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EXHIBIT 10.29
LEASE AGREEMENT
Lease Agreement entered into this 17th day of November, 1996 by and between
Inmobiliaria Nuevo Aeropuerto, S.A. de C.V. ("Landlord") and Smartflex Systems
de Mexico, S.A. de C.V. ("Tenant"), according to the following recitals and
sections:
R E C I T A L S
I. Landlord through its legal representatives hereby states that:
(A) Landlord is a mercantile corporation incorporated
through Public Deed Number 19,502 dated 27th of January, 1983, issued
by Mr. Lic. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Notary Public Number 27
for Monterrey, N.L., United Mexican States, and registered before the
Public Register of Monterrey, N.L. under No. 183, folio 141, Vol. 258,
Book No.3, Second Auxiliary, on the 9th. of March, 1983.
(B) Landlord owns, free and clear of any mortgages, liens
or encumbrances, the land and buildings comprising the Premises (as
defined in section 1.01 of this Agreement).
(C) Landlord wishes to lease and grant a call option
right over the Premises to Tenant under the terms and conditions of
this Agreement.
(D) Landlord and its legal representatives have the
necessary authority to enter into this Agreement, which authority has
not been limited or revoked in any manner whatsoever.
II. Tenant through its legal representative hereby states that:
(A) Tenant is a mercantile corporation incorporated
through Public Deed Number 2556 dated 26 of October 1993, issued by
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Notary Public Number 44 for Monterrey,
N.L., United Mexican States registered before the Public Registry of
Monterrey under No. 2,272, Book 3, Vol. 405, Second Auxiliary on the
12th
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of December 1993.
(B) Tenant wishes to lease and acquire a call option
right over the Premises from the Landlord under the terms and
conditions of this Agreement.
(C) Tenant and its legal representative have the
necessary authority to execute this Agreement, which authority has not
been limited or revoked in any manner whatsoever.
S E C T I O N S
1. CERTAIN DEFINITIONS
1.01 Premises: The Premises leased pursuant to this
Agreement contain 123,347 sq. feet of land (the "Land"), to be improved with a
building ("Building") to be constructed thereon containing approximately 55,000
square feet of floor space, together with parking areas and landscaping, as
shown on the site plan ("Site Plan") attached hereto as Exhibit A. The address
of the Premises is: ▇▇▇▇▇▇▇ ▇▇▇ ▇▇. ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇.▇. CP 66600.
1.02. Lease Term: The Lease term shall commence upon the
date of Substantial Completion of Landlord's Work (as said phrase is defined
below) and delivery of possession of the Premises to Tenant ("Commencement
Date") and end seven (7) calendar years thereafter ("Lease Term") , unless
terminated sooner pursuant to any other provisions of this Agreement or unless
extended pursuant to this Section 1.02. The scheduled commencement date
("Scheduled Commencement Date") of the Lease Term is MARCH 15, 1997. If the
Landlord's Work is Substantially Completed before the Scheduled Commencement
Date, the Lease Term shall commence upon Substantial Completion and Landlord's
delivery to Tenant of possession thereof. Within five calendar days after the
Commencement Date, the parties shall each execute and deliver a commencement
date certificate ("Commencement Date Certificate") in the form attached as
EXHIBIT "B" of this Agreement. The term "Lease Term" as used in this
Agreement, includes any extension as defined in this Section 1.02, provided the
right to perform such extension is exercised.
Notwithstanding the above and provided Tenant is in compliance with
all of its obligations under this Agreement, Tenant shall have the right to
extend the Lease Term for an additional term of five (5) years, by means of
prior written notice to Landlord with at least ninety (90) days in advance of
the date of termination of the initial seven (7) year Lease Term. In such a
case the Lease Term
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shall include such five (5) year extension and all of the provisions of this
Agreement shall continue to be in full force and effect until the conclusion of
the extended Lease Term.
In addition to the foregoing, in the event one of the parties hereto
makes a transfer in fraud of its creditors, makes a transfer for the benefit of
its creditors, is subject to bankruptcy proceedings, is adjudged bankrupt or
insolvent in proceedings filed against it, a receiver, trustee or custodian is
appointed for all or substantially all of its assets, fails to pay its debts as
they become due, convenes a meeting of all or a portion of its creditors, or
performs any act of bankruptcy or insolvency, including the selling of its
assets to pay creditors, the other party hereto may terminate the Lease Term
and this Agreement by means of prior written notice without any liability to
either party (except for obligations accrued in favor of one party prior to the
date of termination).
1.03. Base Monthly Rent: The Base Monthly Rent shall result out of
the following calculation: Total value of the investment to perform Landlord's
Work ("Landlord's Investment") multiplied by 0.13 and divided by 12 (plus value
added tax) equals the Base Monthly Rent. An example of this calculation is
provided in paragraph I of EXHIBIT C attached hereto and forming a part hereof.
The approximate Base Monthly Rent determined as a result of the above
calculation for each month of the Lease Term is US$26,836.00 Dollars (twenty
six thousand eight hundred and thirty six U. S. Dollars) per month, plus the
corresponding Value Added Tax. Such rent corresponds to the Final Plans and
Final Specifications attached hereto as EXHIBIT D and forming a part hereof
("Final Plan and Final Specifications"), assuming a value of Landlord's
Investment of US$2,477,169.23 Dollars (two millions four hundred seventy seven
thousand one hundred and sixty nine U.S. Dollars 23/100).
The value of Landlord's Investment quoted above is divided into two
parts, a fixed part valued at US$1,787,749.23 dollars ("Fixed Value")
corresponding to the portion of Landlord's Work identified as "Fixed Value
Work" in EXHIBIT D and a variable part valued at approximately US$689,420.00
("Variable Value") corresponding to the portion of Landlord's Work identified
as "Variable Value Work" in EXHIBIT D.
Except for the provisions of the following paragraph, the parties
agree that the Fixed Value and the Fixed Value Work will not be modified as a
result of changes in the costs of raw materials, labor and prices quoted by
the suppliers or any other change in circumstances whatsoever. The Variable
Value shall be
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changed to reflect any difference between the actual cost of the Variable Value
Work and the approximate amount quoted above, in the understanding that Tenant
shall have the right to (i) join Landlord in all efforts to obtain low
quotations from the suppliers of materials, equipment or labor related to the
Variable Value Work, and the acceptance of any quotation relating to this
portion of Landlord's Work shall be subject to the previous approval of Tenant,
provided however, that any quotation furnished by Landlord to Tenant in writing
shall be accepted or rejected by Tenant in writing within seven (7) calendar
days, otherwise the same shall be considered as accepted, and (ii) Tenant shall
have the right to acquire or purchase on its own account any materials and
equipment comprised within the Variable Value Work, in which case the Value of
such materials and equipment shall not be computed as part of the Variable
Value, provided that if Landlord is requested to install any such equipment at
the Premises Tenant shall pay to Landlord as compensation for such installation
an amount equal to the actual cost of installation by Landlord plus 20%.
If the Final Plans and Final Specifications suffer any substraction by
any change requested by Tenant prior to the Commencement Date, Landlord's
Investment shall be reduced by subtracting the value of the portion of
Landlord's Work canceled or reduced to the amount of US$2,477,169.23 (as this
amount may be adjusted due to changes in the Variable Value) in order to adjust
the Base Monthly Rent by applying the calculation stated in the first paragraph
of this Section 1.03 to Landlord's Investment as reduced in accordance herewith
(an example of this calculation is provided in paragraph II of EXHIBIT C). If
Such Final Plans and Final Specifications suffer any additions by any change
requested by Tenant prior to the Commencement Date, Landlord's Investment shall
be increased as follows: (i) Landlord shall request five bids from construction
companies or suppliers previously approved by Tenant for the addition and the
highest and lowest bid shall be eliminated, then the parties shall agree on
which of the other three bids shall be accepted, (ii) the actual cost of the
addition as per the bid approved in accordance herewith shall be increased by
20%, and (iii) the result shall be added to the amount of US$2,477,169.23
Dollars (as this amount may be adjusted due to changes from time to time in the
Variable Value) in order to determine the new value of Landlord's Investment
which will be subject to the calculation stated in the first paragraph of this
Section 1.03 in order to obtain the new Base Monthly Rent (an example of this
calculation is provided in paragraph III of EXHIBIT C).
The parties agree that at the Commencement Date, the parties shall
make the calculations hereinabove stated in order to finally determine the
initial Base Monthly Rent, in the understanding however, that the Base Monthly
Rent to be determined in accordance
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herewith shall, except for increases to the Base Monthly Rent as expressly
provided in this Agreement (including increases due to changes to Landlord's
Investment as provided in this Agreement), not exceed the amount of
US$26,836.00 (twenty six thousand eight hundred and thirty six 00/100 U.S.
dollars), plus the corresponding value added tax.
Tenant will pay the Base Monthly Rent in U.S. Dollars at the
International Bank of Commerce of Laredo, Texas, located at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, P.O. Drawer 1359, Laredo, Texas, 78042-1359, at the account indicated
by the Landlord in writing at the appropriate time.
The Base Monthly Rent shall be adjusted every one year of the Lease
Term after the first year by the percentage increase in the U.S. Consumer
Price Index ("CPI") as published by the U.S. Federal Government corresponding
to the applicable one year period. This increase can not be lower than two per
cent (2%) or higher than four per cent (4%).
1.04. Delivery of Possession: Landlord shall deliver
possession of the Premises to Tenant in a Substantially Completed (as such term
is defined below) condition by the Scheduled Commencement Date, or on such
other date as may be determined as expressly provided in this Agreement.
1.05. Substantial Completion: Landlord shall deliver
possession of the Premises to Tenant ready for installation and operation of
manufacturing equipment, as well as for use of office space, including without
limitation readiness for installation of communication and computer systems
("Substantially Completed") in accordance with Final Plans and Final
Specifications including approved changes, and Tenant must approve said
completion in writing, upon the occurrence of all of the following:
1. Construction by Landlord of the Premises in accordance with
the Final Plans and Final Specifications ("Landlord's Work") and
delivery of a certificate to that effect to Tenant by Landlord's
engineer. Whenever the expression Final Plans and Final
Specifications is referred to herein it shall mean the Final Plans and
Final Specifications described in EXHIBIT D, plus any changes approved
by the parties.
2. Acceptance by Tenant that the utility services for the
Building specified in the Final Plans and Final Specifications
including storm and sanitary sewer, water and electricity, and
telecommunications lines (but expressly excluding any treatment of
residual water required prior to its disposal by Tenant into the
park's sewer system in accordance with the provisions of section 7.02
below) have been fully installed
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and are operational for use by Tenant. Tenant shall at its cost,
execute directly with the suppliers of such services their respective
contracts for the supplying of such services, provided however, that
any payment or contribution required by any utility company (i.e.
electricity, telephone or water) for the supply of the corresponding
utility service other than standard hook-up and consumption fees shall
be paid by Landlord in order for the Premises to be considered
Substantially Completed. The foregoing in the understanding that,
with respect to the water supply to the Premises for use by the
Tenant, the Landlord will at its own cost and expense drill and equip
a water well in accordance with the Final Plan and Final
Specifications, and the Landlord represents and warrants that it has
and it will maintain for the duration of this Agreement the required
concession or permit for the extraction of water from such well for
its use by the Tenant.
3. All proposed means of ingress, egress, parking, loading,
manufacturing and office areas are available for use by Tenant, as
specified in EXHIBITS A AND D.
4. All legally required permits or certificates have been issued
by all required governmental authorities and obtained by Landlord
(including without limitation the permits to be obtained by Landlord
referred to in section 7.02 below), except as to any permit to be
obtained from the Federal and State environmental authorities not
relating to the construction of the Premises or the development of the
industrial park where they are located, but related to the specific
operation of Tenant's Intended Uses as hereinafter defined.
5. Remaining work to be done to render the Premises fully
completed shall consist solely of minor details of construction,
mechanical adjustments, or decoration, which will not interfere with
Tenant's use and enjoyment of the Premises. When such remaining work
is finally completed by Landlord and accepted by Tenant Landlord's
Work and the Premises shall be considered as "Finally Completed". To
this effect whenever the Premises and Landlord's Work is finally
completed the parties hereto shall execute and deliver a Final
Completion Certificate in the form of EXHIBIT E attached hereto and
made a part hereof.
6. If there is any dispute during the performance of Landlord's
Work to be executed under this Agreement or at the time of Substantial
Completion, the parties herein agree to be subject to the procedure
described in EXHIBIT F attached hereto and forming a part hereof.
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1.06. Parking: Tenant shall have the exclusive right to
use all available vehicle parking spaces at the Premises.
1.07. Tenant's Work: Tenant's Work, as defined in the
Final Plans and Final Specifications attached hereto as Exhibit D shall be
performed by Tenant at Tenant's expense in a good and workmanlike manner in
accordance with the terms and provisions contained in the Final Plans and Final
Specifications and paid for as provided therein.
1.08. Landlord's Work: Landlord's work shall mean all
works and services to be performed by Landlord in accordance with this
Agreement (including the Final Plans and Final Specifications) , which shall be
performed by Landlord at Landlord's expense in a good and workmanlike manner.
Upon Substantial Completion of Landlord's Work, Landlord shall deliver to
Tenant a certificate of substantial completion ("Certificate of Substantial
Completion").
1.9 Days: Whenever the term "days" is used in this Agreement, it
shall mean calendar days, except as provided otherwise.
2. DEMISE AND POSSESSION
2.01. Landlord leases to Tenant, and Tenant leases from
Landlord, the Premises described in Section 1.01 of this Agreement. In
reliance on Landlord's representations and warranties contained in this
Agreement, Tenant agrees that it will accept the Premises, as of the date of
delivery by Landlord of the Certificate of Substantial Completion provided that
the Landlord has by then substantially Completed Landlord's Work, the
conditions set forth in section 1.05 above have been met and subject to
Landlord's Work being Finally Completed in accordance with this Agreement.
2.02. If for any reason Landlord has not Substantially
Completed Landlord's Work and delivered possession of the Premises to Tenant by
MARCH 15, 1997 ("Scheduled Commencement Date"), except for delays resulting
from changes to the Final Plans and Final Specifications requested by Tenant
after December 31, 1996 or changes resulting in an increase in the surface of
the Building or due to an event of Force Majeure (as such term is hereinafter
defined) (in which case the parties shall agree on an extension of the
Scheduled Commencement Date) , the validity of this Agreement shall not be
affected nor shall either party have the right to terminate this Agreement
except as expressly provided in this Section 2 and in Sections 13 and 15 herein
below; provided, however, that if the delay is not attributable to Tenant,
Tenant shall be entitled to a reduction of the Base Monthly Rent
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applicable to the first month of the Lease Term (and successive months if
necessary) in the amount of US$500 Dollars for each day that passes from the
Scheduled Commencement Date (except for delays resulting from changes to the
Final Plans and Final Specifications requested by Tenant after December 31,
1996 or changes resulting in an increase in the surface of the Building or due
to an event of Force Majeure) until Substantial Completion of Landlord's Work
and delivery of possession of the Premises to Tenant actually occur. Should
the delay be more than forty five (45) days (even as a result of a Force
Majeure as provided in Section 32.07 and without the cure period set forth in
section 15.01 below being applicable for this purpose if the delay is due to
Landlord's default), Tenant shall have the right, but not the obligation, to
terminate this Agreement without incurring in any liability. Each party hereto
shall not incur in any liability whatsoever towards the other party due to
termination of this Agreement by Tenant based on a delay caused by Force
Majeure.
2.03. Landlord represents and warrants that as of the date
of the execution of this Agreement, it holds good and marketable title to the
Land. Landlord will obtain releases of all tenancies, liens, claims,
easements, and other encumbrances on the Land and shall furnish evidence of its
title (including a certificate of no liens issued by the corresponding public
registry of property) satisfactory to Tenant within 30 (thirty) days after the
execution of this Agreement.
2.04 Notwithstanding the foregoing or anything in this
Agreement to the contrary, considering that the manufacturing area of the
Premises identified in EXHIBITS A AND D (the "Manufacturing Area") is scheduled
to be completed by Landlord (including availability of water and electricity
for use by Tenant in the Manufacturing Area) on January 31, 1997, Landlord
shall allow Tenant, at no charge, beneficial occupancy of the Manufacturing
Area for purposes of setting up the custom manufacturing areas, as long as such
occupancy does not interfere with Landlord's Work. In addition to the
foregoing, Tenant shall have the option, which may be exercised in its own
discretion, to receive possession of the Manufacturing Area for purposes of
running production prior to the Substantial Completion of Landlord's Work, as
long as such occupancy does not interfere with Landlord's Work, in which event
Tenant shall pay to Landlord a monthly rent for the occupation and use of such
area equivalent to 10% of the estimated Base Monthly Rent in accordance with
the second paragraph of section 1.03 above, for each month that passes between
the date of such partial occupation of the Premises until the date of
Substantial Completion of Landlord's Work and delivery of possession of the
Premises to Tenant. The election of Tenant to occupy and use the Premises
partially as set forth in this paragraph shall not affect or modify in any way
other terms and
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obligations of the parties pursuant to this Agreement, including the duration
of the Lease Term.
3. BASE MONTHLY RENT
3.01. Tenant shall pay the Base Monthly Rent as rent in the
amount to be determined as specified in Section 1.03 of this Agreement for the
Premises during the Lease Term in legal currency of the United States of
America.
3.02. The Base Monthly Rent shall be paid monthly, without
deduction or offset (except as provided in sections 2.02, 3.03, 5.01 and 21.03
of this Agreement), in advance within the first five calendar days of each
month to Landlord at the place indicated in Section 1.03, or to whomever
Landlord shall designate by notice to Tenant in writing, during the Lease Term.
3.03. Except as provided in Sections 2.02, 3.02, 5.01 and
21.03 of this Agreement, Tenant shall not for any reason whatsoever, withhold
the Base Monthly Rent to be paid to Landlord.
3.04. Landlord shall provide to Tenant the respective
rental receipt (including the Value Added Tax), upon the corresponding monthly
payments of the rent made by Tenant.
4. USE OF PREMISES
4.01. Tenant may use the Premises for any and all lawful
purposes; provided, however, any Use of the Premises by Tenant other than for
Tenant's Intended Uses (as defined below) shall be subject to the prior
approval in writing of Landlord which approval shall not be unreasonably
withheld or delayed. Landlord represents and warrants that: (i) as of the date
of execution of this Agreement the Premises are located in an area of the City
of ▇▇▇▇▇▇▇ in which the Tenant may lawfully under applicable zoning, Stiva
Airport Industrial Park Bylaws attached hereto as EXHIBIT G and other laws,
regulations, and ordinances use the Premises for the manufacturing,
distribution, storage, warehousing and sale of electronic and other related
products, and for offices in connection with the foregoing (collectively,
"Tenant's Intended Uses") , and (ii) water (including one water well) and
utility services required by Tenant will, at Landlord's sole cost and expense,
be made available at the boundary limits (considering that such requirements
will be available to Tenant for use in the Manufacturing Areas) of the Premises
no later than January 31, 1997. For this purpose Tenant's utility requirements
are attached hereto as EXHIBIT H forming a part hereof.
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4.02. Tenant is authorized to place its names on the
Building and the grounds and in any other customary location in conformity with
applicable laws, regulations and Stiva Airport Industrial Park Bylaws.
5. TAXES AND UTILITIES
5.01. Tenant shall pay the value added tax due with respect
to the Base Monthly Rent. Landlord shall pay any other taxes related to the
land and buildings comprising the Premises (collectively, "Taxes") assessed
against the Premises during the Lease Term or assessed against Landlord with
respect to this Agreement. If under Mexican Law there is an obligation to
Tenant to withhold any income taxes out of the payment of the Base Monthly
Rent, Tenant shall be entitled to do so.
5.02. Landlord at its sole cost and expense, shall
prosecute any proceeding to contest any Tax with respect to the Premises. Each
party shall cooperate with the other with respect to such proceedings. The net
amount of any Taxes recovered (after payment of fees and costs incurred in
connection with such proceeding) will be payable or credited, as applicable, to
Landlord.
5.03. Subject to Section 4.01(ii) of this Agreement, Tenant
shall contract directly with, and pay all amounts for consumption by Tenant due
to utility companies for utility services which Tenant may require for its use
of the Premises, arising out of such contracts executed by Tenant. Landlord
acknowledges that prior to this date it received from Tenant the amount of
US$80,000.00 dollars for the hook-up fee charged by the Comision Federal de
Electricidad ("CFE"), and agrees to pay such amount to the CFE for the benefit
and on behalf of Tenant, and to obtain and deliver to Tenant the corresponding
receipt issued by the CFE in favor of Tenant, at any time Tenant instructs
Landlord to do so.
6. MAINTENANCE AND REPAIR
6.01. Except as otherwise provided herein and in Section
6.02 of this Agreement, Landlord shall, at its own cost and expense, make all
necessary repairs to the Premises, including without limitation any structural
(e.g., floor slab and steel structure) and roof repairs needed at the Premises
during the Lease Term, except for those repairs required as a result of
negligent or from inappropriate or misuse by Tenant of the Premises and its
composing parts. The parties agree that the monthly maintenance fee for air
conditioning shall be paid by Landlord and Tenant on a
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fifty per cent basis.
6.02. Neither party shall be obligated to repair damage to
the Premises caused by a Casualty Loss (as defined in Section 9 of the Lease)
except to the extent provided in Section 9 of this Lease and neither party
shall be obligated with respect to any cleanup or remediation of any Hazardous
Substances (as defined in Section 7 of this Lease) except to the extent
provided in Section 7 of this Lease.
6.03. Starting on the Commencement Date and for the rest of
the duration of the Lease Term, Tenant will be responsible for its pro rata
share of the maintenance fee as charged by Landlord which has been quoted by
Landlord at U.S. $0.025 per square foot of land area per year (plus value added
tax). Based on EXHIBIT A the total land area will be 123,347 square feet,
which will result in an annual park maintenance fee of U.S. $3,083 dollars
(three thousand and eighty three U.S. dollars 67/100). This fee will be paid
in monthly installments of US$257.00 (plus value added tax) each within the
first five days of each month during the Lease Term. The first park
maintenance fee charge will be paid by Tenant to Landlord on the Commencement
Date. The maintenance services to be rendered by Landlord (the Stiva's Airport
Industrial Park) will be the following: i) Private guards 24 hours a day; ii)
Maintenance and cleaning of streets all year long; iii) Maintenance of common
parks and gardens; iv) Street lighting maintenance; and, v) a representative of
Landlord (Stiva's Airport Industrial Park) will be available in order to appear
before the State and County's authorities for authorizations of common problems
to the owners and/or lessees of premises within the industrial park. The
maintenance fee may only be modified by means of the written consent of the
majority of the tenants and owners of facilities located in the Stiva's Airport
Industrial Park.
6.04. If Landlord does not perform any repairs or
maintenance required to be performed by Landlord under this Agreement within
twenty (20) days after written notice thereof from Tenant (or such longer
period as Tenant may deem reasonably required to complete such repairs provided
that Landlord has commenced such repairs during said twenty (20) day period and
is pursuing the completion thereof with diligence), then the same shall be a
default by Landlord under this Agreement. In such event, Tenant may, at its
own discretion, perform such maintenance or repairs and charge Landlord with
the cost of same which amount shall accrue interest at the Prime Rate
determined by City Bank, New York, multiplied by two. Such Rate shall be
updated every 180 days and shall apply until payment is effectively made, and
Landlord shall reimburse Tenant for such cost and interest within ten (10) days
after receiving a statement from Tenant for the amount due.
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6.05. If Tenant does not perform any repairs or maintenance
required to be performed by Tenant under this Agreement within thirty (30) days
after written notice thereof from Landlord (or such longer period as may be
reasonably required to complete such repairs provided that Tenant has commenced
such repairs during said thirty (30) day period and is pursuing the completion
thereof with reasonable diligence) , then the same shall be a default by Tenant
under this Agreement. In such event, Landlord may, at its option, perform such
maintenance or repairs and charge Tenant with the cost of same which amount
shall accrue interest at the Prime Rate determined by City Bank, New York,
multiplied by two. Such Prime Rate shall be updated every 180 days and shall
apply until payment is effectively made, and Tenant shall reimburse Landlord
for such cost and interest within ten (10) days after receiving a statement
from Landlord for the amount due. Except as otherwise provided exclusively in
Section 9 of this Agreement, it is expressly understood that Tenant shall have
no maintenance and repair obligations of any kind under this Agreement with
respect to the Premises.
7. ENVIRONMENTAL
7.01. Landlord represents and warrants that any handling,
transportation, storage, treatment or use of hazardous or toxic substances that
have occurred on the Land prior to commencement of construction have been in
compliance with all applicable federal, state and local laws, regulations and
ordinances, that no leak, spill, release, discharge, emission or disposal of
hazardous and toxic substances has occurred on the proposed sites to date, and
that the soil, ground water, and soil vapor on or under the Premises are free
of toxic or hazardous substances as of the date of execution of this Agreement.
7.02. In addition, the parties also agree to the following:
(i) Landlord represents and warrants that as of the Commencement
Date, the Premises will not contain any asbestos or PCB's, any
underground storage tanks and any other kind of contaminated
material as per the applicable environmental laws and
regulations. Within thirty (30) days after the date hereof,
Landlord shall contract a private testing laboratory
acceptable to Tenant to test the environmental quality of the
soil, water and air. This consultant will be paid by Landlord.
If the results of such test show that the Premises contain any
asbestos or PCB's or that the Premises contain any underground
storage tanks and in general any other contaminating material,
Landlord shall have a period of 60 calendar
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days (without the cure period set forth in section 15.01 below
been applicable for these purposes) to clean up the Premises.
If at the end of such term, Landlord shall not comply with
such obligation, Tenant shall have the right to terminate this
Agreement without incurring in any liability.
(ii) That the Parque Industrial Stiva-Aeropuerto (which is owned by
Landlord) where the Premises are located has an internal
sewerage system, into which residual water generated by
Tenant's manufacturing process will be discharged. In
connection herewith Tenant shall have the obligation to treat
such water (excluding water from sanitary services) in order
for the same not to contain metals, corrosive elements, or
radioactive or toxic wastes in excess of the applicable
Mexican Official Norm.
(iii) Landlord shall treat residual water discharged by Tenant to
the internal sewerage system (including water from sanitary
services) and will reuse the same for purposes of irrigating
green areas within the park, for which purpose it has and it
will maintain in effect the permit for discharge or residual
waters (permiso de descarga de acruas residuales) form the
National Water Commission (Comision Nacional del Agua).
Furthermore, the water treated by Landlord shall comply with
all applicable Mexican official norms and with the specific
conditions for discharge imposed by the National Water
Commission.
(iv) In order to evidence compliance with the provisions of items
(ii) and (iii) above, Tenant shall furnish to Landlord every
two months a copy of the results of the tests made to the
water discharged by it, and Landlord shall furnish to Tenant a
copy of the results of the tests made to the water used for
irrigation as filed before the National Water Commission in
compliance with the applicable Mexican official norms and the
corresponding discharge permit. In any event, Tenant shall be
entitled to instruct Landlord to analyze its water after
treated by Landlord in order to evidence compliance with such
provisions.
7.03. Tenant is obligated to use the Premises in compliance
with all applicable environmental laws and shall not use, generate, transport,
refine, produce, process, store or dispose of any hazardous substances on,
under or from the Premises, except in compliance with the applicable
environmental laws and regulations. If any claim is ever made against Landlord
by any person or entity relating to any pollution or contamination from toxic
or hazardous substances, asbestos, or any other chemicals or
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substances in amounts which exceed standards for public health or welfare as
established and regulated by any local, state, or federal governmental
authority (herein collectively referred to as "Hazardous Substances") present
at the Premises during the Lease Term or from non-compliance by Tenant of its
obligations under section 7.02 above, all costs of removal incurred by, all
liabilities imposed upon, and losses and damages suffered by Landlord because
of the same shall be borne by Tenant, provided that such environmental
contingencies herein referred result out of acts or omissions derived from
Tenant's occupancy of the Premises, and Tenant hereby agrees to indemnify,
defend, and hold Landlord harmless from and against all such costs,
liabilities, losses, and damages, including, without limitation, with respect
to all third-party and/or authorities claims for personal injury or property
damage and other claims, actions, administrative proceedings, judgments,
damages, lost profits, penalties, fines, costs, losses, attorneys' fees and
expenses (through all levels or proceedings), consultants or experts fees, and
all costs incurred in enforcing this indemnity.
Notwithstanding the foregoing and anything herein to the contrary, if
any claim is ever made against Tenant by any person or entity (including any
governmental authority) relating to any pollution or contamination from
Hazardous Substances present at the Premises due to no act or omission of
Tenant (i.e. Hazardous Substances which were present at the Premises prior to
the Commencement Date) or due to Landlord's failure to comply with its
obligations under items (i), (ii), (iii) and (iv) of section 7.02 above, all
costs of removal incurred by, all liabilities imposed upon, and losses and
damages suffered by Tenant because of the same shall be borne by Landlord, and
Landlord hereby agrees to indemnify, defend and hold Tenant harmless from and
against such costs, liabilities, losses and damages, including without
limitation, with respect to any third party and/or authority claim for personal
injury or property damage and other claims, actions, administrative
proceedings, judgments, damages, lost profits, penalties, fines, costs, losses,
attorney's fees and expenses (through all levels or proceedings), consultants
or experts fees, and all costs incurred in enforcing this indemnity.
7.04. Section 7 of this Lease and the indemnity obligations
contained in said section shall survive the termination of this Agreement.
Claims by either party against the other pursuant to Section 7 shall be made in
accordance with the requirements of Section 19.03.
7.05. Subject to Section 7.02 above, Tenant agrees that its
operations at the Premises shall be in compliance with all applicable laws,
regulations, and ordinances including, without limitation, laws, regulations,
ordinances and the ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇
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▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ relating to Hazardous Substances.
8. ALTERATION OF PREMISES
8.01. So long as no default by Tenant under this Agreement
exists, Tenant shall have the right to, at any time during the Lease Term (as
from the Commencement Date), make nonstructural alterations affixed to the
Building costing up to an amount of US$50,000.00 dollars (fifty thousand U.S.
Dollars 00/100) per year (for these purposes the first year shall be counted as
from the Commencement Date), without the written consent of Landlord. Any
other alterations to the Premises shall require the prior written consent of
Landlord, which consent shall not be unreasonably withheld. Whenever
alterations requested by Tenant have been made by Landlord at Landlord's cost
and expense, the Base Monthly Rent under this Agreement shall be increased by
the amount resulting from the application of the formula set forth in the fifth
paragraph of Section 1.03 (an example of this calculation is provided in
paragraph V of EXHIBIT C).
8.02. No alterations of the Premises by Tenant (whether
structural or non-structural) shall reduce the value or structural integrity of
the Premises. All such alterations of the Premises by Tenant shall be at
Tenant's own cost and expense and shall be accomplished in compliance with all
applicable laws, regulations, and ordinances. Tenant shall be responsible to
pay all obligations necessary to keep the Premises free from any mechanics' and
materialmen's liens on account of alterations of the Premises by Tenant.
8.03. All machinery and equipment or other tangible
personal property of whatsoever nature installed at the Premises by Tenant
during the Lease Term, (excluding property affixed or other type of property
which removal may cause damage to the Premises), shall continue to be the
property of Tenant and shall be removed by Tenant at the expiration of the
Lease Term.
9. DESTRUCTION
9.01. If during the Lease Term the Premises or any
improvements thereof are damaged or destroyed by fire, earthquake, flood, or
other casualty insured against pursuant to Section 10 (collectively, "Casualty
Loss"), Tenant shall give Landlord prompt written notice thereof ("Notice of
Casualty").
9.02. Landlord shall, within fifteen (15) days of receiving
a Notice of Casualty, determine and notify to Tenant in
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writing, the time (the "Repair Term") in which the Premises can reasonably be
repaired by Landlord to the condition they were in immediately prior to the
occurrence of a Casualty Loss. Within fifteen (15) days after Tenant receives
such notice, Tenant shall (i) instruct Landlord in writing to proceed with the
repairs ("Repair Notice") or (ii) notify to Landlord that this Agreement has
been terminated ("Notice of Termination"), in the understanding that Tenant
may only terminate this Agreement in accordance with this provision if the time
determined by Landlord to be necessary for the repairs is more than ninety (90)
days or if Landlord fails to notify Tenant on time of the time required to make
the repairs. Promptly after receiving a Repair Notice from Tenant, Landlord
shall diligently repair the Premises, in the understanding that if the Premises
are not repaired or rebuilt to the conditions they were in immediately prior to
the occurrence of the Casualty Loss, within the Repair Term, then Tenant may
terminate this Agreement by means of written notice to Landlord without
incurring in any liability.
9.03. If such notice of termination is delivered by Tenant
to Landlord, this Agreement shall terminate on the date of such notice of
termination and Landlord shall be entitled to payment of, or assignment of
rights with respect to, all insurance proceeds recoverable on account of loss
or damage to the Premises caused by such Casualty Loss (except any insurance
proceeds recoverable on account of loss or damage to Tenant's equipment,
machinery, inventory, and other Tenant's property at the Premises). So long as
Landlord does not receive a notice of termination from Tenant as provided
above, Landlord shall continue to repair or rebuild the Premises or any
improvements thereof, irrespective of the adequacy of the insurance proceeds to
cover fully the costs of such repair or rebuilding.
9.04. All insurance proceeds payable under any fire or
other casualty insurance policy maintained by Tenant and covering Tenant's
personal property at the Premises including, without limitation, Tenant's
inventory, furniture, trade fixtures, and equipment shall be payable solely to
Tenant, and Landlord shall have no interest therein. Except to the extent
provided for in this Section 9 or otherwise in this Agreement, the obligations
of Tenant (including rent payments) and Landlord under this Agreement shall not
be affected by the occurrence of any Casualty Loss.
10. INSURANCE
10.01. During the construction period of the Building and
until the Commencement Date, Landlord shall carry "Builder's Risk" insurance
which consist on risks inherent to the construction of the Premises, in amounts
and with companies satisfactory to Tenant.
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Certificates of such insurance shall be delivered to Tenant within 15 days
after execution of this Agreement.
10.02. Landlord shall, at its cost and expense, purchase and
maintain an insurance that covers any loss or damage to the Premises during the
Lease Term caused by earthquake, flood, and any other type of loss that may be
caused by any act of nature or of third parties (other than Tenant and Tenant's
employees and agents), in amounts sufficient to prevent the Landlord or the
Tenant from becoming a co-insurer, under the terms of the applicable policies,
but in any event and at all times in amounts not less than one hundred percent
(100%) of the full insurable value of the Building, which for purposes hereof
will be considered the full replacement cost of the Building. Landlord's
underwriter will provide a certificate of insurance at an initial amount of
US$2,000,000.00 dollars (hereinafter Initial Amount Coverage) for the Building
and Building upgrades and improvements. However, whenever those improvements
and upgrades happen to be made by Landlord or Tenant after the Commencement
Date, such Initial Amount Coverage shall be modified by adding the amount
resulting from the application of the method set forth under Section 8.01
hereof which was used to increase the Base Monthly Rent. The certificate of
insurance will be underwritten by an insurance company acceptable to Tenant,
and will provide for an inflation index based on the United States Consumer
Price Index (as published by the U.S. Federal Labor Department).
10.03. Tenant shall, at its cost and expense, purchase and
maintain an insurance that covers any loss or damage to the Premises during the
Lease Term caused by fire and any other type of loss resulting from any acts of
Tenant, its employees or agents, in amounts sufficient to prevent the Landlord
or the Tenant from becoming a co-insurer, under the terms of the applicable
policies, but in any event and at all times in amounts not less than one
hundred percent (100%) of the full insurable value of the Building, which for
purposes hereof will be considered the full replacement cost of the Building.
Tenant's underwriter will provide a certificate of insurance at an initial
amount of US$2,000,000.00 dollars (hereinafter Initial Amount Coverage) for the
Building and Building upgrades and improvements. However, whenever those
improvements and upgrades happen to be made by Landlord or Tenant after the
Commencement Date, such Initial Amount Coverage shall be modified by adding the
amount resulting from the application of the method set forth under Section
8.01 hereof which was used to increase the Base Monthly Rent. The certificate
of insurance will be underwritten by an insurance company acceptable to
Landlord, and will provide for an inflation index based on the U.S. Consumer
Price Index (as published by the U.S. Federal Labor Department).
10.04. Tenant shall, at its cost and expense, purchase and
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maintain loss of rent insurance that covers any loss or interruption of rent
payable under this Agreement (for a period of up to one (1) year) during the
Lease Term resulting from loss or damage to the Premises caused by any risk
insured under the insurance policies to be maintained by the parties in
accordance herewith.
10.05. Tenant shall, at its cost and expense, also purchase
and maintain general public liability insurance to cover claims for bodily
injury or death or property damage (not including casualties covered by
insurance policies to be obtained under sections 10.02 and 10.03 above) up to a
maximum of US$2,000,000.00 Dollars legal currency of the United States of
America per occurrence and in the annual aggregate.
10.06. All the insurance to be maintained by each party
hereto pursuant to this section 10 shall be obtained and evidenced under valid
and enforceable insurance policies issued by any insurers approved in writing
by the other party.
10.07. Except as provided in Section 10.09, all policies of
insurance herein provided for shall be subject to the prior approval in writing
of Landlord and Tenant, which approval shall not be unreasonably withheld or
delayed, and shall designate Tenant and Landlord as insured and co-insured, as
their respective interests may appear. Tenant may comply with its obligations
to contract insurance policies under this section 10, by evidencing to Landlord
that the risks that should be covered by Tenant's insurance policies in
accordance herewith are covered by insurance policies contracted by Tenant's
holding company, Smartflex Systems Incorporated, as long as Landlord is
designated as co-insured therein with respect to the risks referred to in
sections 10.03, 10.04 and 10.05.
10.08. All such insurance policies shall provide that the
insurer may not cancel such policies without at least thirty (30) days prior
notice in writing to Landlord and Tenant.
10.09. Tenant shall be responsible for insuring all of
Tenant's tangible personal property located at the Premises.
10.10. To the extent that insurance proceeds are actually
received in satisfaction of a loss which is required to be covered by insurance
hereunder, each of Landlord and Tenant hereby waives any and all rights of
recovery against each other for any loss or damage including, without
limitation, loss or damage to the Premises or the contents contained therein,
loss of rent or income on account of fire or other casualty, or injury
sustained on the Premises. Each party's aforesaid policies of insurance shall
contain appropriate provisions recognizing this mutual release and
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waiving all rights of subrogation by the respective insurance carriers. The
deductible payable under any insurance policy shall be paid by the party who is
obligated to maintain such insurance policy in accordance with this Agreement.
11. Landlord's RIGHT TO PERFORM Tenant's OBLIGATIONS
11.01. If at any time during the Lease Term, Tenant fails to
perform one or more of its obligations under this Agreement, Landlord, after
twenty (20) days written notice to Tenant (or without notice in the case of
Emergency), and without waiving or releasing the Tenant from any of its
obligations under this Agreement, may, but shall be under no obligation to,
perform acts which Tenant is required to perform under this Agreement and may
enter the Premises for such purpose to perform all such actions as may be
necessary. Tenant shall reimburse to Landlord all sums reasonably paid by
Landlord and all reasonable costs and expenses incurred by Landlord in
connection with the performance of any such obligations of Tenant, together
with interest at the Prime Rate determined by City Bank, New York. Such Prime
Rate shall be up dated every 180 days and shall apply until payment is
effectively made, shall be payable by Tenant to Landlord within ten (10) days
after demand therefor.
For purposes of this Agreement an "Emergency" shall be considered to
be a situation in which if a repair or maintenance is not made immediately at
any given time other damages would be caused to the Premises or any part
thereof.
12. TENANT'S RIGHT TO PERFORM LANDLORD'S OBLIGATIONS
12.01 If at any time during the Lease Term Landlord fails
to perform one or more of its obligations under this Agreement, Tenant after
twenty (20) days written notice to Landlord (or without notice in the case of
an emergency), may, but shall be under no obligation to, perform any act which
Landlord is required to perform in accordance with this Lease and may take all
such actions thereon as may be necessary. Landlord shall reimburse to Tenant
all sums reasonably paid by Tenant and all reasonable costs and expenses
incurred by Tenant in connection with the performance of any such obligations
of Landlord, together with interest at the Prime Rate determined by City Bank,
New York, multiplied by two. Such Prime Rate shall be up dated every 180 days
and shall apply until payment is effectively made and shall be payable by
Landlord to Tenant within ten (10) days after demand therefor.
13. DEFAULT BY TENANT
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13.01. Tenant shall be in default of this Agreement if at
any time during the Lease Term (and regardless of the pendency of any
bankruptcy, reorganization, receivership, insolvency, or other proceedings in
law, or before any administrative tribunal which have or might have the effect
of preventing Tenant from complying with the terms of this Lease):
(i). Tenant fails to make payment of any installment of Base
Monthly Rent, or of any other sum herein specified to be paid by
Tenant, within ten (10) days of delivery of Landlord's written notice
to Tenant of such failure; provided, however, Landlord shall be
obligated to give Tenant only three (3) notices in any calendar year
during the Lease Term and thereafter during said calendar year Tenant
shall be in default if Tenant fails to make payment when due, it being
understood that whether or not notice is given, all payments of monies
shall accrue interest at the Prime Rate determined by City Bank, New
York, multiplied by two. Such Prime Rate shall be up dated every 180
days and shall apply until payment is effectively made; or
(ii). Tenant fails to observe or perform any of its other covenants,
agreements, or obligations hereunder, and such failure is not cured
within thirty (30) days after Landlord's written notice to Tenant of
such failure; provided, however, that if the nature of Tenant's
obligation is such that more than thirty (30) days are required for
performance, then Tenant will not be in default if Tenant commences
performance within such thirty (30) day period and thereafter
diligently prosecutes the same to completion within ninety (90) days
thereafter; or
(iii). Tenant has abandoned the Premises for thirty (30) days or more
and fails to pay the rent when due.
14. REMEDIES OF LANDLORD
14.01. In the event of default by Tenant, as described in
Section 13 of this Agreement, Landlord, at its sole option, shall have the
following rights:
(i). The right to declare the term of this Agreement ended and to
terminate all of the rights of Tenant in and to the Premises; or
(ii). The right to continue this Agreement in full force and effect,
without terminating Tenant's right to possession of the Premises, in
which event Landlord shall have the right to collect the Base Monthly
Rent and other charges when due,
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including any sums due for any option period for which an option to
extend has been exercised.
If Tenant defaults under this Agreement and abandons the Premises
before the end of the Lease Term, or if its right of possession is terminated
by Landlord because of Tenant's default under this Agreement, then this Lease
may be terminated by Landlord at its option by written notice to Tenant. On
such termination Landlord may recover from Tenant any obligation which has
accrued and not been paid prior to the time this Agreement is terminated, plus
reasonable attorneys fees relating to the enforcement of this provisions by
Landlord and an indemnification from Tenant in the amount of the unpaid rents
for the balance of the Lease Term from the date of such termination notice
payable upon demand;
14.03. The waiver by Landlord of any breach or default of
Tenant hereunder shall not be a waiver of any preceding or subsequent breach of
the same or any other term. Acceptance of any rent payment shall not be
construed to be a waiver by the Landlord of any preceding breach by Tenant.
14.04. All past due amounts owed by Tenant under the terms
of this Lease shall bear interest at the Prime Rate determined by City Bank,
New York, multiplied by two. Such Prime Rate shall be up dated every 180 days
and shall apply until payment is effectively made and shall be payable by
Landlord to Tenant within ten (10) days after demand therefor.
14.06. Notwithstanding anything contained herein to the
contrary, in the event Tenant defaults under any of the terms of this Agreement
and the Agreement is terminated by Landlord, in addition to Landlord's other
remedies, set forth herein, Landlord shall not be obligated to complete the
Landlord's Work as set forth in this Lease.
15. DEFAULT OF LANDLORD AND TENANT'S REMEDIES
15.01. In the event of any default by Landlord hereunder,
Tenant shall give Landlord notice of such default and Landlord shall have
thirty (30) days after such notice to cure such default; provided however that,
except for defaults occurring prior to the Commencement Date (including without
limitation the obligation of Landlord to deliver to Tenant the possession of
the Premises in a Substantially Completed condition in a timely manner in
accordance with this Agreement), if the nature of Landlord's obligation is such
that more than thirty (30) days are required for performance, then Landlord
will not be in default if Landlord commences performance within such thirty
(30) day period and thereafter diligently prosecutes the same to completion
within ninety (90) days thereafter. In the event of (i) a default by Landlord
under
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this Agreement and the expiration of the aforesaid period during which Landlord
may cure such default, or (ii) in the event of a breach of any of Landlord's
obligations under the Call Option Agreement refereed to in section 17.01 below
and the expiration of any cure period established in such Agreement, if any, in
addition to any other rights or remedies provided for herein or in the Call
option Agreement, as applicable, or at law, including any brokerage fees and
court costs and reasonable attorneys fees, Tenant, at its sole option, may
terminate this Agreement upon notice by Tenant to Landlord and all rental
obligations shall be thereby terminated.
Should Landlord fail to perform in a timely manner in accordance
herewith its obligation to deliver possession of the Premises to Tenant in a
substantially Completed condition, and provided Tenant elects to terminate this
Agreement in accordance with the preceding paragraph, Landlord shall (i)
reimburse to Tenant the amounts of money delivered by Tenant to Landlord in
accordance with Sections 5.03 and 22.01 of this Agreement and (ii) pay as
penalty to Tenant the amount of US$200,000 (two hundred thousand U.S. dollars
00/100) upon demand.
16. CERTIFICATE
16.01. The parties will execute and deliver, within ten (10)
business days after written demand by any of them to the other therefor, a
statement in writing certifying, if true, that this Agreement is in full force
and effect, and that the Base Monthly Rent payable hereunder is unmodified and
in full force and effect (or, if modified, stating the nature of such
modification), the date to which rent and other charges are paid, if any, and
acknowledging that there are not any uncured defaults hereunder (or specifying
such defaults if they are claimed).
17. OPTIONS OVER THE PREMISES AND ADJACENT LAND
17.01 Landlord shall grant a call option to Tenant to
purchase the Premises, in a separate agreement to be executed as of the date
hereof substantially in the form of EXHIBIT I attached hereto and made a part
hereof.
17.02 In addition to the foregoing, and provided no default
of any of Tenant's obligations under this Agreement exists, Tenant shall have
the option for a period of two (2) years from the Commencement Date to lease
the Adjacent Land (as such piece of land is described in EXHIBIT J attached
hereto and made a part hereof) from Landlord substantially in the same terms as
those contained in this agreement (including construction of a facility as per
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Tenant's specifications), and thereafter and for the duration of the Lease Term
hereof Tenant shall have a right of first refusal to be preferred over any
third party to lease the Adjacent Land in terms no less favorable than those
offered to such third party. Tenant shall also have the right, at no extra
cost and without paying any maintenance fee, to use the Adjacent Land for
recreation purposes only (i.e. to make a soccer field or something similar)
during the first two (2) years of the Lease Term. If the Adjacent Land is used
for any other purposes Tenant shall pay to Landlord a monthly rent to be
determined in accordance with this Agreement.
18. ACCESS OF LANDLORD TO THE PREMISES
18.01. Tenant shall permit Landlord and its authorized
representatives access to the Premises during reasonable hours with reasonable
prior notice to inspect the Premises and to perform repairs which are the
responsibility of Landlord under this Agreement. Landlord will have the right
to enter the Premises at any reasonable time with reasonable prior notice
during usual business hours at any time within six (6) months prior to the
termination of the Lease Term in order to show the Premises to prospective
future tenants. Notwithstanding the foregoing, Landlord, its employees, or
agents shall have the right to enter the Premises at all times without notice
to Tenant in the event of an Emergency.
19. INDEMNIFICATION
19.01. Except to the extent that there is a written waiver
of rights of recovery by Tenant against Landlord and except that Tenant's
rights against Landlord with respect to Hazardous Substances at the Premises
shall be exclusively governed by the provisions of Section 7 of this Lease,
Landlord shall indemnify and defend Tenant from and against any liabilities,
damages, judgments, expenses, and costs (including, without limitation, legal
fees) for which Tenant is held responsible, or which are incurred by Tenant, in
connection with third party claims against Tenant as a result of any act or
omission of Landlord, its agents, or employees or any breach by Landlord of
Landlord's obligations under this Agreement; provided, however, the foregoing
obligation of Landlord to indemnify and defend Tenant shall be inapplicable to
the extent that any liabilities, damages, judgments, expenses, and costs
(including, without limitation, legal fees) for which Tenant is held
responsible, or which are incurred by Tenant, result from the negligent or
unlawful acts of Tenant, its agents, or employees.
19.02. Except to the extent that there is a written waiver
of rights of recovery by Landlord against Tenant and except that
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Landlord's rights against Tenant with respect to Hazardous Substance at the
Premises shall be exclusively governed by the provisions of Section 7 of this
Lease, Tenant shall indemnify and defend Landlord from and against any
liabilities, damages, judgments, expenses, and costs (including, without
limitation, legal fees) for which Landlord is held responsible, or which are
incurred by Landlord, in connection with third party claims against Landlord as
a result of any act or omission of Tenant, its agents, employees or any breach
by Tenant of Tenant's obligations under this Agreement; provided, however, the
foregoing obligation of Tenant to indemnify and defend Landlord shall be
inapplicable to the extent that any liabilities, damages, judgments, expenses,
and costs (including, without limitation, legal fees) for which Landlord is
held responsible, or which are incurred by Landlord, result from the negligent
or unlawful acts of Landlord, its agents, or employees.
19.03. A party ("Indemnified Party") entitled to be
indemnified by the other party ("Indemnifying Party") pursuant to Section 19.01
or Section 19.02 of the Lease shall promptly and in writing notify the
Indemnifying Party of such claim for indemnification specifying in such notice
the nature of such claim. Also, in the event that any legal proceeding shall
be instituted or any claim or demand shall be asserted by a third party in
respect of which an Indemnifying Party is obligated pursuant to the provisions
of Section 19.01 or Section 19.02 of this Agreement or Section 7 of this
Agreement to indemnify and hold harmless an Indemnified Party, the Indemnified
Party shall with reasonable promptness after obtaining knowledge of such
proceeding, claim, or demand give written notice thereof to the Indemnifying
Party who shall then have the right at the Indemnifying Party's option and
expense to be represented by counsel of such party's choice in connection with
such matter to defend against, negotiate, settle, or otherwise deal with any
such proceeding, claim, or demand; provided, however, that without the prior
written consent of the Indemnified Party (whose consent shall not be
unreasonably withheld or delayed) the Indemnifying Party shall not consent to
the entry of any judgment in or agree to any settlement of any such matter; and
provided further that, in addition to legal counsel retained and paid for by
the Indemnifying Party, the Indemnified Party may retain separate counsel at
such party's own expense to represent such party in connection with any such
proceeding, claim, or demand. Failure by the Indemnifying Party to notify the
Indemnified Party of the former's election to defend any proceeding, claim, or
demand with respect to which indemnity is sought within thirty (30) days after
notice thereof shall have been given to the Indemnifying Party by the
Indemnified Party shall be deemed a waiver by the Indemnifying Party of such
party's right to defend against any such matter. If the Indemnifying Party
assumes the defense of any such proceeding, claim, or demand against the
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Indemnified Party, the Indemnifying Party shall take or cause to be taken all
steps necessary in connection with such defense, and the Indemnified Party
shall in all events be entitled to indemnity with respect to such matter as
provided in this Section 19. In the event that any legal proceeding shall be
instituted or any claim or demand shall be asserted by a third party in respect
of which an Indemnifying Party is obligated to indemnify and hold an
Indemnified Party harmless and in the event that the Indemnifying Party does
not elect to defend any such proceeding, claim, or demand, the Indemnified
Party may defend against, settle, or otherwise deal with any such proceeding,
claims, or demand in such manner as the Indemnified Party in good ▇▇▇▇▇ ▇▇▇▇▇
appropriate, and the Indemnifying Party shall be liable for indemnification
with respect to such matter including, without limitation, the costs of such
defense except that the Indemnified Party shall not settle any such legal
proceeding without the Indemnifying Party's prior written consent, which
consent shall not be unreasonably withheld or delayed. In the event of any
proceeding, claims, or demand by a third party with respect to which a claim
for indemnification is made hereunder, the parties hereto agree that they will
cooperate fully with each other in connection with the defense or settlement of
such matter.
20. LABOR RESPONSIBILITIES
20.01. Tenant agrees that all obligations to Tenant's
employees under applicable Mexican laws and regulations arising out of use of
the Premises by Tenant during the Lease Term shall be the sole and exclusive
responsibility of Tenant, including, without limitation, such legal
obligations, if any, to all personnel employed by Tenant at the Premises,
whether unionized or not, confidential, temporary, or other (including any
subcontractors), and payment or fees to the Mexican Social Security Institute,
Sistema de Ahorro para el Retiro (SAR), INFONAVIT or any other applicable
taxes, fees or duties.
20.02. Landlord agrees that all obligations to Landlord's
employees under applicable Mexican laws and regulations arising out of
Landlord's Work and the performance of any of Landlord's obligations pursuant
to this Agreement, shall be the sole and exclusive responsibility of Landlord,
including, without limitation, such legal obligations, if any, to all personnel
employed by Landlord at the Premises, whether unionized or not, confidential,
temporary, or other (including any subcontractors), and payment or fees to the
Mexican Social Security Institute, Sistema de Ahorro para el Retiro (SAR),
INFONAVIT or any other applicable taxes, fees or duties.
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21. CONSTRUCTION OF THE BUILDING.
21.01. Landlord represents and warrants that the Building
will conform to the Final Plans and Final Specifications and shall be in
compliance with all applicable laws, regulations, ordinances, administrative
orders and Stiva's Airport Industrial Park Bylaws in existence and in force as
of the Commencement Date. Landlord represents and warrants that the Premises,
including the Building and the Building equipment supplied as described in the
Final Plans and Specifications, will be free from defects in design,
workmanship and materials for one (1) year commencing on the date of Final
completion of Landlord's Work and agrees to make, at its sole cost and expense
all repair and replacements required to remedy such defects should they occur
within the guaranty period.
21.02. All warranties to equipment and systems installed in
the Premises, other than equipment forming part of Tenant's personal property,
will be vested in Landlord.
21.03 In addition to the foregoing, Landlord represents and
warrants that Landlord's Work and the Premises will be Finally Completed,
conforming to the Final Plans and Final Specifications, within 90 days after
the Commencement Date. In the event Landlord's Work and the Premises are not
Finally Completed at Tenant's satisfaction by the date above mentioned, then
Tenant, in addition to any other remedies it may have in accordance with this
Agreement and any applicable law, shall be entitled to do by itself or through
the third party of its choice any works necessary to complete Landlord's Work
and to offset from the rents payable to Landlord the actual cost of such works.
22. RENT AND SECURITY DEPOSIT
22.01 Landlord acknowledges the receipt prior to the
execution of this Agreement of three (3) month's rent deposit in the aggregate
amount of US$80,508.00 Dollars.
22.02. The three (3) months deposit referred to in 22.01
above, shall be allocated as follows: (i) One (1) month shall be allocated as a
security deposit and returned to Tenant with no interest upon the expiration
date of the Lease Term; (ii) the other two (2) months of rent shall be applied
to the first and second month of the Base Monthly Rent. In case the Base
Monthly Rent is increased due to any increases to Landlord's Investment in
accordance with this Agreement, Tenant shall deliver to Landlord the balance in
order for the deposit established in section 22.01 to be equal to three month's
rent. In case the Base Monthly Rent is reduced due to any reductions to
Landlord's Investment in accordance with this Agreement, Landlord shall credit
the balance to the payment of the Base Monthly Rent payable for the third month
27
27
of the Lease Term. Tenant shall pay the value added tax corresponding to the
rent for each of the first and second month of the Lease Term within the first
five (5) days of each of such months.
23. PERFORMANCE AND GUARANTEE
23.01. Landlord shall deliver to Tenant, within fifteen days
after the date hereof, at the sole cost of Landlord: (i) a performance bond in
an amount, form and substance, which encompasses the construction of the
Premises and the completion of the road, curb and gutter improvements in the
park and to the southwest entry point into the Stiva Airport Industrial Park as
per EXHIBITS A AND D, to insure Landlord's obligation to construct and perform
under this Agreement, and (ii) a bond in the amount of US$50,000.00 dollars to
guarantee that Landlord will make any repairs or replacements to the Premises
or any part thereof needed due to any hidden or latent defect. The terms and
conditions of such bonds are described in EXHIBITS K AND K-BIS attached hereto
and forming a part hereof.
23.02 Tenant shall deliver, within fifteen days after the
date hereof, a Bond to guarantee that Tenant will take possession of the
Premises in a timely manner in accordance with this Agreement. The specific
terms of such bond shall be as provided in EXHIBIT L attached hereto and made a
part hereof. Additionally, Tenant shall provide to Landlord a corporate
guarantee issued by its parent company in the form of EXHIBIT M attached hereto
and made a part hereof, to guarantee the compliance of Tenant's obligations
during the Lease Term.
24. ATTORNEYS' FEES/COLLECTION CHARGES
24.01. In the event of any legal action or proceeding
between the parties hereto, reasonable attorneys' fees and expenses of the
prevailing party in any such action or proceeding will be added to the judgment
thereon. All past due amounts owed by either party to the other under the
terms of this Agreement shall bear interest at the Prime Rate determined by
City Bank, New York, multiplied by two. Such Prime Rate shall be up dated
every 180 days and shall apply until payment is effectively made.
25. SEVERABILITY
25.01. If any provisions of this Agreement is found to be
unenforceable, all other provisions shall remain in full force and effect to
the extent permissible under applicable law.
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26. BROKERS
26.01. Each party hereto represents and warrants that it has
had no dealings with any broker or agent in connection with this Lease and
covenants to pay, hold harmless, and indemnify the other party from and against
any and all costs, expense, or liability for any compensation, commissions, and
charges or other loss, cost, damage, liability, or expense suffered by the
other party as a result of any claim by any broker or agent who claims to have
dealt with the indemnifying party with respect to this Lease or its
negotiation.
27. WAIVER
27.01. The failure of either party hereto to insist in any
one or more cases upon the strict performance of any term, covenant, or
condition of this Agreement by the other party hereto shall not be construed as
a waiver of a subsequent breach of the same or any other covenant, term, or
condition, and no delay or omission by either party to seek a remedy for any
breach of this Agreement by the other party shall be deemed a waiver by such
party of its remedies or rights with respect to such a breach by the other
party.
27.02. Tenant hereby expressly waives any rights provided in
Articles 2310, 2315, 2317, 2318, 2379, 2380 and 2381 of the civil Code for the
State of Nuevo ▇▇▇▇ that may be in conflict (and only to that extent) with the
provisions of this Agreement.
28. AMENDMENT OF LEASE, RIGHT TO SUBLEASE, ASSIGNMENT
28.01. No amendment or modification of this Agreement shall
be valid or effective unless made pursuant to a written amendment of this
Agreement signed by duly authorized agents of both Landlord and Tenant.
28.02. Tenant shall have the right to sublease all or any
part of the Premises to any third party who, in Tenant's reasonable judgement,
shall be consistent with the standards of the industrial park, in the
understanding that in such event Tenant shall not be released from any of its
obligations towards Landlord under this Agreement.
28.03 Tenant may assign all of its rights and obligations
under this Agreement to a qualified tenant acceptable to Landlord, in which
case Tenant (and the guarantor under the corporate guarantee to be granted in
the form of EXHIBIT M attached hereto)
29
29
shall not have any further obligation towards Landlord after the date such
assignment becomes effective.
29. NOTICES
29.01. All notices permitted or required by this Lease shall
be in writing, sent by recognized overnight courier or hand delivered or by
facsimile transmission provided that there is electronic confirmation of
receipt by the sender's telecopier, and shall be deemed duly given when
actually received by the party to whom it is sent, addressed as follows:
IF TO LANDLORD:
Av. Fe1ix ▇. ▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
Fax: (▇) ▇▇▇-▇▇▇▇
IF TO TENANT:
Prior to the Commencement Date:
Carretera a ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇.▇
▇▇▇▇▇▇▇, ▇.▇. ▇▇ ▇▇▇▇▇
Fax: (▇) ▇▇▇-▇▇▇▇
After the Commencement Date:
at the Premises
Either party may change its address by means of prior written notice
to the other party as provided above.
30. CONFIDENTIALITY
30.01. Landlord shall not make any public announcement or
press release concerning this Agreement unless it has received Tenant's written
consent and shall maintain in confidence and not disclose to others any
information, data or material which Tenant furnishes to Landlord in confidence.
31. APPLICABLE LAW, COURTS AND ARBITRATION
30
30
31.01. This Lease shall be bound by and subject to the laws
of the State of Nuevo ▇▇▇▇, Mexico.
31.02. Except to the extent that the parties have
specifically selected a specific procedure as provided in EXHIBIT F, the
parties hereto expressly submit any dispute, controversy or claim arising out
of or relating to or affecting any of the obligations of any party hereto to be
performed (or the breach, termination or invalidity thereof) prior to the
earliest of (i) the commencement Date as stated in the Commencement Date
Certificate issued by the parties, (ii) the date an arbitral award under the
provisions herein is issued declaring that Substantial Completion of Landlord's
Work has occurred and that the Premises are available for Tenant to occupy
them, or (iii) the date in which Tenant actually takes possession of the
Premises (not including occupancy of the manufacturing Areas prior to
Substantial Completion of Landlord's Work) to settlement by the binding
arbitration procedures set forth herein, in accordance with the Rules of
Arbitration of the International Chamber of Commerce ("ICC") , which
arbitration shall be conducted as provided in the following:
31.02.01. Request for Arbitration: A party hereto may serve
notice upon the other party in the event that there has been a breach of this
agreement which has not been cured as provided herein. Such notice shall
formally request arbitration and shall specify in detail the reasons therefor
(the "Request for Arbitration").
31.02.02. Place of Arbitration: Unless otherwise agreed by the
parties, all arbitrations shall be held in Mexico city, Federal District,
Mexico, and conducted in the English language.
31.02.03. Arbitration court: Three (3) arbitrators who shall be
members of the ICC, provided at least two (2) arbitrators shall be members of
the Mexican Chapter of the International Chamber of commerce shall be named as
follows:
31.02.03.01. one, by Landlord, and the second by Tenant,
with the understanding that said nomination must occur no later than seven (7)
calendar days following the receipt by one party of the other's Request for
Arbitration;
31.02.03.02. if, however, Landlord or Tenant failed to
appoint an arbitrator, either party may request ICC to appoint the necessary
arbitrator pursuant ICC rules;
31.02.03.03 the third arbitrator shall be selected by
mutual agreement of the two (2) arbitrators within a seven (7) calendar day
period following the appointment of the first two arbitrators. If those
arbitrators do not reach agreement on the
31
31
third arbitrator within such seven calendar day period, then either Landlord or
Tenant may apply to ICC to have it appoint such third arbitrator pursuant to
the rules of such organization.
31.02.03.04. in any event, the third arbitrator shall
preside over the Court.
31.02.04. Arbitrators' Fees: Arbitrators shall be compensated
for their services at the standard rate charged by arbitrators appointed by
ICC.
31.02.05. Award: The Arbitration Court shall make its award in
strict conformity with this Agreement and shall have no power to depart from
or change any of the provisions of this agreement.
31.02.06. Performance of the parties' obligations: Landlord and
Tenant agree to continue performing their respective obligations under this
agreement while the dispute is being resolved, unless this Agreement has been
terminated in accordance with its terms.
31.02.07. General: Unless otherwise agreed by the parties or
provided in the Arbitration Award, the prevailing party at the Arbitration
settlement shall be entitled to recover from the nonprevailing party all fees
and expenses paid or incurred by the prevailing party in connection with the
Arbitration herein. A party who successfully brings a judicial action to
compel the Arbitration described herein, shall be entitled to recover its
reasonable attorneys' fees, court costs and expenses from the other party.
31.03 With regard to any dispute, claim or controversy
arising out of or in connection with this Agreement from the earliest of (i)
the Commencement Date as stated in the Commencement Date Certificate issued by
the parties, (ii) the date an arbitral award under the provisions herein is
issued declaring that substantial Completion of Landlord's Work has ocurred and
that the Premises are available for Tenant to occupy them, or (iii) the date in
which Tenant actually takes possession of the Premises (not including occupancy
of the Manufacturing Area prior to Substantial Completion of Landlord Is Work),
the parties hereto irrevocably submit it to the competent courts sitting in
Monterrey, N.L., Mexico, waiving any rights they may have to any other
jurisdiction by reason of their present or future domiciles.
32. MISCELLANEOUS PROVISIONS
32.01. Whenever the singular number is used in this Lease
and when required by the context, the same will include the plural, and the
masculine gender will include the feminine and neuter
32
32
genders, and the word "person" will include any corporation, firm, partnership,
or association. All monetary payments due and paid hereunder shall be paid in
United States currency at Landlord's or Tenant Is address, as the case may be,
or at. such other address as may be designated in writing by Landlord or
Tenant, as the case may be, by written notice to the other party.
32.02. The headings or titles to sections of this Agreement
are not a part of this Agreement and will not affect the construction or
interpretation of any part of this Agreement.
32.03. Time is of the essence of each term and provision of
this Lease.
32.05. Subject to Section 10 of the Agreement, the terms and
provisions of this Agreement are binding upon and inure to the benefit of the
respective successors and assigns of Landlord and Tenant.
32.06. Except as otherwise expressly provided in this
Agreement, all covenants and agreements to be performed by either party under
any of the terms of this Agreement will be performed by such party at such
party's sole cost and expense.
32.07. In the event that Landlord or Tenant shall be delayed
or hindered in, or prevented from, the performance of any act required
hereunder by reason of strikes, lockouts, labor troubles, delay by the other
party, new or unexpected governmental regulations, delays by governmental
authorities, failure of power, riots, insurrection, war, or other reason of a
like nature not the fault of such party or not within its control, then
performance of such act shall be excused for the period of delay, and the
period for the performance of any such act shall be extended for a period
equivalent to the period of such delay (collectively, "Force Majeure").
Nothing contained herein shall excuse either party from performing payment
obligations due hereunder.
32.08. Tenant agrees that at the expiration of the Lease
Term (including any extension thereof), it will deliver to Landlord peaceable
possession of the Premises. Except as provided in Section 1.02 above, no
holding over by Tenant nor acceptance of the Base Monthly Rent or other charges
by Landlord shall operate as a renewal or extension of the Lease without the
written consent of Landlord and Tenant. Should Tenant hold over without the
consent of Landlord, this Lease shall continue in force from month to month,
subject to all of the provisions hereof and at a monthly rent equivalent to
120% of the last Base Monthly Rent applicable during the Lease Term.
32.09. Nothing contained in this Lease shall be deemed or
33
33
construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venture, or any other
association between Landlord and Tenant other than the landlord-tenant
relationship described herein.
32.10. Whenever the term Premises is referred to in this
Lease, it shall mean the land, the Building and any improvements thereon.
32.11. Except as otherwise provided in section 2.04 Tenant
may prior to the Commencement Date, without incurring any liability for payment
for Base Monthly Rent, place and install Tenant's property in any part of the
Premises or award contracts to others to install at Tenant's risk and expense,
provided the foregoing does not cause undue interference or delay in Landlord
substantially completing Landlord's Work.
32.12 The parties agree that any monies due to one party by
the other under this Agreement shall be paid in U.S. Dollars. For this
purposes any costs and expenses incurred in Pesos Mx. Cy. that are to be
reimbursed by one party to the other shall be converted into U.S. Dollars at
the time such costs or expenses are incurred by applying the exchange rate
applicable to such precise date as determined and published by Banco de Mexico.
32.13. The Parties agree to execute and ratify before a
notary public a Spanish translation of this Agreement, in order for the same to
be registered at the corresponding Public Registry of Property and Commerce
within thirty days after the date hereof. Ratification and registration costs
shall be covered by Tenant and Landlord half and half.
IN WITNESS WHEREOF, duly authorized agents respectively of Landlord
and Tenant have executed this Lease in multiple original counterparts as of the
day and year first written above.
INMOBILIARIA NUEVO AEROPUERTO, S.A. DE
C.V.
(LANDLORD)
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Legal Representative
34
34
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Legal Representative
SMARTFLEX SYSTEMS DE MEXICO, S.A. DE C.V.
(TENANT)
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Legal Representative
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Legal Representative
35
[INSERT EXHIBIT "A"]
36
EXHIBIT B
COMMENCEMENT DATE CERTIFICATE
Tenant hereby agrees and accepts possession of the Premises, the Building and
any other improvements together with parking areas and landscaping as shown on
the Site Plan. Therefore Tenant acknowledges receipt hereof and recognizes
that the Substantial Completion of Landlord's Work has been fulfilled and
completed as agreed in the Final Plans and Final Specifications on 1997, the
Commencement Date.
The parties have executed this Commencement Date Certificate the ___________ of
____________, 1997.
INMOBILIARIA NUEVO AEROPUERTO, S.A. DE C.V.
By:
Legal Representative
SMARTFLEX SYSTEMS DE MEXICO, S.A. DE C.V.
By:
Legal Representative.
37
EXHIBIT "C"
I. Example:
TOTAL VALUE OF INVESTMENT = US$2;477,169.23 Dlls.
multiplied by 0.13 = $322,032.00
divided by 12 = $26.836.00 (Base Monthly Rent)
II. Example:
TOTAL VALUE OF INVESTMENT = US$2;477,169.23 Dlls.
minus scope of the substraction = US$477,169.23 Dlls.
= $2;000,000.00 (New Total Value of Investment)
multiplied by 0.13 = $260,000.00
divided by 12 = $21,666.66 (Base Monthly Rent)
III. Example:
TOTAL VALUE OF INVESTMENT = US$2;477,169.23Dlls.
Bid No. 1 = 200,000.00
Bid No. 2 = 250,000.00
Bid No. 3 = 150,000.00
Bid No. 4 = 300,000.00
Bid No. 5 = 275,000.00
Bids Nos. 3 and 4 are eliminated.
Bid No. 2 was the one accepted.
250,000.00 + 20% of such amount (50,000.00) = 300,000.00
300,000.00 +2;477,169.23 = 2'777,169.23 (New Total Investment)
multiplied by 0.13 = 361,032
divided by 12 = US$30,086.00 (Base Monthly Rent)
38
IV. Example:
TOTAL VALUE OF INVESTMENT = US$2;477,169.23Dlls.
Bid No. 1 = 200,000.00
Bid No. 2 = 150,000.00
Bid No. 3 = 150,000.00
Bid No. 4 = 300,000.00
Bid No. 5 = 275,000.00
Bids Nos. 3 and 4 are eliminated.
Bid No. 2 was the one accepted.
250,000.00 + 20% of such amount (50,000.00) = 300,000.00
300,000.00 + 2;477,169.23 = 2'777,169.23 (New Total Investment)
multiplied by 0.13 = 361,032
divided by 12 = US$30,086.00 (Base Monthly Rent)
39
EXHIBIT D
SPECIFICATIONS FOR SMARTFLEX PROJECT
Content
1. Permits and Licenses.
2. Laboratory
3. Design Criteria
4. Preliminaries and Earthwork
5. Concrete
6. Floors and Slabs
7. Walls
8. Steel Structure
9. Roofing
10. Masonry and Finishes
11. Dock Levelers
12. Doors, Hardware and Windows
13. Civil Works
14. Fences
15. Landscaping
16. Plumbing
17. Sanitary Services and Fixtures
18. Heat Ventilation and Air Conditioning System
19. Hydropneumatic System
20. Electricity
21. Telephone Distribution System
22. Fire Protection System
23. Guard House
24. Clocks and Paging System
25. Process Equipment Installation
26. Others.
40
[STIVA LETTERHEAD]
1. PERMITS AND LICENSES.
o Permits and license related to the construction are included
in the contract and they are LANDLORD's responsibility.
o CFE and TELMEX payments are not included in the quotation.
o TENANT shall give the necessary assistance for the documents
development which their manufacturing process could be
involved.
2. LABORATORY.
o The cost of the soil analysis and concrete testing are
included in the proposal, but TENANT has the right to request
another kind of testing, if the result is negative, LANDLORD
will pay for the cost of the test and the corrections. If the
result is positive the charge will be to TENANT.
3. DESIGN CRITERIA.
o All drawings will be presented to TENANT for construction
authorization including the Design Criteria used for
engineering.
o The mentioned scope will be the base for the performance of
the drawings. Any change will be considered after the
approval and handled through a Change or Field Order.
o The approval will be carried out by Landlord and the
authorization by TENANT's representative.
o Mexican codes and Architectural American Standards will be
considered for the design.
o The drawing that does not have the sign "Approved for
Construction" and the signatures of the persons above
mentioned, will NOT be considered for its execution.
4. PRELIMINARIES AND EARTHWORK.
o This item includes clearing the property of bushes, etc.
Remove the top soil (black) from the area where the building
will be located, the depth of this cut will be 12" max.
o The fill material will be approved clay material without
rubbish, weeds, etc. The acceptable material will be placed
in layers (8" max.) to require sub-grade elevations.
o The compacted fill will be 95% ▇▇▇▇▇▇▇ for under slabs soil
and 90% for foundations.
41
[STIVA LETTERHEAD]
5. CONCRETE.
o All structural concrete will be 2,850 psi (200 Kg/Cm2) except
for those elements that the design asks it. All concrete will
be ready mix and meet the Mexican Norm NOM C-155, Clase "A".
o Concrete for minor work might be mixed at the site in power
mixer.
o The concrete will be tested periodically according to the ACI
318'83 (Spanish version) section 4.7 "Evaluation and
Acceptance of the Concrete", part 4.71 "Testing Frequency"
(For English version see ACI 301-84, Chapter 16).
o The steel reinforcement will be 47,000 psi (4,200 Kg/Cm2).
o Special foundations for manufacturing equipments, cranes and
stamping press are NOT included. Everything under this
section will be performed according to the drawings and
calculations for this work.
6. FLOORS AND SLABS.
o For the Plant area, the floor slab will be 5" thickness with
welded wire mesh 66/10-10; design load capacity shall be
2,000 to 2,500 K/sm, diamonds 40 x 40 inches on every column
with all construction and expansion joints according to the
design and with a tolerance of 1/8" every 10'. The final
finish considered is polish-(The poliurethane sealer is not
considered)
o For the offices, the floor slab will be 4" thickness and
welded wire mesh 66&10-10 and rustic finish (NO sealer).
7. WALLS.
o Perimeter walls will be 4" precast concrete fc=2850 psi (200
kg/cm2) panels with steel reinforcing bar designed to support
a wind load of 70 miles/hour.
o For the offices, the interior walls are sheetrock panels, at
9' height as per approved shop drawings.
8. STEEL STRUCTURE.
o Steel trusses and joist, fabrication in accordance to AISC
Specifications and as indicated in the approved shop drawings.
42
[STIVA LETTERHEAD]
o The Structural design load considered for the building is:
o Roof dead load o 2.5 PSF (root panels and joist)
o Collateral load o 8 PSF
o Live load o 20 PSF
o Wind load o 70 MPH
o The clear minimum height will be 20' (6 m) to bottom of joist.
o All structural steel will have shop primer paint (▇▇▇▇).
o The fabrication, erection. welding, etc., will be according to
the normal standard practices procedures.
9. ROOFING.
o Roof system will consist of a 24 gauge galvanized, ribbed
(standing seam) roof (UL 90 wind uplift rating). Insulation
will be 3" fiberglass blanket fastened to deck by means of
wire mesh (R=10)
o Downspouts 6" PVC pipe.
o The roof shall have a ten (10) years factory guarantee,
o Storm water will be channeled to the streets and then by
gravity outside the property, The slope considered is 3%.
o Skylights and smoke vents are NOT included.
1O. MASONRY AND FINISHES.
o The perimeter walls will be latex paint.
o There will be no type o insulation considered on the interior
concrete block walls, The following are the main finishes
considered for the project.
-------------------------------- -----------------------------------------
FINISH AREA
-------------------------------- -----------------------------------------
FLOORS
Ceramic tile Daltile or similar. Bathrooms Cafeteria and offices.
Carpet: Terza model Trend or
similar Offices area
-------------------------------- -----------------------------------------
43
[STIVA LETTERHEAD]
Concrete polish finish Warehouse and production area
-----------------------------------------------------------------------
WALL BASE
4" Rubber base Johnsonite or
similar Offices & cafeteria
-----------------------------------------------------------------------
▇▇▇▇▇
▇▇▇▇▇ Latex Paint or similar. General Offices.
▇▇▇▇▇ Latex paint or similar Interior Manufacturing area
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ exterior latex Exterior walls
paint
-----------------------------------------------------------------------
CEILINGS
▇▇▇▇▇▇▇▇▇ model Minaboard Offices area and bathrooms.
Fissured 755B 2'x4' or
similar
(At 9' elevation)
-----------------------------------------------------------------------
11. DOCK LEVELERS.
o 2 (two) Dock levelers 6'x6' 20,000 Lb capacity, Blue Giant
model A788 or equal approved. Operating range 12" above/below
dock level counter balance springs with solid steel
positioning roller & roller bearings, 55,000 PSI high yield
steel platform & structure, continuos piano type hinge with
front header plate boxed structure with "C" channels gusseted
at front and rear headers, and bumpers included.
12. DOORS, HARDWARE AND WINDOWS.
o 10 Hollow metal personnel doors, 3' x 7', for dock service and
fire exit, includes: 20 Ga. steel door, 16 Ga. steel frame,
MONARCH 19-R-BA exit only panic bar with 3 ▇▇▇▇▇ hinges 4"x4"
model 700 in each door.
o 2 Roll-up doors, galvanized, manual operation, 8'x 10'.
o 33 Solid Wood doors with metallic frames in the interior
offices with 3 ▇▇▇▇▇▇ hinges 4"x4" model 700i in each door.
44
[STIVA LETTERHEAD]
o 28Doorlock Schlage model Orbit A53PD/626.
o 1 (one) 3'x 7' door anodized bronze aluminium.
o Windows 4' tall x 16' wide standard 2"x 4" anodized bronze
aluminium framing storefront system bronze tinted glass.
o 16 Door closers 1460 P LCN closers
o Push plates ▇▇▇▇▇▇ stainless steel, Model 30 S. beveled
o Door pulls stainless steel round 3/4" dia., base / 2 1/4",
protection 1 1/2" clearence
13. CIVIL WORKS.
o Access roads an Parking lots will be compacted backfilling 95%
▇▇▇▇▇▇▇, 6" gravel base compacted 95% ▇▇▇▇▇▇▇, asphalt coating
on top 1 lt/m2 asphalt concrete 2" as finish.
o For the pavements it is considered the
following criteria:
o Auto parking 2" (5 Cm) asphalt concrete plus
6" base.
o Dock area 6" concrete pavement, for trailers.
concrete 2,850 psi (200 K/Cm2), reinforcement
as per final design.
o The sidewalks will be 4'wide (1.20 M) 4" (10 Cm) thickness
concrete 2143 psi (150 K/Cm2). Curbs and painting are also
include.
o Grading will be done in accordance with the final approved
drawings.
14. FENCES.
o Chain link fence around the property 2.10 m (7") height and
barbed wire.
o Architectural fence in the front of the property with automatc
door gate at the principal entrance.
15. LANDSCAPING.
o For landscaping it has been considered San ▇▇▇▇▇▇▇ grass,
ornamental bushes and trees, as per shown in final design,
with irrigation system with automatic controller. Landscaping
areas will be as per final design.
45
[STIVA LETTERHEAD]
16. PLUMBING.
o For sanitary work below the floor, it will be provided service
P.V.C. pipe and fittings schedule std.. For exterior work
concrete pipe will be used with the protection norms required.
o Copper piping type "M" with soldered fittings will be used for
the water system. This is below and above ground. ▇▇▇▇▇ or
equal will be used for gate and ball valves.
o Deep well and cistern is included in the cost,
o Hot water supply is not included.
17. SANITARY SERVICES AND FIXTURES.
o Sanitary fixtures will be Lamosa or equal. All toilets will
be white color and floor mounted, and the urinals, also ▇▇▇▇▇,
▇▇▇▇ be flush valve operated. All accessories will be ▇▇▇▇▇
or equal,
o The toilet partitions will be plastic laminated ceiling hung
type in accordance to final design.
o The fixtures considered are :
FIXTURE QUANTITY
----------------------------------------------------
Waterclosets Lamosa model 15
Urinals Larnosa model Austral 3
Lavatories undermount Vermax Parchment 8
CE
Lavatories faucets ▇▇▇▇ LEGEND 4420 8
Coffe bar sink ▇▇▇▇ 22827 4
Cleaning sink 1
Soap dispenser Bobrick B 8
Paper towel dispenser Bobrick B-262 15
Toilet tissue dispenser Bobrick B-288 4
Mirrors BOBRICK ▇-▇▇▇ ▇▇
▇▇. HEAT VENTILATION AND AIR CONDITIONING SYSTEM.
o Air package units system for all the area.
o Design temperatures as follows: 72 [degrees] F Office areas
78 [degrees] F Manufacturing area.
46
[STIVA LETTERHEAD]
o Designed cooling capacity
o 160 total refrigeration tons are considered
o Fan system installed in walls to supply and exhaust air into
receiving and shipping areas with capacity to change the
bottom of 10' or air 5 times per hour automatically actived by
a thermostat is included.
o Offices and Cafeteria ductwork is galv. steel and insulated
with fiberglass 1" blanket.
o Exhaust air systems will be provided and installed by LANDLORD
as required in toilet rooms.
o All grills and diffusers will be aluminum, Sereli or similar,
thermostats and controls are included.
19. HYDROPNEUMATIC SYSTEM.
o It has been considered for giving presure to the piping water
of domestic usage, (not for process water) and the system
includes: Galvanized steel tank cap 109 gals., two pumps 5HP,
and a 7.5 HP motor.
o The work pressure is 40 PSI to 60 PSI.
o Electrical controls for automatic control of the system
including magnetic starter at full voltage combined with
thermomagnetic switch for control and protection of the motors
connected at 440 volts
20. ELECTRICITY.
o The main service will be 34,500 volts, as determined by CFE
with provision for CFE metering equipment. going underground
with 3-35kv-100% insulation XLP 1/0 XLPE cables from the CFE
connection at the property limit to the primary switchgear .
o The primary switchgear, Including lightning arrestors, ▇▇▇▇▇▇
bus work, connections to ground loop high voltage cable
terminations. Switchgear to have covers and doors and windows
for visual examination of switch position with external switch
operators.
o Two (2) 1000 KVA 480 /277 volts oil filled transformers close
coupled to switchgear and connected to the main low voltage
panels by conduit in pad.
o Transformers shall have oil level gauge, temperature gauge,
two 2 1/2% taps (full capacity) above and below rated rated
primary voltage and standar pipe connections for sampling
filterinf etc.connect each to ground loop.
o The transformers of the substation are going to be mounted in
a concrete pad just outside the building.
o Transformers brands will be PROLEC or equal approved.
o One of the two main low voltage panel will be Square D or
equal and shall be 480 volts, 3 phases, 4 wire and ground 60hz
NEMA-1 and will consist of:
o One main breaker of 3 x 1500 amperes and 42
poles for plant power connections.
o 1 termomagnetic branch breaker 3 x 400 amps
47
[STIVA LETTERHEAD]
o 1 termomagnetic branch breaker 3 x 70 amps
o 1 termormagnetic branch breaker 3 x 40 amps
1 termomagnetic branch ▇▇▇▇▇▇ 3 x 15 amps.
o The other main low voltage panel will be Square D or equal and
shall be 480 volts, 3 phases, 4 wires and ground 60 hz NEMA-1
and will consist of:
o One main breaker of 3 x 1500 amperes and 42
poles for plant power connections
o The plant lighting panel shall be type "NHDP"
480/277 volts, 100 amps, 3 phases, 4 wire
and ground with 42 poles Federal Pacific
Trademark with the following termomagnetic
branch breakers:
- 12type "NEG" 1x20 amps.
- 5 type "NEG" 1x15 amps.
- 2 type "NEG" 3x15 amps.
o The office lighting panel shall be type "NALP" 220/127 volts,
100 amps, 3 phases, 4 wire and ground with 30 poles Federal
Pacific trademark with the following termomagnetic branch
breakers
- 23 type "NA" 1x20 amps.
- 2 type "NA" 2x3O amps.
o One M.C.C panel for HVAC units. Panel shall be 480/277 volts,
3 phases, 4 wire and ground 60 HZ NEMA-1, main breaker 3 x4OO
amps, and 4 termornagnetic branch breaker 3 x 125 amps.
o All wire shall to be THHN/THWcopper, all conduit exposed to
forklift damage to be rigid. Ground wire in all conduits runs
sized per table 250-95 of NEC. All conduits run except main
service to be overhead.
LIGHTING.
o The lighting levels will be as follows:
AREA FOOT CANDLES
---------------------------------------
Plant Area 50
Office Area 70
o There will be 120 V. lay-in fluorescent fixtures in all
offices, to provide 100 FC at work surfaces, and for
manufacturing area illumination of 400 W metal halide.
o Fluorescent lamps manufacturers will be Lithonia, or equal
approved.
48
o Metal Halide fixtures and lamps manufactured by Lumisistemas,
including flexible wiring. Labor and miscellaneous by
LANDLORD.
o Outside lighting on plant and parking lot 1.5 f.c. level with
high pressure sodium vapor. 175 W. "Wallpacks", fixtures and
lamps manufactured by Lithonia. Labor and miscellaneous by
LANDLORD.
o Exit lights above doors will be provided. Also installed one
4OW fluorescent emergency night light battery emergency
lighting for manufacturing and offices areas.
o Duplex receptacles for all offices, meeting, conference,
training and demo area walls, also dedicated split duplex
receptacles in all coffee stations will be as shown on final
design drawings.
OTHER APPROVED BRANDS.
a. Cable: Conductores Monterrey, or equal approved.
b. Conduit piping: "Conduit de Mexico"
c. Cable Trays: ▇▇▇▇▇▇ ▇▇▇▇▇.
21. TELEPHONE DISTRIBUTION SYSTEM.
o Telephone distribution will be according to the final layout,
and includes all necessary conduit, boxes and registers with
pull-in wire to all desk and areas requiring the service as
indicated in the general layout approved by the Owner.
o The telephone wiring and the equipment are NOT included.
22. FIRE PROTECTION SYSTEM.
This includes:
o Manufacturing area density 0.10 GPM/1500 SQF (Light Hazard
o Offices area density 0.10 GPM/1500 SQF (Light Hazard
o 178 Sprinklers in roof manufacturing area
o 94 Sprinklers in offices area.
o 4 Interior hose stations.
o 1 Diesel Engine Fire pump 500 GPM 100 PSI & jockey
o 1 40,000 gallons bolted tank
49
[STIVA LETTERHEAD]
23. GUARD HOUSE.
o One 10'x10' is included.
24. CLOCKS AND PAGING SYSTEM.
o For these systems were considered Conduit boxes, registers,
and pul-in wire, labor and materials. Clocks and Paging
equipment are NOT in the scope.
25. PROCESS EQUIPMENT INSTALLATION.
o Equipments and labor for Manufacturing area, Motor control
centers, Panel Boards for Main Power have NOT been included in
the scope
26. OTHERS
o Although these specifications are the base of the project
TENANT will have the right to change or make additions for the
hereof mentioned. For that case, LANDLORD shall provide the
extra cost or the saving, for approval, and proceed after
this.
o Previous to the starting date, LANDLORD and TENANT will
appoint the persons that will be in charge of the Construction
and Design, who will have the responsibility for the project
decisions.
50
[STIVA LETTERHEAD]
QUOTATION
QUANTITY UNIT U.P. AMOUNT
USD USD
FIXED VALUE WORK:
LAND 123,347 FT2 3.58 440,966
MANUFACTURING BUILDING 42,000 FT2 11.07 464,940
OFFICES 26,000 FT2 25.21 655,460
LOADING DOCKS 2 PC 16,570.28 33,141
PARKING LOT 57,856 FT2 1.41 81,461
EXTERIOR WORKS 1 LOT 100,746.36 100,746
CONSTRUCTION PERMIT 1 LOT 11,000.00 11,035
SUBTOTAL FIXED VALUE WORK 1,787,749
VAT 202,018
TOTAL FIXED VALUE WORK: 1,798,784
VARIABLE VALUE WORK:
ELECTRICAL SUBSTATION 2,000 KVA 110.46 220,924
ELECTRICAL INSTALLATION 1 LOT 78,818.52 78,819
PLUMBING 1 LOT 22,587.40 22,587
HVAC 160 TON 1,221.81 195,490
FIRE PROTECTION 1 LOT 171,600.00 171,600
SUBTOTAL VARIABLE VALUE WORK: 689,420
VAT 103,413
TOTAL VARIABLE VALUE WORK: 861,020
51
EXHIBIT E
FINAL COMPLETION CERTIFICATE
Tenant acknowledges that Final Completion of Landlord's Work has been fulfilled
and completed as agreed in the Final Plans and Final Specifications on _________
1997, the Commencement Date.
The parties have executed this Final Completion Certificate the ______ of _____,
1997.
INMOBILIARIA NUEVO AEROPUERTO, S.A. DE C.V.
By:
Legal Representative
SMARTFLEX SYSTEMS DE MEXICO, S.A. DE C.V.
By:
Legal Representative.
52
EXHIBIT "F"
AMICABLE RESOLUTION PROCEDURES
1. Landlord and Tenant shall seek friendly resolution to any bona fide
disagreement arising out of the Landlord's Work, (hereinafter a
"Disagreement"), in accordance with this exhibit. Landlord and Tenant shall
try to accommodate the Disagreement to a friendly, fast track, business
oriented procedure (the "ARP"). To the extent possible and practicable,
Landlord shall continue with all Landlord's Work in accordance with the Final
Plans and Final Specifications during anv pending ARP. If the Disagreement
involves the performance of certain portion of the Landlord's Work that would
make the continuation of such portions of the Landlord's Work impracticable,
then Landlord shall continue with all Landlord's Work not affected by the
Disagreement. The ARP shall be carried out as provided hereunder and any
failure to reach resolution under the ARP shall entitle either Landlord and/or
Tenant to cause the dispute to be submitted to binding arbitration under the
terms of Clause Thirty-One of the Agreement.
2. Should any Disagreement arise, Landlord and Tenant shall commence the
ARP by notifying the other party in writing of the Disagreement and by
appointing their respective representatives (the "Management Representatives"),
who shall have authority to negotiate a settlement on behalf of Landlord and
Tenant, respectively. The Management Representatives shall be appointed within
three (3) calendar days of the original notice of the Disagreement.
3. No later than five (5) business days following their appointment the
Management Representatives will mutual select and appoint to act as a neutral
mediator, a mutually acceptable engineer or architect, duly licensed in Mexico,
who shall have the qualifications and who shall perform the functions stated in
this ARP (the Neutral Mediator"). If by the aforementioned date, the
Management Representatives have not agreed on who will act as Neutral Mediator,
then Landlord and Tenant shall submit the Disagreement to the Chamber of
Construction Industry located in Monterrey, N.L. who shall appoint such Neutral
Mediator within a period of five business days from the date a request is made
by either of the parties.
4. Within a ten (10) business day immediately following the appointment
of the Neutral Mediator, a formal meeting (the "Formal Meeting") will be held
before a panel consisting of the Neutral Mediator and the Management
Representatives. The Formal Meeting shall be held at the place and time
selected by mutual agreement of the Management Representatives within such ten
(10) business days of the appointment of the Neutral Mediator, and if the
Management Representatives cannot agree upon the place, then the place will be
selected by the Neutral Mediator, The Formal Meeting shall be supervised and
conducted by the Neutral Mediator, and shall have a duration of not more than
forty-eight (48) hours.
5. No later than five (5) business days prior to the Formal Meeting, the
Landlord and Tenant shall exchange, through their Management Representatives,
and shall submit to the Neutral Mediator, concise memoranda stating the issues
in disagreement and their position in such respect, as well as all documents
and exhibits on which the parties intend to rely during the Formal Meeting.
Such memoranda documents and exhibits shall be in English Language.
53
6. During the Formal Meeting, each Management Representative will make an
oral presentation of its case, and each Management Representative shall be
entitled to a reply. The presentations and replies may be made in any form,
and by any individuals, other than the Management Representatives, as desired
by Landlord and/or Tenant, and may be supported by any of, but only, the
memoranda, documents and other exhibits submitted in accordance with Section 5.
hereof. The use of witnesses and experts shall be permitted. Presentations
may not be interrupted, except that the Neutral Mediator and the Management
Representatives may ask clarifying questions. The meeting shall not be
recorded, however, persons attending may take notes. Each Management
Representative may have not more than two (2) advisors (plus one interpreter,
if applicable) in attendance.
7. During the Formal Meeting, the Management Representatives shall make
all reasonable efforts in good faith to seek a resolution to the Disagreement,
to which effect they shall meet one or more times, as necessary, within the
forty-eight (48) hour period set forth hereinabove. By mutual agreement, other
representatives representing either side may be invited to attend the
negotiations. The Neutral Mediator will attend the negotiations and will give
an oral opinion as to the issues raised during the Formal Meeting.
8. Should the Management Representatives not reach a resolution on the
Disagreement, then within a term of forty-eight hours following the conclusion
of the Formal Meeting, the Neutral Mediator shall submit to the Management
Representatives a written proposal which shall contain an opinion on the issues
involved in the Disagreement and a bona fide, proposed, amicable resolution,
settlement and/or compromise of the Disagreement.
9. Should the Management Representatives finally reach a resolution to
the Disagreement, then the terms of any settlement thereof shall be set forth
in a written agreement (the Resolution Agreement), which shall be executed by
the Management Representatives not later than twenty- four hours after the
later to occur of (i) the conclusion of the Formal Meeting, or (ii) the
submitting of the Neutral Mediator's written proposal mentioned in Section 8
hereinabove (or if no written proposal is submitted by the Neutral Mediator
within 48 hours of the conclusion of the Formal Meeting, then upon the
expiration of such 48 hours period after the Formal Meeting). If the
Management Representatives fail to sign a Resolution Agreement within the time
period in this Section 9, then the Disagreement will be submitted to the
arbitration provisions of Clause Thirty-One of the Agreement. The Resolution
Agreement shall be final, and legally binding on Landlord and Tenant.
10. The ARP is not intended to last more than twenty (20) business days
from start to finish and any Disagreement that has not resulted in a Resolution
Agreement within twenty (20) business days, may be submitted by either party to
binding arbitration under Clause Thirty-One of the Agreement. Further, if three
(3) or more consecutive Disagreements fail to result in a Resolution Agreement,
then, in such event, either party can avoid the ARP and submit the Disagreement
directly to arbitration under Clause Thirty-One of the Agreement and
thereafter, no further ARP shall be conducted, unless by the mutual consent of
the parties.
11. If arbitration under Clause Thirty-One of the Agreement must follow
the ARP, the parties herein agree in good faith to shorten the periods of the
arbitration procedure in order that the arbitrators be able to render an award
not later than on the 15th of July of 1997.
54
EXHIBIT G
PARK'S BY-LAWS
55
[STIVA LETTERHEAD]
PROTECTIVE COVENANTS AND
RESTRICTION BYLAWS
With the only intention and purpose to create, develop and maintain a world
class industrial development, with a healthy, efficient labor atmosphere, an
orderly neat, clean work environment with an attractive image and appearance,
the following protective covenants and restriction bylaws are established same
that are binding and of strict observance for all present and future owners,
lessees or tenants of any property, land or building within the limits of the
"STIVA AIRPORT INDUSTRIAL PARK", (from here on, stated as "THE PARK") a
development authorized and officially recognized by the Secretary of Urban
Development of the State of Nuevo ▇▇▇▇, Mexico.
BYLAWS
FIRST:
All bylaws here stated are recognized and accepted of conformity by all owners
and tenants of "THE PARK" and form part of their legal documents of property or
lease. All modifications or changes made to the original Bylaws by this
document will substitute and take the place of the previous one.
SECOND:
The "owners, tenants and neighbors committee" (from hereon stated as "The
Committee") is constituted with the objective to supervise and assure the
strict compliance of "THE PARK" PROTECTIVE COVENANTS and restriction bylaws as
well as to cooperate and actively participate in creating and maintaining an
industrial environment suitable for world class operations for which "THE PARK"
was developed.
All actual or future owners and tenants of "THE PARK" have to become and form
part as active members of "THE COMMITTEE" and have the obligation to assist and
participate in all meetings that "The Committee" convenes to.
THIRD:
The subscribers of the present bylaws that have the status of owner in the
park, must subscribe to a Civil Association which main purpose is to manage and
to pay the maintenance of the common areas in the park, as well as the tax
payments required from the Federation, the State and the Municipality.
Renuncing to what is established in the Article 2573 and have the obligation to
form part and to participate in this association the longest they remain owners
of the real estate property in the park.
56
[STIVA LETTERHEAD]
FOURTH:
The subscribers of the present bylaws are obligated to make known the bylaws,
and the obligation to form part of the Civil Association to the new owners in
the case of transferring the real estate properly by any mean or title.
FIFTH:
Under no conditions whatsoever must the industrial operations in the field of
basic chemical industry, heavy industry or similar be located within the
subdivision. Only the location of light and clean industrial operations which
are capable of carrying out their manufacturing, management, warehousing,
engineering, research, loading, unloading, handling and other functions with
the limits established by these protective convenants and Restrictions.
SIXTH:
No buildings or industrial installations shall be constructed at least (6.00)
meters from the street line where the property adjoins a street if the depth of
lot is less than (8.00) meters, and (10.00) meters if more than (80.00) meters
or five (1.00) meters from any other adjacent properly, on the boundary of the
lots with streets and avenues, sidewalks shall be built of concrete or an
equivalent material and in no case its width will be less than one meter.
Land utilization shall not be more than 80% of the total area of the property
land for actual or future buildings. The total constructed, under roof covered
areas of the buildings shall not be less than a 10% of the size of the lot.
SEVENTH.
The part of land left in front of the buildings, between the buildings itself
and the street, shall be developed and kept in such a way as necessary to
present a clean and attractive appearance. Such areas shall be covered
entirely by sidewalks, paved areas for the circulation of vehicles,
landscaping, decorative fillings of gravel or similar materials, or decorative
constructions compatible with the overall architectural style of the facade of
the building, provided that the design for such decorative construction is
previously approved by "THE PARK".
The land left behind or to the sides of the building shall be kept clean of any
litter, waste, weeds or any other articles, and/or materials and shall be
leveled free of ditches, excavations or mounds, unless they serve a decorative
purpose previously approved by "THE PARK".
57
[STIVA LETTERHEAD]
EIGHT:
The parking of trucks, buses or industrial vehicles in front of buildings is
forbidden. Vehicles of this type shall be parked invariably to the rear or to
the sides of the buildings.
NINTH:
Open air storage of buildings is forbidden whether it be of merchandise,
products, machinery, parking material or any other items, unless such storage
is perfectly covered in all directions by panels, grills or screen of
appearance previously approved by "THE PARK".
TENTH:
It is forbidden to use the land or buildings located within "THE PARK" to
conducted activities that have as a result the following consequences, in
amounts or levels that can be detected at the limits of the lot used by that
industry and are in violation of the regulations of S.E.D.U.E. (The Secretariat
of Urban Development and Ecology) or any local municipal rule:
A.- The emission of dust and/or objectionable smoke.
B.- The generation of gases, vapors, and odors which either are
hazardous to health or create a public nuisance problem.
C.- The production of noises, vibrations and/or radiation that
create either hazards to health or public nuisances.
ELEVENTH:
It is forbidden to conduct within "THE PARK" any operations generating
luminosity of high intensity, unless they are insulated in such a way as to
avoid any discomfort to anybody who could see them from any point where such
operation is located.
58
[STIVA LETTERHEAD]
TWELFTH:
It is forbidden to discharge to the sewage lines within "THE PARK" any
substances, wastes or effluents in amounts in excess of limits established by
regulations issued by S.E.D.U.E. (The Secretariat of Urban Development and
Ecology), or any other which may be issued by any local municipal sewer
authority.
THIRTEENTH:
If considered necessary by "THE PARK" to follow and comply with the regulations
above mentioned, a water treatment process should be installed before disposing
the wastes or effluents into the park's sewer lines by the company involved in
such situation, covering by the same all expenses and permits.
FOURTEENTH:
When judged necessary and to protect all the workers and personnel against the
spread of any infection or plague, "THE PARK" will urge any of its members to
disinfect and/or fumigate the insides and outsides of its land, building and
installations as determined by each case.
FIFTEENTH:
The placement of signs, displays or advertisements on the lots of land or
buildings, within "THE PARK" will be allowed only if such signs, displays or
advertisements have the exclusive purpose of identifying the corporation using
such lot or building, either through lease or ownership. Such signs, displays
and advertisements shall be only of the general specifications established by
"THE PARK" accepting also the emblems, logos, monograms or trademarks generally
used by the corporations located in "THE PARK" it is forbidden to paint any
signs of the roof of buildings, or to place signs which may exceed the height
of the main facade in a building.
SIXTEENTH:
In no case, the construction, expansion, or demolition of a building or any
other installation, shall be started if "THE PARK" has not previously granted
its authorization in writing to do so, however, such authorization shall not be
unreasonably withheld, nor may authorization be defined if the landowner is in
compliance with the other clauses herein.
SEVENTEENTH:
The overall external appearance of buildings shall be kept in a clean, orderly
condition. The exterior painted surfaces snail be repainted at least every
three (3) years.
59
[STIVA LETTERHEAD]
EIGHTEENTH:
Absolutely all members of "THE PARK" and of "THE COMMITTEE" that have an
economical activity within the limits of "THE PARK", shall seriously commit
themselves to avoid to hire or contract any person that had previously worked
with any other company of "THE PARK" or member of "THE COMMITTEE" during the
past six months and to report the situation to the committee and/or to the
other company involved.
This bylaw shall be taken as an internal obligatory policy of the hiring
procedure with the objective to avoid as possible any situation that would
negatively affect the turnover rate of any or all of the members of "THE
COMMITTEE" of "THE PARK".
NINETEENTH:
The company or the property owner that has acquired a lot in this park and
specially those who are located in the perimetral area, will be obligated
through this document to not allow or authorize other land neighbors different
from the tenants of the "STIVA AIRPORT INDUSTRIAL PARK" to connect to its
infrastructure net and utilities service, under any reason or circumstance. If
the tenant fails to observe this clause, a penalty from THE COMMITTEE of owners
and neighbors of the STIVA AIRPORT INDUSTRIAL PARK will be imposed and,
independently of the procedure of legal action that will be executed against
that or those who allow such connections over the STIVA AIRPORT INDUSTRIAL PARK
OR THE COMMITTEE.
TWENTIETH:
An annual maintenance fee is established for all members of "THE COMMITTEE" the
quantity established is to be contributed per advance during the first two
weeks of January of the same year. These contributions are to be administrated
and managed by THE CIVIL ASSOCIATION the use of these contributions are
strictly for the maintenance of the public service infrastructure and the good
keeping of streets, lawns and sidewalks as well as to maintain and improve the
security, safety and good appearance of "THE PARK".
TWENTYFIRST:
The subscribers of the present bylaws that have the status of owners, lessee,
or other similar title, are obligated to pay to the Civil Association mentioned
in bylaw Third, by way of conventional penalties, the followings which amount
at the time to be charged will integrate to the maintenance fund of the park.
a) for delay, in case of failure to pay on time the annual maintenance
fee that is eferred in bylaw twentieth, interest on the due balance at
a rate of two times the CPP (Percentage Cost Average) published every
month by Banco de Mexico.
b) the nonobservance of any of the other dispositions or bylaws that
contains the obligation of do or not to do and not just ordinary
facultatives, will raise a fine that will be calculated at a rate of
$1.00 (one
60
peso 00/100 M.N.) daily, for every square meter of land surface of a
lot owned or used by the infractor, during all the time that runs
without solving satisfactorily the nonfulfillment.
TWENTYSECOND:
The subscribers of the present bylaws that have the status of owners, in "THE
PARK", are obligated to the following: In case that the Federal Authorities,
the State of Nuevo ▇▇▇▇ and the City, decree or enact any type of tax as
obligatory for the execution of development works in the nearby or adjacent
areas to "THE PARK" Or that by any title turn out obligatory for the property
owners situated in the territorial limits involving total or parcially the
location of "THE PARK"; are obliged to pay in proportion the respective tax in
correspondence to the land surface owned from the total extension of "THE
PARK".
"THE COMMITTEE" expressly reserves for itself the right to change these
protective convenants and restrictions at any time, in regards to the land that
"THE PARK" OWNS AT THE DATE, provided that such changes do not result in harm
or damage to the industries previously located within the park limits, if such
changes or modifications may in any form affect the operations of companies
previously located in "THE PARK" will be implemented only if the affected
companies grant their approval in writing to those changes.
In all cases in which (according to these protective convenants and
restrictions): "THE COMMITTE" reserves for itself the right to authorize,
approve and/or accept, it is specifically agreed that such authorizations,
approvals and/or acceptances will be valid only if they are granted in writing
by persons with specific power of attorney from the "THE COMMITTEE", such
authorizations, approvals and/or acceptances shall not be unreasonably defined.
In case "THE COMMITTEE" does not deliver a negative answer to the request for
authorization, approval or acceptance within 30 calendar days after receiving
such a request in writing, the request for authorization, approval or
acceptance shall be considered as granted. The application and interpretation
of these protective convenants and restrictions will be regulated by the laws
of the State of Nuevo ▇▇▇▇, supplemental to the different federal laws and
regulations as pertaining to specific aspects of industrial operations,
including but not limited to the laws and regulations of safety and industrial
health, pollution, public roads and similar provisions.
Pertaining to construction matters, it is specifically understood that these
protective convenants and restrictions surpass the requirements of the
constructions code for the city of Monterrey, but all requirements of such
construction code shall have to be complied with, in case of any controversy on
the content, interpretation and/or application of these protective convenants
and restrictions, the parties agree to submit to the jurisdiction of the courts
in the city Monterrey state of Nuevo ▇▇▇▇.
These protective convenants and restrictions will remain in effect indefinitely
and can only be canceled or modified by "THE PARK" or by a group of individuals
or entities owning at least seventy-five percent of the total area of "THE
PARK".
61
EXHIBIT H. UTILITIES
*WATER. 8 Liters/Sec. Capacity
POWER. 2000 KVA
*TELEPHONE. 30 External lines
Fiber optics availables.
62
EXHIBIT I
CALL OPTION AGREEMENT
THIS AGREEMENT, made and entered into this 17th day of November 1996, by and
between Inmobiliaria Nuevo Aeropuerto, S.A. de C.V. ("Grantor") and Smartflex
Systems de Mexico, S.A. de C.V. ("Grantee"), pursuant to the following.
STATEMENTS
Both parties state that:
I. They have executed in this same date a lease agreement (the "Lease
Agreement") providing for a lease over a piece of real property (land and
building) located in Avenida TLC no. 300, Parque Industrial Stiva-Aeropuerto,
▇▇▇▇▇▇▇ ▇▇ 66600, N.L., Mexico, identified as the "Property" in Exhibit "A"
attached hereto and made a part hereof (hereinafter referred to as the
"Property"). Grantor's title to the Property is evidenced by Public Deed number
19,735, granted on June 9, 1983 before ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Notary
Public 27 in Monterrey, N.L., which was recorded at the Public Registry of
Property and Commerce of Monterrey, N.L., on August 19, 1983, under number 539,
volume 31, book 12, Section of Real Estate Property, Apodaca Unit.
II. As part of the bargain in connection with the Lease Agreement
they agreed to enter into this Agreement in order for Grantor to grant in favor
of Grantee a call option right to purchase the Property in accordance with the
terms set forth herein.
CLAUSES
1. Granting of Call-Option Right.
Notwithstanding anything to the contrary contained herein or in any
third party's offer, Grantor hereby grants to Grantee a call-option to purchase
the Property and any constructions and
63
2
improvements that may be erected or made on or to it in the future (the
"Option") , which Option may be exercised at any time from this date and until
November 17, 1998 (the "Option Term"). The terms and conditions of the option
shall be:
(a) At any time within the Option Term, Grantee may elect to exercise
the Option to purchase the Property from Grantor.
(b) Should Grantee elect to exercise the Option, it shall give notice
in writing (the "Option Notice") to the Grantor no later than the last day of
the Option Term.
(c) The purchase price in case Grantee exercises the Option shall be
calculated pursuant to the provisions of Exhibit "B" attached hereto and made a
part hereof.
(d) Grantor shall execute the transfer and sale of the Property to
Grantee by making, executing and delivering a public deed containing full
covenants of warranty and conveying absolute, good and marketable title to the
Property, free and clear of any liens, charges, encumbrances, mortgages or
other similar limitations, not later than thirty (30) days after Grantor
receives notice from Grantee of its election to exercise the Option.
(e) During the term in which the Option may be exercised by Grantee,
Grantor undertakes to keep the Property free and clear of any mortgage, lien,
encumbrance or any other limitation of property rights, and not to transfer or
make any attempt to transfer title to or any possession or use rights to the
Property or any part thereof to any third party.
2. Terms and Conditions of Purchase.
(a) If the Option is exercised by Grantee, Grantor shall take any
actions needed for the obtention of any approvals and/or the preparation and
filing of the proper parcel maps or any other documentation that may be
required.
(b) The Grantor shall, at its own expense, provide Grantee with such
proof of title to the Property, as Grantee may reasonably require within
fifteen (15) days of Grantee's option Notice. The Grantee shall have the right
to examine the title to the Property and to accept the same if the title is
good and marketable. In the event the title to the Property is not good and
marketable as aforesaid, or if there is a defect to the title, the Grantee
shall notify the Grantor in writing of such objections, and the Grantor shall
have a reasonable time, but not in excess of fifteen (15) days, in which to
make title good and marketable and to remove such defects. The Grantee shall
have the right, but not the obligation,
64
3
to grant Grantor additional time to correct objections to title, or to cancel
the Option in whole or in part, without prejudice of any remedies it may have
in accordance with this Agreement or any applicable law.
(c) Within fifteen (15) days of the date Grantee delivers the Option
Notice to Grantor, Grantee shall designate a place and a time to hold the
closing of the corresponding purchase and sale agreement under this Agreement;
provided, however, that in the event of objections to title under Paragraph 2
(b) herein, the closing shall take place within seven (7) days after the
removal of such objections.
(d) Upon closing, the Grantee shall deliver to the Grantor full
payment of the purchase price to be determined in the manner hereinbefore set
forth in cash, certified check or wire-transfer, and Grantor shall make,
execute and deliver to the Grantee a deed containing full covenants of warranty
and conveying absolute, good and marketable title to the Property or the
Adjacent Land or both, as the case may be, free and clear from all liens,
assessments, and encumbrances.
(e) Upon closing, all existing liens, mortgages, assessments and
encumbrances over the Property shall be discharged by payments from the
proceeds payable to the Grantor. Property taxes if any, shall be prorated to
the date of closing; all other taxes arising from Grantee's purchase of the
Property, shall be covered as provided by the applicable laws. Grantee shall
pay for the drafting of the corresponding purchase and sale deed(s) as well as
for its (their) recording.
(f) The Grantee shall not be liable for the payment of any real
estate commissions, fees or reimbursements.
3. Governing Law and Courts.
This Agreement shall be subject to the laws of the State of Nuevo
▇▇▇▇, Mexico. Should any dispute arise or any action is to be instituted, the
parties hereto agree to submit it to the competent courts of Monterrey, N.L.,
Mexico, waiving any rights they may have to any other jurisdiction by reason of
their present or future domiciles.
4. Notices.
Any notices to be given hereunder shall be given in writing and
delivered personally or by registered or certified mail, postage prepaid and
sent to the following addresses:
65
4
IF TO GRANTOR:
Av. ▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
IF TO GRANTEE:
Prior to the Commencement Date (as defined in the Lease Agreement):
Carretera a ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇.▇
▇▇▇▇▇▇▇, ▇.▇. ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
After the Commencement Date:
Avenida TLC no. 300
Parque Industrial ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
▇▇▇▇▇▇
or to such other address as a party shall, by like notice hereafter, direct
such notices be sent. Notices shall be deemed duly given when actually
received by the party to whom they are sent.
5. Miscellaneous.
This Agreement shall be binding upon and shall operate for the benefit
of the parties hereto and their respective successors and assigns. The failure
of one party to seek remedies upon the breach of another party shall not be
deemed a waiver of such breach. All representations and warranties contained
herein shall survive the commencement date hereof and, in the event Grantee
purchases the Property, shall survive the date of closing of said purchase.
6. Recording.
A Spanish translation of this Agreement shall be ratified by both
parties before a Notary Public of Grantee's choice and recorded at the Public
Registry of Property and Commerce of Monterrey, N.L. at Grantee's option with
the cost and expense shared equally by the Grantor and the Grantee.
66
5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on the day, month and year first above written.
Grantor Grantee
INMOBILIARIA NUEVO AEROPUERTO, SMARTFLEX SYSTEMS DE MEXICO,
S.A. DE C.V. S.A. DE C.V.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------- -------------------------------
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Legal Representative Its: Legal Representative
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------- -------------------------------
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: Legal Representative Its: Legal Representative
67
6
EXHIBIT "B"
OF THE CALL OPTION AGREEMENT
The purchase price of the Property shall be determined as follows:
a) Within two days of the delivery of the Option Notice by Grantee to
Grantor each party shall designate an appraiser. If one of the parties does
not designate its appraiser within such term then the other party may request
for such appointment to be made by _____________________.
b) Each of the appraisers nominated as indicated above shall prepare
an appraisal determining the market value of the Property within five days of
their appointment.
c) If the two appraisals rendered as indicated in item b) above are
not different by more than 5%, then the average of the two shall be the
purchase price.
d) If there is a difference of more than 5% between the two
appraisals, then the parties shall designate a third appraiser to determine the
market value of the Property, and such determination shall be final and shall
be used as purchase price. If the parties do not agree on the designation of
the third appraiser, then either party may request for such appointment to be
made by ___________________________.
e) In the event the parties agree on a specific purchase price for
the Property in writing at any time after the execution of this agreement, then
such purchase price shall binding upon the parties hereto in the event the
Option is exercised by Grantee and the procedure set forth above shall not be
applicable.
68
[INSERT EXHIBIT J]
69
EXHIBIT "K"
BASIC TERMS OF PERFORMANCE BOND
BONDING INSTITUTION: Mexican Bonding Institution acceptable to Tenant
TYPE: Irrevocable
AMOUNT: In Mexican Pesos equivalent to US$200,000.00 Dollars
EFFECTIVENESS: From the date of signing the Lease until Commencement Date
Certificate is issued or the 15th. of July 1997 (hereinafter "Expiration
Date"), which ever is earlier. In case that prior to the Expiration Date, an
award under the arbitral procedure provided in Section 31.02 of the Lease is
granted to Landlord, in the sense that Landlord has complied with all his
obligations under the Lease Agreement, then the performance bond shall cease
upon presentation by Landlord of such award to the Bonding Institution.
PAYMENT: Shall be made following the standard payment procedures applicable to
the Bonding Institution following the request in writing of Tenant.
70
E X H I B I T "K" (BIS)
BASIC TERMS OF BOND
BONDING INSTITUTION: Mexican Bonding Institution acceptable to Tenant
TYPE: Irrevocable
AMOUNT: In Mexican Pesos equivalent to US$50,000.00 Dollars
EFFECTIVENESS: From the date the Commencement Date Certificate is issued until
ONE CALENDAR YEAR THEREAFTER (hereinafter "Expiration Date").
PAYMENT: Shall be made following the standard payment procedures applicable to
the Bonding Institution following the request in writing of Tenant.
71
EXHIBIT "L"
BASIC TERMS OF BOND
BONDING INSTITUTION: Mexican Bonding Institution acceptable to Landlord
TYPE: Irrevocable
AMOUNT: In Mexican Pesos equivalent to US$200,000.00 Dollars
EFFECTIVENESS: From the date of signing the Lease until Commencement Date
Certificate is issued or the 15th. of July, 1997 (hereinafter "Expiration
Date"), which ever is earlier. In case that prior to the Expiration Date, an
award under the arbitral procedure provided in Section 31.02 of the Lease is
granted to Tenant, the bond shall cease upon presentation by Tenant of such
award to the Bonding Institution.
PAYMENT: Shall be made following the standard payment procedures applicable to
the Bonding institution following the request in writing of Landlord.
72
EXHIBIT "M"
GUARANTEE OF LEASE
In order to Induce Inmobiliaria Nuevo Aeropuerto, S.A. de C. V. ("Landlord") to
execute that certain Lease Agreement (the "Lease") of even date herewith, by
and between Landlord and Smartflex Systems de Mexico. S.A. de C.V. (such
corporation, together with any assignees thereof, except as provided in Section
28.03 of the Lease, being herein collectivelly called the "Tenant"), the
undersigned, ("Guarantor"), having an address at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇, U.S.A., hereby guarantees the payment and performance of all
liabilities, obligations and duties imposed upon Tenant under the terms of the
Lease throughout the Lease Term, but from the earliest of (i) the Commencement
Date stated in the Commencement Date Certificate issued by Landlord and Tenant,
(ii) the date an arbitral award under the provisions of the Lease is issued
declaring that Substantial Completion of Landlord's Work has ocurred and that
the Premises are available for Tenant to occupy them, or (iii) the date in
which Tenant actually takes possession of the Premises (not including occupancy
of the Manufacturing Area prior to Substantial Completion of Landlord's Work).
Guarantor hereby waives diligence, presentment and suit on the part of Landlord
in the enforcement of any liability, obligation or duty guaranteed hereby.
Upon the occurrence of any Event of Default under the Lease, Landlord shall
have the right to make demand upon Guarantor for the amounts owing but unpaid
under the Lease. Landlord shall not be first required to enforce against
Tenant or any other person any liability, obligation or duty guaranteed hereby
before seeking enforcement thereof against Guarantor, suit may be brought and
maintained against Guarantor by Landlord to enforce any liability, obligation
or duty guaranteed hereby without joinder of Tenant or any other person or
entity. Without in any way limiting the foregoing, it is expressly understood
and agreed that Landlord shall not be obligated to pursue any other guarantor
(if there are any other guarantors) prior to bringing suit against Guarantor
hereunder and that the obligations of Guarantor hereunder shall not be affected
in any manner by any discharge or release of any other guarantor of all or any
part of the obligations of Tenant under the Lease. The liability of Guarantor
shall be affected consequently by any indulgence, compromise, settlement or
variation of terms which may be extended to Tenant by Landlord or agreed upon
by Landlord and Tenant, and except as provided in Section 28.03 of the Lease,
shall not be affected by any assignment of the Lease or any release of the
assigning Tenant in connection with such assignment nor by any termination of
the Lease to the extent that Tenant thereafter continues to be liable
thereunder. Landlord and Tenant, without notice to or consent by Guarantor,
may at any time or times enter into such modifications, extensions, amendments
or other convenants regarding the Lease as they deem appropriate and Guarantor
shall be not consequently released thereby, but shall continue to be fully
liable for the payment and performance of all liabilities, obligations and
duties of Tenant under the Lease as so modified, extended or amended.
The liability of Guarantor hereunder shall in no way be affected by (a) the
release or
73
discharge of Tenant in any suspention of payments or bankruptcy or other
similar proceedings (hereinafter "Insolvency Proceedings"), (b) the impairment,
limitation or modification of the liability of Tenant or the estate of Tenant
in bankruptcy or of any remedy for the enforcement of Tenant's liability under
the Lease, resulting from the operation of any present or future provisions of
the federal Bankruptcy Code or other statute or from the decision in any court
with respect to such Insolvency Proceedings, (c) the rejection or disaffirmance
of the Lease in any such Insolvency Proceedings, and (d) the assignment or
transfer Of the Lease by Tenant, except as provided in section 28.03 of the
Lease.
Guarantor shall subordinate any liability or indebtedness of Tenant now or
hereafter held by Guarantor to the obligations of Tenant to Landlord under the
Lease.
If Landlord employs an attorney to present, enforce, or defend any of
Landlord's rights or remedies under this Guarantee, Guarantor shall pay
Landlord's reasonable attorney's fees and court costs, so long as Guarantor is
condemned under the respective arbitration procedure.
This agreement shall be binding upon Guarantor and her heirs or assigns and
shall inure to the benefit of Landlord and its successors and assigns.
This guaranty shall be subject to the applicable law and Courts provided in the
Lease. Guarantor expressly waives to the "beneficios de orden y de excusion"
provided under articles 2706, 2707 of the Civil Code of the State of Nuevo ▇▇▇▇
as well as to any other rights provided under said Code which may be
inconsistent to the terms of this Guaranty, including but not limited to
articles 2738, 2740 and 2741 of the Civil Code of the State of Nuevo ▇▇▇▇.
Capitalized terms used and not otherwise defined herein shall have the meaning
ascribed to them in the Lease Agreement.
IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty of Lease
this 17th. day of November, 1996.
GUARANTOR
Smartflex Systems Incorporated
Represented hereby:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Legal Representative
74
CALL OPTION AGREEMENT
THIS AGREEMENT, made and entered into this 17th day of November, 1996, by and
between Inmobiliaria Nuevo Aeropuerto, S.A. de C.V. ("Grantor") and Smartflex
Systems de Mexico, S.A. de C.V. ("Grantee"), pursuant to the following.
STATEMENTS
Both parties state that:
I. They have executed in this same date a lease agreement (the
"Lease Agreement") providing for a lease over a piece of real property (land
and building) located in Avenida TLC no. 300, Parque Industrial
Stiva-Aeropuerto, ▇▇▇▇▇▇▇ ▇▇ 66600, N.L., Mexico, identified as the "Property"
in Exhibit "A" attached hereto and made a part hereof (hereinafter referred to
as the "Property"). Grantor's title to the Property is evidenced by Public
Deed number 19,735, granted on June 9, 1983 before ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, Notary Public 27 in Monterrey, N.L., which was recorded at the Public
Registry of Property and Commerce of Monterrey, N.L., on August 19, 1983, under
number 539, volume 31, book 12, Section of Real Estate Property, Apodaca Unit.
II. As part of the bargain in connection with the Lease Agreement
they agreed to enter into this Agreement in order for Grantor to grant in favor
of Grantee a call option right to purchase the Property in accordance with the
terms set forth herein.
CLAUSES
1. Granting of Call-Option Right.
Notwithstanding anything to the contrary contained herein or in any
third party's offer, Grantor hereby grants to Grantee a call-option to
purchase the Property and any constructions and
75
2
improvements that may be erected or made on or to it in the future (the
"Option"), which Option may be exercised at any time from this date and until
November 17, 1998 (the "Option Term"). The terms and conditions of the Option
shall be:
(a) At any time within the Option Term, Grantee may elect to
exercise the option to purchase the Property from Grantor.
(b) Should Grantee elect to exercise the Option, it shall give
notice in writing (the "Option Notice") to the Grantor no later than the last
day of the Option Term.
(c) The purchase price in case Grantee exercises the option shall be
calculated pursuant to the provisions of Exhibit "B" attached hereto and made a
part hereof.
(d) Grantor shall execute the transfer and sale of the Property to
Grantee by making, executing and delivering a public deed containing full
covenants of warranty and conveying absolute, good and marketable title to the
Property, free and clear of any liens, charges, encumbrances, mortgages or
other similar limitations, not later than thirty (30) days after Grantor
receives notice from Grantee of its election to exercise the Option.
(e) During the term in which the Option may be exercised by Grantee,
Grantor undertakes to keep the Property free and clear of any mortgage, lien,
encumbrance or any other limitation of property rights, and not to transfer or
make any attempt to transfer title to or any possession or use rights to the
Property or any part thereof to any third party.
2. Terms and Conditions of Purchase.
(a) If the Option is exercised by Grantee, Grantor shall take any
actions needed for the obtention of any approvals and/or the preparation and
filing of the proper parcel maps or any other documentation that may be
required.
(b) The Grantor shall, at its own expense, provide Grantee with such
proof of title to the Property, as Grantee may reasonably require within
fifteen (15) days of Grantee's Option Notice. The Grantee shall have the right
to examine the title to the Property and to accept the same if the title is
good and marketable. In the event the title to the Property is not good and
marketable as aforesaid, or if there is a defect to the title, the Grantee
shall notify the Grantor in writing of such objections, and the Grantor shall
have a reasonable time, but not in excess of fifteen (15) days, in which to
make title good and marketable and to remove such defects. The Grantee shall
have the right, but not the obligation,
76
3
to grant Grantor additional time to correct objections to title, or to cancel
the Option in whole or in part, without prejudice of any remedies it may have
in accordance with this Agreement or any applicable law.
(c) Within fifteen (15) days of the date Grantee delivers the Option
Notice to Grantor, Grantee shall designate a place and a time to hold the
closing of the corresponding purchase and sale agreement under this Agreement;
provided, however, that in the event of objections to title under Paragraph 2
(b) herein, the closing shall take place within seven (7) days after the
removal of such objections.
(d) Upon closing, the Grantee shall deliver to the Grantor full
payment of the purchase price to be determined in the manner hereinbefore set
forth in cash, certified check or wire-transfer, and Grantor shall make,
execute and deliver to the Grantee a deed containing full covenants of warranty
and conveying absolute, good and marketable title to the Property or the
Adjacent Land or both, as the case may be, free and clear from all liens,
assessments, and encumbrances.
(e) Upon closing, all existing liens, mortgages, assessments and
encumbrances over the Property shall be discharged by payments from the
proceeds payable to the Grantor. Property taxes if any, shall be prorated to
the date of closing; all other taxes arising from Grantee's purchase of the
Property, shall be covered as provided by the applicable laws. Grantee shall
pay for the drafting of the corresponding purchase and sale deed(s) as well as
for its (their) recording.
(f) The Grantee shall not be liable for the payment of any real
estate commissions, fees or reimbursements.
3. Governing Law and Courts.
This Agreement shall be subject to the laws of the State of Nuevo
▇▇▇▇, Mexico. Should any dispute arise or any action is to be instituted, the
parties hereto agree to submit it to the competent courts of Monterrey, N. L. ,
Mexico, waiving any rights they may have to any other jurisdiction by reason of
their present or future domiciles.
4. Notices.
Any notices to be given hereunder shall be given in writing and
delivered personally or by registered or certified mail, postage prepaid and
sent to the following addresses:
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4
IF TO GRANTOR:
Av. Fe1ix ▇. ▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
IF TO GRANTEE:
Prior to the Commencement Date (as defined in the Lease Agreement):
Carretera a ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇.▇
▇▇▇▇▇▇▇, ▇.▇. ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
After the Commencement Date:
Avenida TLC no. 300
Parque Industrial ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
▇▇▇▇▇▇
or to such other address as a party shall, by like notice hereafter, direct
such notices be sent. Notices shall be deemed duly given when actually
received by the party to whom they are sent.
5. Miscellaneous.
This Agreement shall be binding upon and shall operate for the
benefit of the parties hereto and their respective successors and assigns. The
failure of one party to seek remedies upon the breach of another party shall
not be deemed a waiver of such breach. All representations and warranties
contained herein shall survive the commencement date hereof and, in the event
Grantee purchases the Property, shall survive the date of closing of said
purchase.
6. Recording.
A Spanish translation of this Agreement shall be ratified by both
parties before a Notary Public of Grantee's choice and recorded at the Public
Registry of Property and Commerce of Monterrey, N.L. at Grantee's option with
the cost and expense shared equally by the Grantor and the Grantee.
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5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on the day, month and year first above written.
Grantor Grantee
INMOBILIARIA NUEVO AEROPUERTO, SMARTFLEX SYSTEMS DE MEXICO,
S.A. DE C.V. S.A. DE C.V.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------- ---------------------------------
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Legal Representative Its: Legal Representative
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------- ---------------------------------
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: Legal Representative Its: Legal Representative
79
6
EXHIBIT "B"
OF THE CALL OPTION AGREEMENT
The purchase price of the Property shall be determined as follows:
a) Within two days of the delivery of the Option Notice by Grantee
to Grantor each party shall designate an appraiser. If one of the parties does
not designate its appraiser within such term then the other party may request
for such appointment to be made by ICC.
b) Each of the appraisers nominated as indicated above shall prepare
an appraisal determining the market value of the Property within five days of
their appointment.
c) If the two appraisals rendered as indicated in item b) above are
not different by more than 5%, then the average of the two shall be the
purchase price.
d) If there is a difference of more than 5% between the two
appraisals, then the parties shall designate a third appraiser to determine the
market value of the Property, and such determination shall be final and shall
be used as purchase price. If the parties do not agree on the designation of
the third appraiser, then either party may request for such appointment to be
made by ICC.
e) In the event the parties agree on a specific purchase price for
the Property in writing at any time after the execution of this agreement, then
such purchase price shall binding upon the parties hereto in the event the
Option is exercised by Grantee and the procedure set forth above shall not be
applicable.
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COMPLEMENTARY AGREEMENT
THIS COMPLEMENTARY AGREEMENT IS ENTERED INTO THIS 19th OF NOVEMBER OF 1996, BY
AND BETWEEN INMOBILIARIA NUEVO AEROPUERTO, S.A. DE C.V. ("GRANTOR") AND
SMARTFLEX SYSTEMS DE MEXICO, S.A. DE C.V. ("GRANTEE"), IN ACCORDANCE WITH THE
FOLLOWING:
STATEMENTS
Both parties state that:
A) They have entered into a Call Option Agreement (the "Call option
Agreement") dated November 17, 1996 in connection with a piece of
land of 123,347 square feet (and a building and improvements to be
constructed thereon) located in Avenida TLC no. 300, Parque
Industrial Stiva-Aeropuerto, N.L. CP 66600, Mexico, which is
currently owned by Grantor (the "Property", as defined in the Call
Option Agreement).
B) They wish to execute this Complementary Agreement, in order to agree
on a price at which Grantee, in the event it exercises the option
under the Call Option Agreement, would purchase the Property from
Grantor, in accordance with paragraph e) of Exhibit B of the Call
Option Agreement.
CLAUSES
FIRST.- The parties agree that, in accordance with item e) of Exhibit
B of the Call Option Agreement, in the event Grantee exercises the Option under
the Call Option Agreement, the purchase price for the Property payable by
Grantee to Grantor shall be an amount equal to the value of Landlord's
Investment (as such term is defined in the Lease Agreement entered into by the
parties hereto on November 17, 1996 and hereinafter referred to as the "Lease
Agreement") as such amount may be adjusted in accordance with the Lease
Agreement. The purchase price determined in accordance herewith shall be
adjusted in accordance with the U.S. Consumer Price Index as published by the
U.S. Federal Labor Department applicable to the period starting on the date
hereof and ending on the date the option is exercised.
SECOND.- As a consequence of clause first above, items a) through d)
of Exhibit B of the Call Option Agreement shall not be applicable.
THIRD.- Capitalized terms used and not otherwise defined herein shall
have the meaning ascribed to them in the Call option
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Agreement.
FOURTH.- A Spanish translation of this Complementary Agreement shall
be executed and ratified by the parties before the notary public of Grantee's
choice within 15 days after the date hereof, sharing the parties equally the
costs and expenses in connection therewith.
IN WITNESS WHEREOF, Grantor and Grantee have executed this
Complementary Agreement as of the date and year first above written.
"Grantor" "Grantee"
Inmobiliaria Nuevo Aeropuerto, Smartflex Systems
S.A. de C.V. de Mexico, S.A. de C.V.
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