EXHIBIT 10.17
Copy: 1. Tenant
2. ZS DD
3. Immo-PM
Az 285
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Contract of Tenancy
Business Premises/Property
Between
IVG Property Services GmbH Dresden -Unit Klotsche West - KG
represented by
IVG Property Services GmbH - Dresden Branch,
Zur Xxxxxxxxxxx 00, Xxxxx 337/G 01109 Dresden
hereafter referred to as "the Lessor"
and
XXX-XXXXXX XxxX
Xxxxxxxxxxxx 00, 00000 Xxxxxxx
Hereafter referred to as "the Tenant"
Section1 The Property
(1) The Lessor lets to the Tenant in the real estate area of
Dresden 1 - Objekt Klotsche West -KG
(a) in "Block 2" (section) of the "Micropolis" planned
property development
a floor area of approximately 2,575 square meters
(indicated in blue)
in accordance with the building plans of architects
Xxxxxxxxx and Xxxxxxxx, Cologne (Appendix 1); the
blue crosshatched area is for joint use.
(2) The actual floor area is defined on completion as per DIN
277.
(3) The Lessor undertakes to bear the costs of construction of
the Property in accordance with Appendix 2 (Specification
of Fitments) and to place it at the disposal of the
Tenant.
(4) The Tenant accepts the Property in new condition. Prior
to commencement of the letting period a record of the
state of the property and fitments will be prepared
(Appendix 3)
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Section2 Purpose of Use, Sub-letting
(1) The Property may only be used for the following purposes:
Development, manufacture and trade in
microelectronic components and systems.
(2) The Lessor provides no guarantee of the suitability of the
Property for the Tenant's purposes and guarantees no
business competition protection. The Tenant shall obtain
the necessary approval, permission and licenses for the
conduct of his business and trade at his own expense and
maintain the Property in a condition commensurate with the
stipulations of all relevant authorities. He shall give
notice of all alterations requiring inspection by
buildings, fire and commercial regulatory authorities. He
shall bear the cost of conditions, insofar as they are
required by the Tenant's business operations, even if they
are directed at the Lessor. The refusal or limitation of
authority or licenses etc. shall have no bearing on the
continuance and content of this agreement.
(3) Sub-letting or subleasing of the Property or parts thereof
is permissible only with the written agreement of the
Lessor.
(4) The Tenant is not authorized to transfer his rights under
this agreement to third parties or to make them the
subject of business contracts.
Section3 Period of Tenancy (see also Section13.1)
(1) The tenancy commences on 15.02.1999 and 6 months notice
can be given up until 28.02 of each year after the 28.02
2009.
(2) The Lessor has the right to terminate the tenancy without
notice in certain legally-envisaged circumstances, in
particular if the Tenant
(a) fails in whole or in part to pay the agreed rent and
additional costs when due and despite reminder
(b) infringes stipulations in Sub-section 2, 7 (nos. 1,3 and 5), 8,
9 and 10 (nos. 1 to 3) of this agreement
(3) In cases under no. (2) the Tenant is liable for damages
suffered by the Lessor because the Tenant or sub-tenant
or sub-xxxxxx does not quit or relinquish the property in
time. The same shall hold if the property, when cleared
or left by the Tenant, stands vacant or can only be rented
out at a lower rate or under worse conditions up to the
end of the agreed tenancy period, but for no longer than
one year following being cleared or relinquished.
(4) Notice must be given in writing in all cases. The timing
of the notice is not the time of its despatch, but the
point in time at which the Lessor has access to it.
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Section4 Rent and Additional Costs
(1) The Rent exclusive of VAT is
per month per annum
DM DM
from 15.02 1999 to 28.02 2000 for
(a) areas in "Block 2
open area
1,600 m2 DM ea 11.00/ m2 /month 17,600.00 211,200.00
office and social area
975 m2 DM ea 17.00/ m2 /month 16,575.00 198,900.00
(b) additional costs as per
Xxxxxxxx 0, Xxxxxxx0 (1) 2,450.00 29,400.00
(c) additional costs as per
Xxxxxxxx 0, Xxxxxxx0 (2) 5,150.00 61,800.00
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41,775.00 501,300.00
from 01.03.2000 for
(a) areas in "Block 2
open area
1,600 m2 DM ea 12.00/ m2 /month 19,200.00 230,400.00
office and social area
975 m2 DM ea 18.00/ m2 /month 17,550.00 210,600.00
(b) additional costs as per
Xxxxxxxx 0, Xxxxxxx0 (1) 2,450.00 29,400.00
(c) additional costs as per
Xxxxxxxx 0, Xxxxxxx0 (2) 5,150.00 61,800.00
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44,350.00 532,200.00
The monthly rent is to be paid in advance to the point designated by the Lessor
at such time as will allow the Lessor access to the monies at the latest by the
5th day of the month due.
In the event of late payment the Lessor can charge interest at 3% over the
German Bundesbank rate, but 8% at least.
(2) An additional cost loading on the property arising out of
building work undertaken by the Tenant is to be borne by
the Tenant himself or paid to the Lessor in the event of
such work being requested and paid for by the latter, if
the Tenant is not reimbursed for the increased value due
to this work and the rent is not increased.
(3) In the event of new introduction, subsequent collection or
increase of public taxation in connection with the
property, the Tenant is obliged, at the Lessor's
discretion, from date of the increase, to pay a
correspondingly increased rent or to pay the increase
himself.
(4) For charges on the property as a consequence of public
facilities (in particular development facilities) the
Tenant shall pay an additional 11% per annum of the
contributions falling to the leased property.
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(5) Additional costs and their payment are set forth in
appendix 5.
(6) The rents indicated in this Contract of Tenancy are net in
respect of the current rate of VAT. VAT is added to these
rates at the current rate.
The Lessor has opted in respect of the property for VAT in
accordance with Section9 Para 2 of the VAT (German
Mehrwertsteuer) regulations.
The Tenant will use the property exclusively for
transactions which do not exclude pre-tax deduction.
Insofar as the Tenant carries out transactions which do
exclude deduction of prior turnover tax under current
regulations, he must inform the Lessor of the fact. He is
obliged in such a case to compensate the Lessor for loss
due to the deduction of prior turnover tax.
Furthermore, the Tenant will provide the Lessor with a
written declaration that he is using the property
exclusively for transactions which do not exclude
deduction of prior turnover tax. Insofar as the Lessor in
this respect has to provide the tax authorities with
further proof, the Tenant is obliged to supply such proof
or - should it be sufficient to fulfil the Lessors
obligations - to provide such proof directly to the tax
authorities.
(7) Monies due under paragraphs (2) to (6) are to be paid
simultaneously with the rent as per no (1). If a separate
xxxx results it must be paid within 2 weeks.
Section5 Rent Interest Adjustment
(1) If in the future the Federal Office for Statistics
increases or reduces the price index for the cost of
living of 4-person households with moderate income in the
Federal Republic (1991=100) at the end of one year
compared with the level at the beginning of the second
rental year, i.e. at the start of the third rental year,
the fourth rental year etc, then the annual rent will be
increased or reduced automatically in line with the
percentage change in the index at the start of the third
rental year and at the subsequent adjustment points, i.e.
at the start of the fourth rental year, the fifth rental
year etc. The appropriate increases or reductions will be
applied from the first of the calendar month for which an
adjustment of the annual rent is envisaged, i.e. from the
first of the month at the start of the third rental year,
the fourth rental year etc.
(2) If as a result of a change of the above-named price index
to a new basis, index figures are retrospectively changed,
the new index figures are applied from that point in time
as follows: the new index figures are brought forward for
the first time from the date of rent adjustment under the
former system of calculation before the first official
publication of the new index figures. The basis is the
date of the last rent interest adjustment and the price
index level resulting from the new calculation.
(3) If the price index named in paragraph (1) is no longer
valid or published, the parties will agree to substitute
from that point on such price indexes which continue to be
published by the Federal Office for Statistics and which
most closely reflect the discontinued price index. In
other respects paragraph (2) applies.
Section 6 Electricity, Water, Sewerage, Heating
(1) Electrical power supply is through the appropriate power
supplier; concluding a power supply contract is the
responsibility of the Tenant. The connected load required
by the Tenant at commencement of the Contract of Tenancy
is 800 kW. If this load should be changed during the term
of the agreement, the power supply alteration costs will
be paid to the Lessor.
Alterations to the power supply, in particular a change or
interruption of the power voltage, does not entitle the
Tenant to claims against the Lessor.
(2) In the event of interference with or damage to supply or
waste lines or pipes the Tenant has to arrange immediate
disconnection or shutting off and is obliged to inform the
Lessor or his representatives immediately.
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(3) If the electricity, gas, water supplies or sewerage are
interrupted by circumstances not caused by the Lessor or
should flooding or other catastrophes occur, the Tenant
has no right to rent reduction or replacement against the
Lessor.
For damages connected with parts of the supply lines
belonging to the Lessor, the Lessor is only liable in the
event of deliberate intent or gross negligence.
(4) If spatial heating is provided to the leased property by
the Lessor, the latter is only liable in the event of
deliberate intent or gross negligence.
Section 7 Insurance and Liability
(1) The Lessor will keep the property insured for its new
value against fire and other damage. The basic
contribution for unused property is part of the additional
costs, independent of use, detailed in Xxxxxxxx 0, Xxxxxxx0 no
1. In addition the Tenant will bear the contribution
surcharges caused by his business for rented items or for
buildings in which rented items are situated and in given
circumstances for neighboring objects. The Tenant is
obliged to fully inform the Lessor in good time of any
circumstances which would increase danger.
(2) The Tenant is liable for all damage caused through his own
fault, that of his relatives or associates, his personnel
or visitors at the property or to any items belonging to
the Lessor. The Tenant must provide proof of the absence
of fault. For the actions of persons for which the Tenant
is responsible, he relinquishes his rights to relief from
burden of proof under Federal Legal Statute Section831.
(3) The Tenant exempts the Lessor from all claims against the
Lessor as owner of the property, which become due as a
result of his business or the effect of such business
pursued by private or public third parties during or after
the term of the agreement. This also includes liability
criteria under water economy and environmental
legislation, in particular in the event of pollution of
land, water or ground water caused by the Tenant's
business, including their effect on adjacent land or land
further afield.
(4) The Tenant will provide the Lessor at any time, and on
request also in writing, with full information concerning
the nature, extent and use (including disposal) of such
materials or substances which could be seen as endangering
the environment. The Tenant will allow access to the
property for this purpose to environmental protection
agencies authorized by the Lessor or his representatives.
(5) The Tenant is obliged to keep himself adequately insured
against his contractually assumed liability and to provide
evidence of insurance to the Lessor.
Section 8 Maintenance and Substitute Performance
(1) The Tenant is obliged to treat the property carefully,
service it, maintain it and not neglect anything necessary
to its security, safety including traffic safety in
accordance with official regulations and general legal
requirements. Systems requiring maintenance must be the
subject of a maintenance contract agreed by him with
specialist enterprises.
(2) Maintenance, servicing and repair of the fabric and
structure of the property are the responsibility of the
Lessor. All routine maintenance, servicing and repair of
items on the property are to be carried out in a timely
and correct manner at the expense of the Tenant By
maintenance, servicing and repair the parties mean all
necessary measures to maintain the property in the
condition described in appendix 3. At the request of the
Lessor or Tenant a buildings inspection can take place at
which work to be carried out and the terms under which it
is to be completed are agreed.
If the Tenant does not fully, or only in part or not in
good time, meet his obligation to maintain, service and
repair the property, then the Lessor, after serving a
reminder, is entitled to carry out the necessary work and
to require the Tenant to reimburse him for the costs.
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(3) The Tenant will compensate the Lessor for loss of value in
excess of normal depreciation due to the effects of the
Tenant's business.
(4) Damage to property is to be immediately reported verbally
and in writing to the Lessor or his local representative.
(5) Trees and lawns on the property are available to the
Tenant who must maintain them.
Section 9 Structural and other alterations.
(1) The Tenant requires advance written agreement of the
Lessor to carry out structural and other alterations to
the property. Before start of work a written agreement is
to be concluded regarding the cost (Appendix 4) of such
structural and other alteration, their restitution and any
obligation to return to former condition at the Tenant's
expense on handing back the property. Obtaining necessary
official planning or building regulation approval is the
responsibility of the Tenant. The Tenant has no claim for
restitution of costs accruing to him as a result of
alterations to the property without advance written
agreement of the Lessor. Nor does the Tenant have a right
to reimbursement of any other nature, if as a result of
such alterations a lasting increase in value ensues; The
Lessor is also entitled in such cases to require the
reinstatement of the property to its former state at the
Tenant's expense and prior to handing back the property to
require a security against the costs of restoration.
(2) The Tenant is obliged to allow all work carried out by the
Lessor to extend, alter and maintain his property. Damage
claims from the Tenant in respect of measures undertaken
by the Lessor to maintain his property which directly or
indirectly affects the property or items therein, are
excluded.
Section 10 Right of Lien, Inspection, Assignment, Set-off
(1) For the purposes of exercising his right of access, the
Lessor or his representative, and accompanied by
witnesses, is entitled to enter and inspect the premises
at any time. The Tenant has immediately to inform the
Lessor of the intended use of any items brought in which
are the subject of court orders or held against security.
(2) The Tenant shall immediately inform the Lessor of
enforcement orders in respect of rented property.
(3) The Lessor and his representatives are empowered to enter
and inspect the rented property during normal business
hours or by prior arrangement. If the Lessor should wish
to sell the property or gives notice of termination of
this Contract of Tenancy, then the Lessor or his
representatives may enter the premises together with
interested parties or with new applicants for the tenancy;
in these cases the Tenant has to ensure that the premises
can be entered and inspected even in his absence. The
usual confidentiality will be respected.
(4) The Tenant herewith assigns to the Lessor in order to
secure all the Lessor's claims arising from this agreement
all existing or forthcoming claims against third parties
for payment of rent or leasing payments.
(5) The Tenant relinquishes the right of set-off or right of
retention against all demands of the Lessor arising from
this Contract of Tenancy insofar as such relinquishment is
not excluded by law.
Section 11 Return of the Property
(1) On termination of the agreement the Tenant shall return
the property to the Lessor in renovated condition and as
described in Appendix 3, including keys provided by the
Lessor and those obtained by himself in accordance with
contractual agreements.
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(2) The Tenant is obliged at the discretion of the Lessor in
respect of fitted installations (e.g. gas, water, cooling,
heating or electrical installations) to:
(a) either remove them and restore the original state at
his own expense whereby the Lessor is entitled to
require safety measures for the restoration of the
original state;
(b) or to leave them in exchange for reimbursement of
their estimated value. Should agreement as to their
estimated value not be reached within one month at
the outside after termination of the Contract of
Tenancy, then (a) above shall obtain.
(3) The Tenant is obliged to make good all damage in excess of
normal wear and tear before termination of the Contract of
Tenancy. If the Tenant fails to comply with this
obligation, the Lessor is entitled to make good such
damage and charge the Tenant.
(4) The Lessor may dispose of all items belonging to the
Tenant remaining after the return of the property, if the
Tenant has not removed them within two weeks after being
requested to remove them at his own discretion and will.
He is herewith released from the limitations of Section181 of
Federal German Legislation.
(5) The regulations of Section568 of Federal German Legislation are
not applicable.
Section 12 Rent Security
(1) The Tenant is obliged to provide a security in respect of
rent. The rent security is 3 months rent including
additional costs plus VAT at the appropriate rate
according to Section4 (1) and (6), i.e. DM 154,300.00.
(2) To this end, the Tenant transfers to the Lessor as
security for fulfilling all claims arising from or in
connection with this agreement a directly enforceable sum
payable on first request by bank guarantee without right
to defense of voidability or set-off or benefit of
discussion.
(3) Provision of the bank guarantee is to be before occupation
of the property by the Tenant and at the latest prior to
commencement of the rental term according to Section3 (1).
(4) The Lessor can make use of the security following prior
written notice as a result of claims which have become
due. The Tenant is in this case obliged without delay to
provide the Lessor with a similar bank guarantee made out
for the original amount.
(5) The security expires on return of the security
documentation to the guarantors after proper return of the
property and settlement of additional costs.
Section 13 Further Agreements.
(1) The Lessor agrees to equip the rented area of
approximately 375m2 marked in Appendix 4, Plan 4 by
15.11.98 so that the Tenant can commence assembly of a
production line. Access and use of this area prior to
commencement of the rental term in accordance with Section1(1)
is rent-free. Additional costs will be calculated pro
rata with usage.
(2) The Tenant will receive a hire agreement for the building
rental areas indicated in blue of approximately 365 m2
indicated in blue in appendix 1, plans 5 and 6 by the
31.12 1999.
(3) The Lessor undertakes to provide, by the 31.07.1998, a
technical drawing showing roofing of the courtyard area of
some 400 m2 indicated in Appendix 1, plan 7.
The Tenant can request the construction of this courtyard
roofing xx 00.00.00. This order is subject to official
approval. If requested, the Lessor undertakes to submit a
building plan within 4 weeks and, following approval by
the building regulatory authority, have the work carried
out at his expense.
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The roofed courtyard area will on completion become part
of the rented area and comply in its features with the
standard specification of covered areas in accordance with
the description of equipment (Appendix 2). The rent will
be in accordance with the rates agreed in Section4.
(4) The Tenant will bindingly agree by 15.06.1998 with the
Lessor the partitioning out of the total rented premises
and clarify the technical fitting out of the indoor areas.
The basis of this is the architectural plans as at
Appendix 1. Special requirements are to be agreed
separately and paid for.
(5) The Tenant will at the instigation of the Bundesanstalt
fer Vereinigungsbedingte Sonderaufgaben (BVS), successor
to the Treuhandanstalt (THA), carry out a survey of the
employment situation in the area. The Lessor is prepared
to provide appropriate statistical details on request.
(6) Rent of parking facilities is to be the subject of a
separate agreement.
(7) To guarantee access to business and civil defense areas of
the premises, the Lessor and his representatives are
entitled entry the premises during normal business hours
or following prior notice.
Section 14 Written Format, Alterations to Contract
(1) The parties are familiar with the special written format
requirements of Sections 566 and 126 of Federal German
Legislation. They mutually undertake to make all
declarations and carry out actions which are necessary to
comply with the drawing up of documentation. They further
undertake in respect of any fault in documentation not to
terminate the Contract of Tenancy prematurely in
accordance with Section566 paragraph 2 of Federal Law or to rely
on the invalidity of the agreement. This stipulation
applies to the original Contract of Tenancy and every
additional, supplementary and retrospective agreement.
(2) Agreements other that those agreed in this contract do not
exist. Alterations and additions to this agreement must
be in writing.
This agreement including the following listed Appendices
is supplied in three identical copies of which the Lessor
receives two and the Tenant one copy.
------------------- -------------------
Date Date
IVG Property Services GmbH
Dresden Branch
/s/ Xx. Xxxxxxx Xxxxx
-------------------------- --------------------------
(Lessor) (Tenant)
Appendix 1 Land Plot/Buildings Plan
Appendix 2 Description of Fitments
Appendix 3 Condition of Premises
Appendix 5 Additional Costs
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Copy 1: Tenant
Copy 2: ZS DD
Copy 3: Immo-PM Az 285
Appendix 5 Additional Costs
to the Business Premises Contract of Tenancy
Between
IVG Property Services GmbH Dresden -Unit Klotsche West - KG
represented by
IVG Property Services GmbH - Dresden Branch,
Zur Xxxxxxxxxxx 00, Xxxxx 337/G 01109 Dresden
-Lessor-
and
XXX-XXXXXX XxxX
Xxxxxxxxxxxx 00, 00000 Xxxxxxx
-Tenant-
Section 1 Running Costs are agreed as Additional Costs in accordance
--------------------------------------------------------------
with Section 4 Paragraph 1 b, c of the Rent Agreement
-----------------------------------------------
Running costs are those ongoing costs, which the Lessor incurs through
ownership of the plot of land and the defined use of the premises in accordance
with Section1 of the Contract of Tenancy. In particular these include the
following items and services:
Consumable Item Costs
--------------------
1. Water Supply
This is the cost of water consumption, standing charges and
meter rental, costs of use of intermediate meters,
calibration costs, costs of operating a water supply system
owned by the Lessor and a water purification system
including all purification materials. The tariffs of the
local water supply utility apply and also the regulations
controlling general water supply conditions (AVB Water V).
2. Sewerage
This comprises charges for the use of a public drainage
system, the operating costs of a corresponding non-public
system including the sewerage network and operating costs
of a sewage pump. The tariffs of the local sewerage
operator apply as do the General Conditions for Sewage
Treatment (ABE).
3. Heating
This comprises the charges laid down in the "Statute for
Calculation of Heating and Hot Water Charges " (Heating
Charges Statute - Heating Charges V). The charges are 70%
by metered heat consumption and 30% by the heated rented
floor area. The tariffs and general business conditions of
the local heating supply utility apply.
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4. Waste Disposal
This comprises the charges and costs for public and private
waste disposal.
Waste disposal provided by the Lessor applies only to
normal domestic rubbish which can be disposed of in the
familiar domestic rubbish bins. Manufacturing waste,
business and warehouse waste including raw materials
(paper, fabric waste, glass, metal etc) including packaging
materials and used paper (in particular computer listing
paper) are not normal domestic rubbish and are to be
regularly disposed of in compliance with the stipulations
of the appropriate waste disposal agency in accordance with
waste disposal legislation, separately and at your expense.
Non-Consumable Item Costs
-------------------------
5. Current Public Rate Charges
This comprises in particular local rates at the prevailing
level - base year is 1997. In the event of increases Section 4
(3) of the Contract of Tenancy.
6. Fire Alarm and Fire Prevention Systems
This comprises costs of operation, maintenance and
servicing plus functional and operational testing of
smoke/heat ventilation systems or other fire alarm and fire
protection systems.
7. Street Cleaning
This comprises charges to be paid for public and private
street cleaning.
8. Building Cleaning and Pest Control Charges
Comprises cleaning costs for parts of the building commonly
used by the Tenant/Users such as entrances, corridors,
stairs. This includes pest control.
9. Outdoor Areas, Walkways and Vehicle Ways
This comprises the costs of maintaining open garden areas
and water features including the replacement of plants,
trees and shrubs, maintenance of patio areas, access ways,
vehicle access ways and walkways not open to the public.
10. Lighting
Comprises electricity charges for external lighting and the
lighting of areas of the building commonly used by the
Tenant such as entrances, corridors, stairways and other
rooms on the premises.
11. Property and Liability Insurance
Comprises in particular costs of insuring the building in
its unused state against fire, storm and hail damage and
liability insurance for the land and the building and also
the cost of environmental liability insurance.
12. Caretaker and Outdoor Attendant
Comprises salary, social security and all financial
reimbursements which the Lessor pays to the caretaker or
outdoor attendant. Work carried out by the caretaker or
outdoor attendant may not be charged under any other
paragraph in this appendix.
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13. Security Patrol and Surveillance
Comprises emoluments paid to and where appropriate social
security contributions for and any other payments to
outside personnel and personnel employed on the site who
the Lessor entrusts with patrol or surveillance.
14. Other Operating costs
These are operating costs not listed in the above
paragraphs 5 to 13, namely operating costs of adjacent
buildings, systems and installations (such as firms' name
plaques, advertisement boards etc.)
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Section 2 The Tenant shall pay the following costs listed in Section1:
1. Consumable Item Costs payable in advance:
DM per month DM per annum
1 Water 150.00 1,800.00
2 Sewerage 200.00 2,400.00
3 Heating 2,000.00 24,000.00
5 Waste 100.00 1,200.00
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2,450.00 29,400.00
The Lessor may change the rate of monthly advance payments by
written notice, in order to match the current rate.
Retrospective changes may cover only a maximum of three
months in arrears, with the month in which notice is given
being considered the first month.
2. Non-Consumable Items payable flat-rate on the basis of
rented area:
Paras 5-14 DM per month DM per annum
2575 m2 @ DM 2.00 5,150.00 61,800.00
Flat-rate payments for non-consumable costs are part of the
rent and are subject to rent adjustment (Section5 of the Contract
of Tenancy)
_______________Dated _______________Dated
IVG Property Services GmbH
Dresden Branch
-------------------------- --------------------------
Lessor Tenant
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