SUBLEASE AGREEMENT

This Sublease Agreement, entered into this _____ day of __________ 20___, by and
between:

_____________________________________________________________,
a corporation or sole proprietorship duly organized and established under the laws of
the Philippines, with principal office address at
___________________________________________________________________,
represented herein by its ___________________________ (designation),
__________________________________________________________________
(hereinafter referred to as the "SUBLESSOR");

- and -

_____________________________________________________________,
a corporation or sole proprietorship duly organized and established under the laws of
the Philippines, with principal office address at
___________________________________________________________________,
represented herein by its ___________________________ (designation),
__________________________________________________________________
(hereinafter referred to as the "SUBLESSEE");

WITNESSETH:

WHEREAS, the SUBLESSOR has the sub-leasehold rights over a property situated at
_______________, Subic Bay Freeport Zone with a sublease area of _________________ square
meters (__________ sq.m) having subleased the same from the
__________________________________________________________________________________
(name of SUBLESSOR’s LESSOR or Landlord);

WHEREAS, under the SUBLESSOR’s Sublease Agreement with

__________________________________________________________________________________
(name of SUBLESSOR’s LESSOR or Landlord) and the main Lease Agreement between
_______________________________________________________________________________
(name of LESSOR or Landlord) and the SBMA, the former may sublease portions of the property
subject to certain conditions;

WHEREAS, the SUBLESSOR and SUBLESSEE agree to enter into this Sublease
Agreement subject to the herein stipulated terms and conditions;

NOW, THEREFORE, for and in consideration of the foregoing premises and the covenants
hereinafter stipulated, the parties hereby agree as follows:

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 ARTICLE I
PROPERTIES FOR SUBLEASE

Section 1. . Subleased Property; Property Description. - The SUBLESSOR hereby

subleases to SUBLESSEE, and SUBLESSEE hereby subleases from SUBLESSOR, for the term and
upon the terms, covenants, and conditions hereinafter provided,
_______________________________________________________________________________,
located at _____________, Subic Bay Freeport (“SBF”), Philippines, consisting of _______
square meters (________ sq. ms.) [Sublease Property], more or less, subject to all existing
agreements, easements, covenants, restrictions, mortgages, encumbrances and other liens, charges or
matters affecting the said Subleased Property.

Section 2. Movables Not Included. - It is understood that any movable found in the
Subleased Property is excluded from the scope of this sublease but shall be made the subject of
separate negotiations between the parties unless specifically provided for in this Sublease Agreement.

Section 3. Easements Reserved. - The SUBLESSEE shall have the right to utilize the
Subleased Property subject to the SUBLESSOR’s easement rights under applicable laws.

Section 4. Property “As Is, Where Is”. – The SUBLESSEE acknowledges and agrees that
it is leasing the Subleased Property on an “as is, where is” basis. SUBLESSOR shall not be deemed
to have any obligation to make any improvements or alterations in or to the Subleased Property.
SUBLESSOR makes no representation or warranty as to the condition, marketability, or suitability for
SUBLESSEE’s use, operational capability, or fitness for a particular purpose or as to any defect,
whether apparent or hidden, of the Subleased Property.

Section 5. Certificate of Registration or Certificate of Registration and Tax Exemption.

- It is a condition precedent for the effectivity of this Sublease Agreement that this sublease be
approved in writing by the SBMA and that the SUBLESSEE secures an SBF Certificate of
Registration (CR) or Certificate of Registration and Tax Exemption (CRTE) from the SBMA allowing
it to do business in the SBF pursuant to the pertinent provisions of Republic Act No. 7227 and the
SBMA’s Implementing Rules and Regulations. However, the SUBLESSEE affirms that
notwithstanding its execution with the SUBLESSOR and approval by the SBMA of this Sublease
Agreement, it can only conduct business on the Subleased Property through the continuous holding of
a valid and existing CR or CRTE from SBMA.

ARTICLE II
CONSIDERATION

Section 1. Rental Payment. – The SUBLESSEE shall pay the SUBLESSOR every ______
day of each month, monthly rent at the rate of
__________________________________________________________________________ Pesos
(PhP____________), without need of demand. Payment of rental fees from the commencement of this
Sublease Agreement shall be made regardless of whether or not the SUBLESSEE utilized the
Subleased Properties.

Section 2. SBMA’s Share on Sublease – Pursuant to the SUBLESSOR’s Lease Agreement

with SBMA and the SBMA’s Policy on Sublease, the SUBLESSEE shall directly remit to SBMA, on
or before the fifth (5th) day of every month, without need of demand, the latter’s share in all income
equivalent to _____________ percent (__%) of the monthly sublease rent or ____________ percent
(__%) of the appraised rental value of the Subleased Property of
_____________________________________________________________________________Pesos

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(PhP_______________) as determined by SBMA, whichever is higher; Provided, however, that in
case SUBLESSOR has unpaid obligations to SBMA and upon advise by the latter, an additional
______ percent (____%) on the foregoing base amount shall be directly remitted by SUBLESSEE to
SBMA which amount shall be applied to SUBLESSOR’s unpaid obligations until the same have been
fully paid.

Section 3. Committed Investment, Development and Employment Commitments – The

SUBLESSEE acknowledges that, among other concessions, the SBMA assented to the execution of
this Sublease by reason of its representation that it shall (i) infuse investment on the Subleased
Property amounting to at least _________________________________________________Pesos
(Php _____) [Investment Commitment], (ii) introduce development works through construction
and/or renovation on the Subleased Property amounting to at least
____________________________________________________Pesos (Php ____) [Development
Commitment] for a period of _______ or from ___________ to _____________; and (iii) employ on
the Subleased Property at least _____ (___) employees (Employment Commitment).

Accordingly, SUBLESSEE’s failure to comply with any of the foregoing commitments shall
authorize the SBMA aside from the forfeiture of the Performance Bond under Section 4 below if
applicable, to withdraw its consent on the sublease agreement, the cancellation of the SUBLESSEE’s
Certificate of Registration (CR) or Certificate of Registration and Tax Exemption (CRTE) and/or
impose such other appropriate penalty/ies the SBMA may determine in its discretion without need of
judicial determination.

Section 4. Performance Bond. - To ensure the fulfillment by the SUBLESSEE of its

commitment to introduce developments works amounting to at least
__________________________________________________________________________ Pesos
(Php___________) on the subleased Property through the completion of its development
commitment in accordance with Section 3 above, the SUBLESSEE shall deliver to the SUBLESSOR
within thirty(30) days from the signing of this Sublease Agreement, a Performance Bond callable
upon demand in either of the following forms and amounts:

a. Two percent (2%) of Php____________ if in cash, manager’s check or bank

guarantee; or
b. Ten percent (10%) of Php_____________ if in surety bond from any of the top
twenty (20) surety companies in the Philippines as determined by the Philippine
Insurance Commission.

The Performance Bond to be posted should be effective for the duration of the development
timetable of _____________ and shall be valid until one hundred twenty (120) days after the
scheduled completion of the SUBLESSEE’s development commitment as heretofore stated. Except
for a cash bond, the Performance Bond to be posted shall be renewed annually until the development
commitment is complied with.

The Performance Bond shall be a pre-requisite for the renewal of CR or CRTE of herein
SUBLESSEE. In case of failure to post a Performance Bond, penalties shall be imposed in accordance
with the SBMA Policy on Imposition of Performance Bond and its Applicable Rates.

The SUBLESSEE shall submit to the SBMA annual report on the progress of the above
committed development project. The report shall contain the progress of the committed project total
incurred costs and updated plan for the implementation of the said project.

Upon completion of the development works on the Subleased Property in accordance hereof,
the SUBLESSEE shall submit a letter of compliance to the SBMA subject to verification by the
SBMA Building Permit and Safety Department. In case of compliance, the Performance Bond shall
be refunded to the SUBLESSEE (if in cash) or the parties may effect the cancellation of the same (if

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in the form of bond). On the other hand, in case of failure by the SUBLESSEE to infuse development
as heretofore stated on the Subleased Property, the Performance Bond shall be forfeited in favor of the
SBMA.

ARTICLE III
TERM OF SUBLEASE

Section 1. Term. – The term of this Sublease Agreement shall be for a period of ______ (__)
years commencing on ____________________, 20__ (“Commencement Date”) and continuing
thereafter until _____________________, 20__ (“Termination Date”). Any entry on the Subleased
Property by the SUBLESSEE prior to the Commencement Date shall be subject to all the terms and
conditions of this Sublease Agreement.

There shall be no tacit renewal of this Sublease Agreement or of the SBMA’s consent thereto
notwithstanding the continuation by the SUBLESSEE in the possession of the Subleased Property for
any period of time after the expiration of the term of the Sublease Agreement.

Section 2. Renewal. - This Sublease Agreement may be renewed upon the mutual consent
of the Parties. The SUBLESSEE shall inform the SUBLESSOR in writing its intent to renew this
Sublease Agreement at least three (3) month/s prior to the expiration of the same. The renewal of this
Sublease Agreement is subject to negotiation, the strict compliance by the SUBLESSEE to all the
rules and regulations of the SBMA and the terms and conditions of this Sublease Agreement

ARTICLE IV
PURPOSE OF THE LEASE

Section 1. Purpose of Sublease; Intended Use. - The SUBLESSEE shall use the Subleased
Property strictly for ________________________________________________________________
__________________________________________________________________________________
_______________________________________________________________________________
(“Intended Use”). Accordingly, the SUBLESSEE shall use, maintain and continuously occupy the
Subleased Property solely for this purpose and shall at all times conduct its business in a reputable
manner. Use of the Subleased Property other than the Intended Use shall not be permitted without the
prior written consent of the SUBLESSOR and SBMA.

If the Subleased Property is used for other purposes, the SUBLESSOR has the right, after due
notice and without the need for judicial determination, to do the following:

(i) Rescind the Sublease Agreement; or impose penalties;

(ii) Increase the Monthly Rent; or
(iii) Compel the SUBLESSEE to stop the new activities.

ARTICLE V
ASSIGNMENTS AND SUBLETTING

Section 1. Assignments. – No assignment, transfer, mortgage, sublease, encumbrance, or

other transfer of the Subleased Property shall be valid without the prior written approval of the
SUBLESSOR and SBMA and shall: (a) not relieve SUBLESSEE of any of its obligations under this
Sublease Agreement; or (b) be made pursuant to any agreement (written or oral) other than an
agreement in form and substance substantially similar to form agreements which have previously been
reviewed and approved by SUBLESSOR. Any assignment, transfer, mortgage, sublease or

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encumbrance of this Sublease Agreement or any portion thereof shall be conditioned on an agreement
that the transferee abide by all terms and conditions of this Sublease Agreement.

Section 2. Assignment, Transfer of Rights, Subleases; Conditions. - Each Assignment,

Transfer of right and/or Sublease of any portion of the Subleased Property shall comply with the
following conditions:

2.1 Each Assignment, Transfer of Rights in whole or in part and/or Sublease shall be
subject and subordinate to this Sublease Agreement and the rights and obligations of the
SUBLESSOR hereunder;

2.2 The provisions of this Sublease Agreement shall be incorporated into each
Assignment, Transfer of Right or Sublease Agreement. Within Seven (7) days from
execution thereof, the SUBLESSEE shall deliver to SUBLESSOR true and correct copies of
any said Agreement, and any amendments thereto.

2.3 If the Subleased Property or any part thereof be Assigned, Transferred, and/or
Subleased, or occupied by any person, firm or corporation other than SUBLESSEE, then
upon the occurrence and during the continuance of any Event of Default, SUBLESSOR may,
and is hereby empowered to, collect rent from such person, firm or corporation and apply the
same to the curing of any default hereunder in any order of priority SUBLESSOR may elect,
and any unexpended balance to be applied by SUBLESSOR against any Rental Payment
subsequently becoming due; and

2.4 Any act or omission of any Assignee, Transferee and/or Sub-lessee which violates
any provision of this Sublease Agreement shall, for purposes hereof, be deemed to be a
violation of such provision of this Sublease Agreement by SUBLESSEE, it being the
intention and agreement of the parties herein that the SUBLESSEE shall assume and be liable
to SUBLESSOR for any and all acts and omissions of any and all Assignees, Transferees
and/or Sub-lessees with respect to this Sublease Agreement.

ARTICLE VI
PRE-TERMINATION

Section 1. By the SUBLESSOR. Ground. - At any time during the term of this sublease, or
any renewal thereof, the SUBLESSOR may pre-terminate this Sublease Agreement without need of
any judicial determination upon any violation by the SUBLESSEE of the terms and conditions of this
Sublease Agreement or any orders or rules and regulations imposed by the SBMA.

Section 2. Notice. - The SUBLESSOR must give the SUBLESSEE a written notice of pre-
termination at least ______ days before the intended date of pre-termination.

Section 3. By the SUBLESSEE. - Should the SUBLESSEE pre-terminate this Sublease

Agreement sooner than the Termination Date hereof, it is necessary that it send a _________ prior
written notice to the SUBLESSOR. Moreover, in case the SUBLESSEE shall pre-terminate this
sublease, the Security Deposit shall be forfeited in favor of the SUBLESSOR.

Section 4. Violation of SBMA Rules and Regulations. - The violation by the SUBLESSEE
of any of the rules, regulations and policy of SBMA shall be a ground for the cancelation or
termination of this Sublease Agreement without need of prior judicial determination.

Section 5. Grounds under the Lease Agreement – It is hereby understood that this Sublease
Agreement may likewise be pre-terminated or cancelled by the SUBLESSOR due to the same
grounds stated in the main Lease Agreement with SBMA that covers the Subleased Property that are
applicable and attributable to the SUBLESSEE.

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 ARTICLE VII
DEFAULT

Section 1. Late Payments. - Additional rent shall be payable hereunder in respect of any
Rental Payment or other sum payable hereunder to SUBLESSOR (including sums forwarded by
SUBLESSOR hereunder due to failure by SUBLESSEE to perform its obligations) which shall not
have been paid within the herein stipulated period(s) when said amount(s) shall be due and payable in
an amount equal to ___ percent (__%) per month of the principal payable amount.

ARTICLE V III
SURRENDER HOLDING OVER

Section 1. Surrender of the Subleased Property. - Upon cancellation, expiration or

termination of this Sublease Agreement, the SUBLESSOR shall have the right to enter into the
Subleased Property and establish its possession thereof. All permanent improvements of whatever
kind and nature erected, by virtue of this Sublease Agreement, on the Subleased Property for the
duration of this Sublease Agreement shall become the property or properties of the SUBLESSOR in
fee simple without process of law and without any responsibility on the part of the SUBLESSOR to
reimburse SUBLESSEE of the price, amount and value thereof. Permanent improvements shall mean
those buildings and structures erected on the Subleased Property, including permanent fixtures
therein.

ARTICLE IX
MISCELLANEOUS

Section 1. Improvements. - The SUBLESSEE shall not make any structural changes,
alterations, additions or improvements on the Subleased Property without the prior written consent of
the SUBLESSOR. All constructions, alterations, additions and improvements shall be made in
accordance to and with applicable zoning controls and regulations, laws, codes and insurance
guidelines. SUBLESSEE shall obtain all licenses, permits and approvals by the SBMA prior to
constructions, alterations and/or improvements after the turnover of the property by the SUBLESSOR
to the SUBLESSEE for occupancy.

The ownership of improvements, furnishings, equipment and fixtures that are constructed or
installed on the Subleased Property by SUBLESSEE shall be determined as follows: Title to all
removable furniture, furnishings, fixtures, articles, objects, machinery or equipment installed by
SUBLESSEE and which may be removed without causing destruction to the Subleased Property and
to the permanent improvements thereon remains vested in the SUBLESSEE at all times during the
term of this Sublease Agreement; Provided that within _____________ days after the expiration or
termination of this Sublease Agreement, the SUBLESSEE shall remove such non-permanent
improvements. SUBLESSEE shall be liable for the cost of removal and repair. SUBLESSEE shall
undertake repairs for any damage caused by the removal of the non-permanent improvements at its
expense. If not removed within ____________ days after termination or expiration of this Sublease
Agreement, all removable furniture, furnishings, fixtures and equipment will become the property of
the SUBLESSOR.

Section 2. Insurance. - The SUBLESSEE shall obtain insurance coverage for the Subleased
Property, inclusive of all the improvements therein, against all insurable risks from an insurance
company acceptable to the SUBLESSOR in an amount equal to the maximum insurable value of the
Subleased Property.

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 Section 3. Return of Premises. - Upon the cancellation, expiration or termination of this
Sublease Agreement for any reason whatsoever, pursuant to the provisions of this Sublease
Agreement, the SUBLESSEE shall peacefully and immediately vacate the Subleased Property and
return possession thereof to the SUBLESSOR in good and tenantable condition, devoid of all
occupants, equipment and effects of any kind. Failure of the SUBLESSEE to return the Subleased
Property as provided herein shall make it liable to pay liquidated damages to the SUBLESSOR in an
amount equivalent to __________ months rent without prejudice to such other sums as may be due to
the SUBLESSOR under this Sublease Agreement and/or under the law.

In case of delinquency in the payment of rentals or for any sums due hereunder (including
liability to pay damages), the SUBLESSEE agrees that the SUBLESSOR has the right to sell real and
personal properties belonging to the SUBLESSEE found within the subleased premises in a public
auction or any other manner that the SUBLESSOR deems it proper to dispose said properties and
applying the proceeds thereof to any unpaid rentals, utility charges, cable television, and solid waste
management, damages and other amounts due the SUBLESSOR under this Sublease Agreement
and/or under the law, without need of prior judicial determination. The SUBLESSEE also agrees that
such sale of the properties does not preclude any right of action on the part of the SUBLESSOR for
the further collection of such unpaid rentals, unpaid utilities, damages and other amounts due to the
SUBLESSOR under this Sublease Agreement and/or under the law.

Section 4. Right of Entry. – The SUBLESSEE shall permit the SUBLESSOR or its
representatives to enter and to inspect the Subleased Property at any time to: (a) perform its
obligations and/or exercise its rights hereunder; (b) conduct verifications of SUBLESSEE’s
compliance with this Sublease Agreement; (c) respond to emergency situations or what is to the best
of the SUBLESSOR’s judgment potential emergency situations; and (d) exhibit the Subleased
Property to prospective sub-lessees during the last _____________ days of the Sublease Term or
during any period SUBLESSEE is in default hereunder. The SUBLESSOR shall not unreasonably
interfere with SUBLESSEE’s use of the Subleased Property and shall endeavor to give reasonable
advanced notice of SUBLESSOR’s entry.

Section 5. Non-Waiver. - The failure of the SUBLESSOR to insist upon a strict performance
of any of the terms, conditions and covenants hereof shall not be deemed a relinquishment or waiver
of any of the rights or remedies that the SUBLESSOR may have, nor shall it be construed as a waiver
of any subsequent breach or default of its terms, conditions and covenants which shall continue to be
in full force and effect. No waiver by the SUBLESSOR of its rights under this Sublease Agreement
shall be deemed to have been made unless expressed in writing and signed by the SUBLESSOR. No
payment by SUBLESSEE or receipt by SUBLESSOR of a lesser amount than the payments herein
stipulated as due shall be deemed to be other than a partial payment. No endorsement or statement on
any check or letter accompanying a check shall be deemed an accord and satisfaction, and no
acceptance of rent with knowledge of breach shall constitute a waiver of the breach.

Section 6. Amendments. - Any amendments or additional terms and conditions to this

Sublease Agreement must be mutually agreed upon by the Parties in writing and subject to SBMA’s
consent.

Section 7. Proper Authorization to do Business with SUBLESSOR. - The SUBLESSEE

warrants that it has the authority to enter into this Sublease Agreement with the SUBLESSOR.

Section 8. Incorporation of the Lease Agreement. – All pertinent provisions contained in

the main Lease Agreement _________________________________________________________
and SBMA shall be deemed and is considered to be incorporated in this Sublease Agreement and
shall, under this contract, be considered applicable and operational.

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 Neither this sublease nor anything contained in this Sublease Agreement shall release the
SUBLESSOR from its obligation to perform and be bound by all the covenants and conditions
contained in the said main Lease Agreement.

In case of conflict between the provisions of this Sublease Agreement and that of the main
Lease Agreement, the provisions of the latter shall prevail.

Section 9. SBF Rules and Regulations. - The Implementing Rules and Regulations of the
SBF as promulgated by the SBMA are incorporated herein by reference and made an integral part of
this Sublease Agreement.

ARTICLE X
OTHER TERMS AND CONDITIONS BETWEEN
THE SUBLESSOR AND THE SUBLESSEE

Section 1. Advance Rental Payments. - The SUBLESSEE shall remit to the SUBLESSOR
an Advance Rental Payment equivalent to ________ (_) months rent or the amount of
____________________________________________________________________________Pesos
(PhP________) upon the signing of this Sublease Agreement.

Section 2. Security Deposit. - In addition to the foregoing payments, upon the signing of this
Sublease Agreement, the SUBLESSEE shall remit to the SUBLESSOR an amount equivalent to
_____ (__) months rent or the amount of _______________________________________________
Pesos (PhP___________) for the Subleased Property to serve as Security Deposit for any unpaid
utility bills such as electricity, sanitation, sewerage, etc. which the Subleased Properties may incur.
This amount is refundable to the SUBLESSEE free of any interest at the termination of this Sublease
Agreement subject to whatever bills have remained unpaid and damages that may have been incurred;
Provided, that the SUBLESSEE shall still be liable for any and all bills and damages that may exceed
this Security Deposit. The SUBLESSEE shall not be allowed to offset or use its Security Deposit as
its Monthly Rental Payment.

Section 3. Place and Mode of Payments. - The SUBLESSEE shall pay Rental Payment,
together with all other amounts due under this Sublease Agreement, to SUBLESSOR at the address
set forth below, or to such other party or to such other address as SUBLESSOR may designate from
time to time by written notice to SUBLESSEE, without demand and without deduction, set-off or
counterclaim.

All payments to SUBLESSOR must be made at: ____________________, Subic Bay

Freeport

Section 4. Rental Escalation. –Beginning on the second year of this Sublease Agreement and
every year thereafter, base rent shall increase by ________ percent (___%).

Section 5. Grounds for Cancellation of the Sublease Agreement. - The SUBLESSOR

may, with due notice but without need of prior judicial determination, cancel or terminate this
Sublease Agreement if the SUBLESSEE commits any of the following;

5.1. The SUBLESSEE fails to pay any rental payment and/or any sums due hereunder;

5.2. The SUBLESSEE uses the Subleased Property for purposes other than those specified
herein, without prejudice to the options available to SUBLESSOR under Art. IV Sec.
1 hereof;

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 5.3. The SUBLESSEE violates any of the other terms and conditions of this Sublease
Agreement or the rules and regulations of the SBMA.

Section 6. Utilities. - All expenses for water, gas, electricity, telephone, cable television,
sanitation, solid waste management, sewerage and other public utility services and the installation
thereof shall be for the account of the SUBLESSEE.

Section 7. Lien. - Any Unpaid Rentals, utility charges and any other sums payable under
this Sublease Agreement shall constitute a preferred lien on all personal properties of SUBLESSEE
existing in the Subleased Property. For this purpose, the SUBLESSOR is hereby authorized
following a default of the SUBLESSEE to prevent the removal of the said properties from the
Subleased Property or demand their return from any possessor should they have been removed
without the written consent of the SUBLESSOR.

Section 8. (all other terms that may be agreed upon by the Parties)

IN WITNESS WHEREOF, the parties have set their hands and affixed their signatures this
___ day of ________________, 20__ at Subic Bay Freeport, Philippines.

___________________ ____________________
(SUBLESSOR) (SUBLESSEE)
By: By:

____________________ _________________
(designation) (designation)

SIGNED IN THE PRESENCE OF:

ACKNOWLEDGMENT
REPUBLIC OF THE PHILIPPINES )
OLONGAPO CITY, ZAMBALES ) S.S.

BEFORE ME, a Notary Public for and in the City of Olongapo, Province of Zambales
personally appeared the following:

Name Identification/ Date/

Passport No. Place Issued

_______________________
In his capacity as President
Of _____________________

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_______________________
In his capacity as President
Of _____________________

known to me to be the same persons who executed the foregoing Instrument, a SUBLEASE
AGREEMENT consisting of ______ (__) pages including this one and who acknowledged to me that
the same is their free and voluntary act and deed, as well as the free and voluntary act and deed of the
entities represented herein.

WITNESS MY HAND AND SEAL this ______ day of _______________ 20__ at place first
above written.

Doc. No. _____;

Page No. _____;
Book No. _____;
Series of 20___.

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