LEASE AGREEMENT
SUBJECT MATTER OF AGREEMENT: WAREHOUSE LOCATED AT CALLE FRANCISCO XXXXXXX XXXX
S/N [no number], CONSTRUCTED ON XXXX 0, 0, 0, 00, 00, XXX 00 XX XXXXX NUMBER 2
OF THE GARITA DE OTAY SUBDIVISION.
CONDITIONS PURSUANT TO WHICH THE COMPANY NAMED TAG-IT DE MEXICO, S.A. DE C.V.,
VIA ITS LEGAL REPRESENTATIVE, XXXXX XXXXXXXXX XXXXXXXX XXXXXX, AS IS SHOWN IN
INSTRUMENT NUMBER 13.317, VOLUME 437 OF JANUARY [illegible], 1997, DRAFTED
BEFORE XX. XXXXXXXXX XXXXXXXX XXXXXXX, REGULAR NOTARY OF NOTARY OFFICE NINE OF
THIS MUNICIPALITY, LEASES THE ABOVE-DESCRIBED PROPERTY FROM ITS LEGITIMATE
OWNER, XX. XXXXXXX XXXXXX MOUSSAN.
I.- THE PRICE OF THE LEASE IS THE SUM OF $4,500.00 DOLLARS PLUS V.A.T.,
PAYABLE IN ADVANCE MONTHLY INSTALLMENTS BEGINNING ON NOVEMBER 15, 1997 TO THE
LESSOR OR HIS REPRESENTATIVE IN THE OFFICES LOCATED AT XXXXXXX XXXXXXXXXX XX.
0000, XXXXXXXX 000, XXXX XXXXXX OF THIS CITY, WITHIN THE FIRST FIVE DAYS OF EACH
DUE DATE.
II.- THE LESSEE HEREBY ESTABLISHES A DEPOSIT FOR THE SUM OF $18,000.00
DOLLARS TO GUARANTEE ANY DAMAGES THAT MAY BE CAUSED TO THE PROPERTY SUBJECT TO
LEASE.
III.- THE ABOVE-DESCRIBED PROPERTY IS RECEIVED TO LESSEE'S COMPLETE
SATISFACTION, AND IT IS DECLARED FOR THE RECORD THAT IT IS IN GOOD CONDITION AND
WILL BE RETURNED IN THESE SAME GOOD CONDITIONS WITHOUT ANY ADDITIONAL WEAR OTHER
THAN THAT CAUSED BY THE NORMAL USE MADE OF SAID PROPERTY. OTHERWISE, LESSEE
WILL PAY THE PRICE FOR THE NECESSARY REPAIRS WHEN THE DEPOSIT IS RETURNED.
IV.- THE TERM OF THIS AGREEMENT IS TWO YEARS, WHICH IS OBLIGATORY FOR
BOTH PARTIES, BEGINNING ON NOVEMBER 15, 1997 AND ENDING ON NOVEMBER 14, 1999,
WITH THE OPTION OF ONE MORE YEAR PROVIDED LESSEE MAKES A WRITTEN REQUEST TO
LESSOR TWO MONTHS IN ADVANCE AND THE LATTER AGREES TO GRANT IT TO LESSEE.
DURING THE SECOND YEAR, THE RENT SHALL INCREASE BY 11% PLUS V.A.T., AND IN THE
EVENT LESSEE SHOULD OPT FOR A THIRD YEAR, THE RENT WILL INCREASE BY 5% PLUS
V.A.T.
V.- THE RENTED PROPERTY SHALL BE DESTINED EXCLUSIVELY FOR THE MAQUILA
MANUFACTURE OF PACKAGES, CARDBOARD, PAPER AND PREFABRICATED METAL, AND USING THE
PROPERTY FOR ANY OTHER PURPOSE SHALL BE GROUNDS FOR THE OWNER OR LESSOR TO
UNDERTAKE EVICTION PROCEEDINGS.
[Handwritten note in English]
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VI.- SHOULD LESSEE FAIL TO PAY A SINGLE STIPULATED RENTAL PAYMENT,
LESSOR MAY CLEARLY TERMINATE THIS AGREEMENT AND REQUEST THE IMMEDIATE EVICTION
OF THE PROPERTY, AND LEGAL COSTS AND EXPENSES SHALL BE PAID BY LESSEE.
VII.- LESSEE SHALL BE RESPONSIBLE FOR ANY DAMAGES CAUSED TO THE RENTED
PROPERTY, FOR WHATEVER REASON, WHETHER CAUSED BY LESSEE'S FAMILY MEMBERS,
DEPENDENTS OR SUBLESSEES. DAMAGES TO THE DRAINAGE AND OTHER ITEMS ON THE
PROPERTY SHALL BE REPAIRED AT LESSEE'S COST, EVEN IF SAID DAMAGES ARE CAUSED BY
THE USE OF SUCH ITEMS.
VIII.- THE FOLLOWING MAY NOT BE UNDERTAKEN WITHOUT WRITTEN PERMISSION BY
LESSOR:
A.- VARIATIONS TO THE FORM OF THE RENTED BUILDING;
B.- USEFUL, NECESSARY, OR DECORATIVE IMPROVEMENTS.
IF THE RESPECTIVE PERMISSION IS GRANTED TO MAKE VARIATIONS TO THE FORM AND
TO CONSTRUCT THE IMPROVEMENTS REFERRED TO IN THIS CLAUSE, THE CONDITIONS
PURSUANT TO WHICH THE PERMISSION IS GRANTED MUST BE RECORDED IN THE DOCUMENT
CONTAINING SAID PERMISSION. IF LESSEE MODIFIES THE FORM OF THE RENTED PROPERTY
OR MAKES IMPROVEMENTS TO IT WITHOUT THE REQUIRED PERMISSION, IT SHALL BE
RESPONSIBLE, IN THE FIRST CASE, PURSUANT TO THE TERMS OF ARTICLE 2315 OF THE
CIVIL CODE, AND IN THE SECOND CASE, LESSOR SHALL NOT IN BE OBLIGATED IN ANY WAY
TO PAY FOR THE IMPROVEMENTS AND LESSEE MAY LEAVE THEM OR TAKE THEM, PAYING FOR
THE DAMAGES AND REPAIRING ANY DEFECTS IT HAS CAUSED, AND IT ACCORDINGLY WAIVES
ARTICLES 2297, 2298, AND 2321 OF THE CIVIL CODE.
IX.- LESSEE MAY NOT, FOR ANY REASON, WITHHOLD RENTAL PAYMENTS OR REQUEST
THEIR REDUCTION, EXCEPT IN THE CASE OF ARTICLE 2294 OF THE CIVIL CODE, AND IT
THEREFORE WAIVES THE RIGHTS GRANTED TO IT BY ARTICLES 2295, 2319, AND 2364 OF
SAID CIVIL CODE.
X.- LESSEE MAY NOT SUBLEASE THE PROPERTY OR TRANSFER ITS RIGHTS AS
LESSEE WITHOUT WRITTEN PERMISSION BY LESSOR AND IT MUST BE LEASED TO PERSONS
WITH THE SAME CONDITIONS OF HONESTY, AND LESSEE WAIVES THE RIGHT GRANTED TO IT
BY ARTICLE 2366 OF SAID CIVIL CODE.
XI.- IN THE EVENT THE OWNER OF THE PROPERTY WHICH IS THE SUBJECT OF THIS
LEASE MUST MOVE THE PROPERTY, SELL THE PROPERTY, OR MODIFY ITS CONSTRUCTION,
LESSEE SHALL BE OBLIGATED TO VACATE IT WITHIN A PERIOD OF 60 DAYS BEGINNING ON
THE DAY IT RECEIVES THE RESPECTIVE NOTICE XXX XXXX.
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XXX.- XXXXXX DECLARES THAT IT IS PERFECTLY AWARE OF THE CONDITIONS OF THE
PROPERTY SUBJECT TO THIS LEASE, THAT IT HAS NO HIDDEN DEFECTS, AND IT THEREFORE
WAIVES THE PRIVILEGES AND RIGHTS GRANTED TO IT BY ARTICLE 2286, SECTION V, AND
ARTICLE 2295 OF THE CIVIL CODE FOR THE STATE OF BAJA CALIFORNIA NORTE.
XIII.- THE PROPERTY SUBJECT TO LEASE MEETS THE CONDITIONS OF HYGIENE
ESTABLISHED BY LAW AND LESSEE AGREES TO MAINTAIN THEM AT ITS COST.
XIV.- THIS LEASE AGREEMENT SHALL BE TERMINATED FOR THE VARIOUS CAUSES
ESTABLISHED BY ARTICLE 2357 OF THE CIVIL CODE.
XV.- LESSOR MAY REQUEST THE RESCISSION OF THIS AGREEMENT FOR THE BREACH
OF ANY OF ITS CLAUSES, AS WELL AS FOR THE CAUSES SET FORTH IN ARTICLE 2363 OF
THE CIVIL CODE.
THE FOREGOING HAVING BEEN READ TO THE CONTRACTING PARTIES, THEY RATIFIED AND
SIGNED IT IN THE PRESENCE OF THE WITNESSES WHO ATTEST TO THE ACT.
TIJUANA, B.C., ON THE 15th OF NOVEMBER OF 1997.
LESSOR LESSEE
[signature] [signature]
XX. XXXXXXX XXXXXX XXXXXXX XXXXX XXXXXXXXX XXXXXXXX XXXXXX
LEGAL REPRESENTATIVE OF
TAG-IT DE MEXICO, S.A. DE C.V.
WITNESS WITNESS
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