LEASING CONTRACT ENTERED INTO THE GOVERNMENT OF THE FREE AND SOVEREIGN STATE OF
ZACATECAS HEREIN REPRESENTED BY CPA GUILLERMO HUIZAR CARRANZA, SECRETARY OF
PLANNING AND FINANCE AND MR. CARLOS LOZANO DE LA TORRE, ENGINEER, SECRETARY OF
ECONOMIC DEVELOPMENT, HEREINAFTER REFERRED TO AS THE LESSOR AND BETWEEN NORTH
AMERICA SHOE CORPORATION, A CORPORATION OF VARIABLE CAPITAL REPRESENTED BY MR.
HERNAN BERNARDO URRUTIA IN HIS CHARACTER OF PROXY FOR THE LESSEE, HEREINAFTER
REFERRED TO AS THE LESSEE; ACCORDING TO THE FOLLOWING:
STATEMENTS
THE GOVERNMENT OF THE STATE declares that one of its main functions is to
encourage the economic activity through the establishment of companies in the
Industrial Parks of the Entity and in doing so, to promote the development of
the State.
THE LESSOR declares that he is the legal owner of an industrial built structure
of 8311m2 located in lot number 1, block 5 within the Industrial Park of
Fresnillo.
THE LESSOR wishes to lease the above-mentioned industrial structure to the
LESSEE and takes all necessary actions in order to facilitate the development of
the LESSEE'S business.
THE LESSEE considers that the State of Zacatecas provides all necessary
conditions for the industrial development and has decided to establish his
company in the industrial structure above mentioned within the Industrial Park
of Fresnillo, in accordance to the herein Leasing Contract.
THE LESSEE is a company duly incorporated in accordance with the laws of the
Mexican Republic as certified under Public Deed number 21,706 dated January 3rd,
2000 attested by Ana Patricia Bandala Tolentino, Notary Public No. 195 of the
Federal District.
The parties agree the following:
CLAUSES
FIRST. - THE LESSOR grants in leasing to THE LESSEE the industrial
structure that has been duly described under the statements hereof.
SECOND. - The Effective Period of the herein Leasing Contract shall be of one
year, that shall commence on the signatures' date of the present legal document,
except for the assumptions established hereunder. THE LESSEE shall decide to
continue with the present contract for a maximum of an extra period, of same
duration as the effective period of the present instrument, and THE LESSOR shall
be committed to the compliance with the terms and conditions stipulated
hereunder. In the event THE LESSEE decides to continue with this Contract, shall
exercise his right, in writing at least six months before the expiration date of
the present contract.
THIRD. - The leased premises shall be used for the business' operations
regarding the manufacture as well as any other legal matter. THE LESSOR shall
not use, and shall not permit the use of any part of the leased building for
illegal ends or to cause damages. THE LESSEE agrees to the compliance with laws
and by-rules, whether federal, local or municipal, as well as with present and
future authorities that may be applicable for the business of THE LESSEE in the
leased building.
FOURTH. - For the payment regarding the rent and use of the leased building
during the Period of this contract, THE LESSEE agrees with THE LESSOR to pay
monthly the amount of one dollar per each built square meter, plus the
applicable I.V.A. tax, to the Planning and Finance Secretariat of the State of
Zacatecas, or in any other address that may be notified in written by THE
LESSOR. THE LESSEE shall increase the rent annually, so the increase shall be
every 12 months after the occupancy of the building in the following manner: (i)
75% of the percentage increased of the IPC from previous year's June and up to
the immediate previous month of May or proportionally estimated to the months of
occupancy during the first year or (ii) a maximum increase of 5% on income.
Whatever is less (i) or (ii) shall be applied. The rent shall be paid in advance
the first day of each month. The rent as per a part of the month shall be
proportionally distributed. All rent payments and any other overdue payment owed
by THE LESSEE to THE LESSOR under this contract and in relation to the same may
be made (and shall be deemed as received in time) in accordance with the reason
of the reception by THE LESSEE, either by sending it or delivering it by mail to
THE LESSOR or person designated by THE LESSOR to the address mentioned as for
such effects, through a check or cash, in dollars. THE LESSEE as the option of
deciding to receive it in Mexican Pesos at that date's current exchange rate.
FIFTH. -THE LESSEE shall allow THE LESSOR, his agents or authorized
representatives to have access to the facilities of the leased premises in
working hours with a previous notification to THE LESSEE (except for the lack of
notification in the event of an emergency), taking into consideration that THE
LESSOR shall make his best effort in order not to disturb the use or the
occupancy of THE LESSEE regarding the leased premises and THE LESSEE shall not
be entitled to decreases in the amount of the rent due to access for repairs.
The above mentioned shall not be interpreted as that THE LESSEE may carry out
the necessary safety steps for his protection. THE LESSEE shall continue with
his business operations, as well as the control of his agents, employees, and
visitors in such a way that may not interfere with the maintenance and repairs
obligations of THE LESSOR regarding the leased building.
SIXTH. -THE LESSEE commits to keep and repair the leased building in a correct,
and clean manner and to keep it under sanitary conditions, including without
limitations, to cleaning, maintenance and repairs within the building interior,
up to the termination of the present contract. THE LESSEE commits himself to
return the leased building to THE LESSOR in the same conditions as it was
received, except for the ordinary deterioration, damages and repairs that are
THE LESSOR's responsibility.
SEVENTH. -THE LESSEE shall not carry out any modification to the structure or to
the interior of the leased building, without the previous written authorization
of THE LESSOR. Such authorization may not be denied if the modification does not
decrease the value of the premises. THE LESSEE shall be authorized to carry out
any modification or improvement in the interior of the leased building;
understanding that no modifications shall be made to the structure and that THE
LESSEE shall previously notify THE LESSOR said modifications. At the end of the
present leasing contract THE LESSEE shall remove any improvement paid by THE
LESSEE, committing himself to leave the leased building in the original manner
as it was at the very beginning, except in the event that the removal of such
improvements may cause damages to the structure of the leased building.
THE LESSOR understands and agrees that all equipment used by THE LESSEE for the
manufacturing operations and all related activities are THE LESSEE's property,
and may not be considered in any moment as part of the above mentioned
improvements.
EIGHTH. -THE LESSEE accepts and agrees that at his own expense he will contract
and keep during the effective period of the present contract, a full coverage
insurance with THE LESSOR as beneficiary regarding the leased premises for the
current reposition value amount (current value for the repair of the leased
building becomes unusable for the objectives considered under this contract) as
of this moment and up to the restoration date in accordance with stipulations
made hereunder, has been finished, an equal reduction shall exist or a rent
compensation, taking into consideration the area and type of damage suffered in
the premises that may be used for the purpose of the present contract.
NINTH. -THE LESSOR is entitled to analyze and approve in due case, the coverage
and conditions of the building's insurance policy. If there is an amount /
deductible percentage in said coverage, that shall be at the expense of THE
LESSEE.
TENTH. -THE LESSOR shall be responsible for paying the Added Value Tax (IVA) due
to the rents' payment made to THE LESSOR under the present contract. THE LESSOR
shall be responsible of payment for all other applicable taxes to the leased
building and improvements mentioned under this instrument.
ELEVENTH. -THE LESSEE shall timely pay expenses derived from gas, electricity
and water services as well as any other service that may arise during the term
of the contract, services that are used within the leased building.
TWELFTH. -THE LESSEE shall assure that no damage will be caused and shall
indemnify any cost, liability expenses, insurance, claims or damages (including
with no limitations, injuries or contract liability, as well as time schedules
and attorney's fees) incurred in by THE LESSOR, which are not covered by the
insurance contract and which are derived from the use and occupancy of the
leased building by THE LESSEE, in the understanding that in the event THE LESSOR
has been negligent, THE LESSEE shall not have obligations regarding such costs,
expenses, liability, claims or damages.
THIRTEENTH. -THE LESSOR shall ensure the LESSEE, granting him pacific use and
enjoyment of the leased building, as well as guarantee that the first shall not
obstruct nor prevent in any manner, the use of such leased building. Also to
indemnify as for any cost, expense, liability, insurance, claims or damages
including with no limitations, injuries or contract liability, as well as
attorney's expenses and fees incurred in by THE LESSEE and which are not covered
by the insurance contract and derived from the use and occupancy of the leased
building by THE LESSEE, in the understanding that in the event THE LESSEE has
been negligent, THE LESSOR shall not have obligations regarding such costs,
expenses, liability, claims or damages.
FOURTEENTH. -The parties hereby agree that in any of the following cases, THE
LESSEE will be incurring in a noncompliance with his obligations regarding this
contract:
1) lack of adherence or any other situation imputable to the same,
when such noncompliance exceeds 30 days as of the date when THE LESSOR
notified him in writing: and
2) lack of compliance with or observance of any other clause, term,
disposition or condition hereof, which continues for more than 30 days
after the written notice, in
the understanding that such noncompliance shall only occur when THE LESSEE
fails to start with the necessary formalities as to attempt to comply.
b) As LESSOR's event of default or noncompliance, shall be considered when he
fails to comply with the terms hereof regarding any clause, term,
disposition or condition and such Noncompliance is not compensated within
a 30-day term as of the written notice issued by THE LESSEE. The foregoing
except for the case that such noncompliance is due to acts of God or force
majeure, or when THE LESSOR fails to carry out the formalities being
necessary as for such noncompliance.
SIXTEENTH. -THE LESSOR may at any moment, transmit, assign or transfer
the property of the leased premise, either in full or partially, and
without the LESSEE's consent.
In such assumption, the contract herein shall prevail in its terms regarding the
new owner and the latter shall submit him/herself to the obligations stipulated
hereunder as new LESSOR.
SEVENTEENTH. -In the event at any moment after the Starting Date, any of the
improvements is destroyed or damaged by fire or by any other cause being covered
by the insurance policy, then THE LESSOR shall use the resources received from
the insurance company, for the repair of damages. The term "Restore" (or
"Restoration") refers to restore, replace or rebuild (including temporary
restorations and protection of materials still to be completed) the improvements
or any other portion, leaving it as similar as possible to the status and
condition it was in before the disaster.
EIGHTEENTH. -THE LESSOR hereby agrees to warrantee as follows:
a) THE LESSOR hereby warranties his full property of the leased building, and
also that it is free from any leasing, license, concession, franchise,
preferential rights, occupancy rights or any other right of use as for any
other person. Besides, THE LESSOR hereby warranties that THE LESSEE shall
and will have pacific use and enjoyment of the leased building.
b) THE LESSOR is not aware of:
1) Any judicial, arbitration or awarding procedure regarding the
leased building, its property, operation and occupancy.
2) Any protest, claim, charges, petitions or orders or threats by or
before any Administrative authority or Court, regarding obligations
required by the owner, operator or occupant of the leased building or
any other party that may affect the leased building, its property,
operation or occupancy.
3) Any other action, procedure or inquiry either pending or initiated
against or affecting THE LESSOR or the leased building and which may affect
the latter.
c) There are not, inside or under the leased building, residues or substances
considered as "Hazardous Substances", "Hazardous Residues", "Toxic
Residues", or any other similar denomination expressed under any
environmental regulation, either Local, State or Federal, nor which may
affect the environment or natural resources. Neither oil residues or
chemical or of any other kind compounds.
NINETEENTH. -Any notice from either of the parties, shall be deemed as given on
the date it is personally received or otherwise, 10 days after in the event it
was sent through any communication via, either certified mail with
acknowledgement of receipt, telegraph, telex, for THE LESSEE at the address of
the industrial structure he is granting in leasing, to the attention of: the
President of the Company, and to THE LESSOR at the address located on the street
Doctor Hierro No. 307 of Zacatecas City, Zacatecas. Any change of address shall
be notified to the other party in the manner hereinbefore described, but under
no circumstance, may more than two addresses be considered as to carry out such
notices.
TWENTIETH. -The herein contract shall be regulated, executed and
interpreted under the laws of the Mexican United States.
TWENTY-FIRST. -Every party may, at least 10 days in advance to the written
request, execute, inform and send to the requesting party, a statement
certifying that the herein contract has not been modified and is still in force,
or also that such in force contract has been modified. In such a case, a
statement shall be made about any instrument modifying the next contract, the
dates when rents and charges have been paid, and for the better knowledge of the
requesting party, whether the requesting party has incurred in noncompliance
with any of the obligations derived therefrom, specifying the nature of such
noncompliance. This statement shall be intended as reliable information for any
entity receiving it from the requesting party.
TWENTY-SECOND. -THE LESSEE hereby acknowledges that as for rent concept, he has
a debt with the company who had possession of the real estate subject matter
hereof and commits to pay it within a term of three months following the
signature hereof. The foregoing in the intelligence that if he fails to pay the
said debt, the contract herein shall be rescinded with no liability for THE
LESSOR.
TWENTY-THIRD. -The contract herein may not be altered, modified, nor
changed, except by written instrument signed by the parties. Once signed by
the parties, it shall be an integral part hereof.
The parties hereby manifest that there is neither fraud, nor bad faith in the
subscription hereof, and that the instrument herein is signed in Zacatecas City,
Capital City of the State of the same name, on the twelfth day of April, year
two thousand.
THE LESSOR
C.P. GUILLERMO HUIZAR CARRANZA
PLANNING AND FINANCE SECRETARY
ENG. CARLOS LOZANO DE LA TORRE
ECONOMIC DEVELOPMENT SECRETARY
THE LESSEE
HERNAN BERNARDO URRUTIA
LEGAL REPRESENTATIVE