LEASE AGREEMENT
Exhibit 10.20
In the
autonomous City of Buenos Aires, on the day 19 of the month of August, 2009,
between ACRILICOS XXXXXXXX
X.X., company which address is Avda. Gral. Roca 4250 de Florida, Pdo. De
Xxxxxxx Xxxxx, Pcia. De Buenos Aires, represented in this act by its legal
representative, Xx. Xxxxx Xxxxxxx XXXXXXXX, Argentinean, ID#
25.044.694, in accordance with the attached power of attorney (Exhibit “A”),
hereinafter “THE
LESSOR”, in one hand; and in the other hand, LAKELAND ARGENTINA SRL
(incorporation pending), represented in this act by its manager
partner XXXXXXXX XXXXXXX XX
XXXX ID# 24.069.380, which address is Corrientes No. 1(not legible) 86
piso 13 Capital Federal hereinafter “THE LESSEE”, and
collectively LESSOR and LESSEE called the PARTIES, agree in entering into this
LEASE AGREEMENT under the following terms:
FIRST:
The LESSOR, hereby lets
to the Lessee, the functional unit No. 110 with a surface of 820 m2 composed of
a storehouse and offices located within a bigger property, owned by the LESSOR,
which name is Centro Industrial y Comercial Florida Oeste, located at Avda.
Gral. Roca No. 4250 between X.X. xx Xxxxxx and Xxxxxxx Xxxxxx, Florida, Pdo. De
Xxxxxxx Xxxxx, Pcia de Buenos Aires, intended for business and industrial
development, functional unit which shall be called THE PROPERTY and that arises
from the sketch signed in counterparts and that is attached to this agreement
made part of it (Exhibit “B”). The property is released by this act to the
satisfaction of the LESSEE as per the asset inventory that the parties sign
along with this (Exhibit “D”).
SECOND:
Both parties consent to this contract within the following context: a) the
guaranty granted by the National State (Law 21342, Article 6) regarding the
establishment of freedom of contract in rental matters, b) the application of
the Civil code in its current version (Law 21342, Article 29) whose rules the
parties submit as a matter of suppletory law, only for all points not expressly
regulated by this agreement, that without prejudice to respect the mandatory
regulations of Laws 23091, modified by Law 25.561 and 25628, c) the current
uncertainty regarding the future acquisitive value of Argentinean currency
combined with the prohibition of any kind of default currency
actualization (Law 23928, Art. 7 modified by Law 25.561).
THIRD:
This contract has a length or term of thirty six (36) months, being valid from
August 19, 2009, expiring on August 18, 2012 necessarily, in which date this
contract shall be automatically expired with no need of any notification but
this, being the LESSEE required to return the property to the LESSOR or its
representative at its end, free of goods, occupants and/or intruders, letting
the LESSOR off the obligation to perform the requirements foreseen in Arts.
1604, 1610, 1622 and cites of the Civil Code. The failing to do so,
without prejudice of eviction that the LESSOR could demand plus the payment for
damages, costs and fees that might be granted; for each day that the LESSEE
exceeds the occupation of the property, besides the corresponding rent, shall
indemnify with a daily fine of one percent (1%) of the corresponding lease at
that time, for each day that improperly pass in the property and until the
effective reception of the property by the LESSOR .- The anticipated termination
shall be governed by Law No. 23.091, Art. 8.-
FOURTH:
The LESSEE states she knows the Internal Use Regulation of the Florida Oeste
Industrial Park, attached to this agreement as (Exhibit “C”), agreeing to comply
with it, receiving in this act a complete copy of the Regulation. The
Parties would be able to agree the extension of the term of this contract at its
expiration, for a term equivalent to the original or another term agreed at that
time, having the LESSEE, in such case, to communicate the LESSOR about such
intention within 60 (sixty) natural days before the expiration of the contract
by any reliable means, having the LESSOR to express its decision within the same
granted term. In such case, the clauses of the original contract shall
prevail without prejudice of the variation that could be verified in the lease
amount as per the mechanism provided in clause twenty nine of this
contract.
FIFTH:
In the case the LESSOR continues receiving the lease after the expiration of the
contractual term, either incremented, and any the raise would be, that shall not
be constructed as novation or renewal, being both parties able to terminate the
lease after the expiration of the term by which the rent had been charged.
The termination of the lease should be justified by a written letter sent by any
of the parties requesting the early termination or notifying the ending of the
lease term without the intention to extend it. In all the cases the lease,
complementary benefits and, if applicable, the corresponding fines shall
continue until the property is truly reinstated to the LESSOR and to the extend
it is in the agreed conditions.
SIXTH:
The LESSEE could be able to terminate unilaterally this contract, with a
previous notice, sent by reliable means, of no less than 60 (sixty) days,
strictly adhering to Law 23091, art. 8, regarding terms of effectiveness,
previous notification and indemnity amounts.
SEVENTH:
The monthly amount to be paid shall be ELEVEN THOUSAND FIVE HUNDRED PESOS
plus VAT ($11,500 plus VAT) also charging to the LESSEE in the amount of
rent the payment to the LESSOR of the proportional part corresponding to the
LESSEE regarding the monthly taxes for municipal services on the property by the
Xxxxxxx Xxxxx Municipality, or the corresponding municipality to the property,
in a 3% proportion of the total amount. The local property tax
perceived by the Provincial Revenue Office of Buenos Aires shall be paid by the
LESSEE in a 3% proportion corresponding to it as well as the Aguas Argentinas’
services, in a 3% proportion corresponding to it for the occupied surface, all
of which is paid every month within the expenses payment. Any other direct
or indirect tax created in the future and applied to the amount of rent agreed
in this contract, that shall be notified by reliable means to the LESSEE, shall
be added as per its aliquot resulting from the rent amount and its payment shall
be paid by the LESSEE, integrating such tax the payment of the monthly rent
starting from the date of its legal enforceability. The Value Added Tax
that eventually affects the rent or the obligations assumed towards the LESSOR
shall be supported by the LESSEE.
EIGHTH:
The rent is agreed by entire month and shall be paid in advance from the
1st
to the 10° day of each month, in the address of the Business Center, located in
Ave. Gral Roca 4250 de Florida, Pcia de Buenos Aires, upon receipt of invoice by
bi-annual periods and receipt for such purpose, or as duly indicated by the
LESSOR, within the Federal Capital, therefore the LESSOR is not obliged to
receive or return money for fraction of month.- The payment shall be by-annual,
through six checks issued at the day 30, 60, 90, 120 and 150. The LESSOR
expressly authorizes to XXXXX XXXXXXXX (ID# 25.044.694), ELISA XXXXXX XXXXXXXX
(ID# 13214065) and/or XXXX XXXXXXX XXXXXXX (ID# 12.599.982) to receive the rent
on its behalf and upon its orders. Debt shall become delinquent by
operation of law, without need to notify after the day 10° of each month.- If
the payment is not done on time, the LESSEE should paid by ways of fine the
amount resulting from adding the monthly rate of 3% to the rent.
NINTH:
This contract is not transferable under any circumstance, either
partially nor totally, temporary or free or charge, and it is stated that the
LESSEE cannot be able to assign, transfer and/or sub-lease the leased property;
and it shall use the property as business premises for the manufacturing, sales,
consignation, commission, representation, distribution, import and export of
clothing, footwear, objects, machines, tools and all kind of products and
devices to be used as industrial safety and protection attire, personal, sport,
cleaning and fire, high rise, low and high temperatures, etc. and
derivatives, and storehouse of goods related to its line of business, and agrees
to use it as per the rules stipulated by the Municipality of Xxxxxxx
Xxxxx, or the corresponding municipality for the property and premises of
that kind that it states to know and undertakes to: a) do not commit any action
that threaten the moral and/or good customs; b) do not deny the access to the
premises to the LESSOR or its representatives to check on the occupation status
and/or preservation of the property and to perform any repair on it.
In the case that the LESSOR intends to exert its access right to the leased
functional unit it should give a previous notification with at least seventy two
(72) hours in advance to the LESSEE. The LESSOR expressly authorizes the
LESSEE to store goods and dangerous devices, having, in the case of storage of
sprays or similar products, to adopt the necessary safety measures and to comply
with the current municipal regulations for the storage of this kind of
goods. The LESSEE shall have free and unrestricted access to the premises
of the Centro Industrial y Comercial Florida Oeste, the seven (7) days of the
week, and the twenty four (24) hours of the day. The LESSEE
undertakes to contract a general and third party liability insurance on the
building in its PROPERTY’s surface in anticipation to losses and fire, with
policy endorsed to the LESSOR that covers all foreseeing contingencies over
persons, assets and goods existing in the storehouse, assuming the LESSEE the
risk for the handling of the goods stored in the premises. The lack of
compliance of this clause shall be considered as a violation of this
contract. In this vein it
agrees to do not sell, promote or commercialize any product of direct or
indirect competition for the products commercialized by Acrilicos Polopoli S.A.
or PALOPOLI (elements and supplies for the visual communication industry), which
it declares to know to date, and that the same are out of its trading
practice. Nevertheless the LESSOR accepts that the LESSEE commercializes
safety attires including cat’s eyes and fluorescent
strips.
TENTH:
The LESSEE shall not be able to refurbish without the LESSOR’s previous
authorization in written; if the improvements are done, they shall remain in the
property without obligation of compensation.- As per all constructions made by
the LESSEE, they shall remain once the contract is expired in favor of the
LESSOR, with no right whatsoever for the LESSEE to acknowledges, indemnity or
compensations for them. The PROPERTY should be restituted as of its former
state it was received, except for the natural wearing over time, with its
sanitary and electrical installations, devices, building installations and
enclosures, being the LESSEE able to withdraw the unbounded equipment, air
conditioning, furniture, etc. which are not bonded to the property and that are
of its own.
ELEVENTH:
The LESSEE undertakes to the preservation of the devices, installations and
accessories of the property and to repair any damage arising from the use and
should let the LESSOR know about any damage in the property.- Exhibit “D” is
attached to this agreement the inventory of the assets contained in the property
which belongs to the LESSOR.
TWELFTH:
The LESSOR shall not be responsible for any damages and/or
accidents that the LESSEE could have in its person and/or third parties due to
fire or total or partial destruction of the property, furniture, devices, etc.
and/or all persons working in the property, unless such damages and/or accidents
are the result of structural failures or defects of the PROPERTY for which the
LESSOR should be responsible.- In case of destruction or partial wearing of the
PROPERTY due to force major or third party acts, for which the Parties should
not be responsible, the art. 1521 of the Civil Code should be applied. The
restriction or suspension of the PROPERTY’s services shall not be cause for rent
suspension, withholding or reduction.
THIRTEENTH:
The interior pathway of the property shall be of common use for the LESSEE and
the rest of the property’s dwellers, including the LESSOR itself, being such
pathway of free movement, not being possible to stand in the way of exit and
entrance of vehicles. The LESSOR authorizes the use of 2 (two) parking
lots to the LESSEE for its use, being able to use them at day and night free of
charge, having the LESSEE to state in written the domains of the authorized
vehicles to enter in the property permanently. The rest of the vehicles
that enters to the general property for work purposes, should be authorized in
the control post at the entrance and shall be subject to the entrance general
conditions and property capacity, after stating its allowance, motive and load
as well being its exit authorized by the LESSEE by express note stating the
leaving load, if any.
FOURTEENTH:
The lack of express reservation by the LESSOR either at the moment the PROPERTY
is restituted, or at the moment to receive payments, shall not be construed as a
waiver to rents, tributes, interests, fines, legal accessories or any other
right or claim.
FIFTEENTH:
The rent, proportional interests and the fees for services against the Lessee,
integrate the rent amount and could be claimed through summary
proceedings. The invoices and/or tax receipts will have authenticity
presumption, being differed to regular procedures of repetition, any challenge,
in order, in form or content. The cost of the execution and for the entire
trial due to the no compliance of the LESSEE, should be paid by the party the
intervening judge determines. Once a year of less is remaining of the
contract term of effectiveness, the LESSOR shall be able to require the LESSEE
to sign an agreement to vacate to be judicially approved, the generated costs
shall be paid by the LESSOR. If the LESSEE refuses to sign such agreement
and the LESSOR promotes an early vacate trial, the costs for such trial shall be
charged to the LESSEE. If such previous requirement does not take place,
each party should bear its own costs for the early vacate trial, if, after the
acceptance of the request, the LESSEE proceeds to return the PROPERTY in terms
and form.
SIXTEENTH:
It is agreed that the LESSEE shall be the only responsible for the payments of
electricity, gas (settlement of cable laying, meter and final gas fitting out in
charge of the LESSOR) and telephone charges, services that shall be obtained in
its name, relieving the LESSOR of all responsibility, being the LESSEE in charge of all the
their processing, design
of electrical layouts and plants, piping layouts, etc. With regard to municipal approval, it
should be processed by the LESSEE and it should submit a copy to the
LESSOR.
SEVENTEENTH:
As per the general and common services of all property as common area, which the
LESSEE uses in proportional part, as Aguas Argentinas, Electricity, Private
Security, Hygiene, etc. they shall be supported by the LESSEE in a 3% percentage
of the same, and prorated by surface also as expenses of common sectors.
The LESSEE shall add to the income a month of expenses calculated on the last
due date as expenses fund as it shall pay them one month in advance that shall
be credited in the due date of the last month of the lease. The
services invoiced by the LESSOR for Administration or the administration it
designates for such purpose shall have its 3% fee of the rent amount, being also
such percentages part of the amount of rent and executables to itself, and shall
be expressed in the quarterly invoice having the LESSEE to add such service
along with the monthly rent. The expenses should be paid within 5 days of
the reception of the respective payment, and being considered as xxxxx cash fund
no delay in payment shall be accepted due to accounting reasons, accruing the
corresponding penalties.
EIGHTEENTH:
The LESSOR expressly accepts the key consignment faculty by the LESSEE, without
prejudice of the LESSOR satisfaction on the physical state and preservation of
the leased property.
NINETEENTH:
The no compliance of any of the clauses of this contract, shall authorize any of
the parties to consider this contract terminated and dismissed, with no need of
further or previous demand or to prove any prejudice, having the LESSEE to
restitute the PROPERTY within 30 (thirty) days after the notification of the
respective resolution, having the LESSOR, if applicable, to return the monies
perceived for anticipated rent and not used periods of time. At the LESSOR
will, they shall be considered as a default by the LESSEE and, therefore, cause
for early termination of the lease, prior consultation and notification to the
LESSE for it to try solving such contingencies in a reasonable term, the
following situations: reorganization proceedings, bankruptcy, bank
checking account closeout by the Banco Central de la República Argentina,
seizure on existing assets in the PROPERTY in trails submitted against the
LESSEE, closure due to tax or provisional fine, judicial intervention, and any
other assumptions that could cause the LESSOR a reasonable fear about the
aforementioned compliance with the assumed obligations by the
LESSEE.
TWENTIETH:
In the case of contract expiration or rescission agreement and the no compliance
by the LESSEE with the obligation to restitute the PROPERTY on time, a penalty
clause shall be accrued equivalent to a monthly rent. In the case the
LESSEE resist to the obligation to restitute the PROPERTY on time or if it
ceases paying the rent and/or services, expenses or taxes assigned to the
LESSEE, the LESSOR shall be able to request such suspension of all kind of
services commonly provided to the LESSEE.
TWENTY
FIRST: For any possible judicial intervention the undersigned of this
contract submit to the jurisdiction, of the Civil Lower Courts of this Federal
Capital, expressly waiving to any other venue or jurisdiction that could
correspond to them. The parties establish the following addresses for
service: LESSOR: Ave. Santa Fe 1611, piso 4º Capital Federal. LESSEE:
Corrientes 1386 piso 13 Cap. Federal.
TWENTY
SECOND: In the case that the LESSOR does not notify the LESSEE or does
not xxx for the delay in rent payments, should not be construed as extension of
the term, or extinguish the bond and all judicial expenses, fees and/or of any
nature, arising from the no compliance of the obligations of this contract, all
such expenses should be exclusively charged to the LESSEE.
TWENTY
THIRD: In the case of dissolution or liquidation of the LESSEE this lease
contract shall have no effect; applying the terms of Law 23.091, art. 8, on
early termination.-
TWENTY
FOURTH: The lack of compliance of any of the clauses of this contract,
shall enable the parties to terminate it, if it is not convenient for them,
having the LESSEE to move out of the property in the peremptory term stated by
the LESSOR and having the LESSOR, if applicable, to restitute any received rent
prepayment, reserving both parties the right to claim for any damage along with
the penalties established herein.-
TWENTY
FIFTH: The relationship between the parties, this contract, its effects,
etc. are exclusively governed by the dispositions of the Civil Code with express
exclusion of any emergency regime that could be sanctioned or adopted in
the future to regulate the lease of urban real estate.-
TWENTY
SIXTH: In this act, the LESSEE party, in performance bond of this
contract, and without prejudice of the obligation to respond with all its
patrimony, undertakes to the payment as a deposit, the amount of ELEVEN THOUSAND FIVE HUNDRED PESOS
($11,500.-) to the LESSOR, amount that shall not accrue interests or been
applied for rent payment. Once the lease have finished and the PROPERTY is
returned in the same conditions it was received, except for the wearing effects
of time and being paid all services and accepted by the LESSOR, the devolution
of such deposit shall be done in the same currency after the pertinent
deductions, if any.- The
deposit should be updated any time the rent amount is modified, as per
stipulations of clause 29.
TWENTY
SEVENTH: The LESSOR shall collaborate with the LESSEE in the processing
of the corresponding authorizations, as well as the ones for electricity, water
or gas but being them the total LESSEE responsibility, relieving from their
processing in whole to the LESSOR. Likewise, the LESSOR shall be in charge
to provide all documentation corresponding to the property to obtain the
corresponding municipal authorization, process that shall be done by the
LESSEE. If, hypothetically, the municipal authorization cannot be resolved
with full rights, it shall be resolved in good standing without the need of any
demand and without any of the parties being able to make an economical claim to
the other party or demand damages under no cause or concept. In
this case the LESSOR should return to the LESSEE the rent paid by concept of
deposit and the checks or monies corresponding to the rent amounts paid in
advance, as per clause eight herein, except for the rent for the periods of time
when the LESSEE used the PROPERTY.
TWENTY
EIGHTH: LAKELAND INDUSTRIES INC’s signature GUARANTEES the faithful
compliance of this contract, who submit in this act a check on Wachovia Bank NA
New York USA for TEN THOUSAND US DOLARS (US$10,000.-) which is submitted as
bond, and that the guarantor authorizes its collection by the LESSOR in the case
of the lack of compliance by the LESSEE with the payment of rent and expenses,
authorizing it to receive and to charge from such amounts in such concepts,
having, as a sole prevention, to notify within 5 (five) days in advance of such
deposit to the LESSEE instigating the payment of the owned items, for it to
normalize the defaults, being authorized to collect the amount in case of
silence or the lack of payment. This facility shall have a validity of six
month from the signature date, date in which the LESSEE should submit a bond
reinsured for the remaining term of the contract which guarantees the payment of
the rent, to the LESSOR satisfaction. The lack of compliance with this
clause is automatic cause for termination by the LESSOR.
TWENTY
NINTH: By virtue to formalize this contract in a context of economic
emergency, in which it is impossible to establish an economic correction guide,
both parties agrees to establish an adjustment criterion every six months to
adequate the rent to the local values as per the real estate market situation at
that time, undertaking to assume its best efforts to equally ensure the
resulting modifications. In that way the parties shall meet 15 days before
the ending of every six month period. If the agreement is not reached,
both parties shall accept as the rental value the written appraisal average made
by three local real estate agencies for each party, with experience in
commercial rental, being that resulting value the new rental value for next
year. In the case the LESSEE does not accept the new rental value, it
shall be able to terminate the contract with a 60 days’ advance notification
paying the indemnity amount provided for in Law 23.091 in accordance to the move
out date, being the value of the rent during that period of time the last
immediate paid in accordance with the parties.
THIRTIETH:
STAMP TAX. For
purposes of stamp tax, the value of this contract is estimated in the amount of
$414.000, so the corresponding tax to the rate of 0.6% amounts to $2.484, which
shall be paid by the Parties in a 50% each.
THIRTY
FIRST: By virtue that the LESSEE does not have a bank account and it is
in the process of getting one, it shall be able to pay, in a transitory way, the
monthly rent from the sign of this contract by a maximum period of time of 6
(six) month, the rent in a monthly way, from day one to day five of each month
in the property administration of the LESSOR. Once the bank account
and the check book are obtained, it should issue the checks every six months as
mentioned above. In this vein the first month is paid by wire
transfer, so once it is credited and after the corresponding national currency
exchange control is done the items for the rent of September, August
proportional and deposit shall be cancelled. It is specified that
until such amounts are credited the LESSEE shall not be able to take possession
of the leased property.
THIRTY
SECOND: The property has an electric lift truck, which connects the lobby
with the first floor, with a maximum load capacity of 500 kg. It is
expressly agreed by both parties that such lift truck is not to take up, take down
or transport persons in any way, therefore the LESSOR is relieved of all
responsibility for accidents on persons or third parties when they were
transported in violation of this convention. Likewise, the LESSEE has
been truly instructed on the operation of the lift truck, for third party
persons and goods, having the LESSEE to contract an insurance for such lift
truck that covers its risks relieving the LESSOR from all responsibility in that
respect.
In
witness whereof, reading and confirmation, this agreement is signed in two
counterparts, in Buenos Aires on August 19, 2009.
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By:
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/s/ Xxxxxxxx Gendali Xxxx
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By:
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/s/ Xxxxx
Xxxxxxxx
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Lessee
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Lessor
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