COMMERCIAL LEASE
Exhibit 10.24
BETWEEN THE UNDERSIGNED:
“BALUX”, a French société civile with capital stock of 10,000.00 € having its registered office at 000 Xxxxxx xx Xxxxxx - 00000 Xxxxx Xxxxxx, Xxxxxx, recorded in the Commercial Register of Grenoble under No. 488 559 576.
Represented by Alain Tornier in his capacity as manager,
Hereinafter “THE LESSOR”,
THE PARTY OF THE FIRST PART
and “TORNIER”, a société par actions simplifiée with capital stock of 311,024 €, having its registered office at Rue Xxxxx Xxxxx - 38330 Saint Ismier, recorded in the Commercial Register of Grenoble under No. 070.501.275, represented by Xxxxxxx Xxxxx, Chairman and CEO,
Hereinafter “THE LESSEE”,
THE PARTY OF THE SECOND PART
The parties agree as follows:
RECITALS
On May 22, 2006, SCI BALUX signed a bilateral preliminary and conditional commercial lease with TORNIER SAS relating to a building to be constructed consisting of three stories of 790 m2 each with an elevator, consisting of a ground floor to be used as a clean room and primary and secondary packaging room, two floors for use as offices and tertiary activities and located on a parcel of land in Montbonnot Saint Xxxxxx - Zirst - 000 xxx Xxxxxxxxx.
The lessee paid a pre-rental fee which was determined as follows:
· At the monthly sum of fifteen thousand euros (15,000 €) net of taxes, for the period from July 1, 2006, through December 31, 2006,
· At the monthly sum of twenty thousand euros (20,000 €) net of taxes for the period from January 1, 2007, and the delivery date of the real estate.
The pre-rental fee was payable quarterly and in advance. The first pre-rental fee was due July 1, 2006, plus the VAT at the rate in force.
Since the acceptance report signed on September 7, 2007, the lessee has been paying an annual rent, net of taxes, of four hundred eighty thousand euros (480,000 €). By explicit agreement, the above rent is reduced quarterly by the sum of fifteen thousand euros (15,000 €) net of taxes, by application of a portion of the pre-rental fees paid, until the pre-rental fees have been fully amortized.
The rent is payable quarterly and in advance, in equal installments of one hundred twenty thousand euros (120,000 €) net of taxes, to the lessor’s registered office or to the offices of the person or entity managing the premises in the lessor’s place, for the first time when the premises are delivered and on the first day of every calendar quarter thereafter.
The final acceptance report having been signed on February 5, 2008, the parties have agreed to enter into a commercial lease agreement which is effective retroactive to May 22, 2006.
AGREEMENT
Consequently, the “lessor” leases, subject to the terms and conditions set forth below, to the “Lessee”, which accepts, the property described below:
1/ DESCRIPTION
The premises are located in Montbonnot Saint-Xxxxxx (38330) Zirst, at 000 xxx Xxxxxxxxx, a building composed of three stories of 780 m2 each, with elevator, consisting of:
A ground floor for use as a clean room and for primary and secondary packaging.
Two floors for use as offices and tertiary activities.
It is stipulated that with the explicit agreement of the “lessee”, the “lessor” reserves for itself the use and enjoyment of Office No. 205 located on the 2nd floor, or any other equivalent office which shall remain assigned to it for the term of the lease, for the use of its legal representative for the management of the leased building.
Any error in the above description may not be invoked as grounds for a reduction or increase of the rent, and the parties represent and warrant that they are completely familiar with the size, location and characteristics of the future properties.
2/ TERM - ENTRY INTO FORCE
This lease is granted and accepted for a period of nine full and consecutive years, is in force retroactive to May 22, 2006, and expires May 22, 2015.
Pursuant to the provisions of Article L. 145-4 of the Commercial Code, the Lessee shall have the option of cancelling the lease at the expiration of each three-year period; the Lessor shall have the same option if it intends to invoke the provisions of Articles L. 145-18, L. 145-12 and L. 145-24 of the Commercial Code to rebuild the existing structure, to add floors to the building or to carry out work specified or authorized in the context of a real estate restoration operation.
3/ INTENDED OCCUPATION AND USE
Subject to the provisions of Article 19 below, the Lessee itself must peacefully occupy the leased premises in accordance with the requirements of the Civil Code and for the needs of the administrative and technical operations (including but not limited to packaging and storage) inherent to the activity of the manufacture and sale of surgical instruments and products, to the exclusion of any other utilization.
The lessee may not modify this intended use on any pretext, even temporarily, nor may it change the nature of the activity conducted on the premises.
The lessee may, however, add associated or complementary activities, although on the explicit condition that it makes its intentions known to the lessor and asks it for the authorization via extrajudicial process pursuant to Articles L. 145-47 ff. of the Commercial Code.
4/ CONDITION OF THE LEASED PREMISES
The lessee accepts the premises in their current condition as of the date of this agreement.
5/ MAINTENANCE
To the exclusion of the repairs stipulated in Article 606 of the Civil Code, which remain the responsibility of the lessor, the lessee shall maintain the leased premises in good condition and is responsible for minor repairs necessitated by its tenancy.
The lessee shall maintain all the installations for its own personal use, including but not limited to heating, air conditioning, fire extinguishers, electrical installations, lines and conduits for water, natural gas, electricity, telephone and miscellaneous fluids, as well as the latches and locks of the windows, doors and shutters, metal shutters, plate glass, window panes, floors, tiling, floor coverings, paneling, ceilings etc.
The lessee shall be liable for accidents caused by and to these items.
The lessee must take all precautions to prevent damage caused by ice or freezing.
The lessee shall also be liable for all repairs that are normally the responsibility of the lessor, but which may be required either because of the failure of the lessee to perform repairs for which it is responsible as cited above, or as a result of wear or damage caused by the lessee, its employees or its visitors, either in the leased premises or in other parts of the building.
6/ REPAIRS AND CONSTRUCTION IN THE BUILDING
The lessee must permit, regardless of the any annoyances experienced by it, all repairs, reconstructions, addition of floors and any other construction work that may be performed in the building and may not request any indemnity or reduction of the rent, regardless of the scope and duration of the work, and waiving the provisions of Article 1724 of the Civil Code, even when the work lasts for a period longer than forty days.
The lessee must immediately inform the lessor of any repair for which the latter is responsible and the lessee finds is necessary. The lessee may be liable for any consequences resulting from its failure or delay in notifying the lessor of the need for such repairs.
The lessee must remove, at its own expense and without delay, all falsework and decorations, as well as all installations it may have constructed and the removal of which is necessary for the identification and repair of leaks of all types, cracks in the exhaust or ventilation ducts, including but not limited to after fires or seepage and in general for the execution of all construction work.
The lessee must remove at its own expense and without delay, during the resurfacing of outside walls, all fixtures, signage etc., the removal of which may be necessary for the execution of the work.
7/ TRANSFORMATIONS AND IMPROVEMENTS BY THE LESSEE
The lessee may not perform any demolition, construction or any change of layout, partitioning, make any openings in the walls or install any panel or sign on the facades or anywhere else in the leased premises without prior written permission from the lessor. If the work is authorized, the work must be performed under the supervision of the lessor’s architect, whose fees shall be paid by the lessee.
Upon the expiration of this lease, all decorations, improvements and constructions installed by the lessee in the leased premises shall remain the property of the lessor without any compensation paid to the lessee.
8/ FURNISHING AND OBLIGATION TO USE
The lessee must keep the leased premises in continuous use. The lessee must also furnish the premises and keep them continuously stocked at all times with equipment, merchandise and furniture of sufficient value to cover the payment of the rent and the miscellaneous payments or reimbursements that are associated with the use of the premises.
9/ INSURANCE
The lessee must insure with a solvent insurance company and keep covered for the entire term of the lease all equipment, furniture, merchandise and miscellaneous items used to furnish the leased premises, as well as all the installations and fixtures, in particular against fire, explosions, water damage and natural disasters.
The coverage must include, among other things, electrical damage, breakage of computer and office equipment, glass breakage, tangible and intangible damage resulting from theft or attempted theft, costs of removal and replacement, removal of debris and demolition, including transport of the rubble, expert’s fees and indirect losses.
The lessee must also obtain coverage for claims by neighbors and third parties.
The lessee must also purchase insurance covering the pecuniary consequences of its civil liability, and bodily injury or property damage that may be caused to third parties, not only as a result of its tenancy and the use of the fixtures and installations, but also damage and injury caused by its employees and vicarious agents.
The policy must also provide coverage of the pecuniary consequences of the lessor’s civil liability on account of any damage that may be caused to third parties by the buildings, land, walls and fences.
The lessor and its insurors waive all recourse against the lessee, this waiver of recourse being reciprocal, whereby the lessee and its insurors also waive all recourse against the lessor.
In response to a first request from the lessor or its representative, the lessee must provide documentary evidence of the subscription of said insurance policies and the payment of the corresponding premiums.
10/ PREVENTION OF NATURAL AND TECHNOLOGICAL RISKS
The lessee acknowledges, pursuant to the provisions of Article L. 125-5 of the Environmental Code, that it has been informed of the status of the leased premises with regard to natural and technological risks, and that it is aware of the status of the natural and technological risks. The lessee also acknowledges receipt of the summary report prepared by the Prefecture of Isère, as well as the status of the risks, as these documents are annexed to this Agreement.
11/ TAXES AND ASSESSMENTS
Independently of the reimbursements it may be required to make to the lessor, the lessee must pay all taxes, contributions or assessments for which it is responsible and for which the lessor may be held liable for any reason whatever, and must prove the payment of the amounts in question in response to any request from the lessor, in particular upon the expiration of the lease, before vacating the premises.
The parties explicitly agree that the lessee shall reimburse the lessor for its percentage of the real-estate tax on the improved property.
This participation shall be payable, at the option of the lessor, either at the end of the period, upon receipt of the tax assessment, or in installments, quarterly and in advance, at the same time as the rent for the premises currently leased, with a settlement at the end of the period, as soon as the lessor has been informed of the exact amount of said tax.
12/ COMPLIANCE WITH GOVERNMENT AND OTHER REQUIREMENTS
The lessee must obey the requirements, regulations and orders in force, including but not limited to those related to road maintenance, cleanliness, the police, the labor inspection office and compliance of the premises with general health and safety standards, so that the lessor is protected and held harmless from any and all claims, and the lessee must be responsible for all resulting repairs and construction work.
If, now or in the future, there are formal regulations governing the use and enjoyment of the property or condominium rules for the building, the lessee must obey all such rules and regulations. The lessee must also comply with any decision duly adopted by the meeting of the co-owners.
13/ CLAIMS FROM OR AGAINST THIRD PARTIES
The lessee must assume personal responsibility, at its own risk, peril and expense for any claims made by the other occupants of the building, the neighbors or third parties, including but not limited to noise, odors, heat or trepidations, caused by it or by equipment belonging to it, whereby the lessor must be protected and held harmless from any such claims.
Nevertheless, if the lessor is required to pay any sums as a result of the lessee’s actions, the lessee shall be required to reimburse the lessor without delay.
The lessee must assume personal responsibility for all damage caused to the leased premises and all interference with enjoyment caused by the other occupants of the building, neighbors or third parties and must take action directly against the parties responsible for the interference, whereby the lessor must be protected and held harmless.
14/ SECURITY
The lessee shall be personally responsible for the security and surveillance of its premises. The lessor may not in any case or for any reason be held liable for thefts or misappropriation of which the lessee may be the victim in the leased premises.
15/ DESTRUCTION OF THE LEASED PREMISES
If the premises are totally destroyed by an event which is beyond the lessor’s control, this lease shall be cancelled ipso jure without payment of any indemnity.
In the event of a partial destruction of the premises, this lease may be cancelled without indemnity at the request of either party, notwithstanding the provisions of Article 1722 of the Civil Code, but without prejudice, for the lessor, to its potential recourse against the lessee if the destruction was the fault of the latter.
16/ INTERRUPTION IN PUBLIC UTILITIES
The lessor may not be held liable for irregularities or interruptions in the supply of water, natural gas, electricity or any other analogous public utilities outside the building, nor is the lessor required to give the lessee advance notice of interruptions.
17/ RETURN OF THE PREMISES
On the occasion of the expiration of the lease, the lessee must notify the lessor one month in advance of the date on which it plans to vacate the premises so that the lessor can submit the required information to the tax authorities.
The lessee must return the keys on the day it vacates the premises, even if that is before the expiration of the current term of the lease.
18/ AMENDMENT - WAIVERS - SEVERABILITY
This agreement may only be amended by an explicit written document in the form of a bilateral agreement or an exchange of letters.
An amendment of this type may not in any case be deemed to have been made as a result of a lack of action on the part of either party or a simple failure of any frequency and duration to enforce its rights. The lessor and the lessee are free at any time to demand the strict enforcement of the clauses and stipulations that have not been the subject of an explicit or written amendment.
The lease is held to be indivisible for the sole benefit of the lessor, in particular in the case of any sub-lease that may be authorized. In the case of co-lessees as the result of any change of ownership, the obligation of the co-lessees shall be deemed joint and indivisible.
19/ ASSIGNMENT - SUB-LEASING
The lessee may not:
· allow the enjoyment of the leased premises to any party whatever in any form whatever, even temporarily, for free or for a short period, or sub-lease the premises in whole or in part,
except for the benefit of any company having its registered office in France which is the parent company or subsidiary of the lessee, or for the benefit of any company having its registered office in France that controls the lessee or is controlled by the lessee within the meaning of Article L. 233-3-I of the Commercial Code.
· assign its right to this lease, except in totality to its business successor, in which case it must obtain permission for said assignment from the lessor and not simply notify it of the transfer of the lease, and must give the lessor an execution copy or a copy of the assignment document which shall serve as title with respect to the assignee.
The lessee shall remain the guarantor, jointly and severally with its assignee and all successive assignees, as well as with its sub-lessee or sub-lessees, for payment of the rent and charges, current and future, and for compliance with the conditions of this lease.
The lessee may not transfer or assign the lease if any rent or charges are due.
20/ RENT
This lease is granted and accepted in exchange for an annual rent, net of taxes of four hundred eighty thousand euros (480,000 €) counting from the completion of the construction. The acceptance report shall represent the beginning of the rental period strictly speaking.
By explicit agreement, the rent stipulated above shall be reduced quarterly by the amount of fifteen thousand euros (15,000 €) net of taxes, by crediting a portion of the pre-rental fees paid, until the full amount of the pre-rental fees is amortized.
This rent will be subject to the value-added tax at the rate in force.
The lessee shall reimburse the lessor for the amount of the tax assessed on the rent and charges on the occasion of the payment of each installment of the rent.
The rent shall be payable quarterly and in advance in equal installments of one hundred twenty thousand euros (120,000 €) net of taxes, at the lessor’s registered office or at the offices of the person or company managing the leased premises in the lessor’s place, for the first time upon delivery of the premises and on the first day of each calendar quarter thereafter.
Miscellaneous charges and services shall be reimbursed under the conditions described in greater detail in the article entitled “Charges” below.
The rent for the premises described above is subject to variations in proportion to the index of the cost of construction published quarterly by the I.N.S.E.E.
This article constitutes a conventional indexing clause and does not refer to the triennial revision permitted by law pursuant to Articles 26 and 27 of the Decree dated September 30, 1953, which shall be applied ipso jure.
The rent shall be adjusted on the basis of this clause every 3 years counting from the date of entry into force of the lease. The rent shall vary by the same percentage as the selected index. The indexing shall enter into force automatically without the requirement for prior notification.
If the selected index is no longer published or can no longer be applied for any reason whatever, it shall be replaced by the closest index, which shall be identified, in case of doubt, by an expert acting for both parties, appointed by agreement between them or, if no agreement can be
reached, by an order of the President of the court in response to a petition from the more diligent party. If the expert declines to accept the assignment, resigns or is unable to perform the task for any reason whatever, a replacement shall be appointed in the same manner.
21/ CHARGES
The lessee shall pay, either by direct payment to the supplier or by reimbursement to the lessor, its proportional share of the costs of maintenance, services and all other building charges, plus the VAT, where applicable.
The lessee shall pay all the expenses for the supply of water, natural gas, fuel, telephone, security etc. directly.
The reimbursement to the lessor of all these charges or expenses shall be made at the same time as the payment of each installment of the rent in the form of provisional installment payments, with a final settlement once a year.
22/ CANCELLATION
If payment in full of even a single installment of the rent or reimbursement of expenses, charges or services that represent accessory costs is not received when due, or in the event of a default of any of the conditions of this lease, and one month after a simple demand for payment or an official demand for payment from a bailiff has gone unheeded, containing a statement by the lessor of its intention to invoke this clause, this lease shall be cancelled ipso jure if the lessor considers it appropriate, without the need to bring formal proceedings
If the lessee refuses to vacate the premises, it may be evicted without delay by a simple interim order issued by the President of the Regional Court of Grenoble and immediately enforceable, notwithstanding any appeal.
23/ SECURITY DEPOSIT
The lessor shall receive from the lessee the sum of seventy-eight thousand nine hundred sixty-six euros (78,966 euros) corresponding to three (3) months of rent, in payment of the rent and to guarantee the proper performance of the terms and conditions of this lease, repairs resulting from the tenancy and all amounts owed by the lessee for which the lessor could be held liable.
23/ COSTS
The lessee shall pay all the costs relating to this agreement and its successors.
24/ ADDRESS OF SERVICE
For the performance of this agreement and its successors, the parties elect address of service at the location of their respective registered offices.
Executed in Montbonnot in two originals
on February 6, 2008
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for SCI BALUX |
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for SAS “TORNIER” |
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Alain Tornier |
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Xxxxxxx Xxxxx |
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/s/ Alain Tornier |
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/s/ Xxxxxxx Xxxxx |
