NUMBER FIFTEEN
DEED OF LEASE
In the City of San Xxxx, Commonwealth of Puerto Rico, this twenty third
day of September, Nineteen hundred eighty three.
BEFORE ME
XXXXXXX XXXXX XXXXX
Notary Public and Attorney-at-Law in and for the Commonwealth of Puerto
Rico, with residence in the City of San Xxxx, Puerto Rico, and offices in the
nineteenth floor of the Popular Center Building, Xxxx Xxx Xxxx of said City.
APPEAR
AS PARTY OF THE FIRST PART: XXXXXXX DE FLAMBOYAN ASSOCIATES, L. P., a
limited partnership organized and existing under the laws of the State of
New York, United States of America, duly authorized to do business within the
Commonwealth of Puerto Rico, with its principal office in Binghamton, New York,
hereinafter referred to as the "LESSOR" and herein
represented by its general partner, Marco Industrial, Inc., a corporation
organized and existing under the laws of the State of New York, United States of
America, with its registered office in the City of New York, County of New York,
of said State herein represented by its President, Mister Xxxxxxx Xxxxxx
Xxxxxxx, also known as Xxxxxxx X. Xxxxxxx, of legal age, married, a business
executive and resident of Binghamton, New York, who states that he is duly
authorized to represent said limited partnership and binds himself to show such
authority whenever and wherever properly required to do so. AS PARTY OF THE
SECOND PART: XXXXXXX DE PUERTO RICO ASSOCIATES, INCORPORATED, D/B/A CONDADO
HOLIDAY INN, a corporation organized and existing under the laws of the State of
Delaware, United States of America, with its registered office in the City of
Wilmington, County of New Castle, of said State, duly authorized to do business
within the Commonwealth of Puerto Rico, with its principal office and place of
business in San Xxxx, Puerto Rico, hereinafter referred to as the "LESSEE" and
herein represented by its Chairman of the
2
Board and President Mister Xxxxxx Xxxxx Xxxxxx, also known as Xxxxxx X. Xxxxxx,
of legal age, married, a business executive and resident of New York, New York,
in transit in San Xxxx, Puerto Rico, who states that he is duly authorized to
represent said corporation and binds himself to show such authority whenever and
wherever properly required to do so; and I, the Notary, do hereby certify and
give faith that I am personally acquainted with the natural persons who appear
herein and from their statements and by belief, I also attest as to their age,
civil status, profession and residence. The appearing parties assure me of
their, and in my judgment they do have, the legal authority, capacity and
personal qualifications necessary to execute this Deed, and for such purpose
they freely and voluntarily
SET FORTH
FIRST: THE PROPERTY:
The LESSOR states and warrants that it is the sole owner with valid,
good and marketable fee simple title of the real estate property together with
all improvements
3
presently situated thereon described in the Spanish language in the Registry of
Property of Puerto Rico as follows:
"URBANA: Parcela de terreno situada en el sitiodenominado 'El Condado'
de la Seccion Norte del Barrio Santurce de la ciudad de San Xxxx, Puerto Rico,
con un area superficial total de Cuatro Mil Setecientos Setentiocho metros
cuadrados con Seis Mil Cuatrocientos Treintidos diez milesimas de otro
(4,778.6432) colindando por el Norte en una distancia de ochentidos metros con
cincuenta centesimas de otro, que es su frente, con la Avenida Las Nereidas,
antes, hoy denominada `Xx. Xxxxxxx'; por el Sur, que es su fondo, en linea
irregular y en una distancia total de noventisiete metros con sesentinueve
centesimas de otro con la Ensenada o Laguna del Condado; por el Oeste, con
terrenos propiedad xx Xxxx Brothers, antes, hoy Xxxx Xxxxxx, en una distancia de
cuarenticuatro metros con ochentiocho centesimas de otro y por el Este, en una
distancia de sesentiun metros con sesentidos centesimas de otro con terrenos
propiedad de la Sucesion de Xxxxxxxxx Xxxxx Xxxxxxxxxx, antes, luego propiedad
de Xxxx's Beach Resort, Incorporated, hoy Xxxx Xxxxxxxxx de Xxxxx."
"Enclava en dicho solar un edificio de varias plantas dedicado a
hotel".
Said real estate property is described in the English language as
follows:
"URBAN: Parcel of land located in the place denominated "Condado" of
Section North of the Santurce Xxxx of the City of San Xxxx, Puerto Rico, with a
total surface area of Four Thousand Seven Hundred Seventy Eight square meters
with Six Thousand Four Hundred Thirty Two Thousandths of another (4,778.6432),
adjacent by the North in a distance of eighty two meters with fifty hundreths of
another, which is its front, previously with Las Nereidas Avenue, denominated
today "Xx. Xxxxxxx"; by the South, which is its back, in an irregular line and
4
with a total distance of ninety seven meters with sixty nine hundredths of
another with Ensenada or Condado Lagoon; by the West with land property
previously of Xxxx Brothers, today Xxxx Xxxxxx, in a distance of forty four
meters with eighty eight hundredths of another and by the East, in a distance of
sixty one meters with sixty two hundredths of another with land property
previously of the Estate of Xxxxxxxxx Xxxxx Xxxxxxxxxx, then property of Xxxx's
Beach Resort, Incorporated, today Xxxx Xxxxxxxxx de Xxxxx".
"Erected in said lot is a building of various stories dedicated to a
hotel."
Said real estate property, together with any and all easements, rights,
privileges and appurtenances thereto belonging or in anywise appertaining
together with all of the estate, right, title, interest, claim or demand
whatsoever of LESSOR therein and in and to the streets and ways adjacent
thereto, in possession or expectancy, now or hereafter acquired, is hereinafter
collectively referred to as the "REAL PROPERTY".
SECOND: TITLE:
The LESSOR states and warrants that said real estate property is
recorded at page two hundred eighteen of volume four hundred sixty two of
Santurce Norte, lot number seventeen thousand two hundred eighty six, of the
Registry of Property of Puerto Rico, First Section of San
5
Xxxx and that it acquired the same pursuant to Deed Number One, executed on
September nineteen, nineteen hundred seventy seven before Notary Public Xxxxxxxx
X. Xxxxx Xxxxxx, subsequently clarified pursuant to Deed Number One, executed on
January thirty one, nineteen hundred seventy eight before Notary Public Xxxxxx
Xxxxxx Xxxxxx, recorded at page seventy six of volume six hundred fifty six of
Santurce Norte, fourth entry of the aforesaid lot.
THIRD: LIENS AND ENCUMBRANCES:
The LESSOR states that according to the Registry of Property said real
estate property is subject by its origin to restrictive covenants and by itself
to the following two mortgages:
A. Mortgage guaranteeing the payment of three promissory notes in the
amounts of One Million Seven Hundred Thousand Dollars, One Million Dollars and
Five Hundred Thousand Dollars, with interest at the rate of four percent per
annum, payable to the bearer on December one, nineteen hundred ninety-seven,
constituted pursuant to Deed Number Sixty Two, executed on September nineteen,
6
nineteen hundred seventy seven before Notary Public Xxxxxxx Xxxxxxxx Xxxxxxx,
subsequently clarified pursuant to Deed Number four, executed on January thirty,
nineteen hundred seventy eight before said Notary Public, recorded at page
seventy three of volume six hundred fifty six of Santurce Norte, third entry of
the aforesaid lot which mortgage is hereinafter referred to as the "FIRST
MORTGAGE". The FIRST MORTGAGE is presently in the reduced amount of Two Million
Six Hundred Twelve Thousand One Hundred Seventy Dollars.
B. Mortgage guaranteeing the payment of a mortgage note in the principal
amount of One Million Dollars with interest at the rate of eight percent per
annum, payable on demand to the Puerto Rico Development Fund, or its order, with
interest at the rate of eight percent per annum, subscribed by Mister Xxxx X.
Xxxxxxx, as representative of Marco Industrial, Inc., general partner of the
LESSOR, on February two, nineteen hundred seventy eight before Notary Public
Xxxxxx Xxxxxx Xxxxxx, Affidavit Number eight thousand nine hundred seventy one,
which mortgage was constituted pursuant to Deed Number Two,
7
executed before said Notary Public on the same date of said mortgage note,
recorded at page two hundred ninety three of volume seven hundred sixty eight of
Santurce Norte, fifth entry of the aforesaid lot which mortgage is hereinafter
referred to as the "SECOND MORTGAGE". The SECOND MORTGAGE is presently in the
reduced amount of Nine Hundred Fifty Five Thousand Nine Hundred Seventy Two
Dollars. The FIRST MORTGAGE and the SECOND MORTGAGE are hereinafter collectively
referred to as the "existing mortgages".
The LESSOR states and warrants that except as stated hereinbefore, the
aforesaid real estate property is free and clear of any other liens and
encumbrances and not be subject to any mortgages, liens and encumbrances with a
prior or an equal rank, except the restrictive covenants mentioned hereinbefore.
The LESSOR does hereby consent that the LESSEE's interest in the lease
which is the object of this Deed be assigned by XXXXXX, including the assignment
to the PONCE FEDERAL SAVINGS and LOAN ASSOCIATION OF PUERTO RICO as a collateral
8
guarantee for a Loan that said institution has agreed to grant to XXXXXXXX
ELECTRONICS, INC., a corporation organized and existing under the laws of the
State of Delaware.
FOURTH: The appearing parties state that they have agreed to the lease
of the REAL PROPERTY together with the IMPROVEMENTS, as such term is hereinafter
defined, whereof they freely and voluntarily
EXECUTE
FIFTH: LEASE: In consideration of the mutual covenants hereinafter
contained, LESSOR hereby demises, lets and leases to LESSEE and LESSEE hereby
leases from LESSOR, the REAL PROPERTY together with all of the IMPROVEMENTS
thereto. The term "IMPROVEMENTS" shall mean all buildings and structures now or
hereafter located on the REAL PROPERTY and all fixtures and equipment installed
therein or appurtenant thereto and all alterations and improvements thereto and
replacements thereof including, without limitation, all heating, plumbing,
ventilating, air conditioning and electrical systems, all fixtures, equipment,
furnishings and other items of personal
9
property now or hereafter installed therein. The REAL PROPERTY and the
IMPROVEMENTS are sometimes hereinafter collectively referred to as the "DEMISED
PREMISES".
SIXTH: TERM: The Term of this lease shall be TEN YEARS, commencing as of
October one, nineteen hundred eighty three and expiring, unless sooner
terminated pursuant to the provisions hereof, at midnight on September thirty,
nineteen hundred ninety three.
SEVENTH: RENTAL PAYMENTS: LESSEE shall pay to or upon the order of
LESSOR as rental payment for the leasing of the DEMISED PREMISES the following
amounts:
A. During the first five years of the term of this lease, to wit: the
period commencing October one, nineteen hundred eighty three and expiring
September thirty, nineteen hundred eighty eight, annual rent of Five Hundred
Sixty Six Thousand Dollars payable in equal monthly installments of Forty Seven
Thousand One Hundred Sixty Six Dollars and Sixty Seven Cents, said installments
being payable on the first day of each month
10
commencing October one, nineteen hundred eighty three through and including
September one, nineteen hundred eighty eight; and
B. During the second five years of the term of this lease, to-wit: the
period commencing October one, nineteen hundred eighty eight and expiring
September thirty, nineteen hundred ninety three, an annual rent of Six Hundred
Twenty Two Thousand Dollars payable in equal monthly installments of Fifty One
Thousand Eight Hundred Thirty Three Dollars and Thirty Three Cents, said
installments being payable on the first day of each month commencing October
one, nineteen hundred eighty eight and on the first day of each succeeding month
through and including September one, nineteen hundred ninety three.
EIGHTH: EXTENSION: LESSEE shall have the option to extend this lease for
an additional term of ten and one-half years, commencing October one, nineteen
hundred ninety three and expiring, unless sooner terminated pursuant to the
provisions hereof, at midnight on March thirty one, two thousand four. LESSEE
may exercise such
11
option by written notice given to LESSOR at any time prior to midnight on June
thirty, nineteen hundred ninety three.
LESSEE shall have the option to further extend this lease for an
additional term of four and one-half years, commencing April one, two thousand
four and expiring, unless sooner terminated pursuant to the provisions hereof,
at midnight on September thirty, two thousand eight. LESSEE may exercise its
option by written notice given to LESSOR not earlier than November one, two
thousand three and not later than December 31, 2003. XXXXXX's right to exercise
such option shall be conditioned upon all of the following conditions existing
on the date that LESSEE gives its written notice of its exercise of such option
to extend the term of this lease:
A. The Sixteen Million Dollar obligation secured by the mortgage on the
Condado Holiday Inn Hotel and Sands Casino in favor of PONCE FEDERAL SAVINGS AND
LOAN ASSOCIATION OF PUERTO RICO and the other participating banks, said PONCE
FEDERAL SAVINGS AND LOAN ASSOCIATION OF PUERTO RICO and participating banks
together with their successors
12
and assigns are hereinafter collectively referred to as the "MORTGAGEE", shall
remain unpaid; and
B. The MORTGAGEE shall have, in writing, requested LESSEE to exercise
such option.
If LESSEE exercises such first option and extends the term of this lease
for ten and one-half years, LESSEE shall pay to LESSOR as rental payment for the
leasing of the DEMISED PREMISES the following amounts:
(a) During the first five years of the first option period of this
lease, to-wit: the period commencing October one, nineteen hundred ninety three
and expiring September thirty, nineteen hundred ninety eight, an annual rent of
Six Hundred Eighty Four Thousand Dollars payable in equal monthly installments
of Fifty Seven Thousand Dollars, said installments being payable on the first
day of October, nineteen hundred ninety three and on the first day of each
succeeding month through and including September one, nineteen hundred ninety
eight; and
(b) During the second five years of the first option period of this
lease, to-wit: the period commencing October one, nineteen hundred ninety eight
and expiring
13
September thirty, two thousand three, an annual rent of Seven Hundred Fifty Two
Thousand Dollars payable in equal monthly installments of Sixty Two Thousand Six
Hundred Sixty Six Dollars and Sixty Seven Cents, said installments being payable
on the first day of each month commencing October one, nineteen hundred ninety
eight and on the first day of each succeeding month through and including
September one, two thousand three; and
(c) During the final six months of the first option period of this
lease, to-wit: the period commencing October one, two thousand three and
expiring March thirty one, two thousand four, a total rent of Four Hundred
Thirteen Thousand Five Hundred Dollars payable in equal monthly installments of
Sixty Eight Thousand Nine Hundred Sixteen Dollars and Sixty Seven Cents, said
installments being payable on the first day of each month commencing October
one, two thousand three and on the first day of each succeeding month through
and including March one, two thousand four.
If LESSEE exercises such second option and further extends the term of
this lease for an additional four and
14
one-half years, LESSEE shall pay to the LESSOR as rental payment for the leasing
of the DEMISED PREMISES during the final four and one-half year option term,
to-wit: the period commencing April one, two thousand four and expiring
September thirty, two thousand eight, an annual rent of Eight Hundred Twenty
Seven Thousand Dollars payable in equal monthly installments of Sixty Eight
Thousand Nine Hundred Sixteen Dollars and Sixty Seven Cents, said installments
being payable on the first day of each month commencing April one, two thousand
four and on the first day of each succeeding month through and including
September one, two thousand eight.
NINTH: EXISTING MORTGAGES - LESSEE'S RIGHT TO CURE DEFAULTS:
X. XXXXXX warrants and represents to LESSEE in respect of the EXISTING
MORTGAGES as follows:
One. The unpaid balance as of August thirty one, Nineteen hundred eighty
three is: the FIRST MORTGAGE, two million six hundred twelve thousand one
hundred seventy dollars; the SECOND MORTGAGE,
15
nine hundred fifty five thousand nine hundred seventy two dollars;
Two. The copy of Deed Number Sixty Two, executed before Notary Public
Xxxxxxx Xxxxxxxx Xxxxxxx on September Nineteen, nineteen hundred seventy seven,
together with the copy of Deed Number Four executed before said Notary on
January thirty, nineteen hundred seventy eight, clarifying the same and the copy
of Deed Number One, executed before Notary Public Xxxxxxxx X. Xxxxx Xxxxxx on
September Nineteen, nineteen hundred seventy seven, together with the copy of
Deed Number One, executed before Notary Public Xxxxxx Xxxxxx Xxxxxx on January
thirty one, nineteen hundred seventy eight, clarifying the same, that the LESSOR
has delivered to the LESSEE are true, complete and accurate in all respects and
contain all of the terms and conditions of the FIRST MORTGAGE as of this date
without any exception. Likewise, the copy of Deed Number Two, executed before
Notary Public Xxxxxx Xxxxxx Xxxxxx on February two, nineteen hundred seventy
eight that the LESSOR has delivered to the LESSEE is also true, complete and
16
accurate in all respects and contains all of the terms and conditions of the
SECOND MORTGAGE as of this date without any exception.
Three. The EXISTING MORTGAGES are in full force and effect, all payments
required to be made thereunder through the date of this lease have been made, no
uncured notice of default with respect thereto has been received by LESSOR
through the date of this lease and LESSOR has no knowledge as of the date of
this lease, of the existence or non-existence of any condition or state of
facts, the existence or non-existence of which constitutes or would, with the
passage of time, constitute or create a default under the EXISTING MORTGAGES.
X. XXXXXX covenants and agrees with XXXXXX that with respect to the
EXISTING MORTGAGES:
One. LESSOR shall pay when due all sums payable by Mortgagor pursuant to
the EXISTING MORTGAGES and shall promptly perform all acts and obligations
required to be performed by Mortgagor pursuant to the EXISTING MORTGAGES.
17
Two. LESSOR will not cause, suffer or permit any default to exist or
remain uncured under the terms of the
EXISTING MORTGAGES.
Three. XXXXXX shall direct the holders of the EXISTING MORTGAGES to send
all notices, demands and communications concerning the EXISTING MORTGAGES to
LESSEE as agent for receipt of such notices for LESSOR.
X. XXXXXX may, at XXXXXX's sole option, pay and perform all of LESSOR's
obligations under the EXISTING MORTGAGES and otherwise deal with the holders of
the EXISTING MORTGAGES in the name of and in place of LESSOR; in furtherance
thereof, LESSOR hereby appoints LESSEE as its attorney-in-fact, which
appointment shall be deemed coupled with an interest and irrevocable.
In the event LESSOR shall default in the payment or performance of any
of LESSOR'S obligations under the EXISTING MORTGAGES and provided such default
is not occasioned by LESSEE'S breach of its covenant set forth in subparagraph D
hereof, LESSEE shall have the right but
18
not the obligation to deal directly with the holders of said EXISTING MORTGAGES
and to cure such defaults. In the event that the defaults are of such a nature
that same cannot be cured, LESSOR covenants and agrees with LESSEE that LESSOR
shall satisfy said EXISTING MORTGAGES and cause same to be discharged of record
prior to any public sale of said EXISTING MORTGAGES in foreclosure. In the event
LESSOR shall fail or refuse to satisfy and discharge the EXISTING MORTGAGES as
in the preceding sentence required then, and in such event, LESSEE or LESSEE'S
parent Xxxxxxxx Electronics, Inc. (XXXXXXXX) or any affiliate (AFFILIATE) of
LESSEE or any third party designee (DESIGNEE) of LESSEE shall have the right to
pay off or purchase by assignment the EXISTING MORTGAGES or such of same as
shall be in default.
In the event that any of LESSEE, XXXXXXXX, AFFILIATE OR DESIGNEE shall
advance funds to the holders of the EXISTING MORTGAGES to cure any default on
the part of LESSOR pursuant to the EXISTING MORTGAGES, including without
limitation, purchasing by
19
assignment or satisfying said EXISTING MORTGAGES in the event that such default
cannot be cured, then in any such events LESSEE shall, if LESSEE shall advance
any such funds purchasing or satisfying said EXISTING MORTGAGES, have the
absolute right to offset against the next due installments of rent payable
hereunder the cost of curing such default or acquiring or satisfying such
EXISTING MORTGAGES, including, without limitation, the cost of all recording
fees, title charges, attorneys' fees and interest on all monies advanced or
expended in connection with curing such defaults or acquiring or satisfying such
EXISTING MORTGAGES.
In the event XXXXXXXX, AFFILIATE OR designee shall pay off or acquire
such EXISTING MORTGAGES as above provided, then LESSEE shall have the absolute
right to pay the next due installments of rent payable hereunder to XXXXXXXX,
AFFILIATE or DESIGNEE as the case may be, towards reimbursement of the cost of
curing such default or acquiring or paying off such EXISTING MORTGAGES
including, without limitation, the cost of all recording fees, title charges,
attorneys' fee and interest on
20
all monies advanced or expended in connection with curing such defaults or
acquiring or satisfying such EXISTING MORTGAGES.
Interest on any of the aforesaid sums expended or advanced by LESSEE,
XXXXXXXX, AFFILIATE or DESIGNEE to cure such defaults or pay off or acquire such
EXISTING MORTGAGES shall be calculated on the basis of the actual interest and
other costs charged to LESSEE, XXXXXXXX, AFFILIATE or DESIGNEE by a third party
lender who shall lend to LESSEE, XXXXXXXX, AFFILIATE or DESIGNEE the sums
necessary to finance the costs and expenses incurred in curing such default or
acquiring such EXISTING MORTGAGES. If LESSEE, XXXXXXXX, AFFILIATE or DESIGNEE
shall pay such costs and expenses out of their own funds, interest on such funds
shall be calculated at rate equal to one percent above the highest published
prime rate of any of the three following New York City Banks: The Chase
Manhattan Bank, N.A., Citibank, N.A., and the Chemical Bank, N.A., such interest
rate to be adjusted monthly to take into
21
account the increases or decreases in such prime rate; such adjustments to
automatically take effect on such dates.
Nothing herein contained shall be construed to limit or in any way
impair the right of LESSEE, XXXXXXXX, AFFILIATE or DESIGNEE to foreclose the
EXISTING MORTGAGES by virtue of the defaults of LESSOR in the event that XXXXXX,
XXXXXXXX, AFFILIATE or DESIGNEE shall purchase by assignment the EXISTING
MORTGAGES. Any payments made by LESSEE to XXXXXXXX, AFFILIATE or DESIGNEE shall
be applied first to the payment of interest on the monies so advanced by
XXXXXXXX, AFFILIATE or DESIGNEE and the non reduction of principal. If LESSEE
shall advance the funds, repayment to LESSEE shall be made as in the preceding
sentence provided.
To further secure XXXXXX'S covenant to satisfy the EXISTING MORTGAGES
prior to public sale as above set forth herein, Xxxxxx Xxxxxx Xxxxxxx and
Xxxxxxx Xxxxxx Xxxxxxx are executing and delivering to LESSEE their joint and
several guaranty of XXXXXX'S obligations and their agreement to indemnify LESSEE
from and against
22
any and all loss, liability, cost or expenses incurred or sustained by LESSEE by
virtue of XXXXXX's breach of its obligations set forth above in this
subparagraph C.
D. Notwithstanding anything contained herein to the contrary, XXXXXX
agrees that XXXXXX shall have the right to deduct from each monthly rent payment
due hereunder an amount of money equal to the regular monthly payments of
interest and principal due pursuant to the terms of the EXISTING MORTGAGES and
LESSEE covenants to pay such funds directly to the holders of said EXISTING
MORTGAGES.
TENTH: USE AND OPERATION: LESSEE shall have the complete right, control
and discretion in the operation of the DEMISED PREMISES for any lawful purpose.
Such right, control and discretion by XXXXXX shall include, without limitation,
the use of the DEMISED PREMISES for all customary services as a hotel, the
charges to be made for and the terms and admittance to the hotel for rooms, for
privileges, for gaming, entertainment and amusement, for food and beverages, the
labor policies of the operation, and all phases of promotion and publicity.
23
LESSEE shall at its sole expense cause the DEMISED PREMISES to comply at all
times with all applicable laws, ordinances, rules and regulations in force
during the term of this lease, including any renewal term. Nothing contained
herein shall constitute or be construed to be or create a partnership or joint
venture between LESSOR and XXXXXX, their successors and assigns. Except as
otherwise provided herein, LESSEE shall bear all expenses of operating the
DEMISED PREMISES pursuant to this lease. XXXXXX shall have the right upon
reasonable advance notice to LESSEE to inspect the DEMISED PREMISES.
ELEVENTH: ALTERATIONS: LESSEE shall have the right, from time to time,
during the term of this lease, at XXXXXX's sole expense and discretion, to make
such non-structural alterations or improvements in or to the DEMISED PREMISES;
provided, however, that no alteration or improvement exceeding One Hundred
Thousand Dollars in any fiscal year shall be made without the prior written
consent of LESSOR, which consent shall not be unreasonably withheld or delayed.
24
TWELFTH: GENERAL MAINTENANCE: LESSEE shall, at LESSEE'S sole expense,
maintain the DEMISED PREMISES in good repair, appearance, working order and
condition, and, except as hereinafter provided, make all necessary repairs,
renewals and replacements thereto. LESSOR shall, at XXXXXX's sole expense, make
all necessary repairs to the structural components of the IMPROVEMENTS. Upon the
termination of this Agreement, XXXXXX shall turn over to LESSOR the IMPROVEMENTS
in as good condition as when XXXXXX took possession thereof, ordinary wear and
tear, acts of God or force majeure excepted.
THIRTEENTH: POSSESSION: XXXXXX agrees that XXXXXX, on the paying of rent
provided herein and performing all of its agreements under this lease, shall
peaceably and quietly hold the DEMISED PREMISES for the term aforesaid and any
renewal thereof, free from interruption or disturbance; subject, however, to all
the terms of this lease.
FOURTEENTH: PERMITS: LESSOR and LESSEE shall use their best endeavours
to obtain from the
25
applicable Puerto Rico governmental authorities whatever permits, licenses,
consents, sanctions or authorities that may from time to time be required for
the operation and use of the DEMISED PREMISES as a hotel and casino, all at the
sole expense of LESSEE.
FIFTEENTH: INSURANCE: LESSEE shall, at its sole expense, procure and
maintain at all times during the term of this lease or any renewal thereof
adequate and appropriate insurance for the DEMISED PREMISES with solvent and
responsible insurance companies reasonably acceptable to LESSOR. Such insurance
policies shall be carried in favor of XXXXXX and XXXXXX.
If the DEMISED PREMISES or any part thereof shall be damaged by fire or
other casualty, LESSEE shall give immediate written notice thereof to LESSOR and
this lease shall continue in full force and effect except as hereinafter set
forth.
If the DEMISED PREMISES are partially damaged or rendered partially
unusable by fire or other casualty, the damages thereto shall be repaired by
LESSEE from the proceeds of insurance maintained pursuant to this lease.
26
The rent shall be allocated between the damaged or unusable portion of the
DEMISED PREMISES and the balance of the DEMISED PREMISES, and the portion of the
rent allocated to the damaged or unused portion shall cease until the repairs
are completed while the rent for the balance of the DEMISED PREMISES shall
continue unabated.
If the DEMISED PREMISES, in LESSEE's reasonable judgment, are totally
damaged or rendered wholly unusable by fire or other casualty, then LESSEE shall
have the following options exercisable by written notice of LESSOR given within
ninety days after such fire or casualty:
X. XXXXXX may elect to continue this lease in effect and may repair any
or all the damages from the proceeds of insurance maintained pursuant to this
lease. If such insurance proceeds exceed the costs of repair, the excess shall
be paid to LESSOR. If such proceeds are insufficient to restore the DEMISED
PREMISES to the condition that existed immediately prior to such fire or other
casualty, LESSEE may advance the additional costs
27
of such repairs and restorations and such amounts advanced shall be a credit,
except as hereinafter provided, against all subsequently due rental payments up
to the full amount of such additional costs. The provisions of the preceding
sentence to the contrary notwithstanding, the credit that LESSEE shall be
entitled to take against subsequently due rental payments shall only be in an
amount equal to the difference between the rental payments due hereunder and the
regular monthly amounts payable to the holders of the EXISTING MORTGAGES. If
LESSEE elects to continue this lease in effect pursuant to this Section
ELEVENTH, the rent shall cease until the earlier to occur of the completion of
repairs, or twelve months after the fire or casualty; or
B. Not to repair the damages, in which event the rent shall be
proportionately paid up to the time of the casualty and thenceforth shall cease
until the date when the DEMISED PREMISES shall have been repaired and restored
by XXXXXX, if LESSOR elects timely to so repair and restore pursuant to the next
paragraph of this Lease,
28
subject to XXXXXX's right to elect not to restore the same as hereinafter
provided.
If the DEMISED PREMISES are damaged and rendered wholly unusable by the
fire or other casualty and if LESSEE has not undertaken to continue this lease
in effect as provided in this Section ELEVENTH, then, in such event LESSOR may
elect to terminate this LEASE by written notice to the LESSEE given within
thirty days after receipt of LESSEE's notice given pursuant to the preceding
paragraph of this lease which notice from the LESSOR shall specify a date for
the expiration of this lease, which date shall not be more than sixty days after
the giving of such notice, and upon the date specified in such notice the term
of this lease shall expire as fully and completely as if such date were the date
set forth above for the termination of this Lease and LESSEE shall forthwith
quit, surrender and vacate the DEMISED PREMISES without prejudice to LESSOR'S
rights and remedies against LESSEE under the provisions of this lease in effect
prior to such termination, and any rent owing shall be paid up to the date of
the fire or other casualty and any payments of rent made by
29
LESSEE which were on account of any period subsequent to such date shall be
returned by LESSOR to LESSEE. The insurance proceeds received on account of the
fire or casualty which have not been utilized to repair or restore the DEMISED
PREMISES shall be paid to LESSOR. Unless LESSOR shall serve a termination notice
as provided for in this paragraph, LESSOR shall repair and restore all the
damages and the DEMISED PREMISES to a condition at least as good as that which
existed prior to such fire or casualty, with all reasonable expedition subject
to delays due to adjustment of insurance claims, labor troubles and causes
beyond LESSOR's control.
XXXXXX and LESSOR hereby waive any rights they may have against each
other on account of any loss sustained as a result of a fire or other casualty
that is insured, it being understood that such insurance is for the benefit of
both LESSEE and XXXXXX and no insurer shall have rights of subrogation against
the other.
SIXTEENTH: CONDEMNATION: XXXXXX and LESSEE covenant and agree that in
the event of a taking by condemnation of all or any portion of the DEMISED
30
PREMISES by a competent authority, which taking does not result in a termination
of this Lease, any award for such condemnation shall, subject to the rights of
the holders of the EXISTING MORTGAGES, be disposed of as follows:
A. If such taking by condemnation shall be of all or substantially all
of the DEMISED PREMISES, this lease shall terminate as of the date of such
taking and any rent owing shall be paid up to the date of such taking any
payments of rent made by LESSEE which were on account of any period subsequent
to such data shall be returned to LESSOR by XXXXXX and LESSOR shall be entitled
to such award.
B. If such taking is of a part of the DEMISED PREMISES and LESSEE, in
its reasonable discretion, determines that it can continue to occupy the
remaining portion of the DEMISED PREMISES and use same for the purposes set
forth herein then, and in such event, this lease shall not terminate and the
award shall first be applied to the restoration of the remaining portion of the
DEMISED PREMISES into a single architectural unity and/or for the
31
replacement and relocation, if practical, of any of the facilities or portions
of the DEMISED PREMISES so taken and the remainder of the award, if any, shall
be paid to LESSOR and the rent payable hereunder by XXXXXX from and after the
date of such taking shall be reduced proportionately to reflect the reduced
value of the DEMISED PREMISES.
SEVENTEENTH: EMPLOYMENT POLICY: LESSEE shall use reasonable efforts to
employ local Puerto Rican personnel in the operation of the DEMISED PREMISES;
provided, however, that LESSEE shall have the right to employ such non-local
personnel as LESSEE in its sole discretion shall deem necessary or desirable.
EIGHTEENTH: SUBLEASE: LESSEE shall have the right to sublet any portion
of the DEMISED PREMISES; provided, however, that any sublease shall expire or
terminate not later than the expiration or termination of this lease unless
XXXXXX otherwise agrees in writing. LESSEE will not sublease the whole or any
substantial portion of the DEMISED PREMISES without
32
LESSOR'S written consent, which shall not be reasonably withheld or delayed.
NINETEENTH: DEFAULTS: If at any time, or from time to time, during the
term of this lease or any renewal term any of the following events of default,
hereinafter referred to as "EVENTS OF DEFAULT", shall occur and not be remedied
within the periods of time hereinafter specified, namely:
(a) If LESSEE shall default in the payment of any installment of rent or
any other sum or payment which may become due hereunder and such default shall
continue for thirty days after written notice that the same is due and payable;
If any of the following shall occur:
(b) The entry of a decree or order for relief by a court having
jurisdiction in the premises in respect of LESSEE in an involuntary case under
the federal bankruptcy laws, as now or hereafter constituted, or any other
applicable federal, state or commonwealth bankruptcy, insolvency or other
similar law, or appointing a receiver, liquidator, assignee, custodian, trustee,
33
sequestrator (or other similar official) of LESSEE or for any substantial part
of its property, or ordering the winding-up or liquidation of its affairs and
the continuance of any such decree or order unstayed and in effect for a period
of sixty consecutive days; or
(c) The commencement by LESSEE of a voluntary case under the federal
bankruptcy laws, as now constituted or hereafter amended, or any other
applicable federal, state or commonwealth bankruptcy, insolvency or other
similar law, or the consent by it to the appointment of or taking possession by
a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of LESSEE or for any substantial part of its property, or the
making by it of any assignment for the benefit of creditors, or the failure of
LESSEE generally to pay its debts as such debts become due, or the taking of
corporate action by XXXXXX in furtherance of any of the foregoing; or
(d) If LESSEE shall fail to materially perform, keep or fulfill any
other of the covenants, undertakings, obligations or conditions of this lease,
and any such default shall continue for a period of more than thirty days after
34
written notice thereof is given by LESSOR to LESSEE; provided, however, that if
such default cannot be cured with due diligence within said thirty day period
and provided LESSEE has commenced to cure such default and is diligently and
expediously engaged in curing such default, XXXXXX's time to cure such default
shall be extended for such period of time as may be required to cure such
default.
Upon the happening and continuance of any EVENT OF DEFAULT, LESSOR may
at its option terminate this lease on a date specified in writing to LESSEE and
upon the date so specified, the term of this lease shall expire as fully and
completely as if that day were the day herein definitely fixed for the
expiration of the term of this lease and LESSEE shall then quit and surrender
the DEMISED PREMISES to LESSOR, and LESSEE shall remain liable to LESSOR for the
payment of all rents due pursuant to this lease to the date of such termination,
but not thereafter.
TWENTIETH: INDEMNITY: LESSEE shall indemnify and hold LESSOR and its
partners, and all
35
officers and directors, and controlling persons of such partners, harmless from
and against all liabilities, obligations, damages, penalties, claims, losses,
causes of action, costs, charges and expenses which may be imposed upon or
incurred by or asserted against them or either of them, or the DEMISED PREMISES,
or any part thereof, arising out of the operation of the DEMISED PREMISES or the
Condado Holiday Inn Hotel and Sands Casino by LESSEE pursuant to this Lease.
TWENTY FIRST: ENTIRE AGREEMENT: This lease constitutes the entire
agreement of the parties with respect to the subject matter hereof. No change,
modification, amendment, addition or termination of this lease or any part
thereof shall be valid unless in writing and signed by or on behalf of the party
to be charged therewith.
TWENTY SECOND: NOTICES: Any and all notices or other communications or
deliveries required or permitted to be given pursuant to any of the provisions
of this lease shall be deemed to have been duly given for all purposes if sent
by certified or registered mail, return
36
receipt requested and postage prepaid, hand delivered or sent by telegraph or
telex as follows: If to LESSEE, at: c/x Xxxxxxxx Electronics, Inc., seven six
seven (000) Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx one zero one five three (10153),
Attention: Mister Xxxxxx Xxxxxx, with copies to Golenbock and Xxxxxx, six four
five (000) Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx one zero zero two (10022),
Attention: Xxxxxx Xxxxxxxxx and Xxxxx Federal Savings and Loan Association of
Puerto Rico, P. O. Box one zero two four (1024), Ponce Puerto Rico zero zero
seven two three hyphen one zero two four (00723-1024); If to LESSOR, at: c/x
Xxxxxxx, three hundred (300) Plaza Drive, Binghamton, New York one three nine
zero three (13903), Attention: Mister Xxxxxx Xxxxxxx, with a copy to: Xxxxxxxxx
& Diamond, one three three three (0000) Xxx Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx,
D.C. two zero zero three six (20036), Attention: Xxxxxx Xxxxxxxxx, III; or at
such other address as any party may specify by notice given to other party in
accordance with this Section Twenty Third. The date of giving of any such notice
shall be the date of hand delivery, the date following the posting of the
37
mail or delivery to the telegraph company or when sent by telex.
TWENTY THIRD: SPECIAL COVENANTS RELATING TO BRIDGE:
LESSOR hereby grants to LESSEE a permanent right of support for the
existing bridge over Ashford Avenue, which bridge connects the REAL PROPERTY
with the real estate property owned by the LESSEE and known as the Condado
Holiday Inn. LESSEE shall have the obligation at all times to repair and
maintain said bridge and shall have the right at all times to come upon the REAL
PROPERTY for the purpose of maintaining, repairing OR REPLACING THE BRIDGE.
Lessee shall have the right, subject to requirements of law upon the termination
of this lease to seal off and close the bridge to all traffic by erecting a wall
or suitable barrier at such location on the bridge as LESSEE may determine.
The rights granted herein for support, repair, maintenance and
replacement shall survive the termination of this lease and shall run with the
land and be binding
38
upon and inure to the benefit of the parties hereto, their successors and
assigns.
TWENTY FOURTH: XXXXXX'S RIGHT OF FIRST REFUSAL: If at any time during
the term of this lease or any renewal term LESSOR receives a bona fide offer to
purchase the REAL PROPERTY together with the improvements thereon, which XXXXXX
is willing to accept, XXXXXX shall have a sixty (60) days first refusal option
to purchase the REAL PROPERTY on the same terms and conditions as XXXXXX is
willing to accept from such bona fide purchaser. XXXXXX shall promptly submit to
XXXXXX a contract of sale executed by such third party together with a written
notice that XXXXXX is willing to sell the REAL PROPERTY upon the terms and
conditions set forth in such contract. Thereafter, LESSOR shall have sixty (60)
days to enter into a contract with LESSOR upon the same or equivalent terms,
except that if said executed contract contemplates a consideration to be paid by
such purchaser to LESSOR other than a cash consideration then, and in such
event, such contract shall state a cash equivalent to the consideration to be
paid by such purchaser
39
to LESSOR and LESSEE may pay the cash equivalent of such consideration to
LESSOR. If XXXXXX fails to exercise the first refusal option granted herein, and
if XXXXXX does not sell the REAL PROPERTY to the bona fide purchaser entering
into the contract with LESSOR within one hundred eighty (180) days after the
execution of such contract of sale then, and in such event, LESSOR shall be
required to repeat the foregoing procedure for any subsequent proposed sale
including a proposed sale to the same purchaser.
TWENTY FIFTH: ESTOPPEL CERTIFICATES:
X. XXXXXX'X CERTIFICATE:
LESSOR shall, without charge, at any time and from time to time,
within ten (10) days after reasonable request by XXXXXX, deliver a written
instrument to LESSEE or any other person, firm or corporation specified by
XXXXXX, duly executed and acknowledged certifying:
(a) Whether LESSEE has faithfully and fully made all payments
then and theretofore due to LESSOR;
40
(b) Whether this lease is unmodified and in full force and
effect; or if there has been any modification, whether this lease is in full
force and effect as modified, and stating any such modification;
(c) Xxxxxxx XXXXXX knows or does not know, as the case may be, of
any default by XXXXXX in the performance by LESSEE of all agreements, terms,
covenants and conditions on XXXXXX's part to be performed hereinunder. If LESSOR
certifies that he knows of any such default, he shall specify the same in said
written instrument; and
(d) The dates to which the basic rent, additional rent and other
charges hereunder have been paid.
X. XXXXXX'S CERTIFICATE:
LESSEE shall, without charge, at any time and from time to time,
within ten (10) days after reasonable request by XXXXXX, deliver a written
instrument to LESSOR or any other person, firm or corporation specified by
XXXXXX, duly executed and acknowledged, certifying:
41
(a) Whether this lease is unmodified and in full force and
effect, or, if there has been any modification, whether the same is in full
force and effect as modified, and stating any such modification;
(b) Whether or not there are then existing any setoffs or
defenses against the enforcement of any of the agreements, terms, covenants or
conditions of this lease and any modification thereof upon the part of LESSEE to
be performed or complied with, and if so, specifying the same; and
(c) The dates to which the basic rent, additional rent and other
charges hereunder have been paid.
TWENTY SIXTH: TAX EXEMPTION: LESSOR warrants and represents that
pursuant to the terms of an order (the "ORDER") signed by Xxxxxx Xxxxxx Xxxxxxx,
the Governor of Puerto Rico, on September seventh, nineteen hundred eighty
three, the REAL PROPERTY and the personal property utilized in the operation of
the REAL PROPERTY enjoys partial tax exemption on real and personal property
taxes, which tax exemption pursuant to the terms of the ORDER is for an initial
term of eight and
42
one half (8 1/2) years expiring December thirty one, nineteen hundred eighty
seven, which term shall automatically be extended for ten (10) additional years
in accordance with the provisions of the ORDER. Anything in this lease to the
contrary notwithstanding, LESSOR covenants and agrees with LESSEE that LESSOR
shall, during the term of this Lease, pay and discharge when due Fifty percent
of any and all real or personal property taxes payable with respect to the REAL
PROPERTY and the personal property utilized in the operation of the REAL
PROPERTY and LESSEE shall pay and discharge the other Fifty percent.
TWENTY SEVENTH: PARTIAL INVALIDITY: Should any clause, section or part
of this lease be held or declared to be void or illegal for any reason, all
other clauses, sections or parts of this lease which can be effected without
such illegal clause, section or part shall nevertheless continue in full force
and effect.
TWENTY EIGHTH: GOVERNING LAW: This lease shall be governed, interpreted
and construed in accordance with the laws of the State of New York.
43
TWENTY NINTH: ASSIGNMENT -- SUCCESSORS AND ASSIGNS: This lease and the
various rights and obligations arising hereunder shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
assigns.
THIRTIETH: CAPTIONS: The headings or captions under sections of this
lease are for convenience and reference only nd do not in any way modify,
interpret or construe the intent of the parties or effect any of the provisions
of this lease.
ACCEPTANCE
The appearing parties accept this Deed as drafted because it has been
drawn in accordance with their instructions and acknowledge that they duly
understand the English language.
I, the Notary, do hereby give faith and certify that I have advised the
appearing parties of the legal effects of this Deed and that they waived their
right to have attesting witnesses present in its execution after having been
duly advised of such right.
44
I. the Notary, also give faith and certify that this Deed was read
personally by each of the appearing parties, who having found it in accordance
with their instructions, stipulations, terms and conditions, approve, ratify and
confirm the contents hereof; and that thereupon each of the appearing parties
affixed his initials on each and every page and signs the original of this Deed
before me, the Notary; of all of which, under my signature and seal, signing,
sealing, marking and flourishing the same according to law, I, the undersigned
Notary, ATTEST.
SIGNED: Xxxxxxx Xxxxxx Xxxxxxx---Xxxxxx Xxxxx Xxxxxx
SIGNED, FLOURISHED, MARKED AND SEALED: Xxxxxxx Xxxxx Xxxxx
The initials of each of the signataries, the Notary's seal and flourish
appear on each of its pages.
The corresponding internal revenue stamps and that of the notarial tax
have been cancelled on the original.
I, the NOTARY, CERTIFY and GIVE FAITH that the foregoing is a true and
exact copy of its original which forms part of my protocol of public instruments
for the current year.
IN WITNESS WHEREOF, at the request of Xxxxxxx de Puerto Rico Associates,
Incorporated, d/b/a Condado Condado Holiday Inn and after annotating in the
original that it has been issued, I issue this FIRST Certified
45
Copy, which I sign, flourish, mark and seal in the place and on the same date of
its execution, of all of which, I ATTEST.
NOTARY PUBLIC
46
CERTIFIED, RETURN
RECEIPT REQUESTED
September 23, 1983
Xxxxxxx de Flamboyan
Associates, L.P.
c/x Xxxxxxx
000 Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
ATTN: Xx. Xxxxxx Xxxxxxx
Re: Flamboyan Building
(Laguna Wing, Condado
Holiday Inn)
Dear Sirs:
Reference is made to the Deed of Lease executed by Xxxxxxx de Flamboyan
Associates, L.P. and Xxxxxxx de Puerto Rico Associates, Incorporated on this
same date before Notary Public Xxxxxxx Xxxxx Xxxxx, Deed No. 15, specifically to
paragraph EIGHTH of the same.
Xxxxxxx de Flamboyan Associates, L.P.
Setpember 23, 1983
Page -2-
September 23, 1983
Xxxxxxx de Puerto Rico Associates, Incorporated does hereby exercise its
option to extend the lease for an additional term and does hereby extend the
term of the lease for an additional ten and one-half years.
Cordially yours,
XXXXXXX DE PUERTO RICO
ASSOCIATES, INCORPORATED
By: /s/
----------------------
Xxxxxx X. Xxxxxx
Chairman of the Board
and President
cc: Xxxxxxxxx & Diamond (Certified,
Return Receipt Requested)
0000 Xxx Xxxxxxxx Xxxxxx, X.X.
Washington, D.C. 20036
Attn: Xxxxxx Xxxxxxxxx XXX
Xxxxx Federal Savings & Loan Association
Receipt Acknowledge. The term of the lease is hereby extended for an
additional term of ten and a half years, whereof the term of the lease shall be
twenty and a half years.
XXXXXXX DE FLAMBOYAN, L.P.
By: /s/
----------------------
Xxxxxxx X. Xxxxxxx
Vice President - Marco
Industrial, Inc.
General Partner
