EXHIBIT 2.2
LEASE AGREEMENT
This Lease Agreement (this "LEASE") is made and entered into this 29th
day of August, 2003, by and among TARRANT MEXICO S. DE X.X. DE C.V. ("TARRANT
MEXICO") represented herein by Xxx. Xxxxxxx Xxxxx in her capacity as Legal
Representative with regard to the Equipment (as such term is defined below) and
to the Premises (as such term is defined below), (Tarrant Mexico herein after
referred to as "LANDLORD") and ACABADOS Y XXXXXX TEXTILES S.A. DE C.V.
("Acabados y Xxxxxx Textiles") represented herein by Xx. Xxxx Xxxxx Xxxxx Xxxxx
in his capacity as Legal Representative (herein after referred to as "TENANT")
according to the following recitals and sections:
RECITALS
X. Xxxxxxx Mexico through its legal representative hereby states
that:
x. Xxxxxxx Mexico is an existing mercantile Mexican
corporation incorporated in accordance with the laws of Mexico, through Public
Deed Number 3303 dated April 16, 1998, issued by Lic. Xxxx Xxxxxx Xxxx G.,
Notary Public Number 111 for Monterrey, N.L., United Mexican States; and is the
legal owner of the Equipment (as such term is defined below) subject to this
Lease.
x. Xxxxxxx Mexico and its legal representative have the
necessary authority to enter into this Lease, which authority has not been
limited or revoked in any manner whatsoever.
c. It is the owner of the Equipment (as such term is
defined below) described in Section 1.2.
d. That is has a lease agreement entered into with
Inmobiliaria Xxxxxxx X.X. de C.V. in connection with the Premises (as such term
is defined below) described in section 1.1 and that it has all the necessary
authorizations from Inmobiliaria Xxxxxxx to sublease the Premises.
e. It is his intention to enter this agreement with
Tenant for purposes of leasing the Equipment (as such term is defined below) and
subleasing the Premises to Tenant according to the terms and conditions
described herein and that for purposes of this agreement it will be considered
Landlord.
B. Tenant through its legal representative hereby states that:
a. Tenant is an existing mercantile Mexican corporation
incorporated in accordance with the laws of Mexico, through Public Deed Number
51,507dated September 19, 2000, issued by Lic. Xxxx Name Neme, Notary Public
Number 79, for the state of Mexico, United Mexican States.
b. Tenant and its legal representative have the
necessary authority to execute this Lease, which authority has not been limited
or revoked in any manner whatsoever.
c. It has the economic and financial means to enter this
agreement and it is his intention execute such agreement for purposes of leasing
from Landlord the Equipment and Premises (as such terms are defined below)
according to the terms and conditions described herein.
SECTIONS
1. BASIC PROVISIONS
1.1. PREMISES: The premises (the "PREMISES") leased
pursuant to this Lease consist of the real estate, buildings, parking areas,
improvements and fixtures related to that certain denim and twill fabric
manufacturing facility located at: Xxxxxxxxx Xxxxxxxx - Xxxxxxxxx Xx 0 X/X,
Xxxxxxx, Xxxxxx, Xxxxxx, including the real property identified as "Parcelas 168
X-0 X0, 000 X-0 X0/0, y 176 Z-1 P2/2, Municipio de Ajalpan, Puebla, Mexico. The
Premises are shown on the site plan ("SITE PLAN") attached hereto as EXHIBIT
1.1.
1.2. EQUIPMENT: The equipment consists of all machinery
and equipment owned by Landlord and located at the Premises and used for the
manufacture of wearing apparel (the "EQUIPMENT") located at: a) Xxxxxxxxx
Xxxxxxxx - Xxxxxxxxx Xx 0 X/X, Xxxxxxx, X.X. 00000, inside construction built
over "Parcelas 168 X-0 X0, 000 X-0 X0/0, y 176 Z-1 P2/2 Ejido Pantzingo
Municipio de Ajalpan, Puebla, Mexico; b) Avenida Xxxxxx Xxxxx Xxxxxxx S/N, Col.
Centro, Ajalpan, Puebla; c) Xxxxxxx Xxxxxx Xxxxxx Xx. 0000, Col. Xxxxxxxxx
Xxxxxxx, Tehuacan, Puebla, d) Calle 13 Oriente No. 139, Col. Xxxxxxxxx Xxxxxxx,
Tehuacan, Puebla, e) Xxxxx 00 Xxxxxxx Xx. 000, X,X,X, Col. Guadalupe, Hidalgo,
Tehuacan, Puebla; f) Xxxxxxx Xxxxxxxx X/X, Xxx. Xxxxxx xx Xxxxxxx, Xxxxxxx
Xxxxxxxx, Puebla; g) Xxxxxxx Xxxxxxxxxx Xxxxxx Xxxxx Xxxxxxx Xxx. 501, Col.
Arcadia, Tehuacan, Puebla; h) Xxxxx Xxxxxxxxxxxxxx Xx. 0000, Xxx. Xxxxxx Norte,
Tehuacan Puebla;.i) Xxxxxxx Xxxxxx Xxxxx Xxxxxx Xx. 0000, Xxx. Ex Hacienda San
Xxxxxxx, Tehuacan, Puebla, C.P. 75760." The Equipment is described in Exhibit
1.2 attached herein. Notwithstanding the foregoing, until the Lease Expansion
Date, the Equipment shall not include the Retained Equipment (defined in SECTION
1.3.1).
1.3. RETAINED EQUIPMENT:
1.3.1. Until the Lease Expansion Date, the
equipment leased pursuant to this Lease does not include the equipment and
machinery of Landlord and its affiliates in which GE Capital or BOA (each
defined in SECTION 1.3.2) has a security interest pursuant to the GE Capital
Loan Documents or the BOA Loan Documents (each defined in SECTION 1.3.2) (the
"RETAINED EQUIPMENT"), which Retained Equipment is more fully described in
EXHIBIT 1.3.1. Until the Lease Expansion Date, Landlord shall retain possession
of and all rights to the Retained Equipment.
1.3.2. The "LEASE EXPANSION DATE" means the date
which is thirty (30) days (or such earlier time specified by Landlord) following
the date on which Landlord is able to lease the Retained Premises and Retained
Equipment to Tenant without violating Landlord's or Landlord's affiliates'
obligations to both (i) General Electric Capital Corporation ("GE CAPITAL")
under that certain Loan Agreement, dated as of October 12, 1999 (which
termination date is on October 2006), between GE Capital and Tarrant Apparel
Group, and all agreements entered into in connection therewith (collectively,
the "GE CAPITAL LOAN DOCUMENTS"), and (ii) Banc of America Leasing & Capital LLC
("BOA") under that certain Lease Intended as Security, dated as of November 3,
1999 (which termination date is on
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December 2005), between BOA and TAG MEX, Inc., and all agreements entered into
in connection therewith (collectively, the "BOA LOAN DOCUMENTS"). From and after
the Lease Expansion Date, the "Premises" and "Equipment" leased to Tenant
hereunder shall automatically include the Retained Premises and the Retained
Equipment without any further action of the parties hereunder (or additional
amounts payable by Tenant for the Retained Premises and Retained Equipment), and
Tenant shall thereafter have the right to possession and use of the Retained
Premises and Retained Equipment on the terms and conditions set forth in this
Lease.
1.3.3. Until the Lease Expansion Date, Tenant shall
cooperate with Landlord in all respects to enable Landlord to enjoy possession
and use of the Retained Equipment, including, without limitation, enabling
Landlord to obtain water, power, gas and other utilities and otherwise operate
the Retained Equipment in connection with the manufacture of apparel.
1.4. LEASE TERM: The lease term shall be for a mandatory
term of six (6) years. The lease term shall begin on September 1, 2003
("COMMENCEMENT DATE") and shall end at 5:00 p.m., local time, on September 1,
2009 ("LEASE TERM"), unless terminated sooner pursuant to any other provisions
of this Lease. Upon termination of this Lease, Tenant shall leave and return the
Premises and Equipment to Landlord without need of dispossession proceedings in
accordance with Articles 2319, 2320, 2329, 2349 and 2350 of the Civil Code of
the State of Puebla, Mexico. Tenant hereby waives the provisions of Articles
2273, 2284 and 2321 of the Civil Code for the State of Puebla, Mexico. If Tenant
does not leave and return the Premises and the Equipment to Landlord upon
termination of the Lease, in addition to Landlord's other available remedies,
Tenant shall pay Landlord a holdover monthly base rent of two hundred percent
(200%) of the Base Monthly Rent for the Premises and the Equipment in existence
on the last day of the Lease Term, in the understanding that such payment shall
not be considered or cause to be considered and extension of this Lease and
therefore Tenant will have the obligation of returning the Premises and
Equipment upon request of Landlord.
1.5. BASE MONTHLY RENT: The Base Monthly Rent for the
Premises and the Equipment shall be Two Hundred and Ninety One Thousand Six
Hundred and Sixty Seven Dollars of the United States of America (US$291,667.00).
Tenant shall pay the Base Monthly Rent to Landlord by delivering such amount in
cash to Tenant or through a deposit to the following bank account:
0000-000-0000, Banco Nacional de Mexico S.A. at Plaza Xicotencatl, Xx. 0, Xxx.
Xxxxxx, X.X. 00000, Xxxxxxxx, Tlax., or with certified check according to the
terms established in Section 3.2. Notwithstanding the above, Parties hereby
agree in that the Base Monthly Rent may be adjusted in the event that Landlord
decides to retire part of the Equipment from the Premises in accordance with
Section 1.6 below. Adjustment in the Base Monthly Rate will be mutually agreed
by the parties but in no event it shall exceed the annual amount of
US$1,000,000.00 (One Million Dollars of the United States of America) prorated
throughout a period of 12 months.
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1.6. DELIVERY OF POSSESSION: Landlord shall deliver
possession of the Premises and Equipment to Tenant on the Commencement Date.
Landlord shall deliver possession of the Equipment to Tenant at the Premises
located at: a) Xxxxxxxxx Xxxxxxxx - Xxxxxxxxx Xx 0 X/X, Xxxxxxx, Xxxxxx, Xxxxxx,
including the real property identified as "Parcelas 168 X-0 X0, 000 X-0 X0/0, y
176 X-0 X0/0, Xxxxxxxxx xx Xxxxxxx, Xxxxxx, Xxxxxx; b) Avenida Xxxxxx Xxxxx
Xxxxxxx S/N, Col. Centro, Ajalpan, Puebla; c) Xxxxxxx Xxxxxx Xxxxxx Xx. 0000,
Col. Xxxxxxxxx Xxxxxxx, Tehuacan, Puebla, d) Calle 13 Oriente No. 139, Col.
Xxxxxxxxx Xxxxxxx, Tehuacan, Puebla, e) Xxxxx 00 Xxxxxxx Xx. 000, X,X,X, Col.
Guadalupe, Hidalgo, Tehuacan, Puebla; f) Xxxxxxx Xxxxxxxx X/X, Xxx. Xxxxxx xx
Xxxxxxx, Xxxxxxx Xxxxxxxx, Puebla; g) Xxxxxxx Xxxxxxxxxx Xxxxxx Xxxxx Xxxxxxx
Xxx. 501, Col. Arcadia, Tehuacan, Puebla; h) Xxxxx Xxxxxxxxxxxxxx Xx. 0000, Xxx.
Xxxxxx Norte, Tehuacan Puebla;.i) Xxxxxxx Xxxxxx Xxxxx Xxxxxx Xx. 0000, Xxx. Ex
Hacienda San Xxxxxxx, Tehuacan, Puebla, C.P. 75760." Notwithstanding the above,
Parties hereby agree in that Landlord without incurring in responsability or
breach in the Agreement, may retire part of the Equipment from the Premises
previous written notice to Tenant of its intention to do so and indicating what
part of the Equipment will be retired from the Premises. In such event Parties
will proceed to adjust the Base Monthly Rate in accordance with the provisions
of Section 1.5 above.
1.7. ACCESS TO UTILITY SERVICES: At the Commencement Date,
Landlord shall provide Tenant with access to utility services for the Premises
and Equipment, including, but not limited to, sanitary sewer, water, gas and
electricity, and telecommunications lines. From and after the Commencement Date,
Tenant shall, at its cost, execute directly or indirectly with the suppliers of
such services their respective contracts for the supplying of such services.
Landlord shall have no responsibility or liability to Tenant for utility
services from and after the Commencement Date. In the event that Tenant fails to
pay on time and form the taxes related with such utility services, Tenant shall
be responsible for and will pay the penalties, fines and expenses resulting
therein.
1.8. DAYS: Whenever the term "days" is used in this Lease,
it shall mean calendar days, except as provided otherwise.
1.9. Landlord may request to Tenant from time to time the
documents and receipts evidencing timely payment of utility services fees and
taxes related to the Premises and Equipment.
2. DEMISE AND POSSESSION
2.1. Landlord leases to Tenant, and Tenant leases from
Landlord, the Premises and Equipment described in SECTIONS 1.1 and 1.2 of this
Lease.
2.2. Tenant acknowledges and agrees that, except as
otherwise specifically provided for herein, Landlord is delivering the Premises
and Equipment to Tenant under this Lease on an "as is" basis, without
representations or warranties of any kind or nature, expressed, implied or
otherwise, including, but not limited to, any representations or warranty
concerning (i) the condition of the Premises or the Equipment, or (ii) the
compliance of the Premises with building codes, applicable law, covenants or
restrictions of record, regulations, or ordinances. Tenant further acknowledges
that: (a) it has been advised by Landlord to satisfy itself with
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respect to the condition of the Premises (including but not limited to the
electrical, HVAC and fire sprinkler systems, security, environmental aspects)
and the Equipment, and their suitability for Tenant's Intended Uses, (b) Tenant
has made such investigation as it deems necessary with reference to such matters
and assumes all responsibility therefor as the same relate to its occupancy of
the Premises and Equipment, and (c) Landlord has made no oral or written
representations or warranties with respect to said matters other than as set
forth in this Lease. Tenant agrees that the Premises and Equipment being
delivered hereunder are in good and operational condition for Tenant's Intended
Uses (as defined below), and Tenant therefore hereby waives the provisions
contained in Article 2284 of the Civil Code of the State of Puebla, Mexico.
2.3. Landlord and Tenant hereby agree that, except as
provided in Section 1.6, the Lease includes the use of the Premises and
Equipment as a whole indivisible unit, and therefore the Lease Term applies in
equal terms to the Premises and Equipment.
3. BASE MONTHLY RENT
3.1. Tenant shall pay the Base Monthly Rent during the
Lease Term in legal currency of the United States of America or its equivalent
in currency of Mexico based on the currency exchange rate as published in the
Mexican Official Gazette on the business day immediately preceding the date the
Base Monthly Rent is due.
3.2. The Base Monthly Rent shall be paid to Landlord on a
monthly basis, without deduction or offset, in advance within the first five
calendar days of each month to the bank account indicated in Section 1.5 or with
certified check, or to such other account, person or address Landlord may
designate and notify to Tenant in writing from time to time during the Lease
Term. Tenant shall not for any reason whatsoever, withhold payment to Landlord
of the Base Monthly Rent or any portion thereof.
3.3. In addition to the Base Monthly Rent, with each
payment of Base Monthly Rent Tenant shall pay to Landlord the amount of any
value added tax ("VAT") payable by Landlord with respect to such payment, which
amount shall be in addition to the Base Monthly Rent. For purposes of this
lease, the Base Monthly Rent does not include the VAT, which shall be paid
within the time specified in Section 3.2. In the event Tenant fails to pay the
VAT specified herein, Tenant shall be subject to the Default Rate specified in
Section 13.1.
3.4. Landlord shall provide Tenant with an invoice for the
applicable Base Monthly Rent and VAT payable with respect thereto.
4. USE OF PREMISES
4.1. Tenant's use of the Premises and Equipment shall be
restricted to activities related to the manufacturing of wearing apparel, which
includes spinning, weaving, dyeing, cutting, sewing, finishing, distribution and
storage of wearing apparel (the "TENANT'S INTENDED USES"). Tenant shall not use
the Premises for any use other than Tenant's Intended Uses without the express
prior written approval of Landlord. In the event that Tenant varies the use of
the Premises and Equipment without Landlord's previous written consent, Tenant
shall be liable for costs and damages originated therein.
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4.2 Tenant is authorized to place its names on the
building and the grounds and in any other customary location of the Premises in
conformity with applicable laws, regulations and industrial park bylaws, if any.
4.3 Tenant will obtain all applicable municipal, state
and federal authorizations and permits required to operate the Premises and
Equipment for Tenant's Intended Uses.
4.4 Tenant agrees to provide all necessary maintenance to
the Equipment, in order that such Equipment is in good functional conditions,
having the Landlord at all times the authority to request that Tenant
demonstrates that maintenance has been rendered to the Equipment. If Tenant
fails to provide the necessary maintenance to the Equipment, Tenant will be
responsible for damages originated as a result of such lack of maintenance.
In the event of an emergency due to a lack of maintenance from
Tenant to the Equipment, Landlord may provide maintenance or repair the
Equipment at Tenant's cost. In such event, Tenant shall promptly pay to Landlord
a sum equal to 115% of the cost thereof.
4.5 Tenant agrees that the Equipment being a part of this
Lease is received in good functional conditions and that such Equipment will be
returned to Landlord by Tenant in equal good conditions at the end of this
Lease.
5. TAXES AND UTILITIES
5.1. VALUE ADDED TAX. Tenant shall pay the value added tax
due with respect to the Base Monthly Rent and the use of the Premises and
Equipment, at such times and in the manner provided for in SECTION 3.4.
5.2. REAL PROPERTY TAXES.
5.2.1. DEFINITION. As used herein, the term "REAL
PROPERTY TAXES" shall include any form of assessment; real estate, general,
special, ordinary or extraordinary, or rental levy or tax (other than
inheritance, personal income or estate taxes); improvement bond; and/or license
fee imposed upon or levied against any legal or equitable interest of Landlord
in the Premises, Landlord's right to other income therefrom, and/or Landlord's
business of leasing, by any authority having the direct or indirect power to tax
and where the funds are generated with reference to the building address and
where the proceeds so generated are to be applied by the city, county or other
local taxing authority of a jurisdiction within which the Premises are located.
Real Property Taxes shall also include any tax, fee, levy, assessment or charge,
or any increase therein: (i) imposed by reason of events occurring during the
term of this Lease, including but not limited to, a change in the ownership of
the Premises, and (ii) levied or assessed on the Equipment or any other
machinery or equipment provided by Landlord to Tenant pursuant to this Lease.
5.2.2. PAYMENT OF TAXES. In addition to Base
Monthly Rent, Tenant shall pay to Landlord an amount equal to the Real Property
Tax installment due at least 20 days prior to the applicable delinquency date.
If any such installment shall cover any period of time prior to or after the
expiration or termination of this Lease, Tenant's share of such installment
shall be prorated. Landlord may, in its discretion, estimate the current Real
Property Taxes, and require
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that such taxes be paid in advance to Landlord by Tenant monthly in advance with
the payment of the Base Monthly Rent. Such monthly payments shall be an amount
equal to the amount of the estimated installment of taxes divided by the number
of months remaining before the month in which said installment becomes
delinquent. If the amount collected by Landlord is insufficient to pay such Real
Property Taxes when due, Tenant shall pay Landlord, upon demand, such additional
sum as is necessary. Advance payments may be intermingled with other moneys of
Landlord and shall not bear interest.
5.2.3. PERSONAL PROPERTY TAXES. Tenant shall pay,
prior to delinquency, all taxes assessed against and levied upon Equipment,
Tenant owned alterations, utility installations, trade fixtures, furnishings,
equipment and all personal property of Tenant. If any of the aforementioned
property shall be assessed with Landlord's real property, Tenant shall pay
Landlord the taxes attributable to such property within 10 days after receipt of
a written statement setting forth the taxes applicable to such property. In the
event that Tenant fails to pay on time and form the taxes related with the
Equipment, Tenant shall be responsible for and will pay the penalties, fines and
expenses resulting therein.
5.3. UTILITIES AND SERVICES. Tenant shall pay for all
water, gas, heat, light, power, telephone, trash disposal and other utilities
and services supplied to the Premises, together with any taxes thereon. There
shall be no abatement of rent and Landlord shall not be liable in any respect
whatsoever for the inadequacy, stoppage, interruption or discontinuance of any
utility or service due to riot, strike, labor dispute, breakdown, accident,
repair or other cause beyond Landlord's reasonable control or in cooperation
with governmental request or directions. In the event that Tenant fails to pay
on time and form the taxes related with the Equipment, Tenant shall be
responsible for and will pay the penalties, fines and expenses resulting
therein.
6. MAINTENANCE AND REPAIR
6.1. TENANT'S OBLIGATIONS.
6.1.1. IN GENERAL. Subject to the provisions of
SECTIONS 6.2 and 9, Tenant shall, at Tenant's sole expense (except for
maintenance and repair for natural tear and wear as provided in Section 4
below), keep the Premises, the Equipment, and all utility installations and
alterations to the Premises in good order, functional condition and repair,
including, but not limited to, all equipment or facilities, such as heating,
ventilating and air conditioning systems ("HVAC"), plumbing, electrical,
lighting facilities, boilers, pressure vessels, fire protection system,
fixtures, walls (interior and exterior), foundations, ceilings, roofs, roof
drainage systems, floors, windows, doors, plate glass, skylights, landscaping,
driveways, parking lots, fences, retaining walls, signs, sidewalks and parkways
located in, on, or adjacent to the Premises waiving the provisions of Articles
2273 and 2276 of the Civil Code of the State of Puebla, Mexico. Tenant, in
keeping the Premises and Equipment in good order, condition and repair, shall
exercise and perform good maintenance practices. Tenant's obligations shall
include restorations, replacements or renewals when necessary to keep the
Premises and all improvements thereon or a part thereof in good order, condition
and state of repair. Tenant shall, during the term of this Lease, keep the
exterior appearance of the building in a first-class condition (including, e.g.
graffiti removal) consistent with the exterior appearance of other similar
facilities of comparable age and size in the vicinity, including, when
necessary, the exterior repainting of the building. Tenant agrees that all such
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improvements and repairs shall be at Tenant's sole expense and shall remain for
the benefit of the Premises and Equipment hereby waiving the provisions
contained in Articles 2286 and 2303 of the Civil Code of the State of Puebla,
Mexico.Tenant agrees in that the Premises described in Section 1.1., as of the
beginning of this Lease, are well preserved and are received in good functional
shape and upon termination of this Lease such Premises will be returned in equal
good conditions as received by Tenant.
6.2 Tenant agrees in that the Equipment described in
Section 1.2 , as of the beginning of this Lease, are well preserved and received
in good functional conditions and upon termination of this Lease such Equipment
will be returned in equal good conditions as received by Tenant. Tenant agrees
that the Equipment will not be removed totally or partially from the Premises
without the previous written consent from Landlord.
Tenant agrees in that the Premises described in Section 1.1 ,
as of the beginning of this Lease, are well preserved and received in good
functional conditions and upon termination of this Lease such Equipment will be
returned in equal good conditions as received by Tenant.
6.3 FAILURE TO PERFORM. If Tenant fails to perform
Tenant's obligations under SECTION 6.1, Landlord may enter upon the Premises
after 10 days' prior written notice to Tenant (except in the case of an
emergency, in which case no notice shall be required), perform such obligations
on Tenant's behalf, and put the Premises and Equipment in good order, condition
and repair, and Tenant shall promptly pay to Landlord a sum equal to 115% of the
cost thereof.
6.4 LANDLORD'S OBLIGATIONS. Subject to the provisions of
SECTION 9, it is intended by the parties hereto that except for maintenance and
repair from natural tear and wear, Landlord have no obligation, in any manner
whatsoever, to repair and maintain the Premises, the Equipment, or any other
equipment therein, all of which obligations are intended to be that of the
Tenant who hereby waives the provisions established in Articles 2273, 2276, 2284
and 2285 of the Civil Code of the state of Puebla, Mexico. It is the intention
of the parties that the terms of this Lease govern the respective obligations of
the parties as to maintenance and repair of the Premises and the Equipment, and
they expressly waive the benefit of any statute now or hereafter in effect to
the extent it is inconsistent with the terms of this Lease. For purposes of this
section, maintenance and repair from natural tear and wear will be interpreted
as being those caused by natural environmental conditions that are not
originated by the Pretended Uses of Tenant.
7. ENVIRONMENTAL
7.1. Tenant shall use the Premises and Equipment in
compliance with all applicable laws, regulations, and ordinances including,
without limitation, environmental laws, regulations, ordinances and the
industrial park bylaws, and Tenant shall not use, generate, transport, refine,
produce, process, store or dispose of any hazardous substances on, under or from
the Premises and Equipment, except in compliance with the applicable
environmental laws and regulations. If any claim is ever made against Landlord
by any person or entity relating to any pollution or contamination from toxic or
hazardous substances, asbestos, or any other chemicals or
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substances in amounts which exceed standards for public health or welfare as
established and regulated by any local, state, or federal governmental authority
(herein collectively referred to as "HAZARDOUS SUBSTANCES") present at the
Premises during the Lease Term, all costs of removal incurred by, all
liabilities imposed upon, and losses and damages suffered by Landlord because of
the same shall be borne by Tenant, provided that such environmental
contingencies herein referred result out of acts or omissions derived from
Tenant's occupancy of the Premises, and Tenant hereby agrees to indemnify,
defend, and hold Landlord harmless from and against all such costs, liabilities,
losses, and damages, including, without limitation, with respect to all
third-party and/or authorities' claims for personal injury or property damage
and other claims, actions, administrative proceedings, judgments, damages, lost
profits, penalties, fines, costs, losses, attorneys' fees and expenses (through
all levels or proceedings), consultants or experts fees, and all costs incurred
in enforcing this indemnity.
7.2. Notwithstanding the foregoing and anything herein to
the contrary, if any claim is ever made against Tenant by any person or entity
(including any governmental authority) relating to any pollution or
contamination from Hazardous Substances present at the Premises during such
period while neither Tenant nor any of Tenant's affiliate was in possession of
the Premises, all costs of removal incurred by, all liabilities imposed upon,
and losses and damages suffered by Tenant because of the same shall be borne by
Landlord, and Landlord hereby agrees to indemnify, defend and hold Tenant
harmless from and against such costs, liabilities, losses and damages, including
without limitation, with respect to any third party and/or authority's claim for
personal injury or property damage and other claims, actions, administrative
proceedings, judgments, damages, lost profits, penalties, fines, costs, losses,
attorney's fees and expenses (through all levels or proceedings), consultants or
experts fees, and all costs incurred in enforcing this indemnity.
7.3. This SECTION 7 and the indemnity obligations
contained herein shall survive the termination of this Lease. Claims by either
party against the other pursuant to this SECTION 7 shall be made in accordance
with the requirements of SECTION 18 herein.
8. ALTERATION OF PREMISES
8.1. So long as no default by Tenant under this Lease
exists, Tenant shall have the right, at any time during the Lease Term, to make
reasonable non-structural alterations affixed to the building costing up to an
amount of Fifty Thousand Dollars of the United States of America (US $50,000.00)
per year (for these purposes the first year shall be counted as from the
Commencement Date), without the written consent of Landlord. Any other
alterations to the Premises shall require the prior written consent of Landlord.
Notwithstanding the provisions of Articles 2277, 2357, 2358 and 2359 of the
Civil Code of the State of Puebla, Mexico, Landlord shall be entitled to make
reasonable alterations to the Premises that do not interfere with Tenant's
activities and work. For these purposes, no-structural alterations shall mean
those that are not subject to permits from administrative authorities or others
that involve variations requiring the authorization of an architectural project.
8.2. No alterations of the Premises by Tenant (whether
structural or non-structural) shall reduce the value or structural integrity of
the Premises. All such alterations of the Premises by Tenant shall be at
Tenant's own cost and expense and shall be accomplished in
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compliance with all applicable laws, regulations, and ordinances. Tenant shall
be responsible to pay all obligations necessary to keep the Premises free from
any mechanics' and materialmen's liens on account of alterations of the Premises
by Tenant.
8.3. All machinery and equipment other than the Equipment
owned by Landlord, or other tangible personal property of whatsoever nature
installed at the Premises by Tenant during the Lease Term, (excluding property
affixed or other type of property which removal may cause damage to the
Premises), shall continue to be the property of Tenant and shall be removed by
Tenant at the expiration of the Lease Term.
8.4. In the event that Tenant varies the structure of the
Premises without the previous written consent from Landlord, Tenant shall be
liable for costs and damages originated therein.
9. DAMAGE OR DESTRUCTION
9.1. DEFINITIONS.
9.1.1. "PREMISES PARTIAL DAMAGE" shall mean damage
or destruction to the Premises, which can reasonably be repaired in 6 months or
less from the date of the damage or destruction. Landlord shall notify Tenant in
writing within 30 days from the date of the damage or destruction as to whether
or not the damage is partial or total.
9.1.2. "PREMISES TOTAL DESTRUCTION" shall mean
damage or destruction to the Premises, which cannot reasonably be repaired in 6
months or less from the date of the damage or destruction. Landlord shall notify
Tenant in writing within 30 days from the date of the damage or destruction as
to whether or not the damage is partial or total.
9.1.3. "INSURED LOSS" shall mean damage or
destruction to the Premises, which was caused by an event required to be covered
by the insurance described in SECTION 10.2, irrespective of any deductible
amounts or coverage limits involved.
9.1.4. "HAZARDOUS SUBSTANCE CONDITION" shall mean
the occurrence or discovery of a condition involving the presence of, or a
contamination by, a Hazardous Substance as defined in SECTION 7.1, in, on, or
under the Premises which requires repair, remediation, or restoration.
9.2. PARTIAL DAMAGE - INSURED LOSS. If a Premises Partial
Damage that is an Insured Loss occurs, then Landlord shall, at Landlord's
expense, repair such damage (but not Tenant's trade fixtures or Tenant owned
alterations and utility installations) as soon as reasonably possible and this
Lease shall continue in full force and effect. Notwithstanding the foregoing, if
the required insurance was not in force or the insurance proceeds are not
sufficient to effect such repair, or if the Premises Partial Damage is due to
flood or earthquake, then the Premises Partial Damage shall be subject to
SECTION 9.3, notwithstanding that there may be some insurance coverage, but the
net proceeds of any such insurance shall be made available for the repairs if
made by either party.
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9.3. PARTIAL DAMAGE - UNINSURED LOSS. If a Premises
Partial Damage that is not an Insured Loss occurs, unless caused by a negligent
or willful act of Tenant, including lack of maintenance and repair (in which
event Tenant shall make the repairs at Tenant's expense), Landlord may either:
(i) repair such damage as soon as reasonably possible at Landlord's expense, in
which event this Lease shall continue in full force and effect, or (ii)
terminate this Lease by giving written notice to Tenant within 30 days after
receipt by Landlord of knowledge of the occurrence of such damage. Such
termination shall be effective 60 days following the date of such notice. In the
event Landlord elects to terminate this Lease, Tenant shall have the right
within 10 days after receipt of the termination notice to give written notice to
Landlord of Tenant's commitment to pay for the repair of such damage without
reimbursement from Landlord. Tenant shall provide Landlord with said funds or
satisfactory assurance thereof within 30 days after making such commitment. In
such event this Lease shall continue in full force and effect, and Landlord
shall proceed to make such repairs as soon as reasonably possible after the
required funds are available. If Tenant does not make the required commitment,
this Lease shall terminate as of the date specified in the termination notice.
9.4. TOTAL DESTRUCTION. Notwithstanding any other
provision hereof, if a Premises Total Destruction occurs, this Lease shall
terminate 60 days following such Destruction. If the damage or destruction was
caused by the gross negligence or willful misconduct of Tenant, Landlord shall
have the right to recover Landlord's damages from Tenant.
9.5. ABATEMENT OF RENT; TENANT'S REMEDIES.
9.5.1. ABATEMENT. In the event of Premises Partial
Damage or Premises Total Destruction or a Hazardous Substance Condition for
which Tenant is not responsible under this Lease, the Base Monthly Rent payable
by Tenant for the period required for the repair, remediation or restoration of
such damage shall be abated in proportion to the degree to which Tenant's use of
the Premises is impaired. Tenant shall perform all of Tenant's other obligations
hereunder, and Landlord shall have no liability for any such damage,
destruction, remediation, repair or restoration except as provided herein.
9.5.2. REMEDIES. If Landlord shall be obligated to
repair or restore the Premises and does not commence, in a substantial and
meaningful way, such repair or restoration within 90 days after such obligation
shall accrue, Tenant may, at any time prior to the commencement of such repair
or restoration, give written notice to Landlord, of Tenant's election to
terminate this Lease on a date not less than 60 days following the giving of
such notice. If Tenant gives such notice and such repair or restoration is not
commenced within 30 days thereafter, this Lease shall terminate as of the date
specified in said notice. If the repair or restoration is commenced within such
30 days, this Lease shall continue in full force and effect. "COMMENCE" shall
mean either the unconditional authorization of the preparation of the required
plans, or the beginning of the actual work on the Premises, whichever first
occurs.
10. INSURANCE
10.1. LIABILITY INSURANCE CARRIED BY TENANT. Tenant shall
obtain and keep in force a Commercial General Liability policy of insurance
protecting Tenant and Landlord as an additional insured against claims for
bodily injury, personal injury and property damage based
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upon or arising out of the ownership, use, occupancy or maintenance of the
Premises and the Equipment and all areas appurtenant to the Premises. Such
insurance shall be in accordance with a policy providing single limit coverage
and annual aggregate coverage in amounts, and otherwise be on commercially
reasonable terms, acceptable to Landlord. The limits of said insurance shall
not, however, limit the liability of Tenant nor relieve Tenant of any obligation
hereunder. All insurance carried by Tenant shall be primary to and not
contributory with any similar insurance carried by Landlord, whose insurance
shall be considered excess insurance only.
10.2. PROPERTY INSURANCE - BUILDING, IMPROVEMENTS,
EQUIPMENT. Landlord shall obtain and keep in force a policy or policies in the
name of Landlord, with loss payable to Landlord, any ground-lessor, and to any
lender insuring loss or damage to the Premises and the Equipment. The amount of
such insurance shall be equal to the full replacement cost of the Premises and
the Equipment, as the same shall exist from time to time, but in no event more
than the commercially reasonable and available insurable value thereof. Tenant
owned alterations and utility installations, trade fixtures, and Tenant's
personal property shall be insured by Tenant under SECTION 10.3 rather than by
Landlord. If the coverage is available and commercially appropriate, such policy
or policies shall insure against all risks of direct physical loss or damage
(except the perils of flood and/or earthquake). Said policy or policies shall
otherwise be on commercially reasonable terms acceptable to Landlord.
10.3. TENANT'S PROPERTY. Tenant shall obtain and maintain
insurance coverage on all of Tenant's personal property, trade fixtures, and
Tenant owned alterations and utility installations. Such insurance shall be full
replacement cost coverage. Such insurance shall be in accordance with a policy
providing single limit coverage and annual aggregate coverage in amounts, and
otherwise be on commercially reasonable terms, acceptable to Landlord. Tenant
shall use the proceeds from any such insurance for the replacement of personal
property, trade fixtures, and Tenant owned alterations and utility
installations. At Landlord's request, Tenant shall provide Landlord with written
evidence that such insurance is in force.
10.4. INSURANCE POLICIES. Any United Mexican States insurer
approved in writing by Landlord may issue any insurance required by this Lease
from Tenant. Tenant shall not do or permit to be done anything which invalidates
the required insurance policies. No such policy shall be cancelable or subject
to modification except after 30 days prior written notice to Landlord. Tenant
shall, at least 30 days prior to the expiration of such policies, furnish
Landlord with evidence of renewals or "insurance binders" evidencing renewal
thereof, or Landlord may order such insurance and charge the cost thereof to
Tenant, which amount shall be payable by Tenant to Landlord upon demand. Such
policies shall be for a term of at least one year, or the length of the
remaining term of this Lease, whichever is less.
11. LANDLORD'S RIGHT TO PERFORM TENANT'S OBLIGATIONS
If at any time during the Lease Term, Tenant fails to perform
one or more of its obligations under this Lease, Landlord, after twenty (20)
days written notice to Tenant (or without notice in the case of Emergency), and
without waiving or releasing the Tenant from any of its obligations under this
Lease, may, but shall be under no obligation to, perform acts which Tenant is
required to perform under this Lease and may enter the Premises for such purpose
to
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perform all such actions as may be necessary. Tenant shall reimburse to Landlord
all sums reasonably paid by Landlord and all reasonable costs and expenses
incurred by Landlord in connection with the performance of any such obligations
of Tenant.
For purposes of this Lease an "Emergency" shall be considered
to be a situation in which if a repair or maintenance is not made immediately at
any given time other damages would be caused to the Premises or any part
thereof.
12. TENANT'S RIGHT TO PERFORM LANDLORD'S OBLIGATIONS
If at any time during the Lease Term, Landlord fails to
perform one or more of its obligations under this Lease, Tenant after twenty
(20) days written notice to Landlord (or without notice in the case of an
emergency), may, but shall be under no obligation to, perform any act which
Landlord is required to perform in accordance with this Lease and may take all
such actions thereon as may be necessary. Landlord shall reimburse to Tenant all
sums reasonably paid by Tenant and all reasonable costs and expenses incurred by
Tenant in connection with the performance of any such obligations of Landlord.
13. DEFAULT BY TENANT
Tenant shall be in default of this Lease if at any time during
the Lease Term (and regardless of the pendency of any bankruptcy,
reorganization, receivership, insolvency, or other proceedings in law, or before
any administrative tribunal which have or might have the effect of preventing
Tenant from complying with the terms of this Lease):
13.1. Tenant fails to make payment of any installment of
Base Monthly Rent or of any other sum specified in this Lease or in any of the
Additional Lease Agreements (defined below) to be paid by Tenant or any
Affiliate of Tenant, within fifteen (15) days of delivery of Landlord's written
notice to Tenant of such failure; PROVIDED, HOWEVER, Landlord shall be obligated
to give Tenant only three (3) notices in any calendar year during the Lease Term
and thereafter during said calendar year Tenant shall be in default if Tenant
fails to make payment when due, it being understood that whether or not notice
is given, all payments of monies shall accrue interest at the Prime Rate
determined by Citibank, N.A., New York, multiplied by one and one-half (1.5),
where the Prime Rate shall be up dated every 180 days and shall apply until
payment is effectively made (the "DEFAULT RATE"); or
13.2. Tenant fails to observe or perform any of its other
covenants, agreements, or obligations under this Lease or any of the Additional
Lease Agreements (other than the payment of money, which is governed by SECTION
13.1), and such failure is not cured within thirty (30) days after Landlord's
written notice to Tenant of such failure; provided, however, that if the nature
of Tenant's obligation is such that more than thirty (30) days are required for
performance, then Tenant will not be in default if Tenant commences performance
within such thirty (30) day period and thereafter diligently prosecutes the same
to completion within ninety (90) days thereafter; or
13.3. Tenant has abandoned the Premises for 30 days or
more.
For purposes hereof, "ADDITIONAL LEASE AGREEMENTS" means the
lease agreements for real property and personal property described on EXHIBIT 13
to this Lease, which Additional
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Lease Agreements are being entered into simultaneously between Tenant and
Landlord (and/or their respective affiliates).
13.4 In the event of default by Tenant to any of the
provisions of this section or any other obligation under this Lease, Landlord,
without prejudice of any other remedy available in the applicable laws, may
proceed with any of the actions described in Section 14 of this lease, being
liable of any costs (including attorney fees) that may result.
Tenant will be liable for civil and penal damages with regard
to the lack of truth and veracity of the information delivered in this lease,
including but not limited to information concerning the economic solvency that
enables it to enter into this Lease
14. REMEDIES OF LANDLORD
14.1. In the event of default by Tenant, as described in
SECTION 13 of this Lease, Landlord, at its sole option, shall have the following
rights:
14.1.1. Terminate Tenant's right to possession of
the Premises and Equipment by any lawful means, in which case this Lease shall
terminate and Tenant shall immediately surrender possession to Landlord without
need of dispossession proceedings. In such event Landlord shall be entitled to
recover from Tenant: (i) the unpaid Base Monthly Rent which had been earned at
the time of termination; (ii) the unpaid amount of Base Monthly Rent for the
balance of the Lease Term from the date of such termination notice payable upon
demand; and (iii) any other amount necessary to compensate Landlord for all the
detriment proximately caused by the Tenant's failure to perform its obligations
under this Lease or which in the ordinary course of things would be likely to
result therefrom, including but not limited to the cost of recovering possession
of the Premises;
14.1.2. The right to continue this Lease in full
force and effect, without terminating Tenant's right to possession of the
Premises and Equipment, in which event Landlord shall have the right to collect
the Base Monthly Rent and other charges when due; and
14.1.3. The right to pursue any other remedy now or
hereafter available under the laws or judicial decisions of the jurisdiction
wherein the Premises and Equipment are located. The expiration or termination of
this Lease and/or the termination of Tenant's right to possession shall not
relieve Tenant from liability under any indemnity provisions of this Lease as to
matters occurring or accruing during the term hereof or by reason of Tenant's
occupancy of the Premises.
14.2. The waiver by Landlord of any breach or default of
Tenant hereunder shall not be a waiver of any preceding or subsequent breach of
the same or any other term. Acceptance of any rent payment shall not be
construed to be a waiver by the Landlord of any preceding breach by Tenant. For
these purposes, a waiver shall mean a written manifestation by Landlord waiving
to any remedy or action to which it may be entitled according to this Lease or
the applicable laws.
14.3. All past due amounts owed by Tenant under the terms
of this Lease shall bear interest at the Default Rate established in Section
31.1 and shall apply until payment is
14
effectively made and shall be payable by Landlord to Tenant within ten (10) days
after demand therefor.
15. DEFAULT BY LANDLORD AND TENANT'S REMEDIES
In the event of any default by Landlord hereunder, Tenant
shall give Landlord notice of such default and Landlord shall have thirty (30)
days after such notice to cure such default; PROVIDED, HOWEVER, that if the
nature of Landlord's obligation is such that more than thirty (30) days are
required for performance, then Landlord will not be in default if Landlord
commences performance within such thirty (30) day period and thereafter
diligently prosecutes the same to completion within ninety (90) days thereafter.
In the event of a default by Landlord and the expiration of the aforesaid period
during which Landlord may cure such default, in addition to any other rights or
remedies provided for herein or at law, including any brokerage fees and court
costs and reasonable attorneys fees, Tenant, at its sole option, may terminate
this Lease upon notice by Tenant to Landlord and all rental obligations shall be
thereby terminated.
16. ACCESS OF LANDLORD TO THE PREMISES
Tenant shall allow Landlord and its authorized
representatives, access to the Premises during reasonable business hours to
inspect the Premises and Equipment. Landlord shall have the right to enter the
Premises at any reasonable time during usual business hours at any time within
six (6) months prior to the termination of the Lease Term in order to show the
Premises and Equipment to prospective future tenants. Notwithstanding the
foregoing, Landlord, its employees, or agents shall have the right to enter the
Premises at all times without notice to Tenant in the event of an Emergency.
17. INDEMNIFICATION
17.1. Except to the extent that there is a written waiver
of rights of recovery by Tenant against Landlord and except that Tenant's rights
against Landlord with respect to Hazardous Substances at the Premises shall be
exclusively governed by the provisions of SECTION 7 of this Lease, Landlord
shall indemnify and defend Tenant from and against any liabilities, damages,
judgments, expenses, and costs (including, without limitation, legal fees) for
which Tenant is held responsible, or which are incurred by Tenant, in connection
with third party claims against Tenant as a result of any act or omission of
Landlord, its agents, or employees or any breach by Landlord of Landlord's
obligations under this Lease; PROVIDED, HOWEVER, the foregoing obligation of
Landlord to indemnify and defend Tenant shall be inapplicable to the extent that
any liabilities, damages, judgments, expenses, and costs (including, without
limitation, legal fees) for which Tenant is held responsible, or which are
incurred by Tenant, result from the negligent or unlawful acts of Tenant, its
agents, or employees.
17.2. Except to the extent that there is a written waiver
of rights of recovery by Landlord against Tenant and except that Landlord's
rights against Tenant with respect to Hazardous Substance at the Premises shall
be exclusively governed by the provisions of SECTION 7 of this Lease, Tenant
shall indemnify and defend Landlord from and against any liabilities, damages,
judgments, expenses, and costs (including, without limitation, legal fees) for
which Landlord is held responsible, or which are incurred by Landlord, in
connection with third party claims against
15
Landlord as a result of any act or omission of Tenant, its agents, employees or
any breach by Tenant of Tenant's obligations under this Lease; PROVIDED,
HOWEVER, the foregoing obligation of Tenant to indemnify and defend Landlord
shall be inapplicable to the extent that any liabilities, damages, judgments,
expenses, and costs (including, without limitation, legal fees) for which
Landlord is held responsible, or which are incurred by Landlord, result from the
negligent or unlawful acts of Landlord, its agents, or employees.
17.3. A party ("INDEMNIFIED PARTY") entitled to be
indemnified by the other party ("INDEMNIFYING PARTY") pursuant to SECTION 17.1
or SECTION 17.2 of this Lease shall promptly and in writing notify the
Indemnifying Party of such claim for indemnification specifying in such notice
the nature of such claim. Also, in the event that any legal proceeding shall be
instituted or any claim or demand shall be asserted by a third party in respect
of which an Indemnifying Party is obligated pursuant to the provisions of
SECTION 17.1 or SECTION 17.2 of this Lease or SECTION 7 of this Lease to
indemnify and hold harmless an Indemnified Party, the Indemnified Party shall
with reasonable promptness after obtaining knowledge of such proceeding, claim,
or demand give written notice thereof to the Indemnifying Party who shall then
have the right at the Indemnifying Party's option and expense to be represented
by counsel of such party's choice in connection with such matter to defend
against, negotiate, settle, or otherwise deal with any such proceeding, claim,
or demand; provided, however, that without the prior written consent of the
Indemnified Party (whose consent shall not be unreasonably withheld or delayed)
the Indemnifying Party shall not consent to the entry of any judgment in or
agree to any settlement of any such matter; and provided further that, in
addition to legal counsel retained and paid for by the Indemnifying Party, the
Indemnified Party may retain separate counsel at such party's own expense to
represent such party in connection with any such proceeding, claim, or demand.
Failure by the Indemnifying Party to notify the Indemnified Party of the
former's election to defend any proceeding, claim, or demand with respect to
which indemnity is sought within thirty (30) days after notice thereof shall
have been given to the Indemnifying Party by the Indemnified Party shall be
deemed a waiver by the Indemnifying Party of such party's right to defend
against any such matter. If the Indemnifying Party assumes the defense of any
such proceeding, claim, or demand against the Indemnified Party, the
Indemnifying Party shall take or cause to be taken all steps necessary in
connection with such defense, and the Indemnified Party shall in all events be
entitled to indemnity with respect to such matter as provided in this SECTION
17. In the event that any legal proceeding shall be instituted or any claim or
demand shall be asserted by a third party in respect of which an Indemnifying
Party is obligated to indemnify and hold an Indemnified Party harmless and in
the event that the Indemnifying Party does not elect to defend any such
proceeding, claim, or demand, the Indemnified Party may defend against, settle,
or otherwise deal with any such proceeding, claims, or demand in such manner as
the Indemnified Party in good xxxxx xxxxx appropriate, and the Indemnifying
Party shall be liable for indemnification with respect to such matter including,
without limitation, the costs of such defense except that the Indemnified Party
shall not settle any such legal proceeding without the Indemnifying Party's
prior written consent, which consent shall not be unreasonably withheld or
delayed. In the event of any proceeding, claims, or demand by a third party with
respect to which a claim for indemnification is made hereunder, the parties
hereto agree that they will cooperate fully with each other in connection with
the defense or settlement of such matter.
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17.4. Notwithstanding anything in this SECTION 17 or
elsewhere in this Lease to the contrary, Landlord shall not be liable for injury
or damage to the person or goods, wares, merchandise or other property of
Tenant, Tenant's employees, contractors, invitees, customers, or any other
person in or about the Premises, whether such damage or injury is caused by or
results from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, fire sprinklers, wires,
appliances, plumbing, HVAC or lighting fixtures, or from any other cause,
whether the said injury or damage results from conditions arising upon the
Premises or upon other portions of the building of which the Premises are a
part, or from other sources or places. Notwithstanding Landlord's negligence or
breach of this Lease, Landlord shall under no circumstances be liable for injury
to Tenant's business or for any loss of income or profit therefrom.
18. LABOR RESPONSIBILITIES
Tenant agrees that all obligations to Tenant's employees under
applicable Mexican laws and regulations arising out of use of the Premises by
Tenant during the Lease Term shall be the sole and exclusive responsibility of
Tenant, including, without limitation, such legal obligations, if any, to all
personnel employed by Tenant at the Premises, whether unionized or not,
confidential, temporary, or other (including any subcontractors), and payment or
fees to the Mexican Social Security Institute, Sistema de Ahorro para el Retiro
(SAR), INFONAVIT or any other applicable taxes, fees or duties.
19. ATTORNEYS' FEES/COLLECTION CHARGES
In the event of any legal action or proceeding between the
parties hereto, reasonable attorneys' fees and expenses of the prevailing party
in any such action or proceeding will be added to the judgment thereon. All past
due amounts owed by either party to the other under the terms of this Lease
shall bear interest at the Default Rate established in Section 31.1.
20. SEVERABILITY
If any provisions of this Lease is found to be unenforceable,
all other provisions shall remain in full force and effect to the extent
permissible under applicable law.
21. WAIVER
The failure of either party hereto to insist in any one or
more cases upon the strict performance of any term, covenant, or condition of
this Lease by the other party hereto shall not be construed as a waiver of a
subsequent breach of the same or any other covenant, term, or condition, and no
delay or omission by either party to seek a remedy for any breach of this Lease
by the other party shall be deemed a waiver by such party of its remedies or
rights with respect to such a breach by the other party.
22. AMENDMENT OF LEASE; ASSIGNMENT AND SUBLETTING
22.1. AMENDMENT. No amendment or modification of this Lease
shall be valid or effective unless made pursuant to a written amendment of this
Lease signed by duly authorized agents of both Landlord and Tenant.
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22.2. NO ASSIGNMENT OR SUBLETTING BY TENANT. Tenant shall
not voluntarily or by operation of law assign, transfer, mortgage or encumber or
sublet all or any part of Tenant's interest in this Lease or in the Premises or
Equipment without Landlord's prior written consent of Landlord, which consent
may be withheld by Landlord in its sole discretion. A change in the control of
Tenant shall constitute an assignment requiring consent. The transfer, on a
cumulative basis, of 25% or more of the voting control of Tenant shall
constitute a change in control for this purpose.
22.3. DEFINITION OF LANDLORD. The term "LANDLORD" as used
herein shall mean the owner or owners at the time in question of the Premises
and Equipment or the fee title to the Premises or the Equipment, as the case may
be. In the event of a transfer of Landlord's title or interest in the Premises,
the Equipment or this Lease, the rights and obligations under this Lease will be
subrogated in favor of the new Landlord upon receipt of written notice to Tenant
of such transfer or property, and the prior Landlord shall be relieved of all
liability with respect to the obligations and/or covenants under this Lease
thereafter to be performed by the Landlord. Subject to the foregoing, the
obligations and/or covenants in this Lease to be performed by the Landlord shall
be binding only upon the Landlord as hereinabove defined.
23. NOTICES
All notices permitted or required by this Lease shall be in
writing, sent by recognized overnight courier or hand delivered or by facsimile
transmission provided that there is electronic confirmation of receipt by the
sender's telecopier, and shall be deemed duly given when actually received by
the party to whom it is sent, addressed as follows:
IF TO LANDLORD:
Lote 5,6,7, 15 Xxxxx "X" Xxxxxxx 0
Xxxxxx Xxxxxxxxxx Xxxxxx 0000; Puebla, Pue.
Mexico, C.P. 72220IF TO TENANT:
IF TO TENANT:
Lote 1 A,B,C, S/N, San Diego Xocoyucan
Corredor Industrial, Ixtlacuixtla, Tlaxcala, Tlaxcala,
Mexico, C.P. 90700
Either party may change its address by means of prior written notice to the
other party as provided above.
24. APPLICABLE LAW
This Lease shall be governed by and construed in accordance with the laws of the
State of Puebla, Mexico, without regard to conflicts of law principles of such
jurisdiction.
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25. JURISDICTION
25.1 The parties executing this Lease, agree in that with
regard to any dispute arising from a breach of contract from Tenant, parties
hereto irrevocably submit to the competent courts sitting in the State of
Puebla, Mexico or in the City of Los Angeles, California, United States of
America. The parties also agree in that with regard to any dispute arising from
a breach of contract from Landlord, parties hereto irrevocably submit to the
competent courts sitting in the state of Puebla, Mexico. The parties hereby
waive to any rights they may have to any other jurisdiction by reason of their
present or future domiciles.
26. MISCELLANEOUS PROVISIONS
26.1 Whenever the singular number is used in this Lease
and when required by the context, the same will include the plural, and the
masculine gender will include the feminine and neuter genders, and the word
"person" will include any corporation, firm, partnership, or association.
26.2 All monetary payments due and paid hereunder shall be
paid in currency of the United States of America or its equivalent in currency
of Mexico considering a currency exchange rate as published in the Mexican
Official Gazette on the business day immediately preceding the date such payment
is due.
26.3 The headings or titles to sections of this Lease are
not a part of this Lease and will not affect the construction or interpretation
of any part of this Lease.
26.4 The terms and provisions of this Lease shall be
binding upon and inure to the benefit of the respective party's successors and
permitted assigns.
26.5 Except as otherwise expressly provided in this Lease,
all covenants and agreements to be performed by either party under any of the
terms of this Lease will be performed by such party at such party's sole cost
and expense.
26.6 Tenant agrees that at the expiration of the Lease
Term (including any extension thereof), it will deliver to Landlord peaceable
possession of the Premises and the Equipment. No holding over by Tenant or
acceptance of the Base Monthly Rent or other charges by Landlord shall operate
as a renewal or extension of this Lease without the written consent of Landlord.
26.7 Whenever the term Premises is referred to in this
Lease, it shall also include any improvements thereon.
26.8 This Lease is signed in English and Spanish versions.
The parties agree to ratify before a Mexican notary public the Spanish version
of this Lease and to execute such Spanish version of the Lease in a public deed
if the applicable regulations provide so, in which case, the parties hereby
appoint Xx. Xxxxx Xxxxxxxxxx Xxxxxxx, Xxx. Xxxxxx Xxxxx Xxxxx and or Mr. Xxxxx
Xxxxxxxxx Xxxxxx in order so that any of them either jointly or separately
appears before a Notary Public to sign the corresponding public deed. The
Spanish version of this Lease shall be the operative agreement in all respects
and shall control in the event of a conflict with the English version of this
Lease.
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IN WITNESS WHEREOF, duly authorized agents respectively of Landlord and
Tenant have executed this Lease in multiple original counterparts as of the day
and year first written above.
TARRANT MEXICO S. DE X.X. DE C.V.
(Landlord)
By: /S/ XXX. XXXXXXX XXXXX
---------------------------------------
Xxx. Xxxxxxx Xxxxx
Authorized Representative
ACABADOS Y XXXXXX TEXTILES S.A. DE C.V.
(Tenant)
By: /S/ XXXX XXXXX XXXXX XXXXX
---------------------------------------
Xxxx Xxxxx Nacif Borge
Authorized Representative
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