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Exhibit 10.35
CONTRACT DOC NO AC881 DIVISION PMI
PARTIES ELLIOTT'S ENTERPRISE CO., LTD. DIVISION CONTACT ALICE CHEN
7F NO. 9 WU KUNG 5TH ROAD RICHARD FORREST
WU KU INDUSTRIAL PARK
HSIN CHUNG CITY, TAIPEI HSIEN EFFECTIVE DATE SEPT. 19, 1996
TAIWAN.
TERMINATION DATE DEC. 31, 2001
REN MIN COMPANY LIMITED SALES REP
9 FIVE KUNG FIVE ROAD, HSIN
CHUN, TAIWAN (53,364 SQ. FT.) CONTRACT TYPE LEASE
COUNTRY TAIWAN
CONTR STORAGE LOCAT FILES
(REAL ESTATE)
CONTACT HUANG YING LIANG CONTRACT TEX LOCAT
REMARKS
REAL ESTATE LEASE FOR ADI'S PLANT
IN TAIWAN. THIS FILE ALSO CONTAINS
THE TAIWAN LEASE FOR THE 5TH
FLOOR.
ANALOG ATTORNEY LEE & LI There are three leases; one for 2nd floor, one
for 3rd and 4th floors and one for 5th floor.
Each has an option to extend for 3 to 5 years.
Note that the options can be exercised
individually, meaning not all must be
PARTY ATTORNEY UNKNOWN exercised together. If certain floors are no
longer needed, that option can be allowed to
lapse while the others are exercised. There
are options for additional space. (EXPIRES
ADI INHOUSE ATT WA WISE 12.31.96)
WORD FILE NAME LEASE FOR FLOORS, 1-5 IN FACTORY
BUILDING 9 FIVE-KUNG-FIVE ROAD, HSIN
GO TO WORD FILE CHUN, TAIPEI HSIEN, TAIWAN
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(Translation)
FACTORY BUILDING LEASE AGREEMENT
This Agreement is entered into on Sep. 19, 1996 by and between Lessor, Ren Min
Company Limited (hereinafter referred to as "Party A") and Lessee, Analog
Devices Taiwan Limited (hereinafter referred to as "Party B") for lease of the
Premises as defined below under the terms and conditions set forth below.
Article I - Description of the Premises
1. Party A hereby agrees to continue to lease to Party B, and Party B
hereby agrees to continue to lease from Party A, the entire space of
the first, second, third, fourth and fifth floors (totalling 53,364
square feet) of the factory building situated at 9, Five-Kung-Five
Road, Hsin Chun, Taipei Hsien, and some ancillary facilities and
improvements as agreed upon by the parties (hereinafter referred to as
"Premises") Party B is hereby granted a preferential right to
additionally lease the sixth and/or seventh floor(s) in the same
factory building according to Article 15 of this Agreement.
2. The ancillary facilities and improvements mentioned in Paragraph (1)
above shall include a parking space sufficient for 25 car parks and
such basic fire protecting facilities as fire fighting water hose and
emergency lights, etc.
3. The parties hereto acknowledge that the Premises included in this
Agreement have been leased by Party A to Party B and are currently
being used by Party B and that the existing lease agreements for the
Premises will continue to be in full force once effect until December
31, 1996 and shall not be terminated or otherwise affected by the
execution of this Agreement.
Article 2 - Warranties Regarding the Title over and Quality of the Premises
1. Party A hereby warrants that during the term of this Agreement and any
renewal thereof, the Premises are and shall remain the property of
Party A.
2. Party A hereby warrants that the Premises can be lawfully leased to and
used by Party B as factory premises.
3. Party A hereby warrants that the Premises are in good quality and
suitable for use as a factory, and that the occupancy permits have been
obtained for the factory building in question.
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4. Party A further warrants that Party B has the right to make use of and
get access to the Premises free from any interference of the other
parties (including the owner of land and the government authorities).
Party A shall also be responsible for keeping the access road and
entrance free from any barrier so as to satisfy the requirement of
Party B's operation.
Article 3 - Term of Lease
1. This Agreement shall take effect from January 1, 1997 and unless early
terminated pursuant to this Agreement, shall continue in full force and
effect for a period of five years ending on December 31, 2001. Upon
expiration of the five-year term, Party B shall have a right to renew
this Agreement for another period from five to seven years. In
addition, Party B is hereby granted a right of first refusal to
additionally lease any and all spaces in the sixth and/or seventh
floor(s) of the same factory building during the initial term or any
renewal period thereof.
2. If Party B desires to renew the lease after the expiration of the
five-year term, it shall give Party A a renewal notice in writing at
least one year prior to the expiration of the initial term and shall
agree upon in writing with Party A the rental for such renewal term
prior to the expiration of the initial term. The rental for the renewal
term shall exclude the costs of basic fire protecting facilities as set
forth in Article 1 hereof and shall not exceed the rental level
available for identical or similar factory building in the
neighborhood.
3. In case Party B desires to exercise the right of first refusal with
respect to the other floors of the same factory building, it shall also
give Party A a one-year prior written notice. The rental thereof shall
be calculated according to the same rental for the third, fourth or
fifth floor then in effect.
Article 4 - Rental and Deposit
1. The rental for the Premises other than the parking spaces shall be
fixed at NT$1,145,000 per month during five-year lease term (monthly
rental for each and every floor is set forth in Annex A attached hereto
for reference). The rental for the parking spaces shall be fixed at
NT$1,500 per month per each space during the five-year lease term. The
monthly rental for the renewal period shall be determined in accordance
with Article 3, Paragraph (2), of this Agreement.
2. The rental shall be payable by Party B to Party A in every three months
no later than the fifth day from the beginning of each payment period.
The valued-added tax leviable on the rental. Party A shall issue a
uniform invoice in. full amount against the payment of rental
(including the VAT) by Party B.
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3. A deposit in the amount of $3,435,000 had been paid to and received by
Party A (Note: Under the current lease, Party B had already paid a
deposit in the amount of NT$3,835,500 which is in excess of the deposit
required under this Agreement. The excess amount of NT$400,500 shall be
refunded by Party A to Party B, without any interest, upon the
effective date of this Agreement on January 1, 1997). Upon expiration
or early termination of this Agreement, Party A shall refund to Party B
the deposit without interest at the time when Party B has vacated the
premises. in the event the Premises are subject to attachment by the
court, or sold or the title thereof is transferred to a third party,
Party B shall have the right to offset the undue rental in full against
the deposit, unless the assignee of the Premises confirms in writing
that he has received from Party A the deposit and undertaken to accept
the assignment of this Agreement.
4. In case Party A has breached any of the warranties set forth in Article
2 of this Agreement, which makes Party B unable to lawfully use the
Premises, Party B shall have a right to cancel this Agreement upon
serving a written notice to Party A. In case this Agreement is so
canceled, Party A shall immediately return to Party B the deposit and
the undue rental plus an interest to be calculated according to the
statutory interest rate.
Article 5 - Period for Vacation of the Premises
Upon expiration or early termination of this Agreement, Party B shall be given a
period of three months to vacate the Premises, provided that Party B shall
continue to pay the rental for the period from the expiration or termination of
the term of lease till the date of completion of its vacation of the Premises at
the rental rate prevailing on the expiration or termination date.
Any production equipment and commodities left over at the Premises after the
expiration of the said three-month period shall belong to and be subject to free
disposal of Party A. Should Party A be unwilling to retain such equipment or
commodities and has to dispose of the same, the costs and expenses so incurred
shall be borne by Party B and Party A may deduct the same from the deposit.
Article 6 - Purpose of Lease
The Premises are leased to Party B for its operation of the business as
specified in its Company License.
Article 7 - Improvements by Party B
1. In order to use the Premises as a factory to operate its business,
Party B has the right at any time and from time to time to add, modify
and increase or decrease water and power facilities as well as to
install necessary equipment and facilities
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as required for business operation (hereinafter referred to as "Party
B's Improvements"). Any of the change on the structure of the factory
building shall, nevertheless, be approved by Party A in advance, which
approval shall not be unreasonably withheld. For the purpose of
proceeding the Party B's Improvements, if Party A is required to
provide written consent and other relevant documents and/or application
in the name of Party A for government approval, permit or license,
Party A shall agree to forthwith provide such documents and necessary
cooperation and assistance. When Party B vacates the Premises upon
expiration or termination of this Agreement, any of the Party B's
improvements attached to the Premises that cannot be removed shall
belong to Party A. in case the registration of title transfer is
required therefor, such registration shall be filed by Party A on its
own account and any tax registration fees and other charges arising
therefrom shall also be borne by Party A.
2. Party A agrees to undertake the responsibility of ensuring the
availability and free access by Party B of the roads and entrances
surrounding the Premises and agrees to resolve any problem so
encountered by Party B therefrom. In addition, Party B shall have the
right to get access to the premises, on a 24-hour a day and 7-day a
week basis.
Article 8 - Repair and Maintenance of the Premises
During the term of this Agreement, regular maintenance and repair of the
Premises shall be the responsibility of Party A. Any damages caused by force
majeure shall be repaired immediately by Party A, and for the period before the
said repair is completed, Party B is entitled to rental reduction or rental free
depending upon the extent of unavailability of the Premises. If Party A refuses
or delays to repair, Party B shall have the right to do the job by itself and
request Party A to reimburse the costs or to deduct the costs from the rental
payable.
Article 9 - Tax, Dues, Water and Power Supplies and Other Charges
1. Tax and dues leviable in connection with the Premises shall be borne by
Party A. Charges of water and power supplies incurred from the use of
the Premises by Party B during the term of lease shall be borne by
Party B. Costs of water and power supply facilities added by Party B
during the term of lease shall also be borne by Party B.
2. Party A shall arrange for the availability of a 24-hour security
service and a 10-hour security guard for the factory building. The
costs and expenses incurred therefrom shall be shared by Party A and
Party B according to their respective occupancies of the factory
building.
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3. Party A shall, at its own account, purchase fire and accident
insurances to cover the Premises and the factory building. Any
insurance relating to the facilities and equipment owned by Party B
shall be the sole responsibility of Party B.
Article 10 - Destruction and Damages of the Premises
During the term of lease, if any destruction and damage of the Premises, totally
or partially, should occur due to causes not attributable to Party B's act,
Party A shall be responsible for the restoration thereof. During the restoration
period, Party B may claim rental deduction or exemption, subject to the extent
of availability of the Premises. However, in the case of substantial destruction
and damage, Party A or Party B is entitled to claim extinguishing of the Lease.
Article 11 - Subletting
1. With the prior written consent of Party A which consent shall not be
unreasonably withheld, Party B may assign this Agreement, or sublet or
lend to a third party all or any part of the Premises. In addition,
Party B shall be entitled to assign this Agreement, or sublet or lend
all or any part of the premises to any affiliated enterprise of Party
B's main investors upon a prior notice to Party A, provided that the
use of the Premises shall comply with Article 6 hereof.
2. In case Party B has breached its obligations under Paragraph (1) of
this Article, Party A may terminate this Agreement or request the third
party sublessee to move out of the Premises within two months, with the
costs and expenses to be borne by Party B. During the period between
the termination of the lease and the vacation of the Premises or during
the removal period, Party B shall continue to pay the rental or Party A
may deduct the same from the deposit.
Article 12 - Termination of this Agreement before Expiration
1. Unless otherwise provided herein, if the Premises are no longer able to
be used by Party B pursuant to the Section entitled "Purposes of the
Lease" contained in Article 6 hereof because of change of laws or due
to any other reasons not attributable to either Party, Party B shall be
entitled to terminate this Agreement in writing at any time. Party B is
also entitled to terminate this Agreement if it intends to cease
business operation at the Premises, provided that it shall give a 6
months' prior written notice to Party A. If this Agreement is
terminated in accordance with this Article, Party A shall return the
deposit and the prepaid but unused rental without any interest to Party
B at the same time as Party B moves out of the premises in accordance
with this Agreement.
2. Party B shall not produce, sell or store in the premises unlawful
articles or any articles dangerous to public safety, or conduct any
activities against the
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government policy. In case of violation, Party B shall be solely
responsible for any result thereof. If Party B's business operation is
so suspended by the order of the government, Party A shall have the
right to terminate this Agreement.
Article 13 - Return of the Premises
Upon expiration, termination or extinction of this Agreement, Party B shall move
its production equipment, materials, finished products, office furniture or any
other objects out of the premises and return the premises to Party A within 3
months, and shall not claim any compensation. of the removal costs. In the event
of any damages to the Premises due to Party B's fault, Party B shall be liable
for any repair to restore the Premises to the original condition as soon as
possible. However, if the damages are caused due to normal wear or causes not
attributable to Party B, Party B shall not be responsible for such damage. Any
of the Party B's Improvements that are unable to be removed shall be surrendered
to Party A in their existing condition. At the time of return of the premises,
in the event of any damage which Party B is liable for repair, Party A may
withhold from the returnable deposit an amount equivalent to the repair
expenses, and return the balance thereof to Party B after the repair is
completed by Party B. However, Party B may opt to give up the deposit withheld
by Party A and be exempt from the repair responsibility. When Party B receives
the deposit and the prepaid but unused rental returned by Party A, Party B shall
provide the original copy of the Factory License and the application for
cancellation of the factory registration to Party A so that Party A may apply
for cancellation of the registration of Party B's factory registration.
Article 14 - Punishment for Default
1. In case of delay of the rental payment, Party B shall pay to Party A a
delay interest calculated at the prevailing highest bank loan annual
interest rate on the delayed rental for the days delayed until the date
of full payment. If Party B delays in paying the rental for three
months or more, Party A may terminate the lease hereof and may deduct
from the returnable deposit the amount equivalent to one month's rental
as liquidated damage for the termination thereof.
2. If Party B fails to move out of the Premises within 3 months after the
expiration, termination or extinction of this Agreement, it shall pay
Party A a daily default penalty at a rate of two times of the said
rental, counting from the day of the expiration of the said 3-month
period to the day of return of the Premises. Party A may also deduct
such penalty from the deposit. On the contrary, if Party A fails to
return to Party B the returnable deposit and the prepaid but unused
rental at the time as Party B moves out of the Premises, Party B may
refuse to deliver the Premises, and Party A shall pay delay interest
calculated at the prevailing highest bank loan annual interest rate on
the returnable but not returned amount, counting until the day of
return of the said amount.
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Article 15 - Right of First Refusal
1. During the term of this Agreement, if Party A desires to lease any of
the other floors in the same factory building to others, Party B shall
have the right of first refusal to lease the same under the same terms
and conditions as set forth in this Agreement. In case Party B requires
any other floors of the same factory building for its business
expansion and Party A has vacant floors available for lease, Party B
shall also have the preferential right to lease such floors under the
same terms and conditions as set forth in this Agreement.
2. During the term of this Agreement, if Party A intends to sell the
Premises to a third party, Party B shall have the right of first
refusal to purchase the same. Party A shall notify Party B in writing
of the provisions of sale and purchase of the premises agreed between
Party A and the third party, and shall give Party B a three-month
period to exercise such right. If Party B decides to exercise the
right, an agreement of sale and purchase shall take effect at the time
as Party B's written notice stating the exercise of such right has been
served on Party A. The parties hereto shall then perform their
respective obligations pursuant to the provisions of sale and purchase
contained in the original written notice from Party A, and this
Agreement shall terminate as of the date on which Party B retains the
title of the Premises. In the event of any delay of Party B's
acquisition of the premises due to reasons attributable to Party A,
Party B is not required to pay any rental for the delay period.
If Party B fails to exercise its right of first refusal within the
prescribed period, Party A is entitled to sell the Premises to the
third party in accordance with the provisions of sale and purchase
originally notified to Party B, provided that this Agreement shall in
no event be affected. Moreover, Party A shall be responsible to ensure
that such purchaser would execute a written acknowledgement agreeing to
be bound by this Agreement and to be liable for the return of the
deposit. In the event of any alteration in the provisions of sale and
purchase by which Party A intends to sell the Premises to a third
party, Party B shall also enjoy the same right of first refusal in
accordance with the altered provisions of sale and purchase.
3. After the Premises have been purchased by Party B or the parties hereto
have reached an agreement of sale and purchase in accordance with this
Article, Party A shall not claim any interest on any of the Party B's
Improvements.
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Article 16
This Agreement is executed in duplicate with each party holding one original as
evidence.
Party A:
Ren Min Company Limited
By: /s/ [illegible signature]
----------------------------
Title: Chairman of the Board
Address:
Party B:
Analog Devices Taiwan Limited
By: /s/ Joe McDonough
----------------------------
Title: Chairman of the Board
Address:
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AGREED MONTHLY RENT - JULY 25, 1996
Unit: NT$/Month
FLOOR SQUARE FOOT PING 1997 1998 1999 2000 2001 TOTAL
- ----- ----------- ---- ---- ---- ---- ---- ---- -----
1st Floor 10,195 287 290,000 290,000 290,000 290,000 290,000 1,450,000
2nd Floor 9,857 277 195,000 195,000 195,000 195,000 195,000 975,000
3rd Floor 11,104 312 220,000 220,000 220,000 220,000 220,000 1,100,000
4th Floor 11,104 312 220,000 220,000 220,000 220,000 220,000 1,100,000
5TH FLOOR 11,104 312 220,000 220,000 220,000 220,000 220,000 1,100,000
- --------- ------ ----- ---------- ---------- ---------- ---------- ---------- ----------
Total/Month: 53,364 1,500 1,145,000 1,145,000 1,145,000 1,145,000 1,145,000 5,725,000
Total/Year: 13,740,000 13,740,000 13,740,000 13,740,000 13,740,000 68,700,000
Increase %: 0% 0% 0% 0%
NOTE: THE MONTHLY RENTAL WITH NO INCREASE UNTIL THE END OF 2001.
FLOOR CURRENT 1996
- ----- ------------
1st Floor 250,000
2nd Floor 192,950
3rd Floor 192,950
4th Floor 192,950
5TH FLOOR 180,000
- --------- ----------
Total/Month: 1,008,850
Total/Year: 12,106,200
Increase %: A 13.5% increase for 1997
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This Exhibit 10.35 represents a fair and accurate English translation of a
Lease agreement dated September 19, 1996 between Ren Min Company Limited and
Analog Devices Taiwan Limited relating to the premises at Five-Kung-Five Road,
Taipei, Taiwan.
ANALOG DEVICES, INC.
By: /s/ William A. Martin
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Title: Treasurer