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EXHIBIT 10.5
LEASE AGREEMENT
(unofficial English translation)
TABLE OF CONTENTS
Article 1 Object
Article 2 Destination of Use
Article 3 Finishing Works
Article 4 Sublease
Article 5 Duration
Article 6 Use of the Buildings
Article 7 Rent and expenses
Article 8 Representations and warranties of the Lessor
Article 9 Improvements and Additions
Article 10 Maintenance
Article 11 Liability
Article 12 Insurance
Article 13 Termination
Article 14 Jurisdiction
Article 15 General
Article 16 Guarantee
LEASE AGREEMENT
BETWEEN
PIRELLI CAVI E SISTEMI S.p.A., having its corporate seat in Milano, Viale Sarca
n. 222, capital(euro)12,694,200.00 fully paid up, registered with the Milan
Companies Register, with the No. 197367 Milan Tribunal, fiscal code No.
00470500018, represented by Xxxxx Xxxxxxx, duly empowered in his capacity as
Managing Director of the Company (hereinafter "Lessor" or "Pirelli"),
AND
CORNING O.T.I. S.r.l., having its corporate seat in Milan, Viale Sarca n. 222,
capital(euro)37,152,985.00 fully paid up, registered with the Milan Companies'
Register; fiscal code and registration No 03540780156, registered with. R.E.A.
No 958625, represented by. Xxxxxxx Xxxxxxx, duly empowered, in his capacity as
Chairman and managing Director appointed on December 12, 2000 by the Board of
Directors of the Company (hereinafter "the Lessee" or "OTI")
Whereas
(a) Lessor has the full and free ownership of certain real estate
properties for industrial destination located in San Xxxxxx Milanese
(Milano), Via Xxxxxxxx Xxxxxxx, consisting of about 55,000 square meter
land, on which a number of buildings for industrial, services and
offices use are located;
(b) on December 22, 2000 the Parties entered into a lease for some
buildings existing on the land being the property of the Lessor,
located in San Xxxxxx as per recital (a), of which one still to be
built (the Technological Building as defined in paragraph 1.1(ii)
below) and other to be restructured, indicated as "First Buildings", as
well as new buildings to be built on another part of land, indicated
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as the "Second Buildings", all based on a project and specifications
agreed upon between Pirelli and OTI;
(c) With Pirelli's consent, OTI has installed equipment and machinery owned
by OTI, among which "clean rooms" with machinery, "clean rooms" without
machinery, and service equipment;
(d) OTI has communicated its decision to renounce the construction of
"Second Buildings" to Pirelli , and has also communicated its intention
to lease a part only of the "First Buildings", which in the meantime
have been built and restructured by Pirelli, at the exception of the
restructuring of the Office Building as defined in paragraph 1.1(iii)
below, the plan of extraordinary maintenance of which is dealt with
elsewhere in this agreement;
(e) therefore the Parties have negotiated in good faith a new agreement for
the buildings located in San Xxxxxx with the purpose to supersede any
preceding understanding and agreement between the Parties with respect
to such buildings, and wish to enter into this lease in order to
supersede and replace the agreement entered into on December 22, 2000.
Now Therefore in consideration of the above recitals. which are an integral part
of this agreement, the Parties agree as follows:
ARTICLE 1. OBJECT
1.1 Lessor leases the real estate as listed below (hereinafter the
"Buildings") to Lessee starting as of January 1(degree), 2003 (the
"Effective Date"), on the terms and conditions as set forth
hereinafter:
(i) part of the production building consisting of two floors for
an overall commercial area of about sqm. 11,000, restructured
(the "Production Building");
(ii) new technological building consisting of one underground floor
and two floors for an overall area of sqm.. 3,200 (the
"Technological Building");
(iii) small offices building connected to the building under (i)
above through a catwalk, consisting of three floors, without
basement, for an overall commercial area of about sqm. 1,660,
(the "Offices Building").
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The Buildings under items (i), (ii) and (iii) above are marked by a
grey broken line in the plan attached as Attachment 1.2 and by a blue
broken line in the plans attached as Attachments "3/A" and "3/B".
1.2 Lessor furthermore grants Lessee the right to use the shared areas and
equipments in proportion to the part of buildings occupied by Lessee,
such shared areas and equipments consisting, among others, of the
following: main and service driveway, internal and external parking,
squares, green areas, fencing, lighting for parking and squares,
sewage, disposal of sewage, plant ground, fire-fighting equipment
(pumps area, underground ring, and fire plugs ), the power receiving
building, (and related way), the xxxxx and the drinking and
non-drinking water network, goods elevators at the shared East-West
corridor and related safety staircase and emergency liquids collecting
and storage equipment.
All Buildings are located in San Xxxxxx Milanese (Milan) Via Xxxxxxxx
Xxxxxxx, and the area where they are is identified by a yellow
perimeter in the plan attached as Attachment "1.2"; such area includes
the shared parts, identified by the white areas (nether grey nor
green); the parts identified by a blue broken line in the plan attached
as Attachment 1.2 as well as those identified by a pink broken line in
the plans attached as Attachments "3/A" e "3/B"are also shared parts.
1.3 The Parties acknowledge that one part of the Production Building, on
two floors, as well as the buildings close to the entrance as
identified by green broken line in the plan attached as Attachment 1.2
(the Further Buildings")are excluded from the lease.
ARTICLE 2. DESTINATION OF USE
2.1 The Buildings are leased for exclusive use as industrial facilities and
activities related thereto (such as Data Processing Centre,
Laboratories, Warehouse, etc.). The Parties acknowledge that the
industrial destination does not include, other than within the limits
set forth by the applicable legislation, dangerous or polluting
activities, which might negatively affect [jeopardize] (be they
attributable to the Lessee or to any agent other than the Lessee,
including by way
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of example noises, percussion, vibrations, radiations, magnetic fields,
irritating non- protected lighting, gas and fine dust emissions,
open-air storage not adequately concealed from the public and the
houses nearby) the use of the industrial complex with respect to the
neighbouring activities and residences.
2.2 Throughout the validity period of this agreement Lessee shall use the
Buildings in compliance with the permits obtained by Lessee for the
Lessee's activities and pursuant to the regulations in force from time
to time now or in the future, Health Regulations as well as state and
regional laws and relevant regulations, including those from the
Municipality, requirements by the administrative authorities competent
as to construction in general as well as those relating to the specific
technical activity performed by Lessee.
ARTICLE 3. FINISHING WORKS
3.1 The Parties acknowledge that works of extraordinary maintenance of the
Offices Building are in process for the purpose of rendering the
mechanical, electrical and elevator equipments, the waterworks,
lavatories, air conditioning, roofing, including rainspouts efficient
and complying with the applicable laws and regulations. Plasterboard
damaged by water are being repaired, a fire-cutting door is being
installed, the cantilever roof is being repaired and the required
masonry is being put in place. The above listed works are indicated in
the technical specifications which constitute Attachment 2.
3.2 The Parties acknowledge that the works for the arrangement of the areas
outside the Buildings as per the Project attached to the notice of
starting works (D.I.A), including arrangement of the fencing.
3.3 The works under Paragraphs 3.1 and 3.2 shall be at Lessor's cost and
expense, provided that the maximum amount of cost and expense to be
sustained by Lessor for the works under paragraph 3.1 shall not exceed
the amount of (euro) 200,000.00.
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3.4 On or before the Effective Date, the Buildings shall be handed over [by
Lessor] to Lessee. Handing over shall be recorded in the minutes, which
shall be made by both parties and shall contain the description of the
state of the Buildings.
ARTICLE 4. SUBLEASE
4.1 Lessee may sublease the areas identified by red broken lines on blue
background in the plans attached as Attachments "3/A" and "3/B", and,
in addition thereto, laboratories, offices or service areas up to a
maximum of 50% of the overall leased area.
4.2 Change of destination of the Buildings is not allowed; assignment of
all or part of the lease is not allowed, not even in the framework of
an assignment or contribution of business, unless consented to in
writing by Lessor; such consent shall not be unreasonably withheld if
the assignee of the business is, in the reasonable judgement of Lessor,
sufficiently reliable as to its solvency and compliance with the
obligations under this agreement vis-a vis the Lessor. However sublease
or assignment to subsidiaries - as defined in article 2359 of the
Italian Civil Code or to other affiliates of Lessee is allowed.
ARTICLE 5. DURATION
5.1 The lease of the Buildings shall become effective on the Effective
date. Subject to the provisions under paragraphs 5.3 and 5.4 below,
this lease has the duration of 6 (six)years from the Effective Date.
Subject to article 27, last sentence of Law No. 392 del 27 July 1978,
neither Party may withdraw from the agreement before the expiry date.
5.2 Upon written request, the Lessee shall be authorized to have access to
the Buildings before the Effective Date for the purposes of the due
performance of the activities relating to the services and of the
production lines as well as the activities connected with the moving.
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5.3 On the first six year expiry, this agreement shall automatically
renewed for a further six year period, unless the Lessee gives at least
12 months' notice, to be communicated in writing via registered mail.
If Corning at any time during the validity of this agreement transfers
the direct or indirect control of Lessee to third parties, Lessor
undertakes to negotiate in good faith, upon request by Lessee, the
payment by Lessee of the remaining rent (provided that the Lessor is
obliged to endeavour for the remaining term of the lease, to lease the
Buildings to third parties; in which case, Lessor shall reimburse the
balance, if any, of the amounts received from Lessee and the amounts
received from the third party lessees, up to expiration of the
respective lease [to Lessee]. Therefore if the amounts received by
Lessor from the third party lessee is equal to, or larger than, the
amounts received by Lessor from Lessee, Lessor shall reimburse Lessee
the entire amount paid by Lessee to Lessor). Furthermore, Lessee shall
reimburse the costs incurred by Lessor for (a) payments to third
parties relating to the cleaning of the leased areas in order to
restate such areas into the same conditions as at the beginning of the
lease to the extent required for the purposes of leasing the areas to
third parties and (b) for the advertising relating the availability of
the premises for lease to third parties.
5.4 It will be a just cause for termination of this lease at any time
without any indemnification becoming due the liquidation by Lessee and
by Corning (other than for a non material part thereof) of the activity
of Lessee in the field of optical components as carried out by Lessee
at the date hereof. The termination shall be effective as of the date
set forth in the written notice, which date shall be no earlier than 6
(six) month from the date when the notice was sent to Lessor by Lessee.
The notice shall be sent by registered mail with confirmation of
receipt confirmed by fax on the same day of mailing. The provisions of
this agreement regulating the obligations of Lessee at the expiration
of the agreement shall apply.
ARTICLE 6. UTILIZATION OF THE BUILDINGS
6.1 Lessee acknowledges that it has seen the Buildings and has found them
in a good state for the purposes of lease, subject to completion of the
works as per article 3
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above, which the Lessor shall complete by December 31, 2003, provided
that certain minor works and finishing works may be completed at a
later date. Paragraph 6.3 shall apply to these latter works.
6.2 At the expiry [ termination] of this agreement Lessee shall hand over
the Buildings to Lessor free from persons and goods and in the same
state as they were received by Lessee, save for wear and tear by use
and additions and improvements as per article 9 below.
6.3 For the purposes of performing the works under article 3 above and for
the duration of such works, Lessee hereby allows Lessor to enter the
Buildings also after the Effective Date..
6.4 Lessee furthermore undertakes to allow Lessor or any other third party
who have been granted by Lessor for any reason the use of the Further
Buildings, access thorough the shared areas for the purposes of the
normal use of such Further Buildings.
6.5 The Parties acknowledge that the areas described in article 1.2, and
listed as shared areas as well as the service equipment thereto are for
the shared use by Lessee and Lessor and that therefore such areas may
be used by Lessee, by Lessor and by such persons to whom to Lessor or
Lessee respectively shall grant for any reason, the use of such areas
and equipment. The related operating costs for ordinary maintenance,
cleaning and surveillance shall be borne by the users in proportion to
the leased or owned areas, respectively
ARTICLE 7. RENT AND OPERATING EXPENSES
7.1 The monthly rent is (euro) 75,000.00 plus VAT as of the Effective Date.
However until Lessee shall have entered into subleases with third
parties for the areas listed in paragraph 4.1 above, the monthly rent
shall be (euro) 54,166.67 plus VAT, consequent to the more limited use
of the Buildings. Provided that the rent of monthly (euro) 75.000,00
plus VAT shall be due starting on July 1(degrees),2003 latest.
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7.2 Lessee undertakes to pay Lessor advances on the rent due for the first
two quarters of the lease, according to such timing and amounts as to
allow Lessor to timely pay the invoices for the extraordinary
maintenance works for the Offices Building, which are at Lessor's
expense and are payable upon progress of works. The payment of the
advances shall be effected on a monthly basis, upon prior presentation
of the relevant documentation (copy of suppliers' invoices and progress
of works statement)
7.3 The Parties agree that at the expiry of the 6th year lease and in case
the lease is renewed, the rent for the further six years shall
automatically be adjusted to make it up to the market rent, subject to
material average increases having occurred before or at such date in
the industrial area of San Xxxxxx and neighbouring areas with respect
to the present market rents. For the purposes of this provision, it
will be deemed to be "material" rent increases, increases in excess of
20% with respect to the rent of the preceding year.
7.4 If the increases under 7.3 above have occurred, the Parties undertake
to negotiate in good faith the new rent applicable to the subsequent
six years of lease. If notwithstanding the increase under article 7.3
above, the new rent has not been agreed upon within 30 days of the six-
year expiry, the rent shall be established by an arbitrator mutually
appointed by the Parties or, lacking agreement of the Parties, by the
Chairman of the Milan Chamber of Commerce( who shall select the
arbitrator among well known professionals in the field of the real
estate lease market. In the determination of the rent the arbitrator
shall take into account the following items in the following order: (i)
the agreements already reached in writing by the Parties; (ii) the
rents applicable to industrial building complexes for leases entered
into in the preceding year, and (iii) the indications given by the
associations in the same field. The Parties hereby undertake that they
will treat the determinations by the arbitrator as the expression of
their own will. Furthermore the Parties expressly agree that the
arbitrator shall act according to his equitable judgement pursuant to
article 1349, sentence 1, of the Italian Civil Code.
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7.5 The arbitrator shall complete the determination of the rent within 30
days of his appointment. If the appointed arbitrator can not perform
his task as provided for in this paragraph, the Parties shall consult
in order to mutually agree upon another arbitrator for the same task.
Failing to reach the agreement, paragraph 7.4.above shall apply.
7.6 The fees and expenses for the performance of the arbitrator shall be
paid 50% by Lessee and 50% by Lessor.
7.7 The rent shall be adjusted on an annual basis according to the maximum
amount allowed by the law, which at present is 75% of the variation,
ascertained by ISTAT, of the consumer price index for the families of
workers and employees .
7.8 The rent shall be paid on a quarterly basis within the 20th day of the
due dates of January 1st, April 1st, July 1st, October 1st of each year
at the corporate seat of Lessor.
7.9 During the validity period of this agreement. Lessee shall bear the
expenses for the utilities, such as water, lighting, power, gas,
heating, and conditioning of the Buildings, as well as the operating
expenses of the shared parts as per article 1.2. The above mentioned
plants and equipment, the services present in the Buildings as well as
the shared areas under article 1.2 shall be operated by Lessee directly
or thorough a facility management company. Should Lessor for any
reason, grant the use of the Further Buildings to third parties, Lessee
undertakes to deliver such utilities, to the extent available, to the
third parties at a price such as to allow the recovery of the fixed and
variable costs of the production and distribution of such utilities up
to the point of delivery as well as the expenses for the operation of
the shared areas under art.1.2, plus a 10% compensation for
coordination and administration costs Any costs sustained for rendering
the services and supplying the utilities to the tenants of the Further
Buildings shall be borne by such tenants.
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7.10 Lessee shall not delay or suspend payment of rent under this article
beyond the deadlines established above, which deadlines are of the
essence pursuant to article 1457 of the Italian Civil Code.
7.11 Any claims or objections shall have to be asserted in a separate law
case. Furthermore Lessee shall not offset the rents against any
Lessee's credits whatsoever .
ARTICLE 8. REPRESENTATIONS AND WARRANTIES BY LESSOR .
8.1 Lessor hereby expressly represents and warrants the following.
(i) Lessor has the full ownership of the Buildings and all
information furnished to Lessee with respect to the Buildings
are true, complete and correct and the use of the Buildings by
Lessee as described in this agreement is in no way prohibited;
(ii) that as of the date hereof the Buildings are fit for the use
and the present industrial activity of Lessee and meet the
technical requirements and zoning requirements for the
carrying out by Lessee of the activity that Lessee proposes to
carry out, as described in this agreement and known to Lessor;
(iii) the Buildings are not subject to any restriction of any kind;
(iv) as of the date hereof the Buildings are in compliance with the
laws, regulations and permits applicable to the carrying out
by Lessee of the activity that Lessee is proposing to carry
out, as described in this agreement. To this purpose, Lessor
shall deliver to Lessee copy of all relevant administrative
documentation, technical certifications and authorizations;
(v) Lessor has not and will not violate any applicable
environmental laws, as a consequence of which the occupancy of
the Buildings could be jeopardized or which could constitute a
risk pursuant to the laws on safety at work as from time to
time in force. Lessor furthermore undertakes, in case
Dangerous Materials are ascertained to be present in the
Building, in the shared areas or in the vicinity thereof- to
the extent that the vicinity is such that the occupancy of the
same is jeopardized or there are risks pursuant to the laws on
safety at work from time to time - and evidence is given that
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such Dangerous Materials were present before the Effective
Date, to promptly remove the same at Lessor's sole expenses
and to remain responsible for damages of any kind caused by
the Dangerous Materials. For the purposes of this paragraph
"Dangerous Materials" shall mean any material so defined by
the applicable legislation in force.
8.2 Each declaration in this article 8 shall be true and correct as of the
date of January 1st and until expiry of this agreement.
ARTICLE 9. IMPROVEMENTS AND ADDITIONS
9.1 Lessee declares that it has seen the Buildings and that the Buildings
are fit for the use planned by Lessee. Lessee undertakes to hand the
Buildings back at the expiry of the Agreement in the same conditions,
save for normal wear and tear.
9.2 Additions as can not be removed without damaging the Buildings and
changes (at the exception of minor changes which do not require the
approval of the relevant competent authorities) shall not be effected
by Lessee without the prior consent of Lessor, which shall not
unreasonably withheld. Subject to the provisions of article 9.3 below,
such additions and changes shall not be removed at the expiry of the
agreement unless Lessor expressly agrees thereto. The following non-
removable additions have already been made by Lessee with the consent
of Lessor: building for pumps and extractors, polishing building, gas
bunker, nitrogen tank base, wood-work for intermediate floor and epoxy
varnishing on floor.
9.3 The improvements and the additions made by Lessee, e.g. the raceway for
electrical wiring, the gas piping, water piping made or added and in
general fixed equipment shall be retained by Lessor at the end of this
agreement. Notwithstanding articles 1592 and 1593 of the Italian Civil
Code, all improvements, changes and additions under this article 9.3
shall remain the ownership of the Lessor without any obligation as to
any compensation or indemnification, which are hereby waived by Lessee.
Provided that Lessor shall have the right at any time to require that
they are removed and the Buildings are
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brought back to the previous status at the expense of Lessee. The
Parties acknowledge that the "clean rooms" in the Production Building,
the "package"(pre-assembled)plants and the plants and removable
equipment in the Technological Building have been already installed
with the consent of Lessor and may be removed by Lessee at any time
according to the requirements of production and at the end of the
lease, if not removed earlier, shall be removed if Lessor so requests.
9.4 Lessee shall be responsible for plants and equipment and for any other
goods that Lessee shall have put into the Buildings, including the
"clean rooms" and shall bear any risk of loss of, or damage to, such
plants, equipment and/or goods from the time each of them has been
introduced into the Buildings, unless such events are attributable to
Lessor.
ARTICLE 10. MAINTENANCE
10.1 Lessee undertakes to keep the Buildings in the same conditions as at
the Effective Date, save for the improvements and the additions under
article 9 above and for the reasonable wear and tear for use,
compatible with regular and diligent maintenance and therefore shall
have all ordinary maintenance works performed at its care for the
purpose of keeping the Buildings, the areas and whatever handed over to
Lessee in the same conditions as at the Effective Date. The related
expenses, as better described in article 10.2 below, shall be borne by
Lessee. The expense related to the shared areas shall be shared between
Lessee and Lessor according to the same proportion as the used areas of
the Production Building and of the Offices Building.
10.2 Expenses mentioned in paragraph 10.2 above- subject to the works under
article 3. -, shall include the ordinary maintenance works, that is the
works for preservation, to be performed regularly, inclusive of the
works performed from time to time and those performed on an occasional
basis for the purposes of reducing the progressive deterioration of the
Buildings, plant and equipment. consequent to passing of time and use,
such as, by way of example, the
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restatement of plaster, painting of inside walls, maintenance of doors,
windows and casings and parts thereof, cleaning, lubrication, tuning up
of equipment, plants and parts thereof as well as small repairs, such
as replacing of items of roofing, or single steps, single doors or
windows, repairs to water plant, baths, heating and electric
facilities.
10.3 If Lessee does not perform the repairs within a reasonable delay,
Lessor may have such repairs performed at Lessee's expense.
10.4 Lessor shall perform the so called extraordinary maintenance pursuant
to articles 1621 and 1622 of the Italian Civil Code. Such works shall
include, without limitation, painting and or restoration of all or
parts of outside walls, roofing, squares, parts of building, plants
owned by and Lessor, replacement of all or material parts of machinery
owned by Lessor.
10.5 The Parties acknowledge that the undertaking of Lessee to sustain the
maintenance and repair expenses as per this article 10 has been taken
into account in calculating the rent set forth in article 7.
10.6 Lessor shall have the right to inspect the Buildings, without
interfering with the activities carried out therein and without
infringing the safety regulations of the Buildings and the privacy of
the employees of Lessee. If Lessor wishes to exercise its right to
inspect the Buildings during the lease , Lessor shall inform Lessee by
at least 5 working day's notice and shall ask Lessee's consent, which
shall not be unreasonably withheld.
ARTICLE 11. LIABILITY
11.1 Lessee is hereby declared custodian of the Buildings starting on the
Effective Date.
11.2 Lessee hereby declares Lessor exempt from any liability for direct
and/or indirect damages to the extent that such damages are not
consequent to facts or omissions
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of Lessor or of the persons using the Further Buildings and shall be
liable to the Lessor as well as to the third parties for any damages as
follows.
(i) damages caused by Lessee, which are suffered by Lessor or by
third parties and which derive from the use of the Buildings,
including, by way of example damages:
- deriving from the use of gas, water and electricity,
- caused by vibrations, percussion, explosion, fire,
overpouring of solvents, varnishes or other products
for industrial use, pouring of water, gas leakages,
immissions and emissions in excess of the limits set
forth in the law and regulations and any damages
deriving from environment pollution and from any
unlawful or negligent use of the Buildings.
(ii) damages caused by Lessee's employees or by any of the persons
admitted, even on a temporary basis, into the Buildings.
11.3 Lessor shall not be liable for breakdown of the services or any other
fact connected to the use or non-use of the Buildings for reasons not
attributable to Lessor; however the Lessor shall endeavour to make good
any such breakdowns as soon as possible.
11.4 Neither Lessor nor Lessee respectively shall be liable to the other
Party for loss of profit, loss of use, loss of production, loss of
contracts or for any further indirect or consequential damages suffered
by the other Party, unless such damage has been caused by wilful
misconduct or gross negligence.
11.5 Lessor shall endeavour to instruct and, if required, call the lessees
and/or purchasers of the Further Buildings to order to the purpose that
they should not cause any damage, trouble or interference whatsoever to
the normal course of the activities of Lessee and to the propriety of
the site. Lessee guarantees that its subleases under Article 4.1 above,
shall not cause any damage, trouble or interference whatsoever to the
normal activities of the other occupants of the Building or to the
propriety of the site.
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ARTICLE 12. INSURANCE
12.1 Lessee undertakes to insure and keep insured the Building during the
validity period of the lease against all risks connected with the lease
and for the market values communicated by Lessor and accepted by
Lessee.
12.2 Lessor undertakes to insure the property owned by Lessor (buildings and
plants) for the actual value of the property against any risks not
connected with the activity of Lessee. Such insurance shall also
include all and any damages caused to Lessee, and to third parties by
the buildings owned by Lessor and by the activities of Lessor, deriving
from any cause other than the activities carried out by Lessee.
12.3 Insurance of Lessee shall include third party liability for buildings
and all risks of loss or damage to the Building for causes attributable
to Lessee and shall be adequate with respect to the materials used by
Lessee and stocked in the Buildings and to the production of Lessee.
12.4 Lessee shall produce to Lessor the declaration by the Insurance
Company(ies) containing the insurance conditions, insured risks and
values insured. A similar declaration shall be produced by Lessor for
Lessor's insurance.
12.5 Failure by Lessee to enter into the insurance or suspension or
termination of the policy or inadequacy of the insured values to such
an extent as to jeopardize the validity of the insurance, shall give
Lessor the right to automatically adjust the values of the insurance at
Lessee's expense. Notwithstanding such insurance made by Lessor, Lessee
shall be obliged to reimburse Lessor the damage or part of a damage
suffered by Lessor and attributable to Lessee.
ARTICLE 13. TERMINATION
13.1 Failure by Lessee to pay the rent under Article 7 as well as any
material violation of any substantial obligation under this Agreement
or under the law which is not made good within 30 days of Lessee's
receiving the relevant notice from Lessor
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shall result in the termination of the agreement due to Lessee's
default and in the consequent obligation to pay the amounts due or
reimburse the damages - as the case may be - pursuant to Article 1456
of the Italian Civil Code.
13.2 Failure by Lessee to obtain the consents required for its activity
shall be deemed to be "serious reason" for withdrawal by Lessee from
this agreement.
13.3 Should Lessor waive its right to avail itself of the termination clause
[under 13.1], the delayed rent shall be paid by Lessee within 20 days
subsequent to the 30 days of receipt of the relevant notice by Lessee,
Lessor shall be entitled to be paid interest equal to prime rate by
Credito Italiano Bank plus 3 (three).
ARTICLE 14. JURISDICTION
The Parties agree that any dispute arising out of the interpretation or the
performance of this Agreement shall be submitted to the Tribunal of Milan
exclusively.
ARTICLE 15. GENERAL
15.1 The provisions of this Agreement are valid and effective between the
parties to the extent not in conflict with the specific provisions of
law relating to lease to the extent mandatorily applicable.
15.2 For any purposes of this Agreement, including notices and service, the
Parties hereby declare that they elect their domicile at the respective
corporate seats set forth in this Agreement.
Notices via fax shall be effected to the following numbers:
to Pirelli: 39 02 64423328
to OTI: 39 02 64427788
15.3 This Agreement shall be registered care of Lessor; the related cost
shall be shared by the Parties equally; Lessee may, at its option,
request the recording provided for in Article 2643 n. 8 of the Italian
Civil Code.
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15.4 For the purposes of Articles 34 and 35 of Law 392/1978, Lessee declares
that the Buildings shall be utilized for activities which do not
involve direct contact with the public (such as sales activities).
15.5 This Agreement is subject to 20% VAT pursuant to Article 31 bis of Law
154/89, as it refers to auxiliary buildings of cadastral category D.
ARTICLE 16. GUARANTEE
Corning Inc., a company established under the laws of the state of New York,
USA, with headquarters at 0 Xxxxxxxxxx Xxxxx, 00000 Xxx Xxxx, X.X.X (xx this
Agreement "Corning" and together with its subsidiaries "Corning Group"), owning
the entire capital of the Lessee, by signing this agreement guarantees the
payment of the annual rent, initially equal to (euro) 900,000.00 plus VAT
pursuant to this agreement.
16.1 Upon Corning ceasing to own directly or indirectly the capital stock of
Lessee, such guarantee shall be automatically terminated, on condition
that it is replaced (i) by a guarantee of the new parent company, if
any (as long as such new parent company at the time when replacing
Corning in this guarantee is in a substantially similar financial
position as Corning) or (ii) by bank guarantee securing such rental
payment by Lessee for the remaining term of this Agreement.
16.2 Notwithstanding any of the above, if this agreement is terminated
pursuant to Section 5.4, or under any other provision of this agreement
following the winding up, voluntary or involuntary, in any form, of the
optical components business of the Lessee whether or not such business
is still within Lessee at that time or is in another part of Corning
(save for any non material part thereof); then, upon such termination,
all obligations of Corning under this guarantee shall terminate.
Milano, ______________________
Pirelli Cavi e Sistemi S.p.A. Corning O.T.I. S.r.l.
_______________________________ __________________________
Corning Inc.
by ____________________________
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