1
PUERTO RICO INDUSTRIAL DEVELOPMENT COMPANY
PO BOX 362350
SAN JUAN, PUERTO RICO 00936-2350
LEASE CONTRACT
PROJECT NO.:T-0796-0-67 AND T-0796-
1-67
LOCATION: AGUADA, PUERTO RICO
THIS AGREEMENT ENTERED into onby:
AS "LANDLORD", THE PUERTO RICO INDUSTRIAL DEVELOPMENT COMPANY, AND AS
"TENANT", TELECOM PUERTO RICO, INC. (FORMERLY ZELTEX P.R.,
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 "TELECOMMUNICATION & COMPUTER PRODUCTS".
THREE: TENANT shall hold the Premises for a period of FIVE (5)
years to commence on October 1st., 1994.
FOUR: Commencing on October 1st., 1994, TENANT shall pay to
LANDLORD an annual rental as follows:
PERIOD RENT PER SQUARE FOOT MONTHLY INSTALLMENTS
T-0796-0-67 T-0796-1-67
10-1-94 $ 2.20 $ 2,078.09 $ 2,069.79
The monthly installments for rent specified herein, shall be paid in
advance on the first day of each month at LANDLORD'S office, or at
any other place that LANDLORD may notify. In the event that the
date of commencement does not fall on the first of the month, TENANT
further agrees to pay the first partial monthly installments, prior
to, or on the date of commencement.
FIVE: The amount of $3,016.62 deposited by TENANT under the
provisions of a previous Lease Contract shall be credited to
the $4,147.88 deposit required herein; therefore, simultaneously
herewith TENANT shall pay $1,131.26 in a Certified Check to
complete said amount.
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 no environmental deficiencies as a result
of TENANT's manufacturing operation on the demised Premises.
SIX: TENANT agrees to have on the date of commencement of the term
of this Lease a capitalization of $4,500,000.00.
Likewise TENANT agrees to install within six (6) months from the
same date manufacturing machinery and equipment with a value of at
least $2,200,000.00.
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 ONE HOUNDRED EIGHTY (180)
production workers.
The aforementioned levels of capitalization, machinery and equipment
and employment herein required are not in addition to those required
in the previous lease contract; and 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: PO BOX 362350, SAN JUAN, PUERTO RICO 00936-2350.
To TENANT:
MAX GOLDMAN, ESQ., GOLDMAN, ANTONETTI & CORDOVA, PO BOX 70364,
SAN JUAN, PR 00936-0364
EIGHT: Net Lease - This Lease shall be interpreted as a net lease;
it being the exclusive responsibility of TENANT to pay for all
operating expenses, utilities, maintenance, expenses, insurance,
taxes or any other costs, expenses or charges of any nature not
specifically assumed by LANDLORD hereunder.
NINE: Warranty as to use - LANDLORD does hereby warrant that at the
time of the commencement of the term of this Lease, the Premises
may be used by TENANT for the manufacturing purposes herein intended
which are deemed consistent with the design and construction in
accordance with the corresponding plans and specifications.
TEN: Alterations - TENANT shall make no alterations, additions or
improvements to the Premises without the prior consent of LANDLORD
and all such alterations, additions or improvements made by or
for
TENANT, shall be at TENANT'S own cost and expenses and shall, when
made, be the property of LANDLORD without additional consideration and
shall remain upon and be surrendered with the Premises as a part
thereof at the expiration or earlier termination of this Lease, subject
to any right of LANDLORD to require removal or to remove as provided
for hereinafter.
In the event TENANT asks for LANDLORD'S consent for any
alteration; LANDLORD may at its option, require from TENANT to submit
plans and specifications for said alteration. Before commencing any
such work, said plans and specifications, if required, shall be filed
with and approved by all governmental agencies having jurisdiction
thereof, and the consent of any mortgagee having any interest in or
lien upon this Lease shall be procured by TENANT and delivered to
LANDLORD if required by the term of the mortgage.
Before commencing any such work, TENANT shall at TENANT'S own cost
and expense, deliver to LANDLORD a General Accident Liability Policy
more particularly described in Article THIRTY (30) hereof, but said
policy shall recite and refer to such work, and in addition thereto, if
the estimated cost of such work in more than FIVE THOUSAND DOLLARS
($5,000.00), TENANT shall, at TENANT'S own cost and expense, deliver to
LANDLORD a surety bond, or a performance bond from a company acceptable
to LANDLORD, or a similar bond or other security satisfactory to
LANDLORD, in an amount equal to the estimated cost of such work,
guaranteeing the completion of such work within a reasonable time, due
regard being had to conditions, free and clear of materialmen liens,
mechanics liens or any other kind of lien,encumbrances, chattel
mortgages and conditional bills of sale and in accordance with said
plans and specifications submitted to and approved by LANDLORD. At
LANDLORD'S option TENANT shall provide a blanket written guarantee in
an amount sufficient to satisfy LANDLORD as to all alterations,
changes, additions and improvements to the Premises in lieu of separate
guarantee for each such project.
TENANT shall pay the increased premium, if any, charged by the
insurance companies carrying insurance policies on said building, to
cover the additional risk during the course of such work.
ELEVEN. Power Substation - If required by TENANT'S operations,
TENANT shall, at its own cost and expense, construct and/or install a
power substation and connect it to the PUERTO RICO ELECTRICAL POWER
AUTHORITY (PREPA) distribution lines, for voltages up to 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 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
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 flamable 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 the 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
bill 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.
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 riqht 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
legal 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.
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 Requlations - 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.
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 entrv 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, 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 Enioyment - 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
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. Stoppaqe 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 this paragraph contained shall relieve TENANT from the
payment of rent during the period of any shut-down or curtailments
of operations.
TWENTY SIX: Assignment and Subletting - TENANT shall not assign,
this Lease nor let or sublet the Premised or any part thereof except
to its parent company, to a wholly owned subsidiary, to an affiliate
of TENANT, wholly owned by TENANT'S parent company or to a
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 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: "LANDLORD"- Effect of Conveyance: The word
"LANDLORD", as used herein, means only the owner for the event of
any sale, conveyance or transfer of title of the demised premises,
LANDLORD shall be and hereby is entirely freed and relieved of all
covenants and obligations of LANDLORD hereunder, whenever LANDLORD,
at the time of any sale, conveyance or transfer of title, obtains an
agreement in writing from the purchaser or transferee assuming the
performance of all covenants and obligations in this Lease".
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 Except as provided in the se ond
subparagraph Twelve herein 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
extent of LANDLORD'S gross negligence, and provided such claims or loss
is not covered by insurances herein required from TENANT. TENANT shall
promptly notify LANDLORD of any damage to or defects in the Premises,
particularly in any part of the building's sanitary, electrical, air
conditioning or other systems located in our passing through the
Premises, and the damage or defective conditions, subject to the
provisions of Article TWENTY ONE (21) hereof, shall be remedied by
LANDLORD with reasonable diligence.
THIRTY. General Liability Insurance - TENANT shall indemnify,
have harmless and defend LANDLORD and agents, servants and employees of
LANDLORD against and from any and all liability, fines, suits, claims,
demands, expenses, including attorneys' fees, and actions of any kind
or nature arising by reason of injury to person or property including
the loss of use resulting thereof or, violation of law occurring in the
Premises occasioned in whole or in part by any negligent act or
omission on the part of TENANT or an employee (whether or not acting
within the scope of his employment), servant, agent, licensee, visitor,
assignor or undertenant of TENANT, or by any neglectful use or
occupancy of the Premises or any breach, violation or non-performance
of any covenant in this Lease on the part of TENANT to be observed or
performed.
Pursuant to the foregoing, TENANT shall, maintain during the term
of this lease, at its own cost and expense, a Comprehensive General
Liability Policy. Said policy shall: (i) be for a combined single
limit of no less than $500,000.00 per accident, (ii) hold LANDLORD
harmless against any and all liability as hereinbefore stated, and
(iii) the care, custody & control exclusion shall be deleted from this
coverage. LANDLORD may require additional reasonable limits of public
liability insurance and coverages, when changing circumstances so
require.
THIRTY ONE. Property Insurance - TENANT recognizes that the rent
provided for herein does not include any element to indemnify, repair,
replace or make whole TENANT, his employees, servants, agents,
licensees, visitors, assignees, or undertenant for any loss or damage
to any property or injury to any person in the Premises.
Accordingly, during the term of this Lease, TENANT shall keep the
building standing upon the Premises at the commencement of the term
hereof or thereafter erected upon the Premises, including all equipment
appurtenant to the Premises and all alterations, changes, additions and
improvements, insured for the benefit of LANDLORD and TENANT, as their
respective interest may appear, in an amount at least equal to the
percentages stated below (as LANDLORD may from time to time determine).
The basis of the Property Insurance shall be Replacement Cost and the
coverage an "All Risks" Property Insurance Policy. Coverages included
in the All Risks Form:
1. Fire - "Building & Contents Form"
(a) Building - 100% of insurable value exclusive of
foundations
(b) Contents - All equipment appurtenant to the
Premises (State value of Policy)
2. Additional Coverages under the Fire Policy
(a) Extended Coverage Endorsement - 100% of insurable
value exclusive of foundations
(b) Earthquake - 100% of insurable value including
foundations
(c) Vandalism and Malicious Mischief Endorsement
(d) Improvements and Betterments - For all
alterations, changes, additions and improvements
3. Landsite and Flood whenever applicable and/or necessary
4. Boiler and Machinery (if any) - 100% of insurable value
5. Pollution Liability Policy - if necessary.
THIRTY TWO. Multifactory Building Specific Dispositions - In the
event that the Premises constitute a section or sections of an
industrial building and landsite in which other operations are
conducted by other TENANTS. (i) the insurance coverage herein
required, shall be acquired by LANDLORD for the whole of the industrial
building and TENANT shall reimburse LANDLORD, for its proportionate
share in the total cost of said policies, (ii) if, because of anything
done, caused or permitted to be done, permitted or omitted by TENANT,
the premium rate for any kind of insurance affecting the Premises shall
be increased, TENANT shall pay to LANDLORD the additional amount which
LANDLORD may be thereby obligated to pay for such insurance, and if
LANDLORD shall demand that TENANT remedy the condition which 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 (31) shall be endorsed to include a waiver of subrogation
against TENANT. All amounts to be reimbursed by TENANT under this
ARticle, shall be due and payable, as additional rent, with the next
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 DisDositions 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 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 no agreement to accept a
surrender of the Premises shall be valid unless it be made in writing
and subscribed by LANDLORD. This Contract contains all the agreements
and conditions made between the parties hereto with respect to the
Premises and it cannot be changed orally. Any additions to, or charges
in this Lease must be in writing, signed by the party to be charged.
Failure on the part of LANDLORD to act or complain of any action
or nonaction on the part of TENANT shall not be deemed to be a waiver
of any of its respective rights hereunder nor constitute a waiver at
any subsequent time of the same provision. The consent or approval by
LANDLORD to, or of any action by the other requiring consent or
approval shall not be deemed to waive or render unnecessary the
consent or approval by LANDLORD of any subsequent similar act.
THIRTY FIVE. Reinstatement - No receipt of monies by LANDLORD for
TENANT after the termination or cancellation hereof in any lawful
manner shall reinstate, continue or extend the term hereof, or affect
any notice theretofore given to TENANT, or operate as a waiver of the
right of LANDLORD to enforce the payment of rent, additional rent, or
other charges then due or thereafter falling due, or operate as a
waiver of the right of LANDLORD to recover possession of the Premises
by proper suit, action, proceeding or remedy; it being agreed that,
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 sueh notice, proceeding, suit,
action, order, warrant or judgment; and any and all such monies so
collected shall be deemed to be payments for the use and occupation of
the Premises, or at the election of LANDLORD, on account of TENANT'S
liability hereunder. Delivery or acceptance of the keys to the
Premises, or any similar act, by the LANDLORD, or its agents or
employees, during the term hereof, shall not be deemed to be a delivery
or an acceptance of a surrender of the Premises unless LANDLORD shall
explicity consent to it, in the manner set forth hereinbefore.
THIRTY SIX. Subordination and Attornment - This Lease is and
shall be subject and subordinate to all liens, or mortgages which may
now or hereafter affect the Premises and to all renewals,
modifications, consolidations, replacements and extensions thereof and,
although this subordination provision shall be deemed for all purposes
to be automatic and effective without any further instrument on the
part of TENANT, TENANT 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;
or if (ii) LANDLORD, without assuming any obligation to do so, after
any notice or grace period provided hereunder, performs or causes to be
performed, at the cost and expense of TENANT, any of the acts or
obligations agreed to be performed by TENANT, as stipulated in this
Lease, and TENANT fails to refund LANDLORD any amounts of money paid
or incurred by LANDLORD in performing 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 on any such amounts of
money required to be refunded, from and after the date when payment
thereof matured or became due and payable, until full payment, at the
rate of twelve (12%) per cent per annum, or if such 12% interest, is
unlawful, then and in such event, at the highest maximum prevailing
rate of interest on commercial unsecured loans as fixed by the Board of
Regulatory Rates of Interest and Financial Charges, created under Law
#1, approved October 15, 1973 (10 LPRA 998), as amended, or by any
successor statute or regulation thereof.
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, the term of this Lease and all right, title and
interest of TENANT hereunder shall expire as fully and completely as if
that day were the date herein specifically fixed for the expiration of
the term, and TENANT 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 a notice the
default or event upon which said notice was based shall continue to
exist, or in the case of a default which cannot with due diligence be
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,
or if TENANT shall vacate and abandon the Premises, LANDLORD shall have
the right, at LANDLORD'S option, to terminate this Lease and the term
hereof, as well as all the right, title and interest of TENANT
hereunder, by giving TENANT five (5) days notice in writing of such
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, now or
at any time hereafter, in force by reason of, or based upon, or arising
out of a default under or breach of this Lease on the part of TENANT,
or upon LANDLORD recovering possession of the Premises in the manner or
in any of the circumstances 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 of this Lease, and/or the full l~nt
provided for in the agreement for any holdover of such period after
termination and up to the surrender or recovery of possession of
the Premises by LANDLORD, as the case may be, and thereafter TENANT
covenants and agrees, to pay to LANDLORD until the end of the term
of this Lease as originally demised the equivalent of any
deficiency amount of all the rent reserved herein, less the net
avails of reletting, if any, as specified hereinabove in this
Article and the same shall be due and payable by TENANT to LANDLORD
as provided herein, that is to say, TENANT shall pay to LANDLORD
the amount of any deficiency then existing.
FORTY ONE: LANDLORD'S Remedies - In the event TENANT
shall default in the performance of any of the terms, covenants or
provisions herein contained, LANDLORD may, but without the
obligation to do so, perform the same for the account of TENANT and
any amount paid or expense incurred by LANDLORD in the performance
of the same shall be repaid by TENANT on demand. In the event of a
breach or threatened breach by TENANT 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 provisions of
this Lease, unless notice of such default be given by TENANT to
LANDLORD in which TENANT shall specify the default or omission
complained of, and LANDLORD shall have thirty (30) days after
receipt of such notice in which to remedy such default, or if said
default or omission shall be of such a nature that the same cannot
be cured within said period, then the same shall not be an
enforceable default if TENANT 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 provide employment,
(iv) taxes (including Social Security taxes) paid, and (v) any other
information as required by this Lease.
In the event such statement is not filed with LANDLORD as
herein provided, LANDLORD may obtain such information from TENANT at
TENANT'S expense, and for such purpose TENANT shall make available 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 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 Holdina 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, clean-
up 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
ren.ove 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 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. Chanqe of Address - TENANT shall promptly notify
LANDLORD of any change in the addresses other than those required from
it in Article SEVEN hereof.
FORTY NINE. TENANT will indemnify LANDLORD for any and all
liability, loss, damages, expenses, penalties and/or fines, and any
additional expenses including any attorney fees LANDLORD may suffer as
a result of claims, lawsuits, demands, administrative orders, costs,
resolutions or judgements against it arising out of negligence and/or
failure of TENANT or those acting under TENANT to conform to the
statutes, ordinances, or other regulations or requirements of any
governmental authority, be it Federal, of the Commonwealth of Puerto
Rico, its instrumentalities or public corporations, in connection with
the performance of this Lease.
FIFTY: Inasmuch as TENANT is presently in possession of the demised
premises pursuant to a certain Lease Contract executed between the
parties hereto, TENANT hereby accepts the Premises in their present
condition.
FIFTY ONE: LANDLORD shall provide a basic electrical distribution
system consisting of a 200 AMP meterbase, conduits, conductors,
receptacles and junction boxes as indicated in PRIDCO'S Electrical
Distribution System Drawings for indicated building.
FIFTY TWO: TENANT shall, at is own cost and expense, construct
and/or install all necessary equipment required to connect the
building's electrical system to the Puerto Rico Electrical Power
Authority's electrical distribution lines, such connection to be
made in compliance with the requirement of PREPA.
FIFTY THREE: 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 in accordance with the provisions hereof.
FIFTY FOUR: 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 FIVE: 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 SIX: 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 SEVEN: 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 AGUADA for the final disposition of
wastes.
FIFTY EIGHT: 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
Board and the Environmental Protection Agency, as promulgated by any
succeeding law or regulations.
FIFTY NINE: 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).
SIXTY : TENANT certifies and guarantees that at the date of
subscribing this Contract it has submitted the Corporate Tax Returns
Forms during the last five (5) years and does not have any tax debt
pending with the Commonwealth of Puerto Rico, or is complying with
the terms of a payment plan duly approved.
TENANT also certifies and guarantees that at the date of execution
of this contract it has paid unemployment insurance compensation,
temporary disability insurance, and the driver's social security (as
applicable); or is complying with a payment plan duly approved.
TENANT acknowledges that this is an essential condition of the
Contract and if the above certification is incorrect in any of its
parts, LANDLORD may cancel this contract.
SIXTY ONE: 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 premises for these purposes, upon LANDLORD's
request, and to also provide access to all books, records, documents and
instruments which LANDLORD may deem necessary in order to fully
audit the premises as herein stated.
SIXTY TWO: 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) Quarterly 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 THREE: 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.
SIXTY FOUR: TENANT shall not transfer, lease, burden or dispose of
in any way of the equipment used on its operations without the
previous written notice to LANDLORD.
SIXTY FIVE: TENANT shall not sell, lease or transfer in any way
its operations to any other tenant without the previous written
consent of LANDLORD.
SIXTY SIX: If TENANT is not in default hereunder, beyond the period
for the cure of defaults hereunder, TENANT shall have the right to
further extend this lease for an additional FIVE (5) years period,
upon written notice given to LANDLORD of ninety (90) days prior to
the termination date of the term hereof, such extension to be upon
the terms, covenants and conditions contained herein, except that
the rental rate will be the rate then currently being charged by
LANDLORD in the area. If so requested by any of the parties hereto,
both parties agree to promptly execute such documents as may be
necessary to incorporate in the lease the agreements for said
extended period. If TENANT does not excersise this option, the
Article FORTY-FIVE (45) shall apply in full force and effect.
SIXTY SEVEN: TENANT agrees to submit to LANDLORD within thirty
(30) days from the date of execution of this Contract: (a) evidence
of its registration in the Department of State of the Commonwealth
of Puerto Rico and the name and address of its resident agent; and
(b) a certificate of a resolution of its Board of Directors either
authorizing or ratifying the execution of this Contract.
IN WITNESS WHEREOF, LANDLORD and TENANT have respectively signed upon
proper authority this Lease, this day of
PUERTO RICO INDUSTRIAL DEVELOPMENT COMPANY
BY:_____________________________________
TELECOM PUERTO RICO, INC.
(FORMERLY ZELTEX P.R., INC.)
SOCIAL SECURITY #
BY:_____________________________________
TELECOM PUERTO RICO, INC.
(FORMERLY ZELTEX P.R., INC.) SCHEDULE
"A"
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Description of Building No. T-0796-1-67
Located at Aguada, Puerto Rico
This is a pitched roof type building consisting of reinforced concrete
foundation, columns and girders supporting 30 feet long steel joists
which in turn support prestressed concrete slabs poretes covered by
1/2" fiberglass insulation and a 3 ply built-up roofing.
Roof ventilators are provided.
The structure consists of a main floor 120' - 0" x 90' - 6" out to out
dimensions with an area of 10,860.00 sq. ft. of manufacturing space;
a lean-to 37' - 2" x 11' - 6 3/4" for an area of 429.78 sq. ft.
This amounts to a total area of 11,289.78 sq. ft. of covered floor
space.
The floor consists of a 4" thick reinforced concrete slab with a
monolithic cement finish; floor slab designed for a load capacity
of 150 pounds p.s.f.
Exterior walls are of concrete blocks plastered and painted on both sides.
Interior walls at lean-to are plastered and painted.
Ceiling is rubbed and painted throughout the building.
Windows are Miami aluminum type throughout the building.
Interior doors are made of plywood and exterior are industrial type metal
ones.
Clearance in the manufacturing area from finish floor to lowest part of
beams at the side eaves is 12'-0".
Description of Parcel of Land, Lot No. 2
Located at Aguada Industrial Area,
Aguada, Puerto Rico
Parcel of land, lot no. 2, located at Aguada Industrial Area, Aguada,
Puerto Rico. It bounds by the North, with lot no. 4 of the same
industrial area, by the South, with State Road No. 115, by the East,
with Street "A", of the same industrial area and by the West, with
land owned by Sucn. Raffucci.
It has a surface area of 5753.8898 sq. meters, equivalent to 1.4639
cuerdas.
Encumbrances:
It is affected by a 5.0 feet wide right of way in favor of P.R.E.P.A.
running along its western boundary.
Building: Project No. T-0796-0-67
This is a pitched roof type building consisting of reinforced concrete
foundations, columns and girders supporting 30 feet long steel
joists which in turn support prestressed concrete slabs poretes,
covered by 1/2" fiberglass insulation and a 3 plies built-up
roofing. Roof ventilators are provided.
TELECOM PUERTO RICO, INC.
(FORMERLY ZELTEX P.R., INC.)
SCHEDULE "A"
- - ---------------------------------------------------------------
- - --------
The structure consists of a main floor 120'- 6" x 90' - 6" out to out
dimensions with an area of 10,905.25 sq. ft. of manufacturing space,
lean-to 37' - 2" x 11' - 6" - 6 3/4 for an area of 429.69 sq. ft.
This amounts to a total area of 11,334.94 sq. ft. of covered floor
space.
The floor consists of 4" thick reinforced concrete slab with a monolithic
cement finish. Designed for a live load of 150 p.s.f. on both
sides.
Interior walls at the lean-to are plastered and painted together with a
6'-1" high sprayed-on glazed finish wainscoat.
Ceiling is rubbed and painted throughout the building.
Interior doors are made of plywood and exterior are industrial type metal
ones.
Clearance in the manufacturing area from finished floor to lowest part of
beams at the side eaves is 12'-0".
Windows are miami aluminum louvers throughout the building.