Exhibit 10.1
LEASE AGREEMENT
A portion of
Xxxxx 0, Xxx 0
Xxxxxxxxx
Xxxxxx Industrial del Norte
Reynosa, Tamaulipas
THIS LEASE AGREEMENT (this "Lease") is made as of the 21st day of March,
2001, by and between MATAMOROS INDUSTRIAL PARTNERS, L.P. ("Landlord"), a
Delaware limited partnership, having an address at 000 Xxxxxxxxxxx Xxxxxx, Xxxxx
0000, Xxxxxx Xxxxxxxx 00000, and represented herein by Xxxxx Xxxxxxxxxxx in his
capacity as legal representative, and IEC ELECTRONICOS DE MEXICO, S. DE X.X. DE
C.V. ("Tenant"), a Mexican limited liability association with variable capital,
having an address at Av. Industrial Rio San Xxxx, Parque Industrial del Norte,
Reynosa, Tamaulipas, Mexico, and represented herein by Xxxxxx Xxxxxx in his
capacity as legal representative.
W I T N E S S E T H:
A. Landlord, through its legal representative, hereby states, represents
and warrants that:
(a) Landlord is a limited partnership organized under the laws of the
State of Delaware, United States of America.
(b) Landlord has proper and sufficient legal title (as beneficiary of a
trust holding title to the Land) and authority to grant to Tenant
the temporary use and possession of the Premises.
(c) The Premises has an authorized zoning designation compatible with
light and medium non-contaminating industrial use in accordance with
the city plan of the municipality of Reynosa, State of Tamaulipas,
Mexico.
(d) Landlord wishes to grant to Tenant the temporary use and possession
of the Premises pursuant to the terms and conditions contained
herein.
(e) Landlord and its legal representative have the necessary authority
to execute this Lease. Said authority has not been limited or
revoked in any manner whatsoever.
B. Tenant, through its legal representatives, hereby states, represents and
warrants that:
(a) Tenant is a limited liability association with variable capital.
(b) Tenant wishes to accept from Landlord the temporary use and
possession of the Premises pursuant to the terms and conditions
contained herein.
(c) Tenant and its legal representative have the necessary authority to
execute this Lease. Said authority has not been limited or revoked
in any manner whatsoever.
C. Both parties state that this Lease is being executed free from any and
all consensual defects.
For good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, for themselves, their heirs, executors,
administrators, legal representatives, successors and assigns, hereby covenant
and agree as follows:
Page 1 of 24
1. DEFINITIONS. The following terms shall have the meanings set forth below.
"Base Rent" shall mean the base rent payable by Tenant during the Term, subject
to escalation as provided in Section 3B, as follows (amounts set forth below
are in currency of the United States of America):
PAYMENTS
DATES ANNUAL MONTHLY MONTHLY/PSF
Commencement
Date through Expiration Date $658,560.00 $54,880 $0.49
"Building" shall mean that certain building and other improvements at the Land,
having a street address of Av. Industrial Rio San Xxxx, Parque Industrial
del Norte, Reynosa, Tamaulipas, containing approximately 112,000 square
feet.
"Commencement Date" shall mean May 1, 2001.
"Common Areas" shall mean that portion of Landlord's Park indicated on Exhibit A
attached hereto which is intended for the common use by Tenant and other
tenants or owners in Landlord's Park for purposes of ingress and egress
only.
"Expiration Date" shall mean April 30, 2006.
"Guarantor" shall mean IEC.
"Guaranty" shall mean that certain guaranty executed and delivered by Guarantor
simultaneously with the execution and delivery of this Lease, which guaranty
is in the form of Exhibit C attached hereto
"IEC" shall mean IEC Electronics Corp., a Delaware corporation.
"Land" shall mean that certain real property on which the Building and Parking
Spaces are located, being a portion of Block 7, Lot 6 located in the Parque
Industrial del Norte, City of Xxxxxxx, and State of Tamaulipas, a
description of which is attached hereto as Exhibit A.
"Landlord's Notice Address" shall mean 000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxxxxx XXX 00000.
"Landlord's Park" shall mean all of Block 7, Lot 6 (including the Building and
Premises) located in the Parque Industrial del Norte, City of Xxxxxxx, State
of Tamaulipas, identified on Exhibit A.
"Laws" shall mean all applicable laws, statutes, codes, orders and regulations
and with any related directive, and with all rules, orders, regulations or
requirements of any board of fire underwriters or any other similar body
with respect to the Premises or the use or occupancy thereof.
"Parking Spaces" shall mean approximately [one-hundred (100)] parking spaces
adjacent to the Building and shown on Exhibit A, the exclusive use of which
shall be Tenant's, which Parking Spaces shall comply with all Laws,
including, without limitation, applicable zoning laws and requirements.
"Permitted Uses" shall mean non-contaminating manufacturing, warehouse and
office uses and related non-contaminating operations to the extent same are
permitted under the Licensia de Uso de Suelo, a copy of which is attached
hereto as Exhibit B.
"Premises" shall mean, collectively, the Land, the Building, and any other
building or improvements now or hereafter constructed on the Land.
"Rent Payment Account" shall mean Xxxxx Fargo Bank West, 000 Xxxxxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxx, 00000 account no. ______. Tenant shall pay rent by means
of wire or intra- or inter- bank transfer of funds directly into the Rent
Payment Account.
"Tenant's Notice Address" shall mean Av.Industrial Rio San Xxxx, Parque
Industrial del Norte, Reynosa, Tamaulipas, Mexico, Attn: Xxxxxxx Xxxxx, with
a copy to each of: (i) Xx Xxxxxx, Esq., Xxxxxx, Drought & Xxxxxx, Inc.,
000 Xxxxx 00xx Xxxxxx, Xxxxx 0000, XxXxxxx, Xxxxx 00000, (ii) IEC
Electronics Corp., 0000 Xxxxxxxxxx Xxxx Xxxxx, Xxxxxxxx, Xxxxx 00000, and
(iii) Xxxxxxx Xxxxxx, Esq., Boylan, Brown, Code, Xxxxxx & Xxxxxx, LLP,
0000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000.
"Tenant's Park Share" shall be fifty (50%) percent.
"Term" shall mean the period commencing on the Commencement Date and ending on
the Expiration Date, being approximately five (5) years.
Page 2 of 24
2. PREMISES AND TERM.
(A) Premises and Term. Landlord represents and warrants to Tenant that a trust
of which it is sole beneficiary has free, clear, absolute, complete and
unrestricted ownership of Landlord's Park, the Building and the Premises, and
that Tenant shall have, in accordance with and subject to this Lease, the
uninterrupted, quiet use and enjoyment of the Premises. Subject to the terms,
covenants and conditions contained in this Lease, Landlord hereby grants to
Tenant the temporary use and possession of the Premises and Tenant hereby
accepts same for the Term. The Premises shall be used and occupied by Tenant
solely for the Permitted Uses and for no other purpose without Landlord's prior
written consent. If Tenant takes possession or enters into occupancy of the
Premises prior to the Commencement Date, such possession or occupancy shall be
pursuant to all the terms, covenants and conditions of this Lease. The Premises
is demised subject to all zoning regulations, restrictions, rules and
ordinances, building restrictions and other laws and regulations now in effect
or hereafter adopted by any governmental authority having jurisdiction. Landlord
has not made, does not make, and has not authorized anyone else to make any
representation as to the present or future physical condition, operation, or any
other matter or thing pertaining to the Premises except as expressly set forth
herein. Tenant and its agents, employees, guests and invitees shall have the
non-exclusive right to use the Common Areas in common with other tenants and
owners in Landlord's Park solely for the purposes of ingress and egress to and
from the Premises. Tenant, its agents and employees, shall have access to any
mechanical equipment and systems, and to any telecommunications equipment which,
pursuant to this Lease, Tenant has elected or has the obligation to provide,
maintain and keep in repair. Tenant's use of the Premises and Common Areas shall
be subject to such reasonable rules and regulations as may be promulgated and
modified, added to or deleted by Landlord from time to time, provided that such
rules and regulations and any modifications thereof or additions thereto or
deletions therefrom (i) are not inconsistent with any provision of this Lease,
(ii) shall be applicable to all tenants in Landlord's Park, and (iii) shall not
be effective until a copy thereof has been delivered to Tenant. Landlord shall
enforce such rules and regulations in a non-discriminatory manner against all
tenants in Landlord's Park but will not be liable to Tenant for failure of any
tenant or person to comply therewith. The current rules and regulations are
attached hereto as Exhibit D. In addition, Tenant's use of the Premises shall be
subject to the covenants, conditions and restrictions in force from time to time
with respect to the Del Norte Industrial Park, of which Landlord's Park forms a
part. The current Del Norte Industrial Park covenants, conditions and
restrictions are attached hereto as Exhibit E.
(B) Renewal Term. Provided this Lease shall be in full force and effect and no
Event of Default shall be continuing hereunder, Tenant shall have the right to
extend the Term for one (1) additional, consecutive period of five (5) years
(the "Extension Term"). The Extension Term shall commence on the day after the
Expiration Date and shall expire on the day prior to the fifth (5th) year
anniversary of such commencement unless sooner terminated pursuant to any of the
terms, covenants or conditions of this Lease or pursuant to Laws. Tenant shall
exercise its option hereunder by giving Landlord written notice of such election
no later than six (6) months prior to the Expiration Date, and upon the giving
of such notice, this Lease and the Term shall be extended without execution or
delivery of any other or further documents, with the same force and effect as if
the Extension Term had originally been included in the Term and the Expiration
Date shall thereupon be deemed to be the last day of the Extension Term. All of
the terms, covenants and conditions of this Lease shall continue in full force
and effect during the Extension Term, including, without limitation, with
respect to the payment of rent (with CPI Charges payable for each Rent Year of
the Extension Term).
3. BASE RENT; CPI ESCALATION.
(A) Base Rent. Tenant shall deposit monthly installments of Base Rent, along
with applicable value added tax, directly into the Rent Payment Account or at
such other place designated by Landlord, monthly, in advance, on the first day
of each calendar month during the Term, without notice or demand. Payment of
Base Rent will be made by Tenant directly into the Rent Payment Account by wire
transfer or intra- or inter- bank transfer of funds. Landlord agrees to render
to Tenant monthly rental invoices that shall comply with all applicable legal
and tax requirements and include a breakdown of the value added tax. Said rental
invoices shall be issued on the date rent is paid and shall contain the amount
of rent paid in United States Dollars, as well as the corresponding amount in
Mexican Pesos, according to the exchange rate published in the Official Journal
of the Federation (Diario Official de la Federacion) on such date. Landlord
acknowledges that Tenant has the right to pay rent in Mexican Pesos. In the
event that rent is paid in Mexican Pesos, such will be paid at the rate of
exchange in effect for selling Mexican Pesos to purchase United States Dollars,
according to the rate published in the Official Journal of the Federation
(Diario Official de la Federacion) on the date Tenant pays Landlord such rent.
If Tenant elects to pay rent in Mexican Pesos, Tenant will be obligated to pay,
in addition thereto and as an administrative fee, an amount equal to five
percent (5%) of any such rent payment, plus applicable value added tax. If, for
whatever reason, the Commencement Date does not occur on the first day of a
calendar month or if the Term does not expire or terminate on the last day of a
calendar month, rent payable hereunder shall be prorated for such partial month
on the basis of a thirty (30) day month. In addition to all other rights and
remedies provided Landlord, all amounts payable hereunder which remain unpaid
for five (5) days after their respective due dates shall bear interest from the
date that the same became due and payable to and including the date of payment,
whether or not demand is made therefor, at the rate of twelve percent (12%) per
annum.
Page 3 of 24
(B) CPI Escalation: For purposes of this Lease, the following terms shall
have the following meanings.
"Base Index" shall mean the CPI Index for the month prior to the month in
which the first anniversary of the Commencement Date occurs.
"CPI Charges" shall mean the annual rental adjustment calculated and
payable in accordance with this Section 3(B).
"CPI Index" shall mean the Consumer Price Index presently designated as
the United States Department of Labor, Bureau of Labor Statistics Consumer
Price Index for all Urban Consumers, U.S. City Average, "All Items"
(1982-1984 equals 100). In the event that the statistics are not available
or in the event that publication of the Consumer Price Index is modified
or discontinued in its entirety, the adjustment provided for herein shall
be made on the basis of an index chosen by Landlord as a comparable and
recognized index of purchasing power of the United States consumer dollar
published by the U.S. Department of Labor or other governmental agency. In
the event that the CPI Index is not published for the months required for
the calculation set forth in this Section, the parties shall utilize the
Consumer Price Index for the month(s) nearest preceding the month(s)
required for such calculation.
"Rent Year" shall mean each twelve (12) month period during the Term
commencing on the Commencement Date (or the date corresponding to the
Commencement Date for Rent Years after the first Rent Year) and ending on
the date which shall be one day prior to the one year anniversary of the
Commencement Date (or the date corresponding to the Commencement Date for
Rent Years after the first Rent Year) except that the last Rent Year shall
end on the Expiration Date
In addition to the payment of Base Rent, from and after the commencement of the
third Rent Year, Tenant shall pay CPI Charges, along with applicable value added
tax, in monthly installments in the same manner and at the same time as payment
of Base Rent. As soon as practicable after the end of the second Rent Year and
each succeeding Rent Year during the Term, Landlord shall notify Tenant in
writing of the amount of monthly CPI Charges due and payable by Tenant to
Landlord each month (commencing with the third Rent Year) in addition to Base
Rent for each month of the then current Rent Year. CPI Charges for any
applicable Rent Year shall be calculated by multiplying the Base Rent by a
fraction, the numerator of which shall be the CPI Index for the last month of
the immediately preceding Rent Year less the Base Index, and the denominator of
which shall be the Base Index. Notwithstanding anything contained herein to the
contrary, in no event shall the sum of the Base Rent and CPI Charges payable in
any Rent Year increase at a rate less than one and one-half (1.5%) percent or
more than two and one-half (2.5%) percent over the sum of the Base Rent and CPI
Charges payable in the immediately preceding Rent Year. Upon the commencement of
each Rent Year following the first Rent Year, and continuing thereafter until a
statement of the adjustment in CPI Charges is delivered to Tenant, Tenant shall
pay to Landlord, as and when Base Rent is due, one-twelfth (1/12) of the minimum
CPI Charges (plus value added tax) due for such Rent Year based on the one and
one-half (1.5%) percent minimum increase over the prior Rent Year's payment of
Base Rent and CPI Charges. Tenant shall continue making such monthly payments,
in addition to Base Rent, until receipt of notice from Landlord of the actual
CPI Charges due from Tenant for such Rent Year. If the actual CPI Charges are
greater than the payments Tenant shall have then made on account of CPI Charges,
Tenant shall pay, within ten (10) days after the receipt of notice thereof, the
amount of any such excess. Tenant shall pay Landlord on the first day of each
succeeding month of such Rent Year the adjusted amount due for such month until
the commencement of the succeeding Rent Year. The failure or delay by Landlord
to deliver a notice with respect to CPI Charges for any Rent Year shall not be
deemed a waiver of Landlord's right to deliver such notice or to collect CPI
Charges. Whenever the term "rent" is used in this Lease, such term will be
deemed to include CPI Charges.
Page 4 of 24
4. ADDITIONAL RENT; UTILITIES; NET LEASE.
(A) Taxes. Tenant covenants to reimburse Landlord for all Premises-related taxes
and assessments and other similar governmental charges which are applicable
during the Term and which may be assessed, levied, imposed upon, or become due
or payable out of or in respect of, or become a lien on, the Premises or any
part thereof or any appurtenance thereto, or any personal property, any rent or
income received by Tenant from permitted subtenants, or any use, possession or
occupation of or activity conducted at the Premises (all of the foregoing,
together with, to the extent caused by Tenant, any and all penalties and/or
interest thereon, being sometimes collectively referred to herein as
"Impositions"). Tenant shall pay Landlord the amount of any Imposition within
ten (10) business days after receipt by Tenant of evidence of the amount
thereof. Nothing herein contained shall require Tenant to pay income taxes
assessed against Landlord. Landlord represents and warrants to Tenant that the
Premises is not a separate tax parcel; rather, the Premises constitutes a
portion of a tax parcel which is currently Landlord's Park. Tenant shall pay
Tenant's Park Share of real property taxes payable with respect to Landlord's
Park. Landlord represents and warrants to Tenant that currently, real property
taxes payable with respect to Landlord's Park are in the approximate amount of
US $5,500.00 per annum. Any Imposition which is not timely reimbursed shall bear
interest at the rate set forth in SECTION 3 from the date due until the date
payment is received. In the event that Tenant shall fail to pay Impositions in a
timely manner, Landlord will have the right to require Tenant to deposit
one-twelfth (1/12) of the current annual Impositions, on the first day of each
month, in advance, to be applied to the payment of Impositions.
(B) Utilities. Landlord represents and warrants to Tenant that electric (up to
2,000 KVA, as required by Tenant), water (via a 3/4 inch incoming water line),
sewerage and telephone services (a minimum of four (4) lines) are available to
the Premises. Tenant shall directly contract for all utilities of every type and
nature required by it and available to it in its use of the Premises and shall
pay or cause to be paid, when due, all bills therefor directly to the
appropriate provider. Tenant shall pay all deposits, substation contribution
fees and connection fees with respect to the delivery of utilities to the
Premises. In addition to the 750 KVA currently supplied to the premises, Tenant
will purchase 750 KVA of capacity. Tenant will not be obligated to pay any
transmission fee for the first 300 KVA of electric capacity used by Tenant at
the Premises, under this agreement. It is agreed that with respect to the first
750 KVA of electric capacity to be provided to Tenant, Tenant shall pay, within
30 days after receipt of invoice therefor, a transmission fee in the amount of
$30,946.50 (based on 450 KVA of capacity at $68.77 per KVA) and a transformation
fee in the amount of $41,670.00 (based on 750 KVA of capacity at $55.56 per
KVA).
(C) Industrial Park Fees. Tenant shall pay, within ten (10) business days after
receipt of invoice therefor (accompanied by appropriate back-up), Tenant's Park
Share of any maintenance or other, similar fees or charges levied against
Landlord's Park during the Term by any industrial park authority or any other
association or authority levying any such charges or fees against the Premises
or Landlord's Park or operations thereat. Landlord has been advised that, upon
completion of all buildings that Landlord intends to construct at Landlord's
Park and assuming no unusual monthly assessments, the monthly maintenance
assessment for Landlord's Park will be approximately $650.00. Amounts not paid
within such ten (10) business day period shall bear interest at the rate set
forth in SECTION 3.
(D) Landlord Park Charges. Tenant shall pay, within ten (10) business days after
receipt of invoice therefor, Tenant's Park Share of any reasonable charges for
Common Area maintenance as contemplated under SECTION 7. Amounts not paid within
such ten (10) business day period shall bear interest at the rate set forth in
SECTION 3.
(E) Insurance Reimbursement. Tenant shall pay, within ten (10) business days
after receipt of invoice therefor (accompanied by appropriate back-up), any
reasonable premiums for casualty insurance maintained by Landlord with respect
to the Premises pursuant to SECTION 10A. Amounts not paid within such ten (10)
business day period shall bear interest at the rate set forth in SECTION 3.
(F) Net Lease. It is the purpose and intent of Landlord and Tenant that the rent
payable hereunder shall be absolutely net to Landlord so that this Lease shall
yield, net to Landlord, the rent specified herein in each year during the Term.
To the extent applicable, value added tax will be paid by Tenant on all Landlord
reimbursements required hereunder, as indicated in the applicable invoice from
Landlord to Tenant.
Page 5 of 24
5. WORK.
(A) Landlord's Work. Tenant acknowledges that Landlord is not obligated to
complete or perform any improvements, alterations or other construction or
preparation with respect to the Premises in connection with Tenant's occupancy
thereof. Tenant acknowledges, represents and warrants that, upon commencement
date, Tenant will have fully examined and inspected the Premises and will have
accepted the foregoing and that the Premises will be accepted by Tenant "as is,
where is, with all faults." Landlord has not made, does not make, and has not
authorized anyone else to make any representation as to the present or future
physical condition, operation, or any other matter or thing pertaining to the
Premises except as expressly set forth herein.
(B) Tenant's Initial Alteration; Landlord's Contribution. Tenant shall perform
all work necessary to prepare the Building for Tenant's use and possession
("Tenant's Initial Alteration") as reflected on plans and specifications to be
approved by Landlord in accordance with SECTION 8 of this Lease, such work to be
performed in accordance with the terms of this Lease. Landlord shall reimburse
Tenant for the cost of Tenant's Initial Alteration, as approved by Landlord and
performed by Tenant, to the extent of the lesser of (i) US$200,000.00 and (ii)
the actual cost to Tenant for Tenant's Initial Alteration as depicted on the
approved plans therefor ("Landlord's Contribution"). Provided this Lease is then
in full force and effect and no Event of Default is continuing hereunder,
Landlord shall pay Landlord's Contribution to Tenant within thirty (30) days
after satisfactory completion of Tenant's Initial Alteration and submission by
Tenant of (a) "as-built" drawings showing Tenant's Initial Alteration, (b) a
detailed breakdown of Tenant's final and total construction costs, together with
receipted invoices (or such other proof of payment as Landlord shall reasonably
require) showing payment thereof, (c) a written statement from Tenant's
architect or engineer that the work described on any such invoices has been
completed in accordance with the approved plans therefor, (d) final releases
executed by the general contractor and all major subcontractors employed by
Tenant in connection with Tenant's Initial Alteration, (e) a copy of all
licenses, certificates, permits and other government authorizations necessary in
connection with Tenant's Initial Alteration and (f) proof reasonably
satisfactory to Landlord that Tenant has complied with all of the conditions set
forth in this SECTION 5(B) and has satisfactorily completed Tenant's Initial
Alteration, which may include, at Landlord's option, a certificate from
Landlord's architect after inspection of Tenant's Initial Alteration.
6. PARKING; SECURITY. Tenant shall have the exclusive use of the Parking Spaces.
Landlord shall not be liable for any damage to, or any theft of, vehicles, or
contents thereof, within the parking area. Landlord represents and warrants that
the Parking Spaces are sufficient in all respects to satisfy all Laws,
including, without limitation, zoning laws and building codes. All security or
security measures with respect to the Premises shall be Tenant's responsibility.
7. REPAIRS AND MAINTENANCE.
(A) Landlord's Obligations. Landlord, at its expense, shall maintain and repair
the foundations, structure and roof of the Building in good repair, order and
condition and in accordance with all Laws provided that Tenant shall reimburse
Landlord for the reasonable cost of any repairs or maintenance performed by
Landlord to the extent caused by the negligence or criminal or willful
misconduct of Tenant or its agents, employees, contractors, invitees and
licensees. All repairs, maintenance and replacements to be made or performed by
Landlord shall be performed in a good and workmanlike manner in accordance with
Laws and the provisions of this Lease and shall be as close to the same quality
and design as the original work or item as commercially practicable. Landlord,
at its expense (subject to reimbursement as provided under SECTION 4D), will
maintain the Common Areas and other areas in Landlord's Park that are not
subject to maintenance by a specific tenant, in good repair and condition and in
accordance with all Laws. Landlord shall use reasonable efforts to minimize
interference with Tenant's conduct of business in connection with Landlord's
performance of any work described in this SECTION 7. Tenant agrees to notify
Landlord promptly of any defective condition known to Tenant that Landlord is
obligated to repair. Except as provided herein, Landlord shall not be obligated
to provide any maintenance, repairs or services to Tenant or the Premises.
Page 6 of 24
(B) Tenant's Obligations. Except for Landlord's obligations set forth above,
Tenant, at its sole cost and expense, shall keep, repair and maintain the
Premises and all fixtures and equipment therein, including, without limitation,
all plumbing, heating, air-conditioning, electrical, gas, water, sewerage and
similar systems, fixtures and equipment as well as the interior structure of the
Premises (including interior walls, ceiling and floor coverings), window glass,
loading docks, exterior steps, doors and signs of Tenant on the outside of the
Building, as well as the Premises outside of the Building (including, without
limitation, any landscaping located thereat and the Parking Spaces) in good
repair, order and condition and in accordance with all Laws. Tenant shall keep
the Premises clean and in good order and shall arrange and pay for all garbage
and refuse removal. All repairs, maintenance and replacements to be made or
performed by Tenant shall be performed in a good and workmanlike manner in
accordance with Laws and the provisions of this Lease and shall be as close to
the same quality and design as the original work or item as commercially
practicable.
(C) Notwithstanding anything to the contrary contained herein, each party shall
be obligated to repair damage to the Premises to the extent caused by the
negligence of such party and to the extent that such damage is not covered by
insurance proceeds available for such purpose. If it is not possible to
determine the cause of damage, the applicable provisions of the Civil Code of
the State of Tamaulipas shall apply.
8. ALTERATIONS; SIGNS.
(A) Alterations. Except as set forth in Section 27 of this Lease, Tenant shall
not make any alterations, additions or improvements (collectively, along with
Tenant's Initial Alteration, "Alterations") to the Premises without Landlord's
prior written consent (Tenant's Initial Alteration specifically being subject to
Landlord's consent), except that no consent shall be required for one or more
minor (that is, costing less than $10,000 US) modifications to the interior of
the Building, provided any such modification is non-structural and does not
affect the Building's mechanical or electrical systems or services. Landlord
agrees not to unreasonably condition, delay or withhold its consent to any
Alterations for which its consent is required and which are nonstructural and do
not affect the Building's mechanical or electrical systems or services and
which, in Landlord's reasonable judgment, do not materially reduce the value or
utility of the Building. Tenant shall provide to Landlord for its reasonable
approval plans and specifications with respect to any Alteration (including,
without limitation, engineering and mechanical plans and specifications) as well
as any modifications to any such plans and specifications that have been
previously approved by Landlord. All Alterations performed by Tenant at the
Premises (whether or not subject to Landlord's consent) shall be performed at
Tenant's expense (except as contemplated in SECTION 5(B) above) in a good and
workmanlike manner and of a quality and standard equivalent to the standards for
construction set by Landlord, from time to time, for the Building and by a
contractor or contractors (including major subcontractors) licensed by
applicable authorities and reasonably approved by Landlord, and such Alterations
shall be performed in accordance with such approved plans and specifications and
Laws. Tenant shall give Landlord fifteen (15) days prior notice before
commencing any Alterations which require Landlord's consent. Tenant shall be
responsible for any alterations, additions or improvements required by Laws to
be made by Landlord to or in the Building as a result of Tenant's proposed
Alterations. Upon the Expiration Date or sooner termination of the Term, any
Alterations, except movable furniture and trade fixtures (including, without
limitation, Telecommunications Equipment (as hereinafter defined), telephone
switching hardware, computer equipment and air compressors), shall become
Landlord's property and shall be surrendered with the Premises, unless, prior to
the installation thereof, Landlord directs Tenant to remove such Alterations,
whereupon Tenant shall remove same at its expense and restore the Premises to
the condition existing prior to such Alterations, normal wear and tear excepted.
Notwithstanding the foregoing, in the event Tenant desires to remove any
Alteration which is not furniture or trade fixtures or any of the other items
set forth above, Tenant shall so provide in its request to Landlord to perform
such Alteration (or, if consent is not required with respect to such Alteration,
Tenant shall separately so notify Landlord) and upon approval by Landlord, or
notice to Landlord, as the case may be, such Alterations shall remain Tenant's
property upon the expiration or earlier termination of this Lease. Tenant shall
keep the Premises free from claims arising out of any work performed on Tenant's
behalf (other than work performed by Landlord or its agents) and shall not
affect any interest of Landlord in the Premises.
Page 7 of 24
(B) Signage. Tenant shall not, without Landlord's prior written consent, which
consent shall not be unreasonably conditioned, delayed or withheld and which
will be given or denied within ten (10) days after request, install any exterior
signage at the Premises. In the event that Landlord fails to give or deny its
consent within such 10 day period, Landlord shall be deemed to have given its
consent. Tenant shall also be required to obtain any required approvals from the
del Norte industrial park authorities, with Landlord agreeing to cooperate, at
Tenant's cost, in connection with any such approvals Landlord will permit Tenant
to make any required applications with governmental authorities for
Landlord-approved signage in Landlord's name and to obtain permits from
governmental agencies for the construction and maintenance of any such signage.
The installation of any approved signage shall be performed in a good and
workmanlike manner in accordance with all Laws. All signs and placards must
comply with all Laws. Tenant shall pay all costs of fabrication, installation
and maintenance of all permitted signs or placards. Prior to vacating the
Premises, Tenant shall, at its expense, promptly remove its sign(s) and placards
and restore the surface beneath such signs or placards damaged or discolored by
such removal. Landlord agrees that any signage of Tenant approved hereunder will
not be obstructed or interfered with by Landlord or by approved signage of any
other tenant of the Building or Landlord's Park.
9. ASSIGNMENT AND SUBLETTING
(A) Tenant shall not (i) assign or otherwise transfer this Lease; (ii) permit
the Premises or any part thereof to be used by anyone other than Tenant; (iii)
sublet the Premises or any portion thereof; or (iv) mortgage or otherwise
encumber this Lease or Tenant's interest in the Premises, in each instance
without obtaining Landlord's prior written consent. For the purposes of this
SECTION 9, the transfer or issuance of stock or other interests in Tenant
ultimately resulting in a change of control in Tenant shall be an assignment of
this Lease. For the purposes hereof, "control" shall mean ownership of at least
fifty-one percent (51%) of the voting stock of a corporation or at least
fifty-one percent (51%) of the legal and equitable interest in any other
business entities. The provisions of this SECTION 9 shall not apply to
transactions with a corporation into or with which Tenant is merged or
consolidated or to which substantially all of Tenant's assets are transferred,
provided that Tenant's successor has a net worth computed in accordance with
generally accepted accounting principles at least equal to the net worth of
Tenant herein named on the date of this Lease and Landlord shall have received
satisfactory proof of such net worth at least ten (10) days prior to the
effective date of such transaction.
(B) Tenant shall not be released from its obligations hereunder as a result of
any permitted subletting or, to the extent permitted by Laws, assignment except
as expressly provided herein.
(C) Notwithstanding any provision of this SECTION 9 to the contrary, Landlord
acknowledges and agrees that at any time: (i) Tenant shall have the right, upon
thirty (30) days' prior notice to Landlord, to terminate this Lease and be
released, along with Guarantor, from all further obligations and liabilities
hereunder and under the Guaranty, provided Tenant pays to Landlord an amount
equal to all amounts then owed by Tenant to Landlord plus all rent which Tenant
would have paid hereunder for the then remainder of the Term (which rent shall
include Base Rent and CPI Charges as well as all other amounts to be reimbursed
to Landlord or otherwise paid by Tenant hereunder, with items not then
susceptible of certain calculation being calculated based on the amount Tenant
is then paying hereunder) discounted to present value at a rate equal to the per
annum rate of interest announced from time to time by Chase Bank as its
commercial prime rate prime minus two and one-half (2 1/2%) percent, such amount
being payable upon the date the Lease terminates, (ii) Tenant may assign this
Lease or sublet the Premises, and be released of its obligations and liabilities
hereunder, to any entity which controls, is controlled by, or is under common
control with Guarantor (each, a "related entity") for the Permitted Uses
provided that (a) an Event of Default shall not at that time be present under
this Lease, (b) at least twenty (20) days prior to such assignment or
subletting, Tenant furnishes Landlord with the name of such related entity,
together with Tenant's written certification that such entity is a related
entity, and (c) the Guaranty remains in full force and effect after any such
assignment or subletting, and (iii) Tenant may propose for Landlord's approval,
not to be unreasonably withheld or delayed or conditioned, an assignee of the
Lease or sublessee of the Premises provided the Guaranty remains in full force
and effect, upon which assignment or sublease Tenant shall be released from all
further obligations and liabilities hereunder, and (iv) Tenant may propose for
Landlord's approval, which approval Landlord may grant, withhold or condition in
its sole and absolute discretion, an assignee of the Lease, upon which approved
assignment (a) Tenant will be released from all further obligations and
liabilities hereunder and (b) the Guaranty will terminate.
Page 8 of 24
10. INSURANCE.
(A) Landlord shall maintain throughout the Term, at its expense but subject to
reimbursement as hereinafter provided, fire and extended coverage insurance
covering the Building against loss or damage by fire, flood, windstorm, hail,
earthquake, explosion, riot, damage from aircraft and vehicles, smoke damage,
vandalism, malicious mischief and such other risks as are from time to time
covered under "extended coverage" endorsements and special extended coverage
endorsements commonly known as "all-risk" endorsements in an amount equal to the
full replacement value of the Building and containing the waiver of subrogation
required in this SECTION 10. All such insurance shall be placed with reputable
companies licensed to do business in accordance with applicable law. Tenant
shall be obligated to pay the premiums with respect to such insurance in
accordance with SECTION 4.
(B) Tenant shall maintain throughout the Term, at its expense, the following
insurance (i) fire and extended coverage insurance covering Tenant's fixtures,
equipment and other personal property against loss or damage by fire, flood,
windstorm, hail, earthquake, explosion, riot, damage from aircraft and vehicles,
smoke damage, vandalism, malicious mischief and such other risks as are from
time to time covered under "all-risk" endorsements, (ii) commercial general
liability insurance on an occurrence basis providing coverage for bodily injury
(including death), property damage and products liability insurance (where such
exposure exists) containing a broad form contractual liability endorsement
insuring Tenant's obligations under SECTION 12(A) hereof with a combined single
limit of at least One Million Dollars ($1,000,000) per occurrence and Two
Million Dollars ($2,000,000) in the aggregate for all occurrences within any
policy year and naming Landlord as an additional insured, and (iii) such other
insurance as Landlord may reasonably require, it being agreed that in no event
will Landlord require business interruption insurance. Tenant shall deliver
original certificates of all such policies prior to the Commencement Date and
each anniversary date thereafter, which shall provide that no cancellation or
non-renewal of such policies shall be effective without thirty (30) days prior
written notice from the insurer to Landlord. Tenant shall not do any act or
thing in the Premises or store anything therein except as now or hereafter
permitted by any fire department, board of fire underwriters, or insurance
rating organization having jurisdiction or other authority having jurisdiction
and then only in such quantity and manner of storage as not to increase the
existing rate of, or adversely affect, or cause a cancellation of, any insurance
policies covering the Premises.
(C) Each party shall obtain a waiver of subrogation or consent to a waiver of
right of recovery against the other party, and each hereby agrees that it will
not make any claim against or seek to recover from the other party for any loss
or damage covered by its fire and extended coverage insurance.
11. EMINENT DOMAIN AND CASUALTY.
(A) Eminent Domain. If all or substantially all of the Premises is taken by a
public authority pursuant to the exercise of the power of eminent domain, this
Lease and the Guaranty shall terminate on the date on which the condemning
authority takes possession of the Premises ("Date of Taking"). If part of the
Premises will be taken such that, in Landlord's reasonable opinion (based on the
determination of an architect or engineer named by Landlord and reasonably
approved by Tenant within thirty (30) days after notice of such eminent domain),
the Premises cannot be restored to an economically viable and tenantable
condition, Landlord may terminate this Lease as of the Date of Taking upon
thirty (30) days prior written notice to Tenant at which time the Guaranty shall
also terminate. If Landlord does not terminate this Lease and the condemnation
will render twenty (20%) percent or more of the Building untenantable, Tenant
may terminate this Lease effective on the Date of Taking by written notice given
no later than thirty (30) days after the determination of the architect or
engineer at which time the Guaranty shall also terminate. Upon a partial taking
which does not result in a termination of this Lease: (i) rent shall be adjusted
to reflect the reduced amount of rentable area in the Building; and (ii)
Landlord shall restore the Building and Premises to a tenantable unit and Tenant
shall be entitled to an abatement of rent until the Building and Premises are
made tenantable. Landlord shall not be obligated to replace or restore any
improvements or alterations to the Premises made by or on behalf of Tenant, or
any of Tenant's leasehold improvements, personal property, furniture, fixtures
or equipment. Upon any taking, Landlord shall be entitled to any resulting
damages, awards or any interest therein, and Tenant shall have no claim for the
value of any unexpired term of the Lease or otherwise. Notwithstanding the
foregoing, Tenant may independently claim for the value of its furniture,
fixtures and equipment as well as its moving expenses.
Page 9 of 24
(B) Casualty. If more than 20% of the Building is rendered untenantable by fire
or other casualty and Landlord reasonably determines (based on the determination
of an architect or engineer named by Landlord and reasonably approved by Tenant)
that the damage cannot be repaired within one hundred eighty (180) days after
Landlord is notified of the casualty, then either Landlord or Tenant may, within
thirty (30) days after such determination (which shall be provided to Tenant),
give the other notice of termination of this Lease, and the Term and Guaranty
shall expire thirty (30) days after such notice is given, with rent being
apportioned and as of the date of Lease termination. If either Landlord or
Tenant have not elected to terminate as herein provided, Landlord shall repair
the Building and Premises to the same condition as existed as of the
Commencement Date, reasonable wear and tear excepted with reasonable dispatch
and in compliance with all Laws at the time of such repair. During any period
Tenant is not able to occupy the Premises on account of any repair or
restoration, Tenant will have no obligation to pay rent or other amounts due
hereunder. Tenant shall give Landlord prompt written notice of any damage to the
Building by fire or other casualty. Landlord's obligations to restore are
strictly limited to the replacement of the Building and Common Areas. Landlord
shall not be obligated to restore any Alterations, personal property, furniture,
fixtures or equipment. In the event Landlord fails to perform its restoration
obligations by the date which shall be 30 days after the time estimate provided
by the architect's or engineer's determination noted above, Tenant shall have
the right, but not the obligation, to terminate this Lease and the Guaranty upon
ten (10) days' prior notice without any further obligation to Landlord.
12. INDEMNIFICATION AND COMPLIANCE WITH LAWS.
(A) Tenant shall defend, indemnify and hold Landlord and its officers,
directors, employees, attorneys and agents harmless from and against any and all
demands, causes of action, judgments, costs, expenses, losses, damages, claims,
or liability for any damage to any property or injury, illness or death of any
person (a) occurring in the Premises at any time during the Term on account of
the acts or omissions of Tenant or its officers, directors, employees,
attorneys, agents, guests and invitees; (b) arising out of or in any way related
to claims for labor performed or materials furnished to Tenant (other than labor
performed or materials furnished by Landlord unless due to the acts or omissions
of Tenant) or the performance of any work done by or for the account of Tenant
(other than work furnished by Landlord unless due to the acts or omissions of
Tenant), whether or not Tenant obtained Landlord's permission to have such work
done, labor performed or materials furnished; or (c) arising out of or in any
way related to any breach of a covenant or condition in this Lease to be
performed by Tenant. The provisions of this Subsection shall survive the
expiration or sooner termination of this Lease.
(B) Landlord shall defend, indemnify and hold Tenant and its officers,
directors, employees and agents harmless from and against any and all demands,
causes of action, judgments, costs, expenses, losses, damages, claims, or
liability for any damage to any property or injury, illness or death of any
person (a) occurring in the Premises at any time during the Term on account of
the acts or omissions of Landlord or its officers, directors, employees,
attorneys, agents, guests and invitees, (b) arising out of or in any way related
to claims for labor performed or materials provided by Landlord under this Lease
during the Term; or (c) arising out of or in any way related to any breach of a
covenant or condition in this Lease to be performed by Landlord. The provisions
of this Subsection shall survive the expiration or sooner termination of this
Lease.
Page 10 of 24
(C) Tenant, at its expense, shall comply with all Laws applicable to its
obligations and responsibilities hereunder, including, without limitation, any
Laws relating to any material that is prohibited, limited or regulated as a
toxic or hazardous substance, health or environmental hazard or pollutant under
any Law ("Hazardous Materials"). Neither Tenant nor its officers, directors,
employees or agents shall use, generate, store, treat, transport, dispose of or
release any Hazardous Materials at the Premises other than non-material and
non-reportable quantities of Hazardous Materials used in connection with the
Permitted Uses and only if properly and legally used and stored and disposed of
at Tenant's cost. Landlord has previously provided to Tenant a copy of the Phase
I environmental survey prepared by XxXxxx Environmental Services and dated June
4, 1998 which Landlord has caused to be prepared with respect to Landlord's
Park. Landlord represents and warrants to Tenant that Landlord has no knowledge
of any non-compliance with environmental Laws at the Premises or Landlord's Park
except as may be set forth in such Phase I environmental survey.
(D) Landlord, at its expense, shall comply with all Laws applicable with respect
to its obligations and responsibilities hereunder, including, without
limitation, Laws related to Hazardous Materials. Landlord shall not nor, to the
extent practicable, will Landlord permit others to use, generate, store, treat,
transport, dispose of or release any Hazardous Materials at Landlord's Park
other than non-material and non-reportable quantities of Hazardous Materials and
only if properly and legally used and stored and disposed of at Landlord's cost
(E) Landlord and Tenant each warrant to the other that it is now complying with,
and agrees, at all times during the term of this Lease or any extension hereof,
to comply with those provisions of the social security or such other laws of the
municipality and state within which they operate, which require them to provide
social security for their workers.
13. QUIET ENJOYMENT AND SUBORDINATION.
(A) Landlord covenants and agrees that, upon Tenant's performance of all the
terms, covenants and conditions hereof on Tenant's part to be performed, Tenant
shall have, hold and enjoy the Premises, subject to the terms, covenants and
conditions of this Lease.
(B) This Lease is subject and subordinate to any mortgage, deed of trust or deed
to secure debt (each, a "Mortgage"); any easement agreements; all ground and
underlying leases; and to any renewals, modifications, extensions, replacements,
and substitutions of any of the foregoing, now or hereafter affecting the
Premises. This provision shall be self-operative and no further instrument of
subordination shall be required; provided, however, that upon request, Tenant
shall execute and deliver instrument(s) in recordable form confirming this
subordination. The parties acknowledge that, pursuant to the Civil Code for the
State of Tamaulipas, this Lease shall survive any foreclosure of any Mortgage.
In addition, the subordination of this Lease to any ground or underlying lease
shall be subject to providing Tenant non-disturbance protection in standard
form, reasonably satisfactory to Tenant. Landlord may assign the rents and its
interest in this Lease to the holder of any Mortgage. In such event, Tenant
shall give such holder a reasonable period (not to exceed twenty (20) days) to
cure such default, commencing on the last day on which Landlord could cure such
default. Landlord will notify Tenant of any Mortgage.
Page 11 of 24
14. EVENTS OF DEFAULT. In addition to any other event specified in this Lease as
an event of default, the occurrence of any one or more of the following events
during the Term (each, an "Event of Default") shall constitute a breach of this
Lease by Tenant, and Landlord may exercise the rights set forth in SECTION 15 or
as otherwise provided at law: (1) Tenant fails to pay any sum payable hereunder
within five (5) days after written notice thereof from Landlord to Tenant; or
(2) Tenant fails to perform any of the other covenants, terms or conditions of
this Lease to be performed by Tenant (other than any monetary default), and,
unless expressly provided elsewhere in this Lease, such default shall continue
for thirty (30) days after written notice thereof from Landlord to Tenant, or,
in the case of a default which cannot with due diligence be cured within thirty
(30) days, Tenant or Guarantor fails to commence such cure promptly within such
thirty (30) day period and thereafter diligently prosecute such cure to
completion; or (3) Tenant or Guarantor files a voluntary petition in bankruptcy
or becomes insolvent within the meaning of any applicable bankruptcy code (the
"Code"), or a petition is filed against Tenant or Guarantor under the Code and
is not dismissed with prejudice within ninety (90) days after filing, or Tenant
files any petition or answer seeking reorganization or similar relief under any
bankruptcy or other applicable law, or seeks or consents to the appointment of a
receiver or other custodian for any substantial part of Tenant's properties or
any part of the Premises; or (4) Guarantor shall default beyond any applicable
notice and/or grace period under its guaranty; or (5) the Premises shall be
abandoned by Tenant for a period of twenty (20) days; or (6) a lien or claim is
filed against the Premises arising out of any work performed by or on behalf of
Tenant and Tenant fails to discharge such lien or remedy such claim within sixty
(60) days after the filing thereof. During any period prior to the exercise of
the Purchase Option under the Shelter Agreement or a termination of the Shelter
Agreement, there shall be no Event of Default hereunder unless Guarantor shall
have failed, within fifteen (15) days after notice to Guarantor from Landlord
that Tenant has failed to cure a breach within any applicable grace or cure
period, to cure such breach (whether or not Guarantor or a related entity of
Guarantor shall have assumed Tenant's obligations under the Lease). Landlord
will send copies of default notices hereunder to Guarantor.
15. LANDLORD'S REMEDIES.
Upon the occurrence of an Event of Default, Landlord may pursue any remedies
available to Landlord under Laws including, without limitation, the right of
specific performance or payment of damages to the extent permitted by Laws. Upon
the occurrence of an Event of Default, Landlord may give Tenant written notice
of its election to rescind this Lease, whereupon Tenant's right to possession of
the Premises shall cease on the day specified therein, and this Lease shall be
terminated.
16. LANDLORD DEFAULT.
(A) Landlord Default. In the event Landlord shall fail to perform any covenant
required to be performed by Landlord under the terms and provisions of this
Lease and such failure shall continue unremedied or uncorrected for a period of
twenty (20) days after notice to Landlord (which notice shall be simultaneously
delivered to any mortgagee of which Tenant has been given notice), or, in the
case of a default which cannot with due diligence be cured within twenty (20)
days, Landlord fails to commence such cure promptly within such twenty (20) day
period and thereafter diligently prosecute such cure to completion, Tenant may,
at Tenant's option, terminate this Lease (at which time the Guaranty will be of
no further force and effect) and/or pursue any remedies available to Tenant
under Laws including, without limitation, the right of specific performance or
payment of damages to the extent permitted by Laws.
Page 12 of 24
(B) Tenant's Self-Help Right. In the event that Landlord fails to maintain the
insurance required to be maintained by it under SECTION 10(A) or perform any of
its repair obligations under SECTION 7(A) and fails to cure same during any
applicable cure period under SECTION 16(A), Tenant may provide a notice to
Landlord (which notice shall be simultaneously delivered to any mortgagee of
which Tenant has been given notice) stating that Tenant intends to itself cure
such default. If Landlord has not commenced to cure such default or made
arrangements satisfactory to Tenant to cure such default within five (5)
business days after such notice and thereafter does not proceed with diligence
to cure such default, Tenant may obtain such insurance or cause such work to be
performed, in which event Landlord will be obligated to reimburse Tenant for the
reasonable cost thereof within five (5) business days after receipt of evidence
of such amount. If Landlord fails to pay such amounts within such time period,
Tenant shall have the right to offset such amount against Base Rent next due and
payable.
17. HOLDING OVER. If Tenant remains in possession of the Premises after the
expiration or other termination of the Term, then, at Landlord's option, Tenant
shall be deemed to be occupying the Premises as a non-fixed term ("tacita
reconduccion") tenant pursuant to Laws, at a monthly rental equal to the one and
one-half (1 1/2) times the monthly rent (including, without limitation, CPI
Charges) payable hereunder during the last month of the Term, along with value
added tax.
18. NOTICES. All notices given hereunder shall be (i) in writing and delivered
to Landlord's Notice Address or Tenant's Notice Address, as applicable, (ii)
given by an internationally recognized overnight courier, and (iii) deemed to be
given two days after delivery to the overnight courier (if delivery is
international) or one day after delivery to the courier if delivery is within
the United States, or upon receipt of confirmation with respect to facsimile
delivery. Either party may designate a different notice address at any time and
any Notice given hereunder shall be effective if delivered by counsel for either
party in accordance with this Section.
19. BROKERS. Each party represents to the other that it has dealt with no broker
in connection with the negotiation and/or execution of this Lease. Each party
shall defend, indemnify and hold the other harmless from and against any and all
liability, loss, damage, expense, claim, action, demand, suit or obligation
arising out of or relating to a breach by such party of this representation and
such obligations shall survive the expiration or sooner termination of this
Lease.
20. FORCE MAJEURE. As used herein, the term "Force Majeure" shall mean (i) an
elimination of the Maquila Program which results in the termination of
operations in Reynosa of 35% of the companies holding Maquila permits at the
time of such program elimination, and (ii) acts of God, strike, riot, shortages
of labor or materials, war, acts of terrorism or any other causes of any kind
whatsoever which are beyond such party's reasonable control. Any event of Force
Majeure which prevents a party from performing its non-monetary obligations
under this Lease shall not constitute a default hereunder provided that the
non-performing party perform its obligations promptly after the end of such
Force Majeure event. In the event of Force Majeure arising (a) under clause (ii)
above which renders the Premises unavailable for Tenant's use for a period of
time in excess of six (6) months or (b) under clause (i) above for a period of
time in excess of six (6) months, all rent otherwise payable hereunder will be
abated during any additional period beyond the end of such six (6) month period.
Page 13 of 24
21. NO SETOFF. Except as expressly set forth herein, all agreements, covenants
and activities to be performed by Tenant hereunder shall be at Tenant's expense
and without any abatement of rent. Except as set forth in Sections 11 or 16(B),
Tenant shall not be entitled to any setoff, offset or abatement of any rent due
Landlord hereunder if Landlord fails to perform its obligations hereunder.
22. LIMITATION OF LANDLORD LIABILITY.
(A) Upon a transfer of title to or lease of the Premises, the transferor shall
be relieved of all covenants and obligations of Landlord hereunder except to the
extent that a notice of default shall have been previously provided to the
transferor, and Tenant shall look solely to the successor in interest of the
transferor as Landlord hereunder. Tenant agrees to attorn to the transferee or
assignee, such attornment to be self-operative.
(B) In no event shall Landlord be liable to Tenant for any failure of other
tenants in the Premises, if any, to operate their businesses, or for any loss or
damage caused by the acts or omissions of any other tenants. Notwithstanding
anything to the contrary contained herein, no general or limited partner in or
of Landlord, whether direct or indirect, nor any direct or indirect partners in
such partners, nor any disclosed or undisclosed officers, shareholders,
principals, directors, employees, partners, servants or agents of Landlord, nor
any of the foregoing, nor any investment adviser or other holder of any equity
interest in Landlord, their successors, assigns, agents, or any mortgagee in
possession shall have any personal liability with respect to any provisions of
this Lease. In addition, in no event shall Tenant have recourse under this Lease
against assets of Landlord (including but not limited to the Building) in an
amount in excess of One Million and 00/100 Dollars US ($1,000,000.00 US).
23. ESTOPPEL CERTIFICATE. Each party shall deliver to the other, within ten (10)
days after the other's written request therefor, a certificate to the party
designated in such request, certifying that this Lease is unmodified and in full
force and effect (or stating any modifications then in effect), that there are
no defenses or offsets thereto (or stating those claimed), the dates to which
rent has been paid, and including any other information reasonably requested
which relates to the Lease and the party's performance hereunder (as opposed to
information about the party itself).
24. MISCELLANEOUS.
(A) Either party's failure to exercise its rights with respect to a breach of
any term, covenant or condition contained herein shall not be a waiver of such
term, covenant or condition or any subsequent breach of the same or any other
term, covenant or condition contained herein.
Page 14 of 24
(B) If either party brings an action against the other, the prevailing party (as
determined by the court or administrative body having jurisdiction over such
action) may recover court costs and attorneys' fees and disbursements in such
amount as the court or administrative body deems reasonable. Either party shall
also be entitled to recover reasonable attorneys' fees and disbursements
incurred in connection with a default beyond all applicable notice and grace
periods by the other hereunder which does not result in the commencement of any
action or proceeding.
(C) Each of Landlord and Tenant acknowledges that it has not relied on any
representations or agreements except those expressed herein, and that this Lease
contains the entire agreement of the parties. No modification of this Lease
shall be binding or valid unless in writing and executed and delivered by both
parties. Neither Landlord nor Tenant shall record this Lease or a memorandum
hereof without the other's prior written consent. Except as otherwise
specifically provided herein, the terms, covenants and conditions contained in
this Lease shall bind and inure to the benefit of the respective heirs,
successors, executors, administrators and assigns of each of the parties hereto.
(D) The submission of this document for review does not constitute an option,
offer or agreement to lease space. This document shall be effective only upon
Landlord's and Tenant's execution and Landlord's delivery of same to Tenant.
Except as expressly contained herein, neither Landlord nor Landlord's agent has
made representations, warranties or promises with respect to the Premises or
this Lease. Landlord and Tenant each acknowledge that each has been represented
by independent counsel and has executed this Lease after being fully advised by
said counsel as to its effect and significance.
(E) This Lease shall be construed in accordance with the laws of the Mexican
state in which the Premises is located. Unless herein waived, Landlord and
Tenant acknowledge that all of the applicable statutes of such state are
superimposed on the rights, duties and obligations of Landlord and Tenant
hereunder.
(F) If any term or provision of this Lease shall, to any extent, be illegal,
invalid or unenforceable, the remainder of this Lease shall not be affected
thereby, and all other terms and provisions of this Lease shall be valid and
enforceable to the fullest extent permitted by law.
(G) Landlord and Landlord's agents and representatives shall have the right to
enter the Premises at any time in case of an emergency, and, when accompanied by
a representative of Tenant, at all reasonable times upon reasonable prior notice
for any purpose permitted pursuant to the terms of this Lease, including,
without limitation, showing the Premises to prospective purchasers or lenders.
Landlord and Landlord's agents and representatives shall have the right to show
the Premises to prospective tenants during the last six (6) calendar months of
the Term upon reasonable prior notice during reasonable hours and when
accompanied by a representative of Tenant.
(H) The parties acknowledge that Landlord owns or will own prior to the
commencement of the Term all of Landlord's Park, of which land the Land is but a
part, and that Landlord intends to develop the remainder of Landlord's Park with
one or more buildings. Tenant acknowledges and understands that construction and
related activities may be carried on from time to time near the Premises.
Landlord will use commercially reasonable efforts to minimize any interference
with Tenant's business operations at the Premises.
(I) All dollar amounts set forth herein are in money of the United States of
America.
Page 15 of 24
25. ARBITRATION. Any dispute, controversy or claim arising out of or related to
this Lease or a breach hereof, shall be resolved by arbitration in the event
that the parties, despite their good faith efforts, are not able to resolve the
dispute within 60 days. The arbitration shall be in accordance with the
procedural rules of the American Arbitration Association. There shall be one (1)
arbitrator who shall be selected by the parties, and if the parties are not able
so to select an arbitrator within 30 days after a notice of arbitration is
filed, the American Arbitration Association shall appoint an arbitrator from a
panel of experienced arbitrators accredited by the American Arbitration
Association. The arbitration, including the rendering of the award, shall take
place in San Antonio, Texas, United States of America.
The language to be used in the arbitration shall be English, except that the
arbitral award shall be issued in both English and Spanish.. Judgment upon the
award of arbitrators may be entered and enforced through any competent court of
the State of Tamaulipas, Mexico.
26. TRANSLATION. This Lease has been prepared in English, and a Spanish
translation may be prepared. The Spanish translation would be for reference
purposes only and, in case of conflicts in the translation or interpretation,
the English version will control. In the event, however, that for purposes of
judicial enforcement of this Agreement, a Spanish translation of this Agreement
is required, then a Spanish translation shall be prepared by a court approved
expert translator. The parties shall agree on the language of the Spanish
translation prepared by the court approved expert translator, and the party
seeking enforcement of this Agreement shall pay the cost of such translation.
27. TELECOMMUNICATIONS EQUIPMENT.
(A) Notwithstanding anything to the contrary contained herein, Landlord hereby
grants to Tenant the absolute right, without Landlord's consent, to install,
attach to the exterior of the Building, and operate telecommunications
equipment, including without limitation, antennae, satellite transmission and/or
receiving equipment, and/or microwave dishes ("Telecommunications Equipment") in
the area(s) designated on Exhibit A, provided Tenant shall first submit to
Landlord plans and specifications therefor and obtain Landlord's written
approval thereof (which approval shall not be unreasonably conditioned, delayed
or withheld) prior to commencing any such installation or operation of
Telecommunications Equipment.
(B) Tenant hereby covenants and agrees that the installation and operation of
the Telecommunications Equipment shall be done (i) at Tenant's sole cost and
expense and (ii) in compliance with Laws.
(C) Landlord covenants and agrees to cooperate at Tenant's cost and expense, to
obtain any and all permits and licenses necessary of the installation and
operations of the Telecommunications Equipment. Furthermore Landlord authorizes
Tenant to make application in Landlord's name for any and all permits and
licenses required for the installation and operation of the Telecommunications
Equipment.
(D) Landlord covenants and agrees to use commercially reasonable efforts to
minimize interference with the Telecommunications Equipment by other tenants in
Landlord's Park.
Page 16 of 24
28. TERMINATION OF PRIOR LEASE. Landlord and Tenant hereby terminate, effective
as of the Commencement Date, that certain Lease Agreement dated as of December
18, 1998, between Landlord and Tenant with respect to the leasing of a portion
of the Building (as amended, the "Prior Lease"), it being the intention of the
parties hereto that this Lease supersede and replace the Prior Lease and no
further documents or instruments shall be necessary to evidence such termination
of the Prior Lease, but each party agrees to execute, acknowledge and deliver
such other documents and instruments as may be reasonably necessary or desirable
to confirm the foregoing. Landlord and Tenant each agree to release the other
from all liability and claims under the Prior Lease, except for (i) any third
party claims, (ii) any items of Base Rent and/or other monetary obligations due
and payable under the Prior Lease for periods prior to the termination thereof,
including such amounts which are not yet ascertainable and/or billed and (iii)
obligations of Tenant under the Prior Lease which survive the expiration date
thereof or which relate to the condition of the premises leased thereunder as of
such expiration date.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the date set forth above.
MATAMOROS INDUSTRIAL PARTNERS, IEC ELECTRONICOS de MEXICO,
L.P., Landlord S. de X.X. de C.V., Tenant
By: By:
Xxxxx Xxxxxxxxxxx, Authorized Signatory Xxxxxx Xxxxxx, Authorized Signatory
EXHIBITS
A Description of the Premises and Common Areas
B Uso de Suelo
C Guaranty
D Rules and Regulations for Landlord's Park
E Industrial Park Covenants and Restrictions
Page 17 of 24
LEASE AGREEMENT
BETWEEN
MATAMOROS INDUSTRIAL PARTNERS, L.P., LANDLORD
AND
IEC ELECTRONICOS DE MEXICO, S. DE X.X. DE C.V., TENANT
Premises Address:
Portion of Block 7, Xxx 0
Xxxxxx Xxxxxxxxxx xxx Xxxxx
Xxxxxxx, Xxxxxxxxxx, Xxxxxx
SUMMARY LEASE INFORMATION
GUARANTOR IEC Electronics Corp.
PREMISES SIZE 112,000 square feet
RENTAL RATE ($/MONTH/SF) $0.49 per month per sq. ft.
ESCALATION CPI based after year two
TERM 5 years, with one 5 year renewal option
COMMENCEMENT DATE May 1, 2001
EXPIRATION DATE April 30, 2006
Page 18 of 24
EXHIBIT B
USO DE SUELO
Page 19 of 24
EXHIBIT C
GUARANTY OF LEASE
In consideration of, and as an inducement to Matamoros Industrial Partners, L.P.
("Landlord") to enter that certain Lease Agreement of even date herewith (as
same may be amended or modified, the "Lease") with IEC Electronicos de Mexico,
S. de X.X. de C.V. ("Tenant") for the premises having a street address of Av.
Industrial Rio San Xxxx, Parque Industrial Del Norte, Reynosa, Tamaulipas,
Mexico and in further consideration of the premises and other good and valuable
consideration, the receipt of which is hereby acknowledged, the undersigned
("Guarantor") hereby guarantees, absolutely and unconditionally, to Landlord the
full and prompt performance of all terms, covenants, conditions and agreements
to be performed and observed by Tenant under the Lease and any and all
amendments, modifications and other instruments relating thereto, whether now or
hereafter existing, and the full and prompt payment of all damages, costs and
expenses which shall at any time be recoverable by Landlord from Tenant by
virtue of the Lease and any amendments, modifications and other instruments
relating thereto; and Guarantor hereby covenants and agrees to and with
Landlord, its successors and assigns, that if Tenant, its successors and
assigns, shall default at any time in the payment of Base Rent, CPI Charges
(both as defined in the Lease) or any other sums or charges payable by Tenant
under the Lease or in the performance of any of the terms, covenants, provisions
or conditions contained in the Lease after the passage of any applicable cure or
grace period, Guarantor will, within fifteen (15) days after notice from
Landlord, pay to Landlord, its successors and assigns, such Base Rent, CPI
Charges and other sums and charges and will forthwith faithfully perform and
fulfill all of such terms, covenants, conditions and provisions of the Lease.
Notwithstanding anything to the contrary contained herein, once the
Lease is assigned or sublet pursuant to Section 9(C)(iii), the aforementioned
guarantee shall be limited to the full and prompt payment of Base Rent and CPI
Charges under the Lease. Furthermore, notwithstanding anything to the contrary
contained herein, this Guarantee shall terminate and be of no further force and
effect in the instances specified in the Lease, including, without limitation,
those instances more particularly detailed in Sections 9(C)(i), 9(C)(iv), 11(A),
11(B), and 16 of the Lease.
Any such Lease obligations which Guarantor is guaranteeing hereunder
are sometimes referred to herein as "Liabilities of Tenant."
Guarantor agrees that, with or without notice or demand, Guarantor
will reimburse Landlord, to the extent that such reimbursement is not made by
Tenant, for all expenses (including reasonable attorneys' fees and
disbursements) incurred by Landlord in connection with any default by Tenant
which is covered by this Guaranty.
Page 20 of 24
All moneys available to Landlord for application in payment or
reduction of the Liabilities of Tenant may be applied by Landlord, in such
manner and in such amounts and at such time or times as it may see fit, to the
payment or reduction of such of the Liabilities of Tenant as Landlord may elect.
This Guaranty shall be a continuing guaranty, and the liability of
the Guarantor hereunder shall in no way be affected, modified or diminished by
reason that the Lease or any other obligation of Tenant is changed, altered,
renewed, extended, continued, surrendered, compromised or waived in whole or in
part, or that any default with respect thereto is waived, whether or not notice
thereof is given to Guarantor, and it is understood and agreed that Landlord may
fail to set off, in whole or in part, any credit on its books in favor of
Tenant, and may extend further credit in any manner whatsoever to Tenant, and
generally deal with Tenant or any such security as Landlord may see fit; and
Guarantor shall remain bound under this Guaranty notwithstanding any such
exchange, surrender, release, change, alteration, renewal, extension,
continuance, compromise, waiver, inaction, extension of further credit or other
dealing.
Notwithstanding any provision to the contrary contained herein,
Guarantor hereby unconditionally and irrevocably waives (a) any and all rights
of subrogation to the claims, whether existing now or arising hereafter,
Landlord may have against Tenant, but only until such time as the Liabilities of
Tenant shall have been fully discharged, and (b) any and all rights of
reimbursement, contribution or indemnity against Tenant which may have
heretofore arisen or may hereafter arise in connection with any guaranty or
pledge or grant of any lien or security interest made in connection with the
Lease. Guarantor hereby acknowledges that the waiver contained in the preceding
sentence (the "Waiver") is given as an inducement to Landlord to enter into the
Lease and, in consideration of Landlord's willingness to enter into the Lease,
Guarantor agrees not to amend or modify in any way the Waiver without Landlord's
prior written consent. If any amount shall be paid to Guarantor by Tenant on
account of any claim set forth at any time when all the Liabilities of Tenant
shall not have been paid in full, such amount shall be held in trust by
Guarantor for Landlord's benefit, shall be segregated from the other funds of
Guarantor and shall forthwith be paid over to Landlord to be applied in whole or
in part by Landlord against the Liabilities of Tenant, whether matured or
unmatured. Except as expressly provided for in the Lease, nothing herein
contained is intended or shall be construed to give to Guarantor any rights of
subrogation or right to participate in any way in Landlord's right, title or
interest in the Lease, notwithstanding any payments made by Guarantor to or
toward any payments due from Guarantor under this Guaranty, all such rights of
subrogation and participation being hereby expressly waived and released.
Guarantor hereby expressly waives, except as expressly set forth
above, (a) notice of acceptance of this Guaranty; (b) presentment and demand for
payment of any of the Liabilities of Tenant; (c) protest and notice of dishonor
or default to any party (other than Guarantor) with respect to any of the
Liabilities of Tenant; (d) all other notice to which Guarantor might otherwise
be entitled; and (e) any demand for payment under this Guaranty; and Guarantor
hereby expressly agrees that the validity of this Guaranty and the obligations
of Guarantor hereunder shall not be terminated, affected or impaired by reason
of the assertion or the failure to assert by Landlord against Tenant, or
Tenant's successors and assigns, of any of the rights or remedies reserved to
Landlord pursuant to provisions of the Lease.
Page 21 of 24
This is an absolute and unconditional guaranty of payment and not of
collection and Guarantor further waives any right to require that any action be
brought against Tenant or any other person or entity or to require that resort
be had to any security or to any balance of any deposit account. This Guaranty
shall constitute a primary obligation of the undersigned.
Each reference herein to Landlord shall be deemed to include its
successors and assigns, in whose favor the provisions of this Guaranty shall
also inure. Each reference herein to Guarantor shall be deemed to include the
heirs, distributees, executors, administrators, legal representatives,
successors and assigns of Guarantor, all of whom shall be bound by the
provisions of this Guaranty.
No delay on the part of Landlord in exercising any rights hereunder
or failure to exercise the same shall operate as a waiver of such rights; no
notice to or demand on Guarantor shall be deemed to be a waiver of the
obligation of Guarantor or of the right of Landlord to take further action
without notice or demand as provided herein; nor in any event shall any
modification or waiver of the provisions of this Guaranty nor any termination
hereof be effective unless in writing signed by Landlord, nor shall any waiver
be applicable except in the specific instance for which given.
This Guaranty shall continue to be effective or be reinstated, as
the case may be, if any payment of Guarantor on account of the Liabilities of
Tenant must be returned by Landlord upon the insolvency, bankruptcy or
reorganization of Tenant, Guarantor, or otherwise, as though such payment had
not been made.
Guarantor has delivered to Landlord true, correct and complete
audited financial statements of Guarantor for the fiscal year 2000 which have
been prepared in accordance with generally accepted accounting principles.
Guarantor agrees that, within fifteen (15) days after Landlord's request (which
request may be given no more than once each calendar year), it shall deliver
Landlord accurate, audited financial statements for Guarantor's most recent
fiscal year (which is the calendar year) and calendar period for which financial
statements have been prepared, which financial statements shall be prepared in
accordance with recognized accounting principles and certified by a corporate
officer of Guarantor.
This Guaranty is, and shall be deemed to be, a contract entered into
under and pursuant to the laws of the State of New York and shall be in all
respects governed, construed, applied and enforced in accordance with the laws
of such State; and no defense given or allowed by the laws of any other State or
Country shall be interposed in any action or proceeding hereon unless such
defense is also given or allowed by the laws of the State of New York. In any
action or proceeding arising out of this Guaranty, Guarantor agrees to submit to
personal jurisdiction in the State of New York. Guarantor agrees to pay all
costs and expenses, including, without limitation, reasonable attorneys' fees,
which are incurred by Landlord in the enforcement of this Guaranty.
All of Landlord's rights and remedies under the Lease or under this
Guaranty are intended to be distinct, separate and cumulative and no such right
and remedy therein or herein mentioned is intended to be in exclusion of or a
waiver of any of the others.
Page 22 of 24
As a further inducement to Landlord to accept the Lease and in
consideration thereof, Landlord and Guarantor covenant and agree that in any
action or proceeding brought on, under or by virtue of this Guaranty, Landlord
and the Guarantor shall and do hereby waive trial by jury.
Except as provided in the Lease, this Guaranty shall not be affected
by any assignment of the Lease or sublet of the Premises by Tenant.
Any notices which either party herein may desire to give to the
other shall be made in writing and shall be given by certified or registered
mail, postage prepaid, return receipt requested or overnight courier and shall
be deemed to be given on the third (3rd) business day after the date of posting
in a United States Post Office or branch post office, and shall be delivered to
Landlord at 000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000. Notices
for Guarantor(s) shall be sent to the address(es) set forth below. Either party
may, by notice as aforesaid actually received, designate a different address or
addresses for communications intended for it.
Guarantor represents and warrants to Landlord that each individual
executing this Guaranty on behalf of Guarantor is duly authorized to execute and
deliver this Guaranty and that this Guaranty is binding upon Guarantor in
accordance with its terms.
IN WITNESS WHEREOF, Guarantor has caused its duly authorized
representative the undersigned has executed this Guaranty as of the __ day of
March, 2001.
IEC ELECTRONICS CORP., a Delaware corporation
By: ___________________
EIN:
- -
Guarantor Notice Address:
IEC Electronics Corp.
000 Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxx
With a copy to:
Boylan, Brown, Code, Xxxxxx & Xxxxxx LLP
0000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Page 23 of 24
EXHIBIT D
RULES AND REGULATIONS
(1) Security. Landlord may from time to time adopt systems and procedures
for the security or safety of Landlord's Park or any persons occupying, using or
entering the same, and Tenant shall comply with Landlord's reasonable
requirements relating thereto.
(2) Locks. Tenant shall have the right from time to time to change locks
at the Premises, provided that in all cases, Tenant shall, simultaneously with
such change, provide keys to Landlord.
(3) Keys. At the end of the Term, Tenant shall promptly return or provide
to Landlord all keys for the Building and Premises.
(4) Antennas and Aerials. No antenna or aerial shall be erected on the
roof or exterior walls of the Building or elsewhere at the Premises without the
prior written consent of Landlord. Any antenna or aerial so installed without
prior consent shall be subject to removal without notice at any time, and Tenant
shall bear all costs of removal and any repairs necessitated by virtue of its
attachment to the Building.
(5) Personal Use of Premises. The Premises shall not be used or permitted
to be used for residential lodging or sleeping purposes or for the storage of
personal effects or property not required for business purposes.
(6) Deliveries. Vehicles making deliveries to or pick-ups from the Premises
shall not be permitted to park in, block or remain in the Common Areas. Tenant
shall promptly pay or cause to be paid to Landlord the cost of repairing any
damage in or to Landlord's Park or the Premises caused by any person making such
deliveries or pick-ups.
(7) Parking. Tenant's employees or other users of the Premises shall not
be permitted to park in, block or remain in the Common Areas.
(8) Furniture and Equipment. Tenant shall insure that furniture, fixtures,
equipment and machinery being moved into or out of the Premises is moved in an
appropriate manner through appropriate entrances, and shall promptly pay or
cause to be paid to Landlord the cost of repairing any damage in or to the
Building caused thereby.
(9) Solicitations. Landlord reserves the right to restrict or prohibit
canvassing, soliciting or peddling in Landlord's Park.
(10) Refuse. Tenant shall place all refuse in proper receptacles provided
by Tenant at its expense at the Premises, and shall keep the Common Areas free
of all refuse generated by Tenant.
(11) Obstruction. Tenant shall not obstruct or place anything in or on the
sidewalks or driveways outside the Building or in the Common Areas, or use such
locations for any purpose except ingress to and egress from the Premises without
Landlord's prior written consent. Landlord may remove, at Tenant's expense, any
such obstruction or thing (unauthorized by Landlord) without notice or
obligation to Tenant.
(12) Proper Conduct. Tenant shall not conduct itself in any manner which
is materially inconsistent with the character of Landlord's Park as a first
quality park or which will materially impair the comfort and convenience of
other tenants in Landlord's Park.
(13) Employees, Agents and Invitees. In these Rules and Regulations,
"Tenant" includes the employees, contractors, agents, invitees and licensees of
Tenant and others permitted by Tenant to use or occupy the Premises.
Page 24 of 24
