EXHIBIT 10.19
LEASE AGREEMENT, HEREINAFTER "THE AGREEMENT" EXECUTED BY AND BETWEEN THE
COMMERCIAL ASSOCIATION SERTO, S.A. DE C.V., THROUGH ITS LEGAL REPRESENTATIVE XX.
XXXXXXXX XXXXXXXXX XXXXX, REPRESENTING THE MENTIONED CORPORATION AND THROUGH ITS
OWN RIGHT AS DEPOSITORY OF THE INDUSTRIAL PLANT, HEREIN AFTER AND FOR THE
PURPOSES OF THIS AGREEMENT REFERRED TO AS THE LESSOR, AND BY THE COMMERCIAL
ASSOCIATION "AVEX ELECTRONICS DE MEXICO, S.R.L. DE C.V., THROUGH ITS
REPRESENTATIVE XX. XXXXXXX X. XXXXX, HEREIN AFTER AND FOR THE PURPOSES OF THIS
AGREEMENT REFERRED TO AS "LESSEE", WHICH AGREEMENT IS SUBJECT TO THE FOLLOWING
DECLARATIONS AND CLAUSES:
D E C L A R A T I O N S
------------------------------------------------------------------------------
I.- THE LESSOR DECLARES through its legal representative:
a)That it is a corporation duly incorporated according to the laws of the
Mexican Republic, with sufficient capacity to execute the present AGREEMENT, as
evidenced in Public Deed Number 1150, dated October 9, 1981, granted before
Attorney Xxxxxx X. Xxxxx Xxxxxx, Public Notary number 18 of Monterrey Nuevo
Xxxx, which is duly recorded at the Public Registry of Property and Commerce
under number 1274, Folio 189, Volume 249, Book 3, second AUXILIARY, deeds of
Commercial Companies Commerce section dated Dec. 3, 1981.
b)That its representative C.P. XXXXXXXX XXXXXXXXX XXXXX, has sufficient
authority to execute the present AGREEMENT, and that his authority has not been
revoked or limited in any way, as evidenced in public deed 41,114 dated August
7, 1995, granted before Xxxxx Xxxxxxx Xxxxxx Public Notary Number 60 of
Monterrey Nuevo Xxxx.
c)That its corporate purposes includes the possibility of binding itself in
accordance with the terms of the present agreement.
d).-That THE LESSOR, as OWNER and possessor of the INDUSTRIAL PLANT, has
sufficient legal entitlement, and is able to guarantee LESSEE, in the terms of
this agreement, the peaceful and temporary use and enjoyment of an area of
approximately 17,945 Square meters (SEVENTEEN THOUSAND NINE HUNDRED FORTY FIVE
SQUARE METERS)
which are composed by approximately 5,000 (FIVE THOUSAND SQUARE METERS) of
warehouse space, approximately 578 (FIVE HUNDRED SEVENTY EIGHT SQUARE METERS) of
office area, which totally add approximately 5,578 square meters of construction
and the rest of the area are green areas and parking for approximately 12,367
Square meters, herein after THE INDUSTRIAL PLANT which is located in the
PROPERTY of approximately 25,001 (twenty five thousand and one square meters)
located in Circuito de la Productividad Number 132 in the Industrial Park
Guadalajara with the location meter and bounds described in the blue print
provided by the LESSOR and attached to this agreement as exhibit "2".
e).-That it has the sufficient authority to compromise in lease THE INDUSTRIAL
PLANT to the LESSEE, having previously obtained for said purposes, every and
each one of the authorizations necessary for the execution of this Agreement,
which authorizations include but are not limited the authorization from The
Technical Committee for The Condominium Parque Industrial Guadalajara to change
the use of the land which is attached to this agreement as exhibit "3", as well
as the necessary authorization from BANCO MERCANTIL DEL NORTE, SOCIEDAD ANONIMA,
INSTITUCION DE BANCA MULTIPLE, GRUPO FINANCIERO BANORTE, as beneficiary of a
mortgage on the land and as pledge creditor connected to the rights derived from
the LEASE AGREEMENT executed by SERTO S.A. DE C.V. (AS LESSOR) and OPERADORA
FARMACEUTICA DE OCCIDENTE, S.A. DE C.V. (AS LESSEE) attached to this agreement
as exhibit "4".
f)That in this act it grants the option to purchase the INDUSTRIAL PLANT to the
LESSEE having compiled with the conditions established herein for said purposes.
g)That simultaneously to the signature of this agreement it appears to the
execution of a SUBLEASE AGREEMENT in which OPERADORA FARMACEUTICA DE OCCIDENTE
S.A. de C.V. (As SUBLESSOR) executes with the LESSEE for an area of 7,056 SQUARE
METERS which is attached herein as exhibit "11".
h).-That its address for all legal effects is 400 Calle Rio Xxxxxx Oriente en la
Colonia del Xxxxx, Xxxxx Xxxxxx Nuevo Xxxx, x.x. 66220.
i).-That its intention is to execute and in fact they hereby execute this LEASE
agreement in the terms and conditions established herein.
II.- THE LESSEE declares through its legal representative:
a).-That it is a corporation legally incorporated according to the Mexican laws
with sufficient capacity to execute this Agreement, as evidenced by Public Deed
Number 4,953 dated June 27, 1997, granted before Xx. Xxxx Xxxx Xxxxxxxxxxxxx,
Public Notary Number 218 of Mexico City Federal District, and recorded at the
Public Registry of Property of Guadalajara, Jalisco, under inscription 64-65,
volume 647, First Book of said registry, dated July 16, 1997.
b).-That its representative, XX. XXXXXXX X. XXXXX has the sufficient authority
to execute this Agreement, which authorities have not been revoked or limited in
any way, as evidenced in the resolutions taken on January 13th, 1999, by the
totality of the partners of Avex Electronics de Mexico S.R.L. de C.V. in which
the representative was granted a special power to contract in regards to this
transaction.
c).-That within its corporate purpose it may become bound to the terms of this
agreement.
d).-That its intention is to execute the present AGREEMENT to use THE INDUSTRIAL
PLANT to carry out its industrial activities and to install
equipment,machinery,and offices in order to perform its purposes which mainly
consist on designing, manufacturing, industrializing, processing and carrying
out product engineering work; purchase, sell, import, export, assemble and
distribute all types of materials and products; and render all types of
services, including technical assistance, maintenance, and repair, to itself or
to third parties.
e).- That its address for all legal effects will be the same address as the
INDUSTRIAL PLANT. Copy of any notice related with the present agreement should
be sent to Bismarck 000 X.X. Xxxxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxx, XXXXXX.
III.- XX. XXXXXXXX XXXXXXXXX DECLARES:
a).-That according to the three credit agreements executed with BANCO MERCANTIL
DEL NORTE, SOCIEDAD ANONIMA INSTITUCION DE BANCA MULTIPLE, GRUPO FINANCIERO
BANORTE, which are identified herein after, he was personally appointed
depository of THE PROPERTY in the mortgage guarantee granted over the totality
of the surface, as well as in the pledge guarantee derived from the rights
arisen from the LEASE AGREEMENT executed by SERTO, S.A. DE C.V. (As lessor) and
OPERADORA FARMACEUTICA DE OCCIDENTE, S.A. de C.V. (As lessee) rights over the
INDUSTRIAL PLANT, having obtained the consent from said institution as evidenced
in document attached as exhibit "4", as well as from any other institution, or
authority, of which eventually its consent could be required for the execution
of this document.
THE CONTRACTS REFERRED TO ABOVE ARE THE FOLLOWING:
i).-Simple Credit Operating Agreement contained in Public Deed number 28,890,
dated December 20, 1995, executed by BANORTE (AS CREDITOR) AND LOMAS DE SATELITE
SOCIEDAD ANONIMA DE CAPITAL VARIABLE (AS DEBTOR), for the amount of $1,584,333
UDIS (One million five hundred eighty four thousand and three hundred thirty
three investment units) granting also the guarantees by SERTO S.A. DE C.V., as
referred to in the preceding paragraph.
ii).-Simple Credit Opening Agreement contained in Public Deed number 28,936,
dated December 29, 1995, and executed by BANORTE (AS CREDITOR), AND LOMAS DE
SATELITE SOCIEDAD ANONIMA DE CAPITAL VARIABLE (AS DEBTOR), for the amount of
$7,000,000.00 (Seven million new pesos national currency) granting also the
guarantees referred to before.
iii).-Simple Credit Opening Agreement, with mortgage and pledge guarantees,
which is contained in Public Deed number 31,529 dated February 27, 1998, and
executed by BANORTE (AS CREDITOR), and SERTO, S.A. DE C.V. (AS DEBTOR), for the
amount of $3,000,000.00 (Three million pesos national currency), granting also
the guarantees referred to before.
IV.- THE PARTIES DECLARE:
a)That for purposes of this AGREEMENT the terms listed below will have the
following meanings:
a.1).- AGREEMENT: the present Lease Agreement of THE INDUSTRIAL PLANT.
a.2).- THE INDUSTRIAL PLANT: the surface subject to the lease, formed by the
warehouse area, with an approximate extension of 17,945 Sq. Mts. ( Seventeen
thousand nine hundred forty five square meters) which are composed of 5,000 sq.
mts. (five thousand square meters) of warehouse space and 578 sq. mts. (five
hundred seventy eight square meters) of office areas, which totally add
approximately 5,578 sq. mts. (Five thousand five hundred seventy eight meters)
of construction and the rest are green areas and parking space for approximately
12,367 square meters herein after THE INDUSTRIAL PLANT of which a blue print
provided by the LESSOR is attached as exhibit "12". The INDUSTRIAL PLANT is
located in the property of an approximate 25,001 sq. mts. (Twenty five thousand
and one square meters) located in the following address: Circuito de la
Productividad number 132 in the Guadalajara Industrial Park and that for easier
identification, a blue print will be attached hereto as Exhibit "2", provided by
LESSOR which signed by the parties is an integral part of it.
a.3).- BEGINNING DATE.- the day from which this agreement will be effective and
when the validity of the agreement will be calculated, which will be the day
when the LESSEE, as such, occupies the INDUSTRIAL PLANT.
a.4).- TERMINATION DATE.- the last valid date of this agreement, unless the
parties agree to exercise the extensions contemplated in this agreement, in said
case the termination date will be the last valid date of the mentioned
extension.
a.5).- VALIDITY.- the elapsed period between the BEGINNING DATE and the
TERMINATION DATE.
a.6).- AUTHORIZED USES.- the industrial activities to be carried out by the
LESSEE which have been authorized to take place in THE INDUSTRIAL PLANT by THE
LESSOR and that are in accordance with the land use regulations of the location
of the INDUSTRIAL PLANT, as well as with the municipal licenses for the
operation of the company that the LESSEE will perform, according to the main
activity that has been described in the declarations of this agreement. It is
essential for this agreement to have effects between the parties that said
activities are authorized by the competent Municipal authority, as well as to
grant in its opportunity the corresponding construction permits for the intended
construction in said INDUSTRIAL PLANT, if they are not approved it is a cause to
terminate the agreement in advance.
a.7).- CONSUMER PRICE INDEX (CPI) The Consumer Price Index, determined by the
Ministry of Labor and the Labor and Statistics Department published monthly in
the United States of America.
a.8) ACCOUNT TO DEPOSIT RENT PAYMENT.- The account NO. 109793801 of Bank of
Commerce of the city of Brownsville, Texas. In which the LESSEE shall pay the
rent, by electronic wire transfer of funds, deposit or check.
b).- That it is their intention to execute and in fact they execute, this
AGREEMENT in the terms and conditions specified in this document,according to
the previous declarations and to the following:
C L A U S E S
SUBJECT MATTER
FIRST .- LESSOR delivers in this act in lease to LESSEE, who receives and
accepts, the temporary use and enjoyment of the INDUSTRIAL PLANT, under the
conditions and status of use described in a general manner in exhibit "7"of this
agreement, and under the terms and conditions established herein.
PRICE
SECOND.- a) The price for the lease that LESSEE is bound to pay for the term of
the occupation of the INDUSTRIAL PLANT is the amount of USCY $21,642.64 (Twenty
one thousand six hundred forty two and sixty four cents U.S. CURRENCY) monthly,
plus the corresponding Value Added Tax. The payment shall be made monthly in
advance, within the first 5 days of each month.
b) The parties agree that the rent referred to in the preceding paragraph, will
begin to be paid on March 15, 1999, provided that LESSOR has physically, legally
and materially received the possession of the INDUSTRIAL PLANT, on that date or
before and this agreement has been executed.
c) The price of the sublease should be paid in United States Dollars or in
Mexican currency, according to the official exchange rate published by the Bank
of Mexico in the Official Gazette of the Federation for the compliance of
obligations in dollars, from the immediate prior day in which the payment in
question is made, in accordance with the preceding paragraph.
d) The rent shall be paid by LESSEE to LESSOR by electronic transfer of funds,
deposits or check, at the discretion of LESSEE in the ACCOUNT FOR THE RENT
PAYMENT that LESSOR indicates, or in the one that LESSOR indicates in the future
to LESSEE in writing at least fifteen working days in advance.
e) LESSOR shall give LESSEE monthly receipt for the payment of rent and of the
corresponding V.A.T., which receipt shall comply with all fiscal requirements,
be issued with the date of rent payment, and contain the amount paid in United
States Dollars and the corresponding amount in Mexican Pesos, according to the
exchange rate of the date payment is made as published in the Official Gazette
of the Federation for the compliance of obligations.
f)It is expected that the price of the lease could be adjusted every anniversary
of this agreement, in the same percentage that the CONSUMER PRICE INDEX
increases (CPI) published in the United States of America.
TERM OF THE AGREEMENT
THIRD.- This AGREEMENT has an initial term of two years compulsory and binding
for both parties. Such term will begin to be considered from the date of the
initial date of this Agreement and will conclude on the termination date of the
initial term or any of its extensions, or in the event that an anticipated
termination cause operates or the rescission of this agreement. The initial term
may be extended for up to three occasions for a term of two additional years in
regards with the first two extensions and for one year in case of the last
extension.
LESSEE shall exercise the above referred to right to extend, through a written
notice delivered to SUBLESSOR at least 30 days before the date of the
termination of the initial agreement.
In the event that the extension or extensions referred to in this clause take
place, the agreement the original terms and conditions will survive and the
parties will be bound by it irrespective of time or place.
LESSEE may terminate this agreement without any responsibility during the term
of any of the extensions referred in the corresponding clauses of this
agreement, by notifying LESSOR at least 90 days before the termination date.
USE OF THE INDUSTRIAL PLANT AND DEPOSIT
FOURTH.- LESSEE may only use the leased INDUSTRIAL PLANT to carry out the
activities contemplated in its corporate purposes and described in the
declarations of this agreement. This use may not be modified without previous
consent from LESSOR.
LESSEE delivers in this act to LESSOR a deposit equivalent to one month's rent,
that is, an amount of USCY$ 21,642.64 (Twenty one thousand six hundred forty two
and sixty four cents U.S. CURRENCY), which shall be fully reimbursed by
SUBLESSOR at the termination date of this agreement, unless SUBLESSEE causes
damages to the INDUSTRIAL PLANT not derived from the normal use, or when on the
delivery date the corresponding water, light and electricity receipts contracted
by THE LESSEE to operate in the INDUSTRIAL PLANT have not been paid in which
case both parties will decide the use of the mentioned deposit.
This agreement constitutes the most effective receipt available by law, in
regards to the delivery of said amount to SUBLESSOR.
AGREEMENT REGISTRATION
FIFTH.- If it is considered convenient during the term of this agreement the
parties will register this agreement at the Public Registry of Property and
Commerce of Guadalajara, in compliance with article 2105 of the Civil Code for
the State of Jalisco. The expenses, fees and registration cost of the
registration at the Public Registry or before any other authority, as well as
the applicable"Legal Business Tax",if any, as well as any other right or tax
shall be covered equally by LESSOR and LESSEE.
For purposes of the previous paragraph, any of the following persons will be
authorized, who indistinctly could make the necessary process for the
registration of the present agreement before the Public Registry or before any
authority. Said persons are the following: Xxxxxxxx Xxxxxxx Xxxxxxxxx Xxxxxxx,
Xxxxxx Xxxxxxx Xxxxxx Xxxxx and/or Xxxx Xxxxxx Xxxxx.
MODIFICATIONS TO THE PROPERTY AND TO THE INDUSTRIAL PLANT
SIXTH.- Any material or substantial modification that alters or affects the
structure of the INDUSTRIAL PLANT must be previously authorized by THE LESSOR,
who is bound to respond to a request of that nature within 15 days from the
request. Modifications to support manufacturing facilities and logistics will
not require prior approval.
The modifications proposed by LESSEE and already approved by LESSOR include, but
are not limited to the ones listed in exhibit "8" of this agreement. The parties
agree that the fact that the proposed modifications by LESSEE listed in the
exhibit mentioned, do not bind in any way SUBLESSEE to carry them out,
therefore, LESSEE will have a discretional authority to determine whether it
carries them out or not, according to its interests.
In the event that LESSEE intends to carry out additional modifications to the
ones listed in the exhibit referred to above, the provision of paragraph one of
this clause will apply.
On the date THE INDUSTRIAL PLANT is vacated,LESSEE may remove all and each of
the improvements or modifications made to the INDUSTRIAL PLANT, with the only
limitation that the removal of said improvements do not affect the structure of
THE INDUSTRIAL PLANT, in which case, the parties may negotiate a price for the
modifications made that LESSOR has an interest to keep in the INDUSTRIAL PLANT
and LESSEE will discretionally determine whether such improvements will be left
in exchange for the price offered.
TAXES AND RIGHTS FOR SERVICES AND CONDOMINIUM FEES
SEVENTH.- The property taxes caused THE INDUSTRIAL PLANT during the term of this
AGREEMENT, as well as any other current or future tax or right on THE INDUSTRIAL
PLANT will be covered by LESSOR.
The Value Added Tax on the rent, or its substitute according to the applicable
laws, will be covered by LESSEE.
The charges for water consumption to be paid to the Intermunicipal Water and
Sewer System (SIAPA), as well as the amounts for telephone services and lights
services will be paid by LESSEE. The foregoing in the understanding that the
charges for the connections have been previously paid, since the INDUSTRIAL
PLANT already has such services.
The ordinary charges for maintenance charged by the Association of Co-owners of
Parque Industrial Guadalajara, will be covered by LESSEE, however, the charges
or extraordinary fees, or any other charge inherent to the owners of the
property in the Industrial Park, will be covered by LESSOR.
LESSEE, with the collaboration of LESSOR shall either execute or modify the
agreement with the Federal Electricity Commission for the supplying of
electricity according to the characteristics and consumption required by the
equipment to be installed in the leased INDUSTRIAL PLANT.
MAINTENANCE, CONSTRUCTIONS AND APPRECIATION.
EIGHTH.- LESSEE will take care by itself, of maintaining, cleaning, and making
minor repairs to THE INDUSTRIAL PLANT.
In the event that the city council or any other authority with jurisdiction,
including the Co- owners Association of Parque Industrial Guadalajara, either
directly or indirectly agree to carry out constructions or works that generates
an obligation to pay to any of them for the benefit to THE INDUSTRIAL PLANT,
this charges will be absorbed by LESSOR who is bound to hold LESSEE harmless
from any claim or request for this reason.
All major repairs needed in the INDUSTRIAL PLANT, as well as in the ceilings,
floors, internal or external walls and foundations, will be covered by LESSOR.
The LESSOR delivers the INDUSTRIAL PLANT guarantying that the ceilings, floors,
internal or external walls and foundations are dully sealed, water proof,
without leaking, complying with the customary construction standards, granting
the guarantee for two years as of the signature of this agreement and binding to
provide the corresponding maintenance.
Also, LESSOR will be responsible for the damages and losses that any defect in
the construction or foundation of THE INDUSTRIAL PLANT causes to LESSEE, to any
other party, or to their assets, or from any defect or structural damage of the
INDUSTRIAL PLANT, that impedes or snags LESSEE to operate in a normal way in the
same, unless said defect or structural damage has been caused by an
irresponsible use of the LESSEE.
ADVERTISEMENT
NINTH .- LESSOR authorizes LESSEE to paint or install in THE INDUSTRIAL PLANT,
announcements related to the industrial and commercial activities of LESSEE,
with no more limitations than the ones established in the Municipal Regulations.
The taxes, rights and expenses originated from this concept will be covered
exclusively by LESSEE.
SUBLEASE AND TRANSFER
TENTH. - THE LESSEE may sublease the totality or part of THE INDUSTRIAL PLANT to
its affiliated companies or subsidiaries prior notification to LESSOR. LESSEE
may sublease part or all the INDUSTRIAL PLANT to any third party, with the prior
consent from LESSOR,in the understanding that the LESSEE should adjust in its
case to the provisions of this agreement.
LESSEE would also be able to transfer its rights and obligations with prior
written authorization from LESSOR, who will grant it as long as the transferee,
complies with the following condition:
That the proposed transferee has the sufficient solvency to cover the
established obligations in this AGREEMENT and the ones legally applicable, to
consider the solvency of said transferee it should be classified in a similar
credit level as the one that would correspond to the LESSEE.
Once the transfer has been expressly accepted, and that the corresponding
transferee has been authorized by LESSOR, and it has signed the corresponding
agreement, having delivered the possession of THE INDUSTRIAL PLANT, LESSEE will
be released from the rights and obligations generated in this AGREEMENT, in the
understanding that the new transferee assumes the totality of the obligations,
as well as the corresponding rights. Also,
LESSEE will be released from said rights and obligations, once they have vacated
THE INDUSTRIAL PLANT.
EXTENSION
ELEVENTH.- LESSEE will have the right to extend the term of this AGREEMENT for
three occasions for additional terms of 2 (two) years for the first two
extensions and for 1 (one) year for the last extension, from the expiration of
the initial term referred to in clause third hereof, or in its case, from the
expiration of the extension if the extension right has been exercised,with prior
notice to the LESSOR at least 30 days before the termination of the initial term
of this AGREEMENT or that of the corresponding extension.
In the event that LESSEE exercises his right to extend as established in this
clause, it will have the right, during the term of said extension to terminate
this agreement at any time, by giving written notification to LESSOR, 90
(ninety) days in advance.
INDIVISIBILITY OF THE OBLIGATION WITH THE LEASE AGREEMENT
CLAUSE TWELFTH.- The parties declare that on the same date of execution of this
agreement, LESSEE executes with OPERADORA FARMACEUTICA DE OCCIDENTE S.A. DE
C.V., a SUBLEASE AGREEMENT of an area of 7,056 Sq Mts. (SEVEN THOUSAND, FIFTY
SIX SQUARE METERS) of construction, plus parking area and green areas, located
within the INDUSTRIAL PLANT which have been identified in Exhibit "1". The
parties also declare that because the areas are parts, and because they are
indivisible without affecting the use to which LESSEE intends to devote the
INDUSTRIAL PLANT to, the parties agree to link both agreements in such way that
the revocation, cancellation or anticipated termination of any of them,
automatically causes the revocation, cancellation or termination of the other,
and in such a way that neither of them may survive or continue to be in force
and effect, if the other one is not in force and effect as well. Therefore, the
obligations and rights of the parties to this agreement and those of the
mentioned lease agreement, are considered for legal effects indivisible.
DELIVERY OF THE INDUSTRIAL PLANT
CLAUSE THIRTEENTH.- Once the term of this lease agreement and that of its
extensions, if any, have come to an end, LESSEE shall deliver LESSOR the
INDUSTRIAL PLANT in the terms of this AGREEMENT and in the conditions it was
received, except for the modifications and improvements made that LESSEE decides
to leave in the
INDUSTRIAL PLANT and except to the deterioration of the normal use of the
INDUSTRIAL PLANT.
The modifications and improves made to the INDUSTRIAL PLANT during the term of
this AGREEMENT, that cannot be removed without damaging the structure will be
kept in benefit of LESSOR, the rest of the improvements that are removable may
be removed by LESSEE.
OPTION TO PURCHASE AND RIGHT OF FIRST REFUSAL
CLAUSE FOURTEENTH - LESSEE will have an option to purchase the INDUSTRIAL PLANT,
which right may be exercised at any time during the term of this agreement or
those of its extensions, in the event that LESSOR, have financial difficulties
that imply a risk that any of them could be declared in bankrupt or in
bankruptcy process, or that in any way use, enjoyment or possession of the
INDUSTRIAL PLANT by LESSEE is under risk during the term of this agreement or
any of its extensions. LESSOR as legitimate owner of the INDUSTRIAL PLANT,
grants in this act the Option to Purchase to the SUBLESSEE.
In order for LESSEE to exercise said option, the conditions referred to in the
preceding paragraph should exist. In said case LESSEE should notify in writing
to LESSOR, 45 forty five calendar days before the intended date of execution of
the documents in which the transfer of THE INDUSTRIAL PLANT will be established
in favor of LESSEE or in favor of whom it appoints.
The price of the sale-purchase will be calculated according to the appraisals
conducted to determine the value of the INDUSTRIAL PLANT, in the understanding
that for such purpose, LESSOR and LESSEE, will appoint each one an expert
appraiser, and both will appoint a third expert appraiser, which expert's
opinion will be the one determining the value of the INDUSTRIAL PLANT. That
value will be used as basis to determine the price of the sale-purchase, in the
event that LESSEE decides to exercise its option to purchase.
The parties agree that for the purposes of the appraisal of the INDUSTRIAL
PLANT, the conditions to be taken as basis will be the ones in which THE
INDUSTRIAL PLANT is found before LESSOR has made any improvements and
modifications carried out during the term of this agreement, that is, the expert
appraisers should make their appraisals without considering the appreciation of
the improvements and modifications made by the LESSEE to the INDUSTRIAL PLANT.
For the purposes of the foregoing, LESSEE has made an appraisal before making
the improvements to the INDUSTRIAL PLANT, where the status in which the
INDUSTRIAL PLANT was found is detailed and its value at the time of the
signature of this agreement is expressed in national currency. To calculate the
value of the INDUSTRIAL PLANT in dollars the exchange rate used will be the one
published in the Daily Gazette of the federation for the compliance of
obligations in dollars on the date of the signature of this agreement, said
appraisal will be attached as exhibit 9, the referred appraisal should be
considered by the expert appraisers when they carried out their appraisal in the
event that the LESSEE decides to exercise the option to purchase established
herein. In the event that LESSEE decides to exercise the option to purchase the
price to be used for the option to purchase will be covered by the LESSEE to
SERTO S.A. de C.V. in dollars United States Currency at the exchange rate on the
date of signature of this agreement.
LESSOR, in this act expressly confers the option to purchase THE IDUSTRIAL PLANT
to LESSEE, which can be exercised if the condition established in the first
paragraph of this clause is complied, LESSOR is bound to use the price of the
sale-purchase to release THE INDUSTRIAL PLANT from any encumbrance, in order for
it to be transferred to LESSEE free from any encumbrance or limitation. In case
that LESSOR cannot release an encumbrance, it accepts that from the price of the
sale-purchase, the amount of the encumbrance will be proportionally reduced,
such deduction being calculated by the expert that appraises said plant for the
exercise of the option to purchase.
LESSEE will also have the right of first refusal to acquire the INDUSTRIAL PLANT
in case there is an intention to transfer it. For this purpose, LESSOR, shall
notify LESSEE that there is an interested person or entity in acquiring the
INDUSTRIAL PLANT. Such notice shall contain the terms and conditions in which
the third party is willing to acquire the INDUSTRIAL PLANT. LESSEE will have a
term of 15 (fifteen) days from the date it undoubtedly received the
corresponding notice, to equal the conditions that LESSOR presents, or to notify
LESSOR its lack of interest in the acquisition. The present right will be valid
during the term of the present agreement and its extensions.
Once the initial validity term of two years of this agreement have expired and
its extensions concluded, LESSEE will have the preferential right for a new
lease, as long as it agrees and
declares it within the following 8 (eight) days from the date it was notified of
the price of the rent and other terms that LESSOR proposes for the new
extension, which shall be in equal conditions with regards to other potential
lessees.
RESCISSION OF THE LEASE
CLAUSE FIFTEENTH.- This lease agreement may be rescinded by LESSOR as a result
of the following events:
a).- Lack of payment by LESSEE within the first 15 (fifteen) days of each month,
during three consecutive months.
b).- If LESSEE is voluntarily or obligated to a bankruptcy or bankruptcy
process.
c).- If a process to dissolve and liquidate LESSEE is started.
d).- If LESSEE makes substantial modifications to the leased INDUSTRIAL PLANT,
affecting the structure and foundations without written authorization form
LESSOR.
e).- Termination for any reason of the lease agreement attached to this document
as Exhibit "11".
LESSEE will have a right, but not an obligation to early terminate this
agreement without any penalty, in the case that for any reason and at any time
it cannot use the INDUSTRIAL PLANT for the purposes it was leased, or in the
event that the competent authorities do not grant construction permit for the
intended modifications in the INDUSTRIAL PLANT according to the project attached
herein as exhibit "8" or in the case that there is a change in the political,
social or financial conditions of the country that could prevent it to continue
with the profitable operation of its activities in the INDUSTRIAL PLANT.
LESSEE may also terminate this agreement without any responsibility, in case
that for any reason or motive, not directly attributable to it, the permits or
authorizations to operate in the INDUSTRIAL PLANT are canceled or revoked, or
that for any cause out of its control, the use, enjoyment or peaceful possession
of THE INDUSTRIAL PLANT is impeded or altered by any third party.
In the event that for the reasons referred to the preceding paragraphs the
LESSEE decides to early terminate this agreement, LESSOR compromises to
negotiate in good faith a fair compensation for LESSEE for the investments,
improvements and modifications made to the INDUSTRIAL PLANT which if required,
should be appraised by an expert appraiser, following the same mechanism
established to determine the value of the INDUSTRIAL PLANT in the clause related
with the option to purchase.
EXPANSION OR IMPROVEMENTS
CLAUSE SIXTEENTH.- LESSOR expressly authorizes LESSEE to carry out the
improvements and modifications referred in Exhibit "8" of this document, in the
understanding that the foregoing shall not be construed as an obligation for
LESSEE to carry them out. LESSEE may request LESSOR to expand or create of
additional improvements. LESSOR will analyze the request presented by LESSEE
being bound to respond within the following ten days from the date it was
notified, in the understanding that the additional modifications will be made
with prior written express authorization from LESSOR.
The expansions that in its case might be carried out in the terms of the clause,
will be subject to the preferential rights to lease and to the option to
purchase contemplated in the corresponding clause of AGREEMENT.
In case that LESSEE makes expansions or constructs additional surfaces in the
INDUSTRIAL PLANT, this will not be considered for the rent payment referred in
the corresponding clause of this agreement, since they will stay in benefit of
the INDUSTRIAL PLANT at the termination of the initial term of the agreement and
its extensions.
VISIT AND INSPECTION
CLAUSE SEVENTEENTH. - LESSEE shall authorize LESSOR or the persons it appoints,
access to the INDUSTRIAL PLANT, to verify the use of it, as well as its status
and situation, with a prior written notice that LESSOR shall provide at least
ten working days in advance, as long as said visit does not alter the normal
activities of LESSEE in the INDUSTRIAL PLANT, and it take place during working
days and hours.
AUTHORITY OF LESSOR TO ENCUMBER OR TRANSFER ITS RIGHTS
CLAUSE EIGHTEENTH.- LESSOR may transfer or encumber the rights derived form the
lease agreement, with prior written authorization from LESSEE. SUBLESSOR
expressly binds not to cede, encumber or transfer the rights derived from this
agreement to any
company related with the trade business or activity carried out by the
SUBLESSEE. In case that there is a new SUBLESSOR, it will be surrogated in the
obligations and will have the rights and obligations derived from this
AGREEMENT.
The foregoing in the understanding that the powers granted to LESSOR referred to
in this clause, may not be exercised in regards to individuals or companies, or
entities, dedicated to the same activity as the LESSEE, or to any branch or
subsidiary of them, or that for any reason there would exist a conflict of
interest between the new LESSOR and the LESSEE, without prior written consent
from LESSEE.
COMMISSION
CLAUSE NINETEENTH.- Any commission originated in regards to this agreement shall
be paid directly by the LESSOR.
CLAUSE TWENTIETH.- THE LESSEE binds to obtain an Insurance policy in favor of
the LESSOR with full coverage in order to protect against the following risks:
fire, earthquakes, tornadoes, hurricanes, explosions, snow storms, damages
caused by car accidents, damages caused by smoke, vandalism, theft and other
risks that could be covered by a full coverage policy, with a coverage amount
that covers the value of the damages that could be suffered by the INDUSTRIAL
PLANT.
INSURANCE
The insurance will be valid during the term of this agreement. In the event that
the LESSOR cedes or transfers in any way the rights derived from this LEASE
agreement, the policy should be modified to add the transferee as beneficiary of
the policy, including rent payment if necessary.
The premium to be paid for the insurance referred in the present clause will be
covered by the LESSEE.
GUARANTEE TO THE LESSEE
CLAUSE TWENTY FIRST.- THE LESSOR in this act grants its consent, agree to hold
the LESSEE harmless, of any conflict, process, or claim resulting form
application of the ecological regulations, of State or Federal nature applicable
to the subject matter of the lease, that could be originated, with regards to
the observations referred in the environmental study mentioned in exhibit "10"
of this Agreement.
For purposes of the preceding paragraph, the parties agree that the
obligations of THE LESSEE or returning the leased property in the conditions it
was received, it will be subject to consider for purposes of returning it, that
on the receipt date of possession of the lease property, the land and soil in
which the property is constructed, and found in the conditions mentioned in the
referred Exhibit "7".
In regards to the soil of the PROPERTY in which the INDUSTRIAL PLANT is
constructed, if form the result of the analysis practiced it is necessary to
carried out any actions to solve the status of the soil, this will be an
obligation of the LESSOR, who is binded to carried them out and to cover
expenses originated.
INTERPRETATION AND RESOLUTION OF CONFLICTS
CLAUSE TWENTY SECOND.- For everything related with the construction and
performance of this agreement the parties agree to submit to the provisions of
the laws for the State of Jalisco, Mexico.
In regards to the resolution of any controversy that could arise the parties
shall try to solve it through good faith negotiations during 60 (sixty) days
following form that when the controversy or dispute arises. If once said term
has elapsed the parties do not come to an agreement, said controversy will be
solved through Arbitration before The Commercial Arbitration and Mediation
Center for the Americas CAMCA according to their rules.
The Arbitral Procedure will be in this city of Guadalajara, Jalisco, and it will
be handled before only one arbitrator, which will be appointed by mutual
agreement by THE LESSOR and THE LESSEE. In case that the parties do not agree on
the appointment of one arbitrator, each one will appoint one arbitrator who will
appoint a third arbitrator, which will be appointed following the referred
rules.
The language to be used in the arbitration will be Spanish, except for the
Arbitral Resolution, which should be issued in English and Spanish, the arbitral
resolution will be definitive and should voluntarily adopted by the parties. In
case that the parties do not voluntarily adopt the issued resolution, same will
be presented for its execution before the Jurisdiction of a competent Judge in
the City of Guadalajara, Jalisco.
The losing party, will be responsible for the fees, expenses and costs of the
prevailing party, originated from the Arbitration and its execution.
LANGUAGE
CLAUSE TWENTY THIRD.- This agreement has been prepared in English and Spanish.
In the case that there is an inconsistency between the two versions, the Spanish
version will prevail.
Having read the present AGREEMENT and being aware of its scope and content, the
parties ratify and sign it in three copies in the city of Guadalajara, Jalisco
on February 22, 1999 (nineteen ninety nine) along with two witnesses that
also subscribe it, in all and each one of the ________ pages.
THE LESSOR
/s/C.P. XXXXXXXX XXXXXXXXX XXXXX
SERTO S.A. DE C.V.
Repr: C.P. Xxxxxxxx Xxxxxxxxx Xxxxx
THE LESSEE
/s/XXXXXXX X. XXXXX
AVEX ELECTRONICS DE MEXICO, SRL, DE C.V.
Repr: Xxxxxxx X. Xxxxx
DEPOSITARY
/s/C.P. XXXXXXXX XXXXXXXXX XXXXX
X. X. Xxxxxxxx Xxxxxxxxx Xxxxx
WITNESS WITNESS
/s/ /s/
