Contract O Lease (paranaque).docx

CONTRACT OF LEASE by and between SEAOIL PHILIPPINES, INC. -andTPH PRIME PROPERTIES CORPORATION

Contract Reference No.____________ Table of Contents

Section A (Specific Conditions of the Lease) Section B (General Conditions of the Lease) Section C (Schedule of Lease Payments) Signature Page Acknowledgement Annexes

SECTION A SPECIFIC CONDITIONS OF THE CONTRACT OF LEASE

Item 1

2

3 4 5 6 7 8

9 10 11

Subject Lessor Authorized Representative Address Contact Information Lessee Authorized Representative Address

Condition / Description

Tel. No.: Seaoil Philippines, Inc. Jerome T. Evangelista Retail and Trade Marketing Senior Manager 22nd Floor, The Taipan Place, F. Ortigas, Jr. Road, Ortigas Center, Pasig City 1605 Metro Manila Tel. No.: +632 3971010; Fax No.: +632 3971011

Contact Information Location of Leased Premises Title(s) Total Area Area of Leased Premises Frontage Lot Plan with (copy attached as Annex “B”) Technical Description Lease Term or Period Start and End Date of Lease Rent-Free Construction

12 13 14 15 16 17 18 19

20

Period Basic Monthly Rental Applicable Taxes Annual Escalation Rate Anniversary Date Advance Rental Security Deposit Permits Right of First Refusal on Lease Renewal or Purchase of the Property Warranties by the Property Owner

SECTION B (GENERAL CONDITIONS OF THE CONTRACT) 1.

SUBJECT OF THE LEASE

1.1. The Lessor is the absolute and registered owner of a parcel of land including the buildings and improvements thereon, situated in Dr. A. Santos Avenue, Sucat, Paranaque City, Philippines1 which is covered by the valid Transfer Certificates of Title Nos. 010-2018005650 and 010-20180056512 containing a total land area of One Thousand Two Hundred square meters.3 The Lessor shall furnish the Lessee with a faithful reproduction of the lot or subdivision plan duly certified by a professional geodetic engineer. 1.2. The Lessee expresses its desire to lease the aforementioned premises consisting of an area of One Thousand Two Hundred square meters (1,200 sq.m.) 4 for the construction and operation of its fuel station and other businesses incidental to its operations and the Lessor unequivocally agrees to lease the said premises for such business purposes. The Lessor and the Lessee agrees that the premises leased will have a frontage5 of Thirty meters (30 m). The leased premises are described in the site development plan or drawing6 attached to this instrument.

1

As indicated under Item 3, Section A. As indicated under Item 4, Section A. 3 As indicated under Item 5, Section A. 4 As indicated under Item 6, Section A. 5 As indicated under Item 7, Section A. 6 As indicated under Item 8, Section A. 2

1.3. The Lessor shall, within thirty (30) days from the execution of this Contract, shall cause the annotation of this lease contract on the transfer certificates of title covering the leased property.

2.

PERIOD AND DURATION OF THE LEASE CONTRACT

2.1. The duration of this lease shall be for a period of fifteen (15) years7 the commencement of which shall begin only upon the acquisition and completion of all the relevant, material, and necessary clearances, licenses, permits, and other pertinent documents from the national and/or local governments, including its agencies and instrumentalities for the orderly construction of the fuel station and everything necessary or incidental to its embellishment. 2.2. The Lessee is granted as it is hereby granted by the Lessor of a rent-free construction period of six (6) months8 starting from the completion of the necessary, pertinent and relevant documents for the construction and ending six (6) months thereafter.

3.

RENEWAL

3.1. In case the Lessee desires to have this contract renewed, the Lessee shall, within ninety (90) days prior to the expiration of the contract, submit a written notice to the Lessor clearly stating its desire to renew the contract of lease between the parties thereto and continue to enjoy or possess the leased premises. NO IMPLIED RENEWAL OF THE LEASE CONTRACT IS CREATED in case of expiration of the contract of lease and no written notice was given by the Lessee to the Lessor. If the Lessor is amenable to the renewal, both parties shall negotiate and discuss the valid new terms and conditions which they may mutually agree upon to govern the new lease contract. If no new agreement is arrived at between the parties, the Lessee shall vacate the leased premises within ninety (90) days from the expiration of the lease contract.

7 8

As indicated under Item 9, Section A. As indicated in Item 11, Section A.

4.

RENTAL

4.1. Payment of the rental of the lease shall be paid by way of post dated checks each covering one (1) month’s worth of rent payments. The custody of such post dated checks shall be forwarded to the Lessor on an annual basis. Thus, the Lessee shall issue twelve (12) post dated checks for the twelve (12) months of each succeeding year on or before the corresponding anniversary date. 4.2. Each of the postdated checks issued for the payment of the lease rental shall fall due on the fifth (5th) day of the month for which it was issued. 4.3. The monthly rental shall be subject to an annual escalation rate9 of five percent (5%) starting on the fourth (4th) year of the lease contract and every other succeeding year thereafter. The annual escalation rate shall be reckoned and applied to start at the anniversary date10 of the lease term. 5.

ADVANCE RENTAL PAYMENT

5.1. Upon the complete submission of all the relevant, material, and necessary clearances, licenses, permits, and other pertinent documents from the national and/or local governments, including its agencies and instrumentalities the Lessee shall pay an advance rental in the amount of Eight Million Six Hundred Forty Thousand Pesos (PhP 8,640,000.00).11 The amount stated in the first paragraph represents the value of twentyfour (24) months rent payable subject to Value Added Tax and the Expanded Withholding Tax. 6.

9

SECURITY DEPOSIT

As indicated in Item 14, Section A. As indicated in Item 15, Section A. 11 As indicated in Item 16, Section A. 10

6.1. Upon the complete submission of all the relevant, material, and necessary clearances, licenses, permits, and other pertinent documents from the national and/or local governments, including its agencies and instrumentalities the Lessee shall pay the Lessor a security deposit in the amount of Seven Hundred Twenty Thousand Pesos (Php 720,000.00).12 This security deposit shall not bear any interest; the security deposit shall serve as a guarantee for the faithful compliance by the Lessee of all the terms and conditions of this contract of lease. Said security deposit shall immediately be returned to the Lessee only upon the expiration of this contract and only after the Lessee shall have completely and satisfactorily vacated and surrendered the premises to the Lessor. Deductions to the security deposit could be made by the Lessor if there are any amount owing to the Lessor. Should the Lessee terminate this contract of lease before its expiration without any valid cause, the security deposit shall be deemed forfeited in favor of the Lessor. 7.

IMPROVEMENTS

7.1. Upon the execution of this instrument, the Lessor shall deliver to the Lessee the possession and control of the premises leased. Upon delivery by the Lessor of the leased premises to the Lessee, the latter shall have the absolute right to construct and introduce permanent improvements (i.e. buildings, walls, structures, etc.) without the consent of the Lessor. It is hereby understood by the Lessee that the leased premises shall only be used for the operation of a fuel station and other businesses incidental thereto. Such structures will include but is not limited to the following: pump islands, sales office, comfort rooms for men and women, cashier’s booth. Locker rooms, storage rooms, underground storage tanks, convenience store, carwash facility, service and lube bays. 7.2. The Lessee shall cause the construction of its fuel station, the installation of water, electrical, toilet connections, and other facilities. Improvements which are of fixed or immovable nature, except underground tanks, dispensing pumps and signages, shall become the property of the Lessor upon the expiration or pre-termination of this contract without the Lessee’s right to reimbursement for the cost or salvage value 12

As indicated in Item 17, Section A.

thereof, unless the Lessee exercises the option to demolish and/or remove the said improvements and return the leased premises to its original state prior to the celebration of the contract of lease. 8.

TAXES AND OTHER SERVICES

8.1. The real property taxes on the land, including all charges and any assessment imposed by the national or local government on the land shall be for the sole account of the Lessor. However, real property taxes on the structures and/or improvements introduced by the Lessee on the leased premises and all permits, licenses, electric, water, telephone bill, and other charges and services during the effectivity of this contract shall be for the exclusive and sole account of the Lessee.

9.

FRANCHISE AND SUBLEASE

9.1. The Lessee is absolutely free to grant a franchise to a third party dealer on the premises subject of this contract. In case the Lessee desires to enter into a sublease with a third person, it may do so without the consent of the Lessor. In this case, any and all agreements with the sublessee, as the case may be, is co-terminus with this contract of lease. 10.

SALE, TRANSFER, AND/OR MORTGAGE

10.1. In the event that the ownership, possession, use, or enjoyment of the leased premises or any portion thereof is sold, transferred, conveyed, assigned, mortgaged, or encumbered to a third party by the Lessor during the term of this lease, or any renewal or extension thereof, the Lessor shall immediately inform the said third party, heirs, assigns, successors-in-interest, transferees, executor, administrator, mortgagee, in writing, of the existence of this contract prior to or at the time of the sale, transfer, conveyance, mortgage, assignment, or encumbrance, and undertakes to:

(a) Require the incorporation in the Deed of Sale or Mortgage, or other deed or instrument, either by reference or otherwise, of the terms and conditions of this contract of lease; and (b) To require them to recognize, respect, assume, and abide by all the terms, conditions, covenants, obligations of this contract. 10.2. The Lessor shall be liable to the Lessee and shall indemnify the latter for whatever damage the Lessee may suffer in the event said third party does not or fails to respect, recognize, assume, and abide by any of the terms, covenants, obligations, and conditions of this contract. 11.

ASSIGNMENT

11.1. The Lessee may assign, without Lessor's consent, all of its lease rights and interests under this lease contract to any third party. The foregoing assignment shall be revocable on the part of the Lessee at any time during the lease term. 11.2. The Lessee shall not, in any case, be liable for any misconduct or violation of any law, rules and regulations committed by the assignee. The Lessor shall not have any cause of action against the Lessee for any infraction committed by the assignee. 12.

RIGHT OF FIRST REFUSAL

12.1. Should the Lessor, during the effectivity of the lease contract or any extension of the same, or anytime the Lessee is in possession, actual or constructive, of the leased premises, elect to sell or lease the property subject of this lease contract, or receives a bona fide offer to purchase or lease, the Lessee shall have the right of first refusal to meet any bona fide offer to purchase or lease on the same terms and conditions of such bona fide offer. 12.2. The Lessee shall have sixty (60) days from the time of the Lessor’s election to sell or lease the property or from the time the Lessee had knowledge of such offer from third persons. This period may be extended by the Lessor for thirty (30) days at the written request of the Lessee. 12.3. The Lessor is obliged to inform the Lessee of any offer extended to it by third persons regarding the sale or lease of the property. Failure to inform the Lessee of

such prospective transaction shall invalidate the contract entered into by the Lessor and a third party. 12.4. In case the Lessee opts not to exercise its right of first refusal as granted under this contract, and the sale or lease is made in favor of a third party, the said third party through the Lessor shall respect and honor all the terms and conditions of this contract. The Lessor shall notify the Lessee of such transaction at least fifteen (15) days prior thereto. 13.

WARRANTIES OF THE LESSOR

13.1. The Lessor hereby warrants to the Lessee that the subject property has no existing lease in effect with any third party; that the Lessor has not entered any other lease contract with third persons; that the Lessor has valid title over the property subject of the lease. The Lessor likewise warrants that the leased property has no existing liens or encumbrances other than those annotated on the Transfer Certificates of Title covering the leased properties. The Lessor shall comply with its legal obligation to protect the peaceful control, occupancy, possession, and use of the leased premises by the Lessee during the term of this contract and during the period within which the Lessee is obliged to vacate the leased premises against all claims by any person or entity on the leased premises. Furthermore, the Lessor shall defend and uphold the rights of the Lessee or its successors-in-interest, assignees, transferees against any and all persons whomsoever. 13.2. If the leased property is co-owned, pro-indiviso, by two or more coowners, the Lessor warrants that the representative or representatives of the co-owners is/are properly authorized by a Special Power of Attorney to enter into this contract; that there is no controversy of any kind over the ownership or share of the co-owners over the interest between or among the co-owners exist. The Lessor shall hold the Lessee free and harmless from any liability arising from any controversy arising between or among the co-owners of the leased property.

13.3. The Lessor warrants that the leased property is free from any hidden defects that may render the purpose for which the Lessee entered into this contract impossible or unduly cumbersome. The Lessor warrants that the nature of the land and its topography, its underground is suitable for the construction of the fuel station and all structures concomitant or incidental for the operation of the fuel station. The Lessee shall not be held accountable for any damage, hurt or harm that may result, directly or indirectly, from the natural characteristics of the leased property in relation to the improvements introduced thereon, including the construction of the gas station. Consequently, the Lessor shall hold the Lessee free and harmless from any liability that may result from natural characteristics and condition of the leased property, including fortuitous events. 13.4. In the event that the operation of the fuel station is suspended or cancelled due to reasons attributable to the Lessor (including but not limited to: failure or refusal to obtain the necessary permits and clearances from the national or local governments pertaining to the Lessor, any controversy arising between or among the co-owners of the leased premises, from the natural characteristics and topography of the leased property) the Lessee shall have the right to withhold lease payments until the operation or construction of the fuel station has resumed and/or to have the lease term extended for a period equivalent to the duration of non-operation without any increase in the monthly rental. However, if the Lessor fails and/or refuses to perform or cause the necessary actions for the immediate resumption of the operations of the fuel station within a non-extendible period of ninety (90) days, the Lessee may pre-terminate the lease without any penalty including the return of the security deposit and the unconsumed advance rental paid by the Lessee, and the undepreciated capital expenditures, as the case may be. 13.5. Further, in the event of any order, rule, regulation, law, or other circumstance restricting or limiting the use of the leased premises, such expropriation, road-widening, fortuitous event, or others of analogous circumstance, the Lessor agrees that it shall grant, in favor of the Lessee relief in the form of decrease in rentals, moratorium on lease payments, and other forms of assistance. Such relief as granted

shall continue to only for the period during which the restriction or limitation affects the use of the leased premises. However, should such event render the fuel station permanently inoperative,the Lessee may terminate the Lease and the Lessor shall immediately return the security deposit including the unconsumed advance rental without any need of demand. 14.

ARBITRATION CLAUSE

14.1. Any action arising from any dispute, controversy, or claim regarding this contract of lease or any other issued incidental to said contract shall be brought solely and exclusively in the arbitration office in Pasig City, to the exclusion of other arbitration offices. 14.2. All settlements reached upon by the parties shall be reduced into writing and signed by the representatives of each party having a duly executed Special Power of Attorney for that purpose. 15.

VENUE

15.1. In case the arbitration process fails or if the settlement reached after the arbitration proceedings cannot be enforced, the parties hereby agree that the issue, controversy, or claim shall be brought solely and exclusively before the courts of proper jurisdiction of Pasig City, Philippines.

16.

APPLICABILITY

15.1. All terms and conditions as contained in this instrument evidencing the contract between the parties herein shall be binding upon and shall inure to the benefit of the Lessor, the Lessee, their respective heirs, assigns, representatives, successors-ininterest, or transferees. 15.2. As such binding effect, no heirs, assigns, representatives, successors-ininterest, or transferees of the parties herein shall be allowed to repudiate, renounce or disregard the provisions of this contract to the prejudice of the parties herein.

17.

VIOLATIONS OR BREACH OF THE CONDITIONS OF THE CONTRACT

17.1. Violations of the terms and conditions contained in this instrument shall be settled by the parties in the earliest possible time. 17.2. Thirty (30) days after the written notice is served to the Lessee, or its representative, of the violation of any of the terms and conditions as provided herein, the Lessee shall forthwith voluntarily and consciously comply therewith or voluntarily vacate the leased premises without the necessity of any judicial action to that effect. 18.

PRE-TERMINATION OF THE CONTRACT OF LEASE

18.1. Should the Lessee desires to terminate this contract of lease before the designated date of its expiration, the Lessor shall permit the Lessee to do so and the latter shall withdraw from this contract provided that the Lessee gives the Lessor one (1) month prior written notice and forfeits to the Lessor the security deposit stipulated above and with the condition that upon an inspection to be conducted by the Lessor, the leased premises is found to be undamaged and unimpaired, save for ordinary wear and tear. 18.2. In addition, all improvements and structures (except movable furniture, fixtures, and equipment) shall be left behind to be considered the property of the Lessor without any liability or compensation from the Lessee.

19.

RETURN OF THE PREMISES

19.1. Upon the expiration of the contract of lease, there being no extension granted by the Lessor, the Lessee shall immediately vacate the leased premises and return the control and possession thereof to the Lessor. 19.2. In case the Lessor pre-terminates this contract, it shall obtain from the Lessee a written consent to effect such pre-termination. Should the parties fail to renew or extend the period of this contract, all immovable property with the exceptions as

stated elsewhere in this instrument shall become the property of Lessor upon expiration of the contract. 19.3. The Lessee undertakes to return the premises to its condition prior to the celebration of this contract of lease as far as reasonably possible.

20.

THIRD PARTY LIABILITY

20.1. The Lessee shall hold the Lessor free and harmless from any damages or liability or responsibility to any person or property while on the leased premises unless caused by the wilful acts or omissions or gross negligence of the Lessor, its employees, agents, licensees,or contractors. 21.

INSPECTION

21.1. The Lessor leases the above-described property on an “as is basis.” The Lessee hereby declares that the leased property has been properly inspected prior to the execution of this contract. 21.2. The Lessee hereby declared that the property is in good condition and that the property is clear of any obstruction that could stymie the construction of the fuel station and other structures necessary for the operation of the gas station. 22.

TRANSFER OF INFORMATION

22.1. The Lessor hereby consents to and authorizes the transfer, disclosure and communication any information relating to the lease or any information related therewith as may be required by any law or by judicial decree. 22.2. The Lessor hereby holds the Lessee free and harmless from any liability that may arise from any transfer, disclosure or storage of information pursuant to this provision. 23.

AMENDMENTS TO THE CONTRACT

23.1. This instrument and any other terms and conditions stated herein constitute the entire agreement of the parties and said instrument may be amended or modified accordingly but only by an instrument in writing duly signed by both parties or their representatives. The amendment or modification shall take effect only after the necessary formalities have been accomplished by the parties. 23.2. This contract supersedes and renders ineffectual any and all agreements, whether oral or in writing whether previously agreed upon and entered into between the Lessor and the Lessee covering the above described leased premises subject of this contract. 23.3. In case of any conflict between the provisions of Section A (Specific Conditions) and those of Section B (General Conditions), the former shall prevail. 24.

WARRANTY OF THE LESSEE

24.1. The Lessee shall faithfully comply with all laws,ordinances, rules and regulations relating to fire and safety, sanitation, environment, peace and order, including the National Building Code.

IN WITNESS WHEREOF, the parties have hereunto set their hands this ____ day of __________ 2019, in Pasig City, Philippines.

LESSOR

LESSEE

SIGNED IN THE PRESENCE OF:

________________________________

____________________________________

ACKNOWLEDGMENT REPUBLIC OF THE PHILIPPINES

)

) S.S.

BEFORE ME, a Notary Public, this _____ day of _______________, 20___ in __________________, personally came and appeared the following with their respective competent evidence of identification: Name

Identification

Date & Place of Issue

SEAOIL PHILIPPINES, INC. TIN: 005-054-970-000 JEROME T. EVANGELISTA

all known to me and to me known to be the same persons who executed the foregoing instrument and they acknowledged that the same is their free and voluntary act and deed, and that of the entities they respectively represent. The foregoing instrument relates to a Contract of Lease, consisting of sixteen (16) pages including the page on which this acknowledgment is written, and has been signed by the parties and their instrumental witnesses, and sealed with my notarial seal. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal on the data and place above written.

Notary Public Doc. No. : _______; Page No. : _______; Book No.: _______; Series of 20___.