PUERTO RICO INDUSTRIAL DEVELOPMENT COMPANY
PO BOX 362350
SAN XXXX, PUERTO RICO 00936-2350
LEASE CONTRACT
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PROJECT NO.: PROYECTO NUM.:S-1231-0-77 (22,560.76 P.C.) and
T-0149-0-52 (20,308.44 P.C.); Part of Lot No. 1A (L-82-57) of 1,550.00 S.Q. M.T.
(site for water tanks); Lot No. 1B (L-82-57) of 10,181.00 S.Q. M.T. Equivalent
to 2.59 "cuerdas"
LOCATION: TOA ALTA, PUERTO RICO
THIS AGREEMENT ENTERED into on April 27, 1998 by:
AS "LANDLORD", THE PUERTO RICO INDUSTRIAL DEVELOPMENT COMPANY, AND
AS "TENANT", TII INDUSTRIES, INC.
WITNESSETH
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WHEREAS, XXXXXXXX is the owner of certain landsite and building,
identified in the Epigraph, hereinafter referred to as the Premises.
WHEREAS, XXXXXXXX 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
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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 STAMPED METAL PRODUCTS AND MACHINE PARTS (SIC. #03469), SURGE
ARRESTING EQUIPMENT (SIC. #03643) AND ELECTRONIC COMPONENTS (SIC. #03679).
THREE: TENANT shall hold the Premises for a period of ten (10)
years, to commence on May 1, 1996.
FOUR: Commencing July 1, 1996, TENANT shall pay to LANDLORD an
annual rental of:
A. PROJECT NUMBER S-1231-0-77: TENANT SHALL PAY RENT FOR AN AREA OF
18,961 SQ FT DUE TO A 3,600 SQ FT FLOOR AREA WHICH IS ACTUALLY
DAMAGED.
TERM ANNUAL RENTAL MONTHLY
---- ------------- -------
1st year $2.75 $4,345.23
2nd year $2.95 $4,661.25
TERM ANNUAL RENTAL MONTHLY
---- ------------- -------
3rd year $3.20 $5,056.27
4th year $3.45 $5,451.29
5th year $3.60 $5,688.30
6th year and for $4.10 $6,478.34
the remnant of the
term
Commencing on May 1, 1996, TENANT shall pay to Landlord an annual rental of:
B. PROJECT NUMBER T-0149-0-52:
TERM ANNUAL RENTAL MONTHLY
---- ------------- -------
1st year $2.75 $4,654.02
2nd year $2.95 $4,992.49
3rd year $3.20 $5,415.58
4th year $3.45 $5,838.68
5th year $3.60 $6,092.53
6th year to 10th year $4.10 $6,938.72
C. FOR LOT 1B (L-82-57), TENANT SHALL PAY $600.00 PER MONTH UNTIL THE
TERMINATION OF THE CONTRACT, COMMENCING THE FIRST DAY OF THE MONTH
AFTER THE DATE OF DELIVERY OF THE LOT.
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 $9,684.29 deposited by TENANT under the
provisions of a previous Lease Contracts for the project T-0149-0-32 (CR #12422
of 12-15-98) and M-0804-0-67-01, 02 and 03 (CR #117323 of 9-16-85); therefore,
simultaneously herewith TENANT shall pay $4,138.63 in a 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 no environmental deficiencies as a result of TENANT's manufacturing
operation on the demised Premises.
SIX: XXXXXX agrees to have on the date of commencement of the
term of this Lease a capitalization of $971,755.00.
Likewise TENANT agrees to install within six (6) months from the
same date manufacturing machinery and equipment with a value of at least
$250,000.00.
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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 Hundred (100) 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: PO BOX 362350,
SAN XXXX, PUERTO RICO 00936-2350. To TENANT: PO BOX 433, TOA ALTA, PUERTO RICO
00954.
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 is more than FIVE THOUSAND DOLLARS ($5,000.00), TENANT shall, at
TENANT'S own cost and expense, deliver to LANDLORD a surety bond, or a
performance bond from a company acceptable to LANDLORD, or a similar bond or
other security satisfactory to LANDLORD, in an amount equal to the estimated
cost of such work, guaranteeing the completion of such work within a reasonable
time, due regard being had to conditions, free and clear of materialmen liens,
mechanics liens or any other kind of lien, encumbrances, chattel mortgages and
conditional bills of sale and in accordance with said plans and specifications
submitted to and approved by LANDLORD. At LANDLORD'S option TENANT shall provide
a blanket written guarantee in an amount sufficient to satisfy LANDLORD as to
all alterations, changes, additions and improvements to the Premises in lieu of
separate guarantee for each such project.
TENANT shall pay the increased premium, if any, charged by the
insurance companies carrying insurance policies on said building, to cover the
additional risk during the course of such work.
ELEVEN: POWER SUBSTATION - If required by TENANT'S operations,
TENANT shall, at its own cost and expense, construct and/or install a power
substation and connect it to the PUERTO RICO ELECTRICAL POWER AUTHORITY (PREPA)
distribution lines, for voltages up to 13.2 KV; and to PREPA transmission lines
for voltages of 38 KV, all in conformity to PREPA's
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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
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 bill board, aerial
sign, or structure of any kind, (ii) place any fixture, equipment or any other
loan 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
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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 loan of the Premises herein demised
is 150 pounds per square foot. Therefore, TENANT hereby agrees that in the event
the load of the machinery and equipment to be installed thereat exceeds such
maximum loan, 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 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.
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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 thereof
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
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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 of 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, 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 any emergency shut-down, in
which case such notice shall be given at the earliest possible time.
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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: 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 LANDLORD,
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 or 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 and control
exclusion shall be deleted
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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) and 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 DISPOSITIONS ABOUT INSURANCE - All the
Insurance policies herein required from TENANT, shall be taken in form and
substance acceptable to LANDLORD with
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insurance companies duly authorized to do business in Puerto Rico, having an "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
canceled by the insurer for nonpayment of premium or otherwise, until at least
ten (10) 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 ten (10) days after such renewal, deliver to
LANDLORD adequate evidence of the payment of premiums thereof. If such premiums
or any of them shall be 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 changes 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
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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 Premises unless LANDLORD shall
explicitly 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. XXXXXX 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 the 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
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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%) percent 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 the 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,
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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
events, 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,
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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 rent
provided for in the agreement for any holdover of such period after termination
and up to the surrender or recovery of possession of the Premises by LANDLORD,
as the case may be, and thereafter TENANT covenants and agrees, to pay to
LANDLORD until the end of the term of this Lease as originally demised the
equivalent of any deficiency amount of all the rent reserved herein, less the
net avails of reletting, if any, as specified hereinabove, in this Article and
the same shall be due and payable by TENANT to LANDLORD as provided herein, that
is to say, TENANT shall pay to LANDLORD the amount of any deficiency then
existing.
FORTY-ONE: LANDLORD'S REMEDIES - In the event TENANT shall default
in the performance of any of the terms, covenants or provisions herein
contained, LANDLORD may, but without the obligation to do so, perform the same
for the account of TENANT and any amount paid or expense incurred by LANDLORD in
the performance of the same shall be repaid by TENANT on demand. In the event of
a breach or threatened breach by TENANT 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 exercise by LANDLORD, shall be
deemed to be a waiver, or an exclusion of any of the others.
FORTY-TWO: NOTICE OF DEFAULT - Anything in this Lease to the
contrary notwithstanding, it is specifically agreed that there shall be no
enforceable default against LANDLORD under any provisions of this Lease, unless
notice of such default be given by TENANT to LANDLORD in which TENANT shall
specify the default or omission complained of, and LANDLORD shall have thirty
(30) days after receipt of such notice in which to remedy such default, or if
said default or omission shall be of such a nature that the same cannot be cured
within said period, then the same shall not be an enforceable default if
LANDLORD shall have commenced taking the necessary steps to cure or remedy said
default within the said thirty (30) days and diligently proceeds with the
correction 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
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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 buildings 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 provisions 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 law of
the Commonwealth of Puerto Rico.
FORTY-SEVEN: LEASE TERMINATION AND HOLDING OVER - Upon the
expiration of termination of this Lease:
(i) TENANT shall inform XXXXXXXX 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 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 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 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.
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FORTY-EIGHT: CHANGE OF ADDRESS - TENANT shall promptly notify
LANDLORD of any change in the addresses other than those required from it in
Article SEVEN hereof.
FORTY-NINE: TENANT will indemnify LANDLORD for any and all
liability, loss, damages, expenses, penalties and/or fines, and any additional
expenses including any attorney fees LANDLORD may suffer as a result of claims,
lawsuits, demands, administrative orders, costs, resolutions or judgments
against it arising out of negligence and/or failure of TENANT or those acting
under TENANT to confirm 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: Anything contained in this Contract to the contrary
notwithstanding, in the event that TENANT requires additional volume of water
and/or pressure as is now available within the area wherein the demised premises
are located, it shall be at its own cost and expense the construction and/or
installation of such improvements and/or facilities as may be necessary to or
convenient and/or required by the Puerto Rico Aqueduct and Sewer Authority to
increase such volume and/or pressure; it being agreed and understood, however,
that such construction and/or installation shall in no event be commenced until
after LANDLORD's written approval has first been requested and obtained.
FIFTY-TWO: TENANT hereby acknowledges that in the industrial park
there are other industries; therefore TENANT hereby specifically agrees and
undertakes to take such steps and install such equipment as may be necessary to
prevent that any hazard and/or noise which may be created by its operations may
in any way or manner unduly affect the operations of the other industries and
therefore TENANT hereby releases and saves LANDLORD harmless from any and all
claims or demands arising therefrom or in connection therewith.
FIFTY-THREE: TENANT shall, at its own cost and expense, install a
fire protection system and shall obtain the endorsement and approval from said
Fire Department for such installation.
FIFTY-FOUR: TENANT shall procure and obtain a permit for the
operation of a solid waste emission source from the Environmental Quality Board
and authorization for the Office of Solid Waste and/or from the Municipality of
Toa Alta for the final disposition of wastes.
FIFTY-FIVE: LANDLORD hereby demises and lets unto TENANT and TENANT
hereby leases from LANDLORD during the term of this lease, Lot Number 1B
(L-82-57) of approximately 10,181.00 square meters, in its present conditions,
according to the following terms and conditions:
USE OF PROPERTY - The property identified as Lot No. 1B
(L-82-57) herein demised shall be used by TENANT exclusively as parking
facilities. LANDLORD agrees to pave and improve Lot 1B (1-82-57).
INSURANCE - During the term of this Lease, TENANT shall
provide and keep in force, at its own cost and expense and for the benefit of
LANDLORD insurance policies under the following Risk and Insurance Coverages:
1. COMPREHENSIVE GENERAL LIABILITY POLICY - Including
Puerto Rico Industrial Development Company as
additional insured.
2. LIMITS/COVERAGES - Combined Single Limit of
$1,000,000.00, Hold Harmless Clause, Indemnity
Agreement.
TENANT shall indemnify and save harmless from and against all
losses, liabilities, claims, or demand whatsoever (including, without
limitation, costs and expenses in connection therewith), arising out of any
personal injury, including death resulting therefrom, or out of any
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damage to, or loss or destruction of property, in any manner, based upon,
occasioned by, or attributable or related to the performance, whether by the
TENANT, any employee of the TENANT, or any other person.
All said policies shall be delivered to LANDLORD upon the
commencement of the term of this Lease with evidence of payment of the premiums
therefor.
Any improvement necessary for the use and enjoyment of the property
by TENANT shall be at TENANT's own cost and expense; provided however that
TENANT shall not construct on the property improvements of permanent nature
without the prior written consenlt of LANDLORD.
LANDLORD hereby reserves the right to inspect the propert; however
it shall be necessary during working hours, but without interfering with
TENANT's inteended use, and TENANT hereby agrees to immediately correct any and
all deficiencies as may be notified by LANDLORD.
Upon termination of the Lease by its normal expiration of the term
hereof, or by any other reason, or if TENANT decides to surrender Lot No. 1B
(L-82-57) to LANDLORD before the expiration of the term hereof. TENANT shall
coordinate the delivery of the Premises with LANDLORD's Conservation Office and
with the Contracts Departments subject to the following:
1. TENANT shall remove any improvements constructed
thereon;
2. TENANT shall repair and correct any damage to the
property in the proess of said removal; and
3. TENANT shall return the property to its original
conditions, all at its own cost and expense; or at
LANDLORD's option, TENANT shall return the property with
improvements for the benefit LANDLORD without the right
to be reimbursed or compensated thereof.
FIFTY-SIX: LANDLORD gives its consent to TENANT so that it can
sub-lease Project Number T-0149-0-52 to Crown Tool & Die Corp. or any other
entity controlled by TENANT. This permit is conditioned to the following: (I)
TENANT shall give a copy of the Sub-lease Agreement to LANDLORD, which should
include an acceptance by Crown Tool & Die Corp. to maintain an investment in
machinery and equipment of $650,000 and twenty-five (25) employments additional
to the condition that the rent charge by TENANT to Crown Tool & Die Corp. will
not exceed the rent established on this lease agreement; (II) This consent do
not relieve TENANT of the obligation established in this Contract.
FIFTY-SEVEN: TENANT will deliver to LANDLORD Projects
M-0804-0-67-01, M-0804-0-67-02 and 0804-0-67-03 in coordination with the
Conservation Office and the Contract Department according to XXXXXXXX's
established procedures.
FIFTY-EIGHT: TENANT, at its own cost and expense, shall implement
the necessary measures and install the control equipment to maintain the
atmospherici 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: Inasmuch as TENANT represented that in order to carry
out its operations it is necessary to install and operate an 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.
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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: TENANT must strictly comply with the rules established in
"OSHA Standards for General Industry" regulations, in specific, sections
1910.104, 1910.106 and 1910.110 and with any other local applicable regulations
in relation to the localization, accessibility, spillage and escapes,
elevations, dams, distances between tanks, design, construction, security
equipment, operation and maintenance of the propane and oxygen tanks to be
installed. As a desirable security measure a minimum distance of 25 feet between
the exterior diameter of the tanks and the closest industrial building is
suggested when and if the physical conditions of the lot so permits. Under no
circumstances will distances smaller than those established in the hereinabove
mentioned regulations be permitted.
SIXTY-ONE: 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-TWO: 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.
SIXTY-THREE: 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.
SIXTY-FOUR: 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.
SIXTY-FIVE: Anything herein to the contrary notwithstanding, the
parties have agreed and understood that the following special facilities, shall
be utilized by TENANT "AS IS" and "WHERE IS", free of charge, but TENANT shall
repair and maintain said special facilities as provided under the applicable
provisions of the Contract:
A. PROJECT NUMBER S-1231-0-77
1. A Transclosure Type Substation of 300 KVA, 4.16 KV - 120/208V.
2. A Controlex Main Electric Distribution Panel, 30, 4H, 120-208V
1,200 A.
3. A 150 KVA Westinghouse Dry Transformer, 120-208V/480V, Serie
Number J93J2204.
4. A Controlex Electric Distribution Panel 277/480V, 225 A.
5. A Safety Switch of 200A-240-30.
B. PROJECT NUMBER T-0149-0-52
1. Automatic Sprinkler System on the building (except in the
Annex which was constructed by TII Industries, Inc.)
2. A 50,000 Gallon Water Tank which supplies water to the above
mentioned Sprinkle System located on Lot Number 1A of the
Industrial Park.
3. A Pumping System for the Sprinkle System located on Lot 1A.
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The above mentioned special facilities shall be deemed an integral
part of the demised premises and as such subject to and covered by the terms and
conditions of this Contract as they maybe applicable thereto.
SIXTY-SIX: 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-EIGHT: Notwithstanding anything to the contrary in this
Contract, the parties agree that an area of approximately 3,600 sq. ft. within
building S-1231-0-77 is damaged and TENANT shall not be required to repair this
area at any time during the term of this Contract nor upon termination hereof.
SIXTY-NINE: TENANT agrees to submit to LANDLORD within thirty (30)
days from the date of execution of this Contract: (a) evidence of its
registration in the Department of State of the Commonwealth of Puerto Rico and
the name and address of its resident agent; and (b) a certificate of a
resolution of its Board of Directors either authorizing or ratifying the
execution of this Contract.
IN WITNESS WHEREOF, LANDLORD and TENANT have respectively signed
upon proper authority this Lease, this _____ day of ____________________
PUERTO RICO INDUSTRIAL DEVELOPMENT
COMPANY
S.S.P. #00-0000000
By: /S/ XXXXXX XXXXX XXXXXX
----------------------------
By: /S/ XXXX XXXXXXX
----------------------------
TII INDUSTRIES, INC.
S.S.P. #00-000-0000
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