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EXHIBIT 10.18
ADDENDUM TO SUBLEASE MADE AS OF JULY 2, 1997 (the "Sublease")
BETWEEN BELL SPORTS CANADA INC. ("Sublessor") AND
SPORTRACK INTERNATIONAL INC. (previously known as ADVANCED
ACCESSORY SYSTEMS CANADA INC.) ("Sublessee")
Reference is hereby made to that certain Sublease agreement dated July 2,
1997 between Bell Sports Canada Inc. and Advanced Accessory Systems Canada Inc.
(hereinafter the "Sublease").
All defined terms used herein shall have the meanings ascribed thereto in the
Sublease.
The parties hereby agree to amend the Sublease as follows:
1.0 The Gross Leasable Area of the Sublease Area shall be 65,074 square feet
situated on the ground floor.
1.1 The Gross Leasable Area of the Sublease Area shall be made up of the
following areas:
a. Factory 46,772 sq. ft.
b. Office Space (as presently occupied) 3,008 sq. ft.
c. Cafeteria (Pro Rata Share) 1,149 sq. ft.
d. Compressor (Pro Rate Share) 229 sq. ft.
e. Tool Room 340 sq. ft.
f. Holding Area 2,400 sq. ft.
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Subtotal A 53,898 sq. ft.
f. New Distribution Centre 11,176 sq. ft.
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Subtotal B 11,176 sq. ft.
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Total Gross Leasable Area 65,074 sq. ft.
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2.0 The total basic rent per annum for the Subleased area shall be
$254,510.39 plus GST and QST calculated on the basis of total Gross Leaseable
Area (as set out above) on the following square footage rental charges. The rent
is payable in equal consecutive monthly installments of $21,209.20 plus GST and
QST due on the first day of each month in advance.
a. Factory $3.64/sq. ft. $170,250.08
b. Office Space $3.64/sq. ft. $ 10,949.12
Leasehold Improvement fee $2.76/sq. ft. $ 8,302.08
c. Cafeteria $3.64/sq. ft. $ 4,182.36
Leasehold Improvement fee $3.07/sq. ft. $ 3,527.43
d. Compressor Room $3.64 sq. ft. $ 833.56
e. Tool Room $3.64 sq. ft. $ 1,237.60
f. Holding Area $3.64 sq. ft. $ 8,736.00
g. New Distribution Centre $4.16 sq. ft. $ 46,492.16
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Total basic rent per annum $254,510.39
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2.1 In the event that the Sublease is extended beyond June 30, 1998 and for
each of the successive lease years thereafter the basic rent will be increased
as set out in Article III, section 3.1.2 of the Lease.
2.2 In the event that the Sublease extends beyond December 31st, 2003 the
Leasehold Improvement fees of $2.76 and $3.07 per square foot shall be canceled
effective December 31, 2003.
3.0 In addition to the basic rent as set out in 2.0 and 2.1, the Sublessee
shall pay to the Sublessor operating costs fixed at the sum of $1.12 per square
foot for the total Gross Leasable Area of Subleased Area. This annual operating
cost of $72,882.88 plus GST and QST shall be payable in equal consecutive
monthly installments of $6,073.57 plus GST and QST due on the first day of each
month in advance.
3.1 In the event that the Sublease is extended beyond June 30, 1998 and for
each of the successive lease years thereafter the operating costs will
be adjusted to reflect the actual increases of such operating costs to the
Sublessor including business taxes (based on the value of the entire Leased
Premises as assessed by the city of Granby), utilities, maintenance, etc.
Within thirty (30) days following the commencement of any renewal period the
Sublessor shall deliver to the Sublessee an estimate as to operating costs for
such renewal period taking into account any increase as herein provided. The
Sublessee
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shall pay to the Sublessor operating costs fixed in accordance with such
estimate which such estimate shall be reasonable in all regards. In the event
that the city of Granby directly charges the Sublessee its share of the business
taxes for the total Gross Leasable Area of the Subleased Area instead of
charging the Sublessor for the entire Leased Premises as set out in the Lease,
the Sublessor agrees to exclude the business taxes portion of the operating
costs chargeable to the Sublessee.
3.2 The operating costs cover business taxes, utilities (e.g. hydro, water,
gaz, etc.), building maintenance (internal and external) including but
not limited to snow removal, grass cutting, landscaping, office cleaning,
general garbage pickup (not including compactor charges or compactor garbage
pickup), general repairs needed to the building, general repairs to the alarm
system, repair to the air conditioning, ventilation and heating, and repairs to
the compressors, transformers, electrical wiring and air lines.
4.0 The term of the Sublease shall begin from the Effective Time and expire on
June 30, 1998.
4.1 The Sublease will be renewed for a further term of twelve (12) months from
the date of expiration under the same terms and conditions of the existing
Sublease as they exist on the date of expiration. Notwithstanding the foregoing,
each of the Sublessee and Sublessor may terminate the Sublease or any renewal
thereof by giving twelve (12) months prior written notice to the Sublessor or
Sublessee as the case may be in which event the Sublease shall terminate twelve
(12) months following the date of receipt of such notice. Written notice shall
be hand delivered to Al McCaughen or Josh Greenberg if such notice is coming
from the Sublessee and hand delivered to Jean Maynard or Richard Bedard if such
notice is coming from the Sublessor.
5.0 The Sublessor and Sublessee agree to share on a pro rata basis of 2/3 and
1/3 respectively the costs of mail delivery and pickup, a receptionist, and the
following office supplies: coffee and all coffee supplies such as cream, sugar,
cups, etc., water, soap, toilet paper, paper towels for washrooms.
6.0 The Sublessor agrees to move the compactor to the Sublessor's manufacturing
area at its own expense and costs. The Sublessee agrees not to use such
compactor after it has been moved and agrees to make all arrangements by the
time the compactor is moved to obtain a compactor for its own use including the
equipment and periodic pick up all at its own expense and costs.
7.0 The Sublessor agrees to provide Sublessee 17 parking spaces in front of the
building beginning from the north side of the main entrance doors and extending
to the north end of the parking lot to be used for parking only of its employees
and visitors without additional charge. The Sublessor shall use the remaining
parking spaces beginning directly in front of the door and extending to the
south end of the parking lot to be used only for its employees and visitors.
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7.0.1 The Sublessee shall have the right at its own expense to affix a door to
an opening of the drilling area and lock same door only after regular business
hours and on weekends provided that the door is approved by the Sublessor prior
to being affixed and that a key for the lock of same door be given to the
Sublessor. The Sublessor shall have unrestricted access to the drilling area
during regular business hours, and at other times upon prior request to the
Sublessee, which request shall not be unreasonably withheld by the Sublessee.
7.0.2 The Sublessee shall have the right at its own expense to erect walls to
close off the foam weighing area in a manner agreeable to the Sublessor subject
to Article X of the Lease. The Sublessee shall also have the right at its own
expense to extend the second floor, presently over the drilling area, over the
foam weighing area at the same height and specification as the existing second
floor subject to Article X of the Lease.
7.0.3 The Sublessee shall have the right at its own expense to make any
improvements, alterations, additions or repairs to the Subleased Area subject to
Article X of the Lease.
8.0 Throughout the term of this Sublease and any renewal thereof, Sublessee
shall take out and keep in force:
8.0.1 comprehensive general liability insurance with respect to the
business carried on in or from the Subleased Area and the use and
occupancy thereof for bodily injury and death and damage to property of
others in an amount of at least two millions dollars (2,000,000$) for
each occurrence or such greater amount as Sublessor may from time to
time reasonably require;
8.0.2 all risks insurance including the perils of fire, extended
coverage, leakage from sprinkler and other fire protective devices,
earthquake, collapse and flood in respect to furniture and other
movables, equipment, inventory, securities and stock-in-trade, fixtures
and leasehold improvements located within the Subleased Area and such
other property located in or forming part of the Subleased Area,
including all mechanical or electrical systems (or portions thereof)
installed by Sublessee in the Subleased Area, the whole for the full
replacement cost (without depreciation) in each such instance;
8.0.3 if any boiler or pressure vessel greater than fifteen (15) pounds
of pressure is operated in the Subleased Area, boiler and pressure vessel
insurance with respect thereto;
8.0.4 such additional insurance as Sublessor may request following a
request to this effect by a lending institution or any other event;
8.1 All policies of insurance shall:
8.1.1 be in form satisfactory to Sublessor;
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8.1.2 be placed with insurers reasonably acceptable to Sublessor; and
8.1.3 provide that they will not be canceled or permitted to lapse
unless the insurer notifies Sublessor and its Landlord in writing at
least thirty (30) days prior to the date of cancellation or lapse. Each
such policy shall name Sublessor and its Landlord and the hypothecary
creditor that the Sublessor may designate as additional named insured
as its interest may appear. Each comprehensive general liability
insurance policy will contain a provision of cross-liability or
severability of interests as between Sublessor and Sublessee. All other
policies referred to above shall contain a waiver of subrogation rights
which Sublessee's insurers may have against Sublessor, Sublessor's
insurers and persons under Sublessor's care and control. Sublessee
hereby releases and waives, and will hold the Sublessor harmless, any
and all claims against Sublessor and those for whom Sublessor is in law
responsible with respect to occurrences required to be insured against
by Sublessee hereunder, provided that the Sublessee shall retain its
recourses against the Sublessor to the extent that any claim of the
Sublessee is not covered by its insurance policies as herein
stipulated, and to the extent it should not have been covered pursuit
to this Sublease. Sublessee shall from time to time furnish Sublessor
with certified copies of all such insurance policies or certificates
thereof and the renewals thereof.
8.2 Sublessee agrees that should the Sublessee fail to take out or keep in
force such insurance, Sublessor will have the right to do so and to pay
the premiums therefor and in such event Sublessee shall repay to
Sublessor on demand the amount paid as premiums.
9.0 The Sublessee agrees that its employees who wish to smoke will be
restricted to smoking in their own offices, if they have an office, or in
the cafeteria, if they do not have an office.
10.0 Sublessee agrees to defend, indemnify, and hold harmless Sublessor from and
against any and all losses, damages, costs, claims, lawsuits, judgments,
settlements and expenses including without limitation attorney's fees and
court costs resulting from or in connection with any breach of this
agreement by the Sublessee or any actions or omissions by the Sublessee,
its directors, officers, employees, agents and other persons for which it
is at law responsible.
11.0 Sublessor agrees to defend, indemnify, and hold harmless Sublessee from and
against any and all losses, damages, costs, claims, lawsuits, judgments,
settlements and expenses including without limitation attorney's fees and
court costs resulting from or in connection with any breach of this
agreement by the Sublessor or any actions or omissions by the Sublessor,
its directors, officers, employees, agents and other persons for which it
is at law responsible.
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12.0 The Sublessor agrees and accepts to provide the Sublessee free usage and
utilization of the following equipment
a) compressor
b) alarm system
c) shipping doors #9 and #10
13.0 The Sublessor agrees and accepts that the Sublessee shall be allowed to
post a sign or billboard on the exterior of the leased premises in
conformity with zoning and municipal by-laws..
14.0 The Sublessor agrees that the Sublessee shall have access at all times to
its premises, without restrictions from the Sublessor.
15.0 If during the term of the Sublease, the building is completely or partially
destroyed or damaged by fire or other cause and that destruction or damage
prevents the Sublease to carry out business in the ordinary course for a
period of three months or more, the Sublessee shall have the right to
cancel the lease without having to pay compensation to the Sublessor, the
whole with effect as of the date of such damage or destruction.
Notwithstanding such right of cancellation, the Sublessee shall be
responsible for such damage or destruction if the damage or destruction is
determined to be caused by the Sublessee, its directors, officers,
employees, agents and other persons for which it is at law responsible,
through their actions, omissions, negligence or other.
16.0 The parties hereby agree that the provision of Article XX of the Lease
shall apply to this Sublease, mutatis mutandis, provided however that
section 20.1.8 shall be amended by inserting at the end of the phrase,
"following written notice of 15 days."
All of the terms and conditions of the Sublease shall remain in full force and
effect as amended hereby.
Signed this 23rd day of October, 1997, in the city of Granby, Quebec
Sublessor Sublessee
Bell Sports Canada Inc. SportRack International Inc.
per: /s/ Al McCaughen per: /s/ Jean Maynard
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Al McCaughen, President Jean Maynard, President