CONTRACT OF LEASE

 
 
KNOW ALL MEN BY THESE PRESENTS:
 
            This Contract of Lease is made and entered into by and between:
 
[LESSOR], a domestic corporation duly organized and existing, under and by virtue of
the laws of the Republic of the Philippines, with office address at [address] City
represented by its [position of authorized signatory], [NAME OF SIGNATORY], as
evidenced by the Secretary Certificate attached Annex A and hereinafter referred to as
the LESSOR.
  
-   and -
 
[LESSEE] a domestic corporation duly organized and existing, under and by virtue of
the laws of the Republic of the Philippines, with office address at [address] City,
represented herein by its [position of authorized signatory], [NAME OF SIGNATORY],
as evidenced by the Secretary Certificate attached Annex B and hereinafter referred to as
the LESSEE.
 
 
WITNESSETH THAT:
 
            WHEREAS, the LESSOR is the owner of a warehouse compound located at [address of WH]
containing a total covered area of [Sqm], more or less, covered by TCT No. [_______] and Tax
Declaration No. [_________], copy of which are attached here to as Annexes C and C-1 and hereinafter
referred to as Property;
 
            WHEREAS, the herein LESSEE desires to lease and the LESSOR has agreed to grant lease of
[area to be leased] the property and hereinafter referred to as Leased Premises, under the Terms and
Conditions of this Agreement;
 
            NOW THEREFORE, the parties agree as follows:

SECTION 1
Lease of Space

1. The LESSOR shall deliver to the LESSEE the leased space on [date of turnover]. Failure on the
part of the of the LESSOR to deliver the leased premises to the LESSEE on the abovementioned date
shall automatically render this contract null and void ab initio and any payment made by the LESSEE to
the LESSOR by reason thereof shall be immediately returned unless otherwise extended at the sole
discretion of the LESSEE.

SECTION 2
Lessor’s Warranties

2. The LESSOR warrants to the LESSEE:

2.1. that the property, particularly the leased premises, is free from any lien or encumbrance and
is structurally sound and fit for use as a warehouse;

2.2. that the LESSEE shall enjoy peaceful possession, use and enjoyment of the leased premises
for the entire duration of the lease period or any extension thereof;

2.3. that he has absolute right and title and is authorized to lease the same;

2.4. that in the event that the possession of the LESSEE of the leased premises is curtailed or in
any other manner interrupted during the lease period, or should the LESSEE be unable to
obtain the necessary permit/s to operate its business, whether by reason or arising out of any
issue affecting title to, possession or use of, the zoning or classification thereof, or any

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 adverse claim over the property, the LESSOR hereby undertakes to defend on its own
account whenever necessary and to indemnify the LESSEE for any for whatever damage or
losses it may sustain or for any liability it may incur as a result of such curtailment or
interruption or its failure to obtain the necessary permit/s to operate its business, without
prejudice to the LESSEE’s right to resort to any other remedy available under existing laws.
In such event/s, the LESSEE shall have the right to suspend the effectivity hereof or
terminate or rescind this Contract. And upon termination or recission, the LESSOR shall
immediately return the security deposits and advance rental, and refund all costs incurred by
the LESSEE for the acquisition, renovation, and/or improvement of the Leased Premises,
over and above all legal restitution available to the latter.

2.5. That throughout the duration of this Contract, the LESSOR shall ensure the LESSEE’s
continuous access to the basic utilities of the Leased Premises and shall not cause or allow
any third party to cause the interruption or cessation thereof for any reason whatsoever.

2.6. In case the LESSOR sells, transfers, conveys, mortgages, assigns or encumbers any part of
the Leased premises during the duration of this Contract, the LESSOR further warrants that
this Contract of Lease will be fully respected by the buyer, transferee, mortgagee, or
assignee of the Property and anu subsequent Deed of Sale, Transfer, Mortgage, Assignment,
or Encumbrance shall contain provisions whereby such buyer, transferee, mortgagee or
assignee shall expressly respect and honor all provisions of this Contract of Lease. In such
event, the LESSOR shall, upon prior notice to the LESSEE, likewise caise the transfer of his
rights in this Contract to the new LESSOR, including the execution of the appurtenant
documents and the payment of all applicable taxes relative thereto.

SECTION 3
Term of Lease

3. This lease shall have a term of five (5) years commencing on [insert commencement date], and
expiring on [termination date], renewable at the option of the LESSEE upon such terms and conditions
acceptable to both parties. The LESSEE shall initiate the renewal of the lease by giving the LESSOR a
written notice of its intent no later than thirty (30) days prior to the lease expiry date.

SECTION 4
Rent, Taxes, and Other Charges

4. In consideration for the use and occupancy of the Leased Premises, the LESSEE shall pay the
LESSOR the amount of rent set out herein, inclusive of VAT, every 10th day of the month as indicated
herein but the LESSOR must serve the billing on the 1st day of the month and said billing must be send to
the address of the LESSEE. In case of late payment, the LESSEE is hereby granted a grace period of
fifteen (15) days to make payment without any penalty or interest. Computation of the rent and the
applicable taxes are as follows:

Year Basic Rent Escalation Plus: 12% Gross Less: 5% Total

VAT Amount Withholding Monthly
Tax Rent
1 -
2 -
3
4
5
6

4.1. The applicable VAT or similar taxes that the Government may impose in the future shall be for
the account of the LESSEE. With the above computation as the basis, the LESSEE shall deduct from the
rental fees and shall withhold the applicable withholding tax on all rental payments. The LESSOR shall
issue the corresponding BIR Registered VAT Official receipt to the LESSEE evidencing such payment.
The BIR 2307 form shall be transmitted by the LESSEE to the LESSOR and remit the same to the Bureau
of Internal Revenue within the time prescribed by law.

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 4.2. The LESSOR shall pay for the Real Property Tax and Special Assessments on the Property and
the Documentary Stamp Tax for the lease contract. Failure of the LESSOR to pay the applicable taxes,
charges, fees, and other dues shall give to the LESSEE the right to withhold such amounts from the rental
payments and remit the same to the Government and/or association and/or terminate this Contract,
without prejudice to the other remedies the LESSEE may have against the LESSOR. The LESSOR shall
provide the LESSEE proof of payment of such taxes and assessments within five (5) days from date of
such payment.

SECTION 5
Advance Rental and Security Deposits

5. Upon the start of the construction/renovation of the warehouse of the LESSEE, the LESSEE shall
pay the LESSOR an Advance Rental of [advance rate amount] (P___,000.00), vat inclusive and less
corresponding withholding taxes which is equivalent to three (1) month rental, and within ten (10)
banking days from the turnover of the property the LESSEE shall pay the LESSOR the Security Deposit
of [_____] (P___,000.00), vat inclusive, which is equivalent to three (3) months rental of the first year
basic rent.

5.1. The advance rental shall be applicable on the first (1) month of this Contract or from [________]
to [_________].

5.2. The Security Deposit shall be returned to the LESSEE immediately after completing the lease
period, provided that the LESEE has settled all past due utility bills as other unpaid obligations. It shall
not be applied as rent and no interest shall be claimed.

5.3. All payments to be made by the LESSEE to the LESSOR, including the rental security deposit,
shall be exclusively coursed and paid through a bank account by the LESSOR with any branch of [bank],
upon execution of this Contract. Otherwise, said payments shall be paid by way of check.

SECTION 6
Documentary Stamp Tax

6. The Documentary Stamp Tax (DST) and other taxes accruing by reason of the execution of this
agreement shall be for the account of the LESSOR. The LESSOR further undertakes to promptly file the
DST return and provide the LESSEE with a copy thereof within fifteen (15) days from the filing thereof.

SECTION 7
Force Majeure

7. In the event that the Leased Premises is totally damaged by fire, earthquake or any other
fortuitous events renderinf the whole or a substantial part of the Leased Premises unfiot for use, the
LESSEE herein shall have the option to:

7.1. Declare the lease terminated and the LESSOR shall reimburse the LESSEE whatever Security
Deposit and Advance Rental the LESSEE have paid to the LESSOR; or

7.2. Reconstruct at the LESSOR’s expense the Leased Premises, in chich case, this agreement shall
remain on full force and effect. During the period of reconstruction, if such option is availed of
by the LESSEE, any and all obligations of the LESSEE under this Contract shall be suspended.

7.3. In case of natural calamities, other fortuitous events or the lawful order of the government (such
as but not limited to fire, flood, armed conflict, orders during Martial Law, plague, epidemic, pandemic,
outbreaks of infectious disease or any other public health crises, including quarantine or other employee
restrictions, etc.) resulting to the temporary non-enjoyment of the Leased Premises, the LESSEE has the
option to request for condonation or discount payment of the rent for the period of non-enjoyment of the
leased premises upon giving the LESSOR written request subject for the approval of the LESSOR. The
payment of the rent shall resume once the premises is re-occupied by the LESSEE which shall be in the
same condition as that when the lease commenced.

Section 8
Use, Improvements, Repairs

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 8. The LESSEE hereby expressly agrees and warrants that the Leased Premises shall be used
exclusively in the furtherance of the business of the LESSEE. If the Leased Premises is used for any other
purpose, the LESSEE shall secure the prior written consent of the LESSOR.

8.1. The LESSOR hereby authorizes the LESSEE to undertake improvements, renovations, and
repairs of the Leased Premises as may be required for the operation of the LESSEE’s business. For this
purpose, the LESSOR grants a grace period of thirty (30) days or from ______ to ______to the LESSEE
without any payment of rental consideration to construct such improvements, renovations, repairs at the
Leased Premises.

8.2. The LESSEE shall, however, submit to the LESSOR the complete plans for improvements,
renovations and repairs of the Leased Premises for its conformity, which should not be unreasonably
withheld. The LESSEE agrees that all expenses for the improvements, renovations and repairs of the
Leased Premises, including the permits thereto shall be for its exclusive account.

8.3. The LESSEE further binds itself to undertake at its exclusive expense all minor repairs necessary
or otherwise that may be requires, within the duration of this Contract. For purposes of this Section, the
minor repairs shall mean all required repairs the cost of which shall not exceed the amount of the TEN
THOUSAND PESOS (P10,000.00).

8.4. The parties hereby agree that all such improvements, renovations and repairs which cannot be
removed without destroying the Leased Premises shall, upon completion thereof, form integral parts of
the Leased Premises and shall belong to and become the property of the LESSOR without any right on
the part of the LESSEE for any reimbursement of the cost or value thereof.

Section 9
Utilities

9. The LESSOR shall provide access to necessary utilities required during the period of
construction, such as water and electricity.

9.1. The above paragraph notwithstanding, any arrears in utilities prior to the turnover of the leased
premises shall be for the account of the LESSOR. The failure of the LESSOR to pay such arrears shall
automatically authorize the LESSEE, as Attorney-in0fact of the LESSOR, to deduct said amount in
arrears from the rental payment to be made until the same has been paid in full.

Section 10
Return of the Leased Premises

10. On the day of the termination or expiration date of the term of this contract or of its renewal or
extension, the LESSEE shall peacefully and voluntarily vacate the leased premises and restore possession
thereof to the LESSOR, including the keys pertaining thereto, in as good, clean and tenantable condition
of its delivery to the LESSEE, ordinary wear and tear excepted.

Section 11
Confidentiality Clause

11. The LESSOR unqualifiedly agrees to maintain in extreme confidence any and all information
obtained by reason of this Contract and acknowledges its concomitant obligation not to publish, disclose,
share or to otherwise reveal to third party or his agent, sub agent, franchisees, pr business partners or
representatives, any information, negotiation, discussion thereof with the LESSEE without the prior
written consent of the latter.

Section 12
Pre-termination

12. The LESSEE may pre-terminate this Contract at any time for any cause or reason whatsoever
upon giving the LESSOR written notice of such pre-termination six (6 months prior to the intended date
of termination. Any and all payments made by the LESSEE including the security deposits which were
not consumed shall be returned to the LESSEE in full immediately after the LESSEE vacated the Leased
Premises, provided that the LESSEE has settled all past due utility bills as well as its other unpaid
obligations.

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 Section 13
Exclusivity Clause

13. It is of the essence of this Contract that this lease shall be on exclusive basis in favor of the
LESSEE. As such, the LESSOR hereby acknowledges the competition in the industry which the LESSEE
belongs. For this purpose, the LESSOR hereinafter commits that it shall be absolutely, during the term of
this Contract or any renewal thereof, prohibit and exclude all other business or entity that is in a way,
directly or indirectly, in competition with or similar to the business of the LESSEE from occupying any
space within the building/land where the Leased Premises is located.

Section 14
Gifts, Inducements and Awards

14. The LESSEE shall be entitled to terminate this Lease Contract if the LESSOR or any of its
employee/s, agent/s, or representative/s, shall have offered or given or agreed to give any kind as an
inducement or reward for doing the forbearing to do or for having done the forborne to do any action in
relation to the obtaining or execution of this Contract or for showing or forbearing to show favor to any
person in relation to any agreement with the LESSEE and/or its subsidiaries or affiliates.

Section 15
Rectification

15. Notwithstanding any other provision in this Contract to the contrary, any violation of any term or
provision of this Contract shall be subject to rectification, upon prior written notice from the aggrieved
party addressed to the faulting party within a period of fifteen (15) days from the said notice which may
be extended upon mutual agreement and valid cause.

Section 16
Entire Agreement

16. This Contract including the Annexes and Schedules attached hereto, embody the entire agreement
of the parties. There are no terms, conditions or obligations other than those contained herein. This
Contract shall supersede all previous communications, representations, or agreements wither oral or
written, between the parties hereto. No further amendments, alterations or deletions to this Contract shall
be valid unless the same are reduced in writing and contained in a separate document signed by the
parties hereto or their authorized representatives.

Section 17
Venue of Action

17. In case of any litigation arising from this contract, venue shall be at the proper courts of Pasig
City or ______, to the exclusion of all other venues.

Section 18
Notice

18. Where demand or notice is required to be given under this Contract, notice sent to the parties at
the address or email address specified hereunder shall be sufficient compliance with the requirement of
notice or demand. Demand or notice shall be sent to:

LESSOR: [name]
[address]
[email address]

LESSEE: [name]
[address]
[email address]

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 Section 19
Counterparts

19. This Agreement may be executed in one or more counterparts, each of which shall be deemed an
original and all of which when delivered (including by electronic mail in “portable document format”
(“.pdf”) form, or by any other electronic means intended to preserve the original graphic and pictorial
appearance of a document or by a combination of such means) and taken together shall constitute one and
the same instrument.

Section 20
Separability Clause

20. The parties herein agree that should any clause, section, or provision in this Contract be judicially
declared void, invalid or ineffective for any reason whatsoever, the validity of the remaining provisions
shall not be affected and shall continue to be binding upon the parties herein, their heirs, and assigns.

IN WITNESS WHEREOF, the parties have signed these presents this ____day of February
2022 at ______________.
 

_________________________ _________________
[LESSOR] [LESSEE]

By: By:

[NAME] [NAME]
[POSITION] [POSITION]

SIGNED IN THE PRESENCE OF:

_________________________ ___________________________

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 ACKNOWLEDGEMENT

Republic of the Philippines)

City of )S.S.

BEFORE ME, a Notary Public, for and in ______________________ personally appeared on this
__________________ the following:

NAME ID DATE / PLACE ISSUED

PASSPORT NO.

known to me and to me known to be the same person who executed  the  foregoing CONTRACT OF
LEASE, consisting of __ (__) pages, including this page on which this Acknowledgement appears, and
who acknowledged to me that the same is his own free and voluntary act and deed and that of the
corporations therein represented.

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

NOTARY PUBLIC

DOC. NO. _____

PAGE NO. _____
BOOK NO. _____
SERIES OF 2022.

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 ACKNOWLEDGEMENT

Republic of the Philippines)

City of )S.S.

BEFORE ME, a Notary Public, for and in ______________________ personally appeared on this
__________________ the following:

NAME ID DATE / PLACE ISSUED

PASSPORT NO.

known to me and to me known to be the same person who executed  the  foregoing CONTRACT OF
LEASE, consisting of __ (__) pages, including this page on which this Acknowledgement appears, and
who acknowledged to me that the same is his own free and voluntary act and deed and that of the
corporation therein represented.

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

NOTARY PUBLIC

DOC. NO. _____

PAGE NO. _____
BOOK NO. _____
SERIES OF 2022.