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Switzerland Commercial Office Lease Agreement

 

Source: http://www.sec.gov

 

                                                                Exhibit 10.16-CE

 

Lease

 

(Subsidized, in effect until September 30, 2001)

 

Lessor       Vierwaldstatter Beteiligungen AG, Stans

             represented by

             Noetzli Immobilien-Treuhand AG

             Kappehmattstrasse 5

             5052 Hergiswil

 

Lessee:      Artificial Life Solutions AG

             Muhlebach 2

             6362 Stansstad

 

Property:    Muhlebach 2, 6362 Stansstad

 

- --------------------------------------------------------------------------------

 

Leased Premises - 65.95 m(2) of office space (including a portion of the traffic

area, water-closet facilities, etc.) on the third floor as shown an the enclosed

ground plan

 

1.    Commencement and Term of the Lease

      ----------------------------------

 

      Tenancy begins on October 1, 1999. The lease agreement is concluded for a

      fixed term of two years, ending on September 30, 2001. The lease expires

      without notice upon the lapse of the agreed term. As of October 1, 2001,

      the lease of September 24, 1999, is effective for these same premises.

 

2.    Rent and Other Charges

      ----------------------

 

      The annual net rent amounts to:

      from October 1, 1999 to June 30, 2000                 Fr. 150.00/m(2)     Fr.  9,892.50

      less subsidy per year                                 Fr.  50.00/m(2)     Fr.  3,297.50     Fr. 6,595.00

      from July 1, 2000 to June 30, 2001                    Fr. 170.00/m(2)     Fr. 11,211.50

      less subsidy per year                                 Fr.  70.00/m(2)     Fr.  4,616.50

      from July 1, 2001 to September 30, 2001               Fr. 200.00/m(2)     Fr. 13,190.00

      less subsidy per year                                 Fr. 100.00/m(2)     Fr.  6,595.00

      Furthermore, the lessee has to make payments

      on account for the following additional expenses:

      - heating, hot water and

        water treatment

      - janitorial, cleaning, materials

      - trash collection, sewage purification, operating fees.

        general electric, water, elevator service,

        television fees                                                                           Fr.   600.00

                                                                                                  ------------

      Annual gross rent                                                                           Fr. 7,195.00

      Monthly gross rent                                                                          Fr.   599.60

                                                                                                  ============

 

      The preceding gross rent is to be paid in advance an monthly installments.

 

      Other claims arising from the lease agreement cannot be offset against the

      lessor's claims from this lease agreement. The aforesaid rent reduction is

      a program of Vierwaldstatter Beteiligungen AG for the promotion of

      economic development. The purpose of this program is to lighten the

      starting conditions for enterprising young businesspeople and to promote

      the economy. The rent reduction is limited to 2 years. After the lapse of

      2 years the conditions which are usual for the market will be in force and

      will be regulated in a separate agreement having a term of 5 years and

      nine months with the option right to extend the agreement an additional 5

      years.

 

      Thus the subsidy amounts to

      from October 1, 1999 to June 30, 2000          Fr 2,473.15

      from July 1, 2000 to June 30, 2001             Fr 4,616.50

      from July 1, 2001 to September 30, 2001        Fr 1,648.75

                                                     -----------

      Total                                          Fr 8,738.40

                                                     ===========

 

3.    Other Payments

      --------------

 

      Every year a derailed statement of other payments shall be made in

      accordance with Provision 2. These shall be computed from the actual costs

      and distributed according to an apportionment formula for hearing and

      other expenses. The lessee is obligated to make all resulting additional

      payments based on this statement. Excess payments shall be carried forward

      to the new statement for the lessee. Each monthly contribution for other

      charges shall be increased or decreased according to the result of the

      annual statement balance sheet plus the profit-and-loss-account.

 

4.    Delivery of Possession of the Leased Property

      ---------------------------------------------

 

      Possession of the Leased Property shall be delivered with the assistance

      of the company Noetzli Immobilien-Treuhand AG. The office space is fully

      developed. Upon delivery of possession of the leased property a record of

      the delivery shall be drawn up and signed by the parties to the agreement.

 

5.    Maintenance, Repairs and Renovations

      ------------------------------------

 

      The lessee is required to keep the leased premises in good and clean

      condition in accordance with Article 257fOR. It is liable to indemnify

      the lessor for damages which are not the result of ordinary usage or acts

      of God. If work that is the responsibility of the lessor becomes

      necessary, the lessee shall report it immediately to the lessor in order

      to prevent increasing damage.

 

6.    Repairs Payable by the Lessee

      -----------------------------

 

      The lessee assumes responsibility for the so-called minor maintenance of

      the leased property in accordance with Article 263 OR, namely, all repairs

      which individually cost no more than 0.2 percent of the annual net rent.

      The following repairs shall always be paid by the lessee in accordance

      with local custom:

 

      -     Reparation of door locks and keys, hinges, doorbells and windows and

            the replacement of window cranks, electric switches and broken panes

            of glass and all repairs to the lessee's own furnishings and

            equipment.

 

7.    Inspection Right of the Lessor

      ------------------------------

 

      The lessor is permitted at any time, with prior notice to the lessee, to

      inspect the leased premises as necessary for the preservation of the

      property right and the supervisory right. Normally this inspection shall

      be made during the day. The lessor has the right of access to the furnace

      and utility room in the basement, to the extent that this is necessary.

 

8.    Liens

      -----

 

      For a lapsed annual rent and the current half-year rent and for the other

      charges specified in this agreement the lessor has a lien on the movable

      property which is located in the rented spaces and which furnishes and is

      used in them.

 

9.    Subleasing

      ----------

 

      The lessor can withhold consent to sublease, if either

      -  the lessee refuses to inform the lessor of the conditions of the

         sublease,

      -  the sublease is disadvantageous to the lessor,

      -  the conditions of the sublease are improper in comparison with those

         of the main lease.

 

      Once given, consent to sublease especially becomes inapplicable if the

      lessee agrees to or allows a sub-sublease without the written consent of

      the lessor.

 

10.   Transfer of the Lease to a Third Party

      --------------------------------------

 

      In connection with the transfer of the lease to a third party, the

      following, among other things, shall be agreed upon:

 

      The lessor can withhold consent to the transfer on significant grounds in

      accordance with Article 263 Paragraph 2 OR.

 

11.   Return of the Leased Property

      -----------------------------

 

      Upon expiration of the lease, the premises must be returned in clean

      condition. Fixtures and installations which the lessee has installed at

      its own expense and which are firmly affixed to the building shall become

      the property of the lessor upon expiration of this agreement.

 

12.   Additional Contractual Rights

      -----------------------------

 

      Wherever the present agreement does not specify differently, the

      requirements of the OR (Articles 253 - 274) and the local regulations by

      order the fire and health authorities shall additionally apply. All

      insurance connected with the leased property such as theft, fire, glass,

      liability and loss-of-profit, and staff insurance and insurance of

      furnishings and equipment are the lessee's responsibility. The increased

      premium for the lessor's building insurance which results from approved

      alterations and improvements by the lessee to the leased premises shall be

      borne by the lessee.

 

13.   Court of Jurisdiction

      ---------------------

 

      The Court of Stansstad has jurisdiction over all disputes developing from

      this agreement. Reserved for this are Article 274b OR and the cantonal law

      on arbitration authorities for rent and lease (GSMP), the cantonal and

      Swiss means of legal redress and the arbitration authorities for rent and

      lease in the case of Provision 5 Paragraph 3 ff.

 

The parties acknowledge that they have read this agreement and that each has

received a copy of it.

 

Hergiswil/Stansstad, September 23, 1999

 

The Lessor:                         The Lessee:

Vierwaldstatter Beteiligungen AG

represented by

Noetzli Immobilien-Treuhand AG      Artificial Life Solutions AG