EXHIBIT 10.6
LEASE AGREEMENT
between
Universal Appliances Limited
and
Seagate Technology (Thailand) Limited
Effective on July 18, 1994
Chandler and Thong-Ek Law Offices Limited
7th Floor, Bubhajit Building
20 North Sathorn Road
Bangkok 10500
Thailand
Tel: (662) 266-6485 thru 6510
Fax: (662) 266-6483 - 4
LEASE AGREEMENT
THIS LEASE is made by and between UNIVERSAL APPLIANCES LIMITED, represented by
Mr. John C. K. Sham, the authorized director, having its office at 889 Thai CC
Tower, 18th Floor Room No. 183, South Sathorn Road, Yanawa, Sathorn, Bangkok
10120 (hereinafter referred to as "the Lessor") as party of the one part and
SEAGATE TECHNOLOGY (Thailand) limited represented by Mr. Pornchai Piemsomboon
and Mrs. Jirapannee Supratya, the authorized directors, having its office at
1627 Moo 7, Teparuk Road, Tumbol Teparuk, Amphur Muang, Samutprakarn
(hereinafter referred to as "the Lessee") as party of the other part.
Both parties hereby agree as follow:
1. PREMISES:
The Lessor hereby agrees to lease aid the Lessee hereby agrees to take on lease
of a building evidenced by a house registration No. 73 Moo 5, Bangna-Trad
Highway Km. 36, Tambol Bangsamak, Amphur Bangpakong, Cha Choeng Soa province;
and part of the land evidenced by the title deed (Chanod) No. 13234 for the area
of 8 rai, - ngan and 50 square wah and including the facilities built thereon
and roadway (hereinafter referred to as the "Premises"), details of which is
attached as Schedule 1.
2. PURPOSE OF THE LEASE:
The Lessee takes the lease of the Premises for their purpose of furthering its
business of assembly of disc drives and its related subassemblies. Lessee shall
not make use of the Premises for any unlawful business or purpose.
3. LEASE TERM:
3.1 This Lease shall be for a period of 6 (six) years effective from July 18,
1994 ("Effective Date"). It may be renewed in accordance with Clause 10,
Renewal of Lease. The Lease Term of this lease shall be from the July 18,
19941 to the expiration date of July 17, 2000, both days inclusive.
3.2 The parties agree to enter into the Registered Lease Agreement in the form
attached hereto in Schedule 2 which shall be registered within 30 (thirty)
days from the Effective Date or such later dates as may be mutually agreed
upon. Registration fees and stamp duties in connection with registration
of the Lease Agreement shall be paid by the Lessee.
4. RENT:
4.1 On the Effective Date, the Lessee agrees to pay one month rent in advance
for the amount of Baht 1,206,000 (One Million Two Hundred and Six Thousand
Baht only) to the Lessor. This amount shall be deemed as the rent paid for
the last month of the Lease Term or any renewal term thereof.
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4.2 Within the 5th day of the succeeding calendar months, (the first rental is
payable within the 5th day of September 1994), the Lessee agrees to pay
monthly rent to the Lessor at the rate of Baht 1,206,400 (One Million Two
Hundred and Six Thousand Baht only).
4.3 The parties agree that rent shall be adjusted after the first three years
of the Lease Term and next 3 year term period of the total 6 year Lease
Term and any renewal term thereof. The adjustment of rent shall be based
the Lessor and the Lessee.
For the purpose of this Clause, "Fair Market Rental Rate" means the amount
at which the Premises (without addition renovation or alteration made by
the Lessee) would be leased between a willing lessor and a willing lessee,
neither being under compulsion, both parties having reasonable knowledge of
all relevant facts and with equity to both, and taking into consideration
that the lessee shall be responsible for all repairs, as determined by
appraisers acceptable to both the Lessor and the Lessee or as provided for
herein.
5. DEPOSIT:
The Lessee agrees to make a deposit as performance guarantee of the Lease with
the Lessor on the Effective Date of this lease in the sum of 3,618,000 (Baht
Three Million Six Hundred Eighteen Thousand, the equivalent of 3 (three) months
rent, which payment is made to Lessor as directed in writing by the Lessor.
Subject to Clauses 9.2 and 9.4, this deposit shall be returned to the Lessee by
the Lessor within 7 days from the date on which a notice of returning the
Premises is properly given to the Lessor after the Lessee has fully complied
with this Lease and has returned the Premises to the Lessor in good condition
without causing any damage to the Lessor and the Premises and not owing any rent
or other expenses relating to the Premises. If it appears that the Lessee is in
breach of any part of this Lease and such breach is not remedied within the
period prescribed, the Lessor shall have the right to forfeit all of the
deposit.
The deposit shall not bear interest and shall not be set off for the rent.
6. LESSEE UNDERTAKINGS:
Throughout the Lease Term and/or throughout the period the Lessee occupies the
Premises, the Lessee undertakes:
6.1 To pay rent strictly within 5 (Five) days of the due date. If the rent is
not paid within such time and the Lessor does not terminate this Lease, the
Lessee agrees to pay a fine in the sum equal to 2 (two) percent per month
of the rent overdue.
6.2 To strictly observe all rules and regulations published or to be published
and informed to the Lessee by the Lessor as well as by Wellgrow Industrial
Estate. Copies of the current rules and regulations published by the Lessor
and Wellgrow Industrial Estate are attached as Schedule 3.
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6.3 To use the Premises for lawful business operation only.
6.4 Not to use nor allow any other person to use the Premises as residence or
for sleeping purpose for whatever period of time, except as may be required
for security with prior written consent of the Lessor.
6.5 Not to cause disturbance or annoyance to other tenants or neighbors.
6.6 Not to affix any advertisement or any signs or any materials whether
electric, wire, or aerial within the Premises without prior written consent
of the Lessor except the name of the Lessee.
6.7 To repair and maintain the Premises, including systems and equipment in
good condition and clean at all times at the cost and expense of the
Lessee.
6.8 To allow the Lessor or his representative(s) to enter and inspect the
Premises during normal office hours, upon reasonable prior notice given to
the Lessee.
6.9 Within 90 (ninety) days before the expiration of the Lease, to allow the
Lessor or his representative(s) with any prospective tenants to enter and
inspect the Premises at all reasonable times upon reasonable prior notice
given to the Lessee.
6.10 Not to keep flammable (except for IPA) or illegal material on the Premises.
The Lessee shall not cook any food on the Premises, except in the canteen
area. The Lessee shall not cause or permit its business to be used to
generate, manufacture, refine, store, handle, produce or process hazardous
substances, dangerous or toxic substances or solid waste, except other than
as outlined in the product and process instruction and approved by the
Wellgrow Industrial Estate Authority of Thailand.
6.11 To alter or renovate the Premises suitable for the Lessee's purpose at his
own cost and expenses.
Before any alteration or renovation or any facility expansion shall be
made, the Lessee shall first obtain written consent from the Lessor, which
shall not be unreasonably withheld. Any request properly given by the
Lessee to the Lessor, of which the Lessee has not received any reply in
writing within 7 days, shall be deemed that the Lessor approves according
to such request.
All movable properties, i.e. air pipes, electrical wires, telephone wires
and water pipes and systems relating to such properties, used in the
alteration or renovation which are affixed firmly to the Premises shall,
immediately after the expiration of the Lease Term or any renewal thereof,
become the property of the Lessor. The Lessee agrees that the Lessee will
use of the vacant land which is not under the Premises but is covered under
the title deed as referred to in Clause 1 (the "Additional Utilized Area")
as carpark and recreation area without any charge, but if the Lessee wishes
to use it for other purposes such as construction of any concrete or
asphalt structure, the Lessee will have to pay an additional monthly rent
on all utilized area or all usable area, whichever, is the greater amount,
of such construction on the Additional
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Utilized Area at the rate of Baht 55 (Fifty-Five Baht Only) per square
meter. Such additional lease or use of all the Additional Utilized Area
shall be subject to the same terms and conditions herein.
The Lessor agrees that all other movable properties, e.g. machinery,
equipment and accessories brought onto or installed by the Lessee shall be
at all times the Lessee's properties.
6.12 To be responsible for loss or damage to the Lessee's property.
6.13 The Lessee shall have the right to sublease all or any portion of the
Premises to any persons of its choice subject to obtaining the prior
consent of the Lessor, which consent shall not be unreasonably withheld,
and subject to the terms and conditions of this Lease. The Lessor shall
cooperate in the registration of any sublease of registering such sublease.
The cost shall be borne by the Lessee or its sub-lessee
In the special case that the Lessee decides to remove its business from the
Premises because the Premises are not suitable for its use due to a
condition in the land not apparent before registration of the Registered
Lease Agreement, the Lessor hereby consents to either an assignment or a
sublease of this Lease to a third party of the Lessee's choice in order to
allow the Lessee to recover a portion of its investment in the Premises.
6.14 To pay for the electricity used and recorded by the meter fixed thereto at
the rate directly charged by supplier. All payments shall be made directly
to supplier.
6.15 To pay for all the water used and recorded by the meter fixed thereto at
the rate charged by supplier. All payments shall be made directly to
supplier.
6.16 To pay the Telephone Organization of Thailand ("TOT") for the telephone
charges at the rate charged by the TOT.
6.17 To pay any applicable fees charged onto the Premises by Wellgrow Industrial
Estate.
7. LESSOR'S UNDERTAKINGS AND REPRESENTATIONS:
Throughout the period that the Lessee has fully complied with this Lease, the
Lessor undertakes and represents that:
7.1 The Lessor has full title to the Premises free and clear to all
encumbrances, charges, liens, squatters or other claims including but not
limited to suits or notices with respect to violations of any laws or
regulations (save for any applicable land and house tax due and payable
before the Effective Date of this Lease which shall be solely responsible
by the Lessor. Any land and house taxes due and payable after the Effective
Date hereof until the expiration of this Lease or any renewal term thereof,
shall be reimbursed by the Lessee).
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Subject to Clause 13, the Lessor agrees not to sell, assign, dispose of,
transfer, mortgage or otherwise encumber the Premises or any future or
contingent interest in the Premises during the period of this Lease unless
with a prior written approval of the Lessee, In the case where the Lessee
agrees that the Lessor may sell the Premises the Lessor agrees that this
Lease shall not be extinguished by the transfer of ownership of the
Premises, if any. The Lessor shall cause the transferee to assume rights
and liabilities of the Lessor under this Lease towards the Lessee.
The Lessor has the rights and its legal and corporate authorities to lease
the Premises to the Lessee for the Lease Term and any renewal period
prescribed within.
7.2 The Lessor shall give the Lessee immediate notice in writing of any
proposals of the taking over of the Premises or any portion thereof by
governmental action of condemnation, nationalization, expropriation,
confiscation or otherwise.
7.3 That the Lessee shall enjoy using the Premises without interference from
the Lessor or any other person.
7.4 The Lessor shall have no duty to maintain or repair any building systems
including, but not limited to all facilities and HVAC.
7.5 On the Effective Date of this Lease, the Lessor shall enter into a service
agreement with the Lessee for a provision of certain services in connection
with the Premises. Both parties agree to arrange in due course of time for
the transfer of utility services received from any governmental agencies to
be under the Lessee's name who shall be responsible for providing
performance guarantees required under the relevant laws. The Lessee agrees
to retransfer such utility services to be under the Lessor's name after the
Lease Term or any renewal term thereof.
7.6 Subject to the provision under Clause 6.11, The Lessor agrees that the
Lessee may utilize or have the priority right to lease the Additional
Utilized Area as allowed thereunder. The Lessor shall not lease or dispose
of or create any liens or encumbrances on such Additional Utilized Area
throughout the term of this Lease and any renewal period thereof. The
parties agree that said Additional Utilized Area shall be subject further
to Clause 13.
8. TERMINATION:
This Lease shall be terminated if any of the following events occurs:
8.1 The Premises is destroyed, in whole or in part, and the Lessor decides not
to restore the Premises to the previous condition or the Lessee determines
that the Premises are no longer serving the purpose for which the Lessee
entered into this Lease.
8.2 In the event the Lessee is in default or violation of any provision hereof,
the Lessor may, at its option, give to the Lessee 30 (thirty) days written
notice thereof; and if such default or violation has not been cured or made
good within the said 30 (thirty)
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days, the Lessor may forthwith terminate the Lease and demand or claim
against the Lessee for any amount outstanding including any and all damages
whatsoever.
8.3 The Lessee shall have the right upon six (6) months prior written notice
after the expiration of this Lease, and without payment of penalty or
premium, to terminate this Lease.
8.4 After the expiration of the Lease Term, the Lessor shall have the right
upon 6 (six) months prior written notice to terminate this Lease if the
Lessor decides to sell the Premises to a third party and the Lessee, after
it has been offered under Clause 13, refuses to purchase the Premises.
9. RETURN OF THE PREMISES AND DEPOSIT:
9.1 At the end of this Lease, whether by termination, by expiration or by any
other reason other that Clauses 7.2, 8. 1, or force majeure, the Lessee
shall return the Premises to the Lessor in good condition, wear and tear
excepted.
9.2 If, at the time this Lease ends and within 1 month thereafter, the Premises
are not in the required condition in the reasonable determination of the
Lessor, then the Lessor shall notify the Lessee of the deficiency in the
condition of the Premises and the cost of correcting that deficiency. The
Lessee shall then be permitted, at its option, to correct the deficiencies
in the condition of the Premises; provided, however, that such corrective
action must be completed within 60 (sixty) days following the Lessee's
receipt of the Lessor's notice of deficiency. If the Lessee does not
correct the deficiencies within that period of time, to the Lessor's
reasonable determination, the Lessor shall undertake such corrective
action.
9.3 If the Lessee fails to return the Premises to the, Lessor, the Lessee
agrees to pay damages, at a daily rate equal to the normal daily rent to
the Lessor, continuously until the Premises have been repaired to the
satisfaction of the Lessor.
9.4 If the security deposit is inadequate to pay for the correction of any
deficiency in the condition of the Premises, the Lessee shall pay to the
Lessor such additional amounts as are required for this purpose. However,
if the Lessee corrects or repairs the deficiencies, the Lessor agrees to
return the full amount of deposit as referred to in Clause 5 within 7 days
from the date of a notice of returning the Premises is given properly to
the Lessor by the Lessee.
10. RENEWAL OF LEASE:
The Lessee may, at its option, renew this Lease upon the same terms and
conditions prescribed herein except the rent which shall be determined under
Clause 4, for 1 (one) term exercise the of 3 (three) years. If the Lessee
wishes exercise this option, the Lessee shall notify the Lessor in writing 90
(ninety) days prior to the expiration of this Lease. The renewal period will be
subject to the same terms and conditions of this lease.
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11. INSURANCE:
The parties agree that the Lessee shall keep insured the Premises to its full
value throughout the Lease Term by specifying the Lessor and Lessee as co-
beneficiaries and the Lessee shall have the duty to pay the premium. In the
event of any insurance claim in respect of the Premises, the Lessor shall
receive the first Baht 95,000,000 (Ninety-five Million Baht only) of any
insurance monies recovered.
In addition, the Lessor agrees that the Lessee shall be entitled to keep insured
the properties brought onto or installed by the Lessee throughout the Lease
Term, and the Lessee shall be named as the sole beneficiary or sole loss payee
for any insurance proceeds to be received from the insurer(s) or reinsurer(s).
12. ABANDONED PROPERTY:
Subject to any prior written request of the Lessee, all of the Lessee's property
remaining on the Premises after the termination of this Lease shall be deemed
abandoned and may be removed or stored by lessor at the Lessee's expense and
risk of loss or damage.
13. PURCHASE OF PREMISES:
If at any time from the Effective Date the Lessor shall desire to sell the
Premises the Lessor shall notify the Lessee and Lessee shall have the first and
exclusive right to purchase at a Fair Market Value, within 60 days of receipt of
such notice. Should the Lessee fail to exercise the right, the Lessor, upon
expiration of the said period shall be free to sell to any third party provided
that the transferee shall be caused by the Lessor to assume rights and
obligations of the Lessors against the lessee under this Lease.
However, should the Lessor desire to sell the Premises during the renewal
period, the Lessor has the right terminate this Lease under Clause 8.4 provided
that the Lessee shall also have the same first and exclusive right as mentioned
in the first paragraph but the Lessor, without having to cause the transferee to
assume rights and obligations hereunder towards the Lessee.
For the purpose of this Clause, "Fair Market Value" means the amount for which
the Premises (without renovation and/or alteration made onto by the Lessee)
would be sold to a willing buyer by a willing seller, neither being under
compulsion, both parties having reasonable knowledge of all relevant facts and
with equity to both, as agreed to by the parties or as determined by three
appraisers acceptable to both the Lessor and the Lessee or as provided for
herein.
14. NOTICE:
Any notice given hereunder shall be in writing and shall be delivered by hand or
registered letter or facsimile to the parties at the addresses set out below or
at such other address as shall be advised to the other party in writing upon
change.
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IN WITNESS WHEREOF, this Lease is executed in English and Thai (for the purpose
of the lease registration) in triplicate with the same contents. Any
discrepancies occur between the Thai and English versions, the parties agree
that the English version shall be the governing version in interpreting the
intention of the parties under this Agreement. Each party and the competent
land officer keeps one copy. Both parties have read and understood its contents
before the execution of this Lease.
LESSOR: LESSEE:
UNIVERSAL APPLIANCES LIMITED SEAGATE TECHNOLOGY (THAILAND)LIMITED
Address: 889 Thai CC Tower, Address: 1627 Moo 7, Teparuk Road,
18th Floor Room No. 183, Tumbol Teparuk, Amphur Muang,
South Sathom Road, Yannawa, Samutprakarn
Sathom, Bangkok 10120
Fax: 210-0165 Fax: 383-5755
By: /s/ John C.K. Sham By: /s/ Pornchai Piemsomboon
(Mr. John C. K. Sham) (Mr. Pornchai Piemsomboon
Title: Authorized Director Title: Authorized Director
ON THIS __ DAY OF JULY 1994
By: /s/ Jirapannee Supratya
(Mrs. Jirapannee Supratya)
Title: Authorized Director
ON THIS ___ DAY OF JULY 1994
By: /s/ Khun Kumkit Kunavonggorakul Witness By:__________________Witness
(Khun Kumkit Kunavonggorakul
By: /s/ ILLEGIBLE Witness By:__________________Witness
(__________________) (___________________)
(in Hong Kong)
SCHEDULE 1
DESCRIPTION OF THE PREMISES
1. BUILDING
As evidenced by house registration card No. 73 moo 5 Tumbol Bangsamak,
Amphur Bangpakong, Cha Choeng Soa province, total area of 13,400 square
meters. Building pictures and building plan are attached hereto.
2. LAND, PARTLY
As evidenced by Chanod No. 13234, Land ?To. 171, Survey page No. 1138 Book
No. 133, Page 34, located at Tumbol Bangsamak, Amphur Bangpakong, Cha
Choeng Soa province. Total area under the chanod is 18 rai 3 ngan 61
square wah. Total area under the Lease is 8 rai - ngan 50 square wah. A
map showing the boundaries of the land is attached hereto.