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EXHIBIT 10.38
FREE TRANSLATION
SUBLEASE AGREEMENT
By this act, lawfully and under private signature, the parties below:
1. CECCATO S/A COMERCIO DE UTILIDADES DOMESTICAS, a company with its principal
place of business in the City of Campinas, Sao Paulo State, at Rua 13 de Maio,
231, Centro, registered under CGC/MF no. 45.993.680/0001-20 and State Registry
no. 244.013.828-116, herein represented by its directors Mr. Fioravante Octavio
Ceccato, a Brazilian citizen, married, businessman, the bearer of ID Card RG
no. 1.451.258 and CPF/MF no. 014.241.498/00 and Mr. Oswaldo Ceccato, a
Brazilian citizen, married, businessman, the bearer of ID Card RG no. 1.420.707
and CPF/MF no. 014.241.308/91; and
2. GROUP TECHNOLOGIES SUPR. INFORMATICA IND. E COM. LTDA., a company with its
principal place of business in the City of Hortolandia, Sao Paulo State, at
Rodovia SP101, Km.9 Trecho Campinas - Monte Mor Centro Industrial IBM Predio
031, registered under CGC/MF 00.457.616/0001-96 and State Registry no.
748.017.284.118, herein represented by its Managing Director, Mr. Ricardo Fabio
Battaglia, a Brazilian citizen, married, the bearer of ID Card RG no.
15.659.595 and CPF/MF no 083.697.098/50.
also hereinafter simply referred to as Sublessor and Sublessee respectively, do
hereby agree to enter into this Agreement, in accordance with the following
clauses and conditions, mutually accepted and granted by the parties and their
successors:
CLAUSE 1 - PURPOSE - The present agreement has as a purpose the sublease of a
property located in the City of Campinas, at Rua Antonio Vilela Junior, no. 33,
Real Estate Development Jardim Bandeirantes, Block F, lots no. 07 comprised of
360,00 m2, no. 08 of 360,00 m2, no. 09 of 537,00 m2, no. 10 of 616,00 m2, no.
11 of 448,00 m2, no. 12 of 300,00 m2, no. 13 of 300,00 m2, no. 14 of 300,00 m2,
no. 15 of 300,00 m2, no 16. of 300,00 m2 and no. 17 of 300,00 m2. Jardim
Bandeirantes is a 4121, 00 m2 land and 2851,75 m2 built-up area Real Estate
Development, duly registered before the Real Estate Registry Office of
Campinas, SP, Sao Paulo State, Brazil, under enrollment nos. 7632, 7633, and
7634.
CLAUSE 2 - DESIGNATION - The subleased property is designated for the
installation of any facilities deemed as necessary for the performance of
Sublessee's activities.
CLAUSE 3 - VALIDITY - The validity term of this Agreement shall start on March
20, 1996 and expire on July 07, 1999, on which expiration date Sublessee
undertakes to return the property to Sublessor completely vacant and under the
same conditions it has first received it, independently of any notice.
3.1 - Sublessee may assign and transfer this Sublease Agreement, totally
or partially, to companies pertaining to its economic group. This Agreement
shall remain valid in the event of transfer of the subleased property's domain
or possession to third parties, under any circumstances.
CLAUSE 4 - RENTAL AMOUNT - The initial rental amount to be paid on a monthly
basis shall be R$19,000.00 (Nineteen thousand reais).
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EXHIBIT 10.38
4.1 - As long as this Agreement remains valid or should the term hereof be
extended, the rental amount to be paid on a monthly basis shall be adjusted
annually, as of the initial date of the Agreement, which adjustment shall be
based on the accrued variation of the previous year of the index IGP-M of the
FGV (Getulio Vargas Foundation), and in case such index is not disclosed,
another index, pertinent to the matter, determined by the competent government
authorities, shall be adopted.
4.2 - The rental amount shall be due as of March 20, 1996 and payable by
Sublessee until the fifth (5th) day of the following month, and payments shall
be effected upon deposits at UNIBANCO, current account no. 112233-0 agency 0113
- - - Senador Saraiva, Campinas SP, or by any other mean Sublessor previously and
by written notice determines.
4.3 - Sublessor shall send Sublessee until the 25th day of each month,
copies of the rental payment receipts of the previous month, referring to
payments the former has effected to Owner. Should Sublessor fail to forward
the receipts to Sublessee, the latter may withhold the rental sublease
payments. In the event, payments which were withheld by Sublessee shall be
released to Sublessor, no interest, fine or monetary correction charged, upon
evidence that Sublessee's has complied with its obligations to Owner.
CLAUSE 5 - TAXES AND FEES - Sublessee shall account for all taxes levied on
urban/territorial real property, and any other municipal taxes incurred, as
well as for all the ordinary expenses of the subleases property such as water
supply and electricity.
CLAUSE 6 - BETTERMENTS AND CONSERVATION - Sublessor hereby authorizes Sublessee
to effect any alterations or betterments to the property deemed as convenient
by the latter to furnish adequate services, as long as the legal provisions and
regulations in force are respected, as well as the safety and stability of the
construction.
6.1 - Disassemble or removable betterments may be removed at any time by
Sublessee, who shall replace the original essence as regards any affected parts
of the building.
6.2 - Upon termination of this Agreement, Sublessee agrees to deliver the
sublease property in good conditions of cleanliness, neatness and conservation.
Sublessee further agrees to comply with all requirements enforceable due to
its actions by the administrative authorities.
6.3 - Sublessor declares that the building is in perfect accordance with
the municipal standards of construction and requirements of the concessionaires
of public services. Should any irregularity be evidenced, Sublessor agrees to
promptly comply with the requirements set forth by the competent authorities.
A plan duly approved by the competent authority is annexed hereto.
CLAUSE 7 - INSURANCE - Sublessee agrees to contract insurance against fire risk
for the subleased property, in which policy Owner shall be the beneficiary, and
which amount shall be initially R$3,340,000.00 (Three million, Three hundred
and forty thousand reais), and further adjusted on occasion of the renewal of
the general insurance policy contracted by Sublessee. Upon each renewal of the
referred policy, the insured amount shall be that equivalent to 176 times the
rental amount in effect.
7.1 - In the event of destruction by fire of the subleased property, this
Sublease Agreement shall be automatically terminated. If, however, the
property is only partially destroyed and the competent authorities authorize
utilization of the non-damaged portion of the building, and should Sublessor
wish to
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EXHIBIT 10.38
utilize said portion, this Agreement shall remain valid and a proportional
reduction of the rental amount and other charges shall be established.
CLAUSE 8 - INFRINGEMENT FINE - It is hereby stipulated an infringement fine
equivalent to R$150,000.00 (One hundred and fifty thousand reais), to be
incurred on the party who fails to comply with any clause or condition set
forth by this Agreement. The infringement fine mentioned above shall be due in
its totality, at any time during the term of this agreement.
CLAUSE 9 - SUBLESSOR'S OBLIGATIONS - Sublessor hereby undertakes to renew the
lease agreement entered into with the Owner of the property for more than ten
(10) years, which new instrument shall be executed until November 30, 1998,
pursuant to applicable law.
9.1 - In the event no new agreement has been executed until November 30,
1998, Sublessor agrees to comply with the time frame for filing a judicial suit
against Lessor/Owner, aiming at the compulsory renewal of the agreement, which
judicial suit shall be brought until December 10, 1998, since the period for
bringing suit expires when courts are closed.
9.2 - Once defined the renewal of the lease Agreement between Sublessor
and Owner, Sublessor agrees to offer the property to Sublessee for renewal of
the sublease. The new sublease payment amount shall be in accordance with the
rental amount practiced in the market.
9.3 - In the event Sublessor fails to comply with its obligations as set
out in this Clause, the same agrees to pay a fine of R$150,000.00 (one hundred
and fifty thousand reais) to Sublessee.
CLAUSE 10 - BANK GUARANTEE - It is hereby determined that Sublessee shall
provide a Bank Guarantee in the form of a letter of Guarantee by Banco
Itamarati S/A, comprising the amount of R$150,000.00 (One hundred and fifty
thousand reais). This instrument shall be binding on Banco Itamarati S/A, as a
jointly liable guarantor, in relation to all contractual charges, which
liability shall endure until the property is delivered, vacant of persons and
things. This instrument shall expire on February 24, 1997 and may be renewed
for equal periods of time.
CLAUSE 11 - RESILITION - Sublessee may rescind this Agreement partially or
totally, at any moment during the term hereof, provided that a previous written
notice is given to the other party, with a minimum two hundred and thirty (230)
days, not being owed in this regard any rental amount referring to the months
comprised between the resilition date and the termination date of the
Agreement.
CLAUSE 12 - JURISDICTION - The parties hereby elect the exclusive jurisdiction
of the central courts of the City of Campinas, State of Sao Paulo, with respect
to any controversy arising out of this Agreement.
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EXHIBIT 10.38
IN WITNESS WHEREOF, the parties have executed this Agreement in four (4)
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument, in the presence of the
witnesses below.
Campinas, March 20th, 1996.
By Sublessor
/s/ Fioravante Octavio Ceccato
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Ceccato S/A Comercio de Utilidades Domesticas
Fioravante Octavio Ceccato Oswaldo Ceccato
By Sublessee
/s/ Ricardo Fabio Battaglia
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Group Technologies Supr. Informatica Ind. e Com. Ltda.
Ricardo Fabio Battaglia
Witnesses:
1. /s/ Jose Henrique Xavier
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Jose Henrique Xavier
2. /s/ Jose Eduardo Darros de Matos
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Jose Eduardo Darros de Matos