles
1.4 Interpretation
PART 2 - PREMISES
2.1 Zoning
PART 3 - NET RENT
3.1 Net Rent
3.2 Tenant to Pay Rent Tenant's Covenants
3.3 Allocations
3.4 Deposits
PART 4 - TENANT'S COVENANT TO PAY OPERATING COSTS, TAXES AND UTILITIES
4.1.1 Business Taxes
4.1.2 Realty Taxes
4.1.3 Sales Taxes
4.1.4 Water Rates
4.1.5 Utilities
4.1.6 Management Fee
PART 5 - TENANT'S OTHER COVENANTS
5.1.1 Rules
5.1.2 Use of Premises
5.1.3 Damage
5.1.4 Nuisance
5.1.5 Exhibiting Premises
5.1.6 Overholding
5.1.7 Heat
5.1.8 Invoices and Receipts
5.1.9 Compliance with Laws
PART 6 - TRANSFERS
6.1.1 Consent Required
6.1.2 Conditions
6.1.3 No Release
6.1.4 Processing Fee
PART 7 - LANDLORD'S COVENANTS
7.1.1 Quiet Enjoyment
7.1.2 Taxes
PART 8 - INSURANCE
8.1 Landlord's Insurance
8.2 Tenant's Insurance
8.3 Increase in Insurance Premiums
8.4 Cancellation of Insurance
8.5 Mutual Release
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LANDLORD: N.H.D. DEVELOPMENTS LIMITED
TENANT: STAR BEDDING PRODUCTS (1986) LTD.
INDEMNIFIER: N/A
* See Schedule "D" for SPECIAL PROVISIONS
8.6 Mutual Indemnity
PART 9 - REPAIRS AND MAINTENANCE
9.1 Landlord's Repairs
9.2 Tenant's Repairs
9.3 Repair Where the Tenant is at Fault
9.4 Tenant Not to Overload Facilities
9.5 Entry by the Landlord
PART 10 - DAMAGE AND DESTRUCTION
10.1 Destruction of Premises
PART 11 - TENANT'S ALTERATIONS
11.1 Alterations to Premises
11.2 Removal of Fixtures
11.3 Surrender of Premises
11.4 Signs
PART 12 - DEFAULTS
12.1 Landlord May Perform
12.2 Default
12.3 Re-Entry
12.4 Remedies Generally
12.5 Distress
12.6 Default by Landlord
12.7 Effect of Termination
12.6 Accord and Satisfaction
PART 13 - LANDLORD'S TITLE
13.1 Condemnation
13.2 Expropriation
13.3 Assignment of Landlord's Interest
13.4 Priority of Lease
13.5 Liens
13.6 Registration
PART 14 - GENERAL
14.1 Non-Waiver
14.2 Force Majeure
14.3 Entire Agreement
14.4 Public Policies
14.5 Planning Act
14.6 Notice
14.7 Severability
14.8 Counterparts
14.9 Certificates
14.10 Amendments
14.11 No offer
14.12 Joint and Several
14.13 Enurement
14.14 Authorization
14.15 Construction
PART 15 - INDEMNITY
15.1
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LANDLORD: N.H.D. DEVELOPMENTS LIMITED
TENANT: STAR BEDDING PRODUCTS (1986) LTD.
INDEMNIFIER: N/A
* See Schedule "D" for SPECIAL PROVISIONS
1. BUILDING
53 Courtland Avenue, Concord, Ontario, L4K 3T2
2. TERM
Five (5) years commencing on January 1, 1996 and ending on December
31, 2000.
3. SQUARE FOOTAGE OF THE BUILDING
53,660
4. USE
Manufacturing and distribution of bedding products plus ancillary
offices.
4.1 NET RENT
January 1, 1996 to December 31, 1997: $4.00
January 1, 1998 to December 31, 2000: $4.25
per square foot per annum.
Annual Net Rent based upon square footage in Item 3:
MONTHLY INSTALLMENTS
--------------------
Lease Years Jan.1/1996 through Dec.31/1997 : $214,720.00 $ 17,893.33
Lease Years Jan.1/1998 through Dec.31/2000 : $228,140.00 $ 19,011.66
4.2 MAINTENANCE/INSURANCE FEE
ANNUALLY MONTHLY
----------------------- ------------------
$.60 per square foot per annum. $32,208.00 $2,684
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4.3 MAINTENANCE FEE ADJUSTMENT DATE
September 30, 1996
5. MANAGER AND MANAGER'S ADDRESS
MANAGER: The Sorbara Group
ADDRESS: 3700 Steeles Avenue
West Suite 800
Woodbridge, Ontario L4L 8M9
6. RENT DEPOSIT
$19,145.86
7. SECURITY DEPOSIT
$17,893.33
8. TENANT'S ADDRESS FOR SERVICE PRIOR TO COMMENCEMENT DATE
37 Bethridge Road, Etobicoke, Ontario, M9W 1MB
9. MONTHLY CHARGES FOR REGULAR ITEMS OF ADDITIONAL RENT FOR 1996
CALENDAR YEAR
TAXES: $4,697.00 (based upon one-twelfth of the estimated Taxes)
MAINTENANCE/INSURANCE FEE: $2,684.00
G.S.T. ELIGIBLE ON NET RENT, MAINTENANCE FEE, INSURANCE AND TAXES:
$1,769.20
SCHEDULES:
"A" - Plan
"B" - Definitions
"C" - Rules
"D" - Special Provisions
"E" - INTENTIONALLY DELETED
"E-I"- INTENTIONALLY DELETED
"F" - INTENTIONALLY DELETED
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(hereinafter called the "Landlord")
OF THE FIRST PART;
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STAR BEDDING PRODUCTS (1986) LTD.
(hereinafter called the "Tenant")
OF THE SECOND PART:
PART 1 - DEMISE AND INTERPRETATION
In consideration of the rents, covenants and agreements which the Tenant has
agreed to pay, observe and perform, the Landlord hereby leases and demises the
Premises to the Tenant for the Term at the rent and upon the other terms and
conditions of this Lease.
The Key Item Index and all Schedules to this Lease form part of this Lease. In
the event of any conflict between the terms of this Lease and the terms of
Schedule "D", the terms of Schedule "D" shall apply to the extent of the
conflict.
This Lease is a business agreement in respect of the leasing of real property.
Each party agrees to act in good faith and in a commercially reasonable manner
in accordance with this Lease in enjoying and performing its rights and
obligations in this Lease and where the consent or approval by a party is
required regarding any matter, such approval shall not, unless otherwise
specified herein, be unreasonably withheld or delayed. It is agreed that this
Lease shall be an absolutely net lease for the Landlord and that Rent shall be
received by the Landlord free of any cost or obligation concerning the Premises
unless otherwise specified in this Lease. Each provision of this Lease
applicable to each party although not expressed as a covenant, shall be
construed to be a covenant of such party for all purposes and each party
covenants to perform its covenants hereunder.
This Lease shall be construed in accordance with the laws of the Province of
Ontario. The parties attorn to the exclusive jurisdiction of the courts of
Ontario to deal with all actions in respect of this Lease. The section headings
of this Lease and the Table of Contents, if any, have been inserted for
convenience of reference only and shall not be referred to in the interpretation
of this Lease. This Lease shall be read with all changes of gender and number
required by the context. Time shall be of the essence of this Lease and each of
the provisions hereof.
PART 2 - PREMISES
The Tenant has satisfied itself that the use permitted by this Lease conforms to
all existing Laws and agrees that its covenants and obligations herein contained
shall not be affected In the event it is or hereafter becomes disentitled, in
whole or in part, from carrying on the aforesaid use in or upon the Premises.
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PART 3 - NET RENT
From and after the Commencement Date, the Tenant shall pay to the Landlord an
annual net rent (hereinafter referred to as "Net Rent") calculated at the
rate(s) set forth in paragraph 5 of the Key Item Index.
Net Rent so calculated shall be payable in equal monthly instalments in advance
on the first day of each month. If the Commencement Date is not the first day of
a month, or the Term expires an a day which is not the last day of a month, the
first or last instalment of Net Rent as the case may be shall be payable on the
Commencement Date for the broken portion of the month at the beginning of the
Term, or the first day of the month for the broken period at the end of the
Term, calculated at a per them rate of 1/365th of the then annual Net Rent.
The Tenant covenants to pay Rent without any deduction, ????, set off except as
specified in this Lease, without any prior demand therefor. All Rent in arrears
shall bear interest at the Prescribed Interest Rate from the date an which the
same became due until the date of payment. All Rent shall be paid by the Tenant
to the Landlord at the address in Key Item 6 or to such other person or at such
other place in Canada as the Landlord or the Manager may designate in writing
from time to time.
The Landlord shall in determining, apportioning, attributing or allocating any
amount, cost or expense, do so an a reasonable basis.
Upon execution of this Lease, the Tenant shall deposit with the Landlord a
deposit in the amount set forth in Key Item 7 on account of the first Rent to be
due during the Term.
PART 4 - TENANT'S COVENANT TO PAY OPERATING COSTS,
TAXES AND UTILITIES
4.1 The Tenant shall pay:
4.1.1 on a timely basis to the appropriate municipality all
Business Taxes properly owing in respect of each and every
business conducted at, in, upon, through or from the
Premises during the Term by the Tenant or any other person;
4.1.2 to the Landlord all Realty Taxes imposed or assessed
against the Premises or any part thereof, or against the
Landlord on account of the Premises, their use or
occupation.
Prior to the commencement of each calendar year during the
Term, the Landlord will estimate the Realty Taxes for the
next calendar year attributable to the Premises and the
Tenant will pay one-ninth of the estimated amount in nine
consecutive, monthly instalments, payable on the first day
of each of the first nine months of the ensuing calendar
year. Notwithstanding the foregoing, It is hereby
stipulated that:
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(a) if this Lease is not a renewal lease and the Term
commences on a day other than January 1, the
Tenant shall pay, for the period of the Term
commencing on the Commencement Date and ending
upon the last day of December of the year in
which the Term has commenced, one-twelfth of the
estimated amount of the Realty Taxes (prorated to
reflect the portion of the calendar year that the
Tenant is to be in occupation of the Premises) in
equal monthly installments on the first day of
each month during such period; and
(b) if on any payment date the Landlord has not
received from the Tenant sufficient tax
instalments to pay the actual amount of the
Realty Taxes attributable to the Premises then
owing, the Tenant shall forthwith, upon demand,
pay to the Landlord the amount of the deficiency.
Where Realty Taxes are estimated by the Landlord all
necessary adjustments will be made when the final tax bills
for the year in question have been received. Where Realty
Taxes include local improvement taxes, assessments, levies
or charges, the Tenant shall only be required to make the
minimum payments payable during the Term;
4.1.3 any Sales Taxes upon demand. The Landlord shall, upon the
request and at the cost of the Tenant, prepare and execute
such forms as may be necessary to establish the amount that
the Tenant has paid to the Landlord under this section;
4.1.4 directly to the appropriate authorities when due all water
rates that may be levied, rated, charged or assessed
against the Premises;
4.1.5 directly to the appropriate authorities when due all
charges for utilities used upon or in respect of the
Premises and for fittings, machines, apparatus, meters or
other things leased In respect thereof and for all work or
services performed by any person In connection with such
Utilities or equipment; and
4.1.6 pay to the Landlord, on a monthly basis, the Landlord's
cost Of maintaining the insurance provided for in Section
6.1 hereof and managing the Building and conducting
exterior maintenance to the Premises including, without
limitation, the cost of painting every three years, snow
removal, landscaping, fencing, exterior maintenance to the
Premises including, without limitation, the cost of
painting every three years, snow removal, landscaping,
fencing, exterior lighting, non-structural roof repairs,
paving repairs and any work required to be carried out by
any duly constituted government authority not required as a
result of the Tenant's use and occupancy of the Premises.
The Tenant agrees that it shall pay to the Landlord, on a
monthly basis on the first day of the month, a
maintenance/management fee at the rate set out in paragraph
5.2 of the Key Item Index in respect of such costs;
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PART 5 - TENANT'S OTHER COVENANTS
5.1 The Tenant covenants with the Landlord that it shall:
5.1.1 observe, and ensure that all of its Invitees observe, the
Rules;
5.1.2 Use the Premises only for the purpose set out in paragraph
4 of the Key Item Index and for no other purpose. The
Tenant shall not use or permit or suffer the use of the
Premises or any part thereof to generate, manufacture,
refine, treat, transport, store, handle, dispose of,
transfer, produce or process any Hazardous Substances
except in strict compliance with all applicable federal,
provincial or municipal laws or regulations, including,
without limitation, environmental, land use, occupational,
health and safety laws, regulations, requirements or
permits, and only if the use of such Hazardous Substances
are incidental and necessary for the conduct of the
Tenant's business in compliance with the use permitted in
this section and do not form a main activity of the
Tenant's business. Without limiting the generality of the
foregoing, the Tenant shall not use the Premises as a waste
disposal site or accept waste from outside of the Premises
for transfer, temporary storage or any other reason
whatsoever. The Tenant shall indemnify and save harmless
the Landlord from any liability arising from the existence
of Hazardous Substances brought in, or upon, the Premises
after the Commencement Date by the Tenant or its Invitees;
5.1.3 not do or allow any act of waste, damage or injury to the
Premises or any fixtures, improvements, alterations,
additions or equipment in or upon the Premises and that the
Tenant shall not bring into the Premises any item that by
reason of its weight, size or operation might damage any
part of the Premises;
5.1.4 not do anything on the Premises that may be dangerous,
offensive or may be a nuisance to the Landlord. The use
permitted by this Lease shall not constitute a nuisance
provided the Tenant complies with all Laws and the rules
and regulations of all utility authorities in force from
time to time in respect of the environment, the Tenant's
business and operations, the condition, equipment,
maintenance, use, environment or occupation of the Premises
and the Tenant hereby covenants to comply with all such
Laws;
5.1.5 permit the Landlord or its agents or servants to enter the
Premises from time to time during the last six (6) months
of the Term at reasonable hour to exhibit the Premises to
prospective tenants;
5.1.6 if it continues to occupy the Premises beyond the date on
which the Term expires, with or without the consent of the
Landlord, and without a further written agreement, become a
monthly tenant and shall be subject to the same terms and
conditions of this Lease, except as to the length of the
Term, any inducements and the Net Rent. The Tenant agrees
to pay Net Rent in an amount double the amount
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payable under this Lease for the last month of the Term,
but the acceptance of Rent by the Landlord shall not in any
way renew this Lease as a yearly tenancy; and
5.1.7 heat the Premises in a reasonable manner and at its own
expense to a sufficient temperature at all times so that
the Premises and the installations therein shall not be
damaged by frost or cold;
5.1.8 deliver promptly to the Landlord If the Landlord makes a
written request therefor, copies of all invoices respecting
any item which it is the Tenant's obligation to pay
pursuant to this Lease and evidence of payment of same;
5.1.9 at its sole cost and expense, comply with all Laws which
relate to the Premises or to the making of any repairs,
replacements, alterations, additions, changes,
substitutions or improvements of or to the Premises caused
by the Tenant's use or occupancy of the Premises. The
Tenant agrees that all such repairs, replacements,
alterations, additions, changes, substitutions or
improvements shall forthwith become the property of the
Landlord and the Tenant will comply with all police, fire
and sanitary regulations imposed by any governmental,
provincial and municipal authorities or made by any
insurance underwriters and shall observe and obey all
governmental and municipal regulations and any other
requirements governing the conduct of any business in or
upon the Premises.
PART 6- TRANSFERS
6.1 [TEXT CUT OFF]
6.1.1 The Tenant acknowledges that the Landlord agreed to enter
into this Lease as a result of the business and personal
characteristics of the original Tenant and its
acceptability to the Landlord. It is agreed by the Tenant
that if a Transfer is proposed, the Landlord is entitled to
determine if the proposed transferee and its use is
reasonably acceptable to the Landlord and the Tenant
covenants that no Transfer affecting the Tenant, this
Lease, the Premises or the business of the Tenant on the
Premises shall be permitted or effective until the
Landlord's written consent to the Transfer is delivered to
the Tenant. The Tenant shall deliver to the Landlord its
written request for consent to a Transfer together with
copies of the proposed Transfer documents and shall provide
the Landlord with full particulars of the proposed Transfer
and the business and financial responsibility and standing
of the proposed transferee;
6.1.2 It shall be deemed reasonable for the Landlord to require
as a condition of its consent to a Transfer that the
proposed transferee agree with the Landlord to assume and
perform each of the covenants, obligations and agreements
of the Tenant in this Lease by executing a written
agreement to do so in the form required by the Landlord.
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The Landlord shall have a reasonable time to consider any
request for its approval of a Transfer, which in no event
shall be more than ten (10) days from the date upon which
the Landlord has received the last of the Tenant's request,
all of the information it requires to make its decision,
and the processing fee referred to in section 6.1.4;
6.1.3 No Transfer or other disposition by the Tenant of this
Lease or of any interest under this Lease, shall release
the Tenant from the performance of any of its covenants
under this Lease and the Tenant shall continue to be bound
by this Lease. If this Lease is disclaimed or terminated by
any trustee in bankruptcy of any transferee of this Lease
or repudiated by any transferee or its trustee pursuant to
the Bankruptcy and Insolvency Act (Canada) or any successor
legislation thereto, the original Tenant named in this
Lease, upon notice from the Landlord shall enter into a
lease with the Landlord upon the same terms and conditions
as contained herein except for the duration of the term
which shall commence on the date of such disclaimer or
termination and which shall expire on the date this Lease
would have expired if such disclaimer or termination had
not occurred. The liability of the Tenant in this Section
6.1.3 shall continue during the Term and during any period
during which It is extended pursuant to any right to extend
granted to the Tenant pursuant to this Lease;
6.1.4 Prior to the Landlord delivering any requested consent, the
Tenant shall pay to the Landlord by certified cheque a
processing fee of Five Hundred ($500.00) Dollars for each
request by the Tenant for consent to Transfer; and
6.1.5 Notwithstanding the foregoing, the Tenant shall have the
right to sublet up to 20% of the premises to one or more
subtenants without requirement for the Landlord's consent
or approval.
PART 7 - LANDLORD'S COVENANTS
7.1 The Landlord covenants with the Tenant as follows;
7.1.1 the Landlord covenants with the Tenant for quiet enjoyment,
and that the Landlord shall perform and observe all
covenants in this Lease required to be performed and
observed by it; and
7.1.2 that the Landlord will pay promptly when due all taxes,
rates, duties, levies and assessments properly charged
against the Premises or against the Landlord in respect of
the Premises subject to the Landlord's right to postpone,
contest or appeal payment of any such taxes, rates, duties,
levies or assessments. This provision shall in no way be
interpreted so as to relieve the Tenant from its
obligations to pay Realty Taxes or any other taxes
chargeable to the Tenant under this Lease.
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PART 8 - INSURANCE
8.1 The Landlord shall take out and maintain with respect to the
Premises:
8.1.1 commercial general liability insurance;
8.1.2 building insurance for those risks covered by the standard
commercial building broad form which insurance shall only
cover items in the Premises to the extent same constitute part
of the Base ______________________________________ the
Landlord at its own expense pursuant to its obligations in
this Lease;
8.1.3 boiler and machinery insurance on the standard comprehensive
form on its equipment, including roof-top equipment and
electrical installations; and
8.1.4 loss of rental income insurance including amounts payable by
the Tenant to the Landlord as Additional Rent.
The Landlord, acting reasonably, shall determine all policy
terms including deductibles and shall be entitled to maintain
such other insurance as it considers advisable. Nothing
contained herein shall require the Landlord to maintain any
insurance with respect to any loss, injury or damage required
to be insured against by the Tenant or with respect to Tenant
Property. The proceeds of the Landlord's insurance shall
belong to the Landlord.
8.2 The Tenant shall, at all times, maintain:
8.2.1 commercial general liability insurance against personal and
bodily injury, including death, and property damage, with
respect to the Tenant's business and the Premises and the use
and occupancy thereof, on an occurrence basis to such limits
as the Landlord, acting reasonably, requires from time to
time, but in any event not less than Two Million
($2,000,000.00) Dollars for any one occurrence;
8.2.2 insurance with coverage for those risks covered by the
standard commercial property broad form fully covering the
Premises and Leasehold improvements (to the extent not covered
by the Landlord's insurance) and the Tenant Property. The
insurance required by this section 8.2 shall be for 100% of
the current replacement cost and shall be subject only to
deductibles and exclusions as the Landlord, acting reasonably,
may approve;
8.2.3 business interruption insurance including loss of profits in
an amount sufficient to prevent co-insurance penalties for
under-insurance; and
8.2.4 such other forms of insurance, including boiler and machinery
insurance (in respect of such equipment installed or brought
upon the Premises or the Lands appurtenant thereto by the
Tenant) and pollution liability insurance, as the Tenant
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or the Landlord or any mortgagee of the Premises, acting
reasonably, requires from time to time in form, in amounts and
for insurable risks against which a prudent tenant would
insure.
All insurance to be effected by the Tenant shall be in amounts
and upon terms which the Landlord shall from time to time,
acting reasonably, determine to be sufficient and shall be
with an insurer reasonably acceptable to the Landlord. Such
insurance shall provide that the Landlord is to be given at
least thirty (30) days' written notice of any cancellation or
change in the terms of coverage and shall include the Landlord
as an additional named insured and contain cross-liability and
severability of interest provisions, as applicable. The Tenant
shall, from time to time upon demand by the Landlord, provide
to the Landlord certificates or other proof reasonably
required by it to establish that the Tenant has insurance in
effect which complies with the terms of this section 8.2. If
the Tenant fails to insure, to file proof thereof, or if the
Landlord receives notice of any cancellation of the Tenant's
insurance, the Landlord may, but in no event shall it be
obligated to, effect such insurance. In the event that the
Landlord does effect any such insurance, the Tenant shall pay
to the Landlord on demand the amount of any premiums paid
therefor. If this Lease expires or is terminated at a time
when the Premises or Leasehold Improvements are damaged or
destroyed as a result of a peril required to be insured
against by the Tenant, the Tenant shall pay to the Landlord
free of any encumbrance, an amount equal to the proceeds of
insurance which it would have received if it had maintained
the insurance required hereunder with respect to such damage
or destruction.
8.3 The Tenant shall not, by act or omission, permit anything to
be done, in or upon the Premises which could impair or
invalidate any policy of insurance on the Premises or any part
thereof or which could result in the premium for any such
policy being increased. In the event of a breach of this
section 8.3 by the Tenant, it shall promptly after the receipt
of notice from the Landlord specifying the nature of Its
default, at the option of the Landlord, take such steps as are
necessary to remedy the breach, pay the full amount of any
such increase, or both. In the event of the non-renewal, or
any part thereof and take reasonable steps to remedy the
breach and recover the cost of doing so from the Tenant.
8.4 If the cause of any threatened cancellation of insurance
referred to in section B.3 cannot be remedied in time to
prevent the non-renewal or cancellation of insurance the
Landlord shall be entitled to terminate this Lease effective
upon written notice to the Tenant.
8.5.1 The Landlord and the Tenant each hereby remiss, release, and
forever discharge the other from all actions, manner of
actions, causes of actions, claims, suits and obligations
which it has, or may hereafter have against the other for or
concerning, or by reason of, or in any way connected with or
arising out of, or in consequence of, an occurrence in respect
of which the releasing party has
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insurance. For greater certainty, it is hereby stipulated that
the within release shall apply whether or not the claim being
released was a result of the negligence of the released party
or of any person for whom it is responsible in law.
8.5.2 Notwithstanding anything else herein contained, the benefit of
the release contained in section 8.5.1 cannot be claimed by
any party which has not maintained the insurance that it is
required to maintain in force pursuant to this Lease, and the
release shall not, in any circumstance, apply to the excess of
any claim above and beyond the limits of insurance that the
party seeking the benefit of the release maintained in force.
For greater certainty, it is hereby stipulated that the
release referred to in section 8.5.1 shall apply to the
deductible paid by the releasing party pursuant to any policy
of insurance held pursuant to the terms of this Lease.
8.5.3 For the purposes of this section 8.5 only, the Landlord shall
include the Manager.
8.6 To the extent not released under section 8.5, each party shall
indemnify and save harmless the other from all claims,
demands, causes of action, liabilities, damages, losses or
expenses (hereinafter in this section 8.6 to be collectively
referred to as the "Liabilities") arising out of or occasioned
by:
8.6.1 any breach by an Indemnifying party of any covenant or
condition, or term of this Lease;
8.6.2 any lien on the Premises; and
8.6.3 an act, default or the negligence of an indemnifying party,
its officers, agents, servants, employees, contractors,
customers, invitees or licensees.
For greater certainty, it is agreed by each of the parties
that, notwithstanding anything else contained in this Lease,
the obligations contained in this section 8.6 shall survive
the expiration or earlier termination of this Lease.
PART 9 - REPAIRS AND MAINTENANCE
9.1 The Landlord shall at its sole cost and expense, subject to
section 9.2 and Part 10, at its sole cost and expense,
maintain and repair, or cause to be maintained and repaired,
as would a prudent owner of a reasonably similar industrial
premises, the structure of the Premises, including, without
limitation, the foundations, exterior wall assemblies
including weather walls, sub-floor, roof structure, bearing
walls, and structural columns and beams of the building on the
Premises, and at the cost of the Tenant to carry out the
maintenance in respect of the items referred to in Section
4.1.8 herein.
9.2 The Tenant shall, subject to Section 4.1.8 herein:
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(a) be responsible for all routine and periodic maintenance and
replacement necessary to keep the Premises and their
installations in a good state of repair, reasonable wear and
tear excerpted as would a prudent owner including, any work
required to be carried out by any duly constituted government
authority as a result of the use or occupancy of the Tenant;
(b) replace any glass broken In the Premises including outside
windows and doors on the perimeter of the Premises;
(c) keep in force at times during the Term servicing contracts
with licensed contractors for the service and maintenance of
heating units, air-conditioning units, furnaces (hereinafter
referred to [TEXT CUT OFF] thereof upon demand. In the event
that, during the Term any of the HVAC Units require
replacement, the Tenant shall install a new unit at its own
expense. Upon the expiration or other termination of this
Lease and prior to the return of the Security Deposit, the
Tenant shall deliver to the Landlord a certificate issued by a
licensed service contractor indicating that all HVAC Units are
in a good state of maintenance and repair and are suitable for
operation in accordance with all Laws and the rules and
regulations of all applicable utility authorities;
(d) notify the Landlord, in writing, of any defect or deficiency
in, malfunction of, or damage to, the Premises or any
equipment or Utilities therein or thereon immediately after
same comes to the attention of the Tenant;
9.3 Notwithstanding anything else contained herein, if the
Premises or any part therein or thereof, or any equipment,
machinery, facilities or improvements contained therein or
made thereto, or the roof structure or outside walls of the
Premises or any other structural portions thereof require
repair or replacement or become damaged or destroyed through
the particular use of the Premises by the Tenant, or the
negligence, carelessness or misuse of the Tenant or its
Invitees, or by such persons in any way stopping up or
damaging the HVAC Units, water pipes, drainage pipes or other
equipment or facilities or parts of the Premises, the cost of
repair shall be paid by the Tenant to the Landlord as
Additional Rent within five (5) days after presentation of an
account of such costs incurred by the Landlord.
9.4 The Tenant will not install any equipment which will exceed or
overload the capacity of any utility, electrical or mechanical
facilities in the Premises and the Tenant will not bring onto
the Premises or install any utility, electrical or mechanical
facility or service which the Landlord does not approve. The
Tenant agrees that if any equipment installed by the Tenant
requires additional utility, electrical or mechanical
facilities, the Landlord may, in its sole discretion, if they
are available, elect to install them at Tenant's expense and
in accordance with plans and specifications to be approved in
advance in writing by the Landlord.
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9.5 The Landlord, its employees, contractors and agents shall be
entitled to enter the Premises for any purpose permitted or
contemplated by this Lease including, without limitation, to
effect any repair required or permitted to be made by the
Landlord, to effect any repair which is the responsibility of
the Tenant and which it fails to make when required to view
the state of repair and maintenance of the Premises or any
part thereof, to confirm that the Tenant is complying with its
obligations hereunder (including, without limitation, the
Tenant's obligations respecting Hazardous Substances and
compliance with environmental laws and regulations in respect
to which the Landlord shall be entitled to conduct an
environmental audit or any further testing required to ensure
such compliance) or to obtain information for plans, provided
that such entry is made upon reasonable notice to the Tenant.
In exercising its rights under this section 9.5, the Landlord
shall take reasonable efforts to minimize the interference
with the conduct of the Tenant's business.
9.6 The Landlord shall have the right to do such work in or upon
the Premises as may be necessary to preserve or protect the
Premises.
PART 10 - DAMAGE AND DESTRUCTION
10.1 (a) If the Premises are destroyed or damaged (including,
without limitation, smoke and water damage) as a result of
fire, the elements, accident or other casualty required to be
insured against by the Landlord pursuant to this Lease
pursuant to Section 8.1 herein or otherwise insured against by
the Landlord and not caused by the Tenant, and if as a result
of such occurrence:
(i) the Premises are rendered wholly or partially
untenantable, this Lease will continue in full force
and effect and the Landlord shall, subject to
subsections 10.1(b) and 10.2(a), commence diligently
to restore the Premises to the Base Standard
(hereinafter in this Part 10 to be referred to as the
"Landlord's Restoration Work"), Rent will abate
entirely or proportionately, as the case may be, in
proportion to the area of the Premises rendered
untenantable from the date of the destruction or
damage until the Landlord has completed the
Landlord's Restoration Work. Notwithstanding the
foregoing, Rent will not abate to the extent that the
Landlord's proceeds [TEXT CUT OFF]
(ii) the Premises are not rendered untenantable in whole
or in part, the Lease will continue in full force and
effect, the Rent will not abate and the Landlord
shall, subject to subsection 10.1(b), commence
diligently to carry out the Landlord's Restoration
Work.
(b) Notwithstanding subsection 10.1(a), if the Premises are
damaged or destroyed by any cause whatsoever, and if, in the
opinion of the Landlord's architect, acting reasonably, the
Premises cannot be rebuilt or made fit for the use provided
for in
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this Lease within ninety (90) days of the damage or
destruction, the Landlord instead of carrying out the
Landlord's Restoration work may, at its option, elect to
terminate this Lease by notice in writing to the Tenant. In
the case of such election, the Term and the tenancy hereby
created will expire upon the thirtieth (30th) day after such
notice is given, without indemnity or penalty payable by, or
any other recourse against, the Landlord, and the Tenant
shall, within such thirty (30) day period, vacate and
surrender the Premises to the Landlord. Rent will be due and
payable until the date of termination in accordance with the
provisions of section 10.1 of this Lease.
(c) Upon the Tenant being notified in writing by the Landlord that
the Landlord's Restoration Work has been substantially
completed, the Rent shall re-commence and the Tenant will
forthwith complete the work necessary to restore the Premises
to the condition existing prior to the damage or destruction
(the "Tenant's Restoration Work") and all other work required
to fully restore the Premises for business.
(d) Notwithstanding the foregoing, the Landlord shall be entitled
to change the specifications of the Base Standard as same
existed prior to such damage or destruction and restore
according to plans, specifications, and working drawings other
than those used in the original construction of the Premises,
provided that the Premises, as re-built, will have reasonably
similar facilities and services to those in the Premises prior
to the damage or destruction having regard, however, to the
age of the Premises at such time.
(e) For the purposes of this Part 10, when used in respect of the
Premises or any part thereof, "untenantable" shall mean that
the Premises in question are not reasonably fit for the
Tenant's usual use of same.
PART 11 - TENANT'S ALTERATIONS
11.1 The Tenant may, at any time, and from time to time, at its
expense, paint or decorate the Premises and appurtenances, and
make such changes, alterations, additions and improvements as
will in the judgment of the Tenant better adapt the Premises
for the purpose of its business provided that;
(a) no structural changes, alterations, additions or
improvements shall be made without the written
consent of the Landlord;
(b) all changes, alterations, additions and improvements
shall comply with all Laws;
(c) the Tenant shall pay to the Landlord, upon demand,
the amount of any increase in Realty Taxes or the
cost of the insurance maintained by the
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Landlord over the Premises, to the extent that such
increases are directly and solely attributable to an
action by the Tenant under this paragraph;
(d) nothing herein shall entitle the Tenant to make any
changes to, or installations upon, the roof of the
Premises;
The Landlord shall be entitled, at any time and without notice
to the Tenant, to remove or to rectify, at the expense of the
Tenant, any item which was not erected in compliance with this
section.
11.2 Leasehold Improvements shall become the property of the
Landlord upon installation. The Tenant shall not remove any
Leasehold improvements whether at the expiration or sooner
termination of the Term, unless requested to do so by the
Landlord in which case the Tenant shall remove such Leasehold
Improvements as are designated by the Landlord (provided in no
event shall the Tenant be required to remove any Leasehold
Improvements which form part of the Base Standard) and, if so
requested by the Landlord, restore the Premises to the Base
standard not later than the expiration or sooner termination
of the Tenant's [TEXT CUT OFF] the Premises which may be
caused by installation or removal of the Tenant Property and
leaves the Premises in a neat and tidy condition which the
Tenant hereby covenants to do. The Tenant shall lose its right
(but not the obligation) to remove and retain all Tenant
Property, and all fixtures, furnishings or equipment affixed
in any manner to the Premises not removed on the expiry or
sooner termination of the Term.
11.3 The Tenant shall surrender to the Landlord at the end of the
Term (whether the Term ends by expiry or other termination)
the Premises and all Leasehold Improvements not permitted and
not required to be removed, all in good and substantial repair
and condition in accordance with this Lease. The Tenant shall,
prior to the end of the Term, at its cost, remove from the
Premises any Hazardous substances which are or have been
located, stored or incorporated in or on any part of the
Premises by the Tenant. This provision shall survive the
expiration or earlier termination of this Lease.
11.4 The Tenant shall have the right to erect signs on the Premises
denoting its tenancy therein, provided that such signs conform
with all municipal by-laws governing such signs, and the
Tenant has, prior to erecting the signs, received the written
approval of the Landlord as to the type and placement of the
signs to be erected.
PART 12 - DEFAULTS
12.1 If the Landlord provides to the Tenant written notice of a
default in its obligations contained in this Lease (other than
a default respecting the payment of Rent) and the Tenant does
not rectify such default within ten (10) days thereafter or
during such longer period as may be reasonably required in the
circumstances to cure
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such default, the Landlord shall be entitled to remedy such
default and the coat to the Landlord of doing so (including an
administrative fee of 15% of such costs which shall be deemed
to constitute part of the Landlord's costs) together with
interest thereon at the Prescribed Interest Rate from the date
of default, shall be paid by the Tenant to the Landlord
forthwith upon demand therefor by the Landlord. Nothing in
this section 12.1 shall replace or abrogate the Landlord's
right to exercise any of its other rights hereunder which
rights are in addition to those contained in this section. In
the event of an emergency, the Landlord shall be entitled to
proceed to remedy a default without first providing notice to
the Tenant.
12.2 A default of this Lease shall have occurred if:
12.2.1 the tenant defaults in the payment of any Rent (including
without limitation, any regularly scheduled payment on account
of Additional Rent);
12.2.2 the Tenant defaults in the payment of any Additional Rent
which is not a regularly scheduled payment of Additional Rent,
and the default continues for a period of five (5) days
following notice from the Landlord;
12.2.3 the Tenant fails to cure a default under this Lease (other
than a default respecting the payment of Rent) within ten (10)
days or such longer period as may be reasonably required in
the circumstances to cure such default after receiving notice
from the Landlord to do so;
12.2.4 any property of the Tenant becomes subject to an execution in
an amount in excess of $10,000.00 which remains outstanding
for more than ten (10) days; a receiver of any property of the
Tenant is appointed; the Tenant or any guarantor or
indemnifier of this Lease makes an assignment for the benefit
of creditors or makes any assignment or has a receiving order
made against it under the Bankruptcy Act and Insolvency Act,
or becoming bankrupt or insolvent makes application for relief
under the provisions of any statute now or hereafter in force
concerning bankrupt or insolvent debtors, or any action
whatever, legislative or otherwise, is taken with a view to
the winding up, dissolution or liquidation of the Tenant or
any guarantor or indemnifier of this Lease;
12.2.5 any insurance policy of the Tenant or the Landlord is
cancelled or not renewed by an insurer by reason of the use or
occupation of the Premises;
12.2.6 the Tenant makes any bulk sale or removes any substantial part
of the Tenant Property from the Premises other than pursuant
to a permitted Transfer or by reason of same no longer being
required for the conduct of the Tenant's business provided
that other Tenant [TEXT CUT OFF]
12.2.7 re-entry is permitted under any other provision of this Lease
or in law.
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12.3 In the event of the occurrence of a default as defined in
section 12.2, the then current month's Rent together with the
Rent for the three (3) months next ensuing shall immediately
become due and payable, and at the option of the Landlord the
Term shall become forfeited and void, and the Landlord may
without notice or any form of legal process whatsoever
forthwith re-enter the Premises, anything contained in any
statute or law to the contrary notwithstanding, and may expel
all persons and remove all property from the Premises and such
property may be removed and sold or disposed of by the
Landlord as it deems advisable or may be stored in a public
warehouse or elsewhere at the cost and for the account of the
Tenant without the Landlord being considered guilty of
trespass or conversion or becoming liable for any loss or
damage which may be occasioned thereby, provided, however,
that such forfeiture shall be wholly without prejudice to the
right of the Landlord to recover arrears of Rent and damages
for any antecedent default by the Tenant of its covenants
under this Lease. Should the Landlord at any time terminate
this Lease by reason of any such event, then, in addition to
any other remedies it may have, it may recover from the Tenant
all damages it may incur as a result of such termination.
12.4 The rights of the Landlord in this Lease are cumulative and
not alternatives and reference to any particular right, remedy
or remedies of the Landlord in respect of any default by the
Tenant shall not preclude the Landlord from exercising any and
all of its other rights and remedies in respect thereof,
whether available at law, In equity, by statute, or expressly
provided for herein. No right or remedy shall be exclusive or
dependent upon any other right or remedy, and the Landlord may
from time to time exercise any one or more of such rights and
remedies generally or in combination. The Landlord shall have
the same rights and remedies for collection of Additional Rent
in arrears as it has for the collection of Net Rent whether
such rights exist by virtue of this Lease, statute, common law
or equity.
12.5 The Tenant waives the benefit of any law or statute limiting
the Landlord's right to distress and agrees that none of the
Tenant's goods, fixtures, chattels or other property shall be
exempt from distress for arrears of Rent.
12.6 The Tenant shall not have or exercise any right or remedy with
respect to a default by the Landlord unless it provides to the
Landlord written notice of the default and the Landlord fails
to cure the default within ten (10) days or such longer period
as may be reasonably required in the circumstances to cure
such default.
12.7 The right of the Landlord to recover arrears of Rent and the
right of each party to recover damages for an antecedent
default by the other shall not be affected by the expiry or
termination of this Lease whether by elapse of time or by the
exercise of any right of either the Landlord or the Tenant
pursuant to this Lease.
12.8 No payment by the Tenant or receipt by the Landlord of a
lesser amount than the Rent herein stipulated shall be deemed
to be other than on account of the earlier
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stipulated Rent, nor shall any endorsement or statement on any
cheque or any letter accompanying any cheque or payment of
Rent be deemed an accord and satisfaction, and the Landlord
may accept such cheque or payment without prejudice to the
Landlord's rights to recover the balance of such Rent or
pursue any other remedy provided in this Lease.
PART 13 - LANDLORD'S TITLE
13.1 If the Premises or any part thereof is condemned or declared
unfit for public use by any competent body, the Landlord shall
be entitled to terminate this Lease by notice in writing to
the Tenant.
13.2 The Landlord and the Tenant agree to co-operate with the other
in respect of any expropriation of all or any part of the
Premises, so that each may receive the maximum award in the
case of any expropriation to which they are respectively
entitled at law.
13.3 The Landlord, at any time and from time to time, may sell,
transfer, lease, assign or otherwise dispose of the whole or
any part of its interest in the Premises or any part thereof
or enter into a mortgage of the whole or any part of its
interest In the Premises and upon any party acquiring the
interest of the Landlord to the [TEXT CUT OFF] be released
from all of its [TEXT CUT OFF]
13.4 This Lease and all rights of the Tenant under this Lease are
subject and subordinate to all mortgages now or hereafter made
by the Landlord, except that the holder of any such mortgage
may subordinate and postpone such mortgage to this Lease at
any time by an instrument in writing to such effect registered
against the title to the Premises without any further consent
or agreement of the Tenant. The Tenant, if so requested, shall
attorn to such mortgagee when such mortgagee takes possession
of the Premises and to any purchaser of the Premises and shall
recognize such mortgagee or purchaser as the Landlord under
this Lease.
13.5 The Tenant shall, at its own expense, immediately discharge or
vacate all construction, mechanics' or other liens or
executions that may be filed during the Term against this
Lease, the Premises or any part thereof with respect to any
work or services performed or goods or material furnished at
the request of, for, or on behalf of, the Tenant.
13.6 The Tenant shall not register this Lease or any part thereof
but may register, with the prior approval of the Landlord, a
notice or caveat in respect thereof, which notice or caveat
shall disclose only the existence and Term of this Lease and
such other non-financial terms as the Landlord may approve.
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PART 14 - GENERAL
14.1 A waiver by either party of any breach or non-compliance by the other
party under any provision of this Lease and a waiver by either party of
any term or condition of this Lease shall not be a waiver of any
continuing or subsequent breach or failure of any other provision, term
or condition, and any forbearance or failure to seek a remedy for any
breach or failure shall not be a waiver of any rights and remedies with
respect to such or any subsequent breach or failure.
14.2 In the event that either party shall, by reason of Force Majeure, be
unable to fulfil, or shall be delayed or restricted in the fulfilment
of, any obligation (other than the payment of any money) under any
provision of this Lease, such party shall, so long and to the extent
that any such impediment exists, be relieved from the fulfilment of
such obligation and shall be granted a reasonable period of time to
fulfil the obligation once the Force Majeure ceases to exist and the
other party shall not be entitled to compensation for any resulting
loss, damage, inconvenience, nuisance or discomfort.
14.3 This Lease contains the whole agreement between the parties with
respect to the subject matter of this Lease. There is no promise,
inducement, representation, warranty, collateral agreement or condition
affecting the Premises or any part thereof, the business to be
conducted by the Tenant, or this Lease other than as expressed in this
Lease. All representations and inducements made by either party or
their representatives which are relied upon by the other party are
contained herein and each party disclaims reliance on any other
representation or inducements. The parties agree that nothing contained
in this Lease shall release the Tenant from any of Its obligations
contained in any earlier lease of the Promises, and to the extent that
such obligations remain outstanding as of the commencement of the Term,
such obligations shall become obligations of the Tenant under this
Lease which it hereby covenants to perform.
14.4 The terms and conditions of this Lease including those related to the
provisions of Utilities shall be automatically amended from time to
time to the extent necessary for the Landlord to comply with an
directive, policy or request of a governmental or quasi-governmental
authority acting in the fields of energy, conservation, waste
management and disposal, security or other area of public interest.
14.5 Any notice provided for in this Lease shall be addressed to the
Landlord at the address at which Rent is to be paid pursuant to section
3.2 or in default of such address having been determined a 3700 Steeles
Avenue West, Suite 800, Woodbridge, Ontario, L4L 8ML and to the Tenant
or the Indemnifier at the Premises after the commencement Date and at
the address set forth in paragraph 9 of the Key Item Index prior to
such date. Notices shall be in writing and signed by the party giving
the notice and shall be effectively give by registered mail or by
delivery to the said address. Any written notice so given shall be
deemed to
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have been given three (3) postal delivery days after the day it was so
mailed by registered mail or upon the day it was so delivered. Any
party may, from time to time by notice to the other party [TEXT CUT
OFF]
14.6 To the extent that any provision of this Lease or the application
thereof to any person or circumstance is held to be invalid or
unenforceable by a court of competent jurisdiction, the remainder of
this Lease or the application of such provision to persons or
circumstances other than those to which it is held invalid or
unenforceable shall not be affected thereby and each provision of this
Lease shall be separately valid and enforceable to the fullest extent
permitted by law.
14.7 The Tenant hereby expressly waives the benefits of Section 35 of the
Landlord and Tenant Act and any amendments thereto and of any present
or future act of the Legislature of the Province of Ontario permitting
the Tenant to claim a Set-Off against the Rent to be paid hereunder for
any cause whatsoever.
14.8 Each party at any time and from time to time within ten (10) days after
notice from the other shall execute and deliver to the other a written
statement addressed to such persons as the party requesting the
certificate may require, certifying that this Lease is unmodified and
in full force and effect (or, if modified, stating the modifications
and that the same is in full force and effect as modified), the amount
of the Rent then being paid under this Lease, the dates to which the
same, and the other sums provided in this Lease to be paid by the
Tenant, have been paid, the Commencement Date and duration of the Term
and stating whether or not there is any existing default of which it
has notice, and the particulars and amount of insurance policies on the
Premises.
14.9 Each party agrees that the following certificates shall, in the absence
of proof by the Tenant of a material error therein, be conclusive and
binding in respect of any question of fact or opinion with respect to
the following matters:
14.9.1 a certificate procured by the Landlord from an architect,
professional engineer, land surveyor or other qualified
individual as to: any question of fact concerning the
completion of any construction or other work, either by the
Landlord or the Tenant; the extent to which the completion of
any work or obligation has been delayed by Force Majeure; the
cause of any destruction or damage and the extent and duration
for which the Premises or any part thereof will be incapable
of being used for its intended purposes by reason of any
destruction or damage; and
14.9.2 a certificate procured by the Landlord from a licensed public
accountant including, without limitation, the Landlord's
auditor, respecting any question of fact or opinion concerning
the computation, determination or allocation of Additional
Rent or the proper amount of any payment to the Landlord or
the Tenant under this Lease.
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Any certificate procured by the Landlord shall be prepared
using generally accepted practices and procedures appropriate
to such certificate.
14.10 This Lease may not be amended or altered except by an
instrument in writing signed by the Landlord and the Tenant
and such alteration shall be binding upon the Indemnifier
whether or not it is executed by the Indemnifier.
14.11 The submission by the Landlord to the Tenant of this Lease
shall have no binding force or effect, shall not constitute an
option for leasing the Premises, or confer any rights or
impose any obligations upon either party until the execution
and delivery of this Lease by the Tenant and the Landlord.
14.12 If two or more persons comprise the Tenant, the liability of
each is joint and several. If the Tenant is a partnership or
other business association, the members of which are subject
to personal liability, the liability of each member is joint
and several.
14.13 This Lease shall enure to the benefit of and be binding upon
the parties hereto, and their permitted heirs, executors,
administrators, successors and assigns. No successor or assign
of the Tenant shall be entitled to claim any benefit or to
enforce this Lease unless the Transfer to it was made in full
compliance with the requirements of this Lease, or was
subsequently ratified by the Landlord in writing.
14.14 The Tenant covenants that it has all requisite power and
possesses all licenses, franchises, permits, consents,
approvals and other rights necessary to enable it to enter
into this Lease and carry out its obligations herein.
14.15 Notwithstanding any rule or maxim of construction to the
contrary, any ambiguity or uncertainty shall not be construed
against any [TEXT CUTS OFF AT BOTTOM OF PAGE]
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IN WITNESS WHEREOF the parties hereto have executed this Lease.
SIGNED, SEALED AND DELIVERED ) Landlord:
in the presence of )
) N.H.D. DEVELOPMENTS LIMITED
)
)
) PER:
---------------------------------------------
) Name:
) Title:
)
) I/We have authority to bind the Corporation.
)
) Tenant:
)
) STAR BEDDING PRODUCTS (1986)
) LTD.
)
)
) PER:
---------------------------------------------
) Name:
) Title:
)
) PER:
---------------------------------------------
) Name:
) Title:
)
) I/We have authority to bind the Corporation.
)
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SCHEDULE "B"
In this Lease the following expressions shall have the following meanings:
"ADDITIONAL RENT" shall mean all amounts payable by the Tenant to the Landlord
or to any other person pursuant to this Lease (other than Net Rent);
"BASE STANDARD" means the state of the Premises when first obtained by the
Tenant before the addition of any modifications by the Tenant or by the Landlord
in accordance with this Lease on behalf of the Tenant. Notwithstanding the
foregoing, for the purpose of Part 10 of this Lease "Base Standard" shall mean
in respect of the building premises which are finished with the standard
building base systems in respect of electricity and plumbing and which have
installed herein all perimeter windows, and bare concrete floors and walls, in
compliance with the then applicable building standards.
"BUSINESS TAXES" means business taxes or assessments or any other taxes,
assessments, rates and levies in respect of the existence of, or any use,
enjoyment, possession or occupancy of, or business carried on in or upon the
whole or any portion of the Premises imposed by any governmental authority
having jurisdiction, but does not include Realty Taxes.
"CHANGE IN CONTROL" means, in the case of any corporation or partnership, the
transfer, by sale, assignment, operation of law (transmission on death),
cancellation or redemption, or mortgage, trust, issuance from treasury,
cancellation or redemption, or otherwise, of any shares, voting rights or
interest, which will result in a change of the identity of the person
exercising, or who might exercise, effective control of such corporation or
partnership whether directly or indirectly, unless such change occurs as the
result of trading in shares listed upon a recognized stock exchange.
"COMMENCEMENT DATE" means the first day of the Term.
"DESIGN SPECIFICATIONS" has the meaning provided in the Fixturing Schedule, if
such a schedule is attached to this Lease.
"FIXTURING SCHEDULE" means the provisions set forth in Schedule "E" to this
Lease, if such a schedule is attached to this Lease.
"FORCE MAJEURE" means a fire, inclement weather, strike, lock-out or other
casualty or contingency beyond the reasonable control and not the fault of the
party thereby affected (including, without limitation, any delays caused by any
failure of a utility or other authority to approve any application of the
Landlord or take any action required by the Landlord to carry out its
obligations hereunder), where the effects of such casualty or contingency are
not avoidable by the exercise of reasonable effort or foresight by such party
(but does not include insolvency, lack of funds, or other financial casualty or
contingency).
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"HAZARDOUS SUBSTANCES" means any contaminant, pollutant, dangerous substance,
potentially dangerous substance, noxious substance, toxic substance, hazardous
waste, flammable, explosive, radioactive material, urea formaldehyde foam
insulation, asbestos, PCBs and substances or any other materials now or
hereafter declared or defined to be hazardous, toxic, contaminants or pollutants
in or pursuant to any Laws.
"INVITEES" when used in respect of the Tenant shall include its officers,
directors, employees, customers, suppliers, clients, contractors, agents,
invitees and other persons on the Premises for the benefit of the Tenant or for
whom it is responsible at law.
"KEY ITEM INDEX" shall mean the index identified as such and attached to the
front of this Lease.
"LAWS" shall mean the laws, by-laws, ordinances, orders, rules and regulations
of all county, municipal, regional, provincial or federal government or
governmental authority having jurisdiction over the Tenant or the Premises in
force during the Term;
"LEASEHOLD IMPROVEMENTS" means all fixtures, improvements, installations,
alterations and additions from time to time made, constructed, erected or
installed In or to the Premises with the exception of the Tenant Property;
"MANAGER" means the party set forth in paragraph 6 of the Key Item Index being
the Landlord's authorized agent and manager for the Premises or such replacement
as the Landlord may appoint from time to time.
"MORTGAGE" includes a mortgage, pledge, charge, hypothec, privilege, encumbrance
or any other financing arrangement and "Mortgagee" means the holder of any of
the foregoing.
"PERSON" means any individual, corporation, partnership, trust, other legal
entity or other business association and includes a government or departmental
subdivision thereof.
"PREMISES" means the building described municipally in paragraph 1 of the Key
Item Index which contains approximately the number of square feet set out in
paragraph 3 of the Key Item Index.
"PRESCRIBED INTEREST RATE" means, with respect to any period, a rate of interest
which is five (5) percentage points per annum above the rate of Interest per
annum established by the Landlord's bank, as a reference rate of interest to
determine the interest rates such bank will charge for Canadian dollar
commercial loans to its customers in Canada and which such bank quotes or
publishes as its "prime rate".
"REALTY TAXES" means all real property, municipal, school or local improvement
taxes, assessments or charges or any other taxes, assessments or charges imposed
)on or in respect of any real property from time to time by any governmental
authority, including any costs incurred by the Landlord in determining or
verifying the propriety or reasonableness of or contesting the
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same in good faith, excluding Business Taxes and any income or profits taxes
upon the income of the Landlord, to the extent any such tax is not imposed in
lieu of any tax, assessment or charge upon or in respect of the Premises or upon
the Landlord in respect thereof. If any other taxes, assessments or charges are
imposed by any governmental or regulatory authority upon or in respect of all or
any portion of the Premises, the revenues therefrom or the Landlord, in
substitution for or in addition to any Realty Taxes from time to time imposed,
then any such other tax, assessment or charge shall be deemed to be a Realty
Tax.
"RENT" means Net Rent and Additional Rent.
"RULES" means the rules, procedures and requirements as amended and supplemented
from time to time (initially as set forth in Schedule "C" to this Lease),
governing the manner in which the Tenant shall operate and conduct its business.
"SALES TAXES" shall mean any goods and services, sales, business transfer,
multi-stage sales, use, consumption, value-added or other similar taxes imposed
by the ) government of Canada, or by any provincial or local government, upon
the Landlord or the Tenant on or in respect of this Lease, the payments made by
the Tenant hereunder or the goods and services provided by the Landlord,
including but not limited to, the rental of the Premises and provision of
administrative services to the Tenant or to others.
"TENANT PROPERTY" means the trade fixtures, chattels, merchandise, personal
effects and signs of the Tenant in or upon the Premises.
"TERM" shall mean the period set forth in paragraph 2 of the Key Item Index and
any further period during which the Tenant is in possession of the Premises
pursuant to a validly exercised right to extend the Term granted pursuant to
this lease;
"TRANSFER" means any assignment, sublease, Change in Control, or parting with
possession, or any other transaction or occurrence (including an expropriation,
expropriation, amalgamation, receivership, seizure by execution or other legal
process or the granting by the Tenant of a pledge, Mortgage or other security
interest) which as or might have the effect of changing the identity of the
Tenant or the person controlling the Tenant, or, changing the identity of the
person having use, occupancy or possession of the whole or any part of the
Premises, whether such change is or might be immediate, deferred, conditional,
exclusive, non-exclusive, permanent or temporary.
"UTILITIES" means water, sewer, gas, fuel, electricity, telephone, waste
disposal and other utilities or services or any combination thereof.
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SCHEDULE "C"
RULES
1. The skylights and windows that reflect or admit light into passageways
or into any place in the Premises shall not be covered or obstructed by
the Tenants, and no awnings shall be put up without the prior written
consent of the Landlord.
2. If any sign, advertisement or notice shall be inscribed, painted or
affixed by the Tenant on or to any part of the Premises or the Premises
whatsoever, except with the written consent of the Landlord, then the
Landlord shall be at liberty to enter in or on the Premises or any part
thereof and pull down and take away and remove any such sign,
advertisement or notice, and the expense thereof shall be payable by
the Tenant.
3. The Tenant shall not bring in or take out, position, construct, install
or move any safe, business machine or other heavy office equipment
without first obtaining the consent in writing of the Landlord. In
giving such consent, the Landlord shall have the right to seek
appropriate professional advice at the Tenant's expense and to
prescribe, in its sole discretion the weight permitted and the position
thereof, and the use and design of planks, skids or platforms to
distribute the weight thereof. All damage done to the Premises by
moving or using any such heavy equipment or other office equipment or
furniture shall be repaired at the expense of the Tenant.
4. No public or private auction or other similar type of sale of any
goods, wares or merchandise Shall be conducted in or from the Premises
without the written permission of the Landlord.
5. The toilets, urinals, sinks and other water apparatus shall not be used
for any purposes other than those for which they were constructed, and
no sweepings, rubbish, rags, ashes or other substances shall be thrown
therein. Any damage resulting by misuse shall be borne by the Tenant.
6. No showcases or other articles shall be put in front of or affixed to
any part of the exterior of the Premises.
7. No space In the Premises shall be used for any immoral or illegal
purpose, lodging, sleeping, or the storage of personal effects or
articles other than those required for business purposes.
8. If the Tenant desires telephone or other connections, the Landlord will
direct the installers/electricians as to where and how the wires are to
be introduced, and without such directions no boring or cutting for
wires will be permitted. No pipes or wires or conduits will be
permitted which have not been ordered or authorized in writing by the
Landlord, and no outside radio or television aerials shall be allowed
on the Premises
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without authorization in writing by the Landlord. The Tenant shall not
mark, drill into, bore or cut or in any way damage the walls, ceilings
or floors of the Premises without the Landlord's prior written
approval. No broadloom or carpeting shall be affixed to the Premises by
means of a non-soluble adhesive or similar product.
9. No additional locks or bolts of any kind shall be placed upon any of
the doors or windows by the Tenant, nor shall any changes whatsoever be
made to existing locks or the mechanisms thereof except by the
Landlord, at its option. The Tenant shall not permit any duplicate keys
to be made. Additional keys as are reasonably required shall be
supplied by the Landlord when requested by the Tenant In writing and
such keys shall be paid for by the Tenant, and upon termination of the
Tenant's Lease, the Tenant shall surrender to the Landlord all keys to
the Premises and the Premises.
10. Nothing shall be placed on the outside of window Bills or projections
of the Premises.
11. The Tenant shall not permit any commercial cooking in the Premises
without the written consent of the Landlord.
12. All garbage and refuse shall be kept in the kind of containers
specified by the Landlord and shall not be burned in or about the
Premises.
13. The Landlord shall have the right to make Such other and further
reasonable rules as in its judgment may from time to time be helpful
for the safety, care, cleanliness and appearance of the Premises and
the Premises, and for the preservation of good order therein, and the
same shall be kept and observed by the Tenant and its Invitees.
14. The Tenant shall not Install, store, or otherwise place anything on the
roof of the Building without the written permission of the Landlord,
which [TEXT IS CUT OFF AT END OF PAGE]
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SPECIAL PROVISIONS
[PARAGRAPH NUMBERING NOT VISIBLE ON THIS PAGE BUT INFERRED FROM NUMBERING ON
FOLLOWING PAGES.]
1. Inconsistencies
In the event of any inconsistency between the terms of this Schedule "D" and the
terms of the Lease, the terms of this Schedule "D" shall apply to the extent of
the inconsistency.
2. Courtesy of Occupancy
It is agreed by the parties hereto that the Tenant shall, upon execution of this
Lease, be entitled to occupy the Building during the period from December 1,
1995 until the commencement date. During such period, the Tenant shall not be
required to pay the amounts which would otherwise have been payable by the
Tenant in respect of Net Rent, Operating Costs and Realty Taxes. However, the
Tenant will be required to pay for utilities during such period. The Tenant
shall comply with all of the other terms of this Lease which shall apply,
mutatis mutandis, to the Tenant's occupation of the Building.
3. Rent Free Period
Notwithstanding anything else contained in this Lease, during the period
commencing on January 1, 1996 and ending upon February 28, 1996 the Tenant shall
be relieved from its obligation to pay Net Rent provided that the Tenant
complies with all of its obligations contained in this Lease during such period
and the Lease is not repudiated by the Tenant pursuant to the Bankruptcy and
Insolvency Act (Canada) during such period or prior to its commencement.
4. Management Fee
Notwithstanding what is written in the Lease, the Landlord acknowledges that no
management fee shall be charged to the Tenant during the Lease term. Such fee
has been excluded from the maintenance charge listed on the Key Item Index.
5. Building Area
it is understood and agreed that the rental of the Building is based upon
approximately 53,680 square feet of net rentable area. Prior to the commencement
of the Term, the Landlord shall provide an architect's or a land surveyor's
certificate determining the exact net rentable area, and that any adjustments in
the actual area of the Building shall result in a corresponding adjustment in
rent payable. Calculation of net rental area shall be made in accordance with
the applicable standards of T.R.E.B..
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6. Signage
The Landlord will, at the Tenant's expense, add the Tenant's corporate name
(Serta Mattress Company or Serta with the official logo), or other additional
names, to all present and planned, internal and external directory boards and
panels used for displaying the Building's Tenant roster and unit numbers.
7. Structural Repairs
The Landlord shall be responsible for structural repairs to the Building
including roof, walls, and floors and its services to the Building not resulting
from the Tenant's negligence or default. The Landlord shall undertake any such
repairs promptly upon receipt of notice from the Tenant, in accordance with the
provisions of the Lease to be entered Into for the Premises.
8. Mechanical Installations
The Landlord shall, at its expense, ensure that the Premises and all mechanical,
heating, ventilating, air-conditioning (if applicable), plumbing (including
sprinklers) and the electrical equipment in the Leased Premises are in good
repair and working order as at the date of possession of the Premises. Provided
that the Tenant complies with its obligations to maintain the same, the Landlord
shall, at Its sole cost and expense, repair or replace any heat exchanger or
compressor in an H.V.A.C. Unit requiring repair or replacement during the first
year of the Term.
9. Option to Extend
9.1 The Tenant may extend this Lease for one period of five (5) years
(which period is called the commencing on the day following the date of
expiration of the initial term of this Lease, provided that the Tenant
shall only be entitled to extend this Lease in the event that it:
(a) has duly and regularly paid the Rent and has observed and
performed each and every one of the covenants and agreements
herein to be performed by the Tenant, on a timely basis, until
the time that the option is exercised and thereafter until the
Extension takes effect;
(b) is the original tenant under this Lease and is itself in
possession of the whole of the Premises;
(c) advises the Landlord in writing (the "Notice") that it wishes
to extend this Lease not more than 12 months and not less than
6 months prior to commencement of the Extension, failing which
this right of Extension shall be rendered null and void.
9.2 if the Tenant exercises its right to extend in accordance with the
foregoing, this Lease shall be extended upon the same terms and
conditions herein contained, save and except as follows:
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(a) the Tenant shall only be entitled to one Extension for the
period referred to above so that there will be no further
right to extend following the expiry of the right to extend
granted herein. For greater certainty, it is hereby stipulated
that if the Tenant exercises the within right of Extension in
accordance with this Lease, the Tenant shall be entitled to
lease the Premises for a total of five (5) years following the
expiration of the initial term of this Lease, unless this
Lease is sooner terminated;
(b) the Landlord will not be required to perform the Landlord's
Work, if any, and the Tenant will not be required to perform
the Tenant's Work, if any, and the Tenant will riot be
entitled to any leasehold improvement allowance, tenant
inducement or Rent free period;
(c) the Net Rent payable during the Extension shall be the current
fair market rental value of the Premises as of the date that
the Notice is given to the Landlord, provided that, in no
event shall the Net Rent during any year of the Extension be
less than the Net Rent which was payable by the Tenant during
the last year of the initial term. In the event that the Net
Rent which shall be applicable during the Extension has not
been mutually agreed upon by the Landlord and the Tenant, by
reason of the parties' inability to agree upon the current
fair market rental of the Premises within one month after the
Notice is received by the Landlord, the Tenant shall be
entitled to revoke the Notice by writing to the Landlord with
such one month period (in which case the Notice shall be
deemed to have never been sent), failing which the said fair
market rental shall be determined by arbitration by a single
arbitrator chosen by the Landlord and the Tenant, and if they
cannot agree upon the arbitrator within 5 days after a written
request for arbitration by either party to the other, either
party may apply to a judge for the appointment of an
arbitrator in accordance with the provisions of the
Arbitrations Act (Ontario). The provisions of the Arbitrations
Act shall govern the arbitration and the decision of the
arbitrator shall be final and binding upon the parties and
there shall be no appeal therefrom. The arbitrator shall be
Instructed to render its decision no later than 15 days prior
to the commencement of the Extension. All documents and
proceedings with respect to the arbitration are to be kept
confidential by each of the parties.
(d) the maintenance fee which shall apply during the Extension
shall increase by an amount equal to the amount determined by
multiplying the maintenance fee payable during the original
term of the Lease by the cumulative C.P.I. from the
commencement of the Term to the date of the commencement of
the Extension;
(e) the Landlord may require the Tenant to execute and deliver to
the Landlord prior to the commencement of the Extension, the
Landlord's then standard form of extension agreement.
9.3 The exercise of the within right of Extension is solely within the
control of the Tenant and nothing contained in this Lease, including,
without limitation, this Schedule, obligates or requires the Landlord
to remind the Tenant to exercise the within right of Extension.
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9.4 "C.P.I." means (a) the Consumer Price Index (All items for Regional
cities, base year 1986=100) for the city Toronto published by
Statistics Canada (or by a successor or other governmental agency,
including a provincial agency), or (b) if the Consumer Price index is
no longer published, an index published in substitution for the
Consumer Price Index or any replacement index designated by the
Landlord. If a substitution is required, the Landlord will make the
necessary conversions. If the base year for the Consumer Price Index
(or the substituted or replacement index) is changed by Statistics
Canada (or by its successors or the [ILLEGIBLE]
10. Landlord's Work
The Landlord shall complete, at Its own cost, and in good and workmanlike manner
and in accordance with all federal, provincial, municipal and other laws,
by-laws, building codes, rules and regulations relating to the same, using first
class materials, on or before December 1, 1995, the following work on the Leased
Premises. Before commencement of Landlord's Work both Tenant and Landlord shall
meet at 53 Courtland Avenue to discuss the following work:
(a) Office Space
(i) All existing lighting (fluorescent and track lights)
shall remain;
(ii) Install window where indicated in Schedule "A".
(b) Warehouse Space
(i) Installation of 2 truck - level doors with levellers
and seals (consistent with existing doors) in
location to be agreed;
(ii) Remove block walls where indicated in Schedule "A"
and ensure floor is In good shape, repair, properly
sealed and consistent with the entire warehouse
floor;
(iii) Demolish and remove finished showroom as indicated in
Schedule"A" Demolished area shall be free and clear
of any obstructions and shall be consistent with
existing warehouse space. All walls shall be patched,
repaired and painted and all doors entering the
warehouse shall be in proper working order and in
good repair;
(iv) Clean and repair washroom facilities located on west
side of the Building (adjacent to truck-level
shipping doors).
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