Exhibit 10.32
PUERTO RICO INDUSTRIAL DEVELOPMENT COMPANY
LEASE CONTRACT
PROJECT No.: T-0810-0-68 &
L-154-2-62-06-0 (LOT #6)
LOCATION : ANASCO, PUERTO RICO
THIS AGREEMENT ENTERED into on June 30, 1994 by: AS "LANDLORD", THE PUERTO RICO
INDUSTRIAL DEVELOPMENT COMPANY, AND AS "TENANT", XXXXX-XXXXXXX NEUROCARE, INC.
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 part 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
neurosurgical devices and other medical products. (SIC. #03841).
THREE: TENANT shall hold the Premises for a period of ten (10) years to
commence on July 1st, 1994. TENANT agrees to accept possession of the demised
premises, under the provisions of this Contract, in their present condition and
further agrees and undertakes to put them in thorough repair, good order and
safe conditions in coordination with LANDLORD'S Maintenance Department as
detailed in Schedule "B" hereto annexed and made a part hereof.
FOUR: Commencing on July 1st, 1994, TENANT shall pay to LANDLORD an annual
rental of $2.20 per square foot of gross building area during the first sixty
(60) months of the term of this lease and of $2.75 per square foot of gross
building area during the last sixty (60) months. This rental shall be paid in
equal monthly installments of $2,094.64 for the first sixty (60) months and of
$2,618.30 for the last sixty (60) months. 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: Simultaneously herewith TENANT shall deposit with LANDLORD the
amount of $3,016.28 in Certified Check.
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 clauses 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 not 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 $900,000.00 Likewise TENANT agrees to install within
six (6) months from the same date manufacturing machinery and equipment with a
value of at least $900,000.00. 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 eighty (80) 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:
XXXXXXX X. XXXXXXXXX, ESQ. XX. XXXXXX XXXXXXX
XXXXXXXXX & XXXXXX XXXXX-XXXXXXX NEUROCARE, INC.
XX XXX 000000 XXXXX XXXX 000, XX. 1.2.
XXX XXXX, XXXXXX XXXX 00000-0000 XX XXX 0000
TELF- (000) 000-0000 XXXXXX, XXXXXX XXXX 00000
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,
-2-
additions or improvements made by or for 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, required 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 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 n 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 13.2 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 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
side walks areas, sidewalk hoists, railings, 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 through repair and good order and safe conditions, whenever the necessity or
desirability therefor may occur, and whether or not the
-3-
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 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 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.
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, damages,
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 xxxx board, 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.
-4-
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, 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 has
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 illegal action against
TENANT in any environmental-related case or issue.
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.
-5-
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 made 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 thereon 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 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 need to make
alterations to the Premises, the same shall be done subject to the dispositions
of Article TEN hereof.
-6-
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 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, LANDLORD'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 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 utilized 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 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,
-7-
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.
TWENTY THREE: Quiet Enjoyment - TENANT on paying the full rent and keeping
and performing the conditions and covenants herein contained, shall and may
peaceably 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 prevented,
shall not constitute a breach of this agreement. Nothing in his 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 corporation 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
-8-
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 be 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 conditions 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 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
Promises 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
-9-
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 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 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
(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
-10-
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 Promises 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
cause 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 (3l) 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 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 a "A" and a higher financial fatting 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 policies, 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.
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
11
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 agent during the term of this
Lease shall be deemed an acceptance of a surrender of the Premises and to
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, 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 Promises 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
-12-
subordination provision shall be deemed for all purposes to be automatic and
effective without any further instrument on the part of TENANT, TENANT shall
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.
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 from time to time, deliver or cause to be
delivered to LANDLORD or such lien holder or mortgagee, 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 this 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; of 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 of 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 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.
-13-
THIRTY EIGHT: Abatement - If any substantial service or facility to be
provided by LANDLORD is unavailable for a period 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 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 given 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.
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
an answer admitting the material allegations of a case filed against it in any
bankruptcy, reorganization or insolvency proceeding or, if an order, judgment 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 of all or substantially all its
assets, and such order, judgment or decree, shall continue stayed and in effect
for any period of sixty (60) consecutive days, their 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
-14-
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
from 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 (iv) 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 an 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 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 to TENANT a notice of expiration of the term of this Lease as of the date
of the service of such second notice, and upon the giving of said notice of
expiration 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, but TENANT shall remain liable as
hereinafter provided, LANDLORD or LANDLORD'S agents and servants may immediately
or at 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 this
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, of if TENANT shall
vacate and abandon the
-15-
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
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 may enter into or repossess the Premises, either by force, summary
proceedings or otherwise. The right granted to LANDLORD in this Article or any
other Article of this Lease to terminate this Lease, shall apply to any
extension or renewal of the term hereby granted, and 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 of 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, nor 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 hereinbefore
mentioned, or in any other manner or circumstances whatsoever, whether with or
without legal proceedings, by reason of, or based upon, or arising out of a
default under or breach of this Lease on the part of 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 the
Premises or any portion thereof and then to the fulfillment of the 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 pay to LANDLORD the rent required to be paid
by TENANT up to the time of such termination for 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
-16-
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 or any subtenant or other person holding or claiming
under 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 provision 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 thereof.
FORTY THREE: Capitalization - For the purpose of this Contract,
specifically of Article SIX, Capitalization includes the total of 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 independent 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 provided
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 field with LANDLORD as herein
provided, LANDLORD may obtain such information from TENANT at TENANT'S expense,
and for such purpose TENANT shall make available to 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 ten (10) years from
the date of the last normal expiration of the term hereof and, in such
-17-
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 ten (10)
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 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:
(i) TENANT shall inform LANDLORD in writing of TENANT'S activities
affecting each or any environmental area of concern during the period of
TENANT'S operation, including a description from an environmental standpoint of
the physical conditions of the premises and landsite. TENANT shall also inform
to LANDLORD in writing of any environmental regulatory violations, compliance
plans, permits, closure plans, cleanup actions or any other regulatory
procedures related to the operation. In the event that the information reveals
TENANT'S noncompliance of any of the above, or in the event that a physical
inspection of the Premises and adjacent areas by LANDLORD, or any other source
of information reveal the possibility of contamination, in that event, TENANT
shall, at LANDLORD'S request submit a plan of action with the appropriate
financial provisions to execute it. LANDLORD shall hold TENANT responsible for
any and all environmental damage, or any damage to third parties as a result of
any environmental damage, or any remedial action (including monitoring) to be
performed at landsite or otherwise as a result of TENANT'S operations after
termination of Lease and until such a time as complete remediation or
fulfillment of TENANT'S obligations is effected. In case TENANT fails to comply
with the foregoing provisions, LANDLORD may elect to effect them at TENANT'S
expense and responsibility.
(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 party 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
-18-
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 it 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 the performance
of this Lease.
FIFTY: 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-ONE: 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-TWO: TENANT shall, at its own cost and expense, install a 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-THREE: 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
Anasco for the final disposition of wastes.
FIFTY-FOUR: 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 laws and regulations of
the Environmental Quality
-19-
Board and the Environmental Protection Agency, as promulgated by any succeeding
law or regulations.
FIFTY-FIVE: 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-SIX: TENANT shall, at its 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.
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-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
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: TENANT shall obtain a permit from the Public Service
Commission to situate the propage gas and diesel tank. The installation of said
tank shall be in coordination with LANDLORD'S (MAINTENANCE OR ENGINEERING)
Department.
SIXTY: Inasmuch as TENANT represented that in order to carry out its
operations it is necessary to install and operate a emergency generator; it is
hereby specifically agreed and understood that:
(1) Such installation shall be made in coordination and with the
approval of LANDLORD;
(2) TENANT shall request and obtain from the Environmental Quality
Board,, the necessary permit to operate the said installation and, thereafter,
shall abide by and comply with all requisites imposed by the said Board for such
operations.
It being further agreed and understood that non-compliance by TENANT
with the foregoing provisions shall constitute an additional event of default
under the provisions of this Contract.
SIXTY-ONE: If applicable, TENANT also, shall at its own cost and expense,
obtain the endorsement and approval from the FEDERAL DRUG AND FOOD
ADMINISTRATION concerning the salubrity aspects to be implanted in its
operations.
-20-
SIXTY-TWO: Anything contained in this Contract to the contrary
notwithstanding, if required by TENANT, it shall be at TENANT'S own cost and
expense the construction and/or installation of a sprinkler system; it being
agreed and understood that such construction shall be accordance with the
provisions hereof.
SIXTY-THREE: LANDLORD agrees to indemnify and save harmless TENANT,
TENANT'S successors and assigns and TENANT's present and future officers,
directors, employees and agents (collectively "Indemnitees") from and against
any and all liabilities, penalties, fines, forfeitures, demands, damages,
losses, claims, causes of action, suits, judgments, and costs and expenses
incidental thereto (including cost of defense, Settlement, reasonable attorney's
fees, reasonable consultant's fees and reasonable expert fees), which TENANT or
any or all of the indemnitees may hereafter suffer, incur, be responsible for or
disburse as a result of:
1. any governmental action, order, directive, administrative proceeding
or ruling;
2. personal or bodily injuries (including death) or damage (including
loss of use) to any premises (public or private);
3. cleanup, remediation, investigation or monitoring of any pollution
or contamination of or adverse effects on human health or the
environment; or
4. any violation or alleged violation of laws, statutes, ordinances,
orders, rules or regulations of any governmental entity or agency
(collectively "Environmental Liabilities") directly or indirectly caused by or
arising out of any Environmental Hazards existing on or about the premises
except to the extent that any such existence is caused by TENANT'S activities on
the premises. The term "Environmental Hazardous" shall be defined as hazardous
substances, hazardous wastes, pollutants, asbestos, polycholinated biphenyls
(PCBs), petroleum or other fuels (including crude oil or any faction or
derivative thereof) and underground storage tanks. The term "hazardous
substances" shall be as defined in the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. Section 9601 et sq.) (CERCLA), and
any regulations promulgated pursuant thereto. The term "hazardous wastes" shall
be as defined in the Resource Conservation and Recovery Act (42 U.S.C. Section
6901 et seq.) (RCRA), and any regulations promulgated pursuant thereto. The term
"pollutants" shall be as defined in the Clean Water Act (33 U.S.C. Section 1251
et seq.), and any regulations promulgated pursuant thereto. This provision shall
survive termination of the lease.
TENANT agrees to indemnify and save harmless LANDLORD, LANDLORD's
successors and assigns and LANDLORD'S present and future officers, directors,
employees and agents (collectively "Indemnities") from and against any and all
liabilities, penalties, fines, forfeitures, demands, damages, losses, claims,
causes of action, suits, judgments, and costs and expenses incidental thereto
(including cost of defense, settlement, reasonable attorney's fees, reasonable
consultant fees and reasonable expert fees), which LANDLORD or any or all of the
Indemnities may hereafter suffer, incur, be responsible for or disburse as a
result of any Environmental Liabilities directly or indirectly caused by or
arising out of any Environmental Hazardous existing on or about the premises but
only to the extent that any such existence is caused by TENANT'S activities on
the premises. This provision shall survive termination of the Lease.
In the event any Environmental Hazards are found at any time to be in
existence or about the premises other than any Environmental Hazards whose
existence is caused by TENANT'S activities on the premises, TENANT shall have
the right to terminate this Lease by so notifying
-21-
LANDLORD in writing. Notwithstanding anything to the contrary contained herein,
TENANT shall not be required to pay for any environmental Liability as operating
expenses, additional rental or otherwise if TENANT is not responsible for such
expenses pursuant to this paragraph.
SIXTY-FOUR: LANDLORD hereby leases to TENANT in its present condition and
during the term of this lease Lot Number 6 (L-154-2-62-06-00). Such Lot shall be
used by TENANT exclusively for parking purposes. Also, it is agreed that TENANT
shall provide and/or construct at its own cost and expense such improvements as
may deem necessary to operate said parking. However, TENANT shall not use said
lot for profit purposes, sublet the same, nor permit the use of same or part of
same to any public or private entity without the previous written consent of
LANDLORD with the exception of LANDLORD's authorization to sublease part of said
Lot to Xxxxxx Healthcare Corp., established in Lot Number 5, for parking
facilities for Xxxxxx'x employees. It is also agreed that TENANT shall always
maintain, provide and keep in force the necessary insurance coverage required by
LANDLORD's Insurance Department during the term of the lease.
SIXTY-FIVE: In is hereby agreed and understood that any special facilities
property of LANDLORD, installed on the demises, shall be included, as part of
the Contract by Supplenent and Amendment to Lease, once Landlord's Conservation
and Engineering Offices make the necessary inspection and inventory of said
facilities in coordination with TENANT.
SIXTY-SIX: This Contract may be resolved by LANDLORD previous notification
to TENANT after the first sixty (60) days of the term of this Lease, if TENANT
does not obtain a favorable recommendation or endorsement of the lease and or
use of the premises from the Puerto Rico Environmental Quality Board, the Puerto
Rico Aqueduct and Sewer Authority (PRASA) and LANDLORD's Planning and
Environmental Offices. LANDLORD's undertaking under this terms and conditions in
no event is to be considered as a precedent or as creating a custom of leasing
its properties under such conditions.
SIXTY-SEVEN: TENANT certifies and guarantees that at the date of
subscribing this Contract it does not have any tax debt pending with the
Commonwealth of Puerto Rico.
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-EIGHT: LANDLORD reserves the right to audit the 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 promises 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.
-22-
SIXTY-NINE: TENANT shall furnish to LANDLORD, in addition to any other
information, documents or instruments that may be required in this contract:
a) Prompt written notice of the occurrence of any event that by law or
regulation would require any oral, telephonic or written notice or
communication to the US Environmental Protection Agency and/or to
the Puerto Rico Environmental Quality Board, or any successor
agency, and copies of all orders, notices or other communications
and reports received, made or given in connection with any such
event, and any enforcement action taken against TENANT or against
any property owned, occupied or used by TENANT;
b) Annually certifications subscribed by an authorized representative
designated by TENANT, as to the environmental condition of the
leased premises, containing the information required by LANDLORD,
which is specified in the form included as schedule "B" of this
contract, or any subsequent modification thereto;
c) Any other information and documents relating to TENANT'S compliance
with environmental legislation and regulations under federal and
commonwealth laws.
SIXTY-NINE: TENANT hereby guarantees to LANDLORD that, neither he, or any
of its stockholders, in case of a corporation, owes any money to LANDLORD under
its corporate name or any other corporate name and/or person.
SEVENTY: TENANT shall not transfer, lease, burden or dispose of in any way
of the equipment used on its operations without the previous written notice of
LANDLORD, except in the ordinary course of business and provided that TENANT is
not on default.
SEVENTY-ONE: 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.
-23-
IN WITNESS WHEREOF, LANDLORD and TENANT have respectively signed upon
proper authority this Lease, this 30th day of June , 1994.
PUERTO RICO INDUSTRIAL DEVELOPMENT COMPANY
SSP-66-0292871
BY: [signed]
-----------------------------------
XXXXX-XXXXXXX NEUROCARE, INC.
SSP-36-3951590
BY: [signed]
-----------------------------------
-24-
SCHEDULE "A"
DESCRIPTION OF LANDSITE AND BUILDING
LOCATED AT ANASCO, PUERTO RICO
(L-154-3-69-07-0)
SITE FOR PROJECT NO. T-08100-68
------------------------------------
LANDSITE:
Parcel of land located at Anasco Industrial Park in the municipality of
Anasco, Puerto Rico with a surface area of 4,395.49 square meters, equivalent to
1.1183 "cuerdas".
It bounds: by the NORTH, with land owned by Xxxxxxxxx Xxxx Xxxx and Xxxxxx
Xxxxxx Xxxxxx; by the SOUTH, with a park street; by the EAST; with Xxxxx Xxxx
Xx. 000; and by the WEST, with lot No. 9 of the same industrial park.
ENCUMBRANCES:
It is affected by a 5.0 ft. wide right of way in favor of P.R.E.P.A.
running along its western boundary.
BUILDING NO. T-0810-0-68:
The building is a pitched roof type consisting of reinforced concrete
foundations, steel columns and steel girders supporting 30 feet long steel
joists which in turn support gage #22 standard galvanized steel deck covered by
1" fiberglass insulation and a 3 ply built-up roof.
The structure consists of a main floor 120'-11" x 90'-6" out to out
dimensions with an area of 10,943.26 sq. ft. of manufacturing space; one lean-to
30'-8" x 10'-6" for an area of 322.04 sq. ft. for sanitary facilities and a
loading platform 16'-0" x 10'-0" for an area of 160.00 sq. ft. All amounts to a
total area of 11,425.30 sq. ft. of covered floor space.
The floor consists of a 3 1/2" thick reinforced concrete slab with a
monolithic cement finish designed for a live load of 150 p.s.f.
Exterior walls are of concrete block plastered and painted, a 6'-1"
sprayed-on glazed finish is provided as wainscoat.
Windows are aluminum miami louvers throughout the building.
Clearance in the manufacturing area from finished floor to lowest part of
beams at the side xxxxx is 12'-2".
-25-
DESCRIPTION OF LOT NO. 6
PUBLIC USE XXX X-000-0-00-00-0
XXXXXXX XX XXXXXX XXXXXXXXXX XXXX
XXXXXX, XXXXXX XXXX
---------------------------------
LANDSITE:
Parcel of land lot No. 6 (public use lot) located at Anasco, Puerto Rico.
It bounds: by the NORTH, with access street of the same industrial park;
by the SOUTH, with land owned by Sunc. Arraras; by the EAST; with Xxxxx Xxxx Xx.
000; and by the WEST, with lot No. 8 of the same industrial park,
It has a surface area of 2518.707 square meters, equivalent to 0.6408
cuerdas.
ENCUMBRANCES:
It is affected by a 5.0 ft. wide right of way in favor of P.R.E.P.A.
running along its western boundary.
-26-
SCHEDULE "B"
COMPLIANCE REPORT OF WITH
ENVIRONMENTAL REQUIREMENTS
In the period of ___________ to ___________
I. PERMITS
EXPIRATION RENEWAL DATE
PERMITS NUMBER DATE (IF APPLY)
II. COMPLIANCE ACTIONS
RESPONSE OF
REFERENCE/CASE NUMBER DATE 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.
---------------------------
-27-
