Exhibit 10.40
Hans ▇▇▇▇▇▇ ▇▇▇, Eng., Inc. Complete construction and building management
Rental Contract
between
Hans ▇▇▇▇▇▇ ▇▇▇, Eng., Inc., Complete Construction and Bldg. Management,
▇▇▇▇▇▇▇-▇▇▇▇▇-Weg 10, 88279 Amtzell
- represented by Mr. Hans ▇▇▇▇▇▇ ▇▇▇, Engineer, Martinstra(beta)e 1, 88279
Amtzell - - Lessor -
and
SMS ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ im Allgau
- represented by company director ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ -
- Lessee -
ss.1 Rental Property
1.1 The object of this rental contract is the building to be erected by the
lessor on the property in Amtzell-Gieselharz, in the district of Amtzell, on the
basis of the development plans (see Attachments 3 - 5) and the floor plans with
building description (see Attachment 2) by the planning office of Hans ▇▇▇▇▇▇
▇▇▇, Eng., Inc., ▇▇▇▇▇▇▇-▇▇▇▇▇-Weg 10, 88279 Amtzell. The building is to have 12
m2 net floor space per DIN [German Industrial Standard] 277, with exterior
features including the number of ground level, uncovered parking places required
by the LBO/building permit (at least 30 in any case).
Extent and equipment of the rental object to be supplied by the lessor at his
cost are taken from the Attachments listed under ss.14 Item 14.2 of this
contract.
1.2 Special items not contained in the floor plan or the other attachments to
the offering (ss.14) up to now, as well as later changes desired by the lessee
that extend beyond the scope of the floor plan, will be limited to the amount
absolutely necessary, and will be implemented only within the cost structure
(for building and exterior features) set forth in the rent payment calculation
(see ss. 3 Item 3.7)
1.3 The lessor is obligated to proceed with planning and construction of the
rental object in a timely manner, so that it can be presented to the lessee,
ready to occupy, no later than September 30, 1999.
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1.4 In case this completion deadline is not met, the lessor will pay a
contractual penalty of 300.- DM for every day it is late, without demonstration
of fault. The contractual penalty has no time limit. The contractual penalty
does not exclude additional damage claims. The lessor is responsible for any
subcontractors engaged by him.
ss.2 Rental Period, Cancellation
2.1 The rental relationship begins with the transfer of the rental object to the
lessee in acceptable condition (after acceptance). It is fixed for the period of
10 years, beginning with the first of the month following the transfer. The
lessee is entitled to extend the rental relationship twice, by 5 years each
time, by written request to the lessor (Option). The written request must be
received by the lessor 1 year in advance each time. If the option is not
exercised, the rental relationship ends after the 10-year lease period.
2.2 Thereafter, the rental relationship is extend for an undetermined amount of
time, as long as it is not cancelled with 12 months notice. Cancellation must be
in writing to be valid and must be presented to the other party no later than
the 3rd working day of the first month of the cancellation notice period.
ss.3 Rent Amount
3.1 The rent amount for basement, ground floor, upper floor, and roof is
12.50 DM / m2 of net floor space per month.
The monthly rent for ca. 1200.00 m2 net floor space is therefore 15,000 DM
(in words: Fifteen Thousand Deutsche ▇▇▇▇),
The monthly rent for the basement areas (cellar and underground garage)
is 4.00 DM / m2 of net floor space per month, but despite this
determination it is set by mutual agreement at a rate of 900 DM per
month.
Therefore the total annual rent is 190,800 DM (in words: One Hundred Ninety
Thousand Eight Hundred Deutsche ▇▇▇▇)
The above amounts are net sums; the VAT due is to be added at the
current rate, now 16%.
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The exact rent amount for basement, ground floor, upper floor, and roof
is determined by the finished plan and is to be calculated by both
parties together based on the actual floor space after construction.
This square meter amount will be used to calculate the final rent
amount and will then become addended to the rental contract. The basis
for all floor space calculations is the DIN.
3.2 The rent is to be paid in advance every month, without charge, no later than
the 3rd working day of the month, into an account to be named by the lessor.
3.3 To secure the rent amount, the lessee will transfer a bank guarantee from a
large German bank, in the amount of two years' rent, within 14 days of signing
the rental contract. The lessor will pay 0.75 percent of the guarantee amount
annually. The costs of the guarantee described above are calculated with the
rent each July.
3.4 Each contractual party can demand negotiations about a new determination of
the rent amount for use of the building (building rent portion), if, after the
beginning of the contract, the monthly price index for the cost of living for a
four-person household of laborers and salaried employees, with average income,
in Baden-Wurttemberg, as determined by the Baden-Wurttemberg Statistical Office,
has increased or decreased by 5 per cent relative to its level at the beginning
of the rental relationship, but not before 18 months have passed. The parties
agree upon a basis amount for the cost of living index, in the month in which
the contract period begins, of 1991 = 100 as an index.
3.5 After a new rent amount is set, the next new setting is possible no sooner
than 12 months later, according to the rent adjustment clause in Item 3. If the
cost of living index for 1991 = 100 no longer be available, then it will be
converted on the basis of the new cost of living index published at the time; in
all other ways it will be handled as described above.
3.6 A change in the rent amount is to be validated in writing by both parties.
3.7 During the course of planning and construction, the lessee will only request
those changes that can be financed, from the financial basis of the rental value
calculation, by canceling or changing other positions. If this is not possible
(for example, because they are deemed by the future user/lessee to be
indispensable after the fact as deviations from usage-neutral furnishings), then
special contractual regulations are to be made. Subsequent demands by the lessor
because of inaccurate planning, or changes in planning or furnishings, are
excluded.
3.8 The new set rent amount, underss.3 Item 3.4, 3.5, and 3.6 of this contract,
is due on the first of the month following the rent adjustment request.
3.9 The lessee is entitled to tax deductions. The rent receipts are subject to
sales taxes.
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ss.4 Operating Costs
4.1 The lessee pays all operating costs, as listed in the current edition of
Attachment 10 (Attachment 3 to ss.27 paragraph 1 II. Calculation Arrangements),
of 10/12/1990, (BGBH, I S. 2179 ff.).
4.2 If costs listed under Item 1 are presented to the lessor by a third party
entitled to payment, then the lessee is to be informed promptly of these and any
payments made. The payment obligations arising from these are to be repaid by
the end of the month in which the information was shared.
ss.5 Use of the Rental Space, Sublets
5.1 The lessee will use the rental object commercially as office space with an
integrated storeroom and workshop, as well as two one-room apartments including
underground garage and cellar rooms. Notice is clearly given that the
installation of an elevator is not included in the scope to be provided by the
lessor. It will, however, be ensured that an elevator shaft is present. If the
lessee should install an elevator, then the residual cost of the elevator (time
value) at the end of rental relationship will be paid by the lessor.
5.2 The lessee is entitled to allow others to use the rental object, with the
agreement of the lessor, or to sublet it in whole or in part.
The lessor can only deny permission to sublet for important reasons.
ss.6 Building Maintenance
6.1 Maintenance of the rental property is the responsibility of the lessor. The
lessee is obligated to promptly inform the lessor of any damages discovered that
fall under the maintenance responsibility of the lessor. The lessor is obligated
to maintain the rental property, including accessories, in constant good
condition, fit for its intended purpose. If this obligation is not or is
insufficiently met within an appropriate time frame, despite warnings, then the
lessee is entitled to arrange for the required work to be done at the lessor's
cost.
6.2 Performance of cosmetic repairs is the responsibility of the lessee. The
cosmetic repairs particularly include interior paint, wallpaper, plastering or
painting of walls and ceilings, painting or finishing of radiators, heating
pipes, other supply lines, interior doors, windows, and the interior side of
exterior doors.
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6.3 Small repairs to items permanently attached to the building (blinds,
shutters, radiators, sanitary facilities, and window and door hardware) are to
be repaired by the lessee at his cost, up to 1,000.- DM per case, but not more
than 1 per cent of the annual rent in a calendar year.
ss.7 Safety Obligations, Liability
7.1 The lessee takes responsibility for safety within the rental object. This is
not the case if the lessor does not repair damages in the rental object, despite
having been informed of them by the lessee.
7.2 The lessee takes responsibility for safety, as well as for normal cleaning,
clearing, and spreading responsibilities for the walkways, entrances to the
rental object, with regard to local legal requirements. The required materials
are to be obtained by the lessee at his cost.
7.3 The lessee is responsible for all damages caused by his fault, or the fault
of his employees or visitors. He is also responsible for damages that result
from improper use of supply utilities (water, sewer, and electrical
installations).
7.4 The lessor is responsible for all damages to the lessee, his employees or
visitors, or to objects brought in, that result from the lessor violating the
responsibility for maintenance and safety. This is unless the lessee has failed
to meet his responsibility to inform the lessor under ss.6 Item 6.1 of this
contract.
ss.8 Installations and Modifications
The lessee can, at his cost, perform installations and modifications to the
rental property, as long as the lessor has agreed to them in writing. If the
lessee performs installations or modifications, he is to maintain them properly
and, at the request of the lessor, to remove them and restore the original
condition.
ss.9 Entry to the Rental Areas
The lessor and his agents can enter the rental object during business hours with
prior notice to the user, and, in case of danger, also outside business hours.
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ss.10 Chargebacks, Rent Reduction, Right of Withholding
The lessee can only charge against his rent, reduce the rent, or withhold
payment because of a counter-claim if he has informed the lessor of this in,
writing, at least 1 month before the rent is due. Chargebacks are only valid if
the claim has been legally determined. An additional requirement is that he is
not in arrears on the rent payments.
ss.11 Ending the Rental Relationship
11.1 At the end of the rental relationship, the lessee is to return the rental
object completely empty and swept clean. He is to return all keys, including
those made during the period of the rental relationship, to the lessor. The
lessor and lessee will prepare a joint document regarding the return of the
rental object.
11.2 Damages that clearly took place during the rental period and that are the
responsibility of the lessee are to be described in more detail in the document
- as long as they are not the result of normal wear and tear. They are to be
repaired by the lessee at his cost within a reasonable amount of time.
11.3 The lessor can retain the installations and modifications performed by the
lessee by paying their depreciated value.
The lessor has a two-month declaration limit upon request by the lessee.
11.4 The lessee is obligated, in case no agreement is reached with the lessor,
to remove the fixed installations that he installed in the rental object, by
restoring the original condition.
ss.12 Further Offering of the Rental Property
12.1 The rental property may be offered for sale to a third party.
12.2 The lessor is obligated, in case of a further offering of the rental
property, to ensure that the new owner enters into the rental contract made with
the lessee, with all rights and obligations.
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ss.13 Right of Purchase, Option
Can be guaranteed if desired.
ss.14 Changes and Additions, Attachments
14.1 Changes and additions to this rental contract must be in writing to be
valid.
14.2 The following attachments are included as integral parts of the rental
contract:
Any attachments still missing are to be provided as soon as possible,
and to be signed by both parties.
Attachment 1: Map, scale 1:500, from the State Measurement Office
of Wangen,
Attachment 2: Floor plan with building description, from the
planning office of Hans ▇▇▇▇▇▇ ▇▇▇, Eng., Inc.,
88279 Amtzell, including floor space calculations
per DIN 277, with building permit from the State
Office in Ravensburg, as well as proof of thermal
insulation,
Attachment 3: Draft plans for the building (floor plans,
elevations, sections), scale 1:100 and 1:20, from
the planning office of Hans ▇▇▇▇▇▇ ▇▇▇, Eng., Inc.,
88279 Amtzell,
Attachment 4: Draft plans for the structure, scale 1:100, from
the planning office of Hans ▇▇▇▇▇▇ ▇▇▇, Eng.,
Inc., 88279 Amtzell,
Attachment 5: Draft plans for the exterior features with
parking lot, scale 1:200 and 1:250, from the
planning office of Hans ▇▇▇▇▇▇ ▇▇▇, Eng., Inc.,
88279 Amtzell,
Attachment 6: Installation plan,
Attachment 7: Plans for the installation of heating, sanitary
facilities, and ventilation,
Attachment 8: Plans for the electrical installations,
Attachment 9: Management requirements of the Interior Ministry
for fire protection requirements for pipes and
piping systems (VwV pipes) GABI. 1990 Page 597 ff.
dated 09/05/1990,
Attachment 10: List of operating costs
ss.15 Use of the BGB
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As long as no other regulation is agreed to in this contract, the requirements
of the BGB regarding rent will be valid. If a single contractual requirement
becomes invalid or is changed by a future change in the law, this will not cause
the entire contract to become invalid. The individual invalid requirement is to
be modified under consideration of existed or changed legal requirements, such
that it meets the intent of the contractual parties, as determined under
consideration of best belief.
ss.16 Fulfillment Location, Jurisdiction
The fulfillment location for rent payment is Amtzell. Jurisdiction for all
disputes under this contract is Ravensburg.
ss.17 Final Agreement
This rental contract is made in 4 copies. Each contractual partner receives 2
copies, as well as one copy of the attachments listed under ss.14 Item 14.2.
Amtzell, 12/22/98 Wangen, _________
[Stamp: ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, Eng., Inc.
Complete ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇-▇▇▇ ▇▇ ▇▇▇▇▇ Amtzell
Tel. 0 75 20 / 95 66-0 Fax 95 66 29]
[Signature] //S// ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Lessor Lessee
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List of Operating Costs
(Attachment 3 to ss.27 paragraph 1 II. Calculation requirements) dated
10/12/1990 (BGB 1 I S. 2179 ff.)
Operating costs are the following costs to the owner (entitled to build) that
arise continuously from the ownership (right to build) of the property, or from
proper use of the building or the economic unit, the outbuildings, features,
equipment, and property, unless they are normally borne directly by the lessee
in addition to the rent:
1. Continuous public burdens on the property
2. Costs of water supply
This includes the costs of water usage, basic costs, and rent of
meters, costs of use of intermediate meters, costs of operating a
dedicated water supply system, and a water preparation system,
including preparation materials.
3. Costs of water removal
This includes fees for building and property water removal, the costs
of operating a similar non-public system, and the costs of operating a
water removal pump.
4. Costs of operating the central heating system, including exhaust
system
This includes the costs for consumable fuel and its delivery, costs of
operating electricity, costs of operating, monitoring, and maintaining
the system, regular inspection of its fitness for use and safety,
including adjustment by a professional, cleaning of the system and the
utility room, costs for measuring in accordance with the Federal
Emissions Protection Law, costs of renting or otherwise obtaining the
use of a device to measure usage, as well as the costs of the use of a
device to measure usage, including the costs of calculation and
division.
5. Costs of operating the central hot water supply system
This includes the costs of the water supply, as under item 2, to the
extent that they are not already covered there, and the costs of
heating the water, as under item 4.
6. Costs of operating the mechanical passenger or freight elevator
(if present)
This includes the costs of operating electricity, costs for inspection,
operating, monitoring, and maintenance of the system, regular
inspection of its fitness for use and safety, including adjustment by a
professional, as well as costs for cleaning the system.
7. Costs for street cleaning and trash removal
This includes fees payable for public street cleaning and trash
removal, or the costs for appropriate, non-public services.
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8. Costs for building cleaning and pest control
Building cleaning costs include costs for cleaning the areas used
jointly by the residents, such as entrances, hallways, stairs, cellars,
floor rooms, laundry rooms, elevator passenger compartment.
9. Costs of garden maintenance
This includes costs for care of planted areas, including replacement of
plants and trees, care of play areas including replacement of sand, and
care of areas and entrances that serve non-public access.
10. Lighting Costs
This includes costs of electricity for exterior lighting and lighting
of the areas used jointly by the residents, such as entrances,
hallways, stairs, cellars, floor rooms, laundry rooms.
11. Costs of chimney cleaning
This includes sweeping charges, according to the ruling charge
schedule, to the extent that they are not already included as costs
under No. 4.
12. Costs of property and liability insurance
This includes namely the costs for insurance of the building against
fire, storm, and water damage, glass insurance, liability insurance for
the building, the oil tank, and the elevator.
13. Costs for building management
This includes wages, social contributions, and all similar benefits
provided by the owner to the building manager for his work, to the
extent that these do not apply to the maintenance, repair, renewal,
cosmetic repairs, or building administration.
To the extent that work is done by the building manager, the costs
for work performed under numbers 2 to 10 may not be charged.
14. Costs
14.a) of operating the joint antenna system;
This includes the costs for operating electricity and costs for regular
inspection of its fitness for use, including adjustment by a
professional, or a usage fee for an antenna system that does not belong
to the economic unit.
Or
14.b) of operating the private distribution system connected to a broadcast
cable network;
This includes the costs as under letter a), and the regular monthly
basic charges for broadcast connections.
15. Other operating costs
For other costs not named here, the appropriate legal regulation will
prevail.
Amtzell, 12/22/98
[Stamp: ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, Eng., Inc.
Complete ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇-▇▇▇ ▇▇ ▇▇▇▇▇ Amtzell
Tel. 0 75 20 / 95 66-0 Fax 95 66 29]
[Signature]
Signature of Lessor Signature of Lessee
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