Exhibit 10.3
MEMORANDUM OF AGREEMENT OF RENEWAL OF LEASE
BETWEEN: SITQ INC.
a body politic and corporate, duly incorporated
under the laws of the Province of Quebec, having
its head office in the City and District of
Montreal, Quebec, herein acting and represented by
Fernand Perreault, President, and Gilbert Vocelle,
Vice President, Industrial Division, hereunto duly
authorized (hereinafter called the "Landlord")
For:
SITQ INDUSTRIEL INC.,
ABRIM 14 INC.,
149855 CANADA INC.,
149856 CANADA INC.,
PARTY OF THE FIRST PART;
AND: DECTRON INC.
a body politic and corporate, duly and legally
incorporated, herein acting and represented by
Ness Lakdawala, hereunto duly authorized
(hereinafter called the "Tenant")
PARTY OF THE SECOND PART.
WHEREAS, on May 23rd, 1985, the Tenant executed a memorandum of
agreement of lease (hereinafter called the "Lease") for certain premises located
at and bearing civic number 4300 Poirier, in the City of St. Laurent, Quebec
(hereinafter called the "Premises") measuring 33,750 gross square feet, for a
term of FIVE (5) years, commencing on February 1st, 1985 and ending January
31st, 1990;
WHEREAS, on July 11th, 1989, the Lease was renewed for a term of FIVE
(5) years, commencing on February 1st, 1990 and ending on January 31st, 1995
(hereinafter called "Renewal #1");
WHEREAS, the Landlord and the Tenant wish to extend the term of the
Lease for an additional period of FIVE (5) years, commencing on February 1st,
1995 and ending on January 31st, 2000, upon the terms and conditions hereinafter
set forth in this memorandum of agreement of renewal of lease (hereinafter
called the "Renewal Agreement #2");
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS, AGREEMENTS, AND
OBLIGATIONS OF THE PARTIES HERETO, THE PARTIES HERETO DO HEREBY COVENANT AND
AGREE AS FOLLOWS:
SECTION 1 RENEWAL OF TERM
The Landlord and the Tenant do hereby renew the Lease for a period of
FIVE (5) years commencing February 1st, 1995 and ending on January 31st, 2000
(hereinafter called the "Renewal Term").
SECTION 2 BASE RENT
During the Renewal Term, the Tenant covenants and agrees to pay to the
Landlord an annual base rent of:
For the period commencing on February 1st, 1995 and ending on January 31st,
1997, the sum of ONE HUNDRED AND TWO THOUSAND, AND SIX HUNDRED DOLLARS
($102,600.00), payable in and by even, equal, consecutive, monthly
installments of EIGHT THOUSAND, FIVE HUNDRED AND FIFTY DOLLARS ($8,550.00)
payable in advance in lawful currency of Canada, on the first (1st) day of
each month, at the office of the Landlord, without demand, deduction or
compensation; representing THREE DOLLARS AND FOUR CENTS ($3.04) per square
foot per annum.
For the period commencing on February 1st, 1997 and ending on January 31st,
20000, the sum of ONE HUNDRED AND SIX THOUSAND, THREE HUNDRED AND TWELVE
DOLLARS AND FIFTY CENTS ($106,212.50), payable in and by even, equal,
consecutive, monthly, installments of EIGHT THOUSAND, EIGHT HUNDRED AND
FIFTY-NINE DOLLARS AND THIRTY-EIGHT CENTS ($8,859.38) payable in advance in
lawful currency of Canada, on the first (1st) day of each month, at the
office of the Landlord, without demand, deduction or compensation;
representing THREE DOLLARS AND FIFTEEN CENTS ($3.15) per square foot per
annum.
SECTION 3 TAXES
Notwithstanding anything to the contrary contained in the Lease or in
the Renewal #1, the Tenant undertakes to pay to the Landlord as additional rent
its share of any surtax on non-residential immoveable or other similar tax that
is or might be levied, confirmed, imposed or assessed with respect to the
Building by any taxation authority. The share of the surtax so payable by the
Tenant, shall be calculated by the Landlord in conformity with all applicable
laws and regulations.
Notwithstanding anything to the contrary contained in the Lease or in
the Renewal
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#1, should the real estate taxation system currently in effect be modified, or
should a new tax, assessment or imposition, in replacement of or in addition to
the real estate taxes currently imposed upon the Building, the imposed, or
should such tax, assessment or imposition be imposed upon the Landlord or upon
the revenues arising from the rental of the Building, the words "real estate
taxes" shall include any such new tax, assessment or imposition. Should any
competent taxing authority, at any time whatsoever, cancel any tax, assessment
or imposition forming part of the real estate taxes, the Landlord shall abolish
such tax, assessment or imposition from the real estate tax.
SECTION 4 OPERATING EXPENSES
Notwithstanding anything to the contrary contained in the Lease or in
the Renewal #1, during the Renewal Term, the Tenant shall pay its proportion of
the costs incurred by the Landlord to replace, improve, modify or increase the
insulation of the Building, when, in the opinion of an expert on the subject,
these costs are likely to reduce the cost of electricity or gas consumed in the
Premises.
Notwithstanding anything to the contrary contained in the Lease or in
the Renewal #1, during the Renewal Term, the Tenant shall pay its proportion of
the salaries, wages and cost related to fringe benefits and pension plan
benefits of any kind for all employees of the Landlord engaged in the operation,
maintenance, repair, surveillance, supervision and management of the Building.
Notwithstanding anything to the contrary contained in the Lease or in
the Renewal #1, during the Renewal Term, should the Landlord decide to replace
the heating, ventilation and air conditioning units, or the windows, the capital
cost thereof shall be amortized over a period of FIFTEEN (15) years without
interest and the Tenant shall reimburse annually to the Landlord one fifteenth
(1/15) of such capital cost as additional rental.
SECTION 5 LEASEHOLD IMPROVEMENTS
The Landlord shall grant the Tenant an allowance of SEVENTY-FIVE
THOUSAND DOLLARS ($75,000.00), in order to execute leasehold improvements in the
Premises. This allowance shall be paid subject to the following conditions:
- plans to be approved by the Landlord; and
- upon the obtention of a satisfactory credit report on the
solvability of the Tenant; and
- upon completion of the leasehold improvements; and
- upon inspection and approval of the leasehold improvements by the
Landlord.
SECTION 6 OPTION TO RENEW
Provided the Tenant is not, or has not been in default under any of
the terms and
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conditions of this Renewal Agreement #2, the Landlord hereby grants to the
Tenant ONE (1) option to renew this Lease of a period of FIVE (5) years,
commencing on February 1st, 2000 and terminating on January 31st, 2005 provided
that the Tenant gives to the Landlord written notice, by registered mail, of its
intention to exercise this option SIX (6) months prior to the expiry date of
this Renewal Agreement #2; failing which this option to renew will become null
and void. All terms and conditions are contained in the Lease shall remain the
same except for the following:
- the minimum rental shall be increased by the consecutive annual
Canadian Price Index all items for the Montreal area published by
Statistic Canada from February 1st, 1995 to January 31st, 2000;
- The Landlord shall not be obliged to execute any leasehold
improvements in the Premises.
SECTION 7 RIGHT TO RELOCATE
During the Renewal Term, the Tenant shall have the right without
penalty and upon giving a sixty (60) days prior written notice, to substitute
for the Premises any other premises located in one of the Landlord's building,
provided that such premises comprise of the same area of the Premises, or more;
however, if at the time of the Tenant's request, should there be no available
vacant space in the Landlord's buildings, the Tenant shall be obliged to remain
in the Premises.
SECTION 8 LEASE
Save and except as modified by the Renewal Agreement #2, the Lease
shall remain in full force and affect MUTATIS MUTANDIS.
SECTION 9 ADMINISTRATION FEE
The Tenant undertakes to pay to the Landlord an administrative fee of
five percent (5%) on all sums due to the Landlord under the Lease or the Renewal
Agreement #2, save as to base rent and real estate taxes as set forth in the
Lease.
SECTION 10 LANGUAGE
The parties hereto acknowledge and confirm having requested that this
agreement and all notices and communications contemplated hereby be drafted in
the English Language.
Les parties aux presentes reconnaissent et confirment qu'elles onto
exige que la presente convention ainsi que tous avis et communications y
afferents soient rediges en anglais.
SECTION 11 PREAMBLE
The preamble shall form an integral part hereof.
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IN WITNESS WHEREOF, THE PARTIES HERETO HAVE DULY EXECUTE THIS RENEWAL AGREEMENT
#2.
Signed in the City of St. Laurent,
This 7th day of December 1994
SITQ INC.
For:
SITQ INDUSTRIEL INC.,
ABRIM 14 INC.,
149855 CANADA INC.,
149856 CANADA INC.,
Per: /s/ Fernand Perreault
- ------------------------------ -------------------------------
Witness Fernand Perreault
Per: /s/ Gilbert Vocelle
- ------------------------------ -------------------------------
Witness Gilbert Vocelle
Party of the First Part
Signed in the City of St. Laurent
This 6th day of December 1994
DECTRON INC.
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Per: /s/ Ness Lakdawala
- ------------------------------ -------------------------------
Witness Ness Lakdawala
Party of the Second Part
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