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EXHIBIT 10.4
LEASE AGREEMENT
THIS LEASE AGREEMENT ("LEASE") IS MADE AND ENTERED INTO AS OF NOVEMBER 21, 1997
BY AND BETWEEN TEDE, S.A. DE C.V., A MEXICAN CORPORATION ("TEDE"), AND CALAVO
DE MEXICO, S.A. DE C.V., A MEXICAN CORPORATION ("COMPANY"), WITH REFERENCE TO
THE FOLLOWING FACTS:
Recitals
A. TEDE hereby declares that:
1. TEDE is a corporation organized and existing under the Mexican
General Corporation Law, as per Public Instrument No. 22,582, granted before
Licenciado Xxxxxxx Xxxxxxxx Xxxxxxx, Public Notary Xx. 0 xx xxx Xxxx xx
Xxxxxxxx, Xxxx, Xxxxxxxxxx, Xxxxxx. The corporate purpose of TEDE is the
purchase, ownership and lease of real property;
2. Xx. Xxxxx Xxxxx Del Rio is the attorney-in-fact for TEDE, as set
forth in Public Instrument No. 22,582, granted before Licenciado Xxxxxxx
Xxxxxxxx Xxxxxxx, Public Notary Xx. 0 xx xxx Xxxx xx Xxxxxxxx, Xxxx,
Xxxxxxxxxx, Xxxxxx;
3. TEDE'S registration number at the Federal Registry of Taxpayers
is: XXX-781027-R72;
4. TEDE'S principal place of business is: CARRETERA UNION MARAN
#2701-F, PARQUE INDUSTRIAL MARAN;
5. On or about August 28, 1997, TEDE entered into a Promise of Sale
with Xxx. Xxxxxxxx Xxxxxxx Xxxxx Viuda xx Xxxxxxxx for the purchase of that
certain real property containing approximately 40,468 square meters as more
particularly described on EXHIBIT A attached hereto and incorporated herein (the
"REAL PROPERTY"). The Real Property is located within a larger lot containing
27-31-58 hectares, in the land known as "Quirindavara," located in the outskirts
of the City of Uruapan, Michoacan. Pursuant to said Promise of Sale, TEDE, as
Buyer, and Xxx. Xxxxxxx, as Seller, will enter into that certain agreement for
the purchase and sale of the Real Property) the "PURCHASE AGREEMENT") upon the
execution of this Lease and will thereafter complete the transactions
contemplated therein within fifteen (15) days after the date hereof; and
6. Upon purchasing land, TEDE represents and warrants that the Real
Property is free of any existing liens, taxes, mortgages, leases, adverse
claims or other encumbrances.
B. Company hereby declares that:
1. Company is a corporation organized and existing under the
Mexican General Corporation Law, as per Public Instrument No. ____, granted
before Xxxx Xxxxxx Xxxxxxxx, Public Notary Xx. 00 xx xxx Xxxx xx Xxxxxxxxxxx,
Xxxxxx;
2. ___________________ is the attorney-in-fact for Company, as set
forth in Public Instrument No. ______, granted before _________________, Public
Notary No. ________ of the City of __________________, Mexico;
3. Company's registration number at the Federal Registry of
Taxpayer CME 940415L35; and
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4. Company's Principal place of business is: ______________________.
C. The Real Property is comprised of two parcels, described as follows:
1. A parcel ("PARCEL A") containing approximately 17,806 square
meters (4.4 acres) located in the ______________ portion of the Real Property,
upon which TEDE shall construct certain improvements as set forth in EXHIBIT C
and EXHIBIT D attached hereto and made a part hereof (the "IMPROVEMENTS"); and
2. A parcel ("PARCEL B") containing approximately 22,662 square
meters (5.6 acres) located in the ______________ portion of the Real Property.
Parcel A, Parcel B and the Improvements are described more particularly on
EXHIBITS B, C AND D attached hereto and made a part hereof. Parcel A, Parcel B
and the Improvements are referred to collectively as the "LEASED PROPERTY" and
are sometimes referred to individually as a "PARCEL."
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Agreement
A. LEASE OF LEASED PROPERTY. In consideration of the rent and the
covenants and agreements made herein, TEDE leases to Company and Company leases
from TEDE the Leased Property.
B. COMMENCEMENT AND TERMINATION.
1. The commencement date as to each Parcel shall be as set forth herein:
a. Parcel A and Parcel B. The "REAL PROPERTY COMMENCEMENT DATE"
shall be the date upon which TEDE delivers to Company: (i) evidence reasonably
satisfactory to Company that the purchase of the Real Property by TEDE has been
completed, which evidence shall consist of a copy of the ownership deed
executed with a notary public and duly recorded with the local registry of
public records and commerce of the City of Uruapan, Michoacan and the letter
referred to in Section B.1.a.(iii) below, (ii) a copy of this Lease executed
with a notary public and duly recorded with the local registry of public
records and commerce of the City Uruapan, Michoacan, and (iii) a letter
addressed to Company from legal counsel in Mexico that they have performed a
title search going back a sufficient time period so that the buyer can rely on
receiving clear and unobstructed title to the Real Property and Company can
rely on receiving clear and unobstructed title to the leasehold granted by this
Lease and to the options also granted by this Lease to extend the term of the
leasehold and to purchase the Leased Property; and
b. Improvements. The "IMPROVEMENTS COMMENCEMENT DATE" shall be the
date on which all of the following have been accomplished:
(1) The Improvements have been completed in accordance with the
plans and specifications set forth in Exhibit C and Exhibit D hereto, and with
any Change Orders (as hereinafter defined) agreed to in writing by the parties,
and with all applicable governmental laws and regulations,
(2) All necessary governmental approvals for occupation of the
Leased Property have been issued; and
(3) Company has accepted and approved the Improvements, which
acceptance and approval shall be given provided the conditions listed in
Sections B.1.b.(1) and B.1.b.(2), above, have been satisfied.
The Real Property Commencement Date and the Improvements Commencement Date are
each sometimes referred to individually as a "COMMENCEMENT DATE."
2. Unless earlier terminated in accordance with the provisions hereof,
this Lease shall terminate as to each of the Parcels as set forth below:
a. The term of this Lease with respect to Parcel A and the
Improvements shall expire on the date which is ten (10) years following the
Improvements Commencement Date. The date on which this Lease terminates as to
Parcel A and the Improvements shall be referred to as the "PARCEL A TERMINATION
DATE."
b. The initial term of this Lease with respect to Parcel B shall
expire on the date which is five (5) years following the Real Property
Commencement Date. The date on which this Lease terminates as to Parcel B shall
be referred to as the "PARCEL B TERMINATION DATE."
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The Parcel A Termination Date and the Parcel B Termination Date are sometime
each referred to as a "TERMINATION DATE." The period between the Real Property
Commencement Date and the Improvements Commencement Date shall be referred to
as the "PARCEL A TERM." The period between the Improvements Commencement Date
and the Parcel A Termination Date shall be referred to as the "IMPROVEMENTS
TERM." The period between the Real Property Commencement Date and the Parcel B
Termination Date shall be referred to as the "PARCEL B TERM." The Parcel A
Term, the Parcel B Term and the Improvements Term are each sometimes referred
to as a "TERM."
3. Parcel B Extensions.
In the event Parcel B is improved by agreement of the parties
hereto during the Parcel B Term, Company shall have an option to extend the
Parcel B Termination Date to the Parcel A Termination Date. Thereafter, Company
shall have an option to renew this Lease as to Parcel B, as improved, for two
(2) additional five (5) year periods. Company may exercise this option by
delivering to TEDE written notice of its intent to do so not later than one
hundred eighty (180) days prior to the Parcel B Termination Date or, if Company
has exercised its options as described in this Section, the Parcel A Termination
Date or the end of any succeeding Option Period, as applicable.
C. POSSESSION.
1. Delivery Date. Provided this Lease is executed on or before
November 12, 1997, and subject to TEDE purchasing the property described in
recital A.5 by November 28, 1997, TEDE shall deliver possession of the Leased
Property complete and ready for occupancy not later than July 10, 1998. If this
Lease is not executed as of November 12, 1997, the delivery date shall be
automatically extended by one day for each day that elapses between November
12, 1997 and the date of execution hereof. The date on which possession of the
Leased Property is scheduled to be delivered to Company pursuant to this
Section C.1 hereof shall be referred to herein as the "DELIVERY DATE." TEDE
will deliver to Company complete Final Drawings by January 5, 1998. Company
will execute these drawings, as corrected by Company, no later than 5 days
after being delivered by TEDE to Company.
2. Occupancy Prior to Delivery Date. In order that the Leased
Premises will be ready for occupancy by Company no later than the Delivery
Date, TEDE hereby authorizes Company to occupy portions of the Leased Property
on and after June 15, 1998, for the sole purpose of installing equipment,
fixtures and improvements. Company's occupation of the Leased Property under
this paragraph shall not constitute acceptance by Company of the Improvements.
3. Delay in Delivery. If for any reason TEDE cannot deliver
possession of the Leased Property as of the Delivery Date, TEDE shall pay to
Company as liquidated damages for such delay the amount of Three Thousand Two
Hundred United States Dollars (US $3,200) for each day that elapses between the
Delivery Date and the Improvements Commencement Date, provided, however, that
no liquidated damages shall be payable by TEDE for delays unavoidably resulting
from Acts of God, such as torrential rains or hurricanes.
D. CONSTRUCTION OF IMPROVEMENTS.
1. Parcel A Improvements. TEDE shall construct, solely within the
property limits of the Leased Property, and to the extent of the related
appendices the following improvements: street pavements, curbs and gutters,
street lighting and utilities, including a solution to provide sanitary sewers
storm drainage, electricity, telephone and water services
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within the streets or adjacent to the Leased Property, pursuant to the
_________________ plans and all requirements of the competent governmental
agency that has jurisdiction over the Real Property. TEDE shall commence
construction no later than the Real Property Commencement Date, and shall
proceed with reasonable diligence to cause the Improvements to be Substantially
Completed no later than June 15, 1998 (provided that such date shall be
extended by one day for each day that elapses between November 12, 1997 and the
date of execution hereof). The Improvements shall be deemed to be
"SUBSTANTIALLY COMPLETED" when they have been completed in accordance with
Exhibits C and D hereto, and with any Change Orders agreed to in writing by the
parties, except for finishing details, minor omissions, decorations and
mechanical adjustments of the type normally found on an architectural "punch
list," all of which TEDE shall complete or correct no later than the Delivery
Date.
Company shall appoint its own personnel in order to verify the
biweekly progress of the construction and that such construction is being
executed in accordance with the agreed specifications. In case the Company does
not make objections to concluded construction within a fifteen day period, it
shall be understood that said construction is executed in compliance with
agreed specifications.
Within seven (7) days after the Improvements are Substantially
Complete, TEDE and Company shall inspect the Improvements and jointly prepare a
"punch list" of agreed items of construction remaining to be completed. TEDE
shall complete the items set forth in the punch list as soon as reasonably
possible. Company shall cooperate with and accommodate TEDE and its workers in
completing the items on the punch list.
Company shall not be allowed to start operations until the
building has been delivered and Company has issued an acceptance certificate.
TEDE shall complete the Improvements as defined in this Lease at
its sole cost and expense no later than the Delivery Date. Any additions or
changes to the Improvements (as defined herein) that result in increased costs
and that are requested and approved by Company ("CHANGE ORDERS") shall be the
responsibility of Company. Company shall pay to TEDE such increased costs
within three (3) days after Company receives and approves the Change Order and
the additional costs set forth therein. Prior to executing any Change Order,
the parties shall agree in writing regarding any extension or modification of
the Delivery Date that may be required as a result of any such Change Order. In
the event that any Change Order results in a decrease in the cost of
constructing the Improvements, such decrease shall benefit Company to the
extent such decrease can be offset against any corresponding increase in cost
resulting from any other Change Order. Any Change Order which would increase
costs by Ten Thousand United States Dollars (US $10,000) or less shall be
approved in writing by Xxxxxx Xxxxx. Any Change Order which would increase
costs by more than Ten Thousand United States Dollars (US $10,000) shall be
approved in writing by Xxx Xxxxxxx. Copies of all Change Orders will be
supplied to Xxxxx Xxxxxxxx in a timely manner.
2. Refrigeration System. TEDE shall pay up to an amount of US Cy
(US $315,000) THREE HUNDRED FIFTEEN THOUSAND DOLLARS 00/00 XXXXXX XXXXXX XX
XXXXXXX CURRENCY) in the purchase and installation of refrigeration equipment
required for the Improvements pursuant to specifications approved by Company on
the understanding that it shall be Company's responsibility to perform at its
expense the project design and required capacity study as well as the election
of the supplier of such equipment, also being in charge of covering and
programming its maintenance and pursuing any corresponding warranty claims from
suppliers and other service performers involved in works for the adequate
installation and operation of such equipment.
3. Parcel B Improvements. During the term of this Lease, TEDE and
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Company may agree in writing that TEDE will construct and install certain
improvements on Parcel B ("PARCEL B IMPROVEMENTS").
4. Standards. All on-site and off-site improvements constructed
pursuant to this Lease shall comply with the plans and specifications therefor
as agreed by the parties, and with the laws, ordinances, regulations, orders
and requirements of all Governmental Agencies. TEDE warrants and guarantees
that TEDE, its contractors, representatives and employees shall comply fully
with all pertinent construction, social security, tax and labor laws, and all
other applicable laws and regulations.
E. RENT.
1. Payment of Rent. Company shall pay TEDE Rent in advance at the
address listed in Recital A.4 hereof, or as directed by TEDE, no later than the
third day of each month of the Term. If a Term shall commence on a day other
than the first day of a month, the Rent for that first month shall be prorated
on a per diem basis and shall be paid within three (3) days of the Commencement
Date of such Term. Rent shall be payable in the national currency of the USA.
2. Amount of Rent Payable Monthly.
a. During the Parcel A Term, Company shall pay to Tede Rent with
respect to Parcel A in the amount of Five Thousand Four and 26/100 United
States Dollars (US $5,004.26), plus value added tax ("PARCEL A RENT"), monthly.
b. Commencing on the Improvements Commencement Date, but in no
event earlier than June 15, 1998, and ending on the Parcel A Termination Date,
Company shall pay to TEDE Rent with respect to Parcel A and the Improvements in
the amount of thirty-eight Thousand Three Hundred ninety-six and 26/100 United
States Dollars (US $38,396.26), plus value added tax ("IMPROVED PARCEL A
RENT"), monthly.
c. Commencing on the Real Property Commencement Date and ending on
the Parcel B Termination Date (as it may be extended), Company shall pay to
TEDE Rent with respect to Parcel B in the amount of Two Thousand Six Hundred
Three and 74/100 United States Dollars (US $2,603.74), plus value added tax
("PARCEL B RENT"), monthly.
The rent payable with respect to any Parcel hereunder is referred to as "RENT."
3. Adjustments to Rent.
a. Periodic Adjustments.
(1) Improved Parcel A. On the third anniversary of the Real
Property Commencement Date, the Improved Parcel A Rent shall be adjusted by the
cumulative percentage increase in the United States Consumer Price Index All
Items and Major Group Figures for All Urban Consumers ("CPI") during the two
years period ending with the second month preceding such anniversary.
Thereafter, on each succeeding anniversary of the Parcel A Commencement Date,
the Improved Parcel A Rent shall be adjusted by the percentage increase in the
CPI during the one year period ending with the second month preceding such
anniversary, provided, however, that in no event shall the Improved Parcel A
Rent be increased under this Section E.3.a.(1) by more than Five Percent (5%)
per annum.
(2) Parcel B. On the second anniversary of the Real Property
Commencement Date, the Parcel B Rent shall be adjusted by the cumulative
percentage
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increase in the United States Consumer Price Index All Items and Major Group
Figures for All Urban Consumers ("CPI") during the first year period ending
with the second month preceding such anniversary. Thereafter, on each
succeeding anniversary of the Parcel B Commencement Date, the Parcel B Rent
shall be adjusted by the percentage increase in the CPI during the one year
period ending with the second month preceding such anniversary, provided,
however, that in no event shall the Parcel B Rent be increased under this
Section E.3.a.(1) by more than Five Percent (5%) per annum.
b. Expansion of Parcel A Building. In the event the total floor area
of the primary permanent building located on Parcel A is increased so as to
exceed the total floor area of such building described on Exhibit C hereto,
i.e., 62,640 square feet, the Improved Parcel A Rent shall be increased for
each additional square foot of floor space by the then-current Rent Rate under
this Lease for each square foot of floor space of said building as shown on
Exhibit C.
c. Parcel B Improvements. In the event Parcel B is improved by
agreement of the parties hereto, the Parcel B Rent shall be increased upon
completion of all Parcel B Improvements, including all related off-site
improvements, by the total square footage of the primary building to be located
on Parcel B, multiplied by the then-current Rent under this Lease for each
square foot of floor space of the building on Parcel A.
4. No Advance Rent. Except for the Security Deposit as hereinafter
described, TEDE may not collect any Rent more than one (1) month in advance of
the date on which it is due and payable hereunder.
F. SECURITY DEPOSIT. Company shall deposit with TEDE upon execution of this
Lease a Security Deposit in the amount of the sum of the Improved Parcel A Rent
plus the Parcel B Rent for one and a half months as security for Company's
faithful performance of Company's obligations hereunder with respect to Parcel A
and the Improvements, and Parcel B, respectively. If Company fails to pay Rent
or other charges due hereunder, or otherwise defaults with respect to any
provision of this Lease, TEDE may use, apply or retain all or any portion of the
Security Deposit for the payment of any Rent or other charge in default or for
the payment of any other sum to which TEDE may become obligated by reason of
Company's default. At the Parcel B Termination Date, if Company has performed
all of Company's obligations hereunder with respect to Parcel B, the portion of
the Security Deposit attributable (on the basis of the relative amounts of Rent
payable for Parcel B and for Parcel A and the Improvements, if any, at the
Parcel B Termination Date) to Parcel B, or so much thereof as has not therefore
been applied by TEDE, shall be returned, without payment of interest for its
use, to Company after Company has vacated Parcel B, and complied with all its
obligations. At the Parcel A Termination Date, if Company has performed all of
Company's obligations hereunder with respect to Parcel A and the Improvements,
the portion of the Security Deposit attributable (in accordance with the
preceding sentence) to Parcel A and the Improvements, or so much thereof as has
not therefore been applied by TEDE, shall be returned, without payment of
interest for its use, to Company after Company has vacated Parcel A and the
Improvements.
G. PERMITTED USES.
1. The Leased Property may be used for any lawful industrial purpose,
including, without limitation, the processing of avocado and other food
products.
2. Subject to Section H.2 hereof, Company shall comply, at Company's
expense, with all laws, ordinances, regulations and requirements of all
governmental agencies having jurisdiction over the Leased Property or Company's
use thereof ("GOVERNMENTAL AUTHORITIES"). Without limiting the generality of
the foregoing, Company shall comply with all
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police, fire and sanitary regulations imposed by any Governmental Authority, and
shall observe and obey all other governmental requirements governing the conduct
of any business conducted in the Leased Property.
3. Company shall not use the Leased Property in any manner
that will constitute waste or nuisance or that is liable to cause injury to
others.
4. Quiet Enjoyment. Upon Company paying the Rent for the
Leased Property and complying with terms and conditions of this Lease, Company
shall have quiet possession of the Leased Property for the entire Term subject
to all of the provisions of this Lease.
H. MAINTENANCE, REPAIRS AND ALTERATIONS.
1. Company's Repair and Maintenance Obligations.
a. Subject to Section H.2 hereof and except as
otherwise provided herein, Company shall, at its expense, keep in good order,
condition and repair (except for normal wear and tear) the Leased Property and
every part thereof, including any and all plumbing and sewage facilities,
heating, air conditioning, ventilating, fixtures, partitions, walls (interior
and exterior), floors, ceilings, sinks, roofs, interior and exterior doors,
windows and plate glass located within the Leased Property. Company shall not
be responsible for any damages, and shall not be responsible for any repairs,
caused by any negligent act or omission of TEDE, its employees, agents,
invitees, or contractors.
b. Company shall maintain all rubbish and trash
areas on the Leased Property in a neat and orderly manner, and shall store
trash in such areas only temporarily. All rubbish and trash shall be regularly
removed from the Leased Property at Company's expense. Company shall not burn
any trash of any kind in or about the Leased Property.
2. TEDE's Repair Obligations.
a. In the event of any structural or manufacturing
defect in any of the on-site or off-site improvements made by or for TEDE, TEDE
shall, at its expense, within five (5) days following notice thereof (or sooner
in the event of an emergency), promptly and diligently start to repair any such
defect. Except as provided herein, and subject to section H.1, TEDE shall have
no obligation to maintain or repair the Leased Property. TEDE shall make every
effort to minimize any disruption of Company's use of the Leased Property as a
result of any such defect or the repair thereof. TEDE shall not be responsible
for any damages, and shall not be responsible for any repairs, caused by any
negligent act or omission of Company, its employees, agents, invitees, or
contractors. TEDE shall not be responsible for any damage resulting from TEDE's
failure to make any repairs, unless Company has notified TEDE of the need for
such repairs, and TEDE has failed to commence and thereafter diligently
complete such repairs as required herein.
b. In the event TEDE fails to make the repairs
required in paragraph H.2.a. above, Company may, but shall not be required, to
make such repairs or cause such repairs to be made. TEDE shall, on demand,
immediately pay to Company the actual cost of such repairs. In the event TEDE
does not pay such amounts to Company within twenty (20) days following Company's
demand, then, at the sole option of Company, Company may deduct from any Rent
then or thereafter due and owing to TEDE the cost of such repairs. Company shall
provide to TEDE evidence of all expenses for which it seeks reimbursements or on
account of which amounts have been deducted from the Rent.
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3. Company's Installations, Alterations and Improvements.
a. Installations. Company may, at its expense,
install on the Leased Property such trade fixtures, equipment and furniture as
it may deem necessary or desirable, provided that such items can be removed
without damage to the structural integrity of the Improvements. Said items
shall remain the property of Company, and, Company shall remove all such items
upon the expiration or earlier termination of this Lease. Company shall, at its
sole expense, repair all damage caused by the installation or removal of any
trade fixtures, equipment and furniture hereunder.
b. Alterations and Improvements. Company may, at
its discretion, make any alterations or improvements it may deem necessary or
desirable in, on or about the Leased Property, provided that no such
alterations or improvements may be made without the prior written consent of
TEDE if such alteration or improvement (i) exceeds Ten Thousand United States
Dollars (US $10,000) in cost or (ii) affects the structural integrity of the
Improvements. Said alterations and improvements shall remain the property of
Company, and Company shall remove all such items upon the expiration or earlier
termination of this Lease. Company shall, at its sole expense, repair all
damage caused by the installation or removal of any alterations or improvements
hereunder.
c. No Outside Sheds. Company may not install any
metal sheds or coverings on the exterior of the Improvements without the prior
written consent of TEDE.
d. Compliance with Laws. Company shall perform all
installations, alterations and improvements in accordance with all applicable
laws, ordinances, regulations and orders of any Governmental Authority.
e. Liens and Encumbrances. Company shall keep the
Leased Property free and clear of any and all liens and encumbrances arising out
of any acts or omissions of Company under this Section. Company shall defend,
indemnify and save harmless TEDE from and against any and all actions or
proceedings brought to enforce such liens and encumbrances (including reasonable
attorneys' fees and expenses). Company, at Company's sole expense, shall procure
the satisfaction or discharge of all such liens and encumbrances within thirty
(30) days after the filing thereof; provided, however, that if Company shall, in
good faith, contest the validity or amount of any such lien, claim or demand,
then Company shall, at its sole expense defend itself and TEDE against the same
and shall pay and satisfy any such adverse judgment that may be rendered thereon
before the enforcement thereof against the TEDE or the Leased Property, upon the
condition that if TEDE shall require, Company shall furnish to TEDE a bond
satisfactory to TEDE in an amount equal to such contested lien claim or demand
indemnifying TEDE against liability for the same and holding the Leased Property
free from the effect of such lien or encumbrance. If Company fails to discharge
any such lien or encumbrance or to provide a bond therefor as provided herein,
TEDE may, at its option, pay all or any part of such lien or encumbrance. In
such event, Company shall, on demand, pay to TEDE the amount so paid, together
with interest at the rate of twenty percent (20%) per annum from the date of
payment of such lien or encumbrance by TEDE through the date of payment by
Company to TEDE therefor. The provisions of this Section shall not apply to any
acts or omissions of Company arising as a result of the failure of TEDE to
perform its repair obligations set forth in Section H.2 hereof.
I. TAXES AND CHARGES.
1. Taxes on Company's Property. Company shall pay, at
least ten (10) days prior to delinquency, all income and other taxes
attributable to the conduct of Company's business and operations at the Leased
Property, including but not limited to the Value Added
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Tax.
2. Leased Property Taxes. TEDE shall pay, at least ten
(10) days prior to delinquency, to the appropriate taxing authority any and all
property and other taxes attributable to the Leased Property and TEDE's income
derived from this Lease. TEDE shall not be responsible for any taxes
attributable to any personal property or assets of Company which may be located
at the Leased Property.
3. Utilities. Company shall promptly pay all charges for
all public and other utilities and related services furnished to the Leased
Property, including, but not limited to, water, gas, electricity and telephone
charges, including installation charges.
J. ASSIGNMENT AND SUBLETTING.
1. By Company. Company shall have the right, upon the
prior written consent of TEDE, which shall not be unreasonably withheld, to
assign or transfer this Lease or any interest herein, or to sublease Parcel A
and the Improvements to, or permit the use of Parcel A and the Improvements by,
any individual, corporation or entity. Company shall have the right to sublease
Parcel B or to permit the use of Parcel B by, any individual, corporation or
entity. Notwithstanding the foregoing, without TEDE's consent but upon ten (10)
days notice to TEDE, this Lease may be assigned, or Parcel A and the
improvements may be sublet, to any corporation which is a parent, subsidiary or
affiliate of Company. In the event of any assignment, transfer or sublease,
Company shall remain fully liable for all of its obligations under this Lease
or any extension of this Lease. Any and all proceeds to Company as a result of
the assignment, transfer or sublease of the Leased Property or any portion
thereof shall be the property of, and shall be retained by, Company.
2. By TEDE. TEDE shall have the right to assign and
reassign, from time to time, and transfer, from time to time, any or all of the
rights and obligations of TEDE in this Lease Agreement or any interest therein,
without Company's consent, provided that no such assignment or reassignment
shall impair any of the rights of Company herein and provided further that TEDE
shall remain liable for all its obligations under this Lease Agreement. In the
event of such assignment or reassignment, Company shall not diminish or
withhold, unless otherwise agreed upon herein, any of the rents payable
hereunder by asserting claims against such assignee, any defense, setoff, or
counter claims which Company may have against TEDE or any of its affiliates.
K. DEFAULTS BY COMPANY; REMEDIES.
1. Defaults by Company. The occurrence of any one or more
of the following events shall constitute a material default and breach of this
Lease by Company:
a. The vacating or abandonment of the Leased
Property by Company.
b. The failure by Company to make any payment of
Rent as and when due, where such failure shall continue for a period of ten
(10) days after written notice thereof from TEDE to Company.
c. The failure by Company to perform obligations
required of Company within a reasonable time, but in no event later than 30
days after written notice by TEDE to Company, specifying wherein Company has
failed to perform such obligation; provided, however, that if the nature of
Company's obligation is such that more than 30 days are required for
performance then Company shall not be in default if Company commences
performance within such 30 day period and thereafter diligently prosecutes the
same to completion.
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d. The making by Company of any general arrangement or assignment
for the benefit of creditors;
e. The filing of a voluntary petition of bankruptcy by Company,
or the filing of an involuntary petition of bankruptcy by Company's creditors,
said petition remaining undischarged for a period of sixty (60) days;
f. The appointment of a trustee or receiver to take possession of
substantially all of Company's assets located at the Leased Property or
Company's interest in this Lease, where possession is not restored to Company
within thirty (30) days;
g. The attachment, execution or other judicial seizure of
substantially all of Company's assets located at the Leased Property or of
Company's interest in this Lease, where such seizure is not discharged within 30
days.
h. The failure of Company to provide insurance during the Term of
this Lease as provided in Section T.
2. Remedies. In the event of any such material default or breach by
Company, TEDE shall have the right, at its option and in addition to other
rights and remedies granted by law, to do either of the following:
a. Terminate this Lease, and re-enter and take possession of the
Leased Property; or
b. Reaffirm this Lease and seek specific performance of the
terms, covenants, conditions and provisions of this Lease, in which case TEDE
shall have the right to declare and collect the entire unpaid balance of rent to
the end of the last lease year of the existing Term or extension thereof then in
effect and also declare all other sums due to TEDE, immediately due and payable,
plus interest at the rate of twenty percent (20%) per annum on said sums from
the date of such declaration until paid in full.
3. [Intentionally Deleted]
4. Mitigation of Damages. In the event TEDE re-enters the Leased
Property, TEDE shall be obligated to attempt in good faith to lease all or any
portion of the Leased Property to other prospective tenants, or otherwise to
make beneficial use of the Leased Property, during the remaining balance of the
term of this Lease. In the event TEDE re-leases all or some portion of the
Leased Property or otherwise makes beneficial use of the Leased Property, any
rents received from such other tenant and any value of such beneficial use shall
be offset against any damages otherwise due and owing by Company as a result of
a breach by Company hereunder. TEDE shall promptly refund to Company that
portion, in a month-to-month manner, or as it becomes paid to TEDE from the new
Lessee, any Rent pre-paid by Company which is allocable to the period during
which the Leased Property or any portion thereof was leased to another tenant or
otherwise used in a beneficial manner.
5. TEDE's Right to Cure Defaults. In the event of a default hereunder
as described in Section K.1, TEDE may, without any obligation to do so, at any
time after ten (10) days following written notice of its intent to do so,
provided Company has not commenced to cure such default, cure such breach or
default for the account and at the expense of Company.
L. DEFAULT BY TEDE. TEDE shall not be in default unless TEDE fails to
perform obligations required of TEDE within a reasonable time, but in no event
later than 30 days after
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written notice by Company to TEDE, specifying wherein TEDE has failed to
perform such obligation; provided, however, that if the nature of TEDE's
obligation is such that more than 30 days are required for performance then
TEDE shall not be in default if TEDE commences performance within such 30 day
period and thereafter diligently prosecutes the same to completion.
M. LATE CHARGES. In the event any amount due and payable by one party to
the other hereunder has not been paid in accordance herewith, the owing party's
obligation to pay such amount shall bear interest at the rate of twenty percent
(20%) annually from the date such payment was due until the date such payment
is made by the owing party.
N. SURRENDER; HOLDING OVER.
1. Surrender. On the last day of the Term as to any Parcel, Company
shall quit such Parcel and shall surrender such Parcel to TEDE in the same
condition as received, ordinary wear and tear excepted, clear and free of
debris. Company shall repair any damage to such Parcel occasioned by the
installation or removal of its machinery, trade fixtures, furnishings,
equipment and improvements. Any furniture or fixtures which may be left in the
Leased Property upon Company's vacation thereof shall be deemed abandoned by
Company.
2. Holding Over. If Company retains possession of any Parcel after the
applicable Termination Date, Company shall pay to TEDE Rent with respect to such
Parcel in an amount equal to one hundred twenty-five percent (125%) of the total
amount of Rent payable with respect to such Parcel hereunder, using as a base
the amount of rent, the amount paid by Company for the month immediately
preceding the Termination Date and, in addition thereto, shall pay TEDE for all
damages sustained by TEDE by reason of Company's retention of possession of such
Parcel until Company has delivered to TEDE such Parcel or until the parties
execute a new lease as to such Parcel. This Section shall not be construed as
granting Company any right to remain in possession of any Parcel after the
Termination Date with respect to any such Parcel.
O. WAIVER OF DEFAULT. No waiver by TEDE or Company of any provision hereof
shall be deemed a waiver of any other provision hereof or of any subsequent
breach by the other party of the same or any other provision. Either party's
consent to, or approval of any act, shall not be deemed to waive or render
unnecessary the consent or approval of that party of any subsequent or similar
act by the other party.
P. CERTIFICATE. Company shall, at any time upon not less than fifteen (15)
days' prior written notice from TEDE, execute, acknowledge and deliver to TEDE
a statement in writing (i) certifying that this Lease is unmodified and in full
force and effect (or, if modified, stating the nature of such modification and
certifying that this Lease, as so modified, is in full force and effect) and
the date to which the Rent is paid in advance, if any, and (ii) acknowledging
that there are not, to Company's knowledge, any uncured defaults on the part of
TEDE hereunder, or specifying such defaults if any are claimed. Any such
statement may be relied upon by any prospective purchaser or lending
institution interested in the Leased Property.
Q. [Intentionally Deleted]
R. SUBORDINATION; ATTORNMENT.
1. Subordination. TEDE shall have the right to encumber its interest in
this Lease or the Leased Property for any purpose it deems appropriate. Company
hereby subordinates its interest in the Leased Property to any such
encumbrance, but only on the
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condition that each encumbrancer first agrees in writing (in a form acceptable
to Company) that, in the event of a foreclosure of same or of any other such
action or proceeding for the enforcement thereof, or of any sale thereunder,
this Lease will not be barred, terminated, cut off or foreclosed, nor will the
rights and quiet possession of Company hereunder be disturbed if Company shall
not then be in material default in the payment of Rent or other sums and shall
not otherwise be in material default under the terms of this Lease.
a. Company shall, within ten (10) days of receipt of a written
request made by TEDE, deliver to TEDE a statement in writing, certifying that
this Lease Agreement is unmodified and in full force and effect (or if there
have been modifications that the same are in full force and effect as modified);
the dates to which the rent and any other charges have been paid in advance and,
if that is the case, that TEDE's improvements have been satisfactorily
completed. It is intended that any such statement may be relied upon by any
person, prospective purchaser or lending institution interested in the Leased
Property.
b. Upon notice to Company that TEDE has encumbered its interest
herein, no amendment of this Lease that would have the effect of reducing the
Rent, decreasing the Term or modifying or negating any substantial obligation
shall be effective against such encumbrancer unless such encumbrancer has agreed
to such amendment in writing. This limitation shall continue until such
encumbrancer delivers notice to Company that such encumbrance has been
terminated.
c. In the event any such encumbrancer notifies Company in writing
that Company is thereafter required to pay monthly Rent hereunder to such
encumbrancer, then Company shall, without any duty of further inquiry, pay each
subsequent monthly Rent payment to such encumbrancer until such encumbrancer
authorizes Company to pay Rent hereunder to TEDE or another person entitled
thereto. The encumbrancer shall not be required to credit any payments made by
Company to TEDE following Company's receipt of notice requiring Rent payments to
be made to encumbrancer.
d. In the event such encumbrance is foreclosed or judicially
enforced, the one who holds the encumbrance or the purchaser upon foreclosure or
at the sale under a power of sale shall agree to respect this Lease and accept
the performance by Company of its obligations hereunder. Company shall in the
event any proceedings are brought for the foreclosure of or in the event of
exercise of the power of sale under any mortgage or Trust Deed made by TEDE, its
successors or assigns, encumbering the Leased Property or any part thereof, if
so requested, attorn to the purchaser upon such foreclosure or sale and
recognize such purchaser as the Lessor under this Lease.
S. TEDE'S ACCESS. TEDE and TEDE's authorized representatives shall have
the right to enter the Leased Property at reasonable times during Company's
regular business hours and in emergencies at all times for the purpose of
inspecting the same and making such alterations, repairs, improvements or
additions to the Leased Property or to the Improvements as TEDE may deem
necessary for the preservation of the structural integrity of the Improvements
and for compliance of the Leased Property with applicable requirements of
Governmental Authorities. For a period commencing one hundred twenty (120) days
prior to the termination of this Lease as to any Parcel, TEDE shall have access
to such Parcel for the purpose of showing the same to prospective purchasers,
lender, or lessees, and TEDE shall have the right to post any ordinary "For
Sale" or "For Lease" signs upon such Parcel. Except in case of emergency, TEDE
shall give Company twenty-four (24) hours' notice before entering the Leased
Property, and Company shall have the right to accompany any representatives of
TEDE and any prospective purchasers, lenders, or lessees. TEDE hereby represents
and warrants to Company that none of TEDE, its representatives, employees and
agents, and any prospective purchasers, lenders, or lessees shall divulge or
reveal to any third party any
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proprietary information of Company or any information regarding Company's
business or industrial processes.
T. INSURANCE.
1. Company shall maintain in full force and effect during the
entire Term, at its own cost and expense, the following policies of insurance
with respect to the Leased Property:
a. Comprehensive/Commercial General Liability Insurance
protecting both Company and TEDE with a combined single limit for bodily injury
and property damages of not less than One Million United States Dollars (US
$1,000,000) per occurrence;
b. Standard fire, extended coverage and special extended
coverage insurance with loss payable to TEDE and any lender designated by TEDE,
including fire, lightning, falling aircraft, smoke, windstorm, earthquake,
hail, vehicle damage, volcanic eruption, strikes, civil commotion, vandalism,
riot, malicious mischief and flood endorsements, insuring the Leased Property.
Such insurance shall be in an amount equal to Three Million United States
Dollars (US $3,000,000), which amount shall be adjusted annually by Company
with the value approved by TEDE, to reflect then current property replacement
values.
c. Business interruption insurance with loss payable to TEDE
and/or any lender designated by TEDE, sufficient to cover, for a period not less
than one year, all rental obligations of Company under this Lease which would be
borne by or due from Company if the Leased Property and Company's business were
fully open and operating.
2. Form of Insurance. All insurance required to be carried by
Company under Section T.1 shall be in a form approved by the Department of
Finance and Public Credit, and shall be written with one or more companies
authorized to do business in Mexico. Each such policy shall contain a provision
whereby each insurer agrees to give TEDE at least 30 days prior written notice
in advance of any cancellation or lapse or the effective date of any reduction
in the amounts of insurance. On or before the Commencement Date, Company shall
furnish TEDE with certificates evidencing the aforesaid insurance coverage, and
renewal certificates shall be furnished to TEDE at least 30 days prior to the
expiration date of such insurance.
3. Other Insurance. Each party shall procure and maintain such
other insurance covering its own liability and property as it deems necessary
or desirable.
4. Waiver of Subrogation. Provided the insurance described in
Section T.1 above has been provided, TEDE and Company each hereby release and
relieve the other, and waive their entire right to recover damages against the
other, for loss or damage to its property arising out of the perils required
to be insured against herein. The effect of such releases and waivers is not
limited by the amount of insurance carried or required, or by any deductibles
applicable hereto. The parties agree to have their respective property damage
insurance carriers waive any right to subrogation that such companies may have
against Company or TEDE, as the case may be, so long as the insurance is not
invalidated thereby.
U. INDEMNITY.
1. By Company. Company hereby agrees to indemnify TEDE against and
save TEDE harmless from any and all claims, damages, losses and costs and any
and all expenses, including, without limitation, attorneys' fees, expenses and
costs, arising out of or in connection with any negligent act or omission of
Company or its contractors, licensees, agents, invitees or employees in
connection with Company's use or occupancy of the Leased Property. This Section
U.1. shall survive the termination or expiration of the Term or Article Y
hereof.
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2. By TEDE. TEDE hereby agrees to indemnify Company against and save
Company harmless from any and all claims, damages, losses and costs and any and
all expenses, including, without limitation, attorneys' fees, expenses and
costs, arising out of or in connection with (i) any negligent act of omission of
TEDE or its contractors, licensees, agents, invitees or employees in connection
with the Leased Property, including, without limitation, negligent acts and
omissions of such persons while on or about the Leased Property, and negligent
acts or omissions of such persons in connection with any construction or repair
made by TEDE on or to the Leased Property after the date hereof, and (ii) any
hazardous material present in, on or emanating to or from the Leased Property as
of the Real Property Commencement Data. This Section U.2 shall survive the
termination or expiration of the Term or Article Y hereto.
3. Limitation of Liability. Except for intentional or negligent
acts and omissions of TEDE, its agents, contractors and employees, TEDE shall
not be liable for any loss or damage caused by the intentional or negligent
acts or omissions of the Company, of occupants of adjacent property, or of the
public, or by other causes beyond the reasonable control of TEDE, including,
without limitation, any interruption of any utility or other services to the
Leased Property.
4. Duration of Indemnity. The provisions of this Article shall
survive the termination of this Lease with respect to any damage, injury or
death occurring prior to such termination.
V. DAMAGE OR DESTRUCTION.
1. Total Destruction. In the event that all or a substantial part
of the Leased Property be damaged or destroyed by fire, act of nature or any
other cause, so as to make Company unable to continue the operation of its
business on the Leased Premises ("Total Destruction"), TEDE, shall, within 10
(ten) calendar days from such destruction, determine whether the Leased
Property can be restored within 3 (three) months and notify Company of said
determination. If TEDE determines that the Leased Property cannot be restored
within 3 (three) months, either TEDE or Company shall have the right and option
to immediately terminate this Lease Agreement, by advising the other thereof by
written notice. If TEDE determines that the Leased Property can be restored
within said 3 (three) months, TEDE shall, at its own expense, proceed
diligently to reconstruct the Improvements and in such event, TEDE shall accept
in lieu of rent during the period when Company is substantially deprived of the
use of the Leased Property, any insurance proceeds which may be payable
pursuant to rental insurance provided for herein above. In the event TEDE
notifies Company that TEDE desires to terminate this Lease following such a
casualty, Company may, within thirty (30) days after such notice by TEDE,
notify TEDE that Company desires to exercise the option to purchase the Leased
Property under the terms and provisions of Article Y hereof. If Company
notifies TEDE of its desire to exercise the option, TEDE shall, at its own
expense, proceed diligently to restore the Leased Property. TEDE shall accept
in lieu of Rent during the period when Company is substantially deprived of the
use of the Leased Property, any rental insurance proceeds which may be payable
to TEDE hereunder.
2. Partial Destruction. In the event the Leased Property is
subject to a casualty that does not constitute Total Destruction, TEDE shall
repair the Leased Property as soon as reasonably possible and this Lease shall
continue in full force and effect, provided that during the period required for
such repairs, the Rent shall be prorated baed on the parties' good faith
determination of the proportion to which Company's use of the Leased Property
is impaired.
3. If TEDE shall be obligated to repair or restore the Leased
Property under the
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provisions hereof and shall not address such repair or restoration within
twenty (20) days after such obligations shall accrue and thereafter diligently
pursue such repair or restoration to completion, Company may at Company's
option cancel and terminate this Lease by giving TEDE written notice of
Company's election to do so at any time prior to the commencement of such
repair or restoration. In such event this Lease shall terminate as of the date
of such notice. Nothing herein shall limit Company's other rights and remedies
hereunder and under applicable law for TEDE's breach.
W. RIGHTS OF WAY.
1. For TEDE. TEDE reserves to itself a right-of-way over and under
the Leased Property for installation, repair, replacement and maintenance of
all utilities, including, but not limited to, water, gas, telephone,
electricity, television or radio antenna system serving the Leased Property.
The right of way reserved hereunder shall include reasonable rights of ingress
and egress, and the right to erect and maintain required poles and other
facilities related to such utilities. The right-of-way reserved hereunder shall
not unduly interfere or hinder Company in its normal business operations.
Except in case of emergency, TEDE shall provide at least twenty-four hours'
prior notice of any entry by TEDE or its representatives onto the Leased
Property. TEDE shall consult Company prior to the placement of any poles or
other facilities on the Leased Property.
2. For Parcel B. In the event Company surrenders Parcel B to TEDE
without at the same time surrendering to TEDE Parcel A, Company shall permit an
easement over an area of at least 20 meters for access for Parcel B occupant,
as shown in Exhibit C.
X. LIMITATION OF TEDE'S LIABILITY. If TEDE becomes obligated to pay
Company a money judgment arising out of any failure by TEDE to perform or
observe any of the terms, covenants, conditions or provisions to be performed
or observed by TEDE hereunder, Company shall be limited for the satisfaction of
said money judgment solely from the assets of TEDE and no other property or
assets of the individual partners, directors, officers, or shareholders of TEDE
shall be subject to levy, execution or other enforcement procedure whatsoever
for the satisfaction of said judgment.
Y. OPTION TO PURCHASE. TEDE hereby grants to Company, as of the date
hereof and subject to the terms and conditions set forth herein, (a) the
exclusive right and option (hereinafter called the "PARCEL A OPTION") to
purchase Parcel A, including without limitation all improvements thereon and
all rights appurtenant thereto ("COMPLETED PARCEL A") for the Parcel A Purchase
Price, and (b) a separate exclusive right and option (hereinafter called the
"PARCEL B OPTION") to purchase Parcel B, including without limitation all
improvements thereon and all rights appurtenant thereto ("COMPLETED PARCEL B")
for the Parcel B Purchase Price, both upon the terms and conditions set forth
herein.
1. Term of the Option. The term ("Term") of each of the Parcel A
Option and the Parcel B Option shall commence on the Improvements Commencement
Date and shall expire on the expiration of the Term of this Lease with respect
to such Parcel as such Term may be extended. As provided elsewhere in this
Lease, the Term of this Lease and the options to extend and purchase are as
follows:
a. Parcel A - 10 year Lease Term with an option to purchase
exercisable only at the end of the term.
b. Parcel B - 5 year Lease Term with a conditional option to
extend the Lease Term for two consecutive 5-year periods and with an option to
purchase exercisable only at the end of the term.
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2. Consideration for the Option. TEDE acknowledges that this Lease is
sufficient consideration for the grant of the Option, and that Company would
not have entered into this Lease unless it included the Options described in
this Article.
3. Purchase Price.
a. The Parcel A Purchase Price shall be the greater of (1) Two Million
One Hundred One Thousand Nine Hundred Fifty and No/100 United States Dollars
(U.S. $2,101,950.00), and (2) Fair Market Value of Completed Parcel A
determined, $2,101,950 plus 25% of the increase in Fair Market Value over the
$2,101,950 of Completed Parcel A as of the date on which the Parcel A Option is
exercised.
b. The Parcel B Purchase Price shall be the greater of (1) Three
Hundred Forty-Eight Thousand Six Hundred Sixty Four and No/100 United States
Dollars (U.S. $348,664.00), and (2) Fair Market Value of Completed Parcel B
determined, $348,664 plus 25% of the increase in Fair Market Value over the
$348,664 of Completed Parcel B as of the date on which the Parcel B Option is
exercised.
c. The Fair Market Value of each Parcel shall be determined by a panel
of three Experts ("Experts") authorized by the National Banking Commission, one
of which shall be selected by each of TEDE and Company ("Company's Expert" and
"TEDE's Expert," respectively), and the third of which shall be agreed upon by
TEDE's Expert and Company's Expert. TEDE and Company shall appoint TEDE's
Expert and Company's Expert no later than fifteen (15) Business Days following
delivery by Company to TEDE of notice of Company's intent to exercise the
Option. Within fifteen (15) Business Days following the appointment of the
second of TEDE's Expert and the Company's Expert, TEDE's Expert and Company's
Expert shall appoint the third Expert. No later than thirty (30) days following
the appointment of the third Expert, each Expert shall complete its appraisal
of the Fair Market Value of the Property. Fair Market Value means the most
probable price which a property should bring in a competitive and open market
under all conditions requisite of a fair sale, the buyer and seller each acting
prudently and knowledgeably, and assuming the price is not affected by undue
stimulus. Implicit in this definition is the consummation of a sale as of a
specified date and passing of title from seller to buyer under the conditions
whereby:
(1) Buyer and seller are typically motivated;
(2) Both parties are well-informed or well advised, and acting
in what they consider their own best interests;
(3) A reasonable time is allowed for exposure to the market;
(4) Payment is made in terms of cash in U.S. dollars or in terms
of financial arrangements comparable thereto; and
(5) The price represents the normal consideration for the
property sold unaffected by special or creative financing or sales concession
granted by anyone associated with the sale.
The determinations by the three Experts of the Fair Market Value of the
Property shall be compared, and the two determinations which are closes
together in amount shall be averaged. The resulting value shall be the Purchase
Price.
TEDE shall pay the cost of TEDE's Expert, Company shall pay the cost of
Company's Expert,
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and TEDE and Company shall each pay half the cost of the third Expert.
4. Exercise of the Option. Provided Company is not then in default under
this Lease, Company may exercise the Parcel A Option at any time within five
years prior to its expiration and may exercise the Parcel B Option at any time
within 5 years prior to its expiration, by giving written notice of exercise to
TEDE. The date upon which notice of exercise is given by Company is hereinafter
called the "EXERCISE DATE".
5. Investigation During Option Term. Company shall have right, at any
time and from time to time during the Term of this Option, to conduct whatever
investigations Company thinks appropriate of the Completed Parcel A and
Completed Parcel B, including, without limitation: environmental assessments,
surveys, studies, inspections and investigations) (collectively, "INSPECTIONS")
of such Parcel as shall be deemed necessary, desirable or appropriate by
Company. These Inspections may include, but not be limited to, inspection of the
soils and geologic conditions and inspection for environmental substances,
materials and hazards.
6. Purchase and Sale. Upon exercise of the Parcel A Option or the Parcel
B Option in accordance with Section Y.4 hereof, TEDE agrees to sell to Company,
and Company agrees to purchase from TEDE, Completed Parcel A or Completed Parcel
B, respectively, for the appropriate Purchase Price and upon the terms and
conditions set forth in this Agreement.
7. Closing. The Closing of the purchase and sale shall take place
through an escrow with a third party. At the Closing, Company shall deliver to
TEDE the Purchase Price and TEDE shall deliver to Company the ownership deed
executed with a notary public and duly recorded with the local registry of
public records and commerce of the City of Uruapan, Michoacan and a letter
addressed to Company from legal counsel in Mexico that they have performed a
title search going back a sufficient time period so that Company can rely on
receiving clear and unobstructed title to the Parcel. The Closing shall occur
not later than thirty (30) days after the Exercise Date.
8. TEDE's Covenants. TEDE covenants and agrees as follows:
a. TEDE will not do, or suffer to be done, anything that would
adversely affect Completed Parcel A or Completed Parcel B, the uses to which
the Parcels may be put, or the value of the Parcels.
b. TEDE shall maintain the Parcels in good condition and repair
during the term of the Option, to the extent that it is not Company's
obligation under this Lease to so maintain and repair the Property.
9. TEDE's Representations and Warranties. If Company becomes aware that
any of TEDE's representations or warranties has been materially breached or is
materially misleading, then Company may, in addition to its other rights, at
its option, terminate this Article by providing TEDE with written notice within
five (5) Business Days of Company becoming aware of such breach or inaccuracy.
TEDE shall promptly notify Company in writing if TEDE becomes aware that any of
its representations or warranties was not or is no longer true and correct.
Upon any termination of this Article pursuant to this Section Y.9, the
Parties shall have no further rights or obligations under this Article;
provided, however, that such termination shall not release any Party from any
indemnification obligation hereunder which expressly survives the termination
of this Article. The termination of this Article shall have no effect on the
validity of the remainder of this Lease.
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TEDE hereby represents and warrants to Company, as of the date hereof and
as of the Close of Escrow:
a. TEDE has incurred no obligation, contingent or otherwise, for any
broker's, agent's or finder's commission or fee with respect to the matters
provided for in this Section. TEDE shall indemnify, defend and hold Company
harmless from and against any claim based on any alleged fact inconsistent with
the foregoing warranty and representation contained in this Section Y.9.
b. TEDE shall not, prior to the expiration of the Option, sell,
lease or otherwise transfer, or offer to sell, lease or otherwise transfer, any
existing or future interest it may have in the Completed Parcel A or Completed
Parcel B or any part thereof, to anyone other than Company.
c. This Section and all agreements, instruments and documents herein
provided to be executed or to be caused to be executed by TEDE on or before the
Close of Escrow will be duly authorized, executed and delivered by and be
binding upon TEDE, and TEDE has the capacity and authority to enter into this
Article and consummate the transactions herein provided.
x. XXXX'x purchase of the Real Property shall meet with all Mexican
federal and state environmental regulations and standards. In addition, TEDE
shall comply with all such regulations and standards in its work and activities
on the Real Property.
e. There are no actions, suits or proceedings pending before any
court or governmental department, commission, board, bureau, agency or
instrumentality which would materially and adversely affect the current use or
value of the Parcels.
f. There will be no service contracts relating to the Parcels as of
the Close of Escrow.
10. Company's Representatives and Warranties. If, prior to closing, TEDE
becomes aware that any of Company's representations or warranties has been
materially breached by Company or is materially incorrect, or that any
information or document provided by or on behalf of Company to TEDE is
materially incorrect, then TEDE shall have the right to terminate this Article
by providing Company with written notice within five (5) Business Days of TEDE
becoming aware of such material breach or inaccuracy. Company shall promptly
notify TEDE in writing if Company becomes aware on or before the Closing that
any of its representatives or warranties was not or is no longer true and
correct.
Upon any termination of this Article pursuant to this Section Y.10, (a)
Company shall promptly be refunded all other sums deposited into Escrow by
Company and any interest accrued on any such sums, (b) Company shall pay any
Escrow or Title Company termination fees, and (c) the Parties shall have no
further rights or obligations under this Article; provided, however, that such
termination shall not release any Party from any indemnification obligation
hereunder which expressly survives the termination of this Article. The
termination of this Article shall have no effect on the validity of the
remainder of this Lease.
Company hereby represents and warrants to TEDE, as of the date hereof, the
Closing Date and the Close of Escrow:
a. Company has incurred no obligation, contingent or otherwise, for
any broker's, agent's or finder's commission or fee with respect to the matters
provided for in
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this Article. Company shall indemnify, defend and hold TEDE harmless from and
against any claim based on any alleged fact inconsistent with the foregoing
warranty and representation contained in this Section Y.10.a.
b. This Article and all agreements, instruments and documents
herein provided to be executed or to be caused to be executed by Company are
and at the Close of Escrow will be duly authorized, executed and delivered by
and binding upon Company, and consummate the transactions herein provided and
nothing prohibits or restricts the right or ability of Company to close the
transactions contemplated hereunder.
11. [Intentionally Deleted]
12. Survival of Warranties. The covenants, representations and
warranties of Parties shall survive the recordation of the Deed and the Close
of Escrow, but shall not exceed the term of this Lease.
13. Indemnification. The following indemnification provisions apply
only to this Article:
a. Company shall indemnify, defend and hold TEDE and TEDE's
affiliates, officers, directors, employees, representatives and agents harmless
from and against any and all obligations, liabilities, claims, liens,
encumbrances, losses, damages, costs or expenses (collectively, "Claims")
incurred by TEDE to third parties that result from any breach of any of
Company's representations or warranties or any default by Company under this
Article; provided, however, that TEDE's damages recoverable hereunder shall be
limited to those damages, costs and expenses actually incurred by TEDE, and
shall not include consequential damages, punitive damages, lost profits or
similar items.
b. TEDE shall indemnify, defend and hold Company and Company's
affiliates, officers, directors, employees, representatives and agents harmless
from and against any and all Claims incurred by Company to third parties that
result from any breach of any of TEDE's representations or warranties or any
default by TEDE under this Article; provided, however, that Company's damages
recoverable hereunder shall be limited to those damages, costs and expenses
actually incurred by Company, and shall not include consequential damages,
punitive damages, lost profits or similar items.
c. Each indemnity provided for under this Article shall cover
the costs and expenses of the indemnitee, including, without limitation,
reasonable attorneys' fees and expenses, related to any claims, actions, suits
or judgments incident to any of the matters covered by such indemnity. The
Parties shall cooperate fully with each other to make available to each other
any books, records, documents, or other pertinent information within its
control which is necessary or pertinent to the defense of any Claims.
14. Casualty and Condemnation. The following casualty and
condemnation provisions apply only to this Article. TEDE shall promptly notify
Company of any casualty or any condemnation proceeding affecting a portion of
Completed Parcel A and Completed Parcel B, the Property and occurring or
commencing prior to the Close of Escrow for such Parcel. If, prior to the Close
of Escrow, any portion of such Parcel is taken or proposed to be taken by
eminent domain, either permanently or temporarily, or any material portion of
such Parcel is damaged, Company may elect to: (i) terminate this Article with
respect to such Parcel; or (ii) keep this Article in full force and effect, in
which case, except as set forth in the following paragraph and provided that
the Close of Escrow occurs, Company shall be entitled to any condemnation award
or compensation and any insurance proceeds from such condemnation or
20
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casualty relating to such Parcel and the Purchase Price for such Parcel shall
not be reduced or adjusted in any manner. Such election shall be made by
delivering notice of such election to TEDE and to Escrow Holder within ten (10)
Business Days of such casualty or the receipt of notice of the commencement of
a condemnation proceeding. Company's failure to elect either (i) or (ii) above
within the specified time period shall be deemed to be an election of the
action in (ii) above. In the event such casualty or condemnation occurs within
ten days before the Closing Date, the Closing Date shall be extended for a
reasonable period of time to allow Company to make its election.
In the event of a "TEMPORARY CONDEMNATION", which shall be
defined as any condemnation or taking which affects a Parcel or a portion
thereof for two (2) years of less, TEDE shall be entitled to any condemnation
award attributable to periods prior to the Closing Date, and Company's Rent and
other obligations during such periods shall be reduced proportionally for the
temporary loss of use.
In the event of a permanent condemnation or casualty affecting
a Parcel prior to the Close of Escrow, any awards or proceeds therefrom
received by TEDE prior to the Close of Escrow shall be delivered to Escrow
Holder and remain in Escrow until the Close of Escrow. If the Close of Escrow
does not occur, TEDE shall be entitled to retain all condemnation awards and
insurance proceeds.
Upon any termination of this Article pursuant to this Section
Y.14, (a) Company shall promptly be refunded all sums deposited into Escrow by
Company, and any interest accrued on any such sums, (b) the Parties shall share
equally any Escrow or Title Company termination fees, and (c) the Parties shall
have no further rights or obligations under this Article; provided, however,
that such termination shall not release any party from liability for any breach
of this Article occurring prior to such termination and shall not release any
Party from any indemnification obligation hereunder which expressly survives the
termination of this Article. The termination of this Article shall have no
effect on the validity of the remainder of this Lease.
Z. MISCELLANEOUS.
1. Notices. Any notice required or permitted to be given
hereunder shall be in writing and be delivered by certified mail. Either party
may by notice to the other specify a different address for notice purposes. A
copy of all notices required or permitted to be given to TEDE hereunder shall
be concurrently transmitted to such party or parties at such addresses as TEDE
may from time to time hereafter designate by notice to Company. Any notice
given by mail shall be deemed given ten (10) days after the date of mailing
thereof.
2. Integration; Amendments. This Lease contains all
agreements of the parties with respect to any matter mentioned herein. This
Lease may be modified in writing only, signed by the parties in interest at the
time of the modification.
3. Recording. In the event this Lease is recorded at the
Public registry of Property, Company shall pay all costs of such recordation,
including, without limitation, notary fees, charges and taxes required in
connection therewith.
4. Attorney's Fees. If either party brings an action to
obtain possession of the Leased Property, enforce the terms hereof or declare
rights hereunder, the prevailing party in any such action shall be entitled to
its reasonable attorney's fees and expenses to be paid by the losing party.
5. Cumulative Remedies. No remedy or election hereunder
shall be deemed exclusive but shall, wherever possible, be cumulative with all
other remedies at law or in equity.
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6. Binding Effect. Subject to any provisions hereof
restricting assignment or subletting by Company and subject to the provisions of
Article X, this Lease shall bind the parties, their personal representatives,
successors and assigns.
7. Choice of Law. This Lease shall be governed by the laws
of Michoacan, Mexico.
8. Language. This Lease shall be executed in English and
Spanish. However, in the event of a dispute or an inconsistency regarding
interpretation or meaning of this Lease, the Spanish version shall prevail.
9. Consent Not to Be Unreasonably Withheld. Whenever the
prior consent or approval of either party, written or otherwise is required as
a condition for an act by the other party hereunder, such consent or approval
shall not be unreasonably withheld.
10. Further Documents. The parties agree to execute such
further documents and writings as may be reasonably required to effectuate the
intent hereof.
11. Severability. A determination by a court of competent
jurisdiction that any provision of this Lease or any part thereof is illegal or
unenforceable shall not cancel or invalidate the remainder of such provision or
this Lease, which shall remain in full force and effect.
12. Guaranty. Concurrently with the execution and delivery
hereof, Company shall deliver to TEDE a Guaranty of this Lease in the form of
EXHIBIT F attached hereto and made a part hereof executed by Calavo Growers of
California. Company acknowledges that the delivery of such Guaranty constitutes
a material inducement for TEDE's willingness to enter into this Lease.
13. TEDE certifies that the land is free of any
contaminants or pollutants and COMPANY accepts both Parcels A & B in clean
conditions, and Company agrees to return it in the same manner to TEDE at the
end of this Lease or any extension thereof.
IN WITNESS WHEREOF, TEDE and Company have executed or caused to be
executed this Lease as of the date first written above.
"TEDE" "COMPANY"
/s/ XXXXX XXXXX DEL RIO CALAVO DE MEXICO, S.A. DE C.V.
----------------------- LESSEE
Xxxxx Xxxxx Del Rio
TEDE, S.A. DE C.V.
LESSOR
By /s/ XXXXXX X. XXXXXXX 11/21/97
-------------------------------------
Xxxxxx X. Xxxxxxx
By /s/ XXXXXX XXXXXXX 11/24/97
-------------------------------------
Xxxxxx Xxxxxxx
By /s/ XXXXXX X. XXXXX 11/21/97
-------------------------------------
Xxxxxx X. Xxxxx
22
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ANEXO "B"
SECCION "A" SECCION "B"
AREA = 17,806.00 M2 AREA = 22,662.00 M2
(4.4 Acres) (5.6 Acres)
Area Total de Predio = 40,468.00 m2
(Acres = 10)
24
Anexo "A"
[GRAPHIC - MAP]
25
Anexo "B"
[GRAPHIC -- MAP]
26
Anexo "C"
[GRAPHIC -- MAP]
27
EXHIBIT D.
PROJECT: CALAVO DE MEXICO
LOCATION: URUAPAN, MICHOACAN, MEXICO.
BUILDING SPECIFICATIONS
--------------------------------------------------------------------------------
ITEM REMARKS
--------------------------------------------------------------------------------
PRODUCTION BUILDING
--------------------------------------------------------------------------------
PAD (EARTHWORKS) 40 CM PEBBLE TYPE MATERIAL OVER NATURAL SOIL.
INCLUDE A 20 CM TREATMENT OF THE NATURAL
SOIL. (THIS STRUCTURE MAY CHANGE ACCORDING TO
SOILS STUDY OF THE SITE).
--------------------------------------------------------------------------------
FOUNDATION REINFORCED CONCRETE.
--------------------------------------------------------------------------------
CONCRETE FLOORS 5" CONCRETE (3000 PSI) WITH STEEL
REINFORCEMENT. INCLUDES SATIN SEALER.
--------------------------------------------------------------------------------
METAL STRUCTURE (FRAME) 30 FEET FRAME MINIMUM HEIGHT.
--------------------------------------------------------------------------------
ROOF SINGLE METAL SHEET KR-18 TYPE 24 G.A. WITH
FIBER GLASS BLANKET.
--------------------------------------------------------------------------------
INSULATION FACTOR ROOF R-19, EXCEPT ON PRE-COOLER AREA (R-30).
--------------------------------------------------------------------------------
SKYLIGHTS ACRYLIC TYPE. INCLUDED ON APPROX. 10% OF
ROOF AREA.
--------------------------------------------------------------------------------
CAT-WALK ON ROOF 970 FEET.
--------------------------------------------------------------------------------
PERIMETRAL MASONRY WALLS CONCRETE BLOCK, 4' HEIGHT.
--------------------------------------------------------------------------------
PERIMETRAL METAL WALLS DOUBLE METAL SHEET 26 G.A. WITH 6" FIBER
GLASS INSULATION.
--------------------------------------------------------------------------------
INSULATION FACTOR ON WALLS R-19
--------------------------------------------------------------------------------
PARTITIONS DOUBLE METAL SHEETS 26 G.A. WITH 6" FIBER
GLASS INSULATION.
--------------------------------------------------------------------------------
ILLUMINATION LEVEL 40 FOOT CANDLE ILLUMINATION ON PRODUCTION
AREA WITH METAL HALIDE 000 X XXXXX.
--------------------------------------------------------------------------------
GENERAL VENTILATION 6 UNITS (SWAMP COOLERS), 21,000 CFM EACH.
--------------------------------------------------------------------------------
DRIVER & SECURITY AREA INCLUDED. RESTROOMS INCLUDED.
--------------------------------------------------------------------------------
SPECIAL DOORS:
METAL ROLL-UP DOOR 9'*10' 8 UNITS. (7 TRUCK RAMPS + 1 SHOP AREA).
--------------------------------------------------------------------------------
METAL ROLL-UP DOOR 10'*12' 4 UNITS. (2 PRE-COOLERS ENTRANCE + 1 MACHINE
ROOM + 1 EXIT TO REAR CANOPY).
--------------------------------------------------------------------------------
FREEZER DOOR 10'*10' 6 UNITS. (2 PRE-COOLER + 4 SHIPPING COOLER).
--------------------------------------------------------------------------------
HIGH-SPEED DOOR 10'*12' 6 UNITS. (4 ENTRANCE TO PRE-COOLER
--------------------------------------------------------------------------------
28
--------------------------------------------------------------------------------
AREAS + 2 EXIT TO REAR CANOPY).
--------------------------------------------------------------------------------
EMERGENCY DOORS 4'*7' 3 UNITS.
--------------------------------------------------------------------------------
TRUCK RAMPS:
DOCK LEVELERS 7 UNITS. (TRUCK RAMPS).
--------------------------------------------------------------------------------
DOCK SHELTERS 7 UNITS. (TRUCK RAMPS).
--------------------------------------------------------------------------------
ELECTRICAL SUBSTATION 500 KVA INCLUDED, 480 V.
--------------------------------------------------------------------------------
ELECTRICAL MAIN BREAKER INCLUDED. POWER ELECTRICAL DISTRIBUTION NOT
INCLUDED.
--------------------------------------------------------------------------------
MEZZANINE SHOP AND STAIR INCLUDED.
--------------------------------------------------------------------------------
FIRE SYSTEM LOOP WITH HOSES AND CABINETS ACCORDING TO
LOCAL FIRE DEPARTMENT.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OFFICES, MAIN ENTRANCE, LUNCH
AREA AND RESTROOMS:
--------------------------------------------------------------------------------
WALLS MASONRY BLOCKS + BRICKS ON EXTERIOR FACADES.
--------------------------------------------------------------------------------
ROOF REINFORCED CONCRETE.
--------------------------------------------------------------------------------
FLOORING CERAMIC TILE INCLUDED.
--------------------------------------------------------------------------------
VIEW OF PRODUCTION AREA FROM INCLUDED.
OFFICES
--------------------------------------------------------------------------------
PHONE LINES PREPARATION FOR INSTALLING PHONE LINES INTO
OFFICES.
--------------------------------------------------------------------------------
ROOF INSULATION INCLUDED. R11 FACTOR.
--------------------------------------------------------------------------------
WINDOWS TINTED EXTERIOR WINDOWS.
--------------------------------------------------------------------------------
HVAC INCLUDED.
--------------------------------------------------------------------------------
OFFICE RESTROOMS INCLUDED. BASED ON MAXIMUM OCCUPANCY LEVELS
FOR OFFICES.
--------------------------------------------------------------------------------
PRODUCTION RESTROOMS RESTROOMS FOR 150 PEOPLE ACCORDING NATIONAL
PLUMBING CODE.
--------------------------------------------------------------------------------
DOORS INCLUDED. ACCORDING TO SPACES REQUIREMENTS.
--------------------------------------------------------------------------------
CANOPY AREAS:
--------------------------------------------------------------------------------
CANOPY AREAS REAR AND FRONT AREAS. COVER WITH SINGLE METAL
SHEET. REINFORCED CONCRETE 6" INCHES ON
FLOOR.
--------------------------------------------------------------------------------
EXTERIOR AREA:
--------------------------------------------------------------------------------
CAR PARKING ASPHALT PAVEMENT. TO 40 (MID-SIZE CAR SPACES
OR 19,375 SQFT.
--------------------------------------------------------------------------------
MANEUVERING AREA REINFORCED CONCRETE 6 INCHES FLOOR, 3000 PSI.
AROUND TRUCK RAMPS (10,430 SQFT.)
--------------------------------------------------------------------------------
LANDSCAPE LANDSCAPING (GARDENING) IN THE FRONT PART OF
THE BUILDING OR 7,890 SQFT.
--------------------------------------------------------------------------------
ORNAMENTAL FENCE MARAN STYLE FENCE, 600 FEET ON MAIN FACADE.
--------------------------------------------------------------------------------
ILLUMINATION EXTERIOR 10 UNITS OF 400 W HIGH PRESSURE SODIUM
WALL-PACK.
--------------------------------------------------------------------------------
CONCRETE CONNECTING RAMPS INCLUDED (7 UNITS).
--------------------------------------------------------------------------------
29
EXHIBIT D SUPPLEMENT
Subject: Changes to Building Specifications
Security Area (Guard Shack) - Intercom system with security, entrance,
entrance to storage area with automatic
locking system between security, main
entrance, and storage entrance accessed by
office.
General Ventilation - Include exhaust fans to equalize the
positive air pressure.
- exhaust fans will compensate for the air
pressure delivered by the swamp cooler so
that the overall pressure in the plant is
positive, but not excessive per our original
statement.
HVAC - Shipping and driver area requires HVAC, but
production restroom do not require HVAC.
ALL restrooms require venting.
Fencing - Chain link with razor wire installed the
perimeter of the 4.6 acres to compliment
the Maran style fence as previously
discussed.
Electronic Gates - Entrance and storage accessed from guard
shack.
Truck Xxxxx - Dock area
Sidewalks - Concrete
Drainage - strategically located in interior including
all coolers and machine room and exterior.
Striping - parking lot
Page 1
30
EXHIBIT "F"
G X X X X X X X
XXXXXXX, XXXX, X,X. DE C.V., a Mexican corporation (hereinafter, referred to as
"LESSOR") is owner of certain real property in the city of Uruapan, Michoacan
and CALAVO DE MEXICO, S.A. de C.V.,
WHEREAS, this Guaranty is given by CALAVO GROWERS OF CALIFORNIA (hereinafter
referred to as "GUARANTOR") to induce LESSOR to enter into a Lease Agreement,
with CALAVO DE MEXICO, S.A. de C.V. a Mexican corporation (hereinafter referred
to as "LESSEE"), as stated in corresponding Lease Agreement held between LESSOR
and LESSEE, dated November 21, 1997 (Hereinafter referred to as the "Lease
Agreement").
NOW, THEREFORE, in consideration of the foregoing, it is agreed:
1. OBLIGATION OF THE GUARANTOR. The GUARANTOR unconditionally guarantees to
LESSOR, its successors and assignees, the prompt, full and complete payment and
performance to LESSOR of all the conditions, covenants, obligations,
liabilities and agreements, of LESSEE as set forth in the Lease Agreement or
any extension thereof between LESSOR and LESSEE. This Guaranty extends to and
includes any and all interest due or liable to become due, together with all
attorney's fees, costs and expenses of collection incurred by LESSOR in
connection with any matter covered by this guaranty. The GUARANTOR'S address is:
CALAVO GROWERS OF CALIFORNIA
0000 Xxx Xxxx Xxxxxx
Xxxxx Xxx, XX. 00000-0000
PH. (714) 223-1111
2. TERM OF GUARANTY. The liability of the GUARANTOR shall continue until
payment is made and performance given pursuant to every obligation of the
LESSEE now due or hereafter to become due in accordance with the terms of the
Lease Agreement or any extension thereof, between LESSOR and LESSEE, and until
payment is made of any loss or damage incurred by LESSOR with respect to any
matter conserved by this Guaranty shall be irrevocable. Nothing contained
herein shall impose upon GUARANTOR any greater or different liability than is
or may be imposed on said LESSEE under the Lease Agreement except to pay LESSOR
attorney's fees, costs and expenses of collection incurred in proceeding
against GUARANTOR Hereunder.
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31
3. CONSENT TO LESSOR ACTS. The GUARANTOR consents, without affecting the
GUARANTOR's liability to LESSOR hereunder, That LESSOR may, without notice to
our consent of the GUARANTOR, upon such terms as it may deem advisable, to the
following:
a. Extend, in whole or in part, by renewal or otherwise, any time of
payment or performance on the part of LESSEE, provided for in the Lease
Agreement;
b. Release, surrender, exchange, modify, impair, or extend any period or
duration, or any time for performance, or payment on the part of LESSEE,
required by the Lease Agreement; and
x. Xxxxxx or compromise any claim of LESSOR against LESSEE or against any
other person, firm or corporation whose obligation is held by LESSOR as
security to LESSOR under the Lease Agreement.
The GUARANTOR hereby confirms and affirms any such extension, renewal, release,
surrender, exchange, modification, impairment, settlement or compromise and all
acts shall be binding upon GUARANTOR who hereby waives all defense,
counterclaims or offsets which GUARANTOR might have solely by reason thereof.
4. WAIVER OF GUARANTOR. GUARANTOR Waives:
a. Notice of acceptance of this Guaranty by:
b. Notice of presentment, notice of nonperformance, notice of dishonor and
notices of existence, creation or incurring of new or additional
indebtedness or obligations, demands for payment or performance or protest
of any obligations of LESSEE or LESSOR under the Lease Agreement;
c. Notice of the failure of any person, firm or corporation to pay to
LESSOR any indebtedness held by LESSOR as collateral security for any
obligation of LESSEE to LESSOR under the Lease Agreement;
d. Any right to require LESSOR to (i) proceed against LESSEE (ii) proceed
against or exhaust any security or other lien or right of or held by LESSOR
from LESSEE; or (ii) pursue any other remedy in the power of LESSOR
whatsoever;
e. Any defense, offsets or claims whatsoever, which LESSEE may have
against LESSOR;
27
32
f. Any defenses, offsets or claims arising from any governmental
action or intervention which wholly or partially frustrates any or
all of the purposes for which the Lease Agreement was entered into;
g. Any defects in the perfection of the assignment pledge of the rents
by failure to record the Lease Agreement or any instrument or
assignment and pledge in the public Registry under Mexican Law.
5. REPRESENTATIONS BY GUARANTOR. GUARANTOR represents and warrants that at
the time of execution and delivery of this Guaranty, nothing exists to impair
the effectiveness of the liability of GUARANTOR to LESSOR hereunder, or the
immediate taking effect of this Guaranty as the sole Agreement between the
GUARANTOR and LESSOR with respect to guaranteeing all of LESSEE's obligations
to LESSOR under the Lease Agreement.
GUARANTOR further represents and warrants that GUARANTOR is authorized to
execute and deliver this Guaranty and that the person executing this guaranty
is authorized to execute the same for and on behalf of GUARANTOR.
As an inducement for LESSOR to enter into the Lease Agreement with LESSEE,
GUARANTOR agrees to provide LESSOR with GUARANTOR's financial information for
disclosure to LESSOR's bank or any lending institutions that is used by LESSOR
for assignment of the Lease Agreement. This financial information shall consist
of a balance sheet, cash-flow statement and any relative footnotes for the last
two fiscal periods, plus any additional information required by the LESSOR
financial institution. In addition, GUARANTOR must provide such statements
annually for the term of the Lease Agreement. All of the information provided
by the LESSOR must remain confidential between the involved parties.
6. REMEDY OF LESSOR. In the event of any default on the part of LESSEE as
defined in the Lease Agreement, LESSOR may at its option proceed in the first
instance against GUARANTOR, jointly and severally, to collect any obligation
covered by this Guaranty, without first proceeding against LESSEE or any other
person, firm or corporation and without first resorting to any property at any
time held by LESSOR as collateral security.
7. MODIFICATION OF AGREEMENT. The whole of this guaranty is herein set forth
and there is no verbal or other written agreement and no understanding or
custom affecting the terms hereof. This Guaranty can be remedied only by a
written instrument signed by the party to be charged therewith.
8. NON-WAIVER BY LESSOR. The ability of GUARANTOR under this guaranty shall
not be affected by the insolvency of LESSEE or LESSOR, at any time or by
28
33
the acceptance by LESSOR of security, notes, acceptance, drafts or checks or by
assignment, foreclosure or the other dispositions thereof by LESSOR presenting
or proving for allowance any secure or unsecured claim or demands or by LESSOR
acceptance to any compositions, planned reorganization, settlement, compromise,
divided payment or distribution; and GUARANTOR shall not be entitled to claim
any right in or benefit by reason of any such composition, plan or
reorganization, settlement, compromise, divided payment or distribution, or in
by reason of any security held by LESSOR, or the proceeds or other dispositions
thereof; unless and until all of said obligations, liabilities and
indebtedness, together with interest, attorney's fees and costs due to LESSOR
under this Guaranty or under the Lease Agreements, shall have paid in full.
Nothing contained in this Agreement shall alter any of the right remedies of
LESSOR against LESSEE. GUARANTOR authorizes LESSOR, without notice or demand
and without affecting the liability of GUARANTOR hereunder, from time to time
to:
a. Renew, compromise, extend, accelerate, or otherwise change the time
for payment of, or otherwise change the terms of the indebtedness
or any part thereof under the Lease Agreements, including increase
or decrease of any amounts due thereunder or any rate of interests
specified therein;
b. Take and hold security for the payment of this Guaranty or the
indebtedness guaranteed, and exchange, enforce, waive, release, any
such security;
c. Apply such security and direct the order or manner of sale thereof,
as LESSOR in its discretion may determined and;
d. Release or substitute any one or more of LESSEE or GUARANTOR may
assign this Guaranty in whole or in part. GUARANTOR may assign this
guaranty in whole or in part, provided that GUARANTOR shall remain
liable for its obligations hereunder unless released therefrom by
LESSOR or its successors and provided further that GUARANTOR shall
first give LESSOR sixty (60) days prior written notice.
9. APPLICABLE LAW. This Guaranty is made in the State of California and the
rights and obligations of GUARANTOR hereunder shall be constructed and enforced
in accordance with the laws of the State of California. It is hereby expressly
understood and agreed by GUARANTOR that in the event a dispute arise as to the
performance of the obligations of GUARANTOR pursuant to this guaranty, any
action relating to this guaranty agreement shall be instituted and prosecuted
in the United States District Court for the Central District of California and
each party hereby waives the right to change of venue.
29
34
10. MISCELLANEOUS PROVISIONS. GUARANTOR agrees to pay to LESSOR a reasonable
attorney's fee and all other costs and expenses which may be incurred by LESSOR
in the collection or efforts to collects the indebtedness owed by LESSEE to
LESSOR pursuant to the Lease Agreement or in collection or efforts to collect
or enforcement at the sums due under this guaranty, provide that if GUARANTOR
is the prevailing party in any action or proceeding to enforce this Guaranty or
collects any amounts allegedly due hereunder; LESSOR should pay GUARANTOR a
reasonable attorney's fee and other costs and expenses which may be incurred by
GUARANTOR.
The paragraph headings of this guaranty are not part of this guaranty and shall
have no effect upon the construction and interpretation of any part hereof and
are inserted herein for convenience only.
In the event that any provisions hereof or any portion of any provisions hereof
shall be deemed to be invalid or unenforceable; such invalidity or
unenforceability shall not affect any other portion of said provisions or any
other provisions herein. All remedies herein conferred upon LESSOR shall be
cumulative and no one exclusive of any other remedy conferred herein or by law
or equity. Time is of the essence in the performance of each and every
obligation herein imposed.
GUARANTOR represents and warrants that it has all requisite power and authority
to enter into this Guaranty agreement and that neither the execution or
delivery of this Agreement or the consummation hereof nor the performance of
the terms hereof will conflict with or result in a breach of the terms,
conditions or provisions of or constitute a default under or result in the
creation of any lien pursuant to any other agreement of instrument under which
GUARANTOR is obligated.
11. ACKNOWLEDGMENT OF ASSIGNMENT. In the event this Guaranty is assigned to a
bank or other lending institution, the GUARANTOR shall furnish to such entity a
letter stating that the GUARANTOR acknowledges receipt of notice of an
assignment by LESSOR of said Guaranty; that said guaranty is in full force and
effect; that no changes to the guaranty as originally executed have been made;
that the GUARANTOR will not enter into any modification of this guaranty
without first obtaining prior written approval thereof from said lender; that
said lender may rely solely upon the guaranty with respect to the lender's
right to receive the rents in accordance with the terms of the Lease Agreement;
and that all payments made thereafter shall be made to the lender or its
assigns at such times not in conflict with those permissible under the Lease
Agreement, at such places or in U. S. Dollars as directed by the lender or its
assigns.
12. NOTICE OR DEFAULT. Notwithstanding any provision to the contrary herein
expressed or implied, no claim of default on the part of LESSEE or on the part
of
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35
GUARANTOR shall be made hereunder unless and until notice of such defaults has
been given to LESSEE as provided in the Lease Agreement and a copy thereof mail
to GUARANTOR by first class certified mail, postage prepaid at the address shown
on paragraph 1 of this Guaranty.
13. SUCCESSORS BOUND. This Guaranty is binding jointly severally upon
GUARANTOR and its legal representatives and successors and shall inure to the
benefit of LESSOR, its legal representatives, successors, and assigns.
IN WITNESS WHEREOF, GUARANTOR has signed this Agreement in the city of
Calexico, California, United States of America, on the 16th day of the month of
December, 1996.
LESSOR GUARANTOR
TEDE, S.A. DE C.V. CALAVO GROWERS OF CALIFORNIA
XXXXX XXXXX DEL RIO XXXXXX X. XXXXXXX
PRESIDENT
/s/ XXXXX XXXXX DEL RIO /s/ XXXXXX X. XXXXXXX
----------------------------- --------------------------------
11/20/97 11/20/97
XXXXXX XXXXXXX
/s/ XXXXXX XXXXXXX
--------------------------------
11/24/97
31
