Exhibit 10.16
PUERTO RICO INDUSTRIAL DEVELOPMENT COMPANY
XX XXX 000000
XXX XXXX, XXXXXX XXXX 00000-0000
LEASE CONTRACT
PROJECT NO. T-0609-0-63
LOCATION: GUAYAMA, PUERTO RICO
THIS AGREEMENT ENTERED into on July 15, 1994 BY: AS "LANDLORD", THE PUERTO
RICO INDUSTRIAL DEVELOPMENT COMPANY, AND AS "TENANT", PUERTO RICO INDUSTRIAL
MANUFACTURING OPERATING, CORP.
WITNESSETH
WHEREAS, LANDLORD is the owner of certain landsite and building, identified
in the Epigraph, hereinafter referred to as the Premises.
WHEREAS, LANDLORD has agreed to lease to TENANT, and TENANT has agreed to
hire from LANDLORD the Premises.
NOW THEREFORE, in consideration of the foregoing premises, the parties
herein agree on this lease subject to the following:
TERMS AND CONDITIONS
ONE: LANDLORD hereby demises and lets unto TENANT, and TENANT hereby leases
from LANDLORD the Premises which are fully described in Schedule "A" hereto
annexed and made a apart hereof.
The Premises are subject to the encumbrances, liens and/or restrictions, if
any, that may appear from said Schedule "A". Furthermore, the air rights of the
Premises, are excepted and reserved to LANDLORD.
TWO: Premises shall be used and occupied exclusively in the manufacture of
"Computers and Peripherals". (SIC. #0347, 03572 and 03575).
THREE: TENANT shall hold the Premises for a period of Five (5) years. TENANT
hereby acknowledges that the building herein demised is in need of certain
repairs which LANDLORD undertakes to commence presently after execution hereof;
therefore, the terms of the leases hereunder shall, anything to the contrary
notwithstanding commence on the tenth (10th) working day after the termination
notice sent to TENANT by Certified Mail that the building is ready for
occupancy.
FOUR: Commencing on the first day of the following month after the
commencement term of this, TENANT shall pay to LANDLORD an annual rental of
$2.20 per square foot of gross building area during the term of this lease.
This rental shall be paid in equal monthly installments of $4,190.17.
The monthly installments for rent specified herein, shall be paid in advance
on the first day of each month at LANDLORD'S office, or at any other place that
LANDLORD may notify. In the event that the date of commencement does not fall on
the first of the month, TENANT further agrees to pay the first partial monthly
installments, prior to, or on the date of commencement.
FIVE: The deposit required under the provisions of this contract amounts to
(a) $2,095.04 previously deposited by TENANT to cover the
reservation period of Project T-0609-0-63 (CR# 13226) shall be credited to
the required deposit and (b) $3,938.80 to be paid by TENANT in certified
check simultaneously with the execution of this Contract.
This deposit shall guarantee the compliance by TENANT of its obligations,
under this Contract, particularly, but not limited to, the payment of rent, the
compliance of the environmental classes herein included and the return of the
Premises in proper condition at the termination of this Lease. On said
termination, if TENANT is not in default of any of the terms and conditions of
this Contract, LANDLORD will return to TENANT the sum of money, if any, held
pursuant to this provision, after LANDLORD'S Environmental office certifies that
there are no environmental deficiencies as a result of TENANT'S manufacturing
operation on the demised Premises.
SIX: TENANT agrees to have on the date of commencement of the term of this
Lease a capitalization of $175,000.000.
Likewise TENANT agrees to install within six (6) months from the same date
manufacturing machinery and equipment with a value of at least $100,000.00.
This shall not include the cost of transportation and installation thereof,
nor its ordinary depreciation after installation, and within eighteen (18)
months from the date of commencement of the term, to employ a minimum of thirty
(30) production workers. The aforementioned levels, shall be maintained
throughout the term of this Lease or any extension thereof.
SEVEN: All notices, demands, approvals, consents and/or communications
herein required or permitted shall be in writing. If by mail should be certified
and to the following addresses, to LANDLORD: XX XXX 000000, XXX XXXX, XXXXXX
XXXX 00000-0000. To TENANT:
ATT. Xxxxx X. Xxxxxxxxx
GENERAL COUNSEL
0-0 Xxxxxxxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000-0000
Phone (000) 000-0000
(000) 000-0000
Fax (000) 000-0000
EIGHT: Net Lease -- This Lease shall be interpreted as a net lease; it being
the exclusive responsibility of TENANT to pay for all operating expenses,
utilities, maintenance, expenses, insurance, taxes or any other costs, expenses
or charges of any nature not specifically assumed by LANDLORD hereunder.
NINE: Warranty as to use -- LANDLORD does hereby warrant that at the time of
the commencement of the term of this Lease, the Premises may be used by TENANT
for the manufacturing purposes herein intended which are deemed consistent with
the design and construction in accordance with the corresponding plans and
specifications.
TEN: Alterations -- TENANT shall make no alterations, additions or
improvements to the Premises without the prior consent of LANDLORD and all such
alterations, additions or improvements made by or for
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TENANT, shall be at TENANT'S own cost and expenses and shall, when made, be
the property of LANDLORD without additional consideration and shall remain upon
and be surrendered with the Premises as a part thereof at the expiration or
earlier termination of this Lease, subject to any right of LANDLORD to require
removal or to remove as provided for hereinafter.
In the event TENANT asks for LANDLORD'S consent for any alteration; LANDLORD
may at its option, require from TENANT to submit plans and specifications for
said alteration. Before commencing any such work, said plans and specifications,
if required, shall be filed with and approved by all governmental agencies
having jurisdiction thereof, and the consent of any mortgagee having any
interest in or lien upon this Lease shall be procured by TENANT and delivered to
LANDLORD if required by the term of the mortgage.
Before commencing any such work, TENANT shall at TENANT'S own cost and
expense, deliver to LANDLORD a General Accident Liability Policy more
particularly described in Article THIRTY (30) hereof, but said policy shall
recite and refer to such work, and in addition thereto, if the estimated cost of
such work, and in addition thereto, if the estimated cost of such work is more
than FIVE THOUSAND DOLLARS ($5,000.00), TENANT shall, at TENANT'S own cost and
expense deliver to LANDLORD a surety bond or a performance bond from a company
acceptable to LANDLORD, or a similar bond or other security satisfactory to
LANDLORD, in an amount equal to the estimated cost of such work, guaranteeing
the completion of such work within a reasonable time, due regard being had to
conditions, free and clear of materialmen liens, mechanics liens or any other
kind of lien, encumbrances, chattel mortgages and conditional bills of sale and
in accordance with said plans and specifications submitted to and approved by
LANDLORD. At LANDLORD'S option TENANT shall provide a blanket-written guarantee
in an amount sufficient to satisfy LANDLORD as to all alterations, changes,
additions and improvements to the Premises in lieu of separate guarantee for
each such project.
TENANT shall pay the increased premium, if any, charged by the insurance
companies carrying insurance policies on said building, to cover the additional
risk during the course of such work.
ELEVEN: Power Substation -- If required by TENANT'S operations, TENANT
shall, at its own cost and expense, construct and /or install a power substation
and connect it to the PUERTO RICO ELECTRICAL POWER AUTHORITY (PREPA)
distribution lines, for voltages up to [number illegible in master] KV; and to
PREPA transmission lines for voltages of 38 KV, all in conformity to PREPA'S
requirements. Such construction shall, in no event, be
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undertaken by TENANT until after LANDLORD has approved the location thereof,
as well as the routing of the power line extension.
TWELVE: Repairs and Maintenance -- TENANT shall, at its own cost and
expense, put, keep and maintain in thorough repair and good order and safe
condition the building and improvements standing upon the Premises at the
commencement of the term hereon or thereafter erected upon the premises, or
forming part of the Premises, and their full equipment and appurtenances, the
sidewalk areas, sidewalk hoists, railing, gutters, curbs and the like in from of
the adjacent to the Premises, and each and every part thereof, both inside and
outside, extraordinary and ordinary, and shall repair the whole and each and
every part thereof in order to keep the same at all times during the term hereof
in thorough repair and good order and safe conditions, whenever the necessity or
desirability therefore may occur, and whether or not the same shall occur, in
whole or in part, by wear, tear, obsolescence or defects, and shall use all
reasonable precautions to prevent waste, damage or injury, except as provided
hereinafter.
LANDLORD and not TENANT, shall be responsible for and shall promptly correct
any defects in the building on the Premises which are due to faulty design, or
to errors of construction not apparent at the time the Premises were inspected
by TENANT for purposes of occupancy by TENANT; this shall not be interpreted to
relieve TENANT of any responsibility or liability herein otherwise provided,
including among others, for structural failure due to the fault or negligence of
TENANT.
TENANT shall also, at TENANT'S own cost and expense, maintain the
landsite in thoroughly clean condition; free from solid waste (which includes
liquid and gaseous waste as defined by the Resource Conservation and Recovery
Act), and the Regulation on Hazardous and Non-Hazardous Waste of the
Environmental Quality Board, as amended, rubbish, garbage and other
obstructions. Specifically, TENANT shall not use said landsite, nor permit it
to be used, as a deposit or as a dump for raw materials, waste materials,
hazardous, toxic or non-toxic substances, or substances of whichever nature.
TENANT shall neither make any excavation for the purpose of storing, putting
away and/or concealing raw materials or waste materials of any kind.
Underground storage of hazardous and /or toxic substances is specifically
prohibited.
TENANT shall not do or cause to be done, nor permit on the Premises anything
deemed extra hazardous, nor shall it store in the Premises flammable or toxic
products of any class or kind without taking the proper precautions and
complying with applicable Federal and Commonwealth laws and regulations.
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In case TENANT needs to store in the landsite raw materials of a hazardous
and/or toxic nature or hazardous and/or toxic wastes, TENANT shall notify
LANDLORD and secure its prior authorization. LANDLORD shall be furnished with a
copy of any permit issued for such storage.
Although it is not intended that TENANT shall be responsible for any
decrease in value of the Premises due to the mere passing of time, or for
ordinary wear and tear of surfaces and other structural members of the building,
nevertheless TENANT shall; (i) replace, with like kind and quality, doors,
windows; electrical, sanitary and plumbing, fixtures; building equipment and/or
other facilities or fixtures in the Premises which through TENANT's use, fault
or negligence, become too worn out to repair during the life of this Lease, (ii)
paint the property inside and outside as required.
In addition to the foregoing, TENANT shall indemnify and safe harmless
LANDLORD from and against any and all cost, expenses, claims, losses, damage, or
penalties, including counsel fees, because of or due to TENANT's failure to
comply with the foregoing, and TENANT shall not call upon LANDLORD for any
disbursement or outlay of money whatsoever, and hereby expressly releases and
discharges LANDLORD of and from any liability or responsibility whatsoever in
connection therewith.
THIRTEEN: Roof Care -- TENANT, without the prior consent of LANDLORD, shall
not: (i) erect or cause to be erected on the roof any billboard, aerial sign, or
structure of any kind, (ii) place any fixture, equipment or any other load over
the roof, (iii) drill any hole on the roof for whichever purpose, (iv) use the
roof for storage, nor (v) correct any leaks whatsoever, this being LANDLORD's
sole responsibility. Furthermore, TENANT shall take all reasonable precautions
to insure that the drainage facilities of the roof are not clogged and are in
good and operable conditions at all times.
FOURTEEN: Floor Loads -- TENANT hereby acknowledges that it has been
informed by LANDLORD that the maximum floor load of the Premises herein demised
is 150 pounds per sq. ft. Therefore, TENANT hereby agrees that in the event the
load of the machinery and equipment to be installed thereat exceeds such maximum
load, it shall, at its own cost and expense, carry out any improvements to the
floor of the Premises which may be necessary to support such additional load, it
being further agreed and understood that construction and/or installation of
such improvements shall not be commenced until after LANDLORD's approval of the
plans to be prepared therefor by TENANT and thereafter,
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after completion of construction and/or installation of said facilities, they
shall be deemed covered by and subject to the applicable provisions of this
Contract; it being further specifically agreed and understood that upon
termination of this Lease, such facilities shall be removed by TENANT, at its
own cost and expense, or in the alternative, and upon request by LANDLORD,
they shall remain as part of the Premises with no right whatsoever on the
part of TENANT to be reimbursed and/or compensated therefor.
FIFTEEN: Fixtures -- TENANT shall not affix to the ceiling, nor to its
supporting joists or columns, nor to any of its walls, any air conditioning
unit, nor any other fixture, without the prior consent of LANDLORD.
SIXTEEN: Environmental Protection and Compliance -- TENANT agrees, as a
condition hereof, that it will not discharge its solid, liquid or gaseous
industrial and/or sanitary effluent or discharges, either into the sewer
system and/or into any other place until after required authorizations
therefor have been obtained from the Puerto Rico Aqueduct and Sewer
Authority, and/or the Department of Health of Puerto Rico and/or
Environmental Quality Board, and/or any other governmental agency having
jurisdiction thereof and TENANT further agrees and undertakes to pre-treat
any such effluent, prior to discharge thereof as required by the said
Authority, Department and/or governmental agency with jurisdiction, and/ or
to install any equipment or system required, and to fully abide by and comply
with any and all requisites imposed thereby, and upon request by LANDLORD to
submit evidence of such compliance; it being agreed that non-compliance
thereof by TENANT for a period of ninety (90) days after notice shall be
deemed an additional event of default under the provisions hereof provided,
that no construction and/or installation shall be made until LANDLORD has
approved of it.
TENANT shall also, at TENANT'S own cost and expense, construct and maintain
Premises, processes and/or operating procedures in compliance with the terms,
conditions and commitments specified in any Environmental Impact Statement,
Environmental Assessment or any other analogous document produced by the
Commonwealth of Puerto Rico, Economic Development Administration/LANDLORD as
lead agency, or by any other governmental agency in connection with the approval
or operation of the project.
TENANT shall also serve LANDLORD with a copy of any lawsuit, notice of
violation order to show cause or any other regulatory or legal action against
TENANT in any environmental [material missing in master]
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TENANT shall also serve LANDLORD with a copy of any permit granted to TENANT
for air emissions, water discharge, solid waste generation, storage, treatment
and/or disposal, and for any hazardous and /or toxic waste raw materials or
by-products used or generated, stored, treated and/or disposed or any other
endorsement, authorization or permit required to be obtained by TENANT.
TENANT shall also serve LANDLORD with a copy of any filing or notification
to be filed by TENANT with any regulatory agency or any environmentally related
case or issue, especially in any situation involving underground or surface
water pollution, hazardous and/or toxic waste spillage and ground contamination.
The notification to LANDLORD shall take place not later than the actual filing
of the pertinent documents with the regulatory agency.
SEVENTEEN: Improper Use -- TENANT, during the term of this Lease and of any
renewal or extension thereof, agrees not to use or keep or allow the leased
Premises or any portion thereof to be used or occupied for any unlawful purpose
or in violation of this Lease or of any certificate of occupancy or certificate
of compliance covering or affecting the use of the Premises or any portion
thereof, and will not suffer any act to be done or any condition to exist on the
Premises or any portion thereof, or any article to be brought thereon, which may
be dangerous, unless safeguarded as required by law, or which may in law,
constitute a nuisance, public or private, or which may make void or voidable any
insurance then in force on the leased Premises.
EIGHTEEN: Government Regulations -- TENANT agrees and undertakes to abide by
and comply with any and all rules, regulations and requirements of the Planning
Board of Puerto Rico, the Department of Health, the Environmental Quality Board,
the Environmental Protection Agency (EPA), where applicable and/or of any other
governmental agency, having jurisdiction thereon applicable to TENANT's
operations at the Premises and/or products to be manufactured thereat, and if
requested by LANDLORD, TENANT shall submit evidence of such compliance; it being
agreed and understood that noncompliance with any and all such rules,
regulations and requisites shall be deemed an additional event of default under
the provisions of this Contract, unless remedied within thirty (30) days after
receipt of notice thereof.
Any and all improvements to the Premises required by any governmental
agency, having jurisdiction hereon so as to carry TENANT's operations in
accordance with the regulations and requisites thereof, shall be at TENANT's own
cost and expense, except for any
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improvements that may be required as a result of any violation by LANDLORD
that may exist at the effective date hereof other than violations caused by
TENANT or TENANT's agents.
TENANT further agrees and undertakes to install in the Premises, at its
own costs and expense, such devices as may be necessary to prevent any
hazard, which may be caused or created by its operations from affecting the
environmental integrity of the landsite or causing any nuisance to adjacent
TENANTS and/or the community in general; it being agreed and understood that
creating or causing any such nuisance, shall be deemed an additional event of
default under the provisions of this Contract.
TENANT further agrees and undertakes to abide by and comply with any and all
rules, regulations and requisites of the Fire Department relative to the use and
storage of raw materials, finished products and/or inflammable materials, and/or
of any other governmental agency, having jurisdiction thereon applicable to
TENANT's operations at the Premises, and if requested by LANDLORD, TENANT shall
submit evidence of such compliance; it being agreed and understood that
noncompliance by TENANT with any of the aforementioned rules, regulations and
requisites shall be deemed, in each of such cases, an additional event of
default under the provisions of this Contract, unless remedied within thirty
(30) days after receipt of notice thereof.
If as a consequence of the foregoing dispositions, TENANT needs to make
alterations to the Premises, the same shall be done subject to the dispositions
of Article TEN hereof.
NINETEEN: Use Permit -- TENANT agrees to abide by and comply with any and
all conditions and requisites included in the Use Permit which may be issued by
the Puerto Rico Permits and Regulations Administration (ARPE), and if requested
by LANDLORD , shall submit evidence of such compliance; it being agreed and
understood that noncompliance by TENANT with any and all such conditions and
requisites and/or the cancellation of the said Use Permit shall, in each of such
cases, be deemed an additional event of default under the provisions of this
Contract.
TWENTY: Inspection -- TENANT shall permit LANDLORD or LANDLORD's agents
to enter the Premises at all reasonable time for the purpose of inspecting
the same, or of making repairs that TENANT has neglected or refused to make
as required by the terms, covenants and conditions of this Lease, and also
for the purpose of showing the Premises to persons wishing to purchase the
same, and during the year next preceding the expiration of this Lease, shall
permit inspection thereof by or on
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behalf of prospective TENANTS. If, at a reasonable time, admission to the
Premises for the purposes aforesaid cannot be obtained, or if at any time an
entry shall be deemed necessary for the inspection or protection of the
property, or for making any repairs, whether for the benefit of TENANT or
LANDLORD, LANLORD's agents or representatives may enter the Premises by
force, or otherwise, without rendering LANDLORD, or LANDLORD's agents or
representative liable to any claim or cause of action or damage by reason
thereof, and accomplish such purpose.
The provisions contained in this Article are not to be construed as an
increase of LANDLORD's obligations under this Lease; it being expressly agreed
that the right and authority hereby reserved does not impose, nor does LANDLORD
assume, by reason thereof, any responsibility or liability whatsoever for the
repair, care of supervision of the Premises, or any building, equipment or
appurtenance on the Premises.
TWENTY ONE: LANDLORD's entry for repairs and alterations -- LANDLORD
reserves the right to make such repairs, changes, alterations, additions or
improvements in or to any portion of the building and to the fixtures and
equipment which are reputed part thereof as it may deem necessary or desirable
and for the purpose of making the same, to use the street entrances, halls,
stairs and elevators of the building, provided that there be no unnecessary
obstruction of TENANT's right of entry to and peaceful enjoyment of the
Premises, and TENANT shall make no claim for rent abatement compensation or
damages against LANDLORD by reason of any inconvenience or annoyance arising
therefrom.
TWENTY TWO: LANDLORD excused in certain instances -- If, by reason of
inability to obtain and utilize labor, materials or supplies, or by reason of
circumstances directly or indirectly the result of any state of war, or of
emergency duly proclaimed by the corresponding governmental authority, or by
reason of any laws, rules, orders, regulations or requirements of any
governmental authority now or hereafter in force or by reason of strikes or
riots, or by reason of accidents, in damage to or the making of repairs,
replacements or improvements to the building or any of the equipment thereof,
or by reason of any other cause reasonable beyond the control of LANDLORD,
LANDLORD shall be unable to perform or shall be delayed in the performance of
any covenant to supply any service, such non-performance or delay in
performance shall not be ground to any claim against LANDLORD for damages or
constitute a total or partial eviction, constructive or otherwise. It being
agreed and understood that the time for completion of any such construction,
shall be extended for a period of time equal to the number of days of any
such delay.
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TWENTY THREE: Quiet Enjoyment -- TENANT on paying the full rent and keeping
and performing the conditions and covenants herein contained, shall and may
peaceable and quietly enjoy the Premises for the term aforesaid, subject,
however, to the terms of this Lease and to the mortgages hereinafter mentioned.
TWENTY FOUR: Leasehold Improvements -- If leasehold improvements made by or
for the benefit of TENANT in the Premises at his request or other personal
property to TENANT are assessable or taxable and a tax liability is imposed to
TENANT or LANDLORD, it is understood that it shall be the sole responsibility of
TENANT to pay such taxes and in no event shall such taxes be the liability of or
be transferable to LANDLORD. In the event that by operation of law, such taxes
became a liability of LANDLORD, TENANT shall pay such taxes as they become due
and payable and shall promptly reimburse LANDLORD for any payments or expenses
incurred or disbursed by LANDLORD by reasons of any such assessment. Said amount
shall be due and payable, as additional rent, with the next installment of rent.
In the event that TENANT fails to make this payment when due, it shall be
subject to the dispositions of Article THIRTY SEVEN hereof.
TWENTY FIVE: Stoppage of Operations -- It is understood by the parties
hereto that this Lease is made by LANDLORD in furtherance of the
industrialization plans of the Commonwealth of Puerto Rico, and it is
accordingly understood that TENANT will use all reasonable efforts while this
Lease is in effect to maintain a manufacturing operation upon the Premises, but
nothing contained in this paragraph shall be deemed to require TENANT to
maintain such an operation otherwise than in accordance with sound principles of
business management, or (without limiting the generality of the foregoing) to
prevent TENANT from curtailing such operation or from shutting it down, whenever
and as often as TENANT may, in the exercise of sound business judgment, deem
such action advisable. However, TENANT shall give to LANDLORD notice of any
necessary or convenient curtailment and/or shut-down, at least seven (7) days
prior to the date fixed therefor except in cases of an emergency shut-down, in
which case such notice shall be given at the earliest possible time. No
curtailment of operations or shut-down in accordance with the provisions of this
paragraph shall constitute a default under the provisions of this Contract which
will enable LANDLORD to terminate it, unless such plants shall have been
shut-down for a period of six (6) consecutive months. A shut-down on account of
unforeseeable event or events which although foreseeable could not be
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prevented, shall not constitute a breach of this agreement. Nothing in this
paragraph contained shall relieve TENANT from the payment of rent during the
period of any shut-down or curtailments of operations.
TWENTY SIX: Assignment and Subletting -- TENANT shall not assign, this Lease
nor let or sublet the Premised or any part thereof except to its parent company,
to a wholly owned subsidiary, to an affiliate of TENANT, wholly owned by
TENANT's parent company or to a cooperation to be organized by TENANT. In any of
these cases, TENANT shall promptly notify LANDLORD of said assignment or
subletting, it being agreed and understood that no such assignment or subletting
shall; (i) reduce or, in any way, affect the obligations of TENANT under this
Lease, nor (ii) release TENANT from liability under this Lease.
TWENTY SEVEN: Successors in Interest -- This Lease Contract and every
provision thereof, shall bind and inure to the benefit of the legal
representatives, successors and assigns on the parties. However, the term
"LANDLORD", as used in this Contract, so far as any covenants or obligations
on the part of LANDLORD under this Lease are concerned, shall be limited to
mean and include only the owner or lessor, at the time in question, of the
Premises, so that in the event hereafter of a transfer of the title to the
Premises, whether any such transfer be voluntary or by operation of law or
otherwise, the person, natural or juridical, by whom any such transfer is
made, shall be and hereby is entirely freed and relieved of all personal
liability as respects the performance of the covenants and obligations of
LANDLORD under this Lease from and after the date of such transfer.
TWENTY EIGHT: No Representation by LANDLORD -- LANDLORD, LANDLORD's agents
or employees, or the agents, executives or employees of the Economic Development
Administration, have made no representations or promises with respect to the
Premises except as herein expressly set forth and no rights, easements or
licenses are acquired by TENANT by implication or otherwise except as expressly
set forth in the provisions of this Contract. The taking possession of the
premises by TENANT, shall by conclusive evidence, as against TENANT, that TENANT
accepts same "AS IS" and that said Premises, particularly the building which
forms a part of the same, were in good and satisfactory condition at the time
such possession was so taken.
TWENTY NINE: Damages -- LANDLORD shall not be responsible for any latent
defect or change of conditions in the Premises resulting in damage to the same,
or the property or person therein, except to the
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extent of LANDLORD's gross negligence, and provided such claims or loss is
not covered by insurances herein required from TENANT. TENANT shall promptly
notify LANDLORD of any damage to or defects in the Premises, particularly in
any part of the building's sanitary, electrical, air-conditioning or other
systems located in our passing through the Premises, and the damage or
defective conditions, subject to the provisions of Article TWENTY ONE (21)
hereof, shall be remedied by LANDLORD with reasonable diligence.
THIRTY: General Liability Insurance -- TENANT shall indemnify, have harmless
and defend LANDLORD and agents, servants and employees of LANDLORD against and
from any and all liability, fines, suits, claims, demands, expenses, including
attorneys' fees, and actions of any kind or nature arising by reason of injury
to person or property including the loss of use resulting thereof or, violation
of law occurring in the Premises occasioned in whole or in part by any negligent
act or omission on the part of TENANT or an employee (whether or not acting
within the scope of his employment), servant, agent, licensee, visitor, assignor
or undertenant of TENANT, or by any neglectful use or occupancy of the Premises
or any breach, violation or non-performance of any covenant in this Lease on the
part of TENANT to be observed or performed.
Pursuant to the foregoing, TENANT shall, maintain during the term of this
lease, at its own cost and expense, a Comprehensive General Liability Policy.
Said policy shall: (i) be for a combined single limit of no less than
$500,000.00 per accident, (ii) hold LANDLORD harmless against any and all
liability as hereinbefore stated, and (iii) the care, custody & control
exclusion shall be deleted from this coverage. LANDLORD may require additional
reasonable limits of public liability insurance and coverages, when changing
circumstances so require.
THIRTY ONE: Property Insurance -- TENANT recognizes that the rent provided
for herein does not include any element to indemnify, repair, replace or make
whole TENANT, his employees, servants, agents, licensees, visitors, assignees,
or undertenant for any loss or damage to any property or injury to any person in
the Premises.
Accordingly, during the term of this Lease, TENANT shall keep the building
standing upon the Premises at the commencement of the term hereof or thereafter
erected upon the Premises, including all equipment appurtenant to the Premises
and all alterations, changes, additions and improvements, insured for the
benefit of LANDLORD and TENANT as their
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respective interest may appear, in an amount at least equal to the
percentages stated below (as LANDLORD may from time to time determine). The
basis of the Property Insurance shall be Replacement Cost and the coverage an
"All Risks" Property Insurance Policy. Coverages included in the All Risks
Form:
1. Fire -- "Building & Contents Form"
(a) Building -- 100% of insurable value exclusive of
foundations
(b) Contents -- All equipment appurtenant to the
Premises to the Premises (State value of Policy)
2. ADDITIONAL COVERAGES UNDER THE FIRE POLICY
(a) Extended Coverage Endorsement -- 100% of insurable
value exclusive of foundations
(b) Earthquake -- 100% of insurable value including
foundations
(c) Vandalism and Malicious Mischief Endorsement
(d) Improvements and Betterments -- For all alterations,
changes, additions and improvements
3. LANDSITE AND FLOOD WHENEVER APPLICABLE AND/OR NECESSARY
4. Boiler and Machinery (if any) -- 100% of insurable value
5. Pollution Liability Policy -- if necessary.
THIRTY TWO: Multifactory Building Specific Dispositions -- In the event that
the Premises constitute a section or sections of an industrial building and
landsite in which other operations are conducted by other TENANTS: (i) the
insurance coverage herein required, shall be acquired by LANDLORD for the whole
of the industrial building and TENANT shall reimburse LANDLORD, for its
proportionate share in the total cost of said policies, (ii) if, because of
anything done, caused or permitted to be done, permitted or omitted by TENANT,
the premium rate for any kind of insurance affecting the Premises shall be
increased, TENANT shall pay to LANDLORD the additional amount which LANDLORD may
be thereby obligated to pay for such insurance, and if LANDLORD shall demand
that TENANT remedy the condition which caused the increase in the insurance
premiums rate, TENANT will remedy such conditions within five (5) days after
such demand, and (iii) the insurance policies required in the preceding Articles
THIRTY (30) & THIRTY ONE (31) shall be endorsed to include a waiver of
subrogation against TENANT. All amounts to be reimbursed by TENANT under this
Article, shall be due and payable, as additional rent, with the next
13
installment of rent. In the event that TENANT fails to make this payment,
when due, it shall be subject to the dispositions of Article THIRTY-SEVEN
(37) hereof.
THIRTY THREE: Additional Dispositions about Insurance -- All the Insurance
policies herein required from TENANT, shall be taken in form and substance
acceptable to LANDLORD with insurance companies duly authorized to do business
in Puerto Rico, having an "A" or a higher financial rating according to Best's
Insurance Report and shall include LANDLORD as additional insured. TENANT shall
instruct the corresponding insurer to deliver such policies or certified copies
of Certificates of Insurance, in lieu of, directly to LANDLORD. LANDLORD
reserves the right not to deliver possession of the Premises to TENANT, unless,
and until two (2) days after such original policies, or certified copies or
certificates have been deposited with LANDLORD.
Furthermore, said polices, shall: (i) provide that they may not be
cancelled by the insurer for nonpayment of premium or otherwise, until at
least thirty (30) days after services of notice by registered or certified
mail of the proposed cancellation upon LANDLORD, and (ii) be promptly renewed
by TENANT upon expiration and TENANT shall, within thirty (30) days after
such renewal, deliver to LANDLORD adequate evidence of the payment of
premiums thereon. If such premiums or any of them shall not be so paid,
LANDLORD may procure the same in the manner set forth for governmental
agencies, and TENANT shall reimburse LANDLORD any amount so paid. This
reimbursement being due and payable with the next installment of rent. In the
event that TENANT fails to make this payment when due, it shall be subject to
the dispositions of Article THIRTY SEVEN (37) hereof. It is expressly agreed
and understood, that payment by LANDLORD of any such premiums shall not be
deemed to waive or release the default in the payment thereof by TENANT nor
the right of LANDLORD to take such action as may be available hereunder as in
the case of default in the payment of rent.
Upon the commencement of the term hereof, TENANT shall pay to LANDLORD the
apportioned unearned premiums on all such policies of insurance then carried by
LANDLORD in respect of the Premises in the event TENANT continues with the
insurance policies placed in LANDLORD.
TENANT shall not violate nor permit to be violated any of the conditions or
provisions of any of said policies, and TENANT shall so perform and satisfy the
requirements of the companies writing such policies that at all times companies
of good standing and acceptable to LANDLORD shall be willing to write and
continue such insurance.
14
TENANT shall cooperate with LANDLORD in connection with the collection of
any insurance monies that may be due in the event of loss and shall execute and
deliver to LANDLORD such proofs of loss and other instruments that may be
required for the purpose of facilitating the recovery of any such insurance
monies, and in the event that TENANT shall fail or neglect so to cooperate or to
execute, acknowledge and deliver any such instrument, LANDLORD, in addition to
any other remedies, may as the agent or attorney-in fact of TENANT, execute and
deliver any proof of loss or any other instruments as may seem desirable to
LANDLORD and any mortgagee for the collection of such insurance monies. This
shall not be interpreted as any waiver of the obligations of TENANT under
Articles THIRTY, THIRTY ONE, THIRTY TWO and THIRTY THREE hereof or exclusively
in favor of LANDLORD under Article THIRTY NINE hereof.
THIRTY FOUR: Waivers -- The receipt by LANDLORD of the rent, additional
rent, or any other sum or charges payable by TENANT with or without knowledge of
the breach of any covenant of this Contract, shall not be deemed a waiver of
such breach. No act or omission of LANDLORD or its agents during the term of
this Lease shall be deemed an acceptance of a surrender of the Premises and no
agreement to accept a surrender of the Premises shall be valid unless it be made
in writing and subscribed by LANDLORD. This Contract contains all the agreements
and conditions made between the parties hereto with respect to the Premises and
it cannot be changed orally. Any additions to, or charges in this Lease must be
in writing, signed by the party to be charged.
Failure on the part of LANDLORD to act or complain of any action or
nonaction on the part of TENANT shall not be deemed to be a waiver of any of its
respective rights hereunder nor constitute a waiver at any subsequent time of
the same provision. The consent or approval by LANDLORD to, or of any action by
the other requiring consent or approval, shall not be deemed to waive or render
unnecessary the consent or approval by LANDLORD of any subsequent similar act.
THIRTY FIVE: Reinstatement -- No receipt of monies by LANDLORD for TENANT
after the termination or cancellation hereof in any lawful manner shall
reinstate, continue or extend the term hereof or affect any notice theretofore
given to TENANT, or operate as a waiver of the right of LANDLORD to enforce the
payment of rent, additional rent, or other charges then due or thereafter
falling due, or operate as a waiver of the right of LANDLORD to recover
possession of the Premises by proper suit, action, proceeding or remedy; it
being agreed that,
15
after the service of notice to terminate or cancel this Lease, and the
expiration of the time therein specified, if the default has not been cured
in the meantime, or after the commencement of suit, action or summary
proceedings or of any other remedy, or after a final order, warrant of
judgment of the possession of the Premises, LANDLORD may demand, receive and
collect any monies then due, or thereafter becoming due, without in any
manner affecting such notice, proceeding, suit, action, order, warrant or
judgment; and any and all such monies so collected shall be deemed to be
payments for the use and occupation of the Premises, or at the election of
LANDLORD, on account of TENANT's liability hereunder. Delivery or acceptance
of the keys to the Premises, or any similar act, by the LANDLORD, or its
agents or employees, during the term hereof, shall not be deemed to be a
delivery or an acceptance of a surrender of the Premises unless LANDLORD
shall explicity consent to it, in the manner set forth hereinbefore.
THIRTY SIX: Subordination and Attornment -- This Lease is and shall be
subject and subordinate to all liens, or mortgages which may now or hereafter
affect the Premises and to all renewals, modifications, consolidations,
replacements and extensions thereof and, although this subordination
provision shall be deemed for all purposes to be automatic and effective
without any further instrument on the part of TENANT, TENANT execute any
further instrument requested by LANDLORD to confirm such subordination.
TENANT further covenants and agrees that if by reason of a default upon
the part of LANDLORD of any mortgage affecting the Premises, the mortgage is
terminated or foreclosed by summary proceedings or otherwise, TENANT will
attorn to the mortgagee or the purchaser in foreclosure proceedings, as the
case may be, and will recognize such mortgage or purchaser, as the TENANT's
landlord under this Lease. TENANT agrees to execute and deliver, at any time
and from time to time, upon the request of LANDLORD or of the mortgagee or
the purchaser in foreclosure proceedings, as the case may be, any reasonable
instrument which may be necessary or appropriate to evidence such attornment.
TENANT further waives the provision of any statute or rule of law now or
hereafter in effect which may give or purport to give TENANT any right of
election to terminate this lease or to surrender possession of the Premises
demised hereby in the event any such proceeding is brought by the holder of
any such mortgage, and TENANT'S obligations hereunder shall not be affected
in any way whatsoever by any such proceeding.
16
TENANT, covenants and agrees, upon demand of the holder of any mortgage duly
recorded or recordable in the corresponding Registry of the Property or of any
receiver duly appointed by the foreclose any such mortgage, to pay to the holder
of any such mortgage or to such receiver, as the case may be, all rent becoming
due under this Lease after such demand, provided such holder of any such
mortgage or any such receiver complies with the obligations of LANDLORD under
this Lease.
TENANT, upon request of LANDLORD or any holder of any mortgage or lien
affecting the Premises, shall form time to time, deliver or cause to be
delivered to LANDLORD or such lien holder or mortgage, within ten (10) working
days from date of demand a certificate duly executed and acknowledged in form
for recording, without charges, certifying, if true, or to extent true, that
this Lease is valid and subsisting and in full force and effect and LANDLORD is
not in default under any of the terms of the Lease.
THIRTY SEVEN: Late Payments and Payment by LANDLORD -- In the event that (i)
TENANT makes late payment, or fails to make payments to LANDLORD, in whole or in
part, of the rent, or of the additional rent, or of any of the other payments of
money required to be paid by TENANT to LANDLORD, as stipulated in this Lease,
when and as due and payable; or if (ii) LANDLORD, without assuming any
obligation to do so, after any notice or grace period provided hereunder,
performs or causes to be performed, at the cost and expense of TENANT, any of
the acts or obligations agreed to be performed by TENANT, as stipulated in this
Lease, and TENANT fails to refund LANDLORD any amounts of money paid or incurred
by LANDLORD in performing or causing the performance of such acts or
obligations, when and as due and payable, TENANT undertakes and agrees to pay
LANDLORD as additional rent, interest on such lately paid or unpaid rents,
additional rent, and/or on such other payments of money required to be paid,
and/or on any such amounts of money required to be refunded, from and after the
date when payment thereof matured or became due and payable, until full payment,
at the rate of twelve (12%) per cent per annum, or if such 12% interest, is
unlawful, then and in such event, at the highest maximum prevailing rate of
interest on commercial unsecured loans as fixed by the Board of Regulatory Rates
of Interest and Financial Charges, created under Law #1, approved October 15,
1973 (10 LPRA 998), as amended, or by any successor statute or regulation
thereof.
17
THIRTY EIGHT: Abatement--If any substantial service or facility to be
provided by LANDLORD is unavailable for a period of time exceeding thirty (30)
days and LANDLORD has been notified of the same, should time unavailability of
such service render all or any portion of the Premises untenable, TENANT after
the aforesaid thirty (30) days shall be entitled to an abatement of a portion of
the rent that shall reflect that portion of the Premises which is untenable,
provided the damage to the service or facility is not attributable to the act or
neglect of TENANT or the employees, servants, licensees, visitors, assigns or
undertenants of TENANT.
THIRTY NINE: Fire or other Casualty -- If before or during the term of this
Lease, the Premises shall be damaged by fire or other casualty, LANDLORD after
written notice thereof is given by TENANT, shall repair the same with reasonable
dispatch after notice to it of the damage, due allowances being made for any
delay due to causes beyond the LANDLORD'S reasonable control, provided, however,
that LANDLORD shall not be required to repair or replace any furniture,
furnishings or other personal property which TENANT may have placed or installed
or which it may be entitled or required to remove from the Premises. LANDLORD
shall proceed with due diligence to obtain the corresponding insurance
adjustment of the loss and TENANT shall fully cooperate with LANDLORD and assist
in the adjustment of the loss. Until such repairs are completed, and provided
such damage or other casualty is not attributable to the act or neglect of
TENANT or other casualty is not attributable to the act or neglect to TENANT or
the employees, servants, licensees, visitors, assigns or undertenants of TENANT,
the rent required to be paid pursuant to Article FOUR hereof, shall be abated in
proportion to the part of the Premises which are untenable. If the building, be
so damaged that LANDLORD shall decide to demolish and/or to reconstruct the
building, in whole or in part, LANDLORD may terminate this Lease by notifying
TENANT within a reasonable time after such damage of LANDLORD'S election to
terminate this Lease, such termination to be effective immediately if the term
shall not have commenced or on a date to be specified in such notice if even
during the term. In the event of the giving of such notice during the term of
this Lease, the rent shall be apportioned and paid up to the time of such fire
or other casualty if the Premises are damaged, or up to the specified date of
termination if the Premises are not damaged and LANDLORD shall not be otherwise
liable to TENANT for the value of the unexpired term of this Lease.
18
FORTY: Default Provisions -- If, during the term of this Lease, TENANT
shall: (i) apply for or consent in writing to, the appointment of a receiver,
trustee or liquidator of TENANT or of all or substantially all of its assets or
(ii) seek relief under the Bankruptcy Act, or admit in writing its inability to
pay its debts as they become due, or (iii) make a general assignment for the
benefit of this creditors, or (iv) file a petition case or an answer seeking
relief (other than a reorganization not involving the liabilities of TENANT) or
arrangement with creditors, or take advantage of any insolvency law, or (v) file
and answer admitting the material allegations of a case filed against it in any
bankruptcy, reorganization or insolvency proceeding or, if an order, judgement
or decree shall be entered by any court of competent jurisdiction on the
application of TENANT or creditor adjudicating TENANT a bankruptcy,
reorganization or insolvency proceeding or, if an order, judgement or decree
shall be entered by any court of competent jurisdiction on the application of
TENANT or creditor adjudicating TENANT a bankrupt or insolvent, or approving a
petition seeking reorganization of TENANT (other than a reorganization not
involving the liabilities of TENANT) or appointment of a receiver, trustee or
liquidator of TENANT, or decree, shall continue stayed and in effect for any
period of sixty (60) consecutive days, the term of this Lease and all right,
title and interest of TENANT hereunder shall expire as fully and completely as
if that day were the date herein specifically fixed for the expiration of the
term, and TENANT hereunder shall expire as fully and completely as if that day
were the date herein specifically fixed for the expiration of the term, and
TENANT will then quit and surrender the Premises to LANDLORD, but TENANT shall
remain liable as hereinafter provided.
If, during the term of this Lease: (I) TENANT shall default in fulfilling
any of the covenants of this Lease other than the covenants for the payment
of rent or additional rent or of any other standing contract with LANDLORD or
(ii) if, during the term of this Lease TENANT shall abandon, vacate, or
remove form the Premises the major portion of the goods, wares, equipment, or
furnishings usually kept on said premises, of (iii) this Lease, without the
prior consent of LANDLORD, shall be encumbered, assigned or transferred in
any manner in whole or in part or shall, by operation of law, pass to or
devolve upon any third party, except as herein provided, or (iv0 if TENANT is
in violation of laws rules and regulations regarding minimum wages of its
employees, or of any other law, rules and regulations applicable to his
operations, but which have not been specifically mentioned in this Lease,
LANDLORD may give to TENANT notice of any such default or the happening of
any event referred to above and if at the expiration of thirty (30) days
after the service of such a notice the default or event upon which said
notice was based shall continue to exist, or in the case of a default which
cannot with due diligence be
19
cured within a period of thirty (30 days, if TENANT fails to proceed
promptly after the service of such notice and with all due diligence to cure
the same and thereafter to prosecute the curing of such default with all due
diligence (it being intended that in connection with a default not
susceptible of being cured with due diligence within thirty (30) days that
the time of TENANT within which to cure the same shall be extended for such
period as may be necessary to complete the same with all due diligence),
LANDLORD may give the TENANT a notice of expiration of the term of this Lease
as of the date of the service of the term of this Lease and all right, title
and interest of TENANT hereunder shall expire as full and completely as if
that day were the date herein specifically fixed for the expiration of the
term, and TENANT or any party holding under his will then quit and surrender
the premises to LANDLORD, but TENANT shall remain liable as hereinafter
provided.
If, (i) TENANT shall default in the payment of the rent, the additional
rent, or of any other payment as required under this Lease and such default
shall continue for ten (10) working days after notice thereof by LANDLORD, of
(ii) if the default of the payment of the rent, continues for thirty (30) days
from the date any such payment became due and payable (AUTOMATIC DEFAULT
TERMINATION), OR (III) IF THIS Lease shall terminate as in Paragraph one and two
of this Article provided, this Lease shall terminate and TENANT will then quit
and surrender the Premises to LANDLORD or LANDLORD'S agents and servants may
immediately or ant any time thereafter re-enter the Premises and remove all
persons and all or any property therefrom, whether by summary dispossess
proceedings or by any suitable action or proceeding at law, or with the license
and permission of TENANT, which shall under this Contract be deemed given upon
expiration of the strict thirty (30) days notice period of subdivision of
paragraph Two of the Article, without LANDLORD being liable to indictment,
prosecution or damages therefor and repossess and enjoy the Premises with all
additions, alterations and improvements.
If TENANT shall fail to take possession of the Premises within ten (10) days
after the commencement of the term of this Lease, or if TENANT shall vacate and
abandon the Premises, LANDLORD shall have the right, at LANDLORD'S option, to
terminate this Lease and the term hereof, as well as all the right, title and
interest of TENANT hereunder, by giving TENANT five (5) days notice in writing
of such
20
intention, and upon the expiration of the time fixed in such latter notice,
if such default be not cured prior thereto, this lease and the term hereof,
as well as all the right, title and interest of TENANT hereunder, shall
wholly cease and expire in the same manner and with the same force and effect
(except as to TENANT'S liability) as if the date fixed by such latter notice
were the expiration of the term herein originally granted; and TENANT shall
immediately quit and surrender to LANDLORD the Premises and each and every
part thereof and LANDLORD in this Article or any other Article of this Lease
to terminate this Lease, the exercise of any such right by LANDLORD during
the term hereby granted, shall terminate any extension or renewal of the term
hereby granted and any right on the part to TENANT thereto.
Upon the termination of this Lease by reason of any of the foregoing
event, or in the event of the termination of this Lease by summary dispossess
proceedings or under any provisions of law, now or at any time hereafter, in
force by reason of , or based upon, or arising out of a default under or
breach of this Lease on the part of TENANT, or upon LANDLORD recovering
possession of the premises in the manner or in any of the circumstances
whatsoever, whether with or without legal proceedings, by reason of, or based
upon, or arising our of a default under or breach of this Lease on the part
to TENANT, LANDLORD, at its option, but without assuming any obligation to do
so in any case, may at any time, and from time to time, relet the Premises or
any part or parts thereof for the account of TENANT or otherwise on such
terms as LANDLORD may elect, including the granting of concessions, and
receive and collect the rents therefor, applying the same at a rental not
higher than the one stipulated in this Contract, first to the payment of such
reasonable expenses as LANDLORD may have incurred in recovering possession of
the Premises, including reasonable legal expenses, and for putting the same
into good order or condition or preparing or altering the same for re-rental,
and expenses, commissions and charges paid, assumed, or incurred by LANDLORD
in and about the reletting of covenants of TENANT hereunder. Any such
reletting herein provided for, may be for the remainder of the term of this
Lease or for a longer or shorter period or at a higher or lower rental. In
any such case, whether or not, the Premises or any part thereof be relet,
TENANT shall
21
pay to LANDLORD the rent required to be paid by TENANT up to the
time of such termination of this Lease, and/or the full rent provided for in
the agreement for any holdover of such period after termination and up to the
surrender or recovery of possession of the Premises by LANDLORD, as the case
may be, and thereafter TENANT covenants and agrees, to pay to LANDLORD until
the end of the term of this Lease as originally demised the equivalent of any
deficiency amount of all the rent reserved herein, less the net avails of
reletting, if any, as specified hereinabove in this Article and the same
shall be due and payable by TENANT to LANDLORD as provided herein, that is to
say, TENANT shall pay to LANDLORD the amount of any deficiency then existing.
FORTY ONE: LANDLORD'S Remedies -- In the event TENANT shall default in the
performance of any of the terms, covenants or provisions herein contained,
LANDLORD may, but without the obligation to do so, perform the same for the
account of TENANT and any amount paid or expense incurred by LANDLORD in the
performance of the same shall be repaid by TENANT on demand. In the event of a
breach or threatened breach by TENANT of any of the covenants, conditions or
provisions hereof, LANDLORD shall have the right of injunction to restrain the
same, and the right to invoke any remedy allowed by law or in equity as if
specific remedies, indemnity or reimbursement were not herein provided for. The
rights and remedies given to LANDLORD in this Lease are distinct, separate and
cumulative, and no one of them, whether or not exercised by LANDLORD, shall be
deemed to be a waiver, or an exclusion of any of the others.
FORTY TWO: Notice of Default -- Anything in this Lease to the contrary
notwithstanding, it is specifically agreed that there shall be no enforceable
default against LANDLORD under any provisions of this lease, unless notice of
such default be given by TENANT to LANDLORD in which TENANT shall specify the
default or omission complained of, and LANDLORD shall have thirty (30) days
after receipt of such notice in which to remedy such default, or if said default
or omission shall be of such a nature that the same cannot be cured within said
period, then the same shall not be an enforceable default if LANDLORD shall have
commenced taking the necessary steps to cure or remedy said default within the
said thirty (30) days and diligently proceeds with the correction therof.
22
FORTY THREE: Capitalization - For the purpose of this Contract,
specifically of Article SIX, Capitalization includes the total owner's equity
sources (preferred stock, common stock and surplus accounts) plus long-term
debts, it being agreed and understood that the amortization of any such debt
shall in no way diminish the amount originally determined as capitalization.
FORTY FOUR: Disclosure of Information - TENANT agrees to furnish to
LANDLORD within ninety (90) days after the expiration of each fiscal year of
TENANT, an annual statement certified by an indpendent Certified Public
Accountant showing as of the end of each such fiscal year: (i) TENANT'S paid-in
capital, (ii) long-term debts and capitalization as required by Articles SIX and
FORTY THREE hereof, (iii) investment in machinery and its capacity to provide
employment, (iv) taxes (including Social Security taxes) paid, and (v) any other
information as required by this Lease.
In the event such statement is not filed with LANDLORD as herein provided,
LANDLORD may obtain such information from TENANT at TENANT'S expense, and for
such purpose TENANT shall make available LANDLORD'S designated representatives,
its books of accounts and other necessary data and facilities, all of which
shall be provided and made available at TENANT'S principal office in Puerto
Rico.
FORTY FIVE: Automatic Renewal - In the event TENANT does not vacate the
Premises in the manner and under the conditions hereinbefore provided, within
ninety (90) days after the normal expiration of the term hereof, LANDLORD shall
have the option to be exercised at any time thereafter, to notify TENANT that
the lease herein has been renewed for an additional term of FIVE (5) years from
the date of the last normal expiration of the term hereof and, in such event,
the parties agree that this Contract shall be held to have been renewed and to
continue in full force and effect for such additional term of FIVE (5) years
upon the mere mailing of such notice by LANDLORD to TENANT. This provision shall
in no way prejudice, affect or deny any right which LANDLORD may otherwise have
because, or at the time, of any such termination of the term hereof,
particularly whenever LANDLORD does not exercise such option; it being agreed
and understood that such renewal shall be upon the same terms and conditions
contained herein except that the rental rate to be charged shall be the rate
then currently---
INITIAL HERE
ILLEGIBLE
23
being charged by LANDLORD for similar building in the area, but in no event
shall it be less than the rate herein stipulated.
FORTY SIX: Partial Invalidity and Applicable Law - If any term or
provisions of this Lease or the application thereof to any person or
circumstances shall, to any extent, be invalid or unenforceable, the remainder
of this Lease and the application of such term or provision to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby, and each term and provision of this Lease shall
be valid and be enforceable to the fullest extent permitted by law. This
Contract is entered into and shall be interpreted in accordance with the laws of
the Commonwealth of Puerto Rico.
FORTY SEVEN: Lease Termination and Holding Over - Upon the expiration or
termination of this Lease:
24
(ii) TENANT shall remove all hazardous and toxic substances belonging to
TENANT or to a third party. TENANT shall also remove all other property of
TENANT and that of any third parry and failing so to do, TENANT hereby appoints
LANDLORD its agent so that LANDLORD may cause all of the said property to be
removed at the expense and risk of TENANT. TENANT covenants and agrees to give
full and timely observance and compliance to this covenant to remove all its
property and surrender the Premises broom clean. TENANT hereby agrees to pay all
reasonable necessary cost and expenses thereby incurred by LANDLORD. If, as the
sole result of the removal of TENANT'S property any portion of the Additional
Premises or of the building of which they are a part, are damaged, TENANT shall
pay to LANDLORD the reasonable cost of repairing such damages unless due to the
gross negligence of LANDLORD, its agents, servants, employees and contractors.
TENANT'S obligation to observe or perform this covenant shall survive the
expiration or other termination of the term of this Lease.
FORTY EIGHT: Change of Address - TENANT shall promptly notify LANDLORD of
any change in the addresses other than those required from it in Article SEVEN
hereof.
FORTY NINE: TENANT will indemnify LANDLORD for any and all liability, loss,
damages, expenses, penalties and/or fines, and any additional expenses including
any attorney fees LANDLORD may suffer as a result of claims, lawsuits, demands,
administrative orders, costs, resolutions or judgements against it arising out
of negligence and/or failure of TENANT or those acting under TENANT to conform
to the statutes, ordinances, or other regulations or requirements of any
governmental authority, be it Federal, of the Commonwealth of Puerto Rico, its
instrumentalities or public corporations, in connection with he performance of
this Lease.
INITIAL HERE
ILLEGIBLE
25
FIFTY: TENANT hereby acknowledges that the building herein demised is in
need of certain repairs which LANDLORD undertakes to commence presently after
execution hereof; therefore, the term of the lease hereunder shall, anything to
the contrary notwithstanding, commence on the tenth. (10th.) working day after
the termination notice sent to TENANT by Certified Mail that the building is
ready for occupancy.
FIFTY ONE: Anything contained in this Contract to the contrary
notwithstanding, in the event that TENANT requires additional volume of water
and/or pressure as is now available within the area wherein the demised premises
are located, it shall be at its own cost and expense the construction and/or
installation of such improvements and/or facilities as may be necessary to or
convenient and/or required by the Puerto Rico Aqueduct and Sewer Authority to
increase such volume and/or pressure; it being agreed and understood, however,
that such construction and/or installation shall in no event be commenced until
after LANDLORD'S written approval has first been requested and obtained.
FIFTY TWO: TENANT hereby acknowledges that in the industrial park there are
other industries; therefore TENANT hereby specifically agrees and undertakes to
take such steps and install such equipment as may be necessary to prevent that
any hazard and/or noise which may be created by its operations may in any way or
manner unduly affect the operations of the other industries and therefore TENANT
hereby releases and saves LANDLORD harmless from any and all claims or demands
arising therefrom or in connection therewith.
FIFTY THREE: TENANT shall, at its own cost and expense, install fire
protection system and shall obtain the endorsement and approval from said Fire
Department for such installation. TENANT must also provide security measures to
prevent or reduce fire hazard due to the storage of inflammable materials and
products.
FIFTY FOUR: TENANT shall procure and obtain a permit for the operation of a
solid waste emission source from the Environmental Quality Board and
authorization for the Office of Solid Waste and/or from the Municipality of
Guayama for the final disposition of wastes.
FIFTY FIVE: TENANT, at its own cost and expense, shall implement the
necessary measures and install the control equipment to maintain the
atmospheric air quality levels in compliance with the environmental
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laws and regulations of the Environmental Quality Board and the Environmental
Protection Agency, as promulgated by any succeeding law or regulations.
FIFTY SIX: It is hereby agreed and understood that TENANT shall take the
necessary steps to comply with the regulations and law requirements of the
PUERTO RICO OCCUPATIONAL SAFETY AND HEALTH OFFICE (PROSHO).
FIFTY SEVEN: TENANT must comply with the rules and regulations of
pre-treatment established by the Puerto Rico Aqueduct and Sewer Authority, the
Environmental Quality Board and the Environmental Protection Agency related to
the effluent industrial discharge in the sanitary sewer system and their final
disposition. Also, any improvement necessary to provide pre-treatrnent
facilities for the above mentioned effluents shall be at TENANT'S own cost and
expense and in coordination and with the approval of LANDLORD's Engineering and
Maintenance Departments.
FIFTY EIGHT: It is hereby agreed and understood that TENANT, at its own
cost and expense, shall install an air conditioning system in the demised
premises, in the event TENANT needs to use and/or install it in his process.
Such air conditioning system shall be considered as a special facility from
LANDLORD, and it shall be installed in coordination with LANDLORD'S Engineering
and Maintenance Departments.
FIFTY NINE: Anything herein to the contrary notwithstanding, the parties
have agreed and understood that the following special facilities, shall be
utilized by TENANT "AS IS" and "WHERE IS", free of charge, but TENANT shall
repair and maintain said special facilities as provided under the applicable
provisions of the Contract:
a. Iron Grill works in windows and in parking and driveway gates.
b. Cyclone Fence around the perimeter of the lot.
c. Sprinkler System without water tank and pump system
d. Guard House
e. Office Partitions with hung ceiling and vinyl floor tiles and a glass
main entrance door
f. 44 Flourescent lamps - 2 tubes (8'-0")
g. Loading platform
h. Exterior security illumination lamps
i. Galvanized ceiling structures (exterior)
j. Electric Power Sub-station - 3 transformers
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The above mentioned special facilities shall be deemed an integral part of
the demised premises and as such subject to and covered by the terms and
conditions of this contract as they may be applicable thereto.
SIXTY: LANDLORD shall provide a basic electrical distribution system
consisting of a 200 AMP meterbase, conduits, conductors, receptacles and
junction boxes as indicated in PRIDCO'S Electrical Distribution System Drawings
for indicated building.
SIXTY ONE: TENANT shall, at is own cost and expense, construct and/or
install all necessary equipment required to connect the building's electrical
system to the Puerto Rico Electrical Power Authority's electrical distribution
lines, such connection to be made in compliance with the requirement of PREPA.
SIXTY TWO: TENANT certifies and guarantees that at the date of subscribing
this Contract it has submitted the Corporate Tax Returns Forms during the last
five (5) years and does not have any tax debt pending with the Commonwealth of
Puerto Rico, or is complying with the terms of a payment plan duly approved.
TENANT also certifies and guarantees that at the date of execution of this
contract it has paid unemployment insurance compensation, temporary disability
insurance, and the driver's social security (as applicable); or is complying
with a payment plan duly approved.
TENANT acknowledges that this is an essential condition of the Contract
and if the above certification is incorrect in any of its parts, LANDLORD may
cancel this contract.
SIXTY THREE: LANDLORD reserves the right to audit three leased premises
from time to time during the term of this contract, as LANDLORD may deem
necessary, in order to assess all aspects of the environmental condition of said
premises and TENANT's compliance with all environmental legislation and
regulations, under Commonwealth and federal law; TENANT hereby agrees to provide
access to all areas and structures of the premises for these purposes, upon
LANDLORD's request, and to also provide access to all books, records, documents
and instruments which LANDLORD may deem necessary in order to fully audit the
premises as herein stated, provided that such access shall be limited to the
environmental matters.
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SIXTY NINE: TENANT agrees to submit to LANDLORD within thirty (30) days
from the date of execution of this Contract: (a) evidence of its registration
in the Department of State of the Commonwealth of Puerto Rico and the name and
address of its resident agent; and (b) a certificate of a resolution of its
Board of Directors either authorizing or ratifying the execution of this
Contract.
IN WITNESS WHEREOF, LANDLORD and TENANT have respectively signed upon
proper authority this Lease, this 15 day of July 1994
PUERTO RICO INDUSTRIAL DEVELOPMENT COMPANY
BY: /s/ ILLEGIBLE
-------------------------------
PUERTO RICO INDUSTRIAL MANUFACTURING OPERATIONS, CORP.
S.S.P. 00-0000000
BY: /s/ Xxxxx Xxxxxx
-------------------------------
30
ANNEX "A"
DESCRIPTION OF PARCEL OF LAND
LOT NUMBER 1 AND 3 (GROUPED)
LOCATED AT MACHETE INDUSTRIAL PARK
IN GUAYAMA, PUERTO RICO
SITE FOR PROJECT NO. T-0609-0-63
================================================================================
GENERAL:
Parcel of land, Lots number 1 and 3, located at Machete Industrial Park in
Guayama, Puerto Rico.
It bounds: by the NORTH, with the land owned by Xxxxxx Xxxxxxx Bruno; by
the SOUTH, with access street of the same industrial same; by the East, with Xxx
Xx. 0 xx xxx xxxx xxxxxxxxxx xxxx; and by the West with Xxxxx Xxxx X.X. Xx. 000.
It has a surface area of 7,100 square meters, equivalent to 1.8 "cuerdas".
It is affected by a 12' 6" wide right of way in favor of the Puerto Rico
Electric Power Authority running along its northern boundary.
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ANNEX "B"
COMPLIANCE REPORT OF WITH
ENVIRONMENTAL REQUIREMENTS
In the period of ___________ to ______________
I. PERMITS
PERMITS NUMBER EXPIRATION RENEWAL DATE
DATE (IF APPLY)
II. COMPLIANCE ACTIONS
REFERENCE/CASE NUMBER DATE RESPONSE OF
DATE OF
III. CERTIFICATION
I certify, under penalty of law, that this document was prepared under my
supervision and direction; and that was based in my investigation by the persons
directly responsible of gathering the information, that the information here
submitted is, according to my best judgment, certain, complete and precise.
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SUPPLEMENT AND AMENDMENT TO LEASE CONTRACT
NOW COMES the PUERTO RICO INDUSTRIAL DEVELOPMENT COMPANY (hereinafter
referred to as the "LANDLORD"), and P.R. INDUSTRIAL MANUFACTURING OPERATIONS
CORP., (hereinafter referred to as the "TENANT") and agree to supplement and
amend a certain Lease Contract entered into by them on July 15, 1994 as
subsequently amended (hereinafter referred to as the "Contract") covering
certain landsite and buildings located in Guayama, Puerto Rico, identified as
Project No. T-0609-0-63 (hereinafter referred to as the "Original Premises") in
the following aspects:
ONE: LANDLORD hereby demises and lets unto TENANT, and TENANT hereby leases
from LANDLORD the premises identified as Project Xx. X0000-0-00 located at
Guayama, Puerto Rico, (hereinafter referred to as the "Additional Premises"),
which are fully described in Schedule "A" hereto annexed and made a part hereof.
TWO: The Additional Premises shall be used and occupied exclusively for
warehousing in connection to TENANT's manufacturing operations being carried out
al Project No. T-0609-0-63 located in Guayama, Puerto Rico.
THREE: Commencing on the first day of the following month after the
delivery of the premises, TENANT shall pay to LANDLORD an annual rental for the
Additional Premises of $2.20 per square foot of gross building area, equivalent
to $2,191.54 monthly during the remaining term of the Contract.
The monthly installments for rent specified herein, shall be paid in
advance on the first day of each month at LANDLORD may notify. In the event that
the date of commencement does not fall on the first of the month, TENANT further
agrees to pay the first partial monthly installments, prior to, or on the date
of commencement.
FOUR: The deposit required under the provisions of this Supplement and
Amendment to Lease Contract shall be complied with by TENANT as hereinafter
specified:
a. The amount of $1,643.67 previously deposited by TENANT to reserve
Project T-0462-0-58 (CR#136137 of 12/95, CR #135365 fo 9/22/95 and XX #000000 xx
0/00/00). XX 000000 $1,512.15 6/14/96
b. The amount of $1,512.15 shall be paid by TENANT in certified check with
the execution of this Supplement and Amendment to Lease Contract.
This deposit shall guarantee the compliance by TENANT of its obligations,
under this Supplement and Amendment to Lease Contract, particularly, but not
limited to, the payment of rent, the compliance of any environmental clauses
herein included and the return of the Additional Premises in proper conditions
at the termination of the
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Lease. On said termination, if TENANT is not in default on any of the terms and
conditions of the Contract, LANDLORD will return to TENANT the sum of money, if
any, held pursuant to this provision, after LANDLORD's Environmental Office
certifies that there are no environmental deficiencies as a result of TENANT's
use, occupation or manufacturing operations on the Additional Premises.
FIVE: All notices, demands, approvals, consents and/or communications
herein required or permitted shall be in writing. If by mail should be certified
and to the following addresses, to LANDLORD: X.X. Xxx 000000, Xxx Xxxx, Xxxxxx
Xxxx 00000-0000, to TENANT: Xx. Xxxx X. Xxxxxxxxx, X.X. Xxx 0000, Xxxxxxx,
Xxxxxx Xxxx 00000-0000.
SIX: Anything herein to the contrary notwithstanding, in the event that
TENANT requires additional volume of water and/or pressure as is now available
within the area wherein the Additional Premises are located, it shall be at its
own cost and expense the construction and/or installation of such improvements
and/or required by the Puerto Rico Aqueduct and Sewer Authority to increase
such volume and/or pressure; it being agreed and understood, however, that such
construction and/or installation shall in no event be commenced until after
LANDLORD'S written approval has first been requested and obtained.
SEVEN: TENANT hereby acknowledges that in the industrial park where the
Additional Premises are located there are other industries established;
therefore, TENANT hereby specifically agrees and undertakes to take such steps
and install such equipment as may be necessary to prevent that any hazard and/or
noise which may be created by its operations may in any way or manner unduly
affect the operations of said other industries and therefore TENANT hereby
releases and saves LANDLORD harmless from any and all claims or demands arising
therefrom or in connection therewith.
EIGHT: TENANT shall, at its own cost and expense, install a fire protection
system and shall obtain the endorsement and approval from the Puerto Rico Fire
Department for such installation. TENANT must also provide security measures to
prevent or reduce fire hazards due to the storage of inflammable materials and
products.
NINE: TENANT, at its own cost and expense, shall implement the necessary
measures and install the equipment to control and maintain the atmospheric air
quality levels in compliance with the environmental laws and regulations of the
Environmental Quality Board and the Environmental Protection Agency, as
promulgated or any successor law or regulations.
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TEN: It is hereby agreed and understood that TENANT shall take the
necessary steps to comply with the regulations and law requirements of the
PUERTO RI CO OCCUPATIONAL SAFETY AND HEALTH OFFICE (PROSHO).
ELEVEN: TENANT shall, at is own cost and expense, construct and/or install
all necessary equipment required to connect the building's electrical system to
the Puerto Rico Electrical Power Authority's electrical distribution lines, such
connection to be made in compliance with the requirement of said Authority.
TWELVE: It is hereby agreed and understood that TENANT, at its own cost and
expense, shall install an air conditioning system in the Additional Premises, in
the event TENANT needs to use and/or install it in his process. Such air
conditioning system shall be considered as a special facility, and it shall be
installed in coordination with LANDLORD'S Engineering and Maintenance Offices.
THIRTEEN: Anything herein to the contrary notwithstanding, the parties have
agreed and understood that the following special facilities, shall be utilized
by TENANT "AS IS" and "WHERE IS", free of charge, but TENANT shall repair and
maintain said special facilities as provided under the applicable provisions of
the Contract:
(1) Sprinkler System
The above mentioned special facilities shall be deemed an integral part of
the Additional Premises and as such subject to and covered by the terms and
conditions of the Contract as they may be applicable thereto.
FOURTEEN: TENANT agrees to submit to LANDLORD within thirty (30) days from
the date of execution of this Supplement and Amendment to Lease Contract a
certificate of a resolution of its Board of Directors either authorizing or
ratifying the execution of said Supplement and Amendment to Lease Contract.
FIFTEEN: TENANT must comply with the rules and regulations of pre-treatment
established by the Puerto Rico Aqueduct and Sewer Authority, the Environmental
Quality Board and the Environmental Protection Agency related to the effluent
industrial discharge in the sanitary sewer system and their final disposition.
Also, any improvement necessary to provide pre-treatment facilities for the
above mentioned effluents shall be at TENANT'S own cost and expense and in
coordination and with the approval of LANDLORD's Engineering and Maintenance
Offices.
SIXTEEN: It is hereby agreed and understood that this Supplement and
Amendment to Lease Contract is entered by and between the parties hereto, based
on TENANT's representations that it shall expand its manufacturing operations in
the Original Premises in Guayazma, Puerto Rico. TENANT's projections for said
expansion are that it will
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generate approximately 30 additional employees with a Capitalization of
$60,000.00 and as investment in Machinery and Equipment of $60,000.00.
SEVENTEEN: TENANT hereby acknoledges that the building herein demised is in
need of certain repairs which LANDLORD undertakes to commence presently after
execution hereof.
EIGHTEEN: It is further agreed and understood by the parties herein, that
all other terms and conditions of the Contract which are not inconsistent with
the term and conditions of this Supplement and Amendment, shall remain in full
force and effect.
NINETEEN: All terms and conditions of the Lease Contract executed on July
15, 1994 shall be deemed supplemented and amended to the extend inconsistent
with the terms hereof and shall remain in full force and effect as herein
supplemented and amended.
IN WITNESS WHEREOF, the parties hereto executed this Supplement to Lease
Contract at San Xxxx, Puerto Rico, this 18th day of June, 1996
PUERTO RICO INDUSTRIAL DEVELOPMENT COMPANY
BY: /s/ ILLEGIBLE
-------------------------------
PUERTO RICO INDUSTRIAL MANUFACTURING OPERATIONS, CORP.
S.S.P. 00-0000000
BY: /s/ ILLEGIBLE
-------------------------------
SCHEDULE "A"
DESCRIPTION OF BUILDING NO. T-0462-0-58
LOCATED IN GUAYAMA, PUERTO RICO
This is a pitched roof type building consisting of reinforced concrete
foundations, columns and girders supporting 30 ft. long Pacadar joists which in
turn support prestressed concrete boards, covered by 1/2" cellotex insulation
and a 3-ply built-up roofing. This building has no monitor but roof ventilators
are provided.
The structure consists of a main floor 121'-5" x 90'-10" out to out
dimensions with an area of 11,028.57 sq. ft. of manufacturing space; an entrance
porch 14'-0" x 7'-0" for an area of 98 sq. ft., two lean-to 31'-2" x 10'-6" for
an area of 327.28 sq. ft., and 20' x 25' for an area of 500 sq. ft. This gives a
total area of 11,953.85 sq. ft. of covered floor space.
The floor consists of a 4" thick reinforced concrete slab with a monolithic
cement finish on the manufacturing area, janitor's room, storage room and
stairs; quarry tiles on the entrance porch and ceramic tiles on the men and
ladies toilet rooms. Exteriors walls are of concrete blocks plastered and
painted on both sides, except on the front wall which is plastered and painted
together with a stucco finish. Interior walls at the lean-to are plastered and
painted together with a 5,-l1" high sprayed-on glazed finish wainscot at the men
and ladies toilet rooms.
Ceiling is rubbed and painted throughout the building.
Windows are miami louvers throughout the building.
Doors are made of ply wood, except for one flush metal double swing door at
the main entrance; a similar door equipped with antipanic hardware set at the
rear entrance, and one double sliding door at the loading platform.
Clearance in the manufacturing area from finish floor to lowest part of
beams at the side xxxxx is 12'-0" and 14'-9" at the highest point of the
building.
DESCRIPTION OF PARCEL OF LAND, LOT #2
LOCATED AT MACHETE INDUSTRIAL PARK
GUAYAMA, PUERTO RICO
SITE FOR PROJECT NO. T-0462-0-58
General:
Parcel of land, identified as Lot #2, located at Machete Industrial Park in
Guayama, Puerto Rico.
It bounds: by the North, with the main street of the industrial park; by the
South, with land owned by Xxxxxx Xxxxxxx Bruno; by the East, with Lot #4 of
same industrial park; and by the West, with Xxxxx Xxxx XX-0 00.
It has a surface area of approximately 7,074.71 square meters, equivalent to 1.8
"cuerdas".
It is affected by a 5'-0" wide right of way in favor of the Puerto Rico Electric
Power Authority along its eastern boundary.
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