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CONTRACT OF LEASING

Law 25.248

Concept. Object. Responsibilities, actions and guarantees in the acquisition of the good. Oponibility. Purchase option. Aspects leasing assets tax.

Sanctioned: May 10, 2000.

Partially promulgated: June 8, 2000.

The Senate and Chamber of Deputies of the Argentine Nation assembled in Congress, etc. sanction with force of Law.

CHAPTER I

From the leasing contract

ARTICLE 1 . Concept. In the leasing contract the giver agrees to transfer to the taker the possession of a certain and determined asset for its use and enjoyment, against the payment of a canon and gives it a purchase option for a price.

ARTICLE 2 . Object. Furniture and immovable property, trademarks, patents or industrial models and software, owned by the giver or on which the giver has the power to give in leasing.

Article 3 . Canon. The amount and periodicity of each canon is determined conventionally.

ARTICLE 4 Price of exercise of the option. The operating price of the purchase option must be set in the contract or be determined according to agreed procedures or guidelines.

ARTICLE 5o . Modalities in the choice of good. The object of the contract may:

(a) Buy by the giver to person indicated by the taker;

(b) Buy by the dicer according to the user specifications or according to catalogues, brochures or descriptions identified by it;

(c) To be bought by the giver, who replaces the taker, for the purpose, in a contract of sale that he has entered into;

(d) Be the property of the giver prior to its contractual link with the taker;

(e) It requires the giver to the taker by the same contract or to have previously acquired it;

(f) To be at the legal disposal of the giver by title that allows him to constitute leasing on him.

ARTICLE 6 . Responsibilities, actions and guarantees in the acquisition of the good. In the cases of subparagraphs (a), (b) and (c) of the previous article, the assignor complies with the contract by acquiring the assets indicated by the taker. The taker may claim from the seller, without the need for assignment, all rights emerging from the sales contract. The giver can conventionally be freed from the responsibilities of surrender and the guarantees of eviction and redhibitive vices.

In the cases of subparagraph (d) of the previous article, as well as in those cases where the giver is a manufacturer, importer, seller or builder of the good given in leasing, the giver cannot be freed from the obligation of delivery and from the guarantee of eviction and redhibitive vices.

In the cases of subparagraph (e) of the same article, the giver does not respond by the obligation of surrender or by guarantee of eviction and redemptive vices, unless otherwise agreed.

In the cases of subparagraph (f) the rules of the preceding paragraphs of this article shall apply, as appropriate to the specific situation.

ARTICLE 7 . Services and accessories. The contract may include the services and accessories necessary for the design, installation, commissioning and making available the goods given in leasing, and the price of the canon calculation.

ARTICLE 8 . Form and registration. Leasing must be used in public writing if it has as object immovable, ships or aircraft. In other cases it can be held by public or private instrument.

For the purposes of its third-party effectiveness, the contract must be registered in the registry corresponding to the nature of the thing that constitutes its object. Registration may be effected from the date of conclusion of the leasing contract, and with the exception of the date on which delivery of the subject matter of the committed benefit is appropriate. In order to produce effects against third parties from the date of delivery of the object of leasing, registration must be requested within five (5) working days. After that term, it will produce that effect since the contract is presented for registration. If it is unregisterable movable things or software, they must register in the Register of Prendary Credits of the place where things are located or, if any, where the thing or software should be made available to the taker. In the case of property registration is maintained for the period of twenty (20) years; in the other property it is maintained for ten (10) years. In both cases it can be renewed before its expiry, by the request of the giver or court order.

Article 9 . Modalities of goods. For the purposes of registration of the leasing contract, the legal and regulatory rules corresponding to the nature of the property are applicable.

In the case of unregisterable furniture or software, the recordable rules of the Clothing with Registry Act (text ordered by decree 897 of 11 December 1995) and the other rules governing the operation of the Register of Prendary Credits are applied.

When leasing includes movable things in different jurisdictions, article 12 of the Law on Clothing with Registry (text ordered by decree 897 of 11 December 1995).

The registration must issue certificates and information, applying article 19 of the aforementioned law. The certificate indicating that any leasing contract is not registered on certain goods has legal effect up to twenty-four (24) hours of issue.

ARTICLE 10. . Transfer of goods. The taker may not remove the movable property from the place in which they are to be found according to the contract inscribed. They may only be transferred in express conformity with the giver, granted in the contract or by subsequent written act, and after the transfer and conformity of the giver has been registered in the corresponding records. The first, second, fifth, sixth and seventh paragraphs of article 13 of the Law on Clothing with Registry (text ordered by decree 897 of 11 December 1995).

ARTICLE 11. . Oponibility. Bankruptcy. The effects of the contract duly registered are to the creditors of the parties. The borrower ' s creditors may be subrogated from his or her rights to exercise the purchase option.

In the event of a contest or bankruptcy of the dicer, the contract continues for the agreed time period, with the adopter able to exercise the purchase option in the foreseen time.

In the event of the bankruptcy of the taker, within the sixty (60) days of decree, the syndic may choose between continuing the contract in the agreed conditions or resolving it. In the preventive examination, the debtor may choose to continue the contract or resolve it, within the time frames and through the procedures provided for in article 20 of Law 24.522. After such time periods without the option, the contract is considered to be resolved in full law, the property must be restored immediately to the giver, by the judge of the contest or of the bankruptcy, at the request of the giver, with the sole display of the contract registered and without the need for prior processing or verification. Without prejudice to this the giver may claim in the contest or in the bankruptcy the accrued canon until the return of the good, the preventive contest or even the declarative judgment of the bankruptcy, and the other credits resulting from the contract.

ARTICLE 12. . Use and enjoyment of good. The taker may use and enjoy the object of leasing according to his destiny, but cannot sell, tax or dispose of it. The ordinary and extraordinary expenses of conservation and use, including insurance, taxes and fees that relapse on the goods and sanctions caused by their use, are borne by the adopter, except convention on the contrary.

The taker may lease the object good of leasing, except agreement to the contrary. In no case can the landlord or tenant claim rights over the good that prevent or limit in any way the rights of the giver.

ARTICLE 13. . Reclaimive action. The sale or gravel consented by the taker is inoponible to the giver.

The giver has vindictive action on the piece of furniture that is in the possession of any third party, and can directly implement the provisions of article 21 (a) of this law, without prejudice to the responsibility of the taker.

Furniture things that are incorporated by accession to a property after having been recorded the leasing, may be separated from the property for the exercise of the rights of the giver.

ARTICLE 14. . Purchase option. Exercise. The purchase option can be exercised by the taker once it has paid three quarters (3/4) parts of the total fixed canon, or before the parties agree.

ARTICLE 15. . Extension of the contract. The contract may provide for its extension to the option of the adopter and the conditions of its exercise.

ARTICLE 16. . Transmission of domain. The right of the taker to the transfer of the domain is born with the exercise of the purchase option and the payment of the price of the exercise of the option as determined by the contract. The domain is fulfilled, except that the law requires others in accordance with the nature of the good in question, for which the parties must grant the documentation and perform the other necessary acts.

ARTICLE 17. . Objective responsibility. The emerging objective responsibility of article 1.113 of the Civil Code rests solely on the taker or guardian of the things given in leasing.

ARTICLE 18. . Cancellation. Registration of leasing on non-recordable furniture and software can be cancelled:

(a) When so provided by a strong court ruling in process in which the giver had the opportunity to take due participation;

(b) When requested by the giver or its assignee;

(c) When requested by the adopter after the time limit and under the conditions under which, according to the contract registered, he may exercise the option of purchase. For this purpose you must accompany record of deposit in the official bank or that corresponding to the jurisdiction of the registration of the registration, the amount of the total unpaid canons and the price of exercise of the option, with its accessories, if any. You must be accrediting the giver by offering the payments and requesting the cancellation of the registration, granting it a minimum period of fifteen (15) working days, and having satisfied the other contractual obligations. The registrar must notify the givenr by certified letter addressed to the address constituted in the contract. If the notified manifests conformity the registration is cancelled. If the giver does not comment within the fifteen (15) business days from the notice, the orderer proceeds to the cancellation if he considers that the deposit is in accordance with the contract, of which he must notify the giver and the taker. In the event of any observations of the giver in the term indicated or the deposit is insufficient, the order must notify the taker, who has the appropriate actions.

ARTICLE 19. . Termination of contracts or credits of the giver. The giver can always assign current or future credits by canon or purchase option exercise price. For the purposes of its titulization, it may do so under articles 70, 71 and 72 of Law 24,441. This assignment does not prejudice the rights of the taker in respect of the exercise or non-exercise of the purchase option or, if any, to the early cancellation of the canons, all as agreed in the contract entered.

ARTICLE 20. . Failure and execution in case of properties. When the object of leasing is real things the breach of the obligation of the taker to pay the canon results in the following effects:

(a) If the taker has paid less than one quarter (1/4) of the agreed total canon amount, the mora is automatic and the giver can claim the eviction. It should be seen for five (5) days by the taker, who can prove documentaryly the payment of the periods that are claimed or paralyzed, for the sole time, by paying the dues, with more interest and costs. Otherwise, the judge must have the release without further action;

(b) If the appellant has paid a quarter (1/4) or more but less than three quarters (3/4) of the agreed canon, the abode is automatic; the giver must inestimate the payment of the or the periods owed with more interest and the taker has for one time not less than sixty (60) days, counted from receipt of the notice, for payment of the or periods owed with more interest. After that period without the payment being verified, the giver may sue the eviction, which must be seen for five (5) days by the taker. Within that time period, the appellant may demonstrate the payment of the claimed, or paralyze the procedure by paying the arrears with more interest and costs, if it had not previously resorted to this procedure. If, according to the contract, the adopter can exercise the purchase option, in the same time period he can also pay the exercise price of that option, with its contractual and legal accessories. Otherwise, the judge must have the release without further action;

(c) If the default occurs after the payment of the three quarters (3/4) of the canon, the mora is automatic; the giver must intimate it to the payment and the taker will have the option to pay within the ninety (90) days, counted from the receipt of the notice the due plus its interest if it has not previously resorted to that procedure or the payment price of the purchase option resulting from the application, After that period without the payment having been verified, the giver may demand the eviction, which should be seen by the taker for five (5) days, who can only paralyze him by exercising any of the options provided for in this paragraph, adding the costs of the process;

(d) Produced the eviction, the giver may claim payment of the canon periods due until the time of the launch, with more interest and costs, by the executive way. The giver may also claim damages resulting from the abnormal deterioration of the imputable thing when taken by dolo, guilt or negligence by the relevant procedural path.

ARTICLE 21. . Abduction and execution in case of furniture. When the object of leasing is a piece of furniture, in front of the aperture in the payment of the canon, the giver can:

(a) To obtain the immediate abduction of the property, with the sole presentation of the contract inscribed, and to prove to have appealed to the adopter giving it a period not less than five (5) days for regularization. Produced the kidnapping, the contract is solved. The giver may promote execution for the collection of the canon which was normally accrued until the full period in which the abduction occurred, the penal clause agreed in the contract and its interests; all without prejudice to the action of the giver for damages, and the action of the taker if they correspond; or

(b) Executive action for the collection of the unpaid canon, including the entire outstanding canon; if agreed, with the sole presentation of the registered contract and its accessories. In this case only the kidnapping proceeds when the regular period of leasing has expired without having paid the full canon and the price of the purchase option, or when the danger in the conservation of the good is shown in sum, the giver must grant sufficient caption. In the executive trial provided for in both subparagraphs, execution may be included against the cobblers or guarantors of the appellant. The constituted domicile shall be fixed in the contract.

CHAPTER II

Tax aspects of assets for leasing

Value added tax

ARTICLE 22. In the leasing contracts provided for in this Act, which are subject to movable property, the taxable fact established in the Law on Attached Value Tax (text ordered in 1997 and its modifications) shall be perfected at the time of payment or in the time of the perception, whichever was previously, of the canon and of the purchase option.

ARTICLE 23. Amend the Law on Attached Value Tax (text ordered in 1997 and its modifications), incorporating as article 7 (i) of Title II the following text: "The contract of leasing that is intended for single and permanent housing."

ARTICLE 24. In the case of leasing contracts on cars, the restriction for the calculation of the tax credit set out in point 1, of the third paragraph, of subparagraph (a), of article 12 of the Attached Value Tax Law (text ordered in 1997 and its modifications), will only be applicable in respect of its canons and purchase options, to the extent that the amounts corresponding to the place of import will exceed twenty thousand dollars

ARTICLE 25.. Please enable the Executive Power to extend, subject to the applicable regulations to be established, the value-added tax financing regime provided for in Act No. 24,402, with the aim of enabling, on an optional basis, the financing of the payment of the said tax that causes the purchase or definitive importation of goods destined for leasing operations.

CHAPTER III

Final provisions

ARTICLE 26. . Supplementary rules. The leasing contract is applied subsidiarily to the rules of the location contract, as long as they are compatible, while the taker has not paid the entire canon and exercised the option, with payment of its price. The provisions relating to the minimum and maximum time frames of the location of things or conventionally excluded are not applicable to leasing.

Exercising the purchase and payment option your price is applied subsidiarily to the rules of the sales contract.

ARTICLE 27. . Derogation. Default of Title II "Leasing Contract" (Articles 27-34, both inclusive) of Law 24.441.

ARTICLE 28. Watch. Chapter I (articles 1 to 21, both inclusive) of this Act applies to leasing contracts concluded prior to their validity, unless such application leads to the nullity or inopplicability of the contract or one or more of its clauses, in which case the law most favourable to its validity applies.

The provisions of chapter II (arts. 22-25, both inclusive) of this Act shall enter into force on the day of its publication in the Official Gazette and shall be effective for the operations between that date and that established by the Executive Power as the time limit for the completion of the regime.

The qualifications, deadlines and other requirements or conditions of leasing tax treatment do not prevent the application of this law to all other effects.

ARTICLE 29. . Contact the executive branch.

DADA IN THE SESSION OF THE ARGENTINE CONGRESS, IN GOOD AIRES, TO THE TWENTY DAYS OF THE MONTH OF THE YEAR DOS MIL.

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PASCUAL RAFAEL. Luis Flores Allende. . Mario L. Pontaquarto.

NOTE: The bold texts were observed.