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EXHIBIT 10.16
FINANCE CONTRACT FOR PROPERTY LEASING NO 8386
Between
1 FORTIS LEASE N.V. a limited company incorporated under the laws of Belgium,
with registered office at Kolonienstraat 62, 1000 Brussels, registered in
the Brussels Trade Register under no 310.464, VAT no 403.269.481,
represented for the purposes of this agreement by Mr FF Voorhelst and Mrs C
Boogmans, who have been duly authorised to act in this respect, hereinafter
referred to as "Fortis Lease" or "the owner"
and
2 XEIKON N.V., with registered office at 2640 Mortsel, Vredebaan 72,
registered in the Trade Register of Antwerp under n degrees 265.170, VAT no
BE434.998.973, represented for the purposes of this agreement by Mr A Buts,
and Mr J Van Daele, who have been duly authorised to act in this respect in
accordance with article 17 of the Memorandum and Articles of Association and
who, if so required, stand surety for the company, hereinafter referred to
as "the customer"
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PREAMBLE
The customer wishes to construct an industrial hall and offices.
The customer has applied for the required building permission, has had plans
drawn up in line with his requirements, and has assessed the investment costs
and the time required to complete the project.
The customer has applied to Fortis Lease to finance the transaction by means of
leasing.
Fortis Lease has agreed to finance this transaction by acquiring the
propertyright of the building ("droit de superficie" / "recht van opstal" )and
leasing it to the customer through a lease agreement (" the Lease Agreement ")
attached hereto.
This having been stated, the parties have agreed as follows:
ARTICLE 1: SUBJECT
By virtue of this contract and the Lease Agreement which forms an integral part
thereof, the parties enter into a mutual undertaking with regard to a property
leasing transaction as provided for in article 44 Section 3, 2b of the new VAT
Code and Royal Decree no 30 of 29 December 1992, whereby Fortis Lease will have
a building constructed in accordance with the customer's instructions. Fortis
Lease will subsequently place the building at the customer's disposal against
payment of rentals and an option to purchase at the end of the contract term,
both rentals and option price representing insofar as the customer exercises the
option to purchase on expiry of the lease, the capital outlay plus interest and
the transaction costs.
ARTICLE 2: FINANCING
Fortis Lease undertakes, except in the event of "force majeure" to:
a) acquire from Xeikon a 20 year building right ( "droit de superficie" /
"recht van opstal") on the land, exempt and free from all charges and
mortgages, situated in the commune of Lier,
part of the land registry section A no 299 with a surface area of 1 ha 2
a 80 ca
part of the land registry section A no 301/F with a surface area
9.075 m(2)
part of the land registry section A no 300/A with a surface area
12.906 m(2)
part of the land registry section A no 322/A with a surface area
17.460 m(2)
part of the land registry section A no 322/B with a surface area
6.660 m(2)
and belonging to Xeikon, as the said land appears on the plan dated 1/3/99
submitted by Studiegroep Omgeving CBVA, Mr E. Van Vaerenbergh and Mr V. De
Meulder,, chartered surveyors.
The term of the building right will be extended by 30 years if the customer
is in breach with one or more of his obligations under this contract.
The customer acknowledges awareness of all of Fortis Lease's obligations
under civil law and under the purchase contract for the land in its capacity
as "opstalnemer" (owner of building right) of the land with respect to the
construction of a building and operating a business in the said building.
The customer undertakes to fulfill these
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undertakings and discharges Fortis Lease from any liability in such respect.
The customer will also compensate Fortis Lease fully for any damages which
Fortis Lease may have to pay because of the customer not fulfilling his
commitments.
The notarial deed should be executed by 31/10/2000 at the latest.
b) build on this land the buildings as specified by the customer, in accordance
with the plans and specifications agreed or to be agreed and in accordance
with the conditions set forth below.
The plans and specifications will be attached to this contract and will form
an integral part thereof.
All costs for any legal action which may be necessary against the prior
owners of the land will be paid by the customer, unless the customer has
opposed such legal action with good reason.
Under no circumstances will the total amount to be financed by Fortis Lease
exceed BEF 1.320.000.000.
The customer undertakes to sign a Lease Agreement for the whole of the
above-mentioned property, which the customer will use for his industrial
activities. The parties expressly state that this agreement is not subject
to the law of 30 April 1951 on commercial leases.
ARTICLE 3: RENTAL
The customer will lease the building mentioned in article 2 from Fortis Lease in
accordance with the Lease Agreement, commencing on the date stipulated in
article 7 for a period of 15 years, at the expiry of which the customer will
have an option to purchase the building as specified in article 11. The Lease
Agreement cannot be terminated upon notice.
ARTICLE 4: BUILDING TO BE FINANCED
Fortis Lease is only obliged to construct and to finance the building as
scheduled in the attached plans and specifications, without prejudice to any
additional agreements regarding supplementary works within the limits of the
amount to be financed as specified in article 2b.
The customer is to pay for all other equipment.
The fact that the customer pays for this equipment will constitute proof that he
is owner thereof and Fortis Lease will not oppose removal of, replacement of, or
alteration to such equipment, even after the lease has expired, on condition
that such equipment does not qualify as fixtures and fittings and that the
tenant has paid all damages caused to the land or buildings.
The customer may, during the leaseperiod carry out any works necessitated by his
business activities, including extensions, conversions and improvements. In this
event
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Fortis Lease's prior approval must be sought. Fortis Lease may not withhold its
approval without good reason.
ARTICLE 5: BUILDING MANDATE
Fortis Lease gives the customer an irrevocable mandate, free of charge, to take
any decision, conclude any agreements and in general do anything that is
necessary or lawful for the purpose of having the scheduled building erected on
its behalf in accordance with the plans and specifications which have been
agreed or are to be agreed. The customer accepts this mandate and undertakes to
exercise the mandate in good faith until the final acceptance of the building.
The customer will accordingly represent Fortis Lease as the owner and prime
contractor. After obtaining Fortis Lease's approval, the customer will conclude
the necessary contracts with architects, contractors, suppliers and workmen in
Fortis Lease's name and on Fortis Lease's behalf. Fortis Lease will either give
its express approval or will be presumed to have given its tacit approval if it
has not responded ten days after the customer has sent the plans and
specifications, building contracts, orders and invoices for approval. The
customer must employ validly registered contractors.
Fortis Lease will be entitled to supervise all the building work; this includes
checking that the contracts are being correctly executed. It may not, however,
hinder the progress of the work.
By mutual agreement, the parties to this agreement appoint SECO to check that
the contracts are correctly executed. Their fee is to be paid by Fortis Lease
and included in the amount to be financed.
The customer guarantees that all chosen contractors are registered according to
the implementations of the Law concerning the economic reorientation of 4 August
1978. The customer obliges himself to opt for registered contractors to execute
any works trusted to third parties. During the whole period of the execution of
the contracts, he will see to it that no registrations are canceled. In case of
cancellation, he will immediately inform the lessor by registered letter and
this for any invoice following the cancellation. The customer will pay any
penalties or fiscal or social costs which should be calculated to the lessor in
accordance with the regulations stipulated in the law of 4 August 1978 and the
Royal Decree of 7 October 1978.
All contracts to be concluded with contractors will retain a clause which allows
the builder to suspend any payments and this from the moment of notification of
cancellation of the registration, to charge the concerned contractor to pay
penalties, fiscal or social costs and to break the contract in justice. The
possibility to break the contract in justice must be allowed in case of
banktruptcy of the contractor, extension of payments or concordat, dissolution
of the contracting company, deliberate or forced remittance of the exploitation
of the business by the contractor.
The customer will take any action required against the architects, building
contractors, workmen etc. The costs of such action will be paid by Fortis Lease
and included in the amount to be financed, subject to the limit stipulated in
article 2.
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The customer will use its best efforts to ensure that the construction will be
subject to provisional and final acceptance to be carried out on the dates set
in the specifications which have been agreed or are to be agreed.
ARTICLE 6: PAYMENT OF INVOICES DURING THE CONSTRUCTION PHASE
The customer will have the invoices etc from the architects, builders and
miscellaneous workmen drawn up in the name and address of Fortis Lease, the
owner and prime contractor. Unless otherwise agreed, these bills etc, and in
general all charges relating to the building specified in article 4, para 1,
will be paid by Fortis Lease within the agreed time limit, after being approved
by the architect and or the customer.
ARTICLE 7: COMPLETION OF THE BUILDING WORK AND START OF THE LEASE
(a) The customer's mandate provided for in article 5 does not include the
authority to carry out the provisional and final acceptance. Fortis Lease
alone will carry out the provisional and final acceptance; the customer
will be present or will have been invited to attend by prior written
notice from Fortis Lease.
Subject to the provisions of paragraphs (b) through (d) of this Article
7, the lease will take effect on the day (the "Commencement Date")
following the date of provisional acceptance, which is foreseen for:
31/3/2002.
(b) Fortis Lease hereby covenants and agrees that it will cause construction
of the building on the land and pay all costs in connection therewith in
accordance with Article 2 by 31/3/2002 (the "Completion Date"). Fortis
Lease may, by written notice to customer, extend the Completion Date by
up to 180 days (the "Outside Completion Date").
(c) Notwithstanding the provisions of paragraph (a) of this Article 7, if the
building is not completed by the Outside Completion Date due to the
occurrence of a "Force Majeure Event" (as defined below), customer may
either (i) waive completion of the building by the Outside Completion
Date and the Lease Agreement and payment of rental shall commence or (ii)
terminate the Contract upon payment of 89% of the building improvement
costs to Fortis Lease. "Force Majeure Event" means with respect to the
building any event the existence or potentiality of which, in the case of
any event other than adverse weather conditions, was not known and would
not have been discovered through the exercise of reasonable due diligence
by the customer beyond the control of the customer, including, but not
limited to, strikes, lockouts, adverse soil conditions, acts of God,
adverse weather conditions, inability to obtain labor or materials,
government activities, civil commotion and enemy action. If option (ii)
is chosen, title to the property shall remain with Fortis Lease.
(d) If at any time prior to the Completion Date there occurs full destruction
or expropriation of the building, in each case, the customer shall
either: (i) notify Fortis Lease that it intends to waive completion of
the building by the Outside Completion Date, in which case Fortis Lease
(or the customer as its agent) shall promptly and diligently take all
reasonable and practical steps to complete the
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construction of the building and the Lease Agreement will commence and
customer will commence paying rent on the Outside Completion Date
irrespective of whether the building has been completed by such date, or
(ii) notify Fortis Lease in writing that it intends to terminate the
Contract in which event customer shall pay to Fortis Lease, on a date
designated by the customer (which date shall not be more than thirty (30)
days after the occurrence of the applicable event), an aggregate amount
equal to 89% of the building improvement costs and on such date the
Contract shall terminate and title to the property shall remain with
Fortis Lease. If option (i) is chosen, rent will be calculated based upon
the estimated construction cost and will be adjusted upon completion of
the building.
ARTICLE 8: CHARGES AND RENTAL
The customer undertakes to pay Fortis Lease (i) any interim charges which may be
due up to the starting date of the lease referred to in the preceding article
and (ii) the fixed rentals throughout the duration of the lease.
The interim charges cover the interest accrued pro rata temporis on any amounts
disbursed by Fortis Lease prior to the start of the lease.
The charges and rental plus the option to purchase cover the payment and
financing of any amounts whatsoever disbursed by Fortis Lease for acquiring the
building rights (" droit de superficie"/ "recht van opstal"), the erection of
the building, and other associated transactions, including charges for judicial
and other matters, insurance premiums, charges and fees due to solicitors,
lawyers and other members of the professions whose services and assistance are
required, indirect, non-recoverable taxes on the above-mentioned items and taxes
relating to the property as a whole (property tax, taxes levied by national,
regional, provincial or municipal authorities etc).
If it is necessary to exceed the amount specified in article 2, the customer
will pay the balance and if required will reimburse Fortis Lease immediately
with any amounts disbursed, without any interest or consideration being due to
the customer and without any prejudice whatsoever to Fortis Lease's property
rights over the land and the building as a whole.
ARTICLE 9: INTERIM CHARGES
The interim charges from the date on which this contract is signed until the
date on which the lease comes into effect will be booked in a current account
between the parties.
This current account will be balanced quarterly, the first quarter ending on
30.09.2000 and in any event when the contract comes into force, as defined in
article 7.
The customer will be considered to have definitively approved the statement of
account unless he contests it within ten business days. The interim charges will
be calculated pro rata temporis on the amounts disbursed by Fortis Lease during
the current quarter and on the last balance drawn up.
The rate applied will be the aggregate of (i) Euribor 3 months and a margin of
0.50%.
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ARTICLE 10: RENTAL SCHEDULE
As from the date on which the lease comes into effect, the rental schedule will
be based on all the investments made or to be made in order to make the property
as a whole available, including incidental charges and miscellaneous taxes in
respect of the building, in accordance with article 8 par 3, but in any event
limited to the amounts which Fortis Lease has agreed to finance, ie BEF
1.320.000.000.
A credit discount at the rate Euribor 3m less a margin of 0.50% will be allowed
on the amounts paid by Fortis Lease after the lease has come into effect. A
table summarising the total investment made will be attached to this agreement.
The rental will be calculated according to the formula of constant term
annuities on the basis of the following items:
- THE LENGTH OF THE LEASE: 15 years
- THE INTERVAL AT WHICH RENTAL IS PAID: quarterly in advance
- THE NOMINAL TRANSACTION RATE: 5.59% per year (based on the interest rates
applicable on 19/4/2000)
- THE ESTIMATED AMOUNT OF THE TOTAL INVESTMENT: BEF 1.320.000.000
- THE OPTION TO PURCHASE: BEF 806.798.000, as set forth in Article 11 and
corresponding to the property's estimated fair market value at the normal
date of expiration of the Lease.
- THE RENTAL REPAYS THE AMOUNT OF THE INVESTMENT UP TO 38.8789%
On the basis of the following parameters, the quarterly rental is as follows:
The aggregate of a capital repayment of BEF 8.553.367 and interest calculated on
the outstanding balance at a rate of 5.59 % (based on the interest rates
applicable on 19/4/2000) (VAT excl.).
If the final cost of the investment differs from the amount initially estimated,
the rental schedule will be amended to take account of the new amount.
The initial rate and consequently the rental will be revised when the contract
effectively comes into force, and thereafter every five years.
The applicable interest rate at the beginning of the rent and afterwards at
every revision will be determined taking into account, on the one hand, a
variable interest rate which is determined in function of the duration and
increased with a margin, and on the other hand the formula of the weighted
average taking into account the reimbursement rythm of the capital.
A) The reference interest rates are equal to the Prime Rate at 1, 2, 3, 4 and 5
years applied by the Belgian Banks and published at 11 o'clock, 2 banking
days before the day of the fixing of the transaction interest rate.
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B) Formula of the weighted average:
The formula of the weighted average takes into account the capital part of
the rentals invoiced during the period for which the interest rate had been
fixed. This formula is the following one:
n
(SIGMA) = (a . t . x ) + b . n . x
t 1 t t n
--------------------------------------------
(SIGMA) = (a . t) + b . n
t 1 t
t = period of fixation of the interest rate
a = % of the yearly reimbursed capital parts during the concerned periods
(years 1 till n)
b = % of the capital part still payable at the end of the transaction,
i.e. the residual value
x = interest rate of the period concerned.
The sum of the percentages (a + ... + a ) + b is equal to 100.
1 n
The possibility to fix the rate during the leasing contract for a period longer
than 5 years is subject to the condition that N.V. Fortis Bank will have the
opportunity at that moment to enter the IRS market or to enter any similar
market for the periods concerned.
If for any reason the above-mentioned reference rate is no longer representative
of the cost of loans for the period in question, then Fortis Lease will agree a
new reference rate with the customer, which will in any event be in line with
the rate applied by Fortis Bank to private companies for similar transactions at
the time of the review.
If, during the lease, any costs have to be paid by Fortis Lease in connection
with the building concerned, such as:
- judicial and extra-judicial costs in connection with the transaction, such
as costs deriving from disputes with the neighbours, architect, contractor
and others;
- direct taxes on the property as a whole (property tax, taxes levied by
national, regional, provincial or municipal authorities etc);
- any other costs disbursed by Fortis Lease within the context of this lease;
such costs are to be repaid by the customer within thirty days of Fortis Lease
requesting such by registered letter. They will automatically be subject to
interest at Fortis Bank's base rate plus 1.5%, with a minimum of 10% per annum.
Fortis Lease undertakes to make it possible for the customer to make payment as
soon as possible.
Fortis Lease reserves the right to charge a fee in the event of it being
necessary for Fortis Lease to become involved, as owner of the property, in any
legal proceedings, to negotiate with third parties in connection with the
building or any other action required. This fee will cover Fortis Lease's
administrative costs.
If the rental is paid late, late interest will automatically be charged at
Fortis Bank's rate for cash advances plus 1,5 %, with a minimum of 10 % per
annum.
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Any and all taxes levied on the rental will be paid by the customer.
Upon signature of this contract, the customer undertakes to give a direct debit
order for rental and invoices. If this direct debit order is refused or
rescinded, the rental will automatically be increased by a fixed sum of BFr
10.000.
ARTICLE 11: OPTION TO PURCHASE - OPTION TO GO ON RENTING - REMARKETING OPTION
(a) Provided there is no event of default, upon the expiry of the Lease term
customer shall have the option (exercisable by giving Fortis Lease
irrevocable written notice (the "election notice")) to:
(i) purchase the building on the expiry date at a price of BEF
806.798.000 (eight hundred and six million seven hundred ninety
eight thousand Belgian Francs) corresponding to the Property's
estimated fair market value at the Lease expiration date as
confirmed by the appraisal dated June 15, 2000 of JOB-BOTTEQUIN
N.V. [appraiser] (the "Purchase Option Price");
(ii) remarket the building pursuant to the procedures described below;
or
(iii) continue renting the building on terms to be agreed as mutually
satisfactory to Fortis Lease and to the customer.
The election notice must be sent to Fortis Lease not earlier than 270
days and no later than 180 days prior to the expiry of the Lease
Agreement. If the customer fails to deliver a request for (ii) or (iii)
above by the date which is 180 days prior to the expiry of the Lease
Agreement (or if customer shall have delivered a request for (iii) above
but customer and Fortis Lease shall have failed to reach agreement on
mutually satisfactory terms for renewal of the rental and customer shall
not have thereafter delivered a request for (ii) no later than 180 days
prior to expiry of the Lease Agreement), customer shall be deemed to have
exercised option (i). If customer exercises its purchase option, all
indirect taxes, duties, charges and fees whatsoever entailed by taking up
the option and concluding the deed of sale will be paid solely by the
customer.
The notarial deed of sale must be executed within three months of the end
of the lease; the price and charges will be paid on the day this deed is
executed. During the period between the date on which the financing
contract expires and the payment of the purchase option, the customer
will pay interim interest on the amount of the purchase option at the
last contracted interest rate.
The option may be exercised and the building acquired by any third party
appointed by the customer, but the customer remains jointly and severally
liable for payment of the price, charges, taxes and duties.
By exercising the option, the customer enters into an obligation to
assume in his name and on his behalf all the rights and obligations
deriving from the insurance policies which Fortis Lease may have been
required to conclude because of the customer's failure so to do (cf
article 13).
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The customer waives all right of recourse against Fortis Lease in respect
of any defects in the property sold.
(b) If customer elects the remarketing option (subparagraph ii above)
customer shall market the building as non-exclusive agent for Fortis
Lease, to produce a purchaser therefor on the expiry date. Customer's
effective exercise and consummation of the remarketing option shall be
subject to the due and timely fulfillment of each of the following
conditions, the failure of any of which shall render the remarketing
option null and void and constitute an event of default under the
Contract:
(i) Customer shall, as nonexclusive agent for Fortis Lease, use
commercially reasonable efforts to sell Fortis Lease's interest in
the building and will attempt to obtain the highest cash purchase
price therefor. Customer will be responsible for hiring brokers
and making the building available for inspection by prospective
purchasers. Customer shall promptly provide any maintenance
records relating to the building to Fortis Lease and any potential
purchasers upon request, and shall otherwise do all things
necessary to sell and deliver possession of the building to any
purchaser. All such marketing of the building shall be at
customer's sole expense. Customer shall allow Fortis Lease and any
potential qualified purchaser access to such Property for the
purpose of inspecting the same;
(ii) Customer shall submit all bids to Fortis Lease, and Fortis Lease
will have the right to review the same. All bids shall be on an
all cash basis. Customer shall seek bids from one or more bona
fide prospective purchasers and shall use commercially reasonable
efforts to deliver to Fortis Lease not less than thirty (30) days
prior to the expiry date a binding written unconditional (except
as set forth below) irrevocable offer by such purchaser or
purchasers offering the highest all-cash bid to purchase the
building. No such purchaser shall be customer, or any subsidiary
or affiliate of customer. The written offer must specify the Lease
Expiry Date as the closing date. Customer shall provide Fortis
Lease with such additional information about the bids and the bid
solicitation procedure as Fortis Lease may request from time to
time. In the event of any bona fide offer to purchase the
building, Fortis Lease shall sell the building free of any liens
attributable to Fortis Lease, without recourse or warranty, for
cash to the purchaser or purchasers identified by customer or
Fortis Lease, as the case may be, and customer shall surrender
possession of the building;
(iii) Customer shall pay directly, and not from the sale proceeds, all
prorations, credits, costs and expenses of the sale of the
building, whether incurred by Fortis Lease or customer;
(iv) Customer shall pay to Fortis Lease at least two (2) business days
prior to the Lease Expiry Date (or to such other person as Fortis
Lease shall notify customer in writing), an amount equal to 89% of
the Lease Balance (as herein defined). "Lease Balance" shall mean
that portion (the "unamortized portion") of all costs incurred by
Fortis Lease in connection with the acquisition and construction
of the building which has not yet
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been recovered by Fortis Lease as the capital installments of
rentals invoiced to the customer under the Lease, together with
all acrrued and unpaid rent;
(v) The purchase of the building shall be consummated on the Lease
Expiry Date substantially contemporaneously with customer's
surrender of the building and the gross proceeds (the "gross
proceeds") of the sale (i.e., without deduction for any marketing,
closing or other costs, prorations or commissions) shall be paid
directly to Fortis Lease; provided, however, that if, as of the
expiry date, the sum of (w) the gross proceeds from the sale, plus
(x) 89% of the Lease Balance, plus all rental paid by customer on
the Lease Expiry Date, exceeds the Lease Balance as of such date,
then the excess shall be paid to customer on the Lease Expiry
Date;
(vi) Customer shall have no right, power or authority to bind Fortis
Lease in connection with any proposed sale of the building, other
than as expressly provided herein.
(vii) If customer exercises the remarketing option, then customer
shall, on the Lease Expiry Date, and at its own cost, transfer
possession of the building to the independent purchaser(s)
thereof, in each case by surrendering the same into the possession
of the customer or such purchaser(s), as the case may be, free and
clear of all liens, in good condition, ordinary wear and tear
excepted, and in compliance with all applicable laws and the
provisions of the Contract and the Lease Agreement. Customer
shall, on and within a reasonable time before and after the Lease
Expiry Date, cooperate with Fortis Lease and the independent
purchaser of the building in order to facilitate the ownership and
operation by such purchaser of the building after the Lease Expiry
Date, which cooperation shall include the following, all of which
customer shall do on or before the expiry date or as soon
thereafter as is reasonably practicable: providing all books and
records regarding the maintenance and ownership of the building
subject hereto and all "know-how", data and technical information
relating thereto, providing a current copy of the plans and
specifications, granting or assigning all licenses necessary for
the operation and maintenance of the building subject hereto and
cooperating in seeking and obtaining all necessary approvals.
(c) If upon the Lease Expiry Date customer is in default customer shall pay
the Lease Balance to Fortis Lease.
ARTICLE 12: LIABILITY
The customer will assume full liablility towards third parties in respect of the
works specified in article 4. He discharges Fortis Lease from any such
liablility and guarantees Fortis Lease in this respect.
ARTICLE 13: INSURANCE
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A. With effect from the date on which work commences until the date of the
provisional acceptance, the customer will conclude at his own cost with an
insurance company, approved in advance by Fortis Lease, a contractors' all
risks policy (" Tous Risques Chantier" / " Alle Bouwplaatsrisico's") based
on the 1984 General Conditions.
The policy taken should at least meet the following conditions:
Insured: - the customer
- Fortis Lease
- the principal contractor
- the sub-contractors
- the civil engineer and engineering department of the
construction firm
- the architect and generally all those involved on the site.
Cover:
a) Section 1: Damage and loss to the works (including fire)
1 insured value: amount of the investment + 10 % for the demolition costs
2 cover for a year
3 excess: at the customer's discretion, with a maximum of BEF 500.000
b) Section 2: Liability insurance
1. basic cover: minimum of BEF 50.000.000 in all for physical and
material damage
2. disturbance to the neighbourhood (article 544 of the Belgian Civil
Code) : cover for BEF 20.000.000, minimum excess at the customer's
discretion, with a maximum excess of BEF 200.000.
The excesses stipulated in the contract are to be paid by the insured;
however, the customer undertakes to repay any payments which may for
whatever be made by Fortis Lease.
If the principal contractor has concluded a contractors' all risks policy,
it will not be necessary for the customer to conclude such a policy so long
as the policy take out by the principal contractor meets the above-mentioned
conditions. The customer undertakes to provide Fortis Lease with a copy of
the contractors' all risks policy concluded by the main contractor.
B. The customer further undertakes to conclude at his own cost, commencing on
the date of the expiry of section I of the contractors' all risks policy and
throughout the duration of the lease, one or more insurance policies
covering at least the risks of fire, lightning, explosion, falling of
aircraft and flying craft or parts thereof.
Such insurance will be taken out on both the customer's and Fortis Lease's
behalf and will at all times cover the property for the full index-linked
new reconstruction value.
Furthermore, the contract will specify the waiver of any mutual right of
recourse in case of fire and annexed damages. The customer remains
responsible for any loss provided with in the exceptions of the assurance
contract.
The contract should also cover the following risks:
- commercial unemployment (operating losses)
- neighbours' legal right of recovery
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- demolition and debris removal costs
- the cost of the intervention of the fire brigade.
The customer undertakes to use any monies which he receives in compensation
under these policies for the purpose of having the property repaired.
Any payment of a claim superior to 15 % of the insured capital must obtain
prior consent of Fortis Lease.
If the compensation received is not sufficient to cover the cost of
restoring the property to its original state, the customer will make up the
difference and restore the building immediately in its original state.
In the event of total destruction, the customer will assume full liability
and will discharge Fortis Lease and will hold them harmless in this respect.
The customer will also immediately restore the property to its original
condition at his own expenses.
C. For the duration of the lease, the customer will take out at his own
expenses, to provide cover against claims from third parties, a legal
liability and operational risks insurance policy for an amount of at least
BEF 50.000.000 in all for physical and material damage.
D. In addition the customer expressly waives any right of recourse he may have
against the owner as a result of any loss or damage which may occur to all
or part of the rented property and expressly undertakes to have such a
waiver included in any insurance policies which he is required to take out.
The customer is also obliged to demand the same waiver from any person
occupying the property in any capacity whatsoever.
E. The customer will have a clause included in the insurance policies which
states that suspension, termination, reduction, cancellation or anihilation
will only be enforceable against the owner if one month's notice is given to
the owner by registered letter.
F. If the customer fails to pay the premiums due, Fortis Lease may pay them on
his behalf. The customer will repay these premiums to Fortis Lease on its
first demand by registered letter. Late interest will automatically be
charged on the amounts of such premiums which Fortis Lease pays to the
insurance company, at Fortis Bank's base rate plus 1,5%; interest will be
charged from the date on which Fortis Lease makes payment to the insurance
company.
The same will apply in the event of the customer not taking out policies in
line with the provisions of the contract and Fortis Lease being obliged to
take out policies on his behalf.
G. Copies of the insurance policies will be sent to Fortis Lease. They should
include:
a) index-linking of the amounts insured
b) the waiver of any recourse by the insurers against Fortis Lease
c) the undertaking by the insurers to notify Fortis Lease of any amendment
being considered to the insurance policies. Such notice should be sent to
Fortis Lease at
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least 30 days prior to the cancellation or expiry of the contract,
including in the event of the customer being in default.
ARTICLE 14: AUTHORISATIONS AND LIABILITY
The customer undertakes to complete all the necessary formalities to obtain the
statutory authorisations required to implement this contract and the lease
agreement. If necessary, Fortis Lease will give the customer power of attorney
for this purpose.
Both before and during the validity period of the lease, the customer will
comply with the relevant laws and regulations and will alone be liable to the
public authorities and third parties. In this connection the customer holds
Fortis Lease harmless in every respect. The customer therefore assumes any and
all liability and discharges Fortis Lease and holds it harmless in this respect.
ARTICLE 15: TERMINATION
I. If any of the following events should occur prior to the Commencement
Date:
A) if the granting of the titles of property on the buildings ("droit
de superficie" / "recht van opstal") or the building permit is not
acquired within three months after signature of the contract;
B) if the authorisations mentioned in article 14 required for the
purpose of leasing the property are not obtained or are revoked; or
C) if, due to force majeure such as a natural disaster, war, civil war,
or action taken by the public authorities, it is impossible for this
contract to come into effect, provided that none of the above is due
to one of the parties to the agreement; or
D) if an event occurs which is not due to the fault, even minor, of one
of the parties to this agreement, and which makes it impossible for
the building to be occupied within 27 months of signature of this
contract,
then the provisions of Article 7(c) shall apply.
II. In the event that one of the events cited in I A, B, C or D occurs on or
after the Commencement Date, the Contract will be terminated
automatically and the customer will pay Fortis Lease, subject to the
provisions of Subsection IV of this Article 15, the sum of the following
amounts:
- the rent remaining due discounted to present value as at the date the
contract is cancelled, plus:
- all levies and charges due as a result of the early termination of this
contract, including the VAT to be repaid by Fortis Lease to the
Treasury as a result of the fifteen-year VAT revision clause being
applied,
- the Purchase Option Price as defined in Article 11(a),
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- any amounts and charges disbursed by or due from Fortis Lease under the
leasing contract and which have not been included in the investment
amount in accordance with article 10.
In that case, and subject to full payment by the customer of said amounts
and the levies and/or taxes concerning transfer of title, title to the
property will be transferred to the customer.
The discount is as follows:
- for the period after the next revision of the rate, at the last rate
provided with in the contract, less a margin of 0,50 %;
- the discounted amount calculated as described above and the rentals due
until the next revision, at prime rate (applicable two working days
before the termination of the contract) valid for the remaining period
until the following revision less a margin of 0,50 %. The rediscount
rate may not be superior to the transaction rate, less a margin of
0,50%.
III. In the event of the contract being terminated by reason of the customer's
default pursuant to article 1184 of the Belgian Civil Code, the customer
will pay Fortis Lease compensation for the loss it has suffered. The
amount of this compensation will be equal to the rent remaining due
discounted to present value as at the date the contract is cancelled,
plus:
- all levies and charges due as a result of the early termination of this
contract, including the VAT to be repaid by Fortis Lease to the
Treasury as a result of the fifteen-year VAT revision clause being
applied,
- the Purchase Option Price referred to in Article 11(a),
- any amounts and charges disbursed by or due from Fortis Lease under the
leasing contract and which have not been included in the investment
amount in accordance with article 10.
- plus a one-off sum equal to the total rental for two years.
However, this compensation will be decreased, up to (at most) the amount
of the compensation, by the sale price of the property. The costs for
realising the sale of the property will be included in the compensation
for loss. Should the sale-price of the property, less the costs for
realising the sale of the property, be superior to the compensation, the
customer will not have right to the surplus.
The discount is as follows:
- for the period after the first revision of the rate, at the last rate
provided with in the contract, less a margin of 2%;
- the discount calculated as described and the rentals due until the
following revision, at prime rate (applicable two working days before
the termination of the contract) valid for the remaining period until
the following revision less a margin of 2 %. The rediscount rate may
not be superior to the transaction rate, less a margin of 2%.
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The compensation referred to in this article will be due on the day on which
this contract is terminated.
All amounts and compensations provided for in this article and not paid on the
due date will automatically produce late interest at Fortis Bank's rate for cash
advances plus 1.5%, no prior notice being required. If payment is not effected
within thirty days of the due date, additional interest of 1.5% will be charged.
The customer will not be entitled to claim any compensation from Fortis Lease,
except in the event of serious misconduct on Fortis Lease's part. However,
Fortis Lease will transfer to the customer any right of recourse which it may
have against the persons responsible for the termination, up to the amount of
the damage suffered by the customer. Fortis Lease reserves the right to take
joint action in respect of damage which it has suffered itself.
IV. Notwithstanding any other provision of this Article 15:
(a) Provided there is no event of default, upon a total destruction or
expropriation of the building, customer shall, not later than
thirty (30) days after such occurrence, either (i) deliver to
Fortis Lease a written notice stating that the Contract and the
Lease Agreement shall remain in full force and effect, and at
customer's sole cost and expense, customer shall promptly and
diligently restore the building in accordance with the Contract,
or (ii) deliver to Fortis Lease a termination notice with respect
to the building as described in subparagraph (e) below. If
customer fails to deliver the written notice pursuant to clause
(i) above within the thirty (30) day period, the Contract and the
Lease Agreement shall continue and customer shall promptly build
and restore the building in accordance with the Contract.
(b) If pursuant to the preceding subparagraph, the Contract and the
Lease Agreement shall continue in full force and effect, customer
shall, at its sole cost and expense (and, without limitation, if
any award, compensation or insurance payment is not sufficient to
restore the building in accordance with the Contract, customer
shall pay any shortfall), promptly and diligently repair any
damage to the building (or restore the building) caused by such
destruction or expropriation and in accordance with the terms
hereof and the other provisions of the Contract using the as-built
plans and specifications for the building so as to restore the
building to the same or better condition, operation, function and
value as existed immediately prior to such destruction or
expropriation.
(c) If customer has elected or is required to repair or rebuild,
customer shall be entitled to receive (and Fortis Lease hereby
assigns to customer all of Fortis Lease's right, title and
interest in) any award, compensation or insurance proceeds to
which customer or Fortis Lease may become entitled by reason of
their respective interests in the building subject hereto if all
or a portion of the building is damaged or destroyed in whole or
in part or subject to expropriation. Customer may appear in any
proceeding or action to negotiate, prosecute, adjust or appeal any
claim for any award, compensation or insurance payment on account
of any such destruction or expropriation and shall pay all
expenses thereof. At customer's reasonable request, and at
customer's sole cost and expense,
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Fortis Lease shall participate in any such proceeding, action,
negotiation, prosecution or adjustment. Fortis Lease and customer
agree that the Contract shall control the rights of Fortis Lease
and customer in and to any such award, compensation or insurance
payment. If customer does not rebuild, the proceeds shall be paid
to Fortis Lease.
(d) In no event shall a destruction or expropriation with respect to
which the Contract and the Lease Agreement remains in full force
and effect under subparagraph (a) above affect customer's
obligations to pay rental pursuant to the Contract or the Lease
Agreement or to perform its obligations and pay any amounts due on
or prior to the expiry of the Lease Agreement.
(e) A termination notice under subparagraph (a) shall contain:
(i) notice of termination of the Contract and the Lease Agreement
on the next occurring rental payment date (the "termination date")
and (ii) a binding and irrevocable agreement of customer to pay to
Fortis Lease an amount (the "termination payment") equal to the
lesser of the Lease Balance (as defined in Article 11) or 89% of
the building improvement costs. On the termination date, customer
shall pay to Fortis Lease the termination payment and customer's
interest in the building shall terminate and any insurance or
expropriation proceeds shall be paid over to Fortis Lease.
ARTICLE 16: LEASE AGREEMENT
The Lease Agreement will be converted into a notarial deed, to be executed by
Maitre Olivier de Clippele, a notary of Brussels, within ninety days of this
agreement being signed. The customer undertakes to appear before the notary for
this purpose.
The Lease Agreement forms an integral part thereof. The clauses of the Lease
Agreement and this contract are complementary and each of the two documents is
to be interpreted in the light of the other. Accordingly, any cancellation,
termination or invalidity measures affecting one automatically affect the other.
In the event of contradiction, the finance contract will prevail.
ARTICLE 17: EXPROPRIATION
In the event of expropriation for public purposes or any other actions taken by
a public authority which impair the tenant's rights of possession in respect of
the property, the customer will not be entitled to receive any compensation from
Fortis Lease and may not claim any compensation from any third party whatsoever
which may reduce the compensation due to Fortis Lease.
The first party informed of the expropriation will inform the other thereof. The
procedure will be as specified in Article 15.II and 15.IV.
ARTICLE 18: INTERPRETATION AND VALIDITY
Failure by one of the parties to exercise a right will not be considered as a
waiver or a precedent altering the contractual relations. In particular, Fortis
Lease will at all times retain the right to demand that the customer strictly
respects its contractual obligations,
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even if Fortis Lease has previously accepted a delay or failure on the
customer's part to fulfil all or part of the obligations.
If any one of the provisions laid down in this contract or in the lease
agreement ceases to be valid, the other provisions will nonetheless remain in
force.
ARTICLE 19: INFORMATION
The customer undertakes to remit its annual accounts and income statement to
Fortis Lease every year within six months after the close of the financial year.
The customer accepts that Fortis Lease may have his accounts audited, at the
customer's expense, if the above-mentioned documents have not been remitted to
Fortis Lease within nine months after the close of the financial year.
In addition the customer undertakes to inform Fortis Lease of any statutory or
economic changes which could have an impact on the company's structure,
including, in particular:
changes to the memorandum and articles of association, transactions
affecting the entire company, significant changes in the shareholder base,
management agreements, applications for loans exceeding BEF 30.000.000,
mortgages granted, etc.
All documents and information received by Fortis Lease will be treated as
strictly confidential, according to the nature of the said documents, on Fortis
Lease's responsibility. However, Fortis Lease may, subject to the same
conditions of confidentiality, divulge any information required by the refinance
organisation, whose identity may be divulged by Fortis Lease if necessary.
ARTICLE 20: CHANGE IN PARTIES TO THE CONTRACT
If the title to the property which is leased is transferred, Fortis Lease and
its general assignees and successors will be required to ensure that the new
owner respects all the clauses of this contract and the Lease Agreement,
including the option to purchase. In the event of Fortis Lease transferring its
title it will inform the customer on a priority basis by registered letter.
Fortis Lease will also assume any consequences which this may entail in respect
of VAT.
Subject to prior agreement by Fortis Lease, the customer may transfer all of its
rights and obligations under this contract and the Lease Agreement.
ARTICLE 21: SINKING FUND
In addition to the rentals and other amounts payable under the Lease Agreement
customer shall pay Fortis Lease on each rental payment date an amount equal to
BEF 5.055.724 being 59.1080% of the capital portion of the rental payable on
such date to establish and fund a "sinking fund" with Fortis Lease.
The sinking fund balance shall accrue interest at the rate of 5.59% (based on
the rates applicable on 19/4/2000) and shall be held by Fortis Lease as security
for customer's obligations under this Contract and the Lease Agreement.
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Upon an event of default, Fortis Lease may utilize the sinking fund to cure any
defaults and as additional collateral for customer's obligations. The sinking
fund may also be used to pay sums due from the customer to Fortis Lease upon (i)
the termination of the Lease Agreement or (ii) exercise of the remarketing
option. Fortis Lease may assign the sinking fund for its own business purposes
provided that any unused balance of the sinking fund, together with accrued
interest, shall be reimbursed to the customer upon termination of the Lease
following full satisfaction of the obligations of the customer thereunder.
ARTICLE 22: GUARANTEES
This contract and the Lease Agreement are subject to the following conditions:
ARTICLE 23
Debts with respect to the owner are joint and several, even if they derive from
separate contracts. Accordingly, the owner will have the right to cancel the
contract, in the event of non-fulfilment by the customer of its obligation
undertaken under other contracts concluded with the owner.
ARTICLE 24: APPLICABLE LAW AND JURISDICTION
This contract and the Lease Agreement will be governed by Belgian law.
Any dispute as to the validity, interpretation, or implementation of this
contract and the Lease Agreement will be submitted to a single arbitrator
designated by the parties or by the President of the Commercial Court, if the
parties cannot agree on the arbitrator within two weeks of the application for
arbitration being made by registered letter.
Costs will be borne by the losing party. The arbitrator need not file his ruling
with the legal record office (Greffe) unless required to do so by one of the
parties; the costs entailed will be borne by the party which required the ruling
to be filed.
However, legal action instituted for the purpose of obtaining title for
registration pursuant to statutory rules of publication will be brought before
the Courts.
ARTICLE 25
Fortis Lease reserves the right to pay for and erect, on the building site, a
clearly visible notice to the effect that it is involved in financing the
construction, as under this contract, by means of leasing.
Such notice will be included among the other notices erected on the site by the
customer and the various contractors. The customer hereby gives his explicit
agreement to this.
Done in on
in two copies, each party acknowledging receipt of its copy.
N.V. XEIKON N.V. FORTIS LEASE
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represented by represented by
A.BUTS J. VAN DAELE C.BOOGMANS F.F. VOORHELST
Managing Director ManagerCPRE Commercial Manager
Director
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APPENDICES TO FINANCE CONTRACT
I Ground plans (article 2 a)
II Plans and specifications (article 2 b)
III Lease agreement (article 16)
