LABCO-LARBECO - CONTRACT - OF - LEASE1ava Reviewed by Bench
LABCO-LARBECO - CONTRACT - OF - LEASE1ava Reviewed by Bench
LABCO-LARBECO - CONTRACT - OF - LEASE1ava Reviewed by Bench
1. THE SUBJECT
1.2 The Leased Property shall be used solely for agricultural purposes, devoted
principally to the cultivation/ production of exportable Cavendish bananas,
and the LESSEE-INVESTOR covenants that it shall not use or allow the
use of the Leased Property for illegal or prohibited purposes or other
purposes not covered under this Lease Agreement.
2.1 In consideration of this Lease Agreement which shall be based on the actual
leased area, the LESSEE-INVESTOR shall pay the LESSOR-
COOPERATIVE the following annual rental:
2.1.1For the first three years – P10,000.00 per hectare per year. (Please See
Refer AO 2 s2008)
2.1.2On the fourth year and onwards _____ cents per box Classified as
Regular Class A bananas or P50,000.00 per hectare per year, as
guaranteed lease or income per hectare per year, whichever is higher
which shall be paid every end of the year.
2.2 The LESSEE-INVESTOR shall pay in advance the rental for the first three
years in the total amount of
_______________________________________. It is hereby understood
that the advance rental already received in the amount of
____________________________(P_____________.00) shall be
considered as the first instalment and will be automatically deducted. The
balance in the amount of __________________________________shall be
paid ON INSTALLMENTS in the following manner, to wit:
2.3 While the Lease Agreement is still in force, the LESSEE-INVESTOR shall
provide funds necessary to ensure ecological protection of both the farm
and its workers, particularly for the conservation and maintenance of the
land quality, proper handling, storage and disposal of hazardous residues
and waste products, and proper protective and acceptable safe methods of
applications of fertilizers and other chemicals.
2.4 The LESSEE-INVESTOR may likewise rent also the existing and
operational equipment and machineries of the LESSOR-COOPERATIVE,
if needed from time to time and upon agreement by both parties.
3. RENEGOTIATION
It is hereby agreed that the first renegotiation will be done on the 8 th year from
the start of the operation and every five years thereafter or earlier, if any of the
following grounds under Sec. 4.14 of DAR A. O No. 09, Series of 2006 arise: (1)
extraordinary increase in inflation rate; (2) drastic change in price fluctuation on
both production input and output; (3) declaration of the areas as calamity or
disaster area due to force majeure; and (4) other meritorious grounds. The
renegotiated lease rental and terms and conditions of the Lease Agreement shall
be subject to approval by the PARC/PARC ExCom pursuant to Sec4.1 of the
same Administrative Order.
4.2 The LESSOR-COOPERATIVE recognizes that the crops planted in, and
the fruits produced by, the Leased Property within the period of effectivity
of this Agreement, property belong to the LESSEE-INVESTOR and that
the LESSOR-COOPERATIVE has no interest in the same.
4.3 The LESSEE-INVESTOR shall comply, in good faith, with its duty to pay
the rent and to observe and perform all other obligations contained in this
Lease Agreement. The LESSOR-COOPERATIVE in turn, warrants that the
rights of the LESSEE-INVESTOR under this Lease Agreement shall be
affected by any changes in membership of the LESSOR-ARB’s cooperative
or association or by any distribution of the subject land of the lease made or
to be made in said membership.
4.4 The management of the LESSEE-INVESTOR’s business operations,
including the formulation and implementation of policies on labor and
security operations shall be subject to existing laws.
5.1 The Leased Property shall not be physically segregated and partitioned by
the LESSOR-COOPERATIVE and ARBs within the period of effectivity of
this Lease Agreement. This Lease Agreement shall be respected for the
entire duration of this term, and any extension thereof shall be in
accordance with the terms and conditions herein provided. In the event the
LESSSOR-ARB’s member, by the required vote specified in their Articles
of Cooperative/Association and By-Law, or in the absence thereof two-
thirds (2/3) of the general membership, agree to dissolve and liquidate their
cooperative/association, or agree to partition the Leased Property, the
LESSEE-INVESTOR shall be entitled to the benefits granted by law to
registered leases, and any and all of the LESSOR-ARB’s members who
become individual owners of any portion of the Leased Property as their
share in the liquidation and/or partition thereof pursuant to Article 64, 70,
and 71 of the Cooperative Code of the Philippines and Rule 8 of the Rules
and Regulation Implementing Certain Provisions of the Cooperative Code
of the Philippines shall respect the lease during its term.
5.2 In the event that the LESSOR-ARBs are compelled to go into a process of
dissolution, liquidation and/or partition and distribution of this assets,
including the Leased Property, by virtue of and in compliance with the
provisions of the Cooperative Code of the Philippines or of its Articles of
Cooperative/Association and By-Laws, such process shall be conducted the
by the LESSORS-COOPERATIVE in a manner which shall not prejudice
the LESSEE-INVESTOR’s operations on the Leased Property nor interfere
with the with the LESSEE-INVESTOR’s day to day conduct of its business
affairs or operations. Further, the LESSOR-COOPERATIVE shall, prior to
actual partition and distribution of any portion of the Leased Property to its
members, elect and/or designate a Trustee or any person or group of
persons who shall be authorized to receive payment of the rental due on the
Leased Property for the entire duration of this Lease Agreement including
its renewal.
6. EMPLOYMENT
6.2 In the event that there will be job vacancies and/or openings connected
directly or indirectly with the operation of lands covered by the
Comprehensive Agrarian Reform Program (CARP), the LESSOR-ARB/s,
and/or his/her/their direct dependent/s, shall be given priority in
employment in the enterprise, provided he/she/they are qualified and
physically fit for the job.
7.2 The LESSEE-INVESTOR shall also be liable for all expenses and
charges necessary for the conduct of the business operations.
7.3 All taxes due on the improvements on the Leased Property except those
improvements on the areas that the LESSOR-ARB/s shall have utilized
shall be for the account of the LESSEE-INVESTOR. Taxes due on the
road lots within the Leased Property shall be for the account of the
LESSEE-INVESTOR.
7.4 The LESSEE-INVESTOR may, for its own account, obtain insurance on
all lease improvements, including the crops/trees. In the event of loss, all
proceeds from such insurance shall accrue to the LESSEE-INVESTOR.
7. LESSOR-COOPERATIVE COVENANTS
The LESSOR-COOPERATIVE hereby represents and undertakes to the
LESSEE-INVESTOR as follows:
8.2 All appropriate and necessary corporate and legal action authorizing the
execution and performance of this Lease Agreement have been taken.
8.3 The LESSEE-INVESTOR shall be held free and harmless from any and
all claims of third parties to ownership of, or right of possession over, the
Leased Property, and the LESSOR-ARB/s shall indemnify the
LESSEE_INVESTOR for all damages resulting from its eviction, in the
event such third parties successfully maintains their claims. However, this
excludes any and all cases/claims on the property prior to its transfer to
the LESSOR-ARS/s.
8. REVOCATION/CANCELLATION/TERMINATION
9.1 This Lease Agreement shall be revoked and/or terminated at the close of
business hour on _____________________________________________
(hereinafter, the “Termination Date”). However, the LESSEE-
INVESTOR may, by written notice served to the LESSER-ARB/s as
early as on (1) year prior to the Termination Date, extent this Lease
Agreement for an addition period of
_______________________________________________ years, based
on the terms and conditions which shall be mutually agreed between the
LESSOR-ARB/s and the LESSEE-INVESTOR, and reviewed by the
National AVA Evaluation Committee (NAEC) and approved by the
Presidential Agrarian Reform Council (PARC)/PARC Executive
Committee (ExCom). In the event that the parties cannot agree on the
renewed terms and condition, the same shall be subject to
mediation/conciliation in accordance with Secs. 14 and 15 of DAR A.O.
No. 9, Series of 2006.
9.2 Prior to the expiration of its term, this Lease Agreement may be revoked
and/or terminated by the LESSOR-COOPERATIVE for any of the
following causes:
10.1 The DAR ensures and affirms that the terms and conditions stipulated in
this Lease Agreement are lawful and legally enforceable, and do not
violate or contradict any existing agrarian laws and principles.
10.3 In all instances, the DAR shall promptly report and immediately take
appropriate action against illegal land use, conversion and unlawful
transfer of ownership on the subject landholding/s.
10.4 The DAR shall prepare a periodic report of the monitoring processes and
all over activities undertaken by the parties on the subject landholdings
which shall be kept in a permanent dossier.
11. PENAL PROVISIONS
11.1 The parties to the Lease Agreement shall, in the exercise of their
respective rights and in the performance of their corresponding duties, act
with justice, mutually give what is due, and observe honesty and good
faith.
11.2 The party hereto who, contrary to law and the stipulations herein, wilfully
or negligently causes damage to the other party, shall indemnify the latter
for the same.
11.3 The party to this Lease Agreement who willfully causes loss or injury to
another party in a manner that is contrary to morals, good customs or
public policy shall compensate for the damage on the injured party.
11.4 In all instances, the LESSEE-INVESTOR shall not assign its rights and
obligations under this Lease Agreement nor sub-lease the leased premises
to any person or entity without the express consent of the LESSOR-
COOPERATIVE. Any violation hereof shall give rise to the termination
of this Lease Agreement and the LESSEE-INVESTOR shall bear
whatever losses that may be incurred by reason thereof.
11.5 The LESSOR-COOPERATIVE shall ensure that the lessee enjoys full,
peaceful and quite enjoyment, possession and utilization of the subject
landholdings in accordance with agreed terms and conditions on the
Lease Agreement. Any violation of this particular obligation by the
LESSOR- COOPERATIVE shall cause the termination of this Lease
Agreement and the LESSOR-COOPERATIVE shall bear whatever losses
that may be suffered as a consequence thereof.
12. LEGAL ACTIONS
Without prejudice to the proceedings for mediation and arbitration which
the parties agree to submit themselves to, any legal action or proceedings
arising out of or connected with this Lease Agreement and involving a
matter not determinable by mediation or arbitration shall be brought
before the proper forum.
13. ANNOTATION
This Lease Agreement shall be annotated at the back of the Transfer
Certificate of Title (TCT) and Emancipation Patents (EP’s) Certificates of
Land Ownership Award (CLOAs) or other similar tenurial instruments
(i.e.,, Free Patents, Homestead Patents, etc.) on file with the Registry of
Deeds (ROD) after its approval by the PARC/PARC ExCOM, at the
expense of the LESSEE-INVESTOR.
14. SEPARABILITY CLAUSE
In the event that any of the provisions of this Lease Agreement is
declared with finality as unlawful, inoperative or ineffective by the
PARC/PARC ExCom or any other competent authority, the validity of
the other provisions hereof not so affected, shall continue to be in full
force and effect provided it can stand on its own mandate.
15. EFFECT TO EXISTING AGREEMENT OR CONTRACTS
It is hereby understood by both parties that any contract or existing
agreement before the execution of this LEASE CONTRACT is
automatically superseded and rendered ineffective upon execution and
effectivity hereof.
16. IMPROVEMENTS
16.1 The LESSEE-INVESTOR after due consultation with the LESSOR-
COOPERATIVE, shall have the right to introduce on the leased premises
any and all improvements necessary or advantageous for agricultural
cultivation and production such as, but not limited to: leveling of land,
construction for its irrigation, drainage and harvesting systems,
cableways, roads, packing plants, offices, buildings, machineries or other
structures, that it may think necessary or useful to carry out its business
and operations;
16.2 All improvements introduced by the LESSEE-INVESTOR on the
leased premises, such as banana plantings and other improvement,
whether temporary or permanent, attached or not, shall remain the
exclusive property of the LESSEE-INVESTOR even upon termination of
the lease. The LESSEE-INVESTOR may remove or dismantle all these
improvements, including the banana plants at its own expense.
In the event of expiration or non-renewal of the contract of lease, the
LESSOR-COOPERATIVE or ARBs may opt to assume the management
and operations of the farm or project provided the LESSEE-INVESTOR
shall be reimbursed of all the existing improvements at an agreed price.
(This require further study, the nature of the provisions presupposes a
force sale)
17. EASEMENTS
17.1 The LESSOR and its ARB Members shall undertake to grant a right of way
and other easements, FREE OF CHARGE on any and all facilities of
LESSEEINVESETOR necessary for its operation that may pass on LESSOR
other properties in or around adjacent to the leased premises such as but not
limited to irrigation system, drainage system, cable propping system, cable
harvesting system, roads, bridges, canals, and all such other easements that may
be required by LESSEE’S operations.
18. WARRANTY
18.1The LESSOR-COOPERATIVE shall warrant, as it hereby warrants, the full
and peaceful possession, occupation, cultivation and enjoyment of the leased
premises by the LESSEE-INVESTOR and the latter’s authorized agents and
representatives. Also, LESSOR-COOPERATIVE warrants that it shall not do or
fail to do anything that shall impede or prevent LESSEE’S full and peaceful
possession and cultivation of the leased premises; or shall allow or tolerate any if
its member or third party to perform any act or omission that shall have the same
effect. Further, the LESSOR-COOPERATIVE shall respect the peaceful
possession, cultivation and enjoyment of the leased premises by the LESSEE or
its authorized agents and representatives during the affectivity or
extension/renewal of this contract. The LESSEE-INVESTOR shall surrender
quietly and peacefully to the LESSOR-COOPERATIVE the leased premises,
excluding all the improvements, upon the termination of the contract or
termination of the extension thereof.
18.3 The LESSOR-COOPERATIVE warrants all its members and the ARBs
shall also respect and comply with terms and conditions of the contract;
18.4 The LESSEE-INVESTOR warrants also that it has the financial capability
and technical expertise to develop the leased area into a banana plantation and
make the area viable and productive for the said product;
18.7 The LESSEE-INVESTOR warrants that it will faithfully comply with terms
and conditions of the contract;
20. ALIENATION
20.1 The LESSOR-COOPERATIVE or ARBs shall not sell, transfer, alienate,
dispose of, mortgage or encumber the leased premises or any portion thereof, or
its rights, titles, or interest therein without the prior written consent of the
LESSEE-INVESTOR. A violation thereof will entitle LESSEE-INVESTOR for
damages and will allow the LESSEE-INVESTOR to bar the third party from
entering or actually possessing the premises within the term of the contract.
20.2 In case the leased premises has been encumbered or mortgaged before the
execution of this contract, the LESSEE -INVESTOR is hereby granted the
right to facilitate and make arrangement with the financial institution or Land
Bank of the Philippines to pay the mortgage indebtedness of the LESSOR and/or
to secure a release of the said mortgage or encumbrance, including lawful
interest thereon deductible to the rental payments of the LESSEE-INVESTOR.
21. ASSIGNABILITY
21.1 The LESSSEE shall have the right to assign any or all its rights under this
Contract, the whole portion of the parcel of land or to enter into any agreement
with any person, entity or partnership or corporation for the financing,
development, operation, marketing, administration or management of parcel of
land into agricultural plantation for growing and production of bananas and/or
other products, upon proper consultation with the LESSOR-COOPERATIVE.
22.2 From time to time the LESSEE-INVESTOR may engage the services of the
LESSOR-COOPERATIVE as a contractor for a fee to perform some activities or
operations in the leased premises of the former. In which case, the LESSOR-
COOPERATIVE shall be the one to hire its own employees and they shall be
under its own supervision and control.
22.3The LESSEEE may also rent some of the machineries and equipment needed
in the operation which are owned by the cooperative and still existing, available
and operational. The rental fees may be agreed upon by the parties in a separate
document.
23. EFFECTIVITY
The Lease Agreement shall be effective from the date of receipt by the
contracting parties of the PARC/PARC ExCom resolution approving
such Lease Agreement, or upon the affixing of the DAR LAO
Undersecretary’s signature as a nominal party to the contract. It shall be
binding upon all the LESSOR-ARB/s and his/her/their heirs, assigns and
successors-in-interest. It shall be unaffected by any change in the
membership or distribution made or to be made in the membership of the
cooperative/association.
IN WITNESS WHEREOF, the parties herein have hereunto set their hands this
_____________ day of ____________, 20___ at
__________________________________________.
_____________________________ _____________________
(LESSOR-ARB) (LESSEE-INVESTOR)
___________________________________________
UNDERSECRETARY
Legal Affairs Office
Department of Agrarian Reform
________________________ _____________________________
ACKNOWLEDGEMENT
known to be same persons who executed the foregoing Lease Agreement and they
acknowledged to me that the same is their own free and voluntary acts and deeds and
that of the entity they both represent. It consists of ____ pages and signed by the parties
and their instrumental witnesses thereto including this page whereon the
acknowledgement is written.
_________________________________
Notary Public
Until _____________________________