and -
During the Option period(s) above-referred to, the LESSEE shall have the option
anytime, with notice and discussion in good faithwith the LESSOR, not to
continue with the Lease Agreement, should it turn out that, based on the
feasibility studies made, its solar electric power generating project to be
installed in the premises would not be feasible and/or advantageous without any
obligation to the LESSOR for any other compensation for the use of the land,
apart from the option fee referred to above during its trial period;
Should the LESSEE decide to continue with the Lease Contract by the end of the
option period(s), the LESSOR shall enter into a twenty-five (25) year lease
agreement and the parties may discuss a possible extension. The LESSEE shall
give a fourteen (14) day written notice prior to the end of the relevant Option
period of the intention to lease and the parties agree to work in good faith to
negotiate and sign a lease agreement within thirty (30) days of such notice.
This lease agreement would include clauses that may require additional
discussion and clarification. The parties agree that with respect to all the
commercial terms of the lease, including but not limited to the amount, term
and payment have been agreed and shall be incorporated as follows :
ARTICLE III.AGREED LEASE TERMS TO BE INCORPORATED INTO THE
LEASE AGREEMENT
A. RENTAL AMOUNT AND EFFECTIVITY- The annual rental for the leased
property shall be FIFTY THOUSAND PESOS (P50,000.00) per hectare per
year, with an escalation clause at the rate of TEN PERCENT (10%) every
five (5) years. Rental is payable FIVE (5) years in advance upon signing of
the lease agreement by both parties. This advance rental shall be
amortized on a straight-line basis over the first TEN (10) years- that is,
rental payments for the 2nd to the 10th year will be equally deducted by the
amount equivalent to the amortization of the four (4) years rental paid in
advance since one year rental covers for the first year of lease. Moreover,
escalation of 10% takes effect on the 6 th, 11th, 16th, 21st year of lease
accordingly.
On the 11th year of lease, another FIVE (5) years of rental shall be paid in
advance and likewise this advanced rental payment will be amortized over
the next TEN (10) years (11th-20th year of lease) in a similar manner as the
first 5-year advanced rental payment. The last five (5) years of lease shall
be paid on a regular yearly basis.
B. RENTAL PERIOD - The lease term will be for a period of twenty-five (25)
years. The parties, if they so desire, may engage in discussions for an
extension and negotiate in good faith for the new rental terms. The parties
shall hold these negotiations at least one (1) year prior to the expiry date.
The LESSEE will handover the premises to the LESSOR clear from any
structures or other impediments at the end of the lease term.
C. COMPENSATION FOR CULTIVATION COSTS - When the LESSEE has
decided to continue with the lease during the first six month option
periodthe LESSOR shall be duly compensated for whatever costs incurred
in the cultivation on the leased property, the value to be determined
through the submission by the LESSEE of the proper receipts and/or
documentations to enable a proper audit of the costs and/or value of the
same;
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When the LESSEE has decided to continue with the lease during the
second six month option period, the LESSOR shall be duly compensated
for whatever costs incurred in the cultivation on the leased property, the
value to be determined through the submission by the LESSEE of the
proper receipts and/or documentations to enable a proper audit of the
costs and/or value of the same if the farm has not been closed, i.e. all
necessary cultivation and material inputs have been planted and no more
raw materials are needed ;
If the farm has been closed, the compensation shall be the loss of profits
from the crop if it had been allowed to mature and be harvested in the
normal course of the farming cycle. The parties agree to discuss in good
faith making reference to current commodity prices to arrive at an agreed
amount.
D. CLEAN POSESSION The LESSOR shall allow the LESSEE to take over the
possession and occupancy of the leased premises in a timely manner and
with the land clearedand after removing structures or other impediments
to allow for a timely project construction start. The parties shall discuss in
good faith and agree on the timeline of such activities such that the
construction of the plant is not delayed;
E. TAXES
i) Real Estate and Value Added Tax The LESSEE shall be liable for any
real estate taxes and Value Added Tax which shall be assessed on the leased
premises and/or on the LESSOR by virtue of the LeaseAgreement, during the
lease agreement.
The LESSOR shall deliver to the LESSEE a copy of any real estate taxes
assessments due on the leased premises and/or any assessments of Value
Added Taxes imposed. The LESSEE shall make payment to the relevant tax
collecting agency within a period of five (5) days before said taxes may
become initially due, together with any interests and penalties lawfully
imposed thereon as a result of LESSEEs late payment thereof, provided that
LESSEE is in receipt of said tax assessments within 45 days of due date. The
LESSEE shall furnish copies of the corresponding real estate tax / ValueAdded Tax payments to the LESSOR. In case the LESSOR has already paid
the applicable tax in advance particularly in the first year of lease, the
LESSEE shall reimburse the LESSOR after submission of necessary proof of
payment made by the latter;
The LESSEE may take the benefit of any law allowing assessments to be paid
in installments and in such event the LESSEE shall only be liable for such
installments of assessments due during the term of the Lease hereof.
Nothing, however, contained in this Lease shall require the LESSEE to pay an
estate, inheritance, succession, capital levy, corporate franchise, gross
receipts, transfer or income tax of the LESSOR.
ii) Contest of Taxes The LESSEE, at its own cost and expense, may, if it
shall in good faith so desire, contest by appropriate proceedings the amount
of any of the aforementioned taxes. The LESSEE may, if it shall so desire,
endeavor at any time or times, by appropriate proceedings, to obtain a
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reduction in the assessed valuation of the Leased Premises for tax purposes.
In any such event, the LESSOR shall join with the LESSEE, at the latters
expense in said proceedings and the LESSOR agrees to sign and deliver such
papers and instruments as may be necessary to prosecute such proceedings.
F. CONSTRUCTION AND COMPLETION
i) Improvements by Lessee. LESSEE shall obtain all necessary certificates,
permits, licenses and other authorizations of governmental bodies or
authorities which are necessary to permit the construction of the solar plant
on the leased premises and shall keep the same in full force and effect at
LESSEEs cost.
Upon completion of construction, LESSEE shall, at its cost, obtain an
occupancy, use and operation permits and all other permits or licenses
necessary for the occupancy, use and operation of the solar plant of the
same as set out herein and shall keep the same in force.
Nothing herein shall alter the intent of the parties that LESSEE shall be fully
and completely responsible for all aspects pertaining to the construction of
the solar plant on the leased premises and for the payment of all costs
associated therewith. LESSOR shall be under no duty to investigate or verify
LESSEEs compliance with the provision herein.
Moreover, neither LESSEE nor any third party may construe the permission
granted to the LESSEE hereunder to create any responsibility on the part of
the LESSOR to pay for any improvements, alterations or repairs incurred by
the LESSEE.
ii) Utilities- LESSEE shall pay for all water, sanitation, sewer, electricity,
light, heat, gas, power, fuel, janitorial, and other services incident to the
LESSEEs use of the leased premises.
G. PERMITS AND EXPENSES - Each party agrees that it will procure all
necessary permits for making any improvements in the leased premises,
when applicable.
LESSEE further agrees to hold harmless the LESSOR from and against any
and all injury, loss, claims or damage to any person or property
occasioned by or arising out of the doing of any such work by such party
or its employees, agents or contractors. LESSEE shall further comply with
all governmental requirements in the construction of its installations on
the leased premises. LESSEE will take out adequate insurance coverage;
The LESSEE agrees that if government agencies shall condemn the
installations or improvements in the leased premises or any part thereof
as not in conformity with the laws and regulations relating to the
construction thereof, and such government agency has ordered or
required, or shall hereafter order or require, any alterations or repairs
thereof or installations and repairs as may be necessary to comply with
such laws, orders or requirements the validity of which the LESSEE shall
be entitled to contest the same to be corrected or repaired;
iii)
Occasions of Default by LESSOR The LESSOR shall be deemed
in Default in the event that:
a. LESSOR does not maintain proper title to the property and not
allowing the LESSEE to have trouble-free use of the land
iv) Remedies of LESSEE Upon LESSORs Default If LESSOR shall
default in the performance or observance of any agreement or condition
in this Lease contained on its part to be performed or observed, and if
LESSOR shall not cure such default within thirty (30) days after notice
from LESSEE specifying the default (or, if such default shall reasonably
take more than thirty [30] days to cure, and LESSOR shall not have
commenced the same within the thirty [30] days and diligently prosecuted
the same to completion), LESSEE may, at is option, without waiving any
claim for damages for breach of agreement, at any time thereafter cure
such default for the account of LESSOR and any amount paid or any
contractual liability incurred by LESSEE in so doing shall be deemed paid
or incurred for the account of LESSOR and LESSOR shall reimburse LESSEE
therefor and save LESSEE harmless therefrom. Provided, however, that
LESSEE may cure any such default as aforesaid prior to the expiration of
said waiting period, without notice to LESSOR if an emergency situation
exists, or after notice to LESSOR, if the curing of such default prior to the
expiration of said waiting period is reasonably necessary to protect the
leased premises or LESSEEs interest therein or to prevent injury or
damage to persons or property. If LESSOR shall fail to reimburse LESSEE
upon demand for any amount paid or liability incurred for the account of
LESSOR hereunder, said amounts or liability may be deducted by LESSEE
from the next or any succeeding payments of rent due hereunder;
provided, however, that should said amount or the liability therefor be
disputed by LESSOR, LESSOR may contest its liability or the amount
thereof, through arbitration and LESSOR shall bear the costs.
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N. T I T L E
i) Sale/Mortgage/Sub-Lease of Leased Premises - The LESSOR shall
not, during the term of this Lease Agreement, be allowed to sell or
mortgage the leased property except under the following conditions
a. In case of sale or assignment, the Lease Agreement and all its
provisions annotated at the back of Transfer Certificate attached in
ANNEX A, shall be duly respected and binding on the buyer and/or
the transferee. Provided that the LESSEE is not in default in the
performance of the terms of this Lease Agreement, if at anytime
during the duration of this agreement or any renewal thereof, the
LESSOR shall desire to accept a bona fide offer to purchase the
Leased Property, it shall immediately notify the LESSEE of the terms
said offer in writing, which shall have sixty (60) days within which to
match the terms of the offer by making the proper notification in
writing in which event the LESSOR shall sell the premises to the
LESSEE. If the LESSEE fails to exercise its option within the period
specified, then the LESSOR may sell the Leased Property to any
person provided that the parties therein shall respect, abide, include
and stipulate in the Deed of Absolute Sale the provisions that this
Lease Agreement shall remain in full force and effect and that the
buyer shall be strictly bound thereby and shall absorb all of
LESSORs rights and obligations enforceable under this Deed;
b. In case of mortgage, the LESSOR shall, upon consent of the LESSEE
being given in writing, be allowed to mortgage the leased property
on the following conditions:
1) That the LESSEE be informed in writing within 30 days of
LESSORs intent to mortgage the leased property to secure a loan
from any bank, lending institution or individual, with the LESSEE
giving its consent or refusal within the said period of thirty (30)
days.
2) The mortgagee shall at all times bind itself to respect and uphold
the terms and provisions of the Lease Agreement, which shall be
appended to and form part of the Real Estate Mortgage;
3) The mortgagee shall, in stepping into the shoes of the LESSOR,
first enter into a written agreement with the LESSEE that it shall,
at all times during the mortgage, bind itself to and respect the
terms and conditions of the Lease Agreement, specifically the
stipulations and covenants of the LESSOR;
4) The mortgagee or any person or entity claiming rights under it,
agrees that it shall recognize the rights o the LESSEE to remain in
possession and occupancy of the leased premises and that its
operation and business shall not be disturbed, so long as it does
not violate any of the terms and provisions of the Lease
Agreement;
5) In the event that LESSOR shall pay, refuse or neglect to pay any
mortgages, liens or encumbrances, the judicial or extra-judicial
sale of which might affect the interest of the LESSEE hereunder,
or shall fail, refuse or neglect to pay any interest, penalties or
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(Lessee)
(Lessor)
SIGNED IN THE PRESENCE OF:
______________________________
______________________________
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ACKNOWLEDGMENT
REPUBLIC OF THE PHILIPPINES)
BEFORE ME, a Notary Public, for and in ______________________________, this ______
day of ______________________, personally appeared the following:
Name
Government-Issued identification
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