Número de Contrato: 2017-PRH106-A

Número de cuenta: N/A

FIRST AMENDMENT TO GROUND LEASE AGREEMENT

This FIRST AMENDMENT TO GROUND LEASE AGREEMENT (this "Amendment")

is made as of August 11, 2017 (the "Effective Date"), by and between PUERTO RICO
HOUSING FINANCE AUTHORITY, public corporation chartered by the Government of
Puerto Rico under Law Num. 103-2001 (hereinafter called "PRHFA" or "Lessor") and PUTNAM
LAC HOLDING, LLC, a limited liability company organized under the laws of Delaware duly
authorized to do business pursuant to the laws of the Government of Puerto Rico (hereinafter
called "Lessee").
W 1 T N E S S E T H:

WHEREAS, by Ground Lease Agreement dated as of October 14, 2016 (the "Ground
Lease"), Lessor did demise and let unto Lessee, and Lessee did hire and take from Lessor,
various contiguous parcels ofland recorded and identi:fied as Lots 195, 196 and 197, comprising
approximately 4.23 acres, equivalent to 17,101.9711 square meters of land, adjacent to the
Museo de Arte De Puerto Rico ("MAPR"), bordering De Diego Avenue and Antonsanti Street,
in Santurce, Puerto Rico, more particularly described in Exhibit "A" annexed and made a part of
the Ground Lease;

WHEREAS, Lessor has requested, and Lessee has agreed, to amend the Ground Lease
(i) in order to provide for the prepayment of the rent by the Lessee for the :first :fifteen (15) years
of the term of the Ground Lease, and after that date Lessee will commence to pay monthly base
· rentpursuant to the rent schedule that was established under the Ground Lease, but subject to the
right of Lessee to termínate the Ground Lease as provided under the Ground Lease; (ii) based on
the new base rent structure that has been negotiated by the parties, to delete the provisions of the
Ground Lease requiring a security deposit from Lessee as a condition to the effectiveness of the
Ground Lease; and (iii) to establish a revised due diligence period before Lessee has to proceed
with the development and construction of the Improvements on the Premises and has to
commence to pay rent;

WHEREAS, in order to increase the green recreational area within the Premises and
maximize the ecological footprint that the Santurce Park will provide to the Santurce community
and in consideration of the fact that an af:filiate of Lessee is building approximately 200 parking
spaces on a separate property known as Stop 22, adjacent to the Premises, that will be available
for use by the general public, the Ground Lease will be amended to delete the obligation of
Lessee under the Ground Lease to construct 200 parking spaces within the Premises in order to
increase the green recreational space within the Premises; and

WHEREAS, ata meeting ofthe Board ofDirectors of Lessor held on July 10, 2017, said
Board of Directors approved resolution number 2017-17 authorizing the execution by Lessor of
this Amendment, as evidenced by a Certificate of Corporate Resolution dated August 3, 2017
executed by Margarita Cintrón Solla, in her capacity as Secretary of the Board of Directors of
Lessor, a copy ofwhich is attached to this Amendment as Exhibit 2.
 NOW, THEREFORE, for and in consideration of the mutual covenants herein
contained and other good and valuable consideration, the adequacy and receipt of which are
hereby acknowledged, Lessor and Lessee hereby agree as follows:

l. Defmitions. All capitalized terms used but not defined herein shall have the
meanings ascribed thereto in the Ground Lease.

2. Amendments to Lease.

a. The title of the Ground Lease is hereby amended as of the Effective Date
to read in its entirety as follows:

"GROUND LEASE to PUTNAM LAC HOLDING, LLC

FOR DEVELOPMENT OF A PUBLIC
PARKAT LOTS 195, 196 & 197, SANTURCE, PR"

b. Section 1. M. is hereby amended in its entirety as of the Effective Date to

read as follows:

"Evaluation Period" shall mean the period of time commencing on

the date ofthis Lease and ending on February 28, 2018. If as ofthe
original Evaluation Period (or any extension thereto provided
hereunder} Lessee has not completed all the studies deemed
necessary by the Lessee for the development of the Improvements
on the Premises or Lessee has not obtained all of Lessee's Permits
and all appeal periods with respect thereto shall have expired with
no appeals- having been taken, then Lessee shall have the right to
extend the Evaluation Period for two additional periods of sixty-one
(61) days each, the first of such period expiring on April 30, 2018
and the second of such periods expiring on June 30, 2018. Lessee
shall notify Lessor, in writing, of its election to extend the
Evaluation Period prior to the last <lay of the Evaluation Period then
in effect."

b. Section 3 of the Ground Lease is hereby amended as of the Effective Date

to read in its entirety as follows:

"A. Term. The initial term of this Lease ("Term") shall

commence on the date on which Lessor delivers possession of the
Premises to Lessee in the manner and condition provided in Section
3. B below, and Lessee accepts possession in accordance with the
terms and conditions of this Lease (the "Commencement Date"),
and shall expire fifteen (15) years from that date, all subject to all
terms and conditions of this Lease. Lessee shall have the right to
extend the Term of this Lease for three (3) consecutive periods, the
first of such periods of three (3) years and the next two periods of
six (6) years each, under the same terms and conditions hereof

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 (except for Base Rent, which shall be based on the schedule set forth
in Section 4. A. below), by notifying Lessor in writing at least ninety
(90) days prior to the expiration ofthe then current Term.

B. Evaluation Period.

(1) During the Evaluation Period, Lessee rnay enter upon the
Prernises and conduct tests, inspections, surveys and studies
(including, without lirnitation, soil, environrnental, physical,
rnechanical and structural) which Lessee rnay deern appropriate to
determine the suitability of the Prernises for Lessee's use; conduct a
title search and order a title cornrnitrnent with respect to the
. Prernises; and review applicable zoning and land use laws. Lessee
agrees to protect and hold Lessor harrnless frorn any liability or loss
incurred by Lessor as a result of Lessee's activities at the Prernises
during the Evaluation Period and to prornptly restore any darnage
· caused ·to ·the Prernises as a result of Lessee's activities, if Lessee
<loes not proceed with this Lease.

(2) Within sixty (60) days after receipt of notice frorn Lessee,
Lessor shall cure any encroachrnent, encurnbrance or other defect
disclosed by any survey or title information which shall not be
acceptable_to Lessee. Within sixty (60) days after receipt of an
Environrnental Site Assessrnent which reveals the presence of any
Hazardous Substances or underground storage tanks on the
Prernises, Lessor shall rernediate any Hazardous Substances to a
standard permítting the unrestricted future use of the Prernises and
rernove any underground storage tanks, and any associated
Hazardous Substances, provided that Lessor rnay notify Lessee, in
Lessor' s sol e discretion, of Lessor' s election to termínate this Lease
if the cost to cure any encroachrnent, encurnbrance or title defect, or
rernediation work associated to the presence of any Hazardous
Substance on the Prernises will exceed the sum of $ 100,000.

(3) lf Lessor fails to perform its obligations pursuant to

subparagraph (2) above, then within fifteen (15) days after the
expiration of said sixty (60) <lay period, Lessee rnay notify Lessor of
Lessee's election to termínate this Lease. Upon such termination by
Lessee, Lessor shall have no liability or responsibility upon Lessee's
election to termínate the Lease pursuant to subparagraph (2) of this
Section 3 .B.

(4) In addition, Lessee rnay termínate this Lease at any time

prior to the expiration of the Evaluation Period if, in Lessee's sole,
but reasonable, discretion, Lessee is not satisfied with the results of
any test, inspection, survey, or study performed by Lessee, or with

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 any other condition relating to the Premises, including, without
limitation, title, zoning laws, land use laws, or status of permits or
approvals.

(5) Whether or not this Lease shall be terminated pursuant to

this Section 3. B, Lessee shall have no liability with respect to any
Hazardous Substances or underground storage tanks discovered as a
result of any tests, inspections or studies performed by Lessee
hereunder.

(6) Notwithstanding anything to the contrary in this Lease, in no

event shall Lessee be obligated to accept possession of the Premises
until all due diligence has been completed, all the "Permits" have
been issued to Lessee and Lessor can deliver to Lessee peaceful
possession as tenant of all the land that is part of the Premises free of
any occupants or squatters, other than the Condemned Parcel.
"Permits" shall mean Lessee's construction permit and any other
licenses, permits or approvals issued by any governmental or quasi-
govemmental authority necessary to enable Lessee to perform any
necessary alteration or demolition of existing buildings or
improvém.ents and to perform its initial construction on the Premises
pursuant to this Lease. In addition, "Permits" shall include any
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zoning variance, special use permit, street or alley abandonment, or
_the Jike __necessary for Lessee to operate the Premises as
contemplated under this Lease without restriction (including without
restriction as to operating hours except as required by applicable

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law). It shall be Lessee's obligation to pay for all engineering and
survey consultants and reports required in order for Lessee to obtain
site plan approval and all other permits and approvals from all
govemmental authorities required for construction of the
Improvements on the Premises. Lessee's Permits shall also include,
without limitation, zoning approval, ante-proyecto approval, all
approvals for access to and from the Premises as per Lessee's
requirements, environmental approvals, water and sewer approvals
and electric, telephone and power approvals from the appropriate
govemmental authorities to enable the Premises to be developed for
Lessee's intended use as contemplated under this Lease. Lessor
hereby agrees to cooperate with Lessee in obtaining all the Permits
and hereby authorizes Lessee to file all applications for the Permits
in the name ofthe Lessor.

(7) Unless, on or before the expiration of the Evaluation Period,

Lessee shall have obtained all of Lessee's Permits, and all appeal
periods with respect to all of such permits and approvals shall have
expired with no appeals having been taken, at any time thereafter
(but prior to the acquisition by Lessee of Lessee's Permits and the

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 expiration of all appeal periods with respect thereto, with no appeals
having been taken), Lessee may termínate this Lease upon thirty
(30) days' notice to Lessor, and this Lease will so termínate unless,
prior to the expiration of said thirty (30) days, Lessee shall have
obtained all of Lessee's Permits and such appeal periods shall have
expired with no appeals having been taken.

(8) Provided that this Lease has not been terminated by Lessee
on or prior to the expiration of the Evaluation Period as provided in
this Section 3. B., then if, on or before the expiration of the
Evaluation Period, possession of the Premises has not been
delivered to Lessee by Lessor, then at any time thereafter (until such
possession is so delivered), Lessee may, at Lessee's sole option,
termínate this Lease upon thirty (30) days' notice to Lessor, and this
Lease will so termínate unless, prior to the expiration of said thirty
(30) days, Lessor shall deliver possession of the Premises to Lessee
in accordance with the terms hereof.
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(9) Notwithstanding anything to the contrary in this Lease, in no

event shall Lessee be obligated to accept possession of the Premises
until Lessee shall have:

-v --
-~J_ - (i) received a leasehold policy oftitle insurance to be paid by
Lessee with respect to the Premises, which policy shall be
satisfactory to Lessee;

r (ii) received and presented for recording this Lease pursuant

to Section l 4 hereof; and

'(iii) approved, in Lessee's reasonable discretion, the form

and substance of all easements providing utilities, or access for the
Premises, and received from Lessor and Lessor shall have presented
for recording same.

(10) Lessor shall deliver to Lessee within ten (10) days after
receipt ofLessee's request therefor:

(i) any documents reasonably required by Lessee's title

insurance company to remove the standard title exceptions from
Lessee's title commitment and subsequent title policy, including,
without limitation, an Owner's Title Affidavit in customary form
sufficient to delete any exceptions for parties in possession and
mechanics' or materialmen's liens;

(ii) any documents reasonably required by Lessee's title

company evidencing Lessor' s authority to enter into this Lease and

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 other documents required to be executed by Lessor, including,
without limitation, certifications, votes and other documentation
relating to Lessor' s organizational structure; and

(iii) any other documentation listed in the

"Requirements" section of Schedule B or B-1 of Lessee's title
commitment.

(11) The conditions in Paragraphs 3 B. (9) and (10) above shall

also apply to the Condemned Parcel and the inclusion of such parcel
under this Lease shall be subject to the satisfaction of those
conditions.

(12) Lessor hereby agrees to cooperate with Lessee and hereby

authorizes Lessee to negotiate with the Municipality of San Juan the
exchange of the parcel of land shown in Exhibit A-2 hereto that is
part of the ·Premises, which segregated parcel shall be used for the
expansion of the Antonsanti Street, in exchange for a road of the
Municipality of San Juan that is no longer in use and that is part of
the design of Lessee that is attached to this Lease as Exhibit A-1 for
the development of a public park on the Premises. The parties
acknowledge that their intension is to segregate the portion of the
Premises that is shown in Exhibit A-2 from the Premises and to
--~ . transfer title to the segregated parcel to the Municipality of San Juan
in exchange for the Municipality of San Juan transferring to Lessor

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legal title to the property of the Municipality of San Juan that is also
shown in ·Exhibit A-1. The property that is transferred by the
Municipality to Lessor as part of such exchange shall be grouped by
Lessor to the Premises and shall form part of the Premises that are
subject to this Lease. Lessor hereby authorizes Lessee to negotiate
such transaction with the Municipality of San Juan on behalf of
Lessor and to obtain all necessary segregation permits with respect
to the portion of the Premises to be segregated and the expansion of
the Antonsanti Street. No adjustment to the Base Rent shall result
from such transaction. lf the transactions with the Municipality of
San Juan that are described in this Paragraph 3 B. 12 are not
completed prior to the expiration of the Evaluation Period, Lessee
may, at Lessee's sole option, either (i) terminate this Lease upon
thirty (30) days' notice to Lessor, and this Lease will so terminate or
(ii) modify Exhibit A-1 hereto in order the develop the park and the
lmprovements within the portion of the Premises that is owned by
Lessor (excluding the parcel that is owned by the municipality of
San Juan). All reasonable costs and expenses related to the matters
set forth in this subparagraph 12 shall be paid by Lessee, except that
the transfer of the parcels to be exchanged between the Municipality
of San Juan and the Lessor shall be gratuitous."

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 b. Section 4 A. of the Ground Lease is hereby amended as of the Effective
Date to read in its entirety as follows:

"Base Rent. Within twenty (20) days of the Commencement Date,

Lessee shall pay to Lessor the sum of TWO MILLION DOLLARS
($2,000,000.00) as full prepayment of the base annual rent under the
Ground Lease for the first fifteen (15) years of the Term of the
Ground Lease. During the extension periods of the Term of this
Lease, to the extent that such extension options have been exercised
by Lessee as provided in this Lease, Lessee shall pay to Lessor
during the applicable Term, as basic annual rent ("Base Rent"), the
following sums:

Annual Base Rent Under Lease

Year Rent Period

16 $382,454 1st Extension

17 393,928
18 405,746
19 $450,000 2nd Extension
20 463,500
21 . 477,405
22 491,727
23 506,479
24 521,673
25 $537,324 3rd Extension
26 553,443
27 570,047
28 587,138
29 604,762
30 622,905

c. Section 4. B. of the Ground Lease is hereby deleted in its entirety as of the

Effective Date and the reference in the Ground Lease to that Section shall read as follows:

"[INTENTIONALLY DELETED]"

d. Section 4. C. of the Ground Lease is hereby amended in its entirety as of

the Effective Date to read as follows:

"C. Rent Commencement Date. Base Rent and ali other charges
due under this Lease shall accrue from the Commencement Date
and shall initially be due and payable by Lessee in one (1)
installment commencing on the twentieth (20th) <lay after the
Commencement Date with respect to the first fifteen (15) years of

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 the Term of this Lease and thereafter, commencing on the first <lay
of the first extension option of the Term, shall be payable monthly in
advance in the amounts set forth in Section 4 A. above ("Date of
Periodic Rent Commencement"). Commencing on the Date of
Periodic Rent Commencement, Base Rent shall be paid in twelve
(12) equal monthly installments as provided in Paragraph 4. E.
below. Ifthe Date of Periodic Rent Commencement shall be on any
<lay other than the first <lay of a calendar month, then the Base Rent
and other charges for such month shall be pro-rated on a per diem
basis. The foregoing notwithstanding, Lessee's obligation to provide
insurance pursuant to Section 8 and to pay Additional Rent
hereunder shall begin on the Commencement Date ofthe Term."

e. Section 4. E. ofthe Ground Lease is hereby amended in its entirety as ofthe

Effective Date to read as follows:

"E. Reri.t Payments. All payments of Base Rent, Additional Rent

and oth~r payments required to be made to Lessor shall be in la"Yfill
money of the United States of America without demand, offset or
deduction, and shall be paid as provided in this Lease to Lessor at
- the_ address indicated in Paragraph 29 or at such other place as
Lessor may designate to the Lessee by notice in writing from time to
_time and may be made by check or draft payable to the order of such
payee,_ which check or draft must be paid in fu.U when presented.
After the Date of Periodic Rent Commencement, all payments of
Base Rent shall be made without notice in equal monthly
installments in advance within the first five days of each and every
calendar month."

f. Section 4. H. of the Ground Lease is hereby deleted in its entirety as of the

Effective Date.

g. Section 5. A. of the Ground Lease is hereby amended in its entirety as of

the Effective Date to read as follows:

"A. Lessee shall use the Premises to construct and operate on

any part thereon a community park for the general use of the public
to be designed and constructed in harmony with the current design
and landscape of the MAPR, as determined by Lessee's architect.
Lessee, or an Affiliate of Lessee, shall make available to the
Santurce community an hourly parking parking facility with
capacity for parking of at least two hundred (200) vehicles on a
separate property known as Stop 22, adjacent to the Premises. The
parties hereto hereby agree that said park shall be known initially as
"Parque La Cuidadela". Lessee shall have the right to change the

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 name ofthe park during the Tenn of the Lease in its sole discretion.
The right granted to the Lessee under this Section 5. A. includes the
right of the Lessee to use of the Premises for fairs, concerts and
other activities open to the public to be held within the Premises. As
part of these activities the Lessee shall have the right to sublease
space within the Premises to vendors and other merchants so that
they can sell their products and merchandize within the Premises,
including food trucks and other food and merchandise vendors."

h. Section 5. B. ofthe Ground Lease is hereby deleted in its entirety as ofthe

Effective Date and the reference in the Ground Lease to that Section shall read as follows:

[INTENTIONALLY DELETED]

i. Section 17. A~_ (1) of the Ground Lease is hereby amended by adding the
following language at the end ofthis Section.

~'Notwithstanding the foregoing, Lessee may assign ºI' otherwise

transfer this Lease at any time to Santurce Park Conservancy, Inc., a
non-profit corporation organized for the purpose of operating and
maintain the Santurce Park, without requiring the prior written
consent of the Lessor. Any such assignment to Santurce Park
Conservailcy, Inc. shall be notified in writing to Lessor by
_ __delivering to Lessor an executed copy of such assignment, to the
extent required in recordable form, under which Santurce Park
Conservancy, Inc., shall have assumed this Lease and agreed to
perform and be bound by the covenants and conditions of this Lease
required to be performed and observed by Lessee after the date of
such assignment. Upon such assignment to Santurce Park
Conserirancy, Inc., Lessee shall be relieved from all of its
obligations under this Lease."

j. Section 37. B. of the Ground Lease is hereby amended in its entirety as

ofthe Effective Date toread as follows:

"B. This Lease shall become effective only when the Lessee
has delivered to the Lessor the insurance policies required from the
Lessee under this Lease and Lessor is not obligated under this
Agreement until this Lease has been signed by the Executive
Director or any other authorized officer to whom such authority
was delegated by the Board of Directors of the Lessor and a copy
of this Lease and the Amendment thereof executed on August ,
2017 has been filed by the Lessor in the Puerto Rico Comptroller's
Office in compliance with the requirements of Law No. 18 of
197 5, as amended."

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 k. Exhibit A-1 to the Ground Lease is hereby replaced in its entirety as of the
Effective Date with the new Exhibit A-1 that is attached to this Amendment.

2. Ratification. Except as expressly set forth in this Amendment, the terms and
conditions of the Ground Lease shall continue in full force and effect without any change or
modification, are hereby ratified and confirmed in all respects, and shall apply for the balance of
the Term. In the event of a conflict between the terms of the Ground Lease and the terms of this
Amendment, the terms of this Amendment shall govem. On and after the Effective Date, each
reference in the Ground Lease to "this Agreement," "hereunder," "hereof' or words of like
import referring to the Ground Lease shall mean and be a reference to the Ground Lease as
amended hereby.

3. Modifications. This Amendment shall not be altered, amended, changed,

waived, t~rminated, or otherwise modified in any respect or particular, and no consent or
approval required pursuant to this Amendment shall be effective, unless the same shall be in
· writing and signed by or on behalf of the party to be charged.

4. Binding Effect. This Amendinent shall be binding upon and shall inure to the
benefit ofthe parties hereto and to their respective successors, and permitted assigns.

5. . Entire Agreement. Ali prior statements, understandings, representations, and

agreements between the parties, oral .or written, with respect to the subject matter hereof are
_____ superseded byand merged in this Amendment, which alone fully and completely expresses the
agreement between them in connection with this transaction and which is entered into after full
investigation, neither party relying upon any statement, understanding, representation, or
agreement made by the other not embodied in this Amendment.

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law provisions.

7.
Governing Law. This Amendment shall be interpreted and enforced in
accordance with the laws of the Govemment of Puerto Rico, without reference to its conflicts of

Counterparts. This Amendment may be executed in any number of

counterparts. It is not necessary that all parties sign all or any one of the counterparts, but each
party must sign at least one counterpart for this Amendment to be effective.

8. Representations. Lessee and Lessor, and each of the persons executing this
Amendment on behalf of Lessee and Lessor, do hereby warrant that the party for which they are
executing this Amendment (i) is a duly authorized and existing entity, (ii) is qualified to do
business in the Commonwealth of Puerto Rico, and (iii) has full right and authority to enter into
this Amendment, and that any person signing on behalf of such party is duly authorized to do so.
Upon either party's request, the other party shall provide evidence reasonably satisfactory to the
requesting party confirming the foregoing warranties.

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 9. Effectiveness. This Amendment shall not be binding upon either party unless and
until it is fully executed and delivered to both parties, whereupon it shall be effective as of the
Effective Date.

IN WITNESS WHEREOF, Lessor and Lessee have executed this Amendment as of the
Effective Date.

LESSOR:

PUERTO RICO HOUSING FINANCE AUTHORITY

By:~--+---+-~~~~~~~­
Name: -;re (Le M v Gfl. r ~ r- 1"'T"\.\J
Title: C Fo
TAX I.D. NUMBER:

475274v56

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 ~··b
ANTONSANTI st., SANTURCE PROPOSED IMPROVEMENT ALTERNATIVE 2 GENERAL PLAN~'"~