1
EXHIBIT 10.12
CONTRACT OF LEASE
KNOW ALL MEN BY THESE PRESENTS:
This CONTRACT OF LEASE, made and entered into this May 06, 1994 at Makati,
Metro Manila, Philippines, by and between:
XXXXXXX XXXXXX REALTY CORPORATION, a corporation organized and
existing under and by virtue of the laws of the Republic of the
Philippines, with principal office at X-00 Xxxxxx Xxxxx Xxxx., Xxxxx
Xxxx, Xxxxxx, Xxxxx Xxxxxx, herein represented by XX. XXXXXXXX X.
XXXXXX, XX. (hereinafter referred to as the "LESSOR");
- and -
AUTOMATED MICROELECTRONICS, INCORPORATED, a
corporation duly organized and existing under and by virtue of the
laws of the Republic of the Philippines, with principal office at
Km. 00, Xxxx Xxxxxxx Xxxx, Xxxxx Xxxxxxxxxxxx, Xxxxxx Xxxxxx, Xxxxx
Xxxxxx, herein represented by XX. XXXXX X. XXXXXXXX, and hereinafter
referred to
as the "LESSEE".
WITNESSETH:
WHEREAS, LESSOR, by a certain lease agreement made and executed on May 03,
1994, leased from IMI Realty, Inc., certain parcels of land described in
Transfer Certificate of Title Nos. 188087, 188088, 188090, 188091 and 188092
with a total area of THIRTY FOUR THOUSAND FOUR HUNDRED NINETY (34,490) SQUARE
METERS, more or less, copies of the said titles attached hereto as Annexes
"X-0", "X-0", "X-0", "X-0" and "A-5" and collectively referred to as "the Land".
WHEREAS, under paragraph Nine (9) of the aforementioned lease contract,
LESSOR has the right to sublease the land or any portion thereof.
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Contract of Lease
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WHEREAS, LESSOR desires to sublease a portion of the Land to the extent of
FOURTEEN THOUSAND FOUR HUNDRED TWO (14,402) square meters and to lease the
buildings and improvements standing thereon to Automated MicroElectronics,
Incorporated, which area of land, buildings and improvements are more
particularly represented by the shaded portion of Annex "B", hereinafter
referred to as "the Leased Premises".
NOW, THEREFORE, it is agreed that in consideration of the rents herein
stipulated as well as compliance with the covenants, conditions and restrictions
herein imposed as to the use and occupancy of the Leased Premises on the part of
the LESSEE, the LESSOR hereby rents and delivers unto the LESSEE the Leased
Premises described in Annex "B".
The LESSEE hereby accepts this lease subject to the following terms,
covenants, conditions and restrictions:
1. TERM. - The term of the lease for the Leased Premises shall be from
February 1, 1994 to midnight 31 August 2003. LESSEE shall have the option to
renew the lease for another five (5) years by giving written notice to LESSOR of
its intention to renew at least one hundred twenty (120) days before the
expiration of the original term of the lease.
2. RENT. - The rental for the Leased Premises shall be ONE MILLION TWO
HUNDRED SIXTY FOUR THOUSAND SIX HUNDRED TEN PESOS (Pl,264,610.00) per month from
February 1, 1994 until August 31, 1995. Commencing on 01 September 1995 and
annually thereafter, the said rental shall be increased by ten percent (10%) by
applying the percentage of increase on the lease rental rate as follows:
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Contract of Lease
Page three (3)
TOTAL
YEAR ANNUAL MONTHLY
------------------------ ------------- ------------
2/01/94 to 8/31/95 15,175,320.00 1,264,610.00
9/1/95 to 8/31/96 16,692,852.00 1,391,071.00
9/1/96 to 8/31/97 18,362,137.20 1,530,178.10
9/1/97 to 8/31/98 20,198,350.92 1,683,195.91
9/1/98 to 8/31/99 22,218,186.01 1,851,515.50
9/1/99 to 8/31/2000 24,440,004.61 2,036,667.05
9/1/2000 to 8/31/2001 26,884,005.07 2,240,333.76
9/1/2001 to 8/31/2002 29,572,405.58 2,464,367.13
9/1/2002 to 8/31/2003 32,529,646.14 2,710,803.85
For the purpose of payment of the rental under this Contract.
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Contract of Lease
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2.1 The rental rate shall be evaluated after 10 years and this new
rate shall be based on the market value of the Leased Premises
at that time as well as prevailing rental market conditions.
The rental however shall not be unjustifiably increased and
shall be the subject of a third party arbitration by a
mutually acceptable and accredited realtor or appraiser if a
dispute arises thereon.
2.2 There shall be paid a deposit equivalent to one month rental
and an advance rental for one month payable upon signing of
this Contract. The deposit shall be refundable to the LESSEE
at the termination of this Contract subject to deductions to
cover damages to the Leased Premises and unpaid obligations
and liabilities of the LESSEE to the LESSOR, if any.
2.3 The rent shall be liquidated and paid at the office of the
LESSOR or its assigns without necessity of demand or services
of a collector, within the first ten (10) days of every
calendar month to which the rent corresponds.
The rent shall be subject to the mandatory withholding tax.
3. INTEREST AND PENALTY. - Without prejudice to the
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Contract of Lease
Page five (5)
exercise of the LESSOR of its rights under the penal
provisions herein, the LESSEE shall pay to the LESSOR interest
or any amount herein provided to be paid by the LESSEE that is
not paid on time, at an interest rate equivalent to Two
Percent (2%) per month to be computed from the date of
delinquency until the amount due is paid in full.
3.1 A payment made by the LESSEE to the LESSOR shall first apply
to the preceding interest charges, if any, and thence to all
arrearages in the amounts herein provided to be paid by the
LESSEE before it is applied to the current rental.
3.2 In the fulfillment of obligations involving the payment of
money, and without prejudice to the imposition of interest
charges mentioned above, the LESSEE is hereby given a grace
period of sixty (60) days from the due date within which to
make good the breach or default, after which period the LESSOR
may exercise its absolute right to rescind and cancel this
Contract of Lease for breach or non-performance of essential
conditions.
3.3 In case of cancellation or termination of this Contract or
breach of its terms, the offending party shall, in addition to
any liability under Par. 10 of this Contract, pay all
commercially reasonable attorney's
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Contract of Lease
Page six (6)
fees, costs, expenses of litigation and other incidental
damages that may be incurred by the aggrieved party in
enforcing its rights under this Contract.
4. LESSOR'S OBLIGATIONS. - The LESSOR is obliged:
(a) to deliver the Leased Premises in such conditions as to render them
fit for the uses and purposes for which they are intended;
(b) To make on the Leased Premises during the period of the lease all
the necessary repairs in order to keep them suitable for the uses and purposes
to which they have been intended except necessary repairs caused by fault or
negligence of the LESSEE, its employees, agents and guests;
(c) To maintain the LESSEE in the peaceful and adequate enjoyment of
the Leased Premises for the entire duration of the lease contract and any
renewal term without any disturbance from the LESSOR or from any person claiming
through the LESSOR;
(d) To insure the Leased Premises with such reputable insurance
companies acceptable to the LESSEE for such amount or amounts equivalent to the
replacement value of the things leased;
(e) To make some urgent repairs upon the Leased Premises and to allow
the LESSEE, if the LESSOR fails to make urgent repairs, in order to avoid an
imminent danger, to order the repairs at the LESSOR'S cost and if the urgent
repairs last more than forty (40) days, to allow a reduction of the rent in
proportion to the time including the first forty (40) days
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Contract of Lease
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and the part of the property on which the LESSEE has been deprived.
(f) To allow access to the LESSEE, its employees and agents to enter
upon the Leased Premises at all reasonable times for the conduct of their
business.
5. TAXES. - The real estate tax of the Leased Premises at the current
rate as described in Annex "C" shall be for the account of the LESSOR. Any
increase in the real estate taxes over and above the current amount in so far as
they are due on the lands and buildings owned by the LESSOR shall be for the
account of the LESSOR. The real estate tax on all the equipment within the
Leased Premises as well as additions, improvements and alterations upon the
Leased Premises and any increase in real estate tax in respect thereto shall be
for the account of the LESSEE.
6. IMPROVEMENTS AND ALTERATIONS. - The LESSEE may, at its own expense,
undertake improvement, alterations or additions as long as they secure the prior
written consent of the LESSOR which consent shall not be unreasonably withheld;
provided, however, that all such alterations, additions or improvements
including but not limited to partitions, doors, toilets and canteen made by
either party, in or upon the Leased Premises, except movable furniture put in at
the expense of the LESSEE and removable without defacing or injuring the
building, shall become the property of the LESSOR and shall remain upon, and be
surrendered with the Leased Premises as part thereof at the termination of the
lease without compensation to the LESSEE. The LESSEE, however, may be required
by the LESSOR to restore the Leased Premises in its
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Contract of Lease
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original condition ordinary wear and tear excepted at the expense of the LESSEE
if the LESSOR does not want to take possession of the alterations, additions or
improvements.
7. MAINTENANCE AND ORDINARY REPAIRS. - The LESSEE hereby accepts the
Leased Premises in good and sanitary order and condition. The LESSEE shall, at
its expense, maintain the Leased Premises in a clean and sanitary condition,
free from obnoxious odors, or other nuisances. The LESSEE shall be responsible
for the maintenance and ordinary repairs of the Leased Premises. Necessary
repairs on the structure of the buildings such as the roof as a result of normal
wear and tear shall be for the account of the LESSOR.
7.1 The LESSEE shall not claim any loss or damages on account of
necessary work that the LESSOR undertakes in the building and
which would in anyway interfere in the use of the premises
leased; provided, however, that the LESSOR shall give the
LESSEE notice of such an event in advance as far as possible
under the circumstances; provided, finally, that the LESSOR
shall exert its best efforts to perform all work in a manner
that does not unreasonably interfere with the LESSEE's use of
the Leased Premises.
7.2 LESSOR may not be liable for the presence of bugs, vermin,
termite or insects, if any, in the Leased Premises.
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Contract of Lease
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7.3 The LESSOR shall not be liable for the failure of electric
current or water supply which are provided by public utility
companies and whose supply of such services are totally beyond
the control of LESSOR.
7.4 LESSOR shall, on a best effort basis, undertake to explore,
construct and develop such water well or xxxxx inside the
Leased Premises as may be necessary to provide the LESSEE,
during the contractual life of the lease, with continuous and
adequate water supply at the current level or capacity. If the
business of the LESSEE would require a higher volume of supply
over and above the current level, due to growth or expansion,
the required increase in capacity shall be for the account of
the LESSEE. The current supply of electricity and water is
described in Annex "D" hereof.
7.5 The LESSEE shall comply with sanitary rules and safety
regulations which may be promulgated from time to time by the
LESSOR. The LESSEE shall also comply with government rules and
regulations and all applicable laws of the country.
8. USE OF LEASED PREMISES. - The premises hereby leased shall be used
as office, factory/warehouse for LESSEE's
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Contract of Lease
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electronics assembly business. The LESSEE shall not bring into or store in the
Leased Premises any poison, explosives or highly inflammable material nor
install any apparatus unrelated to its business as an electronics company which
may expose the Leased Premises to fire or increase the fire hazard of the
building or change the insurance rate of the building. In the event of breach or
violation of this provision by the LESSEE, it shall be responsible for all
damages which such violations may cause the LESSOR and/or other tenants;
provided further, that the LESSOR, shall, in addition thereto, have the right to
cancel this Contract.
8.1 In the event of expansion or growth in the business of the
LESSEE, any required additional support facility or cost
related thereto, shall be for the sole account of the LESSEE.
9. SUBLEASE, TRANSFER OF RIGHTS. - The LESSOR grants the LESSEE the
right to sublease the Leased Premises under this contract upon written request
by the LESSEE and approved in writing by the LESSOR. The LESSOR shall not
unreasonably withhold its consent relative to a request to sublease made by the
LESSEE. The LESSEE shall be answerable for the rentals of the subleased space.
10. INDEMNITIES. - Either party shall hold the other party free and
harmless from any claim or demand by any third party for injury, loss or damage
including claims for property resulting from any accident in the Leased Premises
or
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Contract of Lease
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occasioned by any nuisance made or suffered on the Leased Premises, or by any
fire therein or growing out of or caused by any failure on the part of the
either party to maintain the Leased Premises in a safe, sanitary and secure
condition or by reason of either party's violation, non-observance or
non-performance of rules, regulations, ordinances, laws and the conditions of
this Contract concerning or affecting the Leased Premises or the improvements
thereon. Each party shall be responsible for all the acts and commissions of its
officers, employees, helpers, agents and all other persons allowed by it to have
access to the Leased Premises which may have caused damage thereto. Each party
shall not be held harmless for its own negligence or willful misconduct or the
negligence or willful misconduct of its agents, servants or employees acting in
their official capacity.
11. AWAI MEMBERSHIP. - The LESSEE agrees to pay its appropriate
membership dues and share in the expenses of the Advanced Warehousing
Association, Incorporated. The LESSEE further agrees to abide by and comply with
any and all reasonable rules of the Association regarding the use, occupation
and sanitation of the AWAI compound.
12. UTILITIES. - All utilities and services such as light, water,
telephone, garbage collection and other similar services shall be paid by and
for the account of the LESSEE. The LESSEE may at its own expense undertake the
necessary utility installation required by its business provided such
installation does not adversely affect the other tenants in the premises nor
endanger the structural soundness of the
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Contract of Lease
Page twelve (12)
building. The additional installation of electricity, water and telephone in the
Leased Premises shall be for the account of the LESSEE.
13. SALE OF LEASED PREMISES. - In the event the LESSOR desires to sell
the buildings subject of this lease, it shall first offer the sale thereof to
the LESSEE upon terms and conditions to be stipulated in such offer. Such offer
shall be communicated by the LESSOR to the LESSEE by personal delivery. Should
the LESSEE accept the offer, it shall be entitled to purchase the buildings at
the time of the offer is made. In the event that such offer shall not be
accepted by the LESSEE by notice in writing forwarded by personal delivery not
later than sixty (60) days after receipt of the offer, the LESSOR making the
offer shall be free to sell the buildings to any other person, firm or
corporation without restriction, except that the subsequent transfer of the
buildings shall not be on terms more favorable to the transferee than the terms
which the transfer was initially offered to the LESSEE. If within sixty (60)
days after expiration of the sixty-day period of any offer made hereunder, the
LESSOR offering to sell the buildings shall fail to consummate a sale or
transfer thereof to any other purchaser, then no sale of such buildings may be
made thereafter by the LESSOR without again re-offering the same to the LESSEE
in accordance with the provisions of this paragraph.
If the LESSEE to whom an offer is made is prohibited by law or
regulation from purchasing the buildings of the LESSOR, or its acquisition will
prejudice the interest of the LESSEE,
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Contract of Lease
Page thirteen (13)
the LESSEE shall have the right to look for a qualified purchaser for the
buildings and such qualified purchaser shall be entitled to purchase thereon
under such terms stated in the offer and in accordance with the procedure
hereinabove provided.
In the event LESSOR receives a bona fide offer from a third person to
purchase the buildings and such offer is acceptable to the LESSOR, LESSEE shall
have sixty (60) days from receipt of the notice of such offer within which to
purchase the buildings by matching the bona fide offer made by third person to
the LESSOR.
14. INSPECTION OF LEASED PREMISES. - During the term of the Contract,
the LESSEE shall allow the LESSOR, its agents or representatives to inspect the
Leased Premises during reasonable hours, with prior notice to the LESSEE.
15. INSURANCE. - During the term of this Contract, the LESSEE shall at
all times and at its own expense secure insurance coverage for all improvements
owned by it or introduced by it in the Leased Premises with responsible and
reputable insurers in such amounts and covering such risks as are usually
carried by companies engaged in similar business or by companies owning similar
property in their area in which they operate.
16. WARRANTY OF THE LESSOR. - The LESSOR warrants that it is the
absolute owner of the buildings and improvements and has the right to lease the
same together with the land on which the buildings and improvements are erected.
Furthermore, the LESSOR shall, in case of litigation or
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Contract of Lease
Page fourteen (14)
controversy concerning its right, title and interest in the Leased Premises,
defend and hold harmless the right of the LESSEE under the terms and conditions
of this Contract at the expense of the LESSOR.
17. NON-WAIVER. - No failure of the LESSOR or the LESSEE, no course of
dealing with respect to, and no delay in exercising any right, power or
privilege, under this contract shall be deemed a relinquishment or waiver of any
right or remedy that said LESSOR or LESSEE may have, nor shall be construed as a
waiver of any subsequent breach or default and the terms and conditions herein
contained shall continue to be in full force and effect. No waiver by the LESSOR
or LESSEE of any of their rights under this contract shall be deemed to have
been made unless expressed in writing and signed by the LESSOR or the LESSEE.
18. STRIKES AND LOCKOUTS. - In case the operation of the business of
the LESSEE is suspended due to strikes or lockouts, this Contract shall continue
in full force and effect notwithstanding said disturbance.
19. BREACH OF CONTRACT. - Should the LESSEE fail to pay the rentals as
herein provided or fail or neglect to perform or observe any agreement, covenant
or condition herein provided, or should the LESSEE cause deliberate damage to
the Leased Premises, the LESSOR shall forthwith give notice to the LESSEE of the
occurrence of such default or breach giving the LESSEE a period of sixty (60)
days from receipt of notice to correct the breach. If after the lapse of the
said period, no corrective actions are taken, then the LESSOR shall have the
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Contract of Lease
Page fifteen (15)
option to terminate this Contract without prejudice to the exercise of any and
all rights of the LESSOR arising from this Contract and those provided by law.
In cases where the curing period will be a period longer than sixty (60) days,
the LESSEE shall not be considered in default if it takes the corrective action
within twenty (20) days from receipt of the notice of its breach.
20. REGISTRATION OF LEASE. - The parties hereto agree that this lease
shall be registered with the office of the proper Register of Deeds and in the
event of sale, transfer or disposition of the Leased Premises, the LESSEE binds
itself to require the transferee to respect and abide by all the terms and
conditions of this Contract. The LESSEE shall bear the cost of documentary
stamps and registration costs.
21. RIGHT OF FIRST REFUSAL. - The LESSOR grants the LESSEE the right of
first refusal to lease the other buildings or additional buildings to be built
by the LESSOR on its Muntinlupa property. The terms of offer to lease such other
buildings or additional buildings to be built by the LESSOR shall be the same as
that offered to any third party.
22. PRE-TERMINATION. - After the original term provided under paragraph
one (1) hereof, upon One Hundred Twenty (120) days prior written notice, LESSEE
may pre-terminate this Contract without penalty.
23. SURRENDER OF PREMISES. - Upon the termination of this lease, the
LESSEE agrees to return and surrender to the LESSOR the Leased Premises without
any delay whatsoever. The
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Contract of Lease
Page sixteen (16)
LESSEE shall at its expense and within three (3) months from the expiration of
the lease, demolish and remove any improvements that the LESSOR may require the
LESSEE to remove.
IN WITNESS WHEREOF, the parties have hereunto set their hands this May 06,
1994 at Makati, Metro Manila.
XXXXXXX XXXXXX REALTY CORPORATION
("Lessor")
By: /s/ XXXXXXXX X. XXXXXX, XX.
----------------------------
XXXXXXXX X. XXXXXX, XX.
President
AUTOMATED MICROELECTRONICS, INC.
("Lessee")
By: /s/ XXXXX X. XXXXXXXX
----------------------------
XXXXX X. XXXXXXXX
Treasurer
SIGNED IN THE PRESENCE OF:
[SIG]
---------------------------------- -------------------------------
REPUBLIC OF THE PHILIPPINES)
: S.S.
MAKATI, METRO MANILA )
ACKNOWLEDGMENT
BEFORE ME, a Notary Public in and for Makati, Metro Manila, Philippines,
personally appeared XXXXXXXX X. XXXXXX, XX. with Community Tax Certificate No.
6465617 issued at Paranaque, Metro Manila on February 23, 1993 in his capacity
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Contract of Lease
Page seventeen (17)
as President of XXXXXXX XXXXXX REALTY, CORPORATION, a corporation with Community
Tax Certificate No. 0061289 issued at Makati, Metro Manila on December 21, 1993
and XXXXX X. XXXXXXXX with Passport No. 000000000 issued at British Embassy,
Manila on August 18, 1993 in his capacity as Treasurer of AUTOMATED
MICROELECTRONICS, INC., a corporation with Community Tax Certificate No. 0456127
issued at Muntinlupa, Metro Manila on January 20, 1993, to me known and known to
me to be the same persons who executed the foregoing instrument and acknowledged
to me that they executed the same as their free and voluntary act and deed of
the corporations they represent.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial
seal this 1st day of June, 1994 at Makati, Metro Manila, Philippines.
[SIG]
XXXXX XXXXXXX X. XXXXX III
NOTARY PUBLIC
Doc No. 8 Until December 31, 1996
Page Xx. 0 XXX XX. 0000000
Book No. I Issued at Makati, Metro Manila
Series of 1994. Issued On January 26, 1994
