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Exhibit 10.13
*** Text Omitted and Filed Separately
Confidential Treatment Requested
Under 17 C.F.R. §§ 200.80(b)(4)
and 230.406
LEASE AGREEMENT entered into by and between INDUSTRIAS ASOCIADAS
MAQUILADORAS, S. A. de C. V. (hereinafter referred to as IAMSA),
herein represented by Mr. Jaime Roberts Vildosola) and
INDUSTRIAL VALLERA DE MEXICALI, S. A. DE C. V., (hereinafter
referred to as COMPANY), herein represented by Mr. Sergio
Tagliapietra Nassri, Legal Representative, pursuant to the
following RECITALS and CLAUSES.
RECITALS
I.- IAMSA declares that:
A.- It is a Company organized and existing under Mexican General
Corporation Law, as per Public Instrument No. 13,602 dated
August 8, 1955, before Notary Public Number One of the City of
Mexicali, Baja California, Attorney Macedonio R. Gutierrez,
registered under number 2900, pages 339, Volume XII, on
November 3, 1955; this public Instrument was later amended
through other instruments, including Public Instrument Number
229,855, dated August 14, 1987, before Notary Public as
Associate in Protocol of Notary Ten of the Federal District,
Attorney Francisco Lozano Noriega, wherein the actual denomination
of INDUSTRIAS ASOCIADAS MAQUILADORAS, S. A. DE C. V. was adopted.
IAMSA has as its corporate object the development and operation of
Industrial Parks in the City of Mexicali, Baja California, Mexico,
including that known as Las Californias Industrial Park.
B. Mr. Jaime Roberts Vildosola is its Legal Representative,
as evidenced by in Public Instrument No. 230,465, volume 8965,
dated September 28, 1987, executed before Attorney Francisco
Lozano Noriega y Tomas Lozano Molina, Notary Public No. 87 of
Mexico City.
C. IAMSA’s registration number at the Federal Registry of
Tax Payers is: IAM-870622-MF4.
D. The address at which it has its principal place of business
is Km. 10.5 on Highway to San Luis, Rio Colorado, Sonora, Mexicali
Baja California, Mexico.
E. IAMSA has established the "Palaco Industrial Park",
hereinafter referred to as the Industrial Park, and more
specifically shown described on Exhibit "A", which is attached
hereto and made a part hereof.
F. The parties desire to enter into a lease regarding lot number
5, block number 3 & lot number 6 block East, with a total area
of 20,892.22 square meters and a portion of the building located at
Calzada del Oro #2001 int. 5 Parque Industrial Palaco, Mexicali,
B.C. Zip Code 21600. The portion of the building which is subject
of this Lease Agreement is constructed as a basic shell with
warehouse area of approximately 95,000 square feet, which consists
of a portion of the warehouse of the "Scotsdale" building module 3
with a total area of 15,500 square feet ( see Exhibit "B" ).
This area includes production & warehouse (13,926 s.f.),
parking, offices (1,574 s.f.), and access to 2 loading docks and 1
level access ramp. The property subject matter of this lease and
the improvements, together shall hereinafter be referred to as
Leased Property ( See Exhibits A, B & C ).
G. IAMSA has previously applied for and obtained financial loans
through Mexican and Foreign Banking and Lending Institutions, with
which funds, buildings and improvements located in the Industrial
Park, are being constructed.
A. It is organized under the Mexican General Corporation Law as
per Public Instrument No. 22,079, Volume 349 executed on
June 30, 1982, before Attorney Fernando Diaz Ceballos, Notary
Public Number Four of the City of Mexicali, Baja California,
properly registered in the Public Registry of Property and Commerce
of this City of Mexicali, under number 2,039, on August 30,
1982. Such document was amended by means of Public Instrument
Number 26,551, volume 511, dated January 8, 1987, before
Attorney Eduardo Illades Villafaña, Notary Public Number Six
of the City of Tijuana, Baja California, duly registered in the
Public Registry of Property and Commerce of this City of Mexicali,
Baja California, under number 5,339, pages 457, of volume XIII,
First Book, Commerce Section, that contains the change of
denomination to INDUSTRIAL VALLERA DE MEXICALI, S. A. DE C. V.
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B. Mr. Sergio Tagliapietra Nassri verifies
his capacity as attorney-in-fact of COMPANY as per the Public
Instrument No. 28,902 Volume 552 executed on November 27,
1987, before Attorney J. Eduardo Illades Moreno, Notary Public No.
Six of the City of Tijuana, Baja California, properly registered in
the Public Registry of Property and Commerce.
D. The address at which it has its principal place of business
is precisely the Leased Property subject matter of this
Agreement.
CLAUSES
I. SCOPE OF LEASE AGREEMENT
On the express terms and conditions set forth hereinafter, the
scope of this Lease Agreement is as follows: IAMSA hereby leases to
COMPANY, and COMPANY hereby leases from IAMSA the building in the
Industrial Park as precisely described in "Exhibit B" ,
referred to above, which is attached hereto and made a part hereof,
and the improvements as more specifically described in
"Exhibit C" . It is expressly understood that COMPANY
enters this agreement with the intention of fabricating "disposable
medical products".
II. CONSTRUCTION BY IAMSA
A. All improvements to the Leased Property have been constructed
in accordance with specifications approved by IAMSA and
COMPANY.
B. IAMSA shall perform all future improvements in accordance
with all laws, ordinances, regulations, and orders of governmental
authorities, and the Industrial Park Regulations which are attached
hereto as "Exhibit D" .
C. IAMSA will proceed diligently with construction and
completion of the improvements, so as to allow the use of
previously designated areas for the purposes contemplated and in
accordance with the Specifications.
D. COMPANY shall have the right to require changes in the
Specifications during the course of construction provided that such
changes do not unreasonably delay completion of Improvements and
provided that COMPANY reimburses IAMSA upon demand for any
additional costs incurred by IAMSA by reason of changes required by
COMPANY. COMPANY hereby waives the right to object to any delay in
completion caused by said changes in Specifications.
E. The Leased Property shall be considered ready for occupancy
as of July 1, 2003, on which date COMPANY will be able to use
the Leased Property for those purposes previously contemplated and
in accordance with the Specifications.
IAMSA shall diligently complete or repair, as soon as possible,
any items or corrections not completed when the Leased Property is
ready for occupancy.
F. Upon prior written consent of IAMSA, COMPANY may, at any time
prior to the commencement of the term hereof, at its sole risk,
enter upon and install such trade fixtures and equipment in the
Leased Property as it may elect.
G. IAMSA hereby acknowledges that any and all construction
improvements to be completed by IAMSA hereunder, either during the
pre-lease term of afterwards, either with IAMSA’s employees
or third parties contracted by IAMSA, will be the sole
responsibility of IAMSA and therefore guarantees and warrants to
COMPANY that such employees and third parties will be in full
compliance with all pertinent construction and Social Security,
tax, labor and other applicable Mexican laws and regulations.
III. INSTALLATIONS BY COMPANY
A. COMPANY may, at its expense, install on the Leased Property,
such trade fixtures, equipment and furniture as it may deem
necessary; provided that such items are installed and are removable
without damage to the structural integrity of the Building and
Improvements. Said trade fixtures, equipment and furniture shall
remain COMPANY’s property and unless COMPANY is in default
hereunder, shall be removed by COMPANY upon expiration of the term
hereof, or earlier termination of this Lease. COMPANY may also
install temporary improvements in the interior of the Building,
provided that such improvements are installed and removed without
damage to the structure of the Improvements. COMPANY shall repair,
at its sole expense, all damage caused by the installation or
removal of such trade fixtures, equipment, furniture or temporary
improvements.
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B. COMPANY shall perform all installations in
accordance with all laws, ordinances, regulations, orders of
government authorities, and the Industrial Park Regulations which
are attached hereto as "Exhibit D" .
IV. LEASE TERM AND COMMENCEMENT DATE.
B.- Term.- The term of this Lease shall be for five
(5) years, binding for the parties, commencing on the date
stated in item A) above, July 1, 2003 and shall end on the
last day of the last month of the 5 th year of the term, full lease
year, as said term is hereafter defined.
C. Lease Year. The term "Lease Year" as used herein, shall mean
a period of twelve (12) consecutive full calendar months. The
first Lease Year shall begin on the date of commencement of the
term hereof or at occupancy of the Leased Property, if the date of
commencement of the term hereof shall occur on the first day of a
calendar month; if not then the first Lease Year shall commence
upon the first day of the calendar month following the date of
commencement of the term hereof.
D. Renewal of Lease Agreement. It is understood that LESSEE
shall have the right to extend the term of this lease agreement
after termination of the original term. LESSEE shall notify LESSOR
in writing, at least 180 days prior to the termination of the
original term, regarding it’s intention to exercise this
option. If no written notice is received prior to such period, it
is understood that the LESSEE has no intention to renew the lease
and consequently shall immediately proceed to vacate the premises
as stated hereunder. It is also agreed that the payment rent during
the first year of the extension period, will be the same in force
during the last year of the original lease term, reflecting only
the annual increasing as established in Clause V, paragraph A of
this lease agreement.
V. RENT.
A. Lease.- As fixed rent for the Lease of the Leased Premises
during the Lease Term hereof, COMPANY shall pay to IAMSA the amount
equivalent to […***…] currency of the United States
of America) equivalent to […***…] currency of the
United States of America), plus the Value Added Tax, per square
foot per month, payable precisely in such currency or its
equivalent in Mexican Currency at the rate of exchange prevailing
at the time of payment for the sale of dollars at Banco BITAL, Las
Californias Branch. Such amount shall be payable in advance on the
first day of each month at the address of IAMSA. Said rent shall be
adjusted annually to reflect the increase of the Los
Angeles-Anaheim-Orange County Consumer Price Index on each
anniversary of the lease term.
B. Maintenance fee. COMPANY shall pay a monthly maintenance fee
for the building, which covers the costs of landscaping, public
lighting, street up-keep, security guards, common area litter
removal and external building maintenance, at the rate of
[…***…] per square feet plus the Value Added Tax,
payable jointly with the monthly rent. Such fee shall be adjusted
annually to reflect the increase of the Los Angeles-Anaheim-Orange
County Consumer Price Index on each anniversary of the lease
term.
If such rent and maintenance fee are not paid within
(5) days after the first day of any given month, it shall
become delinquent and late payment penalty will be applied of 5% of
the monthly rent.
IAMSA and COMPANY hereby agree that maintenance for specific
equipment such as A/C units, compressors, electrical transformers,
will be COMPANY’s sole responsibility. For such purpose,
COMPANY will obtain a maintenance policy covering said specific
equipment property of IAMSA and COMPANY shall assume all
liabilities concerning it’s own equipment. Further, COMPANY
shall obtain an insurance on such equipment and improvements
property of IAMSA, in an amount sufficient to provide for their
replacement in the event of damage, naming IAMSA as the
beneficiary.
C. Notwithstanding the above statements, COMPANY will pay the
rent provided for in the above, at the address of IAMSA as set
forth in this Agreement, or at the address of the banking financial
institution or to any assignee of IAMSA, as IAMSA may direct, under
the terms of Clause XIII of this Lease Agreement.
* Confidential Treatment Requested
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E. Liquidated Damages. Termination by IAMSA of this Lease
Agreement due to a default of COMPANY, prior to or during the first
six (6) months of the Lease Term, or termination by COMPANY
without cause, entitles IAMSA to apply as liquidated damages all
sums paid or deposited by COMPANY, as prepaid rent or as a security
deposit, in addition to any other rights of IAMSA provided for
herein.
F. Setoff. The payment of any rent due under this Lease, shall
not be withheld or reduced for any reason whatsoever, and COMPANY
agrees to assert any claim, demand, or other right against IAMSA
only by way of an independent proceeding.
VI. USE.
The Leased Property shall be used and occupied for any Lawful
industrial purpose not in violation of the Industrial Park
Regulations attached hereto as "Exhibit D" . COMPANY shall
promptly and adequately comply with all laws, ordinances and orders
of all governmental authorities affecting the Leased Property or
that may be a menace to other occupants of the Industrial Park.
VII. INSURANCE.
A. Fire and Other Insurance.- Effective as of the date of
commencement of the Lease, COMPANY will obtain insurance covering
the building, building improvements, its contents and third parties
damages, in an amount sufficient to provide for their replacement.
All insurance policies will name IAMSA as the beneficiary. If such
policies are not obtained on or before the commencement date, IAMSA
will contract an insurance policy equivalent to cover such
contingencies and COMPANY will be responsible to reimburse IAMSA
the amount for the corresponding premiums immediately upon
demand.
B. Form and Delivery of Policies.- Each insurance policy
referred to in the preceding paragraphs shall be in a form approved
by the Department of Finance and Public Credit and written with one
or more companies licensed to do insurance in Mexicali, Baja
California, Mexico, and shall provide that it shall not be subject
to cancellation or change, except after at least 30 days prior
written notice to IAMSA. Prior to the Commencement Date of the
Lease Term, each of the parties shall procure and maintain such
Insurance deemed necessary to cover its liabilities and property.
COMPANY shall deliver to IAMSA the corresponding policies within
thirty (30) days following the date of signature of the
agreement.
C. Guaranty. It is clearly understood that LESSOR has been
induced to enter into this Lease with LESSEE due to the guaranties
to be submitted by LESSEE. Consequently, LESSEE shall assure that a
Guarantee under the form of Exhibit "E" attached hereto, is
given by Masimo Corporation, a Delaware corporation ("GUARANTOR"),
to insure the adherence by LESSEE of all of the conditions,
covenants, obligations, liabilities and agreements set forth in
this Lease Agreement. In lieu of the aforementioned Guaranty, In
the event that the GUARANTOR does not satisfy the financial
requirements, the parties shall agree on some other arrangement
such rental insurance or bond for a period covering the Initial
Lease Term.
VIII. TAXES AND ASSESSMENTS.
With the exception of the income tax and fixed asset tax imposed
on IAMSA, which shall be borne by IAMSA, COMPANY shall pay all
taxes and assessments of every kind, which are or may be at any
time during the Leased Term levied against the Leased Property, the
Lease Agreement, or COMPANY. All such taxes and assessments shall
be paid by COMPANY, and receipt showing their payment delivered to
IAMSA before such taxes and assessments become delinquent.
All taxes which shall become due for the first and last years of
the Lease Term shall be distributed proportionally between IAMSA
and COMPANY in accordance with the respective numbers of months
during which each party shall be in possession of the Leased
Property. COMPANY also agrees to pay all taxes and assessments of
every kind levied upon any and all personal property of COMPANY,
its successors and assigns, whether same shall or may become a lien
upon the Leased Property. All such taxes and assessments shall be
paid by COMPANY before the same become delinquent.
IX. REPAIRS, ALTERATIONS AND IMPROVEMENTS.
1. After receipt of written notice from COMPANY, IAMSA, at its
expense shall, with minimum interference of COMPANY’s normal
use of the Leased Property, diligently proceed to repair any
structural defects in the roof or exterior bearing walls, as
constructed by IAMSA, excepting normal use, wear and damage. IAMSA
shall not be liable for any damages, and shall not be obligated to
make any repairs due to damages caused by any negligent act or
omissions of
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COMPANY, its employees, agents, invitees or
contractors. IAMSA shall have no other obligation to maintain or
repair any other
portion of the Leased Property, except for the repair of those
improvements constructed by, IAMSA for COMPANY for a period of one
year after its completion. IAMSA shall not be liable to COMPANY for
any damage resulting from lAMSA’s failure to make repairs,
unless COMPANY has notified IAMSA of the need for such repairs, and
IAMSA has failed to commence such repairs within seven
(7) working days after said notice has been given and has
failed to complete the same in a diligent manner in the case of
urgent matters.
2. If IAMSA fails to make the repairs described in Clause IX,
"A", COMPANY may, but shall not be required to, make or cause such
repairs to be made, and IAMSA shall, on demand, immediately pay to
COMPANY the cost of the repairs.
B. COMPANY
1. COMPANY, at its expense, shall keep and maintain in good
order and repair, except for normal use and wear, all of the Leased
Property, including improvements, except for those obligations of
IAMSA stated in paragraph "A", 1, of this Clause including but not
limited to, all plumbing, sewage and other utility facilities that
are within the Leased Property, as well as fixtures, partitions,
walls (interior and exterior, including painting as often as
necessary), floors, ceilings, signs, air conditioning, electric
installations, heating, and similar equipment, doors, windows,
plate glass and all other repairs to the Leased Property. COMPANY
at its expense, shall repair all leaks except those caused by
structural defects in the roof and exterior walls. The plumbing
facilities shall not be used for any other purpose than that for
which they were constructed. The expense of any breakage, stoppage
or damage resulting from a violation of this provision, shall be
borne by COMPANY. COMPANY shall store all trash only temporarily
within Leased Property, and shall arrange for the regular pick-up
of trash at COMPANY’s expense. COMPANY shall not burn any
trash of any kind in or about the Leased Property or the Industrial
Park or near it.
2. COMPANY shall require lAMSA’s written consent to make
any alterations, improvements or additions to the exterior walls
and roof of the Leased Property with a cost exceeding US$5,000.00
(FIVE THOUSAND DOLLARS 00/100 CURRENCY OF THE UNITED STATES OF
AMERICA). COMPANY shall not damage any floors, walls, ceilings,
partitions, or any wood, stone or ironwork on or about the Leased
Property in connection with the construction of any such
alterations or improvements.
3. COMPANY shall keep the Leased Property free and clear of all
encumbrances and liens arising out of acts or omissions of COMPANY,
including those arising out of acts or construction done or ordered
by COMPANY. However, if by reason of any work performed, materials
furnished or obligations incurred by COMPANY with any third party,
or any other act or omission by COMPANY, IAMSA is made liable or
involved in litigation, COMPANY shall hold harmless and indemnify
IAMSA including any costs and expenses, and attorney’s fee
incurred by reason thereof. Should COMPANY fail fully to discharge
any such encumbrances or liens within thirty (30) days after
the date the same appears of record or fail to provide a bond
acceptable to IAMSA in case of litigation, IAMSA at its option, may
pay all or any part thereof. If IAMSA pays any s
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