Exhibit 10.31
ROSEDALE WALLCOVERINGS INC.
LEASE OF ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
LEASE NET, FREE-STANDING.IND
INDEX
PART 1 - DEMISE AND INTERPRETATION
1.1 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
3.3 INTENTIONALLY DELETED
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 Insurance
4.1.7 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
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
9.6 Preservation of Premises
.../2
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INDEX CONTINUED...
PART 10 - DAMAGE AND DESTRUCTION
10.1 Destruction of Building
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 Tenant's Covenants
12.2 Default
12.3 Re-Entry
12.4 Remedies Generally
12.5 Distress
12.6 Default by Landlord
12.7 Effect of Termination
12.8 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
SCHEDULES:
"A" - Optional
"B" - Definitions
"C" - Rules
"D" - Special Provisions
"E" - Fixturing Schedule
"E-l" - Landlord's Work
"F" - DELETED
"G" - Option to Extend
KEY ITEM INDEX
1. BUILDING
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
2. TERM
Ten (10) years commencing on November 1, 1994 and ending on October 31,
2004.
3. SQUARE FOOTAGE OF THE BUILDING
47,104
4. USE
Warehousing and distribution of wallpapers and related office, studio and
distribution uses.
5. NET RENT
ANNUALLY MONTHLY
$3.75 per square foot per annum. $176,640.00 $14,700.00
5.1 MANAGEMENT FEE
$250.00 per month.
6. MANAGER AND MANAGER'S ADDRESS
MANAGER: Sorbara Services Inc.
ADDRESS: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
7. RENT DEPOSIT
$12,953.60
8. SECURITY DEPOSIT
N/A
9. TENANT' S ADDRESS FOR SERVICE PRIOR TO COMMENCEMENT DATE
c/o Torkin, Manes, ▇▇▇▇▇ & ▇▇▇▇▇
Barristers and Solicitors
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇. ▇▇▇▇▇▇▇
SCHEDULES:
"A" - Optional
"B" - Definitions
"C" - Rules
"D" - Special Provisions
"E" - Fixturing Schedule
"E-1" - Landlord's Work
"F" - DELETED
"G" - Option to Extend
LEASE NET, FREE-STANDING. IND
THIS LEASE, made on the 6 day of July 1994
BETWEEN:
N.H.D. PROPERTIES LIMITED
(hereinafter called the "Landlord")
OF THE FIRST PART;
- and -
ROSEDALE WALLCOVERINGS INC.
(hereinafter called the "Tenant")
OF THE SECOND PART;
PART 1 - DEMISE AND INTERPRETATION
1.1 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.
1.2 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.
1.3 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 or the Building unless 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.
1.4 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
2.1 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.
PART 3 - NET RENT
3.1 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 rates 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 on 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 diem rate of 1/365th of the then annual
Net Rent.
3.2 The Tenant covenants to pay Rent without any deduction, abatement or
set of f 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 on 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.
3.3 INTENTIONALLY DELETED.
3.4 The parties acknowledge that the Tenant has deposited 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.
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PART 4 - TENANT'S COVENANT TO PAY OPERATING COSTS,
TAXES AND UTILITIES
4.1 The Tenant shall pay:
.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;
.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
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, if on any such payment date the
Landlord has not received from the Tenant sufficient tax instalments
to pay the full amount of the Realty Taxes then owing, the Tenant
shall forthwith, upon demand, pay to the Landlord the amount of the
deficiency.
If the first and last years of the Term are not full calendar years,
the Tenant shall pay the Realty Taxes for those years (pro-rated
accordingly) as estimated by the Landlord, upon demand, provided
that no demand may be made unless the Realty Taxes demanded are
payable, paid or will not fall due until after the end of the Term.
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;
.3 any Sales Taxes upon demand. The Landlord shall, upon the request 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 directly to the appropriate authorities when due all water rates
that may be levied, rated, charged or assessed against the Premises,
such amounts to be estimated by the Landlord and paid by the Tenant
to the Landlord monthly;
.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
.6 to the Landlord on a monthly basis the cost of the insurance
maintained by the Landlord pursuant to Section 8.1 of this Lease,
which insurance the Landlord hereby warrants shall be competively
priced;
.7 to pay to the Landlord, on a monthly basis on the first day of the
month, a management fee at the rate specified in paragraph 5.1 of
the Key Item Index.
PART 5 - TENANT'S OTHER COVENANTS
5.1 The Tenant covenants with the Landlord that it shall:
.1 observe, and ensure that all of its Invitees observe, the Rules;
.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 necessary for the conduct of the Tenant's
business in compliance with the use permitted in this section.
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 in, or upon, the Premises;
.3 not do or allow any act of waste, damage or injury to the Building
or to the Premises or any fixtures, improvements, alterations,
additions or equipment in or upon the Building or the Premises and
that the Tenant shall not bring into the Premises any item that by
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reason of its weight, size or operation might damage any part of the
Premises;
.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 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 hours to exhibit the Premises to prospective tenants;
.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 equal to 150%
of the amount 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
.7 heat the Building in a reasonable manner and at its own expense to a
sufficient temperature at all times so that the Building and its
installations shall not be damaged by frost or cold;
.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;
.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. 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
6.1.1 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;
.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.
The Landlord shall have a reasonable time to consider any request
for its approval of a Transfer, which in no event shall be less than
fifteen (15) 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;
.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, 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
Free-Standing, Industrial - May, 1994
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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; and
.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.
PART 7 - LANDLORD'S COVENANTS
7.1 The Landlord covenants with the Tenant as follows:
.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
.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.
PART 8 - INSURANCE
8.1 The Landlord shall take out and maintain with respect to the
Premises and the Building:
.1 commercial general liability insurance;
.2 building insurance on the standard commercial building broad form
(commonly referred to as the "All-Risk" wording);
.3 boiler and machinery insurance on the standard comprehensive form on
its equipment, including roof-top equipment and electrical
installations; and
.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 although some portions of
same may be applied to reduce Operating Costs as provided in this
Lease.
8.2 The Tenant shall, at all times, maintain:
.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;
.2 insurance with coverage on the standard commercial property broad
form and/or commercial building broad form (i.e. "all risk") fully
covering the Premises 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;
.3 business interruption insurance including loss of profits in an
amount sufficient to prevent co-insurance penalties for under-
insurance; and
.4 such other forms of insurance, including boiler and machinery
insurance and pollution liability insurance, as the Tenant 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. 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
Free-Standing, Industrial - May, 1994
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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 effect such insurance and 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 Building 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
receives or 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 the Building 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
cancellation or a threatened cancellation of any such policy, the
Landlord shall have the right to immediately enter upon the Premises
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 8.3 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 hereby remise, 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 which the releasing party is insured against or
which it is required to be insured against pursuant to this Lease.
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. Notwithstanding the foregoing, the
within release shall not apply to damage incurred by the Tenant as a
result of the Landlord's failure to maintain the roof of the
Premises in accordance with its obligations contained in this Lease.
.2 Notwithstanding anything else herein contained, the release referred
to in section 8.5.1 shall only apply to the extent that the
releasing party receives proceeds of insurance, or it would have
received proceeds of insurance if it had obtained the insurance
required to be obtained by it pursuant to this Lease, and the said
release shall have no application to the amount of the excess of any
claim above and beyond the proceeds of insurance which would have
been received by the releasing party if it had held all of the
insurance required to be obtained by it pursuant to this Lease. 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.
.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:
.1 any breach by the indemnifying party of any covenant or condition,
or term of this Lease;
.2 any contract, lien on the Premises; and
.3 an act, default or the negligence of the 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.
8.7 The Landlord shall, from time to time upon demand by the Tenant,
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provide to the Tenant certificates or other proof reasonably
satisfactory to it to establish that the Landlord has insurance in
effect which complies with the terms of Section 8.1.
PART 9 - REPAIRS AND MAINTENANCE
9.1 The Landlord will, subject to section 9.2 and Part 10, maintain and
repair, or cause to be maintained and repaired, as would a prudent
owner of a reasonably similar industrial building, the structure of
the Building, 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.
9.2 The Tenant shall:
(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 excepted, as
would a prudent owner including, without limitation, the following:
painting every three years; snow removal; landscaping; fencing;
lighting; roofing repairs (subject to the limitations in this
Lease); paving repairs; and any work required to be carried out by
any duly constituted government authority;
(b) replace any glass broken in the Building including outside windows
and doors on the perimeter of the Building;
(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
collectively as "HVAC Units"), electrical mains and any pressure
vessels in use by the Tenant in the Building such contracts to be on
industry standard terms and to provide the Landlord with copies
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 Building or any other structural
portions thereof require repair or replacement or become damaged or
destroyed through the use, occupation, 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 Building, 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 Building 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
the Tenant's expense and in accordance with plans and specifications
to be approved in advance in writing by the Landlord.
9.5 The Landlord, its employees, contractors and agents shall be
entitled to enter the Premises and the Building 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 calculate
the area of the Premises or any part thereof, 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
Free-Standing, Industrial - May, 1994
-7-
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 Building is 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 or otherwise insured against
by the Landlord and not caused by the Tenant, and if as a result of
such occurrence:
(i) the Building is 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 Building to the Base
Standard (hereinafter in this Part 10 to be referred to as the
"Landlord's Restoration Work") and then only to the extent of
the insurance proceeds actually received by the Landlord, and
only Net Rent (but not Additional Rent) will ▇▇▇▇▇ entirely or
proportionately, as the case may be, to the portion of the
Building rendered untenantable from the date of the
destruction or damage until the Landlord has completed the
Landlord's Restoration Work;
(ii) the Building is not rendered untenantable in whole or in part,
the Lease will continue in full force and effect, the Rent
will not ▇▇▇▇▇ 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 Building is damaged or
destroyed by any cause whatsoever, and if, in the opinion of a duly
licensed architect retained by the Landlord, acting reasonably, the
Building cannot be rebuilt or made fit for the use provided for in
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 Building to the condition existing
prior to the damage or destruction (the "Tenant's Restoration Work")
and all other work required to fully restore the Building 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 Building, provided that the Building,
as re-built, will have reasonably similar facilities and services
to those in the Building prior to the damage or destruction having
regard, however, to the age of the Building at such time.
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 Building and appurtenances, and make such
changes, alterations, additions and improvements as will in the
judgment of the Tenant better adapt the Building 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 Landlord over the Building, to the extent
that such increases are attributable to an action by the
Tenant under this paragraph;
Free-Standing, Industrial - May, 1994
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(d) nothing herein shall entitle the Tenant to make any changes
to, or installations upon, the roof of the Building;
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 and, if so requested by the Landlord, restore the
Premises to the Base Standard not later than the expiration or
sooner termination of the Term. For greater certainty, it is hereby
stipulated that the Tenant shall not be required to remove any
Leasehold Improvements that existed prior to the making of any
modifications to the Premises by the Tenant or by the Landlord on
behalf of the Tenant, or any Leasehold improvements made by the
Landlord pursuant to its obligations contained in this Lease. If not
in default, the Tenant may, on the expiration or sooner termination
of the Term, remove from the Premises all Tenant Property provided
that it repairs any damage to the Premises which may be caused by
installation or removal of the Tenant Property and leave 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 or 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 Building
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 such
default, the Landlord shall be entitled to remedy such default and
the cost to the Landlord of doing so 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 theref or
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:
.1 the tenant defaults in the payment of any Rent (including, without
limitation, any regularly scheduled payment on account of Additional
Rent);
.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;
.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;
.4 any property of the Tenant becomes subject to an execution 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
Free-Standing, Industrial - May, 1994
-9-
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;
.5 any insurance policy is cancelled or not renewed by an insurer by
reason of the use or occupation of the Premises;
.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
Property of equal or greater value and utility is contemporaneously
substituted therefor;
.7 re-entry is permitted under any other provision of this Lease or in
law.
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 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 Building or any part of the Building 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
Free-Standing, Industrial - May, 1994
-10-
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
Building, the Landlord shall thereupon be released from all of its
covenants under this Lease.
13.4 Provided that the Tenant receives a non-disturbance agreement on
terms reasonably satisfactory to it from each mortgagee of the
Premises, 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.
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.
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 any
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 at
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
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 given
by registered mail or by delivery to the said address. Any written
notice so given shall be deemed to have been given three (3) postal
delivery days after the day it was so mailed by registered mail or
Free-Standing, Industrial - May, 1994
-11-
upon the day it was so delivered. Any party may, from time to time
by notice to the other(s), change its address for the purpose of any
subsequent notice. The Manager shall be entitled to sign a notice on
behalf of the Landlord.
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 be
conclusive and binding in respect of any question of fact or opinion
with respect to the following matters:
.1 a certificate procured by the Landlord from an architect,
professional engineer, land surveyor or other qualified individual
as to: the area of any part of the Premises or the Building; 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 Building or any part thereof will be
incapable of being used for its intended purposes by reason of any
destruction or damage; and
.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.
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
party hereto by reason of the authorship of any of the provisions
hereof.
Free-Standing, Industrial - May, 1994
- 12 -
PART 15 - INDEMNITY
15.1 INTENTIONALLY DELETED.
IN WITNESS WHEREOF the Parties hereto have executed this Lease.
SIGNED, SEALED AND DELIVERED Landlord:
in the presence of
N.H.D. PROPERTIES LIMITED
PER: /S/ [ILLEGIBLE]
---------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
I have the authority to
bind the Corporation.
Tenant:
ROSEDALE WALLCOVERINGS INC.
PER: /S/ ▇▇▇▇ Fine
-------------
Name:
Title: President
PER: /S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------
Name:
Title:
I/We have authority to bind the Corporation.
Free-Standing, Industrial - May, 1994
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 before the addition of any
modifications by the Tenant or by the Landlord on behalf of the Tenant other
than those which the Landlord has specifically agreed to make pursuant to this
Lease. 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 therein all perimeter windows, and bare
concrete floors and walls, in compliance with the then applicable building
standards.
"Building" means the building described municipally in paragraph 1 of the Key
Item Index which contains approximately the number of square feet (as determined
in accordance with the applicable B.O.M.A. standards) set out in paragraph 3 of
the Key Item Index.
"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,
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).
"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 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.
Free-Standing, Industrial - May, 1994
-2-
"Premises" shall mean the premises described in paragraph 1 of the Key Item
Index and which are identified on Schedule "A" and include the Building.
"Prescribed Interest Rate" means, with respect to any period, a rate of interest
which is three (3) 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
upon 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 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,
multistage 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,
amalgamation, receivership, seizure by execution or other legal process or the
granting by the Tenant of a pledge, Mortgage or other security interest) which
has 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.
Free-Standing, Industrial - May, 1994
SCHEDULE "C"
RULES
1. The skylights and windows that reflect or admit light into passageways or
into any place in the Building 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 Building
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 in its sole discretion to
prescribe 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 Building 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 Building.
7. No space in the Building 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 Building
without authorization in writing by the Landlord. The Tenant shall not
▇▇▇▇, drill into, bore or cut or in any way damage the walls, ceilings or
floors of the Building without the Landlord's prior written approval. No
broadloom or carpeting shall be affixed to the Building 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
Building.
10. Nothing shall be placed on the outside of window ▇▇▇▇▇ or projections of
the Building.
11. The Tenant shall not permit any commercial cooking in the Building 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
Building, and for the preservation of good order therein, and the same
shall be kept and observed by the Tenant and its Invitees.
Free-Standing, Industrial - May, 1994
SCHEDULE "D"
SPECIAL PROVISIONS
1. The Landlord represents and warrants that the building is structurally
sound and that all of the heating, air conditioning, electrical and
plumbing equipment (including sprinklers) (hereinafter to be referred to
as the "Equipment") shall be in good repair and operating condition at the
commencement of the Term and shall provide a certificate to that effect
for any equipment that is not new at the commencement of the Term.
2. The Landlord covenants to provide the Premises to the Tenant in a broom-
swept condition.
3. The Tenant hereby agrees that it shall have sole responsibility for the
cost of the annual maintenance of the sprinklers in the Premises and for
any upgrades or changes to the sprinklers required during the Term as a
result of the Tenant's use of the Premises. The Landlord agrees that in
the event that during the first year of the Term there is a malfunction of
the sprinklers which is not occasioned by an act or omission of the Tenant
or any of its Invitees, it shall, for a period of three years thereafter,
be resposible for any increase in the Tenant's insurance premiums for
contents insurance arising as a result of a claim resulting from such
malfunction.
4. The Landlord hereby agrees to remove any existing signs affixed to the
Premises at its sole cost and expense.
5. The Landlord hereby agrees that it shall be solely responsible for the
payment of any real estate commissions owing to the listing agents as a
result of the leasing of the Premises to the Tenant.
6. Building Area
It is understood and agreed that the rental of the Building is based upon
approximately 47,104 square feet of net rentable area. Within thirty (30)
days after the commencement of the Term, the Landlord shall provide an
architect'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 B.O.M.A. standards.
7. First Refusal to Purchase
(i) If at any time during the first three (3) years of the original term
of this Lease, the Landlord receives a bona fide offer to purchase
the Premises which the Landlord is willing to accept, the Landlord
shall give written notice of the offer to the Tenant by sending to
it a true copy of the offer and the Tenant shall have the right,
during the 72 hours after the giving of such notice, by written
notice to the Landlord, to elect to purchase the Premises for the
price and upon the terms and conditions contained in the offer.
(ii) If the Tenant does so elect, the notice given by it shall constitute
a binding agreement of purchase and sale. If the Tenant does not
elect, the Landlord shall be free to sell the Premises on the terms
and condtions set forth in the offer. If the Premises are not sold
pursuant to the offer, the Landlord shall be obliged to submit any
further offer to the Tenant by giving written notice of it to the
Tenant in the manner provided in sub-paragraph (i).
(iii) The rights of the Tenant set forth in sub-paragraphs (i) and (ii)
shall not be enforceable against any assignee of the freehold.
Free-Standing, Industrial - May, 1994
SCHEDULE "E"
FIXTURING SCHEDULE
PART 1 - DEFINITIONS
1.1 In this Fixturing Schedule terms defined in the Landlord's Standard Form of
Lease are used with the meanings so defined and the following additional defined
terms have the meanings indicated:
"Design Specifications" means the standards and procedures specified by the
Landlord from time to time as applicable to any work or material to be done to
the Premises including, without limitation, the preparation and approval of
plans in the conduct and completion of Tenant's Work. Without limiting the
generality of the foregoing, the Design Specifications shall relate to the
architectural, mechanical, and Utilities standards and specifications required
by the Landlord.
"Landlord's Work" means all items of work specified in Part 3.
"Landlord's Work on Tenant's Behalf" means all the work described in this
Fixturing Schedule to be performed by or on behalf of the Landlord at the
Tenant's expense.
"Lease" means the offer, agreement or lease to which this Fixturing Schedule is
attached or incorporated by reference.
"Plans" means plans, specifications and drawings.
"Premises Outline" means the plans described as such in Section 2.1.
"Final Tenant Plans" means the final plans described in Part 2 as approved by
the Landlord.
"Tenant's Work" means all items of work described or referred to in Section 4.7
of this Schedule.
PART 2 - PLANS AND APPROVALS
2.1 Premises Outline
The Landlord may provide to the Tenant a Premises Outline consisting
of one or more plans which show the approximate dimensions of the Premises and
the approximate location of its boundary walls and which may show the
approximate location of mechanical equipment and Utilities serving the Premises.
2.2 Design Specifications
The Tenant agrees that all Tenant's Work and plans shall conform to
the Design Specifications.
2.3 Tenant's Plans
The Tenant shall submit to the Landlord preliminary and final Plans
and a completion schedule for the Tenant's Work in accordance with the
requirements and procedures set out in the Design Specifications. The approval
of Final Tenant Plans by the Landlord for all the Tenant's Work is required
prior to the commencement of any such work. The Landlord may require revisions
to such plans as a condition of its approval. The Landlord may remove or correct
at the expense of the Tenant, any Tenant's Work which is not done in accordance
with the plans, information and revisions delivered to and approved by the
Landlord or is not otherwise in accordance with the requirements of the Lease
and the Design Specifications and which has not been removed or corrected
forthwith after request by the Landlord. The Landlord's approval of plans shall
not constitute an assumption of any responsibility by the Landlord for their
accuracy or sufficiency, or their compliance with applicable Laws and the Tenant
shall be solely responsible for all such items.
2.4 Plan Review Charge
INTENTIONALLY DELETED.
PART 3 - LANDLORD'S WORK
3.1 Existing Premises
The Tenant accepts the Premises in an "as is" condition except for
completion of any further work which is specified in this Fixturing Schedule or
the Lease to be done by the Landlord at the Landlord's expense.
3.2 Floors
If the Tenant's use of the Premises requires any allowable live
floor load to be increased, the Landlord shall perform the upgrading work at the
Tenant's expense.
Free-Standing, Industrial - May, 1994
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3.3 Landlord's Work
The Landlord agrees that it shall, at its sole cost and expense,
prior to the commencement of the Term, carry out the work set forth on Schedule
"E-1" hereto.
PART 4 - CONDUCT OF TENANT'S WORK
General Rules Regarding Tenant's Work
4.1 Tenant's Contractors
The Tenant shall obtain the Landlord's approval of any general
contractor or subcontractor whom the Tenant proposes to involve in the
completion of the Tenant's Work prior to retaining same. The Tenant shall obtain
or cause its contractors to obtain commercial general liability insurance
against personal and bodily injury, including death, and property damage on an
occurrence basis and having limits of not less than Two Million ($2,000,000.00)
Dollars in respect of any one occurrence and such insurance shall be in force
prior to the Tenant or its contractors gaining access to the Premises, if
required by the Landlord.
4.2 Landlord's Access for Inspection
All Tenant's Work shall be subject to the inspection, supervision
and approval of the Landlord. The Landlord and its authorized employees and
agents shall have access to the Premises at all times for the purpose of
inspecting the Tenant's Work or conducting the Landlord's Work.
4.3 Accuracy of Landlord's Plans
The Landlord makes no representations in respect of the accuracy
(and is not responsible for any inaccuracy) of any dimensions shown on any
Plans.
The Tenant acknowledges it is its sole responsibility to confirm to
its satisfaction prior to commencing any of the Tenant's Work, that any and all
dimensions shown on the Premises Outline, Final Tenant Plans and any other plans
are accurate and conform to actual measurements and dimensions.
4.4 Structure
The Tenant shall not, without the prior written consent of the
Landlord, allow or cause any conduit, pipe sleeves, chases or duct equipment
opening in any floors, columns, walls or roofs of the Premises or the Building
to be cut or drilled or allow or cause to be imposed upon any floor area of the
Premises or the Building a greater working load than the maximum allowable live
load of such floor area, or cause to be suspended from the underside of the
roof, roof structure, or ceiling, any load other than normal ceiling and
lighting loads. The Landlord shall perform, at the Tenant's expense, any work
contemplated by the Final Tenant Plans which may affect the integrity of any
base building component.
4.5 Commencement of Tenant's Work
No Tenant's Work shall be commenced or undertaken until all
procedural and approval requirements contained in this Fixturing Schedule
(including the Design Specifications) have been satisfied by the Tenant.
4.6 On-Site Plans
The Tenant shall keep accessible within the Premises during the
conduct of any Tenant's Work, one set of Final Tenant Plans with the Landlord's
consent endorsed thereon.
4.7 Tenant's Work
The Tenant shall carry out and complete, promptly, and in a good and
workmanlike manner, all work necessary to prepare the Premises including
ceilings, plumbing, electrical, metering, fire-rating and any other work,
improvements or finishings necessary to prepare the Premises for its use
including the demolition and disposal of any existing improvements and fixtures
in the Premises, as well as any alterations to such items and the Premises
proposed to be done by the Tenant at any time during the Term. All such work
shall only be undertaken and carried out in compliance with the Final Tenant
Plans, the Design Specifications and this Fixturing Schedule.
PART 5 - PAYMENT SCHEDULE
5.1 Landlord's Work at Tenant's Expense
The Tenant shall upon receipt of an invoice therefor from the
Landlord pay the cost of all Landlord's Work at the Tenant's Expense and any
other work undertaken, performed or paid by the Landlord on the Tenant's behalf.
In the absence of an agreement between the Landlord and the Tenant to the
contrary, the cost of such work shall include the actual cost of all labour,
materials, taxes and architectural, engineering and contractors' fees, and an
administration fee equal to fifteen percent (15%) of the total of such costs.
Free-Standing, Industrial - May, 1994
-3-
In the absence of actual cost figures the Landlord shall preparea reasonable
estimate of the cost and the Tenant shall make payments based on such estimate
in accordance with this section. Appropriate adjustments shall be made between
the parties when the work is completed and actual costs are known. This
paragraph shall not apply to the work referred to in paragraph 3.3 herein.
Free-Standing, Industrial - May, 1994
SCHEDULE "E-1"
LANDLORD'S WORK
Ground Floor
Re-configure offices on ground floor in a lay-out to be agreed upon between
the Landlord and the Tenant (all to be done substantially similar to existing
construction)ith the Landlord's standard finishes , which will consist of the
following:
28 oz. broadloom complete with carpet base ($16.00/square yard allowance),
ceramic tile flooring only in office washrooms, 3 5/8" metal stud partition
complete with 1/2" drywall on both sides to underside of ceiling, 3 piece hollow
metal door frame complete with standard paint grade wood flush door, standard 2'
x 4' acoustical suspended T-bar ceiling system complete with 2' x 4' fluorescent
light fixtures to standard office foot candle rating, 2 coat latex paint finish
on walls (1 colour throughout).
Existing washrooms and other office areas which are not to be renovated, shall
be cleaned and/or repaired and painted as required.
Second Floor
Construct on second floor a studio area in a lay-out to be agreed upon,
finishings to be the same as for ground floor except where otherwise expressly
provided herein, including washrooms consisting of standard ceramic tile
flooring only, plumbing fixtures and/or vanities similar to existing, 3 5/8"
metal stud partition complete with sound insulation (washroom only) and 1/2"
drywall both sides to underside of ceiling, 2' x 4' suspended acoustical T-bar
ceiling complete with mechanical ventilation and 2 coats of semi-gloss paint
finish on walls. The Landlord shall construct stairs from the existing entrance
to the west of the existing office to the second floor which shall be used as
the main access point for this area.
Lunchroom to consist of the following:
vinyl tile floor complete with vinyl base, 1 stainless steel sink in a 6'-0"
long counter (melamine finish), 3 5/8" drywall partition complete with 1/2"
drywall on both sides, 2' x 4' suspended acoustical T-bar ceiling system and 2
coat semi-gloss latex paint finish on walls.
Warehouse Plant
Install two new truck-level overhead doors (high lift) at rear of Premises,
together with dock levellers (25,000 lbs. capacity, semi-automatic), bumpers,
neoprene door seals and related grading and paving.
Install additional heating equipment in plant area as necessary to meet local
building codes.
Free-Standing, Industrial - May, 1994
SCHEDULE "G"
OPTION TO EXTEND
1.1 The Tenant may extend this Lease for 2 successive periods of 5 years (each
of which period is called an "Extension"), commencing on the day following the
date of expiration of the initial term of this Lease or the first such
Extension, as the Case may be, 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 in question
takes effect;
(b) the Tenant is the original tenant under this Lease and is itself in
possession of the whole, of the Premises;
(c) advises the Landlord in writing that it wishes to extend this Lease
not more than 12 months and not less than 6 months prior to the
expiration of the initial term of this lease or the then current
Extension, as the case may be, failing which this right of Extension
shall be rendered null and void.
1.2 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:
(a) the Tenant shall only be entitled to a total aggregate number of
Extensions equal to the number of successive periods referred to
above so that there will be no further right to extend following the
exercise of the 2nd right to extend. For greater certainty, it is
hereby stipulated that if the Tenant exercises all of the within
rights of Extension in accordance with this Lease, the Tenant shall
be entitled to lease the Premises for a total of 10 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 not be entitled to any leasehold
improvement allowance, tenant inducement or rent free period;
(c) the Net Rent payable during each year of an Extension shall be the
greater of the current fair market rental value of the Premises at
the time the right of Extension is exercised and the Net Rent
payable in the immediately preceding Lease Year. 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 at least 3
months prior to the expiry of the initial term or the then current
Extension, as the case may be, by reason of the parties' inability
to agree upon the current fair market rental of the Premises, 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 expiry of the initial term or the then current
Extension, as the case may be. All documents and proceedings with
respect to the arbitration are to be kept confidential by each of
the parties.
1.3 The exercise of the within rights of Extension are 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 rights of Extension.
