RENTALOF NON-RESIDENTIAL PROPERTY CONTRACT No. 1704/1

1.  

The landlord declares that he is the owner of the following property:

1.  

The rental payment and the regular charge for services provided by the landlord in connection with the subject of the rental amount to 3, 742 CZK per month inc. VAT ( in words three thousand seven hundred and forty two crowns ). A detailed breakdown of the rental payment and regular service charges is shown in attachment no. 1 which is an inseparable part of this contract.

2.  

The tenant agrees that the landlord has the unilateral right to increase the rental payment on a yearly basis in line with the rate of inflation (expressed as a percentage) as announced by the Czech Statistical Institute ( i.e. the coefficient corresponds to the rate of increase in retail prices), the increase will be calculated from the previous increase in rent and the landlord is entitled to implement the increase up to 2 calendar months in arrears from the month in which the new inflation rate was announced by the Czech Statistical Institute.

3.  

The price of services used by the tenant will be adjusted according to the prices provided by their suppliers and within 30 days after notification of price changes to the landlord. The tenant will be informed of these changes without delay and in written form.

4.  

The rent will be paid monthly  on  the basis of an invoice , the invoice will be issued by the landlord on the first day of the month preceding the month for which the rent will be paid. The tenant undertakes to pay the rent by at the latest the 20th day of the preceding month, on that basis the rent will be paid  by bank transfer to the landlord’s account no. 639-111/0100, KB (Komercni Banka) Prague. The date of invoice for tax purposes shall be considered the same as the date of issue.

5.  

If the tenant doesn’t pay the amount for rent and services within the agreed time and is more than 15 days late in making payment, the landlord is entitled to terminate this contract with a period of notice of one month, this period being calculated from the date of delivery of notice to the tenant.

6.  

In the event of late payment for rent and services the contracted parties agree a contractual penalty  amounting to 0.1% of the amount owed for every day of until payment is made. The contractual penalty shall be paid by the tenant to the landlord’s account  on the basis of a penalty invoice issued by the landlord with payment due within thirty days from the date of issue

1.  

This rental contract relates to a rental for an unspecified period with effect from 01.01. 2009.

2.  

The landlord is obliged to hand over the subject of the rental in a state suitable for use as contracted no later than 01.01.2009.

3.  

The tenant is obliged to accept the subject of the rental at that time.

4.  

 At least two identical copies of “ protocol for the hand over and take over of the subject of the rental” will be prepared in connection with the hand over and take over of the subject of the rental. They will be signed by the landlord and tenant and each  party to the contract  will retain a copy of the protocol.

1.  

The tenant is obliged to use the subject of the rental in accordance with the purpose of the building agreed in this contract. In the event of structural alterations to the subject of the rental the special conditions are agreed  in section VI. of this contract ( Special agreement).

2.  

Changes to the subject of the rental including changes to the interior furnishings which belong to the landlord  may only be carried out with the prior written consent of the landlord. The consent of the landlord is also required prior to the installation of any advertising or informational equipment by the tenant.

3.  

The tenant may only sublet the subject of the rental or part thereof to a third party on the basis of the prior written permission of the landlord. An attachment to a request for the agreement of the landlord is a proposal for a rental agreement.

4.  

The tenant is required to refrain from any activity which would disturb, restrict or put in danger the ownership rights of the landlord and the user rights of other tenants. The tenant is obliged to respect the rules of the building which form appendix no.2 and is an inseparable part of this contract, follow safety and fire precautions in order that the owner of the building does not incur damage. Non compliance with these regulations is considered as a fundamental breach of this contract and will result in termination of the contract on the part of the landlord with a notice period of one month, calculated from the date of delivery of notice.

5.  

The tenant is required to look after the subject of the rental in terms of general housekeeping and undertakes to report to the landlord without unnecessary delay  by telephone, fax or in writing any repairs required.

6.  

The tenant undertakes to provide at his own expense secure locks for the subject of the rental. Furthermore in the event of keys to the subject of the rental being lost the tenant is obliged to ensure entry to the subject of the rental at his own expense. After every change of key or lock  to the subject of the rental the tenant is obliged to provide the landlord without unnecessary delay one set of keys to the subject of the rental. The landlord will deposit this set of keys in a box or envelope which will be sealed in the presence of the tenant. These keys will only be used by the landlord in exceptional circumstances ( burst pipes, fires etc.). In such circumstances the landlord is obliged to inform the tenant without delay and reseal the keys in his presence.

7.  

The tenant is aware and agrees that the landlord is obliged to inform the tenant of any visit to the subject of the rental at least 24 hours in advance and with the presence of the tenant or his appointed representative, with the exception of emergency situations in which case prior notice is not required in order to prevent damage to the subject of the rental as the property of the landlord.

8.  

The landlord is obliged to ensure for the tenant, at the prices agreed in appendix no. 1. of this contract services connected with the tenancy (electricity, water and sewerage, heating and water heating, cleaning of communal areas). The tenant shall ensure cleaning of the subject of the rental and waste disposal at his own expense.

9.  

The landlord is obliged to maintain at his own expense the subject of the rental in a state in accordance with the agreed (usual) usage, except for minor repairs and general maintenance which the tenant should take care of himself at his own expense. What is considered as minor repairs and general maintenance is agreed in appendix no.3 which is an inseparable part of this contract.

10.  

If it is not possible for the subject of the rental to be used to its full extent the landlord is obliged to provide the tenant with a proportionate reduction in rent .

11.  

The tenant is obliged to provide the landlord without unnecessary delay with notice of his entry into bankruptcy or any proposal regarding the declaration of insolvency proceedings involving his property. Furthermore the landlord should be informed if the tenant  loses the right to carry out the business activities for which this rental contracted was agreed.

12.  

Both parties are obliged to inform each other without unnecessary delay of any changes in their identification or other data required for the fulfillment of this contract, that is company name, registered office, identification number, tax identification number, bank account details, contact details etc.

2.  

The tenant undertakes to obtain the approval of the relevant Building Authority or other institutions if required, if this is required by the character of the changes requested by the tenant. The landlord is required to offer assistance in this task.

3.  

The tenant is aware of and agrees that all structural changes to the subject of the lease  requested and accepted by the landlord according to this contract will be carried out by the tenant solely at his own expense.

4.  

The tenant is aware of and agrees that all structural changes to the subject of the lease carried out with the agreement of the landlord which the tenant carried out at his own expense are not the subject of any financial settlement between the parties to the contract either during the period of this rental contract or after its end.

1.  

The landlord declares that he has concluded an insurance contract for the property as a whole, namely only for damage caused by natural causes and responsibility for damage, resulting from ownership of the building. The tenant is aware that any damage caused by his activities are not covered by this insurance contract.

2.  

The tenant is obliged to prevent damage and to inform the landlord without unnecessary delay of any hazards or potential hazards already present in the subject of the rental. Non compliance with these responsibilities by the tenant will result in his sole responsibility for any damage caused as a result.

3.  

The tenant is obliged to make good any damage caused to the property of the landlord or a third party in good time and at his own expense.

1.  

The rental is ended when:

-  

The written agreement of both parties to the contract

-  

 Notice by one of the parties to the contract even without reason with a notice period of 3 months, which is calculated from the first day of the following month in which the written notice was delivered to the other party.

-  

Notice on the side of the landlord for reasons shown in the contents of section III. para 5, section V. para.4 and section VI. para.1. of this contract.

2.  

The tenant is obliged to hand back the subject of the rental no later than the last day of the validity of the contract, cleared, clean, without rubbish and in the state it was handed over taking into consideration normal usage and including any changes made with the agreement of the landlord.

3.  

For hand back and take over of the subject of the rental at end of contract the contents of section IV. Para 4 are also applicable.

4.  

Non-compliance with the responsibilities of the tenant with regard to the hand back of the subject of the rental cleared at the latest by the last day of the validity of the contract according to the contents of para 2. of this section, the landlord is entitled to invoice the tenant with a penalty to the amount of  ,-CZK for every day of delay in clearing and handing back the subject of the rental; the contractual penalty is to be paid on the basis of an invoice issued by the landlord with a payment due within 30 days from the date of its issue; this does not preclude the right of the landlord to claim damages resulting from the breach of contract by the tenant described above.

5.  

If the tenant  delays the clearance and hand back of the subject of the rental by more than 15 days the landlord is entitled after prior written notice to enter the subject of the rental and clear the property himself with the condition that the costs of clearance and possible storage of the tenant’s property will be invoiced to the tenant.

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The correspondence was delivered to the second party in person or

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The correspondence was delivered to the second party via the holder of a postal licence, or

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The correspondence was delivered to the second party via courier service, or

-  

The registered correspondence sent via the holder of a postal licence and returned to the sender as undelivered.

1.  

If any part or parts of this contract are or will be invalid or void this does not effect the remaining contents of the contract which remain valid and in effect. In this case the partners to the contract are obliged to replace the invalid or void parts with new valid or effective content which most closely meets the original intention of the invalid or void content. During the period of correction the civil law of the Czech Republic is applicable.

2.  

Both parties to the contract declare that there are no known circumstances which could cause this contract to  become invalid or void towards any third party.

3.  

All changes and additions to this contract must be carried out in the form of written amendments and become from the   date of signature of both parties to the contract.

4.  

 Both parties to the contract declare that the contents of this contract correspond to their will, concluded freely, solemnly, explicitly and with understanding and as proof of this, below they put their signatures to the text of the contract.

5.  

Both parties to the contract agree to the appendices specified below which form inseparable parts of the contract:

6.  

This contract is prepared in four identical copies of which two copies will be retained by both parties.

8.  

Tenants will be informed of any changes to the rules of the building in good time.

1.  

Repairs to individual parts of the floor space, repairs and replacement of floor and replacement of threshold and skirting boards.

2.  

Repairs to individual parts of doors and windows and their components, their painting, change of locks, fittings, keys, blinds if they form parts of the subject of rental.

3.  

Replacement of switches, sockets, fuses, bells, lighting, bulbs, strip lighting, neon lighting, electrical door security including electric locks if they form part of the subject of rental.

4.  

Replacement of gas taps, excluding the mains supply tap.

5.  

Repair of water taps and fittings, if they form part of the subject of the rental.

6.  

Repair of heating and hot water meters if they form part of the subject of the rental

7.  

Repair of waste water pipes, odour trap, steam extractors, extractor fan, taps, shower, water heater, bidet, wash basin and  waste water disposal, sink, toilet fittings, cooker, hot plates, infra heating equipment, fitted kitchen, fitted cupboards, if they form part of the subject of rental.

8.  

Repairs, cleaning, maintenance and pressure testing of solid fuel, gas and electric stoves, local heating boilers using solid, liquid or gas fuels including closing and regulating taps and thermostat regulators for local heating and radiators, if they form part of the subject of rental and also the replacement of small components of these types of equipment.

9.  

Decoration, including repairs to paint work, wallpaper, the cleaning of floors and floor coverings, wall coverings, indoor painting and the cleaning of blocked pipes up to the main waste outlet.

10.  

Other maintenance and repairs not shown above which individually do not amount to more than 3,000CZK.