Exhibit 10.14
October 22, 1993
Phoenix International Life Sciences Inc.
Dear Sirs:
Notwithstanding the terms and conditions of the Offer and Amendment to Lease to
ensue and more particularly the Article entitled "Entire Agreement" the
following modifications and/or option shall be granted to Tenant upon the terms
and conditions therein contained:
(A) Article 50 of the existing Lease executed between the parties hereto on
the 28th day of February 1989 shall be modified by the deletion of the
last four (4) paragraphs thereof and by the inclusion of the following
paragraphs at the end of the said Article:
"Notwithstanding anything herein contained to the contrary, the present
right of first refusal shall not apply to one sale by the Landlord during
the first year of the term.
Furthermore, the present Article shall not apply and there shall be no
right of first refusal in the following circumstances:
i) the offer to purchase or lease from the third party involves
the purchase and/or sale and/or lease of one or more other
properties of the Landlord; and/or
ii) there is a sale or purchase or lease of the Property to any
of Landlord's affiliates or subsidiaries or related companies
or to any existing partners of Landlord; and/or
iii) there is any transfer/roll-over of the Property for income
tax or corporate reorganization purposes.
iv) the sale of the shares of the company or companies owning the
Property."
In the event that any person other than the Landlord acquires the Property under
conditions such that the Tenant is not permitted to exercise its right of first
refusal (such person being hereinafter referred to as the "Exempt Purchaser")
then such person shall be required to enter into an agreement directly with the
Tenant in registrable form providing that the exempt Person agrees to abide by
the terms of the right of first refusal.
(B) Provided Tenant pays the Minimum Net Net Rental and all other
amounts payable in virtue of the Lease and Amendment to Lease and
has fulfilled all the terms and conditions of the Lease and
Amendment to Lease, then Tenant shall have a one-time option to
purchase the lands and building upon which the Leased Premises are
situate (including the Parking Lot as defined in the Offer and
Amendment to Lease) (the "Property") at any
time after the expiry of the first year of the Term and up to the
expiry of the fifth year of the term ("Option to Purchase"), the
whole subject to the conditions, hereunder enumerated:
a) The Tenant shall advise the Landlord in writing four (4) months in
advance that it intends to purchase the Property upon the terms
and conditions set out hereinbelow on a date specified (the
"Closing Date") in default whereof, the present Option to Purchase
shall be deemed to be null and void and/or to have expired by
lapse of time. It is understood and agreed that the notification
for the exercise of the option may be sent by Tenant at the
earliest after the expiration of the first four (4) months of the
Term of the Amendment to Lease and at the latest, before the
expiry of the first four (4) years and eight (8) months of the
Term of the Amendment to Loan.
b) The purchase price of the Property shall be to product obtained by
i) multiplying the sum of six million four hundred thousand
dollars ($6,400,000.00) by a fraction, the numerator of
which is the Consumer Price Index for the City of Montreal,
All Items (the "CPI") for the month in which the Closing
Date is scheduled and this denominator of which is the CPI
for the month of May 1993, and by
ii) adding thereto the applicable factor based on the
Deficiencies described in Schedule "Z" annexed hereto and
entitled "Compensation for cash flow deficiency" calculated
as follows: the difference, between the Deficiency with
respect to the year in which the Closing Date occurs and
the Deficiency for the year prior thereto shall be
pro-rated based on the applicable month during which the
Closing Date occurs and such pro-rata portion shall be
added to the Deficiency for the year prior to that in which
the Closing Date occurs to after that will be added to the
price otherwise determined. By way of example, if the
Closing Date occurs after two years and seven months of the
term have elapsed then the factor shall equal ($244,431 -
$214,723) x 7/12 + $214,723.
c) In the event the Tenant has so exercised its Option to Purchase in
the manner hereinabove described, the Landlord and Tenant shall
sign the deed of sale before the notarial firm chosen by Tenant
out of three notarial firms designated by Landlord on the Closing
Date and Tenant shall assume all notarial costs incurred with
respect thereto, such deed of sale to include all terms and
conditions herein agreed as well as the usual terms and conditions
of a deed of sale, in default whereof the present Option to
Purchase shall, at Landlord's sole discretion be deemed to be null
and void and/or to have expired by the lapse of time.
Notwithstanding anything heretofore contained, the Option to Purchase shall, at
no time be interpreted as restricting the absolute right of Landlord to sell,
lease, alienate, transfer or
exchange the Property, in whole or in part, at any time to any person, moral or
corporate, during the Term of the Lease or extension thereof, provided it has
compiled with the of Article 50 of the existing Lease as amended herein and has
required the third party acquireror to respect the present Option to Purchase.
The present is conditional upon the signing of the Offer and subsequent
Amendment to Lease.
The parties hereby confirm having requested that the present document be drafted
in the English language. Les parties certifient avoir exige qua les presentes
soient redigees en langue anglaise.
Your truly,
BELCOURT INC.
/s/ Joseph Zunenshine
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Joseph Zunenshine
Director of Leasing AYD:012
We, the undersigned, acknowledge having read the foregoing letter and accept the
terms and conditions contained therein.
SIGNED at __________________________ this day of ________________, 1993.
PHOENIX INTERNATIONAL LIFE SCIENCES INC
Per:
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SCHEDULE "Z"
COMPENSATION FOR CASH FLOW DEFICIENCY
Year 1: $ 187,830
Year 2: $ 214,723
Year 3: $ 244,431
Year 4: $ 277,250
Year 5: $ 313,506
MEMORANDUM OF AGREEMENT
BETWEEN: BELCOURT INC., a body politic and corporate, duly incorporated, having
its head office and principal place of business at 7405 Trans Canada
Highway, St. Laurent, Quebec, H4T 1Z2, herein acting and represented
by JOSEPH ZUNENSHINE and A. YVONNE DAIGLE duly authorized,
AND: LES INVESTISSEMENTS RENARY INC., a body politic and corporate, duly
incorporated, having its head office and principal place of business
at 7405 Trans Canada Highway, St. Laurent, Quebec, H4T IZ2, herein
acting and represented by JOSEPH ZUNENSHINE, duly authorized,
(hereinafter jointly the "Landlord")
PARTY OF THE FIRST PART
AND: PHOENIX INTERNATIONAL LIFE SCIENCES INC., a body politic and
corporate, duly incorporated, having a place of business in the
district of Montreal, Province of Quebec, herein acting through and
represented by its hereunto duly authorized as he declares,
(hereinafter the "Tenant")
PARTY OF THE SECOND PART
WHEREAS by a lease entered into between the Landlord and the Tenant on the
28th day of February 1989 (hereinafter the "Lease") the Landlord agreed to lease
to the Tenant that certain thirty-three thousand three hundred thirty-one
(33,331) square feet situated on the ground floor of the building of which the
leased premises form part bearing civic number 2330 Cohen, St. Laurent, Quebec
and being part of the building erected upon that certain parcel of land more
specifically described in Schedule "B" attached hereto and initialed by the
parties for identification to form an integral part of the Lease, for a term
expiring on the last day of June 2004. The Building is situated upon the land
described in the attached Schedule "B";
WHEREAS by a Memorandum of Agreement entered into on the 1st day of January
1990, the Landlord agreed to lease to the Tenant an additional space situated on
the ground floor, of three thousand eight hundred forty-eight (3,848) square
feet, bringing the total area of the premises to thirty-seven thousand one
hundred and seventy-nine (37,179) square feet (hereinafter the "Original
Premises"), for a term expiring on the last day of June 2004:
WHEREAS Tenant offers to lease from Landlord additional space situated on
the ground floor and mezzanine level of the building, having an area of
approximately thirty-four thousand four hundred and ninety-six (34,496) square
feet (hereinafter the "Additional Premises");
WHEREAS Landlord accepts to lease to Tenant the aforesaid additional space
on the conditions stipulated hereunder and consequently, the total area of the
Leased Premises shall be seventy-one thousand six hundred and seventy-five
(71,675) square feet which represents the entire building (hereinafter the
"Leased Premises"):
WHEREAS the parties hereto desire to amend the Lease accordingly;
WHEREFORE IT IS HEREBY AGREED AS FOLLOWS:
1. The preamble hereto shall form part of these presents as though set out at
length herein.
2. The Landlord hereby leases to Tenant thirty-four thousand four hundred and
ninety-six (34,496) square feet, located on the ground floor and mezzanine
level of the building to be constructed as shown outlined in blue on the
plan attached hereto as Schedule "A-2" (hereinafter the "Additional
Premises") and as a consequence of the leasing of such Additional Space,
Tenant will have leased the entire Building as it then stands.
3. The term (hereinafter the "Term") for the Additional Premises shall
commence (hereinafter the "Commencement Date") on the first day of May 1993
and terminate (hereinafter the "Termination Date") on the last day of April
2008.
4. During the year through to the expiration of the fifth year of the Term,
the Tenant covenants and agrees to pay to the Landlord for the Additional
Premises, without deduction, abatement or setoff, an annual minimum net
rental of one hundred seventy- two thousand four hundred eighty dollars
($172,480.00) calculated on the basis of five dollars ($5.00) per square
foot per annum and payable in advance on the first day of each month in
equal consecutive monthly instalments during said period of fourteen
thousand three hundred seventy-three at the Landlord dollars ($14,373.00);
and
During the 6th year through to the expiration of the 15th year of the Term,
the Tenant covenants and agrees to pay to the Landlord for the Additional
Premises, without deduction, abatement or setoff, an annual minimum net net
rental of two hundred twenty-nine thousand fifty-three dollars and
forty-four cents ($229,053.44) calculated on the basis of six dollars and
sixty-four cents ($6.64) per square foot per annum and payable in advance
on the first day of each month in equal, consecutive monthly instalments
during said period of nineteen thousand eighty-seven dollars and
seventy-nine cents ($19,087.79).
5. Tenant shall pay with respect to the Additional Premises all those expenses
referred to in Article 9 of the Lease ("Proportionate Expense Rental")
except that the parties acknowledge that there is currently no policing or
supervision being done by the Landlord and the Tenant will not be charged
for any Proportionate Expense Rental with respect to same, it being agreed
and understood that the Tenant renounces the right to ask the Landlord for
this service. Furthermore, all expenses incurred by the Landlord shall be
reasonable. At any time during the term, upon six (6) months prior written
notice to the
Landlord the Tenant shall have the option of assuming the landscaping and
gardening or the snow removal or both for the property, and from and after
the expiry of the six (6) month period the Tenant shall not be required to
pay Landlord for such service or services.
6. The Landlord will effect in the Additional Premises, at its expense, the
work outlined in Schedule "C-2" attached hereto, hereinafter "Landlord's
Work" with the exception of a maximum of fourteen (14) roof openings for
which the Tenant will contribute the sum of forty thousand dollars
($40,000.00) plus applicable taxes at the date of completion of Landlord's
Work.
Should the Tenant require modifications in writing which involve work other
than Landlord's Work, the said work shall be deemed extra work and shall be
payable by Tenant in accordance with the following provisions:
In the event Landlord agrees to execute the said extra work, it shall
forward Tenant a written estimate indicating the cost of said extra work.
Tenant shall have a delay of five (5) days upon receipt of said estimate to
confirm, in writing to Landlord, that it wishes Landlord to proceed with
the work.
Tenant shall have the option of having the extra work performed by other
parties.
The Landlord shall perform Landlord's Work in accordance with the state of
the art and shall guarantee Landlord's Work for a period of one (1) year
from the Completion Date being March 15, 1993. Furthermore and in addition
to the foregoing, the Landlord shall warrant that the roof and walls for
the building shall be watertight for a period of five (5) years from the
Completion Date. Tenant shall ensure that the window caulking is maintained
by Tenant during the aforesaid period. This warranty shall not apply to the
extent that the leakage is the result of any access, maintenance, use, or
abuse, or Tenant's equipment and installations thereof, to which the roof
and walls were subjected by Tenant's employees, subcontractors or agents.
7. Tenant will be allowed to place such signage on the exterior of the
building as it shall in its sole discretion consider to be advisable
provided that it shall comply with all laws and regulations applicable
thereto and it shall hold the Landlord harmless and indemnify it against
any damages, losses or penalties that the Landlord might suffer or incur as
a result of any signage which might be erected by the Tenant. Tenant shall
at its sole expense repair any damage or holes left in the Building
following removal of their signage at the expiration of the Lease as
amended herein.
8. Landlord undertakes to provide to Tenant for the Additional Premises one
hundred and one (101) additional exterior parking spaces, in addition to
all the one hundred and eleven (111) parking spaces located on the
property.
9. The Lease is amended as follows:
a. Article 3 of the Lease is deleted as it no longer applies.
b. Article 5 of the Lease is deleted and replaced by the following:
"The Leased Premises can be used for any purpose permitted by law and
the Landlord expressly acknowledges that Tenant intends to perform
research and other scientific studies with respect to AIDS and other
infectious diseases. The Tenant agrees to hold the Landlord harmless
from and against any damages, losses or penalties that the Landlord
might suffer or incur as a result of the use to which the Tenant might
put the Premises. Furthermore, at the end at the term or the earlier
termination of the term the Tenant shall take such measures as shall
reasonably satisfy the Landlord that there is no danger or
inconvenience to any party as a result of the use to which the Leased
Premises have been put. In addition, Tenant agrees to sign and conform
to the Hazardous Substances Amendment attached hereto as Schedule "Z".
c. Article 9 is amended by deleting subsection (iii) thereof and making
such other amendments thereto so that Article 9 corresponds to Section
5 hereof. Article 9 is further amended by inserting a provision
whereby the Tenant shall be entitled to contest the Real Estate Taxes
without the consent of the Landlord provided that it will pay the Real
Estate Taxes notwithstanding its contestation and that it informs the
Landlord of such contestation.
d. The second paragraph of Article 11 is hereby amended so that the
Tenant shall be required to regularly maintain and repair the heating,
ventilating and air conditioning system.
e. Article 12 is amended by deleting the Landlord's right to cancel the
Lease on a sublet or assignment.
f. Article 13 shall provide that expropriation shall entitle both parties
to the maximum compensation permitted by law to each of them for their
respective interests and that the lease shall not automatically be
cancelled.
g. Article 14 and Article 20 are amended by changing the interest payable
by the Tenant to the prime rate of the Royal Bank of Canada plus four
percent (4%).
h. The first five lines of Article 15 are replaced by "The Tenant shall
save the Landlord harmless...".
i. Article 16 is amended so that the Tenant shall be entitled to remove
at the end of the term anything that it installed in the Leased
Premises or whose installation was paid for by the Tenant (all of such
items being herein expressly referred to as the "Leasehold
Improvements") with the exception of the air-conditioning and
ventilation units, in addition to any base building, electrical or gas
installation (but, specifically including the electrical generator
which Tenant shall be entitled to remove) in respect of which Landlord
reserves its right to either keep, at its discretion, provided that
any damage caused as a result at any such removal is repaired by the
Tenant. Tenant shall not in any event be required to remove base
Building installations of any type or any floors or walls. It is
expressly agreed and understood that during the term all of the
Leasehold Improvements shall belong to the Tenant.
j. The first sentence of the second paragraph of Article 19 is amended so
that the Tenant shall not be required to carry out any modifications
for which it appeals to the relevant organizations and which those
organizations eventually agree are not required. As well any need for
the Landlord's consent for the Tenant's alterations and improvements
is also deleted provided that the Tenant informs the Landlord of any
significant alterations and Improvements and provides the Landlord
with as-built drawings on completion where same is appropriate.
However, the consent of the Landlord is only required for major
structural changes, said consent not being unreasonably withhold.
k. Article 24 is deleted, the Tenant having the right to make any
alterations or Improvements that it desires to the Leased Promises
provided that the Tenant informs the Landlord of any significant
alterations and Improvements and provides the Landlord with as-built
drawings on completion where same is appropriate. However, the consent
of the Landlord is only required for major structural changes, said
consent not being unreasonably withheld.
l. Article 26 is amended by inserting in the second line from the bottom
of page 26 after "solvents" the words "and other toxic or flammable
materials" and by providing that the Tenant shall not be required to
obtain an environmental Impairment Insurance policy unless same is
required by the Insurer of the Building, by the hypothecary creditor
of the Building or by some governmental authority having jurisdiction
thereover.
m. Article 27 is amended so that the Landlord shall not be entitled to
re-enter the Leased Promises unless it has attempted and failed to
obtain other reasonable insurance for the Building.
n. Article 29 is amended to delete the Landlord's, right to terminate the
Lease.
o. Article 35 is amended in accordance with Section 8 hereof.
p. The sum deposited with the Landlord pursuant to Article 40 shall be
applied as indicated therein notwithstanding the extension of the
Lease.
q. Article 49 is deleted.
r. Article 64 is deleted.
s. Article 68 is amended to provide that the Tenant shall be entitled to
all one hundred and eleven (111) parking spaces on the Property and
one hundred and one (101) parking spaces as outlined in red on a plan
attached hereto as part of Schedule "A".
10. The Tenant Acknowledges that the additional space agreement prepared and
sent to the Tenant for the three thousand eight hundred and forty-eight
(3,848) square feet of additional space located on the ground floor and
forming part of the Original Premises, which commenced on the first day of
January, 1990 shall be comprised and executed simultaneously with the
present Memorandum of Agreement.
11. The term for the Original Promises shall be extended so that it shall be
coterminous with the present Memorandum of Agreement, the minimum rent for
such extension namely, the period starting July 1, 2004 and terminating on
the Termination Date to be the market rental for similar space of a similar
size with similar improvements at the beginning of the calendar year 2004
with a maximum of ten dollars ($10.00) per square foot. If the parties are
unable to agree on the market rent, same shall be settled by arbitration.
Any arbitration shall be conducted and finally decided prior to the
extension of the term for the Original Premises, such that the rental shall
be due and payable at the commencement of such extension. A single
arbitrator shall be named by the Syndic du Barreau from his list of
available arbitrators. Said arbitrator shall render the final decision to
any dispute in this matter having taken into account the considerations
hereinabove described.
12. Schedules "A-2", "B", "C-2", "Z" and the plan attached hereto and initialed
by the parties for identification form part of the Lease.
13. Save and except for the modifications stipulated herein, all the terms and
conditions of the Lease shall apply mutatis mutandis to the Additional
Premises.
14. It is hereby declared and agreed that these presents and everything herein
contained shall enure to the benefit of and be binding upon the parties
hereto and their respective heirs, administrators, successors and assigns.
15. These presents shall come into force as of the first day of May 1993.
16. The parties hereto hereby confirm that they have requested that these
presents be drawn in English. Les parties aux presentes confirment avoir
exigequo les presentes soient redigees en anglais.
IN WITNESS WHEREOF THE LANDLORD HAS SIGNED IN THE CITY OF ST. LAURENT,
PROVINCE OF QUEBEC., ON THIS 9 DAY OF NOVEMBER 1993.
BELCOURT INC.
Per: /s/ Belcourt Inc. Signature
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Per: /s/ Belcourt Inc. Signature
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/s/ Suelyn Li
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Witness
/s/ Linda Fraraccio
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Witness
LES INVESTISSEMENTS RENARY INC.
Per: /s/ Les Investissements Renary Inc. Signature
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/S/ SUELYN LI
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Witness
/S/ LINDA FRARACCIO
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Witness
IN WITNESS WHEREOF THE TENANT HAS SIGNED IN THE CITY OF MONTREAL ON THIS
8TH DAY OF NOVEMBER, 1993.
PHOENIX INTERNATIONAL LIFE SCIENCES
INC.
Per: /s/ Heather Savage
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/s/ Blake Glover
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Witness
/s/ Witness
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Witness