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EXHIBIT 10.26
LEASE AGREEMENT
by and between
1. Suddeutsche Feinmechanik GmbH,
BruckenstraBe, 63607 Wachtersbach
- hereafter referred to as "Landlord" -
and
2. UTI SFM Feinmechanik GmbH,
XxxxxxxxxxXx 0, 00000 Xxxx
- hereafter referred to as "Tenant" -.
1. The Landlord is the owner of the real estate located in Aura,
registered in the land register of the Local Court Gemunden/Main of
Aura, Volume 40, Sheet 2645, which has been marked in red on the land
and title map attached to this Agreement as Exhibit 1.
The Landlord rents out this entire real estate including all its
components, buildings and systems (no parts hereof are the fixed and
current assets being sold by the Landlord to the Tenant under the
respective agreement as of the date of signing this Agreement) to the
Tenant, exclusively for the purpose of utilization as production plant
for fine tubes and related products.
2. The landlord warrants to the Tenant that the building on the leased
property is in good condition and working order. Otherwise Tenant is
familiar with the condition of the real estate including its components
and accessories. It shall be obliged to maintain this condition at its
own expense. With exception to the maintenance of substantial component
parts, outer walls and the roof, the Tenant shall maintain and repair
the real estate except for the elimination of damages caused by events
in the responsibility of the Landlord or due to force majeure.
The parties are aware that the real estate and the groundwater are
partly contaminated with halogenated hydrocarbons (HHC) because of the
previous industrial utilization,
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and due to the governmental decrees issued as a result, which are
known to the Tenant, remediation measure must be carried out. The
Landlord shall indemnify the Tenant against present and future fees and
costs incurred because of these measures, unless these are costs and
levies resulting from the business operations of the Tenant itself.
The Landlord shall have the right to execute all measures on the real
estate resulting from the aforementioned decrees, and in case of
imminent danger, shall not require the tenant's prior consent.
To the extent that the Landlord purchases insurance to cover the
aforestated risks, it shall not have the right to pass the costs
therefore on to the Tenant.
3. Under consideration that the Tenant is to maintain the real estate, the
monthly rent shall be DM 4.50 per M(2) of built area. Calculated upon a
total built area of 5.694 M(2) (Exhibit 2), the total monthly rent
amounts to DM 25,623.00 plus value added tax at the statutory rate.
This amount, which has been agreed taking into consideration the
maintenance and repair obligations of the Tenant, is composed as
follows;
4. In addition to the rent pursuant to para. 3, the Tenant shall bear all
ancillary costs within the meaning of Section 27 of the Second Rent
Calculation Regulation attached to this Lease Agreement as Exhibit 3,
which is hereby made an integral part of this Agreement. The operating
expenses shall be reimbursed to the Landlord to the extent that the
tenant does not pay them directly to the respective creditor. The
Landlord shall have the right each calendar year to account for the
expenses disbursed by it and to request adequate monthly down payments.
The operating costs excluding input tax shall be increased by the
relevant value added tax.
Regardless of the said allocation of cost, the Landlord shall take out
at its own expense an insurance covering all real estate related risk
and shall provide evidence thereof to the Tenant.
The Tenant shall be required at its own expense to take out adequate
insurance for all liability risks resulting from its business operation
and to provide evidence thereof to the Landlord.
5. In connection with the use of the lease object, the Tenant shall comply
with all legal provisions.
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The provisions of para. 2 subpara. 2 notwithstanding, the Tenant shall
indemnify the Landlord against all risks and public obligations
resulting from its business operation conducted on the lease object.
6. This lease shall commence on June 15, 1999 and have an indefinite term.
It may be terminated by either party giving one year's written notice
to the other, such notice to take effect on December 31 of any calendar
year, but on December 31, 2004 at the earliest.
The Tenant shall have the right to renew the fixed term for 5 years
until June 15, 2009, by giving a one-sided notice. Such notice must be
made in writing by June 15, 2003 at the latest. Such option shall be
deemed exercised unless such exercise shall have been refused in
writing by June 15, 2003.
7. Adjustment of rent
In the event that the "Index for construction costs", as determined
and published by the Federal Bureau of Statistics (or its legal
successors) exceeds the level as of January 1, 2001, by more than 5%,
then the Landlord and the Tenant shall have each the right to ask for
renegotiating the rent.
In the event that the parties do not achieve an agreement within one
month upon receipt of a written notice requesting renegotiation, the
rent shall be deemed adjusted in accordance with the change of the
Index as of the beginning of the following month.
In each case of an increase of this index by more than 5% against the
status on which the previous adjustment was based, this adjustment
shall be repeated on the basis of the relevant most recent rent.
8. The Tenant shall have the right to mount advertising signs on the
buildings to the extent legally permitted. Obtaining any governmental
permits therefor shall be the Tenant's responsibility.
The Tenant shall have the right to expand or modify the buildings to
the extent permitted by the authorities, but only on the condition that
upon termination of the lease agreement the original condition must be
restored or a condition is created that was agreed by the parties in
writing before modification work began.
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9. The Tenant shall have the right to permit a third party to use the
rental object to, in particular to sub-lease the object. The Tenant
shall notify the Landlord of any such sub-lease.
10. The parties intend to grant to the Tenant a proprietory right to
purchase the leased real estate during the term of this Lease
Agreement.
11. There are no agreements other than those laid down in this Agreement.
Any modifications and amendments to this Agreement shall be valid only
if made in writing.
12. In the event that individual clauses of this Agreement shall be or
become invalid or this Agreement shall contain a gap, then the validity
of the remaining clauses shall not be affected. Instead of the invalid
clause, the parties shall agree upon a clause that comes closest to the
intention and purpose of the invalid clause. In the event of gaps, the
parties shall agree on such valid clause as corresponds to that which
they reasonably would have agreed according to the spirit and intention
of this Agreement had the matter been considered from the beginning.
Wachtersbach, this 14th day of June 1999
/s/ AUTHORIZED SIGNATURE /s/ AUTHORIZED SIGNATURE
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Landlord Tenant
