LEASE AGREEMENT ENTERED INTO BY AND BETWEEN MRS. REFUGIO VICTORIA GEFFROY
DE FLOURIE IN HER PERSONAL CAPACITY AS ATHE COMMON REPRESENTATIVE FOR HERSELF
AND FOR MR. DAVID BRAMZON STENGEL AND ARE (HEREINAFTER REFERRED TO AS THE
LESSOR), AND BOTH DAYRUNNER, INC. AND DAYRUNNER DE MEXICO, S.A. DE C.V.
(HEREINAFTER REFEREED TO AS THE LESSEES), REPRESENTED RESPECTIVELY BY MESSRS.
JOHN KIRKLAND AND JOSE ANGEL AGUAYO RAMIREZ PURSUANT TO THE FOLLOWING RECITALS
AND CLAUSES.
R E C I T A L S
I. LESSORS COMMON REPRESENTATIVE hereby states that:
B. That she and her co-owner are the owners and can freely dispose of a
plot of land identified as lot 9-A of block 352, in Parque Industrial La Joya,
in Tijuana, Baja California, as evidence with public Instrument number 7826,
dated March 18th., 1999, which was granted before Notary Public No. 12 for the
City of Tijuana, and which document is in the process of being recorded before
the Tijuana offices of the Public Registry of the Property and Commerce, with an
area of approximately 21,019.03 square meters (hereinafter referred to as the
Real Property). A drawing which shows the exact location as well as a
description of the referred piece of Real Property is attached hereto as Exhibit
B and shall henceforth be an integral part of this Agreement.
C. She and her co-owner have obtained official documentation from the
competent authorities to define the industrial use of the Leased Premises.
D. The Real Property has access to water, sewer, electric, public lighting,
and telephone capacity to support the requirements of LESSEES.
E. For purposes of this Agreement, her principal address is Boulevard
Pacifico #14533, Parque Industrial Pacifico, Tijuana, Baja California
F. She and her co-owner are willing to perform on the Real Property,
certain improvements as hereinafter defined in Section 2 below, and lease such
Real Property and Improvements (collectively the LEASED PREMISES).
G. The Leased Premises is free and clear of any liens, encumbrances, and
any other limitations of domain, except for easements, covenants and other
restrictions or utility easements, as may be defined in the final official
version of the subdivision map, and as shown on Exhibit B.
H. She has the authority to enter into this Agreement in her capacity as
Lessors Common Representative as evidenced in the Public Instrument referred to
in Item b) above, which authority has not been revoked or limited.
I. She and her co-owner are willing to lease the LEASED PREMISES to the
LESSEES, pursuant to the terms and conditions of this Agreement.
655352 LESSEES hereby state that:
A. DAYRUNNER DE MEXICO, S.A. DE C.V. is a corporation duly organized and
existing according to the Laws of the Mexican Republic. As evidenced by Deed No.
1459, dated May 2, 1991, granted before Mr. Lic. Marco Antonio Mayo Barron,
Notary Public No. 11 for the City of Tijuana. A copy of which is attached as
Exhibit C.
B. Mr. Jose Angel Aguayo Ramirez ,evidences to by duly authorized to
execute this agreement through the public deed which is referred to in the
preceding paragraph, and further states that such authority has not been limited
or revoked in any manner whatsoever.
C. DAYRUNNER, INC., is a corporation duly organized and existing pursuant
to the Laws of the State of Delaware, U.S.A.
D. Mr. John Kirkland, evidences to be duly authorized to execute this
agreement in his capacity as a Vice President, a corporate officer, and further
states that such authority has not been limited or revoked in any manner
whatsoever.
E. Said parties wish to lease from the LESSOR the LEASED PREMISES pursuant
to the terms and conditions hereunder.
IN VIEW OF THE FOREGOING, the parties hereto agree as follows:
C L A U S E S
FIRST. LEASE AND DELIVERY.
The LESSOR hereby leases to the LESSEES and the LESSEES hereby lease from LESSOR
the LEASED PREMISES referred to in I.A. above, which are located at Boulevard La
Joya # 35208, Parque Industrial La Joya, Tijuana, B.C., Mexico, and described in
Exhibit B hereto.
SECOND. IMPROVEMENTS.
2.1 LESSOR, at LESSORS own cost and expense shall perform all work, provide
all labor, furnish all new materials, and obtain all certificates and
permits necessary to construct an industrial facility with an area of
approximately 70,000 square feet on the LEASED PREMISES (hereinafter
LESSORS Improvements or Improvements) in accordance with the
preliminary drawings, specifications, schedule of work and construction
terms, (collectively the Drawings and Specifications) set forth by the
parties and attached hereto as Exhibit D. The parties agree that within
a term of 30 days as of the date hereof, a final set of drawings and
specifications shall be submitted by LESSOR to LESSEES for final
approval and to be ultimately attached here as Exhibit D.
2.2 By approval of the Drawings and Specifications, LESSEES shall not be
liable for the technical compliance of any of the terms and
specifications set forth in Exhibit D hereto. The approval by LESSEES
is for general arrangement only, unless otherwise noted, and does no
relieve LESSOR of full responsibility for the proper and correct
design, construction and erection of the improvements as required.
2.3 LESSOR will perform all construction with respect to LESSORS
improvements in accordance with all laws, ordinances, regulations, and
orders of government authorities, and Park regulations which are
attached hereto as Exhibit E. LESSOR shall indemnify and hold harmless
LESSEES from any and all claims, assessments by government authorities,
including but not limited, to Social Security Institute Workers,
Housing Institute and Tax Authorities, as well as from damages and cost
resulting from or arising out the LESSORs lack of performance of any of
its obligations for construction improvements, fixtures, machinery and
equipment to the Leased Premises required hereunder.
2.4 LESSOR acknowledges and agrees that LESSEES may request changes in the
design and specifications of the Improvements, provided such changes do
not affect the cost thereof or the work schedule for construction of
same. In the event such changes affect the cost of the Improvements or
the work schedule, LESSOR and LESSEES shall jointly determine the
effects of the change in cost and any extension to such schedule.
2.5 LESSOR shall diligently complete the Improvements on the Leased
Premises, in accordance with the Drawings and Specifications, in order
that LESSEES may use and occupy such Improvements pursuant to the
following schedule:
21 Beneficial Occupancy of Leased Premises: March 31, 1999
22 Final Occupancy of the Leased Premises: April 7, 1999
For the purposes hereof, Beneficial and Financial Occupancy shall be
defined as follows:
Beneficial Occupancy.- Shall be defined as the delivery to LESSEE of
the manufacturing portion of the Improvements including walls, roof, doors,
floor, slabs, docks and interior paint, in order that LESSEES may move their
equipment into the Leased Premises and begin construction of certain
Improvements, and that such equipment and any of LESSEES Improvements that may
be installed, be secured and not be damaged by weather or the process of
construction.
Final Occupancy.- Shall be defined as the substantial completion of all
works and interior finishing of the industrial and office areas of the
Improvements and all exterior and infrastructure Improvements to permit LESSEES
to commence utilization of the Leased Premises and all Improvements of the
unencumbered conduct of its business, excluding non functional minor cosmetic
items, or a punch list of items not to exceed a total construction cost of US
$50,000.00Dollars of the Improvements established pursuant to
Exhibit D. In the event cost of construction of punch list items exceed the
amount of US$50,000.00 Dollars, final occupancy date shall be deferred in
accordance with following Section 2.8.
2.6 At all times following the execution of this Lease Agreement, LESSEES
and/or its representative shall have the right to enter the Leased
Premises to inspect the progress of construction of the Improvements,
and LESSOR shall place the construction log and any construction
reports available at the disposal of LESSEES and/or its representative,
in order that LESSEES and/or its representatives may be continuously
appraised of construction of the Improvements.
2.7 Should LESSOR fail to conclude construction of the initial Improvements
in order that LESSEES may occupy the Leased Premises on the date of
Beneficial Occupancy set forth herein above LESSEES shall be entitled
to receive as liquidated damages the abatement of one day of rent for
each calendar day (one to one) the initial Improvements are not
concluded pursuant to Exhibit D and 2.5B hereof, which define the
Improvements to be completed as date. This abatement shall apply
towards the first, and if applicable, following months of which LESSEES
commences to effect rental payments as set forth herein.
2.8 Furthermore, should LESSOR fail to complete construction of the
Improvements pursuant to Exhibit D on or before the date of Final
Occupancy of the Leased Premises, LESSEES shall jointly be entitled to
receive as liquidated damages the amount corresponding to two days rent
for each calendar day (two to one) of delay following the projected
date of Final Occupancy. Provided, however should construction of the
improvements be stopped or suspended for any reason included but not
limited to the lack of permits and/or authorization from the competent
authorities, for a term of thirty or more cumulative calendar days,
then, LESSEES, at their joint option, may either terminate this
agreement and LESSOR agrees to immediately reimburse LESSEES all
security deposits and/ or advanced rent that LESSEES might have
delivered to LESSOR to such date under the terms of this Agreement,
such amount shall generate interest at the yearly rate of 18%, until
total and complete reimbursement to LESSEES, or defer occupancy. Any
abatement hereunder shall apply towards the first, and if applicable,
following months on which LESSEES commence to effect rental payments as
set forth herein. The parties acknowledge and agree that the date of
Final Occupancy shall be extended for a term equivalent to delays
solely attributable to LESSEES or LESSEES contractors or
subcontractors, acts of God, inclement weather or force majeure.
THIRD. OCCUPANCY BY LESSEES.
LESSEES shall use the LEASED PREMISES for industrial purposes in accordance with
its corporate purposes, subject to the provisions that regulate the land use and
the ecology.
In view of the foregoing.
3.1 LESSEES may, at their respective risk and expense, install in the
LEASED PREMISES such fixtures, equipment and furniture as they may deem
necessary, provided, that such items are installed and are removed
without damage to the LEASED PREMISES.
3.2 LESSEES shall repair all damages caused to the LEASED PREMISES during
the installation or removal of the fixtures, equipment and furniture
mentioned in the preceding paragraph.
3.3 LESSEES shall perform the installation or removal of their equipment
and furniture in accordance with all applicable laws, ordinances, and
regulations, being liable for any violations thereto.
3.4 The LESSEES agree to retrieve such fixtures, equipment and/or furniture
they may have installed in the LEASED PREMISES on or before the date of
termination of this lease. Should the LESSEES fail to retrieve such
fixtures, equipment and/or furniture form the LEASED PREMISES as
provided above, the LESSOR shall be entitled to either retrieve such
fixtures, equipment, furniture and/or improvements from the LEASED
PREMISES at the LESSEES risk and expense, or deem that said fixtures,
equipment and/or furniture have been left in the LEASED PREMISES by the
LESSEES to gratuitously inure in favor of the LESSOR. For purposes
hereof, the LESSEES acknowledge that none of such fixtures, equipment
and or furniture are to be construed as useful improvements to the
LEASED PREMISES.
3.5 LESSEES may not modify the basic structure, facade or basic public
services of the LEASED PREMISES, nor may they perform any improvements
or make alterations to the base structure without the LESSORs prior
written consent.
FOURTH.- TERM OF THE LEASE AND DELIVERY OF THE LEASED PREMISES.
4.1 The term of this lease shall be for a period of seven (7) years binding
for LESSEES and LESSOR, unless extended pursuant to the provisions
hereof, (hereinafter the Initial Lease Term or the Initial Term of this
Lease). The term of this Lease shall commence as of thirty (30) days
after the date (hereinafter) the Lease Commencement Date) of Final
Occupancy, which shall be the date of acceptance of the Improvements by
LESSEES. It is contemplated that such Final Occupancy shall occur on
April 7, 1999 or afterwards as the case may be under the terms of
Section 2.8. above.
4.2 Rent Commencement Date: The first months rent shall be due thirty (30)
days after Final Occupancy. All adjustments to the rent as per Sections
5.4 and 5.5 below shall occur on the anniversary of the Lease
Commencement Date.
4.3 LESSEES shall have access to the Leased Premises as of March 31, 1999.
4.4 Notwithstanding the provision of paragraph 2.5 above, LESSOR expressly
acknowledges and agrees that LESSEES may enter into the Leased Premises
at any time during construction of the Improvements with the purpose of
making initial installation of LESSEES Improvements, in accordance with
the schedule of work and provided it does not thereby unreasonably
interfere with LESSOR construction of the Improvements. It is further
understood that LESSEES entrance into the Leased Premises at any time
prior to LESSEES issuance of a certification of Final Occupancy
pursuant to Section 2.5B, shall at no time to be construed as LESSEES
acceptance of all or any part of the Improvements.
4.5 This lease shall be automatically extended for two (2) additional five
(5) year term, unless either of the LESSEES informs the LESSOR
otherwise, in writing and at least 180 (One hundred and Eighty) days
before the end of the original term or of any of its extensions, of
their intent of terminating this agreement on such original date of
termination or on the date of termination of any such extension.
FIFTH. RENT.
5.1 From the RENT COMMENCEMENT DATE, and payable in advance during the
first 5 (five) days of each month the LESSEES shall pay to the LESSORs
designated COMMON REPRESENTATIVE, as monthly rent, at its address or
any other address as instructed by the LESSOR or its assignee, as the
case may be the amount of $30,800.00 Dollars (Thirty Thousand Eight
Hundred Dollars and 00/100 U.S. Cy.) or its equivalent in Mexican
Currency.
Prior to the RENT COMMENCEMENT DATE, LESSOR shall provide either of
LESSEES with unanimous written instructions by all parties representing
said LESSOR, attesting to their willingness to have their COMMON
REPRESENTATIVE 1.- collect any and all rental proceeds, specifically to
include Added Value Taxes, and to 2.- issue the corresponding Mexican
tax deductible receipt for all proceeds received of LESSEES. Should
LESSORS wish to implement different payment instructions than the
foregoing, they shall so advise LESSEES in writing, whereupon no change
shall take force until duly confirmed in writing by either of LESSEES,
it being further understood that the absence of LESSORs written
instructions in such regard shall result in LESSEES deposit of rental
proceeds before the Tijuana Civil Courts, as allowed under Law.
5.2 If the RENT COMMENCEMENT DATE of this Lease is a day other than the
first day of a calender month, the amount of this first monthly rental
payment which is equal to the pro rata portion of the first calendar
month that the Leased Premises will have been occupied by LESSEES; and
the amount of the final rental payment hereunder shall be that pro rata
portion of the usual monthly rental payment which is equal to the pro
rata portion of the last calendar month during which this Lease shall
be in effect.
5.3 For purposes of calculating the monthly rent, the parties shall use the
highest rate of exchange for sale quoted by Banco Nacional de Mexico,
Bancomer, and Banca Serfin, on the day of payment or on the immediately
preceding business day in case the day of payment is a holiday for the
banking institutions of Mexico.
5.4 As of the second year of this lease, the monthly rent shall be
$31,724.00 (Thirty One Thousand Seven Hundred Four Dollars and 00/100
U.S. Cy.). As of the third year of the lease, the monthly rent shall be
$32,675.75 (Thirty Two Thousand Six Hundred Seventy Five Dollars and
75/100 U.S. Cy.). As the fourth year of the lease, the monthly rent
shall be $33,656.00 (Thirty Three Thousand Six Hundred Fifty Six
Dollars and 00/100 U.S. Cy.). As of the fifth year of the lease, the
monthly rent shall be $34,665.68 (Thirty Four Thousand Six Hundred
Sixty Five Dollars and 68/100 U.S Cy.). As of the sixth year of the
lease, the monthly rent shall be $35,705/65 (Thirty Five Thousand Seven
Hundred Five Dollars and 65/100 U.S. Cy). As of the seventh year of the
lease, the monthly rent shall be $36,776.82 (Thirty Six Thousand Seven
Hundred Seventy Six Dollars and 82/100 U.S. Cy).
5.5 As of year eight, the then monthly rent shall revert to $34,665.68
(Thirty Four Thousand Six Hundred Sixty Five Dollars and 68/100 U.S.
Cy.). In years nine through twelve there will be a 3% annual increase
in the rental rate.
5.6 As of year thirteen, the then monthly rent shall revert to $34,665.68
(Thirty Four Thousand Six Hundred Sixty Five Dollars and 68/100 U.C.
Cy.), and for each subsequent year there will be a 3% annual increase
in the rent rate.
5.7 In case of late payment, the LESSEES agree to pay the LESSOR liquidated
damages at a rate of 1.5% (One point five percent) per month.
SIXTH. INSURANCE.
6.1 During the life of this agreement, the LESSEES, shall obtain and
maintain in full force and effect, the following insurance policies:
6.1.1. Insurance to cover the LESSEES and the LESSOR against any
civil liability claims, demands, lawsuits or actions, or
against the accidents or death of any person, or from any
damages to the goods of any third party in connection with the
use by the LESSEES of the LEASED PREMISES. The corresponding
insurance policy shall cover an insurable value of at least
$100,000.00 dollars (One Hundred Thousand Dollars and 00/100
U.S. Cy.).
6.1.2 Insurance in favor of the LESSOR which shall cover the
LEASED PREMISES against fire, lightning, explosion, falling
aircraft collision, smoke, storms, hail, vehicle damage,
earthquakes, volcanic eruption, strikes, riots,civil commotion,
vandalism, flood, and/or any others risks covered under the so
called extended coverage (including windows and gas tanks).
In view of the foregoing, LESSEES hereby waive any right to
demand payment from the LESSOR for damages caused by fire,
explosion and other unforeseen events,save for LESSOR-generated
or LESSOR-caused acts of negligence or wilful misconduct. The
corresponding insurance policy shall cover an insurable value
of $1,400,000.00 Dollars (One Million Four Hundred Thousand
Dollars 00/100 U.S. Cy.).
6.2 The insurance policies referred to in paragraph 6.1. above shall be
obtained with any insurance company authorized to do business in Mexico
acceptable to the LESSOR. Likewise, the policies shall provide that the
same may not be amended without the prior written authorization of the
LESSOR. Additionally, said insurance policies shall provide that they
shall not be subject to cancellation or change, except after at least
30 (thirty) days written notice to the LESSOR.
6.3 The minimum coverages mentioned in paragraph 6.1.1 and 6.1.2 above
shall be annually increased at a rate of 3% per annum.
SEVENTH. TAXES AND COSTS.
7.1 The LESSOR shall be responsible of payment of the income and assets
taxes to which it is obligated. On its part, the LESSEES shall be
responsible for the payment of the property taxes, the I.V.A. tax and
any other taxes which may be levied upon the LEASED PREMISES, or which
may derive from this agreement or from the use of the same by the
LESSEES. LESSEES shall submit to the LESSOR a copy of the corresponding
tax receipts at least 10 (ten) days before said taxes become due. The
property taxes shall have a cap of 5% per year of increase for which
the LESSEES are liable, any increase above this amount shall be
responsibility of the LESSOR.
EIGHTH.- REPAIRS AND MAINTENANCE.
8.1. LESSOR
8.1.1. After written notice from the LESSEES, the LESSOR shall repair
the structural defects of the exterior walls, roof, hidden
plumbing, main sewer line, floor and any roof leaks not caused
by LESSEES and other structural items of the LEASED PREMISES
caused as a consequence of the normal use of the same. The
parties further agree that: 1.- the repair of such structural
defects, and 2.- repairs covered through LESSEE-financed
or generated insurance proceeds pursuant to Section 6.1.2.
above, shall be deemed as the only necessary repairs for which
the LESSOR shall be responsible hereunder. Notwithstanding
the foregoing, the LESSOR shall not be responsible for repairs
of the LEASED PREMISES, unless the LESSEES so inform said
LESSOR in writing within three (3) business days after the
LESSEES notice the damage. LESSOR shall proceed diligently
to make such repairs as soon as practically possible and shall
continue to do so until the same are completed.
8.1.2 The LESSOR shall not be responsible, nor have the obligation
to repair the damages caused by the LESSEES negligence, or
that of LESSEES workers, clients, contractors, or guests
shall not be responsible, nor have the obligation to repair
the damages caused by the LESSEES negligence, or that of
LESSEES workers, clients, contractors, or guests.
8.2. LESSEES
8.2.1. LESSEES shall be responsible for repairs to damages sustained
to the LEASED PREMISES, other than: those described in clause
8.1.1. herein above. The damages referred to in this paragraph
include but are not limited to, the damages to and maintenance
of plumbing systems, sewage, telephone, gas as well as for the
equipment, interior walls, interior and exterior painting,
floor slab, ceilings, air conditioning and ventilation systems
and appliances, heaters, doors and windows, glass,docks, docks
levels, landscaping, lighting, electrical, etc., of the LEASED
PREMISES, and in general, everything not considered a
structural repair under clause 8.1.1. above. Likewise LESSEES
shall repair all kinds of leaks and gutter malfunctions if
caused by LESSEES. All repairs made by LESSEES must be equal
in quality and kind to the original work. All expenses
resulting out of disregarding or negligence to the LEASED
PREMISES solely by LESSEES, their employees, agents or guests,
or a violation of LESSEES obligations hereunder, shall be
borne by said LESSEES.
8.2.2 The LESSEES shall maintain the LEASED PREMISES and its
improvements free from any liens. LESSEES shall maintain all
parts of the Leased Premises in a neat, clean and orderly
condition, free of garbage, debris and illegal materials.
NINTH.- LIMITATION OF LIABILITY AND INDEMNIFICATION.
9.1 Except for intentional or negligent acts or omissions of LESSOR, or
that of LESSORs agents or employees, the LESSOR shall not be liable to
LESSEES or to any other person whatsoever for any loss or damage of any
kind of nature caused by LESSEES intentional or negligent acts or
omissions, or that of other occupants of the Industrial Park or of
adjacent property, or the public, or other causes beyond the control of
the LESSOR, including, but no limited to failure to furnish or any
interruption of any utility or other services in or about the LEASED
PREMISES.
LESSEES recognize that additions, replacements and repair to the
Industrial Park may be made from time to time. Accordingly, LESSOR
shall make its best efforts to keep interferences at a minimum, and,
where same comprise or require efforts over a period anticipated to
exceed forty eight (48) hours, shall require prior notice to LESSEES
and reasonable accommodation by LESSOR to provide alternative vehicle
access to the Leased Premises for such period.
9.2. If the LESSOR or LESSEES are held responsible for any obligation
undertaken by the other, both parties agree to indemnify and hold the
other harmless from any and all claims for damages or losses of any
kind, arising from negligent acts or omission of either party or its
contractors, licensees, agents, invitees, or employees, or arising from
any accident, injury or damages whatsoever caused to any person or
property occurring in or about the LEASED PREMISES, or the areas
adjoining said LEASED PREMISES and against all cost and expense,
including attorneys fees, incurred thereby, and to restore or reimburse
any all such cost and expenses to the other party.
TENTH.- UTILITY SERVICES.
LESSEES agrees to request directly from the corresponding utility companies that
the public services that said LESSEES may need be rendered by such companies,
and shall promptly pay for any and all utilities, capacity charges and related
services furnished on LESSEES behalf in the LEASED PREMISES, including but not
limited to water, gas, electricity, and telephone charges. A complete list of
utility services available in the Industrial Park and those utilities and
improvements being supplied by the LESSOR to LESSEES to the Leased Premises are
hereby attached as Exhibit G.
ELEVENTH.- ASSIGNMENT AND SUBLETTING.
11.1 The LESSEES may not assign their joint rights and obligations under
this agreement, nor may they sublet the LEASED PREMISES unless they
obtain LESSORS prior written authorization; which authorization shall
not be unreasonably withheld.
11.2 The LESSOR shall be entitled to assign, in whole or in part, its,
rights and obligations under this agreement. Consequently, the LESSEES
hereby grants authorization to the LESSOR so that the latter may
formalize the assignments which it may deem appropriate. Likewise,
LESSOR shall be expressly entitled to guarantee any of its present or
future obligations with its rights under this agreement.
TWELFTH.- RENT WITHHOLDING.
The LESSEES hereby waive any right to withhold any rental payments. Accordingly,
the LESSEES shall deliver in a timely fashion, and under the terms hereunder,
any and all amounts to which the LESSOR may be entitled to, thus agreeing to
assert any claim, demand, or other right against the LESSOR only by an
independent proceeding.
THIRTEENTH.- ACCESS TO THE LEASED PREMISES.
13.1 The LESSOR or its authorized representatives shall have the right to
enter the LEASED PREMISES during all of LESSEES business hours, and in
emergencies at all times, to make repairs, additions, or alterations to
the LEASED PREMISES which it may be authorized or obligated to do under
this agreement, but only after proper written notice from LESSEES of
such emergency or situation.
13.2 LESSOR shall have the right to show the LEASED PREMISES to any
prospective clients. Likewise LESSOR shall have the right to post those
signs which it may deem appropriate on the facade of the LEASED
PREMISES in order to promote its future rental, only upon written
notification from LESSEES of said parties intent to terminate the Lease
Agreement.
13.3 Except in case of emergency, the LESSOR shall give notice to the
LESSEES before entering the LEASED PREMISES, and the LESSEES shall have
the ongoing right to escort any representative of the LESSOR and
prospective clients.
FOURTEENTH.- DAMAGE OR DESTRUCTION.
14.1 TOTAL
In the event the whole or substantial part of the LEASED PREMISES are
damaged or destroyed so as to impede the LESSEES operations for the
purposes for which the same where leased, LESSOR shall, within 10 (ten)
days from such destruction, determine whether the LEASED PREMISES can
be restored within the following 4 (four) months and notify the LESSEES
of such determination. If the LESSOR determines that the LEASED
PREMISES cannot be restored within the following 4 (four) months,
either the LESSOR or the LESSEES shall have the right and option to
immediately terminate this Lease Agreement by means of a written notice
to the other party. If the LESSOR determines that the LEASED PREMISES
can be restored within said 4 (four) month period, the LESSOR shall, at
its own expense, proceed diligently to rebuild the LEASED PREMISES,
waiving any right to receive rental payments while the LEASED PREMISES
are being rebuilt.
14.2 PARTIAL.
In the event the referred damages do not prevent the LESSEES, in a
substantial way from continuing the normal operation of its business on
the LEASED PREMISES, the LESSOR or the LESSEES, as the case may be,
shall repair said damages under the terms of clause SEVENTH above. In
said case the rent hereunder shall be abated according to the actual
square footage occupied by the LESSEES during the reconstruction phase.
Should there be any dispute as to the actual space occupied by the
LESSEES the parties agree to submit the same before a licensed civil
engineer, to be jointly determined by LESSOR and LESSEES, and in lieu
of an agreement thereof, before a civil engineer selected by the citys
private Civil Engineers Board (Colegio de Ingenieros Civiles).
14.3 If the damage in question is caused by a negligent or willful act of
the LESSEES or their employees, the LESSEES agree to punctually pay the
rent hereunder (provided that all LESSEE-generated insurance proceeds
are fully applied pursuant to sections 6.1.2, and 14.1 above).
FIFTEENTH.- CONDEMNATION.
15.1 In the event the whole or a portion of the LEASED PREMISES is taken by
expropriation, for any public or quasi-public use or purposes, this
Lease shall terminate and conclude on the date that the possession is
taken by the condemnor.
15.2 Taking by condemnation or eminent domain shall include: the exercise of
any similar government power and sale and purchase or other disposition
of the LEASED PREMISES in Mexican Law, regulation or governmental order
which physically prevents LESSEES from using all or part of the LEASED
PREMISES.
SIXTEENTH.- CERTIFICATES.
The parties shall, within (10) days of receipt of a written request made by
eachother, deliver a statement in writing, certifying that this Lease Agreement
is unmodified and in full force and effect, (or if there have been modifications
that the same are in full force and effect, as modified); the dates to which the
rent and any other charges have been paid in advance and that LESSOR-built or
LESSEE-built Improvements have been satisfactorily completed. It is intended
that any such statement may be relied upon by any person, prospective purchaser
or lending institution interested in either the LEASED PREMISES, or in the
parties respective interests or assets.
SEVENTEENTH.- COVENANTS AND PARK RESTRICITONS.
17.1 The LESSEES agree to be bound by the terms and conditions of the
covenants and restrictions of Parque Industrial La Joya, which are
attached hereto as Exhibit E and form an integral part of this
agreement. The parties agree that any subsequent changes will not apply
to LESSEES or to this agreement, unless accepted by the latter in
writing. In addition LESSOR and LESSEES agree that a variance has been
granted in regards to sections 4, 5 and 6, of the above mentioned CC&Rs
to enable the building, subject of this lease agreement to be
constructed as per the attached plans and specifications.
17.2 Accordingly, the LESSEES agree to pay in advance to the LESSOR in a
semiannual basis the maintenance fee provided for in the covenants and
restrictions of Parque Industrial La Joya, according to the total area
of the land (Phase I) where the LEASED PREMISES are built at a maximum
rate of $0.50 (Fifty cents U.S.
Cy.) Per square meter per year.
17.3 LESSEES shall not pay the aforementioned maintenance fees for one (1)
year as of the date of Final Occupancy. The maintenance fee shall then
be charged on the first phase of land expansion approximately 18,336
square meters.
EIGHTEENTH. DEPOSITS.
18.1 LESSOR hereby acknowledges to have received from LESSEES, as deposit,
the amount of $123,200.00 Dollars (One Hundred Twenty Three Thousand
Two Hundred Dollars 00/100 U.S. Cy.), in order to guarantee its
obligations hereunder. Said deposit shall be retained as follows: Two
(2) months rent or $61,600.00 Dollars (Sixty One Thousand Six Hundred
Dollars 00/100 U.S. Cy.), to be held as a refundable security deposit
and to be reimbursed to the LESSEES, without interest after the LESSOR
carries out an inspection of the conditions under which the LEASED
PREMISES are returned, normal wear and tear excluded. The remaining two
(2) months rent to be credited equally through the first twelve (12)
months of rental payments.
18.2 In case of early termination for any cause attributable to the LESSEES
default, the LESSOR shall be entitled to keep any amounts delivered to
said LESSOR as prepaid rent or deposit, regardless of any other rights
to which the LESSOR may be entitled to.
NINETEENTH. NOTICES.
19.1 Any notice to be given to the LESSOR under this agreement shall be sent
to the address mentioned in recital I.C. or to such other addresses
which may from time to time be notified by the LESSOR to the LESSEES.
19.2 Any notice to be given to the LESSEES under this agreement shall be
addressed to the LEASED PREMISES.
19.3 Said notice shall be in writing, and shall be delivered personally to
the legal representative of the party in question, or sent by certified
mail, postage prepaid to the addressed mentioned above, in which case
the corresponding notice shall be deemed delivered 14 (fourteen) days
after the date of mailing thereof.
TWENTIETH.- LESSEES=S DEFAULT.
20.1 Each of the following shall be a default of the LESSEES and LESSOR
shall provide written notice to LESSEES informing them of said default.
Upon written notification from LESSOR, LESSEES shall have 30 days to
cure the default:
20.1.1 In case the LESSEES fail to surrender the LEASED
PREMISES upon the expiration of the term indicated in
clause THIRD above.
20.1.2 The LESSEES failure to pay any monthly rent due and
payable hereunder.
20.1.3 Default in the performance of any of the LESSEES
covenants, agreements or obligations hereunder.
20.1.4 The filing of a petition of bankruptcy against the
LESSEES, said petition remaining undischarged for a
period of 90 (ninety) days.
20.1.5 In case of an attachment, execution or other judicial
seizure of substantial part of LESSEES assets, with a
minimum dollar value of Five Hundred Thousand Dollars
($500,000), such attachment, execution or other
seizure remaining undismissed or undischarged for a
period of 30 (thirty) days after the levy thereof.
20.1.6 In case of the appointment of a trustee or receiver
to take possession of all or substantially all of
LESSEES assets.
20.2 Upon occurrence of any one of the foregoing LESSEES defaults, LESSOR
shall have the right, at its option and in addition to other rights or
remedies granted by law, including the right to claim damage, to do
either of the following:
20.2.1. Immediately rescind this Lease Agreement and eject
LESSEES from the LEASED PREMISES. Should LESSOR
initiate any action to terminate this agreement,
LESSEES shall reimburse the LESSOR any costs related
to the LESSEES vacancy of the LEASED PREMISES in
the understanding that if the LESSEES fail to vacate
the LEASED PREMISES, and starting on the date on
which the corresponding action is filed, the LESSEES
shall pay to the LESSOR, as liquidated damages, a
monthly amount equal to 150% (One Hundred Fifty
percent) of the monthly rent in force on the
date on which said action may be initiated or that
in force prior to the termination of the agreement.
The LESSEES acknowledges that this provision shall
not be construed as an authorization to occupy the
LEASED PREMISES beyond the term set forth herein.
20.2.2 Claim specific performance after sixty (60) days
of continuing default. In the case of default as
specified above exceeding sixty (60) days of LESSORs
written notification, LESSOR shall, in addition to
all other remedies, have the right to declare and
collect the entire unpaid balance of rent to the end
of the last year of the existing Lease Term or
extension thereof then in effect and also declare all
other sums due to LESSOR, immediately due and
payable, plus interest at the rate of eighteen
percent (18%) per annum on said sums form the date of
such declaration until paid in full.
In the event that the LEASED PREMISES covered under
this Lease Agreement are leased to another tenant
during the remainder of the initial term or extension
thereof, and the LESSEES prepays the rental unpaid
balance as a result of this clause, LESSOR shall
promptly refund to LESSEES, in monthly installments
that portion of rent paid by LESSEES pursuant to this
paragraph which is allocable to the period of the
Lease Term during which the LEASED PREMISES was
leased to another tenant of otherwise used in a
beneficial manner as well as any other allocable sums
paid by LESSEES to LESSOR, less any loss o damage
incurred by LESSOR as a result of LESSEES default.
TWENTY FIRST.- MISCELLANEOUS.
21.1 In case any party fails to execute any action against the other as to
protect a certain right under this agreement, said failure shall not be
construed as a waiver of any other rights derived herefrom.
21.2 This agreement may only be modified by written agreement signed by the
authorized representatives of the parties hereto. Furthermore, the
parties agree that the LESSOR shall not have the power to amend this
Lease Agreement so as to reduce the rent, decrease the terms or modify
or negate any substantial obligation without the written consent of
LESSEES. Such obligation shall continue until the LESSEES notify in
writing that the LESSOR has complied with all of LESSORS obligations or
has paid all amounts owed to the abovementioned party, in the
understanding that if the LESSOR fails to obtain the LESSEES approval
to carry out the foregoing, the amendment of the terms and conditions
above mentioned shall have no effect whatsoever against said LESSEES.
21.3 In case any party hereto exercises an action against the other in order
to demand the performance of this agreement, the prevailing party shall
be entitled to reasonable attorneys fees.
21.4 Each party shall execute such further documents as shall be requested
by the other party, but only to the extent that the effect of said
documents is to give legal effect to rights and obligations stated
forth in this Lease Agreement.
21.5 In case any competent court declares that any provision hereunder is
null and void, the remaining clauses shall continue in full effect.
21.6 The parties agree that this Lease Agreement shall governed by the laws
of State of Baja California. For everything pertaining to the
interpretation and compliance of this Lease Agreement the parties
hereby expressly submit to the jurisdiction of the Civil Courts of the
City of Tijuana, Baja California, waiving any other jurisdiction which
might be applicable by reason of their present or future domiciles or
otherwise.
21.7 The parties agree that this Lease Agreement shall be executed in both
Spanish and English versions, whereupon both versions shall constitute
the full agreement between same, to the exclusion of any other
translation or interpretation.
TWENTY SECOND - EXPANSION & IMPROVEMENT OPTIONS.
22.1 The parties agree that there is an area of land directly adjacent (to
the north) of the first phase land expansion. This area is
approximately 5,416 square meters. The LESSEES shall have full use and
enjoyment of this expansion land, free of charge, for the first 24
(twenty four) months of the lease agreement.
22.2 If the LESSEES wish to continue using the aforementioned expansion land
after the free 24 (twenty four) month period, from years 3 through 5,
the LESSEES shall pay rent of $1,800.00 (One Thousand Eight Hundred
Dollars and 00/100) per month. After year 5, the LESSEES can continue
to pay the ground rent herein above mentioned or relinquish the
expansion land to the LESSOR at no penalty or cost.
22.3 The parties agree that upon termination of the initial lease term,
LESSOR shall repaint the exterior of the facility the color of LESSEES
choice.
22.4 The parties agree that upon written notice and approval by LESSEES,
LESSOR shall construct an expansion of the lease premises of
approximately 30,000 square feet of the expansion land. The rent for
the shell facility shall not exceed $0.30 (Thirty Cents) per square
foot per month. There will be additional costs if the LESSEES choose to
add tenant improvements to the facility expansion such as but not
limited to offices, restrooms and cafeteria installations.
22.5 The parties agree that there is a $20,000.00 (Twenty Thousand Dollar)
landscape allowance included in the lease agreement. This allowance is
reserved for landscape improvements within the fenced perimeter of the
facility land area and does not include exterior banks or common areas
which shall be landscaped and maintained by LESSOR.
IN WITNESS WHEREOF, the parties have executed this agreement in the places and
on the dates stared hereinbelow.
LESSORS LESSEE
/s/ Refugio V. Geffroy de Flourie /s/ Jose Angel Aguayo Ramirez
- ------------------------------ -------------------------------
By Common Representative DAYRUNNER DE MEXICO, S.A. DE C.V.
Refugio V. Geffroy de Flourie By: Jose Angel Aguayo Ramirez
Date: 4/2/99 Date: 3/31/99
Place:Tijuana, B.C.
Place: Tijuana, B.C.
LESSEE
/s/ John Kirkland
--------------------
DAYRUNNER, INC,
By Mr. John Kirkland
Date: 4/5/99
Place: Tijuana, B.C.
WITNESS WITNESS
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Exhibits
A: Land Ownership documentation
B: Drawing and description of plot of land
C: Acta Constitutiva of Dayrunner de Mexico
D: Building drawings and specifications
E: Parque Industria La Jollas,-CC&Rs
G: Utilities and tenant improvements list