Contract of Lease of Commercial Building

                                     CONTRACT OF LEASE OF COMMERCIAL BUILDING

KNOW ALL MEN BY THESE PRESENTS:

            This Contract of Lease executed and entered into by and between:

_________________, Filipino, of legal age, married, with residential address at _______________________, Philippines, hereinafter referred to as the ‘LESSOR’

                                                                  And

          _________________, a corporation duly formed under the laws of the Philippines and engaged in _____________________, with authorized representative __________________, Filipino, of legal age, single/married, with residence at _______________________________________, hereinafter referred as the “LESSEE’

TERMS AND CONDITIONS

1. PREMISES- LESSOR hereby leases to LESSEE and LESSEE hereby leases from LESSOR approximately _____________ (__) square meters more or less of total land area, as is improvement, Door ___, situated in  __________________________ which shall be referred to as the “Premises”.

2. USE OF THE PREMISES- The Lease is for the purpose of operating a commercial or retail business which the corporation is engaged in. The LESSEE, at his own expense may put up improvements upon prior consultation and written approval of the LESSOR within the premises hereby leased for the purpose of storage, retail, wholesale and commercial in nature and not for any purpose whatsoever. It is being expressly agreed that if, at any time during the existence of this lease and without the previous written consent of the LESSOR, the said premises are used for the purposes other than what is stated, the LESSOR has the option of either terminating the lease or collecting increased rental as deemed appropriate from the date of diversion of use of the premises or to compel the LESSEE to stop the unapproved activity.

3. TERM OF THE LEASE- The term of this Lease Contract is for a period of _________ (___) years, renewable for an unspecified duration at terms mutually agreeable to both parties, commencing on _____________________ and ending at midnight of _____________________, In case of pre-termination by the lessee, for any reason whatsoever, the LESSOR has the right to collect any remaining rentals corresponding to the unexpired portion of the LEASE period, or until such time a new LESSEE comes.

This LEASE shall not be deemed extended or renewed beyond the period time above-mentioned for any cause or reason whatsoever and unless the parties agree in writing to extend or renew or enter into a new Contract to Lease upon such terms and conditions acceptable to them, the possession of the Premises by the LESSEE or any persons claiming rights through the LESSEE, after the expiration of the term thereof, shall be illegal.

            Any renewal or extension of this Contract must be expressly agreed upon by the LESSOR and LESSEE in writing and under no circumstances can such renewal or extension be considered as having made impliedly.

            For this purpose, the LESSEE shall notify the LESSOR to the latter’s office in writing, of this intent to renew or extend the Contract at least sixty (60) calendar days prior to the expiration of the Leased period, or any extension or renewal thereof, provided, however, that the notice as aforesaid does not in any way vest unto the LESSEE the right to demand for such extension or renewal of the Lease Period or any renewal or extension thereof.

4. RENT- The monthly rental shall be scheduled as follows, inclusive of the twelve percent (12%) Expanded Value Added Tax (EVAT) adjustable corresponding to the subsequent and substantial tax policy changes by the local or national government, with an escalation of five (5) percent after two (2) years as illustrated below. All payments must be made only through cash/check. Without necessity of demand, the LESSEE shall pay the monthly rental within the first five (5) days of each calendar month, at the office of the LESSOR.

SCHEDULE OF RENTAL RATES

_____________________                        Php.                         / Month

_____________________                        Php.                         / Month

_____________________                        Php.                         / Month

_____________________                        Php.                         / Month

                                                                                                                 

a)    PENALTIES- Payment made after the said date shall be subject to a penalty charge of 5% per month.

b)    WITHOLDING TAX- The LESSEE shall furnish the LESSOR with the original and two copies of its certificate of creditable income tax withheld at source BIR Form 2307, not later than 5 days after the end of each month. Failure to submit the documents shall authorize the LESSOR to automatically add amount to the billing.

c)    BOUNCING CHECKS- Issuance of checks with no sufficient funds for three (3) instances shall compel the LESSEE as having pre terminated the contract and as such the security deposit shall be considered forfeited in favor of the LESSOR.

d)    NON-PAYMENTS OF RENTS- Failure of the LESSEE to pay the rentals herein agreed upon for two (2) consecutive months shall be ground for termination of this Contract of Lease and upon which the LESSEE obligates itself to vacate and clear the premises in such tenantable conditions without need of notice from LESSOR.

5. SECURITY DEPOSIT and ADVANCE- upon signing of the Contract of Lease, the LESSEE shall make a Three (3) months deposit and Three (3) month advance rental in the total amount of _____________________________ (Php ____________.00)   Philippine Currency for the full and faithful performance of each and every term, provision, covenant, and condition of this lease, except that said deposit shall not constitute or substitute payment of any rent.

The deposit, which is non-interest bearing, shall remain intact during the entire term of this lease and shall not be applied as payment for any monetary obligations of the LESSEE under this contract, and shall be refunded to the LESSEE upon completion of the lease.

a)         The amount deposited shall answer for any unpaid accounts of the LESSEE at the expiration of the contract as well as for any damages which the LESSOR or any of its employees, agents or guests might suffer by reason of the wrongful acts or actuation, negligence, and or malfeasance of the LESSEE. It shall not be applied to pay for the last months of occupancy of the premises.

b)         Any unappropriated  amount of such deposit shall be refundable to the LESSEE within sixty (60) days from the termination of the contract.

c)         In the event that the LESSEE terminates its contract before its term expires, the deposit shall be deemed forfeited and refundable, regardless of the reason for its pre-termination and whether a sixty-day notice was given or not.

d)         The LESSEE shall pay an advance payment equivalent and applicable to the twelve (12) months with post dated check dated every _____^th of the month of the lease starting _____________________ or ______ days after signing of contract. The one (1) month advance rental is applicable on the 12th month of the year of contract. Subsequent post-dated check payments shall be collected by the LESSOR on an annual basis on the first month of the next subsequent year.

6. SUBLEASE AND OR TRANSFER OF RIGHTS- The LESSEE shall not directly or indirectly assign, sublease, sell, transfer, convey, mortgage, demolish or in any manner dispose of or encumber its right under the contract in whole or in part or any interest thereto be conferred on anyone.

7.    RIGHT TO INSPECT LEASED PREMISES- The LESSOR or its authorized agent shall, by previous notice to the LESSEE, have the right to enter the leased premises at any reasonable hour of the day to examine the leased premises.

8.    CARE OF THE LEASED PREMISES- The LESSEE shall examine the Leased Premises before taking possession thereof, and LESSEE’s entry into possession shall constitute conclusive evidence or admission by the LESSEE that as of the date thereof, the said Premises were in  good order and satisfactory tenantable condition. The LESSEE hereby binds itself to keep and maintain the same in such condition as a prudent person shall do under the circumstances, ordinary wear and tear expected. The LESSEE shall at its own expense, improve and maintain the Leased Premises clean and free from rubbish and dirt at all times, store all trash and garbage in proper containers and not burn any trash and garbage in or about the Leased Premises or anywhere within the Premises.

9.    SECURITY & SANITATION- The LESSOR shall ensure the security of the premises and provide a security guard for the whole commercial establishment where the leased premises are located. The LESSOR must also ensure regular collection of garbage through the barangay garbage collector or any private entity which shall be to the account of LESSOR. The LESSOR also agrees to make the septic tank of the leased premises bigger in order to accommodate more waste volume in anticipation of more customers using the toilet.

10.  INSURANCE TAKEN BY THE LESSEE- The LESSEE shall be required to insure at his own account any LESSOR approved permanent structure or structures constructed within the premises with the LESSOR as co-benefactor against fire or total loss of property. The LESSEE although not required, is also allowed and authorized to insure its own property taken inside the leased premises, provided that the LESSOR shall be notified in advance of any and all kinds of insurance over the property therein.

11.  BUSINESS PERMITS, TAXES, AND COMPLIANCE AND GOVERNMENT REGULATIONS- The LESSEE shall be responsible for securing all the necessary governments permits and licenses for the operation of its business and all costs thereof shall be its sole account. Copies of the said permits and licenses or any renewal date thereof shall be furnished to the LESSOR not later than fifteen (15) days from the start of the LESSEE’s business and every renewal date thereof as required by law.

12.  INTRODUCTION OF PERMANENT IMPROVEMENTS- No permanent or fixed improvements shall be introduced by the LESSEE on the leased premises unless with prior written consent and approval of the LESSOR. Any such permanent structures, if approved and allowed, shall be upon the option of the LESSOR registered under the co-ownership of both LESSEE and LESSOR. Furthermore, the LESSEE shall bear the full cost of the annual real estate taxes of such structures until expiry of lease contract and full cost of transfer of ownership to LESSOR upon termination of contract;

13.  UTILITIES AND SERVICES- The LESSEE shall be responsible for the installation and maintenance costs of its own electric current, telephone, water, security and other utility services in the Leased Premises for the duration of the lease. The LESSEE shall also clear all accounts with all concerned utility companies upon pre-termination or expiration of contract.

14.  REVISION OF LEASE CONTRACT- Both parties may revise this lease contract after six (6) months to one (1) year in the event that LESSEE assigns the business with a newly-registered business name.

LESSOR:                                                                                LESSEE:

_________________                                                         ___________________

                                                                                   

Signed in the presence of:

___________________                      _____________________

ACKNOWLEDGEMENT

BEFORE ME, a Notary Public for and in the Cities and Province of _______________ this _______________ at ______________________ personally appeared.

Name                                            ID/Comm. Tax Cert. No.                  Date & Place

_________________                      _________________                 ______________

__________________                    _________________                 _______________

Known to me and to me known to be the same persons who executed the foregoing Contract of Lease consisting of __ pages including this page of the acknowledgement and they acknowledge to me that the same is their free and voluntary act and deed.

WITNESS MY HAND AND NOTARIAL SEAL on the date and in the place first above written.

Doc No. _____;

Page No. _____;

Book No. _____;

Series of _____.