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telephone number to L&G for no consideration. At the same time,
Guaderrama, as president of L&G, executed a lease with Benavidez
that provided for monthly rental payments of $3,031.34 by
Benavidez. Although the lease agreement was between Benavidez
and L&G, Benavidez’ payments were made directly to Guaderrama.
Under the lease agreement, Benavidez agreed to make payments for
a period of 15 years. The monthly payments represented an
amortization of the construction costs of Severo’s, calculated at
a 15-percent interest rate. In a letter from Guaderrama’s
attorney, Steven Fairfield (Fairfield), to Benavidez, Fairfield
referred to the payments as Guaderrama’s costs plus an interest
component. After 10 years, Benavidez had the option to purchase
Severo’s for 125 percent of the remaining balance. Benavidez
intended to exercise the option to purchase Severo’s and sought
financing from the Small Business Administration (SBA).
The lease agreement was subsequently amended in May and June
1992 to account for additions to Severo’s and loans made by
Guaderrama to Benavidez for furniture to be used in Severo’s.
The final lease agreement provided for monthly payments of
$3,821.70. This monthly payment was based on Guaderrama’s total
construction costs of $272,237.26, which included the $25,000
that Guaderrama lent Benavidez to pay off the note for the land,
and again also included an interest component on Guaderrama’s
expenses at a rate of 15 percent.
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Last modified: May 25, 2011