Exhibit 10.29
LEASE AGREEMENT
By this private Lease Agreement (the `Agreement"), the parties hereto;
a. on the one hand. as LANDLORD, LUCENT TECHNOLOGIES NETWORK SYSTEMS DO BRASIL
S.A., a company with head office at Rodovia Dom Pedro I, KM 128/129. Campinas,
Brazil. corporate taxpayer ID No. 84.512.045/0003-05, herein represented by its
undersigned attorneys-in-fact; and
b. on the other hand, as TENANT, AVEX ELECTRONICS DO BRASIL LTDA., a company
with head office at Rodovia Dom Pedro I, KM 128/129, Campinas, Brazil, corporate
taxpayer ID No. 02.470563/0001-79, herein represented by its undersigned
attorneys-in-fact,
have agreed to enter into this Agreement which shall be governed by the
following terms and conditions:
1. LEASED PROPERTY
1.1. The TENANT leases from the LANDLORD, and LANDLORD does hereby lease to
TENANT, the real estate property described in more details and
characterized in Attachment I ("REAL ESTATE PROPERTY")
1.2. The TENANT receives the REAL ESTATE PROPERTY from LANDLORD, and LANDLORD
hereby delivers the REAL ESTATE PROPERTY in the conditions set forth in a
report prepared by LANDLORD and TENANT, a copy of which is included in
Attachment II.
2. PURPOSE OF THE LEASE
2.1. The lease covered by this agreement is of the non-residential type, and
the TENANT undertakes to use the REAL ESTATE PROPERTY solely for
performing its activities as described in Attachment III. The sublease or
assignment of this Agreement, in whole or in part, even if free of charge
and/or on a temporary basis shall be forbidden, as well as the
performance of activities other than those described in Attachment III,
without the LANDLORD's prior consent in writing.
2.1.1. To the extent that hazardous or flammable.materials are necessary
for TENANT'S manufacturing processes, TENANT shall be permitted to
use and store such hazardous materials on the REAL ESTATE
PROPERTY; provided, however, that TENANT shall: (1) at TENANT'S
sole cost and expense, obtain and maintain during the term of this
Agreement any and all licenses and permits required by applicable
laws, rules, regulation and orders in connection with the
transportation, storage, use and disposal of any such hazardous
and/or flammable materials; and (2) at all times transport, store,
use and dispose of any and all such hazardous and/or flammable
materials in strict
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accordance with all applicable laws, rules. regulations, and
orders. When any hazardous and/or flammable material is used,
stored or disposed of on the REAL ESTATE PROPERTY by TENANT.
TENANT will disclose to LANDLORD the nature and quantity of such
materials. A list of materials necessary to perform the services
specified in this contract are contained in Attachment IV.
TENANT will be fully responsible for and shall indemnify LANDLORD
from and against any and all damages (including, without
limitation, any fines, penalties. environmental clean-up and/or
remediation costs and the like) actually incurred by LANDLORD
which are in any way related to the hazardous and/or flammable
materials used. stored or disposed of by TENANT on or near the
REAL ESTATE PROPERTY.
Such damages are understood to be actual damages only and are not
understood to include attorney's fees, and any consequential
damages. TENANT will not be responsible fur environmental damages
caused by LANDLORD or third parties. LANDLORD agrees to indemnify
TENANT of all actual damages caused to TENANT as a result of
environmental damage caused exclusively by LANDLORD. Such damages
are not understood to include attorney's fees, and consequential
damages.
2.1.2. The TENANT shall be the sole responsible for securing all licenses
and/or authorizations related to the activities to be performed in
the REAL ESTATE PROPERTY. and shall bear all expenses arising
therefrom, including, without limitation, the electric power.
water, sewage, gas and telephone connections and disconnection.
2.1.3. The TENANT shall be the sole and exclusive responsible for all
penalties which may be applied as a result of violations of any
nature committed against the REAL ESTATE PROPERTY during the term
of this Agreement, the LANDLORD being released, irrevocably and
irreversibly, from any liabilities and/or burden.
2.1.4. Without prejudice to all other obligations and/or liabilities of
the TENANT under the Agreement, the TENANT shall be the sole and
exclusive responsible for its employees, as well as for the labor,
agrarian and/or social security charges owed, to same, and for any
damages and losses caused to the LANDLORD or to any party,
irrespective of its nature, title or reason, including, without
limitation, as a result of the use of the REAL ESTATE PROPERTY
and/or activities conducted in the REAL ESTATE PROPERTY and of
complaints from any authorities and/or third parties.
2.1.5. During the term of this agreement, all taxes, rates and other
charges imposed upon the REAL ESTATE PROPERTY related to the
payments made hereunder, shall be the responsibility of and paid
for by TENANT. TENANT will not be responsible for any taxes,
rates, charges or penalties imposed upon the REAL ESTATE PROPERTY
that were incurred or accrued prior to the commencement of this
Agreement or after its termination or expiration.
2.1.6. Each Party shall be exclusively liable for any and all labor and
social security lees due to or claimed by its respective
employees.
3. LEASE TERM
3.1. The LANDLORD leases the REAL ESTATE PROPERTY so the TENANT, exclusively
for the performance of the activities detailed in Attachment III, for a
term of two (2) years, with a two (2) year option to extend, subject to
approval by both parties, beginning on June 15, 1998 and ending on June
14. 2000, on which date the TENANT undertakes to return the REAL ESTATE
PROPERTY in good repair and proper conditions for use (as reflected tn
Attachment II) and totally vacant in terms of occupants and objects.
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3.1.1.The TENANT agrees and accepts that the restitution of the REAL
ESTATE PROPERTY, whether due to the expiration or termination of
the Agreement, shall be preceded by an inspection by the LANDLORD.
Should the REAL ESTATE PROPERTY be found to be in good repair and
proper conditions for use (as reflected in Attachment II) and
totally free of occupants and objects, the LANDLORD shall deliver
to the TENANT, duly signed, a CERTIFICATE OF INSPECTION AND
ACCEPTANCE. If, however, the LANDLORD finds the REAL ESTATE
PROPERTY to be in violation of the provisions of this Agreement
for any reason whatsoever, the LANDLORD shall receive the REAL
ESTATE PROPERTY on a conditional basis, however this shall not
imply novation, and the LANDLORD shall notify the TENANT to
immediately remedy. at its sole expenses, the inconformities
pointed out by the LANDLORD. In case the REAL ESTATE PROPERTY is
received by the LANDLORD on a conditional basis and the TENANT
fails to begin the necessary works or repairs within at the most
ten (10) days from the above-mentioned conditional receipt, the
LANDLORD may, at its exclusive criteria, hire third parties, at
the TENANT's expenses, to carry out the constructions works and
repairs in the REAL ESTATE PROPERTY it deems necessary, pursuant
to Article 881 of the Civil Code, and this Agreement shall
constitute an extrajudicial executive instrument. During the
period allotted for remedying said faults either by the TENANT or
by third parties hired by the LANDLORD, at the TENANT's expenses,
this Agreement shall remain in full force and effect, pursuant to
Article 3.2 below. Both LANDLORD and TENANT will conduct
"walkthroughs" prior to the joint occupancy and prior to TENANT
occupying the entire facility to identify any problems and/or
issues needing to be resolved. Both parties will work faithfully
to resolve any issues that may arise.
3.2. Should the TENANT, for any reason, remain in the REAL ESTATE PROPERTY
after the expiration of the lease term, all further articles and
conditions contained in the Agreement, especially those related to the
payment of the rent and its respective adjustment, shall apply up to the
actual delivery of the REAL ESTATE PROPERTY, and this fact shall not
imply in any manner whatsoever, a novation or waiver of any right.
especially the prerogative of repossession.
4. RENTAL PAYMENTS-ADJUSTMENTS
4.1. Subject to the adjustments set forth in Clause 4.4.4 below, the initial
monthly rent to be paid under this Agreement is detailed in Attachment V,
taking as a basis April 1, 1998.
4.2. This Agreement shall be adjusted in accordance with the variation of the
IGPM or IGP considered on an annual basis or on the shortest time
interval admitted by the law or any index which may replace it, and
should this substitution occur, the new index shall be applied
immediately, irrespective of the period of the Agreement already elapsed.
4.3. The TENANT shall pay the rent monthly to the LANDLORD up to the
first(1st) working day of the month subsequent to the month elapsed.
4.4. The monthly rental payments shall be made through a credit in the
LANDLORD's current account with the XXXX Bank, Bank Identification Number
XXX, Agency Number XXXX, Bank Account Number XXXXXX, with the funds fully
available on the maturity date, the receipt of bank deposit being valid
as a regular receipt of payment, provided the amount and date of deposit
are correct
4.4.1. Any expenses or charges on the REAL ESTATE PROPERTY, including,
without limitation, the expenses of maintenance, taxes, fees,
electric power, water, sewage, gas and other public utilities, as
well as
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the costs incurred with the registration of this Agreement with
the appropriate Real Estate Property Register, which shall be made
within fifteen (15) days as of the execution of this Agreement,
shall be paid directly and exclusively by the TENANT, with no
responsibility on the LANDLORD's part. The utilities payable
during the lease term shall be the TENANT's exclusive
responsibility, even if charged after the actual termination of
this Agreement.
4.4.2. The failure to pay the rental payments and other charges which are
or may be imposed on the REAL ESTATE PROPERTY on their respective
due dates, shall subject the TENANT to the payment of a ten
percent (10%) fine on the overdue amount, plus monetary
restatement pursuant to Article 4.2 above and. delinquent interest
of one percent (1%) per month or on a "pro rata" basis, from the
date of the respective maturity until the actual payment, without
prejudice to any of the LANDLORD's other rights.
4.4.3. The actual receipt of the rental payments after their maturity
shall not imply an amendment or novation of the Agreement, and
shall constitute a mere favor or forbearance of the LANDLORD.
4.4.4. Rental payments will be adjusted monthly according to the actual
facility usage of TENANT as illustrated in Attachment V of this
agreement. Additional manufacturing floorspace is scheduled to be
available for occupancy by TENANT on August 1, 1998 while
additional office space availability is scheduled for October 1,
1998. These dates are for planning purposes only and are subject
to change. Accordingly, payment adjustments made on a usage basis
will be calculated on actual use and not projected use.
4.4.5. Parking spaces will be allocated according to the actual facility
usage of TENANT and will be adjusted on a monthly basis. In the
event insufficient parking exists, both LANDLORD and TENANT will
work faithfully in order to provide additional parking that
sufficiently meets their needs.
TERMINATION
5.1. The TENANT may terminate this Agreement before its expiration provided it
gives a one-hundred and eighty (180) day advance notice in writing to the
LANDLORD, without prejudice to the total and timely fulfillment of all
and any of its obligations under this Agreement (excluding payment
obligations pursuant to Article 4.1 hereof), until the LANDLORD'S
execution of the CERTIFICATE OF INSPECTION AND ACCEPTANCE. The TENANT
shall, additionally pay to the LANDLORD, an irreducible fine, for earlier
termination of the agreement, equivalent to fifty percent (50%) of the
sum total of the monthly rental payments to fall due until the time set
for the expiration of the Agreement.
5.1.1. The fine payable as a result of termination of the Agreement shall
be paid at the time of the execution, by the LANDLORD, of the
CERTIFICATE OP INSPECTION AND ACCECTANCE and shall be calculated
on the basis of the rent then prevailing.
5.2. The LANDLORD may terminate this Agreement in the case of expiration or
termination of the "General Purchase Agreement No. OPA1030" dated
February 26. 1998, and/or the Agreement for the Purchase and Sale of
Equipment and Other Covenants signed between the parties on June 8, 1998.
5.3. This Agreement may also be terminated by any of the parties in case of
bankruptcy, reorganization proceedings (concordata) or liquidation of the
other party, the termination being effective as of the date of the
application for reorganization proceedings, application for or
adjudication of bankruptcy or liquidation. 5.4. In the event the LANDLORD
terminates this agreement due to no fault of the TENANT both parties
will, in good faith, discuss the impact on both parties, relocation
expenses and a timeframe for evacuation.
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6. MAINTENANCE OF THE REAL ESTATE PROPERTY
6.1. The TENANT undertakes to pay all maintenance and upkeeping expenses
related to the REAL ESTATE PROPERTY, and to keep it in good repair and
proper conditions for use and to return it to the LANDLORD in said
conditions.
6.1.1. The LANDLORD may at any time and with no need of prior
communication, during the term of this Agreement, provided it is
on a working day and during business hours, inspect the REAL
ESTATE PROPERTY so as to determine the full, regular and timely
fulfillment of the TENANT's obligations under this Agreement.
6.2. Any change that the TENANT needs to perform in order to adapt the REAL
ESTATE PROPERTY to the activities described in Attachment III, shall only
be made upon the express authorization of the LANDLORD and of the
appropriate authorities, and the TENANT shall not be entitled to any
indemnity or withholding of any kind and the TENANT shall, at the
expiration or termination of the Agreement, restore the REAL ESTATE
PROPERTY to its original condition if the LANDLORD so deems advisable.
Should questions arise, both parties will work faithfully to provide
responses in a reasonable period of time.
7. INSURANCE
7.1. The LANDLORD shall yearly contract with an insurance company of its
choice, an insurance coverage for the REAL ESTATE PROPERTY at its actual
value, against fire, civil liability against third parties and other
risks directly linked to the REAL ESTATE PROPERTY, and the TENANT shall
bear the costs of the corresponding premium.
8. VIOLATION OF THE AGREEMENT
8.1. Should the TENANT violate any of its obligations under this Agreement,
and not remedy or have taken substantial steps to remedy such violations
prior to the expiration of a fifteen (15) business day cure period after
receipt of notice from LANDLORD, the LANDLORD shall, at its sole
discretion, terminate this Agreement, by sending a termination notice
with such termination to take effect only after the expiration of the
referenced cure period, and the TENANT shall pay to the LANDLORD, a
contractual fine equivalent to fifty percent (50%), of the total sum of
the monthly rental payments to fall due up to the date established for
the termination of the Agreement, irrespective of the period of the
agreement which has already elapsed, without prejudice to the
fulfillment, by the TENANT, of its obligations under this Agreement
(excluding payment obligations under Article 4.1 hereof), in particular
its obligation to return the REAL ESTATE PROPERTY to the LANDLORD in good
repair and proper conditions for use. The provisions of this Article 8.1
shall not be applicable in the case of violation, by the TENANT, of the
provisions of Article 4.4.2 above, unless the TENANT has failed to timely
pay the rent for two consecutive months, within a period of 12 months
(12) from the last default. The fine shall always be due in full,
irrespective of the time of the Agreement, which has already elapsed.
8.2. All obligations arising from this Agreement shall be enforceable on the
dates and in the manners now agreed upon, irrespective of any
communication or judicial or extrajudicial notice, and the failure to
perform said
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obligations shall give rise to the legal termination of this Agreement
and shall subject the infringing party, to the payment of the fines
provided for in the Agreement, in addition to the penalties provided for
in law.
8.3. In addition to the fines provided for in this Agreement, the TENANT shall
reimburse to the LANDLORD, all expenses incurred by the LANDLORD as a
result of any violation of the Agreement by the TENANT, including
judicial and extrajudicial costs and expenses, in addition to the
attorney's fees which are herein set at twenty percent (20%) of the
amount involved.
9. GUARANTEE
9.1. The TENANT undertakes to offer to the LANDLORD, as a guarantee of the
full and timely fulfillment of its obligations under this Agreement,
within fifteen (15) days at the most of the execution of this Agreement,
a bank surety from a first rate bank, in the amount equivalent to the
total sum of the monthly rents payable by the TENANT during the term of
validity of the Agreement, including the common expenses of the building
(condominium fees) and other contractual expenses, all adjusted pursuant
to Article 4.2 above, plus one percent (1%) per month. The bank surety in
question shall remain in full force and effect until the full discharge
and performance of the TENANT's obligations under this Agreement.
10. GENERAL PROVISIONS
10.1. the TENANT undertakes to immediately advise the LANDLORD of the following
facts;
(a) any abnormality which may occur in relation to the structure and
the solidity of the REAL ESTATE PROPERTY, especially if this has
given rise to a notice from the appropriate public authorities;
(b) all and any notice, summons, communication or letter addressed to
the LANDLORD and delivered at the REAL ESTATE PROPERTY;
(c) the occurrence of any fact or act performed by neighbors and/or
third parties, which may cause damage to the REAL ESTATE PROPERTY,
it being also incumbent on the TENANT to make other notices aimed
at preventing the occurrence of any damage to the REAL ESTATE
PROPERTY;
(d) The application of any fine or similar penalty, even in the name
of the LANDLORD.
10.1.1.The communications made both by the LANDLORD and by the TENANT
shall be necessarily made in writing to the address indicated in
the preamble of this Agreement or to any other address previously
informed by any one of the parties.
10.1.2.Should the LANDLORD be required to make any disbursement,
including in relation to any additional amount related to an
obligation attributable to the TENANT, the latter shall reimburse
to the LANDLORD the amount paid within ten (10) working days,
being also subject to the other penalties provided for in this
Agreement
l0.2. The TENANT undertakes to comply with all demands and to pay any penalty
imposed by the public authorities as a result of the use of the REAL
ESTATE PROPERTY, even if said demands and fines are made or charged after
the expiration or termination of this Agreement
10.3. During the term of validity of this Agreement, the TENANT may post on the
external part of the REAL ESTATE PROPERTY, in a place previously approved
by the LANDLORD, an identification sign of its corporate name. At the
time of the expiration or termination of the Agreement, said
identification signs shall be removed by the TENANT, and it shall be
required, at its own expenses, to make the repairs resulting from the
removal of said sign which may be necessary.
10.4. The execution of this Agreement does not imply the existence of a JOINT
VENTURE or any type of association between the parties, under any
pretense or for any purposes.
10.5. The LANDLORD may transfer or assign this Agreement to controlled
companies, holding companies, affiliates, subsidiary companies or any
third parties
10.6. The Articles of this Agreement and its Attachments which due to its
nature have a permanent nature, especially
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those related to payment, shall survive the expiration or termination of
this Agreement.
10.7. The provisions of this Agreement and its Attachments reflect the full
understandings and agreements between the parties in relation to the
subject matter of this Agreement and shall supersede any prior
understandings or proposals, whether oral or written.
10.8. Should any Article, term or provisions of this Agreement be determined as
null or unenforceable, said nullity or unenforceability shall not affect
any other Articles, terms or provisions herein contained, which shall
remain in full force and effect.
l0.9. Any omission or tolerance by any of the parties in demanding strict
compliance with the obligations herein agreed upon or in exercising any
right arising from this Agreement shall not constitute a novation or
waiver, nor shall it affect its right to exercise said right at any time.
l0.10. This Agreement, including its Attachments, is executed in an irrevocable
and irreversible manner, and shall be binding upon the parties, their
heirs and successors and may only be amended by mutual consent, in
writing.
10.11. The parties hereto elect the courts of the judiciary district of the city
of Campinas, State of Sao Paulo, to settle any disputes arising from this
Agreement, with exclusion of any other venue, however privileged it may
be.
Now, therefore, the parties hereto have agreed to execute this Agreement in
three (3) counterparts of an equal concern and form before the two (2)
undersigned witnesses, for the same legal purposes.
TENANT LANDLORD
AVEX ELECTRONICS DO BRASIL LTDA LUCENT TECHNOLOGIES NETWORK
SYSTEMS DO BRASIL S.A.
By: /S/ TODD WESTBROOK By: /S/ ALBERTO DAVIN
------------------ -----------------
Name: Todd Westbrook Name: Alberto Davin
Title: VP Business Development and Title: CFO
Technology Date: June 16, 1998
Date: June 8, 1998
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INTENTIALLY BLANK
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ATTACHMENT I
REAL ESTATE PROPERTY
"Property Number 605, Address: Rodovia Dom Pedro I, KM 128/129, City Hall Permit
"Habit-Se," Number 7051 from January 31, 1986. Notary Public Number 139.109 from
December 17. 1986. Constructed area: 3,710.00 m2 (square meters)"
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ATTACHMENT II
REPORT ON CONDITION OF FACILITY
UPON ACCEPTANCE BY TENANT
Date: Issue: Permanent Responsible Lucent Avex
Change: Y/N Party: Approval/Date: Approval/Date:
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ATTA6HMENT III
STATEMENT OF WORK
LandLord agrees to permit Tenant to operate and Tenant agrees to operate and
conduct contract manufacturing services, including but not limited to: material
ordering and kitting, printed circuit board assembly, and ICT and FCT testing,
on Landlord premises, at Rodovia Dam Pedro I, KM 128/129, Campinas, Sao Paulo,
Brazil. CEP 13089-000.
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ATTACHMENT IV
REQUIRED MATERIALS
Kester 951 Flux
Alpha 63/37 Solder
Isopropyl Alcohol
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ATTACHMENT V
Lucent Technologies Network Systems do Brush S.A
Allocation - Total Building area 3.744 rn2 = 100%
Total Allocation % from
ASSUMPTION M2 C.M.M2 AVAILABLE REFERENCE
- -----------------------------------------------------------------------------------------
Manufacturing 1,200 485,86 Production board manufacturing
Warehouse area 337 102,5 30 30% from the Warehouse
Compressor room34 31 90 90% from the Compressor Total
Avex area 619
Common areas
Guardhouse 15
Power room 475
Dock 60
Chiller 56
Aisle 179
Restroom 114
Cafeteria 151
Club 27
Meeting rooms 31
Total common areas 710,5
Total constructed area 2.744
Available area 3.033,5
AVEX needed area 619
% from available 20,40
SERVICES/ UTILITIES ALLOCATION
UTILITIES ACTUAL ALLOCABLE % / ACTUAL VALUE R$
- ------------------------------------------------------------------------------------------------------------------
Electricity 824 KVA 475KVA 57,6 8600
Telephone: Will be charged on a connection and usage basis
Water 650m3 132m3 20,4 798
Cafeteria: AVEX will direct-pay cafeteria service for meals
Security 11.500,00 20.4 2346
Cleaning 7.000,00 20.4 1428
Landacaping 1.20000 20,4 244,8
Facility Maintenance & Mgmt. 7500.00 20,4 1530
Nitrogen AVEX will assume contract and direct pay vendor
Land Tax 6.604,00 20,4 13472
Insurance 500,00 20,4 102
Floor apace rental ($7/Sq. Mtr.) 61Dm 4333
Estimated monthly rate $20,729
o Will vary based on actual rate.
o Market price for building with AC; cleaning floor, appropriated
lightning, paving, employees club, site landscaping, and well located =
R$ 7.00/ rn2
One-time charged for preparation of facility for CR manufacturing.
TOTAL AVEX
Storage room fence 14000 4200
Transformer & Vacuum 8500 8500
Nitrogen tank pad 8000 8000
Roof Improvement 27000 6500
Total R$ $57,500 $27,200
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