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Exhibit 10.17
LEASE
BETWEEN:
XXXX XXXXXX ROMANA, S.A., a commercial corporation organized in conformity
with the laws of the Dominican Republic, with its domicile and social seat
established in La Romana, Municipality and Province of the same name, Dominican
Republic, Corporation this, which is represented by its vice-president, Eng.
Xxxxxxx Xxxxxxxx-Xxxx, dominican, old in age, married, an entrepreneur,
domiciled and resident in the City of La Romana, Municipality and Province of
the same name, Dominican Republic, bearer of the Personal Identification Card
Number 67791, Series 26, with capable seal, Corporation hereinafter referred to
as LA ARRENDADORA.
COSTURA DOMINICANA, INC., a corporation duly constituted in conformity
with the laws of the State of Delaware, United States of America, with its
social seat at 000 Xxxxx Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx, 00000, which
is represented by Xxxxx X. Xxxx, a citizen of the United States of America, old
in age, married, an entrepreneur, domiciled and resident at Greenville, South
Carolina, United States of America, bearer of the Northamerican Passport No.
000000000, and acting as vice-president of Finance, hereinafter referred to as
LA ARRENDATARIA.
ATTENDED: That XXXX XXXXXX ROMANA, S.A. subscribed a contract with the
Dominican State on August 11th, 1986, in virtue of which, the Dominican State
granted the necessary faculties to operate and administrate the La Romana
Industrial Free Zone II, established by Decree No. 700-86, dated August 8th,
1986.
ATTENDED: that LA ARRENDADORA, within the ground plot where the La Romana
Industrial Free Zone is located, which have been fully described in Decree No.
700-86, will build the following immovable:
"A building with a steel structure, luzinc ceiling and reinforced
concrete columns, block walls and aluminum windows, with a
construction area of Forty Thousand Square Foot (40,000 P2)
equivalent to Three Thousand Seven Hundred and Seventeen point Forty
Eight Square Meters (3,717.48 M2), which plans, duly signed by both
parties are annexed to the present contract. The building is
situated in ground plots No. 6 and 7 of the La Xxxxxx XX Industrial
Free Zone General Plan, ground plot that have an extension of Sixty
One Thousand Four Hundred and Sixty One point Twelve Square Feet
(61,461.12 P2), equivalent to Five Thousand Seven Hundred and Twelve
Square Meters (5,712 M2)."
The building is equipped as follow: (a) Sanitary installation that
comprehends 48 toilets and 48 lavatories; (b) an office in a total area of Two
Thousand Square Feet (2,000 P2).
THEREFORE: In the understanding that the former preamble is part of the
present contract.
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THE PARTIES HAVE AGREED THE FOLLOWING:
FIRST: LA ARRENDADORA agrees in renting to LA ARRENDATARIA, who will
examine it at the time of the turnover of the formerly described immovable,
under the terms and conditions that follow:
TERM: The present contract will last eight (8) years, term that will be
divided up into three (3) periods, a first period of one (1) year; a second
period of three (3) years; and a third period of four (4) years, term that will
begin on April 1st, 1996.
SECOND: 1st rent period: Amount - The price of this rent has been agreed
to be of an amount of Twenty Five Dollars Cents (US$ 0.25) per construction
square foot (P2), per month, payable in National Currency (RD$) at the official
exchange rate, assigned to the Industrial Free Zones, and established by the
Central Bank of the Dominican Republic at that time, for the first period of One
(1) year; and the amount of (US$ 0.27) per construction square foot (P2), per
month, payable in National Currency (RD$) at the official exchange rate,
assigned to the Industrial Free Zones, and established by the Central Bank of
the Dominican Republic at that time, for the second period of Three (3) years;
and the amount (US$ 0.29) per construction square foot (P2), per month, payable
in National Currency (RD$) at the official exchange rate, assigned to the
Industrial Free Zones, and established by the Central Bank of the Dominican
Republic at that time, for the third period of Four (4) years.
PAYMENT: LA ARRENDATARIA will pay the agreed price on monthly payments,
due on the 1st day of each month starting with the date in which the present
contract becomes effective. LA ARRENDATARIA will pay interest in the event that
the payment get behind the due date, at a monthly interest rate equal to the
interest rate of Dominican Republic Commercial Banks, plus service charges..
INSURANCE: It is understood between the parties that during the inforce of
the present contract, LA ARRENDATARIA obliges itself to obtain and maintain: a)
An Insurance Policy of an Insurance Company acceptable to LA ARRENDADORA which
covers the building for damages resulting from cyclone, earthquake, floods,
etc., for an amount not less than Two Million Pesos 00/100 (RD$ 2,000,000.00).
This amount will be reviewed in order to adjust it to the replacement cost, from
time to time, in conformity to the periodic evaluations realized by the
Engineering Department of Central Romana Corporation, b) An Insurance Policy
that covers the civil responsibility of LA ARRENDADORA and/or LA ARRENDATARIA
for the damages caused to third parties due to accidents or any other cause in
the rented immovable. Such policy shall be of an amount of Two Hundred Thousand
Pesos (RD$ 200,000.00) in relations to the accidents that can occur to any
person or their properties and Two Hundred Thousand Pesos (RD$ 200,000.00) for
any accident or catastrophe that could overcome and affect more than one person
or their properties.
This policy shall contain an irrevocable endorsement in favor of LA
ARRENDADORA.
THIRD: Use of the Immovable -- The immovable hereby rented will only and
exclusively be used for the installation and functioning of any industry that
previously obtains the approval of
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the Consejo Nacional de Zonas Francas de Exportacion, created by Law No. 8-90,
dated January 15th, 1990 and in conformity with the proceedings established in
the same one, on the correspondent category.
FOURTH: Alterations -- LA ARRENDATARIA will not be able to realize any
alterations or substantial modifications in the rented building without the
previous written consent of LA ARRENDADORA.
Likewise, LA ARRENDATARIA compromises itself so that in case of any
alterations or modifications of the rented building, it will fulfill the laws,
decrees, and regulations, both nationals and municipals that rule the matter.
It is also understood that in case LA ARRENDATARIA orders or carries out
any repairs, alterations, change or improvement of the rented immovable, once
obtained the authorization from LA ARRENDADORA, this one will in no way be
responsible for the payment of materials provided or for the labor employed in
the formerly mentioned works.
LA ARRENDATARIA will have the right to withdraw, at the term of the
contract, the equipment and improvements installed, with the purpose of leaving
the immovable in the same way that was received, except the depreciation as a
result of normal use of such place.
FIFTH: Repairs and Maintenance -- LA ARRENDATARIA will maintain in good
state and at its own expenses the rented building, making all gross and minor
repairs that are necessary for such purposes, as well as all operations required
for its maintenance in order to preserve such building and its annex in good
state. For such purpose, LA ARRENDATARIA will have on its behalf and without
this enumeration being a limit:
a) The interior and exterior painting of the immovable;
b) The ceiling filtrations that could appear;
c) The repair of floors/ceilings/doors/windows/sanitary or electrical
installations.
It is understood, however, that LA ARRENDATARIA will not be responsible
for repairs resulting from damages that occurred or structural defects in the
rented local.
LA ARRENDATARIA will not have the authorization to realize any act or
contract that could create or serve as a source for any mortgage or privilege
upon the rented immovable and/or its improvements or upon any other assets
belonging to the patrimony of LA ARRENDADORA.
If due to any act or omission of LA ARRENDATARIA, any claim or action is
attempted against LA ARRENDADORA, or any assessment is recorded upon the rented
immovable or upon any other assets belonging to LA ARRENDADORA, LA ARRENDATARIA
shall at its own expense, take the necessary precautions so that such claims or
actions are withdrawn and such assessments canceled, or grant LA ARRENDADORA an
Insurance Policy that covers this last one against risks resulting from such
claims, actions or assets.
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In case that, due to the formerly indicated motives, LA ARRENDADORA
suffered any prejudice, LA ARRENDATARIA shall indemnify for all costs, damages
and prejudices that LA ARRENDADORA has suffered, including the necessary amounts
to reimburse the judicial expenses and reasonable attorney's fees in which this
one has incurred.
SIXTH: Total or Partial Destruction -- In case that the rented building is
totally or partially destroyed, any of which were the reasons of the sinister,
LA ARRENDATARIA shall immediately inform LA ARRENDADORA so this one can present
the corresponding claim to the underwriters. When a sinister of this type
occurred, LA ARRENDADORA will have the right to decide between repairing the
building or rescinding the contract. In this last eventuality, LA ARRENDATARIA
will not be indebted to pay any more rent than the fraction corresponding to the
time used and effective enjoyment of the immovable.
If total or partial destruction of the immovable should be due to a fault
or negligence of LA ARRENDATARIA, this last one should be responsible for the
damages caused, in the way that these are not covered by the insurance.
SEVENTH: Immovable Inspection -- LA ARRENDATARIA obliges itself to permit
the access of LA ARRENDADORA and/or any of its functionaries and agents from
time to time, in the rented building, with the purpose of realizing the
inspection and verifying that the use adapts to the laws and regulations, as
well as to the terms and conditions in the present contract.
EIGHTH: Bankruptcy of LA ARRENDATARIA -- LA ARRENDATARIA compromises
itself to inform LA ARRENDADORA of any claim, trial judicial act or solicitude
of agreement attempt.
At that moment, LA ARRENDADORA will be able to declare to its own
discretion, that the contract be rescinded, without this having to affect its
rights of reclaiming the total amount owed by LA ARRENDATARIA, nor its right to
intervene in the bankruptcy procedure.
NINTH: Utilities: Water, Electricity, Trash Removal, Cleaning and
Evacuation of Sewers, Insurance Premium Payment -- The water, electricity, trash
removal, cleaning of green areas and sewer system including the septic and well
services will be on behalf of LA ARRENDATARIA who will contract them by means of
the public or private entities with the inforce rates.
In case that LA ARRENDATARIA did not pay all or any of such services or
the insurance premium, according to the terms of this contract, in the
established dates, the owed amounts will be immediately demanded by LA
ARRENDADORA with the interests calculated on an annual basis of Twelve Percent
(12%) per month or fraction of the month delayed.
In case that a law, decree, ordinance or any legal act or regulation
transfers the services to which the present article refers, to any public or
private entity the obligation of supplying LA ARRENDATARIA with the formerly
mentioned services, will automatically cease for LA ARRENDADORA.
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TENTH: Nonfulfillment -- The Nonfulfillment from LA ARRENDATARIA of any of
the clauses and conditions of this contract will lead to the rescission of the
same one as a matter of law and after twenty (20) days of a written notification
by LA ARRENDADORA to LA ARRENDATARIA, if within the formerly mentioned term, the
Nonfulfillment has not been amended by LA ARRENDATARIA.
In this case, LA ARRENDADORA will again take possession of the rented
immovable with no need of a judicial procedure or any type of indemnification,
twenty (20) days after a notification to vacate the place. Upon any eventuality,
LA ARRENDADORA reserves the right of reclaiming through the corresponding via
the total amount of the rent stipulated in the Second Article of the present
contract.
ELEVENTH: Contract Termination -- The parties agree that the present
contract cannot be renewed by an extension of lease term by operation of law.
In case the contract is not renewed, LA ARRENDATARIA shall turnover the
rented building to LA ARRENDADORA previous inspection of it within twenty (20)
days term after a simple notice has been made as a request of LA ARRENDADORA.
TWELFTH: Court of Jurisdiction -- For all purposes and consequences of the
present contract, the parties select their domiciles to be as follow: LA
ARRENDADORA in its main offices in Dominican Republic located at Xxxxx Principal
of Central Romana in the City of La Romana and LA ARRENDATARIA In the rented
immovable object of this contract.
The parties also agree that, in case of any lawsuits or differences
between them, in what respects the present contract, they will submit the same
one to the Dominican Courts, resigning previously to any other courts that for
any cause could be empowered of such lawsuits or differences. Likewise, they
agree that all which is not foreseen in this contract will be ruled by the laws
of the Dominican Republic and specially by what is prescribed by Law No. 8-90,
dated January 15, 1990 and Decree No. 700-86 dated August 8th, 1986 that created
the La Romana Industrial Free Zone II.
THIRTEENTH: Insurance Policy Turnover -- LA ARRENDATARIA promises to
deliver to LA ARRENDADORA, within the sixth (60) days that follow the signatory
of the present contract, the Certificates and Insurance Policies that point out
LA ARRENDADORA as the beneficiary of the Insurance Contracts subscribed in
conformity with the dispositions of the present contract.
FOURTEENTH: Contract Cession -- It is expressly convened that LA
ARRENDADORA will be able to cede its rights in virtue of the present contract.
Likewise, it is agreed that LA ARRENDATARIA cannot cede its rights owned
in virtue of the present contract nor sublease totally or partially the rented
immovable, without the previous written consent of LA ARRENDADORA. Such consent,
however, will not be denied in an arbitrary or capricious way, but due to fair
reasons.
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Done and signed in two originals, one for each one of the parties,
originals which are composed of _____ (___) pages, all which have been duly
signed (initialized) by the parties, in La Romana, Dominican Republic, on the
__________ (___) day of the month of _____________ of the year One Thousand Nine
Hundred ________ (___).
By: XXXX XXXXXX ROMANA, S.A.
LA ARRENDADORA
(Signature)
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Eng. Xxxxxxx Xxxxxxxx-Xxxx
Vice-president
By: COSTURA DOMINICANA, INC.
LA ARRENDATARIA
(Signature)
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Xx. Xxxxx X. Xxxx
Vice-president of Finance
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