EXHIBIT 10.42
PAGE 1
LEASE
BETWEEN STAR TELECOMMUNICATIONS DEUTSCHLAND GmbH
XXXXXXXXXXXX 0x
00000 XXXXXXXXX/XXXX
REPRESENTED BY
-LESSEE-
AND WSL WESTSTADT XXXXXXXXXXXXX XxxX
XX XXXXX 00
00000 XXXXXXXX/XX.
REPRESENTED BY XXX. XXXXXXX XXXXXXXX
-XXXXXX-
PAGE 2
SECTION 1
LEASED PROPERTY
1. Lessor grants a lease of training and office building with underground
parking lot in the premises in Xxxxxxxxx-Xxxx, Xxxxxxxxxxxx 0x.
2. Following premises will be let to less in the building set forth in
sub-paragraph 1, as indicated in the ground plan, Appendix 1:
2
a) approx. 2,586m of offices, technical areas, social rooms and
secondary areas on the 1st and 2nd floor.
2
b) m of storage space in the basement and attic story
c) car parking spaces in the underground parking lot
car parking spaces in the underground parking lot
of Novotel.
The final area leased results from the dimension of the leased area, which
will be prepared together with the handing over protocol in accordance with
the calculation of area attached to this contract, Appendix 2.
3. The floor plan of the leased areas and the required fittings will be set
forth in Appendix 1. Any additional costs accrued due to later special
requests by lessee have to be borne by lessee. Before executing special
requests on part of lessee, lessee has to be provided with a quotation,
including a statement of a possible delay with respect to the handing over
date. Special requests may not be executed until lessee has given its
consent to the execution according to the submitted quotation. The final
state of the floor plan and fittings of the rooms is subject to the
building authority's regulations.
SECTION 2
PURPOSE OF USE
1. The lease is made for entrepreneurial purposes in terms of the Turnover Tax
Law.
Lessee will make use of the leased areas as offices and technical areas
with social rooms and secondary areas as it is common practice.
2. Lessee is not entitled to use the leased premises for another purpose than
contractually agreed. A change of use is subject to prior written consent
by lessor, who shall not unreasonably withhold its consent.
PAGE 3
SECTION 3
DURATION OF LEASE
1. The lease commences on January 2nd, 1998. The lease is contracted for a
duration of 10 years. It is renewed for another 2 years, unless it is
terminated at least 6 months before end of the term of lease by one of the
contracting parties. The notice of termination of the lease must be given
in writing.
2. Lessee is entitled to start with the installation of operational equipment
before the stipulated date. It is obligated, however, to integrate the
works into the schedule of the building site. The leased premises are
regarded as complete particularly even if remaining structural work and
removal of defects are still to be attended to, provided that these works
and defects will only insignificantly affect the use. In case of a delay in
handing over, lessee shall not be entitled to terminate this contract or to
withdraw from this contract unless the handing over of the leased property
is not effected until February 28th, 1998 at the latest.
In case of termination of the lease due to rent arrears, rent shall include
incidental expenses as well.
SECTION 4
AMOUNT OF RENT
1. The monthly total amount of rent for the described leased areas in the
building indicated in the Appendix is
net rent per month DM 71,115.00
plus VAT, at present 15% DM 10,667.25
------------
GROSS RENT PER MONTH DM 81.782.25
2. The total amount of rent is calculated on the basis of the calculation of
the leased area and of the following table of rent:
2
a) approx. 2,586m of offices, technical areas,
social rooms and secondary areas
on the 1st and 2nd floor. DM 27.50
2
b) m of storage space in the basement
and attic story DM 15.00
c) car parking spaces in the underground
parking lot
car parking spaces in the underground
parking lot of Novotel DM 120.00
3. In addition to the rent, advance payments have to be made for the accruing
incidental expenses - including heating costs according to Section 5, in
the amount of DM 4.00/m(squared) leased area plus 15% VAT.
net apportionment per month DM 10,344.00
plus 15% VAT DM 1,551.60
------------
GROSS APPORTIONMENT PER MONTH DM 11,895.60
PAGE 4
SECTION 5
INCIDENTAL EXPENSES
1. Lessee shall bear the following incidental expenses plus VAT in proportion
of the areas leased by lessee to the total of the leased area of the
building (according to Section 1, Appendix 1), for which an advance payment
according to Section 4, sub-paragraph 3, has to be made. Incidental
expenses shall include all current costs incurred by lessor due to
ownership of the premises, grounds and fittings, including areas used by
the public. These costs are the following:
Insurance, water charges, canal dues, fees for refuse collection, land tax,
energy consumption in the general areas, chimney sweeping, street cleaning,
cleaning of building and facade, attention to grounds and green areas on
the whole of the premises, snow removal and gritting in icy weather,
janitor as well as costs of property management (3.5% of the total annual
gross rent), operation of passenger and goods elevators (firemen's
elevators) including complete maintenance and, if available, maintenance of
elevator emergency call device, interior decorative repairs in the general
areas, cost of maintenance, repair, upkeep, reconditioning, operation and
checking of the technical equipment (like for instance the heating system,
lifting facilities, fire alarm, access control facilities, facilities for
protection against the sun, ventilation and air conditioning equipment,
emergency power generating unit, supply meters etc.), maintenance of roof's
covering with greenery and of the waterproof sheetings as well as checking,
refilling and replacement of hand fire extinguishers.
If costs for heating, air conditioning or hot-water are determined
separately by intermediate meters for the area leased by lessee, lessee
shall bear these individually determinable consumption-based costs. If
that is not the case, the accruing expenditure on consumption will be
distributed at 33 per cent according to the size of the leased area and at
70% according to consumption determined by measuring facilities.
If water consumption is determined separately, lessee shall bear 100% of
the individual consumption costs. This applies to canal dues accordingly.
Not later than Sept. 30th of the subsequent year, lessor is obligated to
settle accounts with lessee on the incidental costs accrued during one year
of management (Jan. 1st to Dec. 31st), taking into account the advance
payments made according to Section 4, sub-paragraph 3.
Additional or short payments have to be mutually compensated immediately.
In the case of an increase or decrease in operating expenses, lessor shall
reassess the monthly advance payment correspondingly.
2. If the increase or the new introduction of operating expenses agreed by the
two parties causes lessor an additional financial burden, lessee is
obligated to pay the respective additional amount on a pro rata basis as
from receipt of a corresponding notification.
3. Lessor shall be entitled to alter the distribution code and the accounting
period in its fair judgment.
4. Registration with the competent public utilities shall be effected by
lessee in due time before commencement of lease.
PAGE 5
SECTION 6
CENTRAL HEATING AND HOT-WATER CONSUMPTION
1. Lessor is obligated to maintain operation of the central heating during
usual business hours if the outdoor temperature so requires, at least,
however, in the time from October 1st to April 30th. Ventilation and air
conditioning equipment - if available - are to be operated all the year
round.
2. Hot-water supply, if not effected by the central heating, has to be
provided at any time during usual business hours.
3. A fuel shortage beyond lessor's control, resulting in partial or complete
suspension of heating, does not entitle lessee to claim reduction or to
claim for damages. This also applies to the inevitable interruption of
operation of the heating facilities due to repair or maintenance purposes.
SECTION 7
ALTERATION OF THE AMOUNT OF RENT
1. The amount of rent remains unchanged during the first year after
commencement of lease.
After that date, the agreed amount of rent will change as soon as the
cost-of-living index determined by the Federal Statistical Office
(Statistisches Bundesamt) for a worker's family of 4 earning an average
income, assessed in the base year 1985 at 100 points, has increased or
decreased as compared with the corresponding level at commencement of
lease. In this case, the agreed amount of rent will be changed according
to the extent of change occurred. The altered amount of rent, determined
as described above, will be valid, in turn, for another period of at least
12 months. If then the above mentioned index will have increased or
decreased as compared to the last change of rent, the amount of rent will
be adjusted for a subsequent period of at least 12 months. The change of
the amount of rent is subject to a written request by the party entitled.
The altered amount of rent is due for payment on the 3rd business day of
the month following the receipt of the request.
2. In order to become effective, this agreement requires the approval by the
Land central bank (Landeszentralbank), to be obtained by lessor. In case
of refusal of this approval, however, the provisions agreed by the parties
shall remain valid. In this case, the parties will change the index clause
that way, that it will be approved and will be economically as similar to
the original clause as possible.
PAGE 6
SECTION 8
PAYMENT OF RENT
1. Rent, advance payment of incidental expenses and value added tax have to be
transferred, post-free and charges paid, monthly in advance, on the 2nd
business day of each month at the latest to lessor's account no.
11 00 58 195, Bank Code Number BLZ 550 500 00, Landesbank Rheinland-Pfalz
in Mainz.
2. Delay in payment entitles lessor to charge xxxxxxx costs of DM 15.00 per
reminder, incl. VAT plus postage and default interest of 2% p.a. above the
current discount rate of the Central Bank of Germany (Deutsche Bundesbank).
3. If lessee effects part payments on the accounts payable, lessor may set
these payments at its own option against the unsettled accounts, not paying
consideration to declarations made by lessee.
SECTION 9
SET-OFF, RETENTION
1. Lessee may claim the reduction of the amount of rent only with prior
written notification to lessor.
A set-off and retention by the two parties is possible only if undisputed
claims or claims raised with final and binding effect are concerned.
2. A retention and set-off due to claims arising from other obligations is
excluded. Claims for compensation according to Section 538 of the Civil
Code (BGB) are excluded, unless lessor has acted intentionally or with
gross negligence.
SECTION 10
SUBLETTING TO THIRD PARTIES
1. Lessee is not entitled to subletting or subleasing the premises to third
parties without prior written consent given by lessor. Lessor may only
refuse its consent if there are objective material reasons against such
subleasing. Subleasing to companies or subsidiaries of the same group is
exempt from this provision (Section 2, subparagraph 1 applies accordingly
to a possible sublessee).
2. In case of subleasing or subletting, lessee shall be liable for all acts or
failures by sublessee or that party, to whom it has sublet the use of the
leased premises.
PAGE 7
SECTION 11
PLAQUES, ADVERTISING EQUIPMENT
1. Lessee is entitled to fix a company plaque at the main entrance. The
lessor will indicate the position of the advertising equipment, its
possible dimensions as well as the possible design according to the
planned design of the exterior and considering the official guidelines.
2. Upon termination of lease, lessee is obligated to remove plaques and
advertising equipment as well as the damages caused by fixing, operation
and removal.
SECTION 12
USE OF THE ELEVATORS
1. Existing elevators will be in operation 24 hours a day.
2. In case of operational failures lessee is not entitled to uninterrupted
service. A control of the elevators is not provided. Failures have to be
communicated immediately to lessor or its representative.
SECTION 13
ELECTRICITY, GAS, WATER, HEATING FUEL
1. Existing electricity (incl. possibly existing telecom and antennae
cabling) networks as well as gas and water pipe networks may only be
used by lessee to such an extent, that no overstressing will occur. An
increased demand may be met by Lessee by extending supply pipes or lines
at its own expense after prior written consent of lessor. The laying of
any additional pipe or line network within the building is subject to
lessor's prior written consent.
2. In case of failures or damages of the supply network, lessee shall
provide for immediate cutoff and inform lessor. In case of imminent
danger, lessee is obligated to eliminate this imminent danger at once by
itself. Further repair of the damage shall be arranged for by lessor,
unless according to this contract the maintenance and repair are
incumbent on lessee. If the latter is not the case, lessor shall also
bear the cost incurred due to elimination of the imminent danger.
3. An alteration of the energy supply, in particular a change of the
current voltage, does not entitle lessee to assert claim for damages
against lessor. In such a case, however, lessee is entitled to
exceptional termination of contract.
PAGE 8
4. If power, gas or water supply or drainage is interrupted by
circumstances beyond lessor's control, if irregularities occur with
respect to supply or in case of floods or other catastrophes, lessee
shall have no right to claim reduction of rent or damages against
lessor. This applies to heating fuel supply accordingly, as long as it
is effected by the public utilities.
If the terms of delivery stipulated by the public utilities, from which
lessor purchases power or water, provide undertakings' liability for
interruptions in supply and for irregularities in delivery, lessor
hereby assigns any claims it may have against the public utilities to
lessee. Additional claims are not asserted by lessee, unless they could
be asserted by lessor as well.
SECTION 14
OFFICIAL PERMITS AND
OPERATING EQUIPMENT OF LESSEE
1. Lessor does not assume any liability for the fact that the permits
granted for the operation known and planned at present and for the
equipment required will continue until after the date of handing over
of the leased property (Section 3, sub-paragraph 1). Lessor warrants,
however, that a commercial use within the scope of lease set forth in
Section 2, sub-paragraph 1, is permitted. This applies in particular to
licenses as well. Lessee has to bear all the costs required for the
creation and maintenance of the preconditions for the operation of its
business. This also applies to advertising equipment etc.; obligations
imposed by the trade supervision or other authorities with respect to
lessee's business have to be complied with at lessee's own expense.
2. Before installing machines, heavy objects, other plant and equipment in
the leased premises, lessee shall ask lessor about the approved limit of
load and obtain lessor's written consent. Lessee is liable for damages
caused by failure to comply with this provision. If the installation of
this plant and equipment has an adverse effect on the building -
tremors, cracks, etc. - lessor may withdraw the granted permit if lessee
fails to take remedial action in the due course of time to be
stipulated. Lessee is liable for all plant and equipment brought in or
operated by lessee. If the installation or operation of lessee's plant
and equipment results in unreasonable disadvantages or detriments,
lessee is obligated to remove them or to discontinue operation unless it
can take remedial action.
3. Obligations within the scope of the building permit, imposed by the
construction supervision authorities with respect to lessee's operating
equipment, have to be complied with at lessee's own expense.
PAGE 9
SECTION 15
MAINTENANCE AND REPAIR OF LEASED PROPERTY
1. Lessee shall provide for sufficient cleaning, ventilation and heating of
the leased property and treat the rooms and the plant and equipment therein
with care and keep it free from pests.
2. Lessee is liable for any damages of and in the leased property and for
damages of the open space belonging to it, as long as these damages are
caused by itself, its employees, family members, vicarious agents,
sublessees, visitors, suppliers, customers and workmen, acting with gross
negligence.
3. Lessee is obligated, in particular, to have interior decorative repairs
of the leased premises executed at its own expense (repapering and/or
painting of the walls and ceilings, and, as agreed with lessor, painting
of coated floors, radiators, visible mains, rusts, doors, windows or
other parts, unless they have a coated, eloxed, varnished, galvanized or
similar surface) within reasonable intervals, and to exchange upper floor
coverings. Lessee shall maintain and repair lighting installations, xxxx
systems, thermometers, locks, water cocks, water closet flushing
apparatuses, wash-basins and sinks, stoves, gas burning installations,
electric appliances, ventilating equipment, water heaters and similar
technical installations, exclusively used for lessee's supply, including
the corresponding feeding pipes or lines and sewage pipes.
4. Lessee shall inform lessor immediately about any damage occurred with
respect to the leased property. Lessee is liable for consequential damages
caused by delayed notification.
5. Lessor is not liable for damages suffered by lessee or third parties with
respect to stored goods and fittings, irrespective of nature, origin,
duration or scope of influence, unless lessor has caused the damage
intentionally or by gross negligence. In other respects, lessor's
liability is limited to the coverage and the scope of the liability
insurance, unless lessor has caused the damage intentionally or by gross
negligence. The amount covered by the houseowner's liability insurance
amounts to DM 1,000,000.00 for property damage and pecuniary loss and to
DM 2,000,000.00 for bodily injury.
SECTION 16
ALTERATION OF AND IN THE LEASED PROPERTY BY LESSEE
1. Alterations of and in the leased property, in particular structural
alterations, built-ins, installations and the like, are subject to
lessor's prior written consent. It is lessee's sole responsibility
to obtain all the official permits required as well as to comply with
all the laws and regulations enacted in this respect. Lessor shall,
however, be of assistance - as far as possible - in obtaining contingent
official permits.
PAGE 10
Lessee shall bear all the respective costs and the costs for structural
alterations. On lessor's demand, lessee is obligated to remove the
structural alterations or built-ins partly or in full when moving and
to restore the former condition without requiring a reservation on the
part of lessor when giving its consent. Lessee is liable for any damages
occurring in connection with the structural alterations performed by
lessee.
2. If on termination of lease lessee intends to remove the installations it
has fitted to the leased property, it may offer these to be taken over
by lessor. In doing so, lessee shall make a price proposal, proving
production costs and day of manufacture. If lessor wishes to take over
the fittings, lessee has to be reasonably compensated. If lessor rejects
the fittings, lessee is obligated to restore the original condition of the
leased property.
SECTION 17
STRUCTURAL ALTERATIONS AND REPAIRS
BY LESSOR
1. Lessor may executed repair work and structural alterations, which may
become necessary for maintenance or economic exploitation of the property
or for enlargement of the building or for the elimination of damages,
without prior consent of lessee. This also applies to works and structural
measures, which are not strictly necessary but suitable, and will serve,
in particular, to modernize the building. Lessee shall provide access to
the rooms to be considered and must not hinder or delay the execution of
the works. Otherwise lessee shall compensate for damages caused by such
hindrance or delay. In the cases set forth above, lessee is not entitled
to claim reduction of rent unless insufficient consideration is taken of
lessee's interests, thus causing detriments to lessee.
SECTION 18
ADMITTANCE TO LEASED PROPERTY
1. During normal business hours, lessee shall ensure, that surveyors and
interested parties authorized by lessor may view and have access to the
leased property for the purpose of determination of the state of repair,
state of the building site, releasing, sale etc., after the visit having
been announced in due course of time. In case of emergency, the access has
to be possible at all hours of the day and night.
SECTION 19
DUTY TO SAFEGUARD TRAFFIC
1. Lessee is subject to the duty to safeguard traffic within its area of
lease, according to the legal provisions. In this respect, lessee
releases lessor from third party claims.
PAGE 11
SECTION 20
INSURANCE
1. Fire insurance, insurance against damages caused by tap water, storm and
tempest and EC, property liability insurance, fire liability and glass
insurance of the building are within lessor's responsibility. The
insurance premiums incurring in this respect have to be paid by lessee
as a part of the incidental costs.
2. Insurance of the objects, goods and built-ins as well as advertising
and operational equipment brought in by lessee is within lessee's
responsibility. Lessee is obligated to effect and maintain a business
liability insurance and a leased property damage insurance and to prove
on request the existence of insurance coverage to lessor.
SECTION 21
TERMINATION OF LEASE/
EXCEPTIONAL TERMINATION
1. On termination of lease, lessee shall return the leased property to
lessor in a state of expert redecoration (walls and ceilings repainted).
If floor coverings show signs of wear and tear to an extend exceeding
wear and tear caused by usual use, lessee shall have the coverings
replaced by a specialized company. If lessee fails to comply with this
obligation, lessor may have the leased property redecorated at lessee's
expense.
Lessee's obligation of vacation of premises covers all objects situated
within the area of the leased property unless they are owned by lessor. If
lessee fails to comply with its obligation of vacation, lessor is entitled
to have the vacation executed at lessee's expense. There is no obligation
on part of lessor to preserve such objects still within the area of the
leased property after termination of lease.
2. Lessor may immediately terminate the lease for material reasons, if:
a) lessee is in arrears with its rent payments or with other financial
obligations amounting to a month's rent for more than a month;
b) lessee continues the use of the leased property in breach of contract
or the unauthorized subletting to a third party despite admonition by
lessor;
c) a petition has been filed for institution of composition proceedings
or in bankruptcy with respect to lessee's assets or if lessee has made an
affirmation in lieu of an oath according to Section 807 of the Code of
Civil Procedure (ZPO) or if lessee discontinues payments;
d) lessee fails to comply with its essential contractual obligations
within a reasonable period of time despite written admonition by lessor;
PAGE 12
Lessee is entitled to a corresponding right of termination, if lessor
fails to comply with its obligations according to subparagraph 2 c/d above.
3. In case of termination of lease without notice, lessee is liable for any
loss of rent until termination of the agreed period of lease, which is
caused by the leased property not being rented or by the fact that in
case of a new lease the previous amount of rent cannot be achieved.
Lessor is obligated to do everything possible in order to find a new
lessee to take over the leased property. Lessor will accept a new lessee
provided by lessee, under the condition that the new lessee is comparable
to lessee in terms of kind and scope of operating business and with regard
to financial soundness.
4. On termination of lease, lessee shall hand over all the keys, including
those it has had made, to lessor.
SECTION 22
OTHER AGREEMENTS
1. Lessor is entitled to transfer any rights and obligations on the part of
lessor under this contract to third parties with the effect of discharging
debts, without lessee being in a position to derive any rights of any
nature from this fact.
2. Refuse originated by lessee's business activities, except office refuse,
may not be disposed of in the dustbins provided by lessor for general use,
but has to be disposed of by lessee itself.
SECTION 23
PROVISION OF SECURITY
1. In order to secure lessor's claims under this agreement, lessee is
obligated to provide a promise of surety by an important German bank
or Sparkasse (savings bank) amounting to 12 gross monthly rents incl.
incidental costs, immediately after signing of contract or to submit
a letter of support of its American parent company.
PAGE 13
SECTION 24
EFFECTIVENESS OF PROVISIONS OF CONTRACT
1. Later modifications and supplements to this contract must be made in
writing. It cannot be contracted out verbally. If any of the provisions
of this contract becomes legally invalid, be it partly or in full, the
validity of the other provisions shall remain unaffected. In such a case,
the contract has to be fulfilled correspondingly.
If the invalidity is caused by a determination of performance or time, it
will be replaced by the performance or time permitted by statute.
2. Place of jurisdiction is Frankfurt am Main.
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-lessee- -lessor-
