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18 December 1996 EXHIBIT 10.6
LEASE AGREEMENT
XXXXX S.P.A., a company whose registered office is located at Voghera
(PV), having a share capital of ITL 3,142,320,000, entered in the
Register of Companies of Voghera under No. 1194, Fiscal Code and VAT Code
No. 00186380184, represented by Xx. Xxxxx Xxxxx, in his capacity as
Chairman and Managing Director of the Company (hereinafter referred to as
"Lessor" or "Xxxxx")
AND
U.S.C. EUROPE ITALIA S.R.L., a company whose registered office is located
at Xxxxx Xxxxxxxx 0, Xxxxx, having a share capital of ITL 20,000,000,
entered in the Register of Companies of Milan under No. 786360/1996,
Fiscal Code and VAT Code 11907070152, represented by Xx. Xxxxxx Xxxx, in
his capacity as Attorney in Fact (hereinafter referred to as the "Lessee"
or "USC")
W I T N E S S E T H :
X. Xxxxx is the owner of an industrial building and appurtenances
thereto, located at Xxx Xxxxxxxxx Xx. 000, Xxxxxxx (XX), as better
identified in the map and description which are attached hereto as
Exhibit "A" (the term "Building Unit" is inclusive of the building
which is marked in red color in the map attached hereto as Exhibit
"A" and the surrounding areas which serve the building itself and
which are marked in red color in the aforesaid map);
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X. Xxxxx desires to lease to USC, and USC desires to lease from Xxxxx,
the Building Unit on all the terms and conditions set out
hereinafter.
NOW, THEREFORE, THE PARTIES AGREE AND COVENANT AS FOLLOWS:
1. RECITALS AND EXHIBITS
The recitals hereof and exhibits hereto are an integrating and
substantive part of this Agreement.
2. SCOPE AND TERM OF LEASE - RENEWAL
2.01 Xxxxx hereby leases, as a unit and not by measurement, the Building
Unit to USC, and USC hereby accepts to so lease the Building Unit
from Xxxxx, for a term of 6 (six) years commencing on 15 January 1997
("Effective Date") and ending on 14 January 2003 ("Expiration Date").
2.02 Xxxxx hereby waives, now for then, its right not to tacitly renew
this Agreement pursuant to the combined provisions of articles 28 and
29 of Law No. 392 of 27 July 1978; therefore, at the Expiration Date,
this Agreement will tacitly be renewed for a further 9 (nine) year
period, unless USC has notified Xxxxx of its intention not to renew
it by a registered letter, return receipt requested, which shall have
been mailed at least 6 (month)s prior to the Expiration Date.
2.03 In the event that this Agreement is automatically renewed in
accordance with the provisions of paragraph 2.02 above, USC will be
entitled to withdraw therefrom for any reason and at any time,
pursuant to art. 27, seventh paragraph, of Law No. 392 of 27 July
1978 by giving Xxxxx a
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written prior notice of at least 6 (six) months by registered letter,
return receipt requested.
2.04 At the end of the lease, the Building Unit shall be surrended to
Xxxxx on or before the date specified by USC in its notice pursuant
to and for the purposes of paragraphs 2.02 and 2.03 above, which
respectively apply according to whether USC has decided not to renew
this Agreement or to withdraw therefrom. USC shall pay to Xxxxx, by
way of liquidated damages, the sum of ITL 2,000,000 (two million
Italian Lire) for each day of delay in surrending the Building Unit
after the date set out in USC's notice.
3. RENT-PAYMENT-ADJUSTMENT
3.01 The annual rent payable by USC shall be the sum of ITL 380,000,000
(three hundred eighty million Italian Lire) plus VAT as applicable,
and shall be paid at the Lessor's domicile in 12 equal monthly
installments payable in advance, each expiring on the last working
day of the month preceding the reference month upon receipt of
Xxxxx'x regular invoice.
3.02 In partial derogation of the foregoing provisions and in
consideration to the relevant provisions containted in article 4
hereof, USC and Xxxxx acknowledge and agree that, in the period
between the Effective Date and the date in which the Building Unit
will be completely and definitively delivered to USC pursuant to
paragraph 4.01 hereof, the above rent shall be proportionally reduced
in order to take into consideration the effective portion of the
Building Unit delivered by Xxxxx to USC in such period as provided
for in paragraph 4.02 hereof.
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3.03 Effective from the beginning of the second year of lease and subject
to a prior written notice to be sent by Xxxxx to the Lessee by
registered letter return receipt requested, the annual rent, as
determined in paragraph 3.01 above, may be increased by an amount
equal to 75% of the changes, as assessed by ISTAT, occurred in the
cost of living for families of laborers and clerical workers in the
preceding year, and so forth on a yearly basis throughout the term of
this Agreement.
3.04 Without prejudice to the provisions of article 6 below, the amount
of rent as agreed in paragraph 3.01 above, does not include the
expenses deriving from the use of the Building Unit and from the
operation of USC's business activities which shall be paid by USC
directly to the suppliers of such services. Xxxxx hereby acknowledges
that no compensation shall be due by USC as reimbursement of
overheads and accessory charges.
3.05 Without prejudice to the provisions set out in paragraph 3.04
hereof, Xxxxx undertakes on demand of USC to supply to the latter any
services which might be necessary or useful for the carrying out of
USC's activity in the Building Unit. In such event USC shall
reimburse to Xxxxx, upon receipt of a regular invoice in which the
services rendered and the relevant period shall be specified, solely
the costs incurred by Xxxxx for providing such services, being in
fact waived any further compensation howsoever relating to the same.
4. LESSOR'S OBLIGATIONS
4.01 Considering that the Building Unit is presently occupied by certain
plants and machinery belonging to Xxxxx, Xxxxx agrees to remove all
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these plants and machinery, at its own care and expenses, within 20
days from the Effective Date and, therefore, to deliver the Building
Unit by that date duly vacated and ready to be used by USC as USC may
require. In the event that the above removal is not completed within
20 days from the Effective Date, for any reasons whatsoever,
including an event beyond the parties' control, Xxxxx shall pay USC,
by way of liquidated damages, the sum of ITL 2,000,000 for each day
of delay.
4.02 In partial derogation of the provisions set out in paragraph 4.01
above, Xxxxx undertakes to deliver to USC on or before the Effective
Date a portion of approximately 1,200 square meters of the Building
Unit in the area marked in orange color in the map attached as
Exhibit "A", duly vacated and ready to be used as the Lessee may
require.
In the event in which Xxxxx does not fulfill for any reasons
whatsoever the obligations set out in this paragraph, it shall pay
USC, by way of liquidated damages, the sum of Lire 2,000,000 for each
day of delay in the delivery of such portion of the Building Unit.
4.03 Within 20 days from the Effective Date, Xxxxx, at its own expenses
and according to such criteria as will be decided by Xxxxx itself
without USC's right to raise objections thereto, and as will be
determined by an engineer appointed by Xxxxx, but in any event in a
workmanlike manner and in compliance with the relevant Permits (as
defined hereinafter), shall construct an asphalted and open air
parking area for 30 cars (the "Parking") in the area marked in rose
color in the map attached hereto as Exhibit "A"; for the construction
of the Parking, Xxxxx shall at its own care and expenses obtain any
and all necessary or requisite permits and/or approvals and/or
authorizations and/or concessions from the
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competent Authorities (the "Permits"). In addition, Xxxxx shall
construct the Parking in full compliance with all building, zoning,
environmental and safety regulations as well as any other applicable
provisions of law, without prejudice to the Lessee's and third
party's rights, and shall also indemnify and hold the Lessee harmless
from any nuisance, claim, liability, penalty or damage that may arise
from the execution of the construction works for the Parking or
from any works connected therewith. In the event that the Parking is
not completed, for any reasons whatsoever including an event beyond
the parties' control, within 20 days from the Effective Date, Xxxxx
shall pay USC, by way of liquidated damages, the sum of ITL 500,000
(five hundred thousand Italian Lire) for each day of delay. Without
prejudice to the above, Xxxxx, as from the Effective Date and until
the Parking has been completed, shall make available to USC, at no
additional cost or expenses, space for ten cars in the parking area
marked in blue color in the map attached hereto as Exhibit "B".
5. ALTERATIONS TO XXX XXXXXXXX XXXX XXX XXXXXXX
0.00 Xxxxx hereby authorizes USC to make in the Building Unit any and all
works as may be necessary or appropriate to replace the present
electrical control board and install a new fire-fighting system, and
to make thereto any other alterations, transformations or additions
of non-structural nature which were to become necessary or
appropriate in relation to the above.
5.02 In the event that USC deems it necessary or appropriate to make any
other alterations, transformations or additions to make the Building
Unit fit for USC's operating requirements, Xxxxx'x prior consent
shall be
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required, consent which, in no event, shall be unreasonably withheld
or refused. Provided that all costs associated with such works shall
be borne by USC in full, the parties hereby reciprocally acknowledge
that, without prejudice to Xxxxx'x right to demand USC to restore the
Building Unit into its original condition (provided, however, that
such demand shall be made by Xxxxx in its notice informing USC of its
consent to the execution of the relevant works) and without prejudice
to USC's right to remove from the Building Unit any improvement made
by USC to the Building Unit during the lease, any improvements made
by USC to the Building Unit will become an integral part thereof at
the end of the lease and that USC cannot claim any compensation
therefor.
5.03 For the purposes of paragraphs 5.01 and 5.02 above, the Lessor shall
promptly sign any and all applications to the competent authorities,
as may be required or appropriate to obtain the relevant permits
and/or approvals and/or authorizations and/or concessions and
facilitate the course thereof.
6. OPERATION AND MAINTENANCE OF SYSTEMS AND BUILDING UNIT.
6.01 The routine maintenance of the Building Unit and systems installed
therein shall be made by the Lessee at its own care and expenses,
whereas the non-routine maintenance of the Building Unit and systems
installed therein, such as, by way of mere example, roof repairs and
heating system repairs, shall be made by the Lessor at its own care
and expenses.
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6.02 Without prejudice to the parties' respective responsibility for the
above maintenance works, the parties agree that, whenever urgent
maintenance and/or repair works are required, either party, subject
to requesting the other party which is responsible therefor to make
such urgent works, is entitled to make them if the other party has
failed to promptly do so and to be reimbursed for the costs incurred
in connection therewith within ten days of the notice of completion
thereof, without prejudice to its right to claim damages and to any
other remedy provided by the law or by this agreement in any event
of default.
7. ENLARGEMENT OF BUILDING UNIT
7.01 Upon request by USC and as supplementation of the existing Building
Unit, Xxxxx shall at its own expenses enlarge the Building Unit by
approximately 1,000 (thousand) square meters in the area marked in
xxxxx color in the map attached hereto as Exhibit "A" (Enlargement
Works"). Xxxxx shall prepare, at its own care and expenses, the
relevant building projects and technical specifications as will be
necessary or appropriate to execute the Enlargement Works, provided,
however, that the said works shall be made in a masterly manner, in
compliance with the relevant Permits (as defined above) and using
comparable building materials and techniques to those employed in the
construction of the Building Unit. In respect of the Enlargement
Works to be executed, Xxxxx shall at its own care and expenses obtain
any and all necessary and requisite permits and/or approvals and/or
authorizations and/or concessions from the competent Authorities (the
"Permits"). In addition, Xxxxx shall execute the Enlargement Works in
full compliance with all building, zoning, environmental and safety
regulations and any other applicable provisions of law. In this
respect, Xxxxx shall relieve USC
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from any liabilities arising from the execution of the Enlargement
Works and shall indemnify and hold USC harmless from and against any
claim for damages made against USC by any third party, including but
not limited to the professionals who have been entrusted with the
study and design of the Enlargement Works, the site superintendent,
the construction company, its employees and/or representatives, the
competent Public Authorities, relating to and/or arising from the
Enlargement Works, including any fines inflicted by the competent
Public Authorities.
7.02 Once the Enlargement Works have been completed and the new space so
obtained has been made available to USC for USC's intended use, the
annual rent referred to in paragraph 3.01 above shall be increased -
on the basis of ITL 90,500 (ninety thousand five hundred Italian
Lire) per square meter - to be adjusted according to the variations
quoted by ISTAT, as described in paragraph 3.03 above, in the period
between the first anniversary of the Effective Date and the date on
which such new space is made available to USC.
8. INDEMNIFICATION OF ENVIRONMENTAL CLAIMS
Xxxxx shall indemnify, defend and hold USC harmless from and against
any and all claims raised by third parties, including, but not
limited to, public agencies and administrative authorities, as well
as any costs or liabilities incurred by USC, howsoever deriving from
or relating to (i) non-conformity of the Building Unit or of the
activities carried out therein prior to the Effective Date under
environmental regulations and (ii) any obligations to make
restoration works in the Building Unit or in the surrounding land
under the applicable provisions of law or further to
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an order issued by any competent authority, provided, however, that
such claims, costs or liabilities stem from activities which were
carried out in the Building Unit prior to the Effective Date or which
are imputable to Xxxxx or other lessees.
9. RIGHT OF PASSAGE
Considering that the Building Unit has not an independent access from
Via Lomellina, Xxxxx, for the entire duration of this Agreement,
warrants that USC and any other subject who for whatsoever reason
will visit the Building Unit, will be authorized to use, at no
additional cost or expense, the passage through the land pertaining
to the other building unit next to the Building Unit as better
identified in yellow in the map attached hereto as Exhibit "A" (the
"Passage"), provided that, however, no vehicles belonging to USC or
to any other subject who will visit the Building Unit are authorized
to park in such Passage, save for temporary maneuver reasons of the
above vehicles. However the parties hereby agree that the access to
the Passage through the gate identified with number "2" in the map
attached hereto as Exhibit "A" shall be permitted exclusively from
7.45 to 19.00 each day, excluding Saturday, Sunday and other public
holidays. Furthermore the parties agree that the access to the
Passage through this gate shall be regulated by a custodian employed
by Xxxxx who will open the gate upon demand of USC and/or of any
other subject who will visit the Building Unit. Finally, the accesso
to the Passage through the gate identified with number "1" in the map
attached hereto as Exhibit "A" shall be permitted to USC and any
other subject who who will visit the Building Unit without any
limitation whatsoever.
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10. GUARANTEE-DEPOSIT
As security for any damages caused to the Building Unit during the
term of this Agreement for which USC will be liable towards Xxxxx,
USC undertakes to deliver to Xxxxx on or before 31 December 1996 a
bank guarantee payable upon demand for an amount equal to three
twelfth of the annual rent payable hereunder, as due from time to
time, and, therefore, initially for the sum of ITL 95,000,000
(ninety-five million Italian Lire). USC agrees to procure that this
bank guarantee be adjusted by the issuer on the basis of the rent
payable from time to time by increasing the guaranteed amount
accordingly. The Lessor shall authorize the release of the above bank
guarantee within ten (10) days of the termination or expiration of
this Agreement and, for this purpose, the Lessor shall make all
necessary inspections to determine whether any damages were caused by
USC to the Building Unit within the above period of time. Such
guarantee shall have a one year duration and shall be automatically
renewed year by year for the entire duration of the lease. In the
event in which, for any reason whatsoever, such guarantee is revoked
or not renewed by the granting bank, USC undertakes to promptly
replace such guarantee with another guarantee of the same amount or,
at its sole discretion, to set up a deposit equal to three twelfths
of the rent in favor of Xxxxx.
11. GUARANTEE IN FAVOR OF XXXXX
As security for due performance by USC of its obligation to timely
pay all rents due, USC (i) delivers to Xxxxx a letter of patronage
issued by US Can Corporation confirming that USC is a company
controlled by US Can Corporation and containing US Can Corporation's
undertaking to procure that USC at all times owns such financial
means as will be
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necessary and sufficient to perform USC's obligation to pay the rents
agreed hereunder and (ii) undertakes to deliver on or before 31
December 1996 a bank guarantee for an amount equal to the annual rent
as payable from time to time and, therefore, initially for an amount
of ITL 380,000,000 (three hundred eighty million Italian Lire). USC
agrees to procure that this bank guarantee be adjusted by the issuer
on the basis of the rent payable from time to time by increasing the
guaranteed amount accordingly. The purpose of this bank guarantee is
solely that of securing that the rent agreed in article 3 above will
be fully paid by USC to Xxxxx at the due dates. This bank guarantee
shall remain in force for one year after the Effective Date and shall
be automatically renewed for successive terms of one year each until
the Expiration Date, unless either party revokes it by giving to the
other a written notice thereof at least 30 days prior to the
forthcoming expiration date. It is in any event agreed that all
costs and expenses for the issue of the above guarantee shall be
fully borne by Xxxxx which, accordingly, shall promptly reimburse USC
for all expenses advanced by USC to the Bank. Similarly, such
guarantee shall also be delivered by USC to Xxxxx in the event that
this Agreement is renewed in accordance with the provisions of
paragraph 2.02 above.
12. RIGHT OF FIRST REFUSAL
Xxxxx grants USC hereunder a first refusal right for the lease of an
industrial building owned by Xxxxx as better identified in violet
color in the map which is attached hereto as Exhibit "B". This right
shall be exercised by USC, under penalty of forfeiture, within 30
(thirty) days of receipt of a notice from Xxxxx informing of Xxxxx'x
intention to lease such other building; the said notice shall also
contain detailed
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information on the essential terms of the proposed lease agreement,
including the rent payable thereunder, the term thereof and any other
details as may be useful for USC to decide whether or not to exercise
the first refusal right granted to USC hereunder.
13. COMPANY SPLIT-UP
The parties hereby reciprocally acknowledge that, considering that
Xxxxx intends to split-up its corporate organization pursuant to art.
2504-septies of the Civil Code, after which the Building Unit leased
hereunder will be included in the assets of either of the new legal
persons which will result thereof, this Agreement shall be assigned
to either of such new legal persons and, thereafter, will be binding
on and will inure to the benefit of such new legal person, provided,
however, that the other legal person which will result of such split
up operation shall nevertheless be jointly and severally liable for
any and all obligations of the Lessor hereunder.
14. OUTDOOR SIGNS
The Lessor hereby authorizes the Lessee to install any signs,
including electric signs, outside or on the Building Unit.
15. REGISTRATION TAX
This Agreement is subject to VAT and, accordingly, pursuant to
article 40 of Presidential Decree No. 131 of 26 April 1986, the
registration tax is due at fixed rate.
The tax payable for the registration of this agreement, as well as
any expenses associated with any future renewal thereof, shall be
borne by the Lessee and the Lessor in equal shares.
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16. NOTICES
Any notice relating to this Agreement shall be given by fax or
registered letter, return receipt requested, to the addresses of the
parties as respectively set out below, or to such other address as
either party may notify to the other in writing with at least 15 days
notice, and shall be deemed as received at the moment of the
transmission, if sent by fax, or at the moment of the receipt, if
sent by registered letter:
If to USC:
Xxx Xxxxxxxxx 000
Xxxxxxx (XX)
Fax n.:__________
att.: Plant Manager
with copy to:
United States Can Company
000 Xxxxxxxx Xxxxx,
Xxx Xxxxx, XX, 00000
Fax n.: 000 000 000 0000
att.: Legal Department
and copy to:
Studio Legale Fondato da Francesco Carnelutti
Xxxxx Xxxxxxxxx 00
00000 Xxxxxx
att.: Xxxxxx Xxxx
If to Xxxxx:
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xxx Xxxxxxxxx 000
Xxxxxxx (XX)
Fax n.: __________
att.: Xxxxx Xxxxx
00. GOVERNING LAW - ARBITRATION CLAUSE
This Agreement shall be governed and construed in accordance with the
laws of Italy. Any disputes between the parties relating to this
Agreement shall be finally determined by a board of three
arbitrators. The Board of Arbitrators shall be formed upon request of
either party: the requesting party shall notify the other party of
its request for arbitration by registered letter, return receipt
requested, and shall appoint therein its arbitrator and request the
other party to appoint its own arbitrator within 20 (twenty) days.
In the event that the other party fails to do so, the requesting
party may request the Presiding Judge of the Tribunal of Milan to
appoint the arbitration for the defaulting party.
The arbitrators so appointed shall by mutual agreement appoint the
third arbitrator, who shall act as Chairman of the Board, within 15
(fifteen) days from their designation.
In the event that no agreement is reached by the two arbitrators
designated by the parties on the third arbitrator to be appointed,
the said arbitrator will be appointed, upon request of the more
diligent party, by the Presiding Judge of the Court of Milan, who,
similarly, shall also designate, if necessary, an arbitrator in
replacement of any arbitrator previously appointed.
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The Arbitrators shall sit in Milan and shall decide according to the law.
Their award shall be delivered within 90 (ninety) days (unless an extension of
this period is authorized by the parties or their attorneys). Any matter which
is not expressly covered herein shall be governed by articles 806 and following
of the Code of Civil Procedure.
XXXXX S.P.A. U.S.C. EUROPE ITALIA S.R.L.
/s/ Xxxxx Xxxxx /s/ Xxxxxx Xxxx
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In my capacity as an officer of the registrant, I hereby represent, to
the best of my knowledge and belief, that the foregoing is a fair and
acccurate English translation of the registrant's Voghera, Italy lease
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Vice President & Treasurer
