<PAGE>
Exhibit 10.2
Dated ____________ 2008
WGN (GER) LLC
(as Landlord)
and
WAGON AUTOMOTIVE GmbH
(as Tenant)
LEASE AGREEMENT
Premises: Fabrikstrasse 6, 63857, Waldaschaff, Germany
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<C>
1 Lease of the
Premises.................................................
4
2
Guarantee.............................................................
4
3
Definitions...........................................................
4
4
Interpretation........................................................
10
5 Lease
Term............................................................
11
6 Transfer of
Possession................................................
11
7
Rent..................................................................
12
8
VAT...................................................................
12
9
Insurance.............................................................
14
10 Tenant's
Obligations..................................................
18
10.1
Rent and Other
Payments......................................... 18
10.2
Repair and
Replacement.......................................... 18
10.3
Alterations and
Additions....................................... 19
10.4
Signs and reletting
notices..................................... 21
10.5
Use,
Occupancy..................................................
21
10.6
Alienation......................................................
21
10.7
Entry...........................................................
23
10.8
Compliance with
Law............................................. 24
10.9
Outgoings, costs and
fees....................................... 25
10.10 Taxes; VAT
..................................................... 26
10.11 General
requirements concerning use.............................
26
10.12 Indemnity
...................................................... 26
10.13
Environmental requirements......................................
26
10.14 Not to
overload.................................................
27
10.15 Guarantee
...................................................... 28
10.16 Compulsory
Purchase............................................. 28
10.17
Restoration ....................................................
28
11 Security
Deposit......................................................
31
12 Covenant of Quiet
Enjoyment........................................... 32
13 Post Closing
Obligations..............................................
32
14 Intentionally
Omitted.................................................
32
15 General
Provisions....................................................
32
15.1
Events of
Default............................................... 33
15.2
Surrender of the
Premises....................................... 34
15.3
Service of
notices.............................................. 34
15.4
Failure to perform
obligations.................................. 35
15.5
Waiver of right to
forfeit...................................... 36
15.6
Covenants relating to
adjoining Premises........................ 36
15.7
Entire understanding;
Schedules................................. 36
15.8
Severance.......................................................
36
15.9
Governing law and
jurisdiction.................................. 36
15.10
Non-recourse....................................................
36
15.11 Requests
for information........................................
37
15.12 Amendments
..................................................... 37
15.13 Successors
and Assigns.......................................... 37
15.14
Requirement of Written Form.....................................
37
15.15
Representation by Landlord......................................
37
Annex 1
Premises.........................................................
Schedule 1 Intentionally
Omitted.........................................
Schedule 2 Basic Rent and Provisions for Rent
Adjustments................
</TABLE>
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Schedule 3 Intentionally
Omitted.........................................
Schedule 4 Corporate
Covenants...........................................
Schedule 5 Post Closing
Obligations......................................
Schedule 6
Fixtures......................................................
Schedule 7 Property Condition
Report.....................................
EXECUTION of Lease
Agreement:............................................ 39
</TABLE>
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THIS LEASE AGREEMENT is made as of June ___, 2008
BETWEEN:
(1) WGN (GER) LLC, a
limited liability company organised under the laws of the
state of Delaware, U.S.A. with an office at c/o W. P. Carey &
Co. LLC, 50
Rockefeller Plaza, 2nd Floor,, New York, New York 10020,
Attention,
Director Asset Management (hereinafter referred to as the
"LANDLORD"); and
(2) WAGON AUTOMOTIVE
GMBH, a company with its statutory seat in Waldaschaff,
Germany, and registered with the trade register maintained at the
local
court of Aschaffenburg, Germany, under number HRB 7374
(hereinafter
referred to as the "TENANT");
the above companies hereinafter jointly referred to at the
"PARTIES".
All of the terms of this Lease Agreement have been individually
negotiated
between the Parties.
FOR GOOD AND VALUABLE CONSIDERATION RECEIVED THE LANDLORD AND THE
TENANT AGREE
AS FOLLOWS:
1 LEASE OF
THE PREMISES
1.1
The Landlord is the
legal owner of the Premises as more fully
described in Annex 1 hereto.
1.2
The Premises shall
include items (i), (ii) and (iii) of this Clause
1.2 now or hereafter located thereon or therein and
appertaining
thereto: (i) the Land (as hereinafter defined) together with
the
Appurtenances (as hereinafter defined), (ii) the Improvements
(as
hereinafter defined), and (iii) the Fixtures (as hereinafter
defined).
1.3
The Landlord hereby
demises and lets to the Tenant, and the Tenant
hereby takes and leases from the Landlord the Premises for the
term
and upon the provisions hereinafter provided.
2
GUARANTEE
2.1
The Guarantor shall
guarantee all obligations of the Tenant, so that
under this Lease, Guarantor shall (save as provided for in the
Guarantee) always be jointly and severally liable to the Landlord
for
the performance of all of the Tenant's obligations under this
Lease.
3
DEFINITIONS
In
this Lease agreement the following expressions have the
following
meanings:
3.1
ACQUISITION COST shall
mean E17,366,500.
3.2
AFFILIATE of any
Person means any Person which shall (i) control, (ii)
be under the control of, or (iii) be under common control with
such
Person (the term "control" as used herein shall be deemed to
mean
ownership of more than 50% of the outstanding voting stock of a
corporation or other majority equity and control interest if
such
Person is not a corporation) and the power to direct or cause
the
direction of the management or policies of such Person.
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3.3
ALTERATION OR
ADDITIONS means all alterations and additions made to
any part of the Premises including without limitation additions
or
alterations to the Fixtures, changes to the existing design or
appearance of the Premises or any alteration in or extension to
the
electrical or other installations located in the Premises or
the
erection of any new building or other structures.
3.4
APPURTENANCES shall
mean all easements, rights-of-way and rights
associated with the Land.
3.5
BASIC RENT means the
amount per annum set forth in Clause 1 of
SCHEDULE 2 as increased in accordance with the provisions of
SCHEDULE
2, and
payable in accordance with Clause 7 of this Lease.
3.6
CASUALTY means any
damage to, or destruction of the Premises.
3.7
COMMENCEMENT DATE
means the date the purchase price is paid under the
Purchase and Sale Agreement.
3.8 COMPETENT AUTHORITY means any
national or local governmental agency,
body or other entity having enforcement or regulatory powers in
Germany in respect of any Environmental Law.
3.9
COMPULSORY PURCHASE
shall mean any expropriation or taking of all or a
material portion of the Premises, (i) by compulsory purchase or
other
proceedings brought by any authorized governmental or other
public
authority ("Enteignung") pursuant to any Law, which relate to
the
same, or (ii) by reason of any agreement with any purchaser in
settlement of, or under threat of, any such compulsory purchase
or
other proceeding brought by a governmental body, agency or
department,
or (iii) a Requisition. The Compulsory Purchase shall be considered
to
have taken place on the date in which the decision enforcing
the
Compulsory Purchase, issued by a relevant authority, becomes final
or
on the date on which an agreement transferring the Premises (or
portion thereof) to the applicable governmental authority is
entered
into.
3.10
COMPULSORY PURCHASE NOTICE shall mean an official notice on the
commencement of any proceeding for Compulsory Purchase.
3.11
DANGEROUS SUBSTANCES means any substance (whether in the form of
a
solid, liquid, gas or vapour) the generation, keeping,
transportation,
storage, treatment, use or disposal of which gives rise to a risk
of
causing harm to man or to any other living organism or causing
damage
to the environment and includes (but without limitation) any
controlled, special, hazardous, toxic, radioactive or dangerous
waste;
all substances in the Tenant's fittings, plant, machinery and
stock
used for the Permitted Use will not be included in this definition
of
Dangerous Substances, provided that: (i) such substances are in
common
normal use or necessary for a new technical invention in relation
to
or for purposes analogous to the Permitted Use in terms of
applicable
technical standards, (ii) they do not exceed maximum quantities
specified under applicable law, and (iii) they are properly
secured
and do not constitute a danger of any kind to anyone.
3.12
DEFAULT AMOUNT means the Outstanding Amounts.
3.13
ENVIRONMENTAL CONSULTANT shall mean ENVIRON UK Ltd.
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3.14 ENVIRONMENTAL LAW
shall mean (a) whenever enacted or promulgated, any
applicable federal, state and local law, statute, ordinance,
rule,
regulation, license, permit, authorization, approval, consent,
court
order, judgment, decree, injunction, code, requirement or
agreement
with any governmental entity, (i) relating to pollution (or the
cleanup thereof), or the protection of air, water vapor,
surface
water, groundwater, drinking water supply, land (including land
surface or subsurface), plant, aquatic and animal life from
injury
caused by a Hazardous Substance or (ii) concerning exposure to, or
the
use, containment, storage, recycling, reclamation, reuse,
treatment,
generation, discharge, transportation, processing, handling,
labelling, production, disposal or remediation of Hazardous
Substances, Hazardous Conditions or Hazardous Activities, in each
case
as amended and as now or hereafter in effect, and (b) any common
law
or equitable doctrine (including, without limitation,
injunctive
relief and tort doctrines such as negligence, nuisance, trespass
and
strict liability) that may impose liability or obligations for
injuries or damages due to or threatened as a result of the
presence
of, exposure to, or ingestion of, any Hazardous Substance. The
term
Environmental Law includes inter alia, the Federal Emission
Control
Act ("Bundes-Immissionschutzgesetz BImSchG"), the Federal Soil
Protection Act ("Bundesbodenschutzgesetz"), the Federal Water
Protection Act ("Wasserhaushaltsgesetz"), the Federal Recycling
and
Pollution Prevention Act ("Kreislaufwirtschafts und
Abfallgesetz"),
the German Civil Code, including all regulations
(Rechtsverordnungen)
which have their legal basis ("Ermachtigungsgrundlage") in the
aforementioned statutes, each as amended and as now or hereafter
in
effect and any similar state or local Law.
3.15
ENVIRONMENTAL PERMITS means any and all consents, permits or
authorisations required under Environmental Law in connection with
the
Tenant's use and occupation of the Premises;
3.16
EUR (also EURO or E) means the single currency of the
participating Member States in the Third State of European
Economic
and Monetary Union of the Treaty Establishing the European
Community,
as amended from time to time.
3.17
EVENT OF DEFAULT means any breach or non-performance of the terms
of
this Lease whether of a monetary or non-monetary nature,
including
breach or non-performance of covenants, representations and
warranties
of Tenant under this Lease.
3.18
FIXTURES means all plant and machinery as described in Schedule
6
hereto.
3.19
GERMAN CIVIL CODE means the German statutory law for civil
matters
titled "Buergerliches Gesetzbuch" ("BGB").
3.20
GUARANTEE means the Guarantee issued on the date of this Lease by
the
Guarantor in favor of Landlord in order to secure the performance
of
all of the Tenant's obligations under this Lease.
3.21
GUARANTOR means Wagon PLC, whose registered office is at 3500
Parkside, Birmingham Business Park, Birmingham B37 7YG, a
company
registered in England under registration number 150042 together
with
its permitted successors and assigns and any guarantor that may
be
substituted for Guarantor in compliance with the terms of this
Lease
and the Guaranty.
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3.22
GUARANTOR INSOLVENCY EVENT means Guarantor Insolvency Event as
defined
in Clauses 15.1.3(i) and (ii).
3.23
IAS means international accounting standards as issued by the Board
of
the International Accounting Standards Committee (IASC) or any
other
internationally recognized accounting standard consistently applied
by
such Person, including, but not limited to German GAAP, UK GAAP
and
IAS.
3.24
IMPROVEMENTS means all buildings, premises, structures and
other
improvements constructed on the Land and any future
improvements
developed on the Land within the Term of this Lease in accordance
with
terms and conditions hereof.
3.25
INSURANCE PREMIUMS means all sums payable by the Tenant pursuant
to
Clause 9.1.1 under relevant insurances.
3.26
INSURED RISKS means the risks insured to be against under
Clause
9.1.1.
3.27
INTEREST means eight (8) percentage points above base rate as
defined
in Sec. 247 para 1 of the German Civil Code.
3.28 INVOICE means any
invoice issued by the Landlord to the Tenant for the
payment of the Basic Rent, the Outgoings, or other amounts to be
paid
by the Tenant to the Landlord under the terms of this Lease.
3.29
LAND means the parcels of land identified on Annex 1 hereto and
situated in Nagold, Germany.
3.30
LANDLORD means the Person first named herein as the Landlord and
its
successors and assignees.
3.31
LAW includes any constitution, decree, judgment, legislation,
order,
ordinance, regulation, statute, treaty or other legislative measure
in
Germany (including zoning regulations) and any present or
future
directive, regulation, guideline, practice, concession, request
or
requirement issued by any German authority, as well as
applicable
European Union regulations, directives and treaties, including,
but
not limited to the German Civil Code.
3.32
LEASE means this Lease Agreement.
3.33 LEASE YEAR means,
with respect to the first Lease Year, the period
commencing on the Commencement Date and ending at midnight on the
last
day of the twelfth (12th) full consecutive calendar month
following
the month in which the Commencement Date occurred, and each
succeeding
twelve (12) month period during the Term.
3.34
LENDER shall mean any Person (and its respective successors and
assignees) which may, on or after the date hereof, make a Loan to
the
Landlord (the Landlord will notify the Tenant of such Lender if
the
Lender is different from the Mortgagee).
3.35
LOAN means any loan made by one, or more Lenders: (a) to the
Landlord
in connection with the financing of the Premises or, at any time,
or
from time to time, any increase in such loan or any refinancing of
any
such loan (which may include any increase in the principal
amount
thereof); or (b) to any purchaser in connection with the purchase
of
the Premises or the interests in Landlord or, at any time, or
from
time to time, any refinancing of such loan (which may include
any
increase in the principal amount thereof).
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3.36
MATERIAL LEASE DEFAULT shall mean an Event of Default under
Clauses
15.1.1, 15.1.2, 15.1.3, 15.1.4, 15.1.5 or 15.1.7 of this Lease
or
Clause 15.1.1 of the Nagold Lease.
3.37
MORTGAGE means any legal instrument which secures the
Landlord's
obligation to repay a Loan.
3.38
MORTGAGEE means the holder of a Mortgage or similar lien (the
Landlord
will notify the Tenant about the establishment of the Mortgage
or
similar lien and such notification will indicate the
Mortgagee).
3.39
NAGOLD LEASE shall mean that certain lease agreement by and
between
Landlord and Tenant with respect to a property located at
Lise-Meitner, Strasse 10, 72202, Nagold, Germany dated as of the
date
hereof.
3.40
NET AWARD shall mean the entire award payable to the Landlord
by
reason of a Compulsory Purchase or insurance proceeds payable
by
reason of a Casualty whether pursuant to a judgment or by agreement
or
otherwise, less any reasonable expenses incurred by the Landlord
in
collecting such award or proceeds.
3.41
OFAC means the Office of Foreign Asset Control of the Department
of
the Treasury, codified at 31 C.F.R. Part 500 as defined in
Clause
10.6.6.
3.42
OUTGOINGS means all existing and future rates, taxes (such as
local
real estate taxes), fees, charges, assessments, impositions and
outgoings whatsoever, and all other expenses referring to or in
relation to the maintenance, operation or management of the
Premises,
including, but not limited to, all rents and charges for water,
sewer,
utility and communication services relating to any of the
Premises,
including all costs and expenses listed in Section 2 Operating
Cost
Order ("Section 2 Betriebskostenverordnung") as well as costs
and
expenses for running, cleaning and maintenance of windows,
window
panes,
fronts and exterior of the building, garage doors, technical
admission systems, e.g. code card systems or other electronic
systems,
ventilation and air conditioning equipment, elevators and
escalators,
any interior or exterior pipes especially gas or water pipes,
leads,
wires, power circuits, ducts, taps, telephone and communication
systems, heating systems, security systems, fire detectors,
emergency
power units, generators, air and water cleaning filters, snow and
ice
removal, street sweeping and street cleaning, roof maintenance
and
repair, costs, for administration and administrative personal,
security surveillance measures, lighting of the building, labeling
of
the building by exterior signs and all other public charges whether
of
a like or different nature, even if unforeseen or extraordinary in
so
far as they are reasonable and would be incurred by a reasonable
and
prudent property owner
making such payments itself.
3.43
OUTSTANDING AMOUNT means the sum of any amount payable by the
Tenant
(including but not limited to the Basic Rent and the Outgoings)
which
is past due under this Lease and which is unpaid and all Basic
Rent
and Outgoings that would otherwise be paid in the future under
the
remainder of the Lease Term should the Lease terminate earlier
than
specified under this Lease Agreement.
3.44
PARTIAL COMPULSORY PURCHASE shall mean any Compulsory Purchase
which
relates to a non-material part(s) of the Premises.
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3.45
PERMITTED USE means industrial and manufacturing (except for
metal
foundry) and other related activities, such as office use, to
the
extent permitted by Law or otherwise in accordance with Clause
10.5.1
of this Agreement.
3.46
PERSON means an individual, legal person or other entity having
no
legal personality under the Law.
3.47
POST CLOSING OBLIGATIONS shall mean the Post Closing
Obligations
defined in Clause 13.
3.48
PREMISES means the Premises defined in Clause 1.2.
3.49
PURCHASE AND SALE AGREEMENT means the Purchase and Sale Agreement
by
and between Landlord, as purchaser, and Tenant and Wagon
Automotive
GmbH, as seller, with respect to the Premises notarized on
_____
_________ 2008 by Dr. Peter Schmite, notary public, in Cologne,
Germany.
3.50
REINSTATEMENT VALUE shall mean the amount which would need to be
spent
in order to fully reinstate the Premises to its previous
physical
condition (including the Premises' structure and the Fixtures,
excluding the personal property of the Tenant used in the operation
of
its business (e.g. racking) within the Premises and any elements of
a
decorative nature), the physical condition of which complies with
this
Lease, in the
event that the Premises are entirely destroyed, provided
that such amount shall be subject to adjustments within the
Term
following changes to applicable market prices (e.g. to reflect
an
increase in the prices of construction materials); this amount
should
also include the costs of demolition and site clearance,
temporary
works, compliance with local authority requirements in connection
with
any works of repair or reinstatement, architects', surveyors'
and
other professional fees and other incidental expenses, and in
each
case with due allowance for VAT, customs duty and other public
charges.
3.51
REMAINING PREMISES means the Remaining Premises defined in
Clause
10.16(iii).
3.52
RENEWAL DATE means the Renewal Date defined in Clause 5.2.
3.53
RENEWAL TERM means the Renewal Term defined in Clause 5.2.
3.54
RENT means Basic Rent, VAT, Outgoings and any other amount payable
by
Tenant to Landlord under the terms of this Lease.
3.55
RENT ADJUSTMENT means an adjustment of Basic Rent in accordance
with
the provisions of SCHEDULE 2.
3.56
RENT ADJUSTMENT DATE(S) are as described in SCHEDULE 2.
3.57
RENT PAYMENT DATE means (a) with respect to each payment of Basic
Rent
the fifth (5th) Working Day of each February (covering the
calendar
months of February, March and April), May (covering the
calendar
months of May, June and July), August (covering the calendar months
of
August, September and October), and November (covering the
calendar
months of November, December and January) during the Term, and
(b)
with respect to any payment of Outgoings which are payable to
the
Landlord (as opposed to a third Person) within thirty (30) days
following receipt of an Invoice and if such date is not a Working
Day
then it will be payable on the immediately preceding Working
Day.
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3.58
REQUISITE NOTICE means a notice to the Tenant, forty-eight (48)
hours
before any entry is made on any Premises provided that in the case
of
an emergency no notice will be required.
3.59
REQUISITION shall mean any temporary requisition or confiscation
of
the use or occupancy of any portion of the Premises by any
governmental authority, civil or military, whether pursuant to
an
agreement with such governmental authority in settlement of or
under
threat of any such requisition or confiscation, or otherwise.
3.60
RESTORATION FUND means the Restoration Fund as defined in
Clause
10.17.2.
3.61
SECURITY DEPOSIT means a Security Deposit as defined in Clause
11.1.
3.62
SUBLET SECURITY DEPOSIT means a Sublet Security Deposit as defined
in
Clause 10.5.2.
3.63
TENANT includes the Tenant and the Tenant's successors and/or
assigns
in title which are permitted by the terms of this Lease.
3.64
TENANT GROUP means Guarantor and Tenant and their respective
subsidiaries if and for so long as each such Person shall be part
of
the group for the purpose of reporting financial positions and
results
on a consolidated basis.
3.65
TERM means Term as defined in Clause 5.1.
3.66
TERMINATION AMOUNT means Termination Amount as defined in
Clause
9.2.8.
3.67
TERMINATION DATE means the date of expiration or earlier
termination
of the Term.
3.68
TERMINATION EVENT means Termination Event as defined in Clause
9.2.8.
3.69
TERMINATION NOTICE means Termination Notice as defined in
Clause
9.2.8.
3.70
UNDERLET PREMISES shall have the meaning given to it in Clause
10.6.3(i).
3.71
VAT means value added or similar tax which is payable by the
Landlord
on the Basic Rent, Outgoings (if applicable) or any other amount
due
from Tenant under the terms of this Lease.
3.72
WORKING DAY means any day excluding Saturdays, Sundays and
national
holidays recognised by the laws of the Republic of Germany.
4
INTERPRETATION
In
this Lease:
4.1
Where any act is
prohibited, the Tenant will not allow or suffer such
act to be done by someone under the Tenant's direction or
control
(which shall include any subtenant or assignee).
4.2
The Clause headings
(except for the definitions) are for ease of
reference and
shall not affect the interpretation or meaning of this
Lease.
4.3
References to Clause
numbers or schedules or paragraphs in schedules
mean the Clauses of or schedules to or paragraphs in schedules to
this
Lease.
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4.4
Words importing
persons shall be construed as including firms,
companies and corporations and vice versa.
4.5
Words importing one
gender will be construed as importing any other
gender.
4.6
Words importing the
singular will be construed as importing the plural
and vice versa.
4.7
The words "hereof",
"hereunder", "hereto", "herein", and similar words
shall be construed as being references to this Agreement.
5 LEASE
TERM
5.1
The initial term of
this Lease for the Premises shall be for a period
of one hundred eighty (180) months (said initial term, as extended
by
any Renewal Term, the "TERM"), commencing on the Commencement
Date.
5.2
Provided that if, on
or prior to the date upon which the Term is
scheduled to expire (the "EXPIRATION DATE") or any other Renewal
Date
(as hereinafter defined) this Lease shall not have been
terminated
pursuant to any provision hereof, then on the Expiration Date and
on
the fifth (5th) anniversary of the Expiration Date (the
Expiration
Date and each such anniversary being referred to herein as a
"RENEWAL
DATE"), Tenant shall have the right to extend the Term (each
such
extension, a "RENEWAL TERM") for an additional period of five
(5)
years with respect to each Renewal Term, notification to Landlord
in
writing at least twelve (12) months (the "RENEWAL NOTICE DATE")
prior
to the next Renewal Date that Tenant is extending this Lease as of
the
next Renewal Date (each such notice, a "RENEWAL NOTICE"). If
Tenant
elects to not send a Renewal Notice to Landlord, Tenant shall have
the
right to extend the then current Term by a period of up to six
(6)
months by giving to Landlord a written notice of such extension
at
least twelve (12) months prior to the expiration of the then
current
Term, which notice shall specify the length of such extension of
the
Term (not to exceed six (6) months). Any extension of the Term
shall
be subject to all of the provisions of this Lease, as the same may
be
amended, supplemented or modified (except that Tenant shall not
have
the right to any additional Renewal Terms). An extension of this
Lease
according to Section 545 German Civil Code due to continued usage
of
the Premises by Tenant is specifically excluded.
5.3
Except as otherwise
expressly provided herein, Tenant shall have no
right and hereby waives all rights which it may have under any Law
(i)
to quit, terminate or surrender this Lease or any of the
Premises,
save for Tenant's right to terminate this Lease for cause ("AUS
WICHTIGEM GRUND") including, but not limited to, Sections 543 and
578
of the German Civil Code, or (ii) to any set-off of any Rent,
unless
such amounts claimed by Tenant are not disputed by Landlord or
have
been confirmed in a non-appealable judgment.
6 TRANSFER
OF POSSESSION
6.1
The Tenant shall be
entitled to take possession of the Premises as of
the Commencement Date.
6.2
The Tenant is aware of
and hereby acknowledges that there may be legal
defects, and construction and environmental defects relating to
the
Premises. The Tenant shall have no claims against Landlord with
respect to any defects now or hereafter existing.
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6.3
As of the Commencement
Date, in addition to Tenant's obligations under
Section 10.2 and elsewhere under this Lease, the Tenant shall have
the
general duty to maintain safety (Verkehrssicherungspflicht).
7 RENT
7.1
The Tenant covenants
and agrees that it shall be responsible for the
payment of the Basic Rent annually and proportionately for any
fraction of a Lease Year from and including the Commencement Date
and
from and including the Rent Adjustment Date such other Basic Rent
as
may become payable under the provisions of SCHEDULE 2. Following
the
first rent payment on the Commencement Date (with respect to
the
period defined in the next sentence below), the Basic Rent shall
be
divided into four (4) equal portions and each portion will be
paid
quarterly in advance on each Rent Payment Date in every Lease
Year.
The first (1st) rent payment shall be made on the Commencement
Date
and to be in respect of the period from and including the
Commencement
Date to and including the Working Day immediately preceding the
next
following Rent Payment Date calculated on a daily basis.
7.2
From and including the
Commencement Date, the Tenant shall pay all
Outgoings, VAT and any and all other taxes or sums whatsoever
as
become payable or refundable by the Tenant to the Landlord under
the
provisions of Clause 10.9 of this Lease.
7.3
The Tenant shall, if
possible, ensure that direct contractual
relationships are established between the Tenant and the
contractor
for the services included in the Outgoings. If direct
contractual
relationships between the Tenant and a contractor cannot be
established, the Landlord shall direct all such contractors to
account
on a monthly basis directly to Tenant (or shall provide copies on
a
monthly basis of any such accounting statements provided by
such
contractor to Landlord together with the applicable statement),
payment of which shall be made by Tenant to the applicable
contractor
within thirty (30) days following receipt of an Invoice from
Landlord
or contractor, as applicable.
7.4
If required by the
Landlord, the Tenant shall pay the Basic Rent
reserved by Clause 7.1 and VAT by wire transfer or banker's
standing
order to a bank account or bank accounts (but not more than two
(2))
either in Germany or another country which the Landlord has
notified
in writing to the Tenant. If Landlord requires Basic Rent and VAT
to
be paid to a bank account located outside of Germany and the cost
to
wire transfer Basic Rent and VAT to such account exceeds the cost
to
wire transfer such funds to an account in Germany, then such
excess
cost shall be
borne by Landlord.
7.5
Any payments from the
Tenant to the Landlord under this Lease
(including the payment of the Basic Rent) shall be made against
Invoices issued by the Landlord to the Tenant.
8 VAT
8.1
In accordance with
Sec. 9 of the German VAT Act ("Umsatzsteuergesetz")
the Landlord has elected to waive the VAT exemption within the
meaning
of Sec. 4 No. 12a of the German VAT Act. The Tenant is aware of
the
fact that this requires the Landlord to use the Premises solely in
its
capacity as entrepreneur and for the purpose of creating
turn-over
that does not exclude pre-tax deduction and that in case of any
sub-leasing of the Premises of any part
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thereof, the Tenant elects for VAT and agrees to impose the
aforementioned obligations on any possible sub-tenant by way of
a
contract for the benefit of the Landlord (echter Vertrag zugunsten
des
Vermieters).
8.1.1 If the Landlord's conditions for opting for VAT are
inapplicable
because the Tenant or any sub-tenant is not using the property
in
accordance with the principles in Clause 8.1 above, Tenant will
indemnify Landlord for any cost arising out of this event, and
will in particular (i) reimburse Landlord for any VAT
correction
amount which is payable by Landlord pursuant Sec. 15a VAT Act
(or
under any of its successor statutes) because of this event and
(ii) bear any VAT owed by Landlord pursuant Sec. 14c VAT Act
(or
under any of its successor statutes). Further rights of the
Landlord shall remain unaffected hereof.
8.1.2 The Tenant is aware of the Landlord's obligation to prove
the
observation of the requirements of Sec. 9 ss. 1, 2 of the
German
VAT Act to the financial authorities and therefore undertakes,
on
request and without undue delay, to provide the Landlord with
documentation and to make representations enabling the Landlord
to comply with his obligations to report to financial
authorities
under Sec. 90 ss. 2 sentence 2 of the German VAT Act. Moreover,
the Tenant shall be obligated to inform the Landlord promptly
of
any events that could affect VAT opting.
8.1.3 The Landlord's claims against the Tenant according to
this
Clause 8.1 shall not become time-barred prior to expiry of any
six (6) months period, starting upon receipt by the Landlord of
the relevant tax assessment notices. In case the Tenant or any
sub-tenant does not comply with the duty to provide information
according to Cause 8.1.2, the limitation period with respect to
all claims arising from the Tenant or such sub-tenants'
failures
to provide information shall extend to ten (10) years.
8.2
Each payment of Basic
Rent, the Outgoings and other amounts provided
for under this Lease shall be subject to VAT on such payment. To
the
extent that any Basic Rent, the Outgoings and other amounts
provided
for under this Lease is subject to VAT under any applicable VAT
provision, the Tenant shall pay such VAT imposed on any Basic
Rent,
the Outgoings and other amounts provided for under this Lease at
the
applicable rate in addition to any such Basic Rent, Outgoings
and
other amounts payable by Tenant under this Lease.
8.3
Tenant shall make all
VAT payments arising from Tenant's obligations
under this Lease as and when due, at the option of Landlord,
(i)
directly to the appropriate taxing authority and will provide
Landlord
evidenced of such payment within thirty (30) days after the due
date
thereof, or (ii) to Landlord's designated account. If (x) an
overpayment by Tenant of VAT due on this Lease occurs and (y) a
claim
against the German tax authorities for reimbursement of such
overpayment of VAT due on this Lease may only be asserted by
Landlord,
then promptly after written request, and with Tenant's
cooperation,
Landlord shall assert such claim against the German tax
authorities
for reimbursement of such overpayment of VAT due on this Lease
and,
upon receipt of reimbursement of such claim from the German tax
authorities, shall remit such reimbursement to Tenant. All
costs
reasonably and necessarily incurred by Landlord with respect to
the
preparation, review or
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filing of any VAT returns shall be paid by Tenant excluding costs
for
Landlord's own employees and resources.
8.4
Landlord shall, upon
receipt of written request of Tenant, provide
Tenant with invoices satisfying the formal requirements of Section
14
of the German VAT Act with respect to the Basic Rent due under
this
Lease. Landlord's costs of preparing and/or reviewing such
invoices
shall be paid by Tenant.
9
INSURANCE
9.1
The Tenant shall:
9.1.1 insure the Premises, pay the Insurance Premiums and maintain
the
following insurance against:
(i) loss or damage by
fire, explosion, storm, tempest (including
lightning), flood, earthquake, burst pipes, impact, heave,
subsidence and (in peacetime) aircraft and articles dropped
there from, riot, civil commotion and malicious damage
impact by road vehicle for their full Reinstatement Value in
the name of the Tenant with the Landlord as additional
insured and Loss Payee as their interests may appear and the
Lender as additional insured and First Loss Payee as their
interests may appear;
(ii) the loss of rent payable under this Lease from time to
time
(having regard to the review of Basic Rent which may become
due under this Lease) equal to twenty four (24) months of
Basic Rent or such longer period as the Landlord and the
Tenant may from time to time agree to in writing as being
sufficient or for the purposes of planning and carrying out
any reinstatement of the Premises following a Casualty in
the name of the Tenant with the Landlord as additional
insured and Loss Payee as their interests may appear and the
Lender as additional insured and First Loss Payee as their
interests may appear;
(iii) third party liability arising out of or in connection
with
any matters involving or relating to the Premises in an
amount satisfactory to the Landlord, acting reasonably which
is in line with insurance usually effected by a prudent
owner of a property being of a similar nature to the
Premises and naming the Landlord and the Lender as
additional insured; and
(iv) such other insurance coverage as the Landlord shall
reasonably request which is applicable to commercial
properties and constitutes a risk and an amount that it is
usual business practice to insure against in Germany;
(jointly referred as the "INSURED RISKS").
9.1.2 The Tenant will procure at all times that all insurance
policies
contain:
(i) a clause whereby
such insurance policy will not be vitiated
or avoided as against a Mortgagee in the event or as a
result of any misrepresentation,
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act or neglect or failure to make disclosure on the part of
the insured party or any circumstances beyond the control of
any insured party; and
(ii) terms prohibiting the insurer from vitiating or avoiding
any
insurance policy as against a Mortgagee in the event of any
misrepresentation, act or neglect or failure to make full
disclosure on the part of the Landlord, the Tenant or other
insured party and a waiver of all rights of subrogation.
9.1.3 ensure that the insurer has a claims paying ability rating of
at
least AA- given by Standard & Poor's Rating Services, a
Division
of MacGraw Hill Companies, Inc. or an equivalent rating by
Moody's Investment Services and is authorised to write
insurance
in Germany, or, if the insurer does not possess such rating,
ensure that the insurer is reputable, authorized to write
insurance in Germany and reasonably acceptable to Landlord;
9.1.4 at least thirty (30) days prior to modifying or replacing
any
insurance required under Clause 9.1.1 provide the Landlord with
details of the proposed insurance, the form of policy, details
of
the insurer, any excesses and deductible exclusions and
limitations under the policy, details of the full Reinstatement
Value including all professional fees, and details of all other
amounts insured under the policy. The Landlord's approval for
modifying or replacing any insurance is required if terms of
the
insurance are different than set out under this Clause 9 or if
any deductible is increased. If the Landlord's approval is
required,
the Tenant shall have the right to renew, modify or
replace the insurance policy, if such approval has been granted
in writing. The approval or disapproval should be issued by the
Landlord acting reasonably within fourteen (14) days, counting
from the day on which the Tenant proposed to the Landlord the
full details of the insurance;
9.1.5 comply with the requirements of the insurers relating to
the
Premises;
9.1.6 promptly, but in any event within three (3) days of the
occurrence, give the Landlord written notice of any material
damage to or destruction of the Premises;
9.1.7 pay the Landlord within ten (10) days of demand the
reasonable
costs incurred by the Landlord in connection with any insurance
claim relating to the Premises arising from any insurance taken
out by the Landlord pursuant to Clause 9.3, including, but not
limited to, deductibles, reasonable legal fees, and costs of
Landlord's construction consultant.
9.1.8 notify the Landlord immediately if the Tenant, undertenant,
or
any other lawful occupier vacates the Premises; and
9.1.9 provide to Landlord and to the Lender certified copies of
policies (or any substitute documents issued by the insurance
company) and receipts with respect to the payment of premium
within thirty (30) days following the commencement or renewal
date of the insurance.
9.1.10 Undertake all reasonable endeavours to cause each
insurer
carrier to issue a certificate of third party interest in the
insurance (Sicherungsbestatigung / Sicherungsschein) in favour
of
Lender confirming that the legal provisions set out
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in sections 94 and 142 to 149 of the German Insurance Contract
Act (Versicherungsvertragsgesetz) apply to all kinds of
property
insurances.
9.2
Reinstatement
9.2.1 If any part of any Premises is damaged by any of the
Insured
Risks then,
(i) If the provisions of Clause 10.17.1 apply, the Tenant shall
apply the net Award (except those amounts relating to fees and
Rent) towards reinstating the Premises and Tenant shall be
responsible for any short-fall.
(ii) If the provisions of Clause 10.17.2 apply, upon receipt of
the Net Award by the Landlord, Landlord shall make the Net
Award
available to the Tenant in accordance with Clause 10.17.2 for
reinstating the Premises.
9.2.2 The Tenant shall be obliged to arrange for the performance
of
construction work aimed at reinstating the Premises. The
detailed
scope and the schedule for the works will be subject to the
Landlord's approval, which approval shall not be unreasonably
withheld or delayed and subject to the requirements of the
insurers. The Tenant shall ensure that a contractor carrying
out
any reinstatement works grants a construction quality guarantee
(Gewahrleistungsburgschaft) (as to the performed reinstatement
works) for the joint benefit of the Landlord and the Tenant or
be
assigned to the Landlord.
9.2.3 If the payment of any insurance monies is refused for any
reason
other than a default by Landlord under this Lease, the Tenant
will pay to the Landlord within fourteen (14) days of demand
the
amount so refused. The monies paid by the Tenant to the
Landlord
shall be made available to Tenant in accordance with Clause
9.2.1(ii).
9.2.4 The Landlord will not be obliged to comply with the
obligations
under Clause 9.2.1(ii) if payment of the insurance monies has
been refused in whole or in part by reason of any act or
default
of the Tenant or anyone under its control or the Tenant has not
complied with its obligations in Clauses 9.2.2 and 9.2.3.
9.2.5 For the avoidance of doubt, nothing in this Lease imposes
an
obligation on the Landlord at any time, for any reason, to
reinstate or repair the damaged Premises.
9.2.6 Tenant shall be obligated to restore the Premises as close
as
possible to its value, condition and character immediately
prior
to a Casualty (assuming
