EX-10.20



 Exhibit 10.20 

CONTRACT OF LEASE 
 KNOW ALL MEN BY THESE
PRESENT: 
 This Contract of Lease (this “Contract”) made and executed this
1st day of April 2004 at Paranaque City, by and between: 

ALLEGRO MICROSYSTEMS PHILS. REALTY, INC., a corporation duly organized and existing under the laws of the
Republic of the Philippines, with an office address at the 9th Floor Common Goal Tower, Industry Cor. Finance Sts., Madrigal Business Park, Alabang, represented herein by its duly authorized
President, Mr. Francisco N. Meroy, Jr., hereinafter referred to as the LESSOR; 
 and 

ALLEGRO MICROSYSTEMS PHILIPPINES, INC., a corporation duly organized and existing under the laws of the
Republic of the Philippines, with an office address at the 9th Floor Common Goal Tower, Industry Cor. Finance Sts., Madrigal Business Park, Alabang, represented herein by its duly authorized
President, Frederick Reiersen, hereinafter referred to as the LESSEE; 
 WITNESSETH: 

WHEREAS, the LESSOR is the registered owner of a parcel of land, with an approximate area of Five Thousand Five Hundred (5,500) sq.m. more or
less, situated at Paranaque City, covered by Transfer Certificate of Title No. 158614 of the Registry of Deeds for the City of Paranaque, a copy of which is attached herewith as Annex “A” (hereinafter the “Leased Premises”);

 WHEREAS, the LESSOR has offered for lease and the LESSEE desires to lease the Leased Premises; 

NOW THEREFORE, for and in consideration of the foregoing premises and the mutual covenants contained herein, the LESSOR hereby leases upon the
LESSEE the Leased Premises and the LESSEE hereby accepts the same, under the following terms and conditions: 
 1.
        TERM OF LEASE. This lease shall be for a period of fifty (50) years commencing on 1 April 2004 to 31 March 2054, renewable for another twenty-five (25) years by giving written
notice to renew at least ninety (90) days prior to the expiration of the original fifty-year term, upon terms and conditions mutually agreed by the parties. 

2.         RENTALS. The LESSOR shall pay annual rentals in the amount of Five Million
One Hundred Five Thousand One Hundred Pesos (P 5,105,100.00) payable in advance within five (5) days from the start of the year, exclusive of VAT. The annual rentals shall be subject to escalation equivalent to one percent (1%) at the end of
every five (5) years. 
 3.         REAL ESTATE TAXES. All real estate taxes
levied or assessed or those which may thereafter be levied or assessed on the Leased Premises shall be for the account of the LESSEE for the duration of the lease. 

4.         SECURITY DEPOSIT. Upon signing of this Contract and upon delivery of the
LESSOR of the Leased Premises to the LESSEE, the LESSEE shall remit the sum of Four Hundred Twenty-Five Thousand Four Hundred Twenty-Five Pesos (P 425,425.00) (the “Security Deposit”). The Security Deposit shall remain intact during
the entire term of this lease and shall not be applied by the LESSOR as payment for rentals, but shall serve as security to answer for any unpaid utility bills, charges and other obligations due to the LESSOR under this Contract,








 
and real property taxes due on the improvements introduced by the LESSEE, which are payable by the LESSEE at the termination or expiration of this Contract. The Security Deposit shall be refunded
by the LESSOR and returned to the LESSEE, within thirty (30) days after the expiration or termination of this Contract and after presentation by the LESSEE to the LESSOR of proof that the former has paid all of its utility bills and real
property taxes, if any, and provided that the LESSEE has vacated the Leased Premises. 
 5.
        USE OF THE LEASED PREMISES/SUB-LEASE. The LESSEE shall use the Leased Premises for any lawful purpose. The LESSEE shall have the right to sub-lease all or any portion of the Leased Premises to any third party, upon written notice thereof to the LESSOR. 

6.         ALTERATIONS/IMPROVEMENT. The LESSEE shall have the right to erect upon the
Leased Premises a laboratory, warehouse, office building, and install such machinery, facilities and equipment as it may consider necessary for the operation of their business thereon, without the need of the consent of the LESSOR, provided that the
improvements installed are necessary and appropriate for the use or purpose provided in paragraph 5 hereof. 

Upon expiration or termination of this Contract, permanent physical improvements introduced by the LESSEE on
the Leased Premises during the term of this Contract, excluding those improvements made on the existing building owned by the LESSEE, which cannot be removed therefrom without damage to such improvements and to the Leased Premises, shall vest in and
become the property of the LESSOR without obligation on the part of the LESSOR to refund its value or cost to the LESSEE. Unless the parties agree to another extension of the term of the lease, the LESSOR shall purchase the aforementioned existing
building and the permanent improvements thereon from the LESSEE at the depreciated value at the time of the aforementioned expiration or termination of Contract. 

7.         UTILITIES AND SERVICES. Payment of all utility bills,
including electric, telephone and water bills, if any, shall be for the account of the LESSEE. 
 8.
        OPTION TO PURCHASE. Should the LESSOR decide to sell the Leased Premises, the LESSEE shall be granted the first option to purchase the Leased Premises at the same terms and conditions as offered by the
LESSOR to a third party, and such option shall be exercisable by the LESSEE within sixty (60) days from receipt by the LESSEE of written notice of LESSOR’s intention to sell or transfer the Leased Premises. The LESSEE shall have the right
to assign its option to purchase the Leased Premises to a qualified designee. 
 9.
        SALE OR ENCUMBRANCE OF PREMISES. In the event of a sale, transfer, or mortgage or any encumbrance of the Leased Premises to any person other than the LESSEE, the LESSOR shall warrant and ensure that
the purchaser, transferee, mortgagee or person in whose favor the encumbrance is constituted shall respect all the terms and conditions of this Contract, including the provision for renewal thereof. To this end, the LESSOR shall cause the pertinent
deed or agreement with such person to reflect this foregoing commitment. 
 10.
      TERMINATION. (a) The LESSOR shall have the right to terminate this Contract upon a thirty (30) day prior written notice to the LESSEE in any of the following instances: 

 

	 	 (i)	 the LESSEE fails to pay rentals; or 



 

	 	(ii)	 in the event of any violation by the LESSEE of the terms and conditions stipulated in this Contract and the
LESSEE fails to rectify or remedy the default within sixty (60) days from its receipt of written demand from the LESSOR. 



(b)       The LESSEE shall have the option to terminate this Contract upon a
thirty (30) day written prior notice to the LESSOR in the event of any breach by LESSOR of this Contract, 







 
and the LESSOR fails to rectify or remedy such breach for default within sixty (60) days from its receipt of the written demand of LESSEE. 

(c)       Should the LESSEE decide to
pre-terminate this Contract without just cause, the LESSEE shall forfeit as liquidated damages in favor of the LESSOR the Security Deposit and LESSOR is without further recourse of any other remedy at law or
in equity. 
 (d)       In the event of termination by the LESSOR of this
Contract for causes under (a), the LESSEE shall forfeit the Security Deposit as liquidated damages in favor of the LESSOR. 

11.       RETURN OF PREMISES. Upon expiration or termination of this Contract,
the LESSEE shall immediately vacate the Leased Premises and peacefully surrender complete possession thereof to the LESSOR, devoid of all occupants, furniture, articles and effects of any kind, in the same good and tenantable condition, normal wear
and tear excepted and other than fur such alterations, additions or improvements which pertain to the LESSOR in accordance with the provisions of Paragraph 6 hereof. 

12.       ENTIRE AGREEMENT. This Contract represents the entire agreement between
the parties with respect to the subject matter hereof and supersedes any prior expression of intent, representation or warranty with respect to this transaction. This Contract may only be modified by an instrument in writing signed by both parties.

 13.       ARBITRATION AND VENUE. The parties agree to settle any and all
disputes by binding arbitration in accordance with the rules of the Philippine Dispute Resolution Center, Inc. In the event that the LESSOR initiates arbitration proceedings, venue for arbitration shall be the Commonwealth of Massachusetts, U.S.A.
and in the even that the LESSEE initiates arbitration proceedings, the venue for arbitration shall be Manila, Philippines. 

14.       SEVERABILITY. If any one or more of the provisions of this Contract is
declared invalid or unenforceable in any respect under any applicable law, the validity, legality or enforceability of the remaining provisions contained therein shall not in any way be affected or impaired. 

IN WITNESS WHEREOF, the parties have hereunto affixed their signatures on the date and place first above stated. 

 

			
	 ALLEGRO MICROSYSTEMS
 PHILIPPINES
REALTY, INC.
 (LESSOR)
	  	 ALLEGRO MICROSYSTEMS
 PHILIPPINES,
INC. (LESSEE)


  

									
	By:	 	/s/ Francisco N. Meroy, Jr.	 		 	By:	 	/s/ Frederick Reiersen
		 	FRANCISCO N. MEROY, JR.	 		 		 	FREDERICK REIERSEN


 Signed in the presence of: 
  

											
		 	/s/ [Illegible]	 		 		  	/s/ [Illegible]	  	








 ACKNOWLEDGMENT 

REPUBLIC OF THE PHILIPPINES) 
 CITY OF MAKATI) S.S. 

BEFORE ME, a Notary Public for and in the CITY OF MAKATI, this APRIL 01, 2004, personally appeared: 

 

					
	Name                            	  	Community Tax Cert. No.            	  	Date/Place Issued                
	Francisco N. Meroy, Jr.	  	22655674	  	01-20-04 Paranaque
	Frederick D. Reiersen	  	22683025	  	02-18-04 Paranaque

 known to me and to me known to be the same persons who executed the foregoing Contract of Lease and who
acknowledged to me that the same is their free and voluntary act and deed as well as that of the corporation they represent. 
 WITNESS MY
HAND AND SEAL on the date and place first above written. 
  

					
	Doc. No.	  	333;  	  	
	Page No.	  	68;  	  	
	Book No.	  	III;  	  	
	Series of 2004.	  	

  

	
	Joselito M. Bautista
	Notary Public
	Until December 31, 2004
	PTR 11 8807700-1/31/04- Makati City
	TIP No. 606122-753104 Makati










																	
	 	 	ALLEGRO MICROSYSTEM PHILS. REALTY INC.	  	 	  	 	  	 	  	 	  	 
	 	 	RENT INCOME	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 	 	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 	 	Year Covered	  	Rent/Year	  	Total Rent / 5 Years	  	 	  	Rental Income	  	Income Per IAS 17  	  	 
	 	 	From	  	To	  	(1% Escallation   every 5 years)	  	(1% Escallation every 5   years)	  	 	  	(as of February 2005)  	  	(every 5 years)	  	Variance
	 	 	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 	 	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 	 	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 	 	April 1, 2004	  	February 28, 2005	  	 	  	4,679,675.00	  	A.) P 425425 x 11 Months 	  	4,679,675.00	  	4,903,774.92	  	224,099.92    
	 	 	March 31, 2005	  	March 31, 2009	  	5,105,100.00	  	20,845,825.00	  	B.) Rental Income for the next 49 months	  	 	  	27,193,660.92	  	 
	 	 	April 1, 2009	  	March 31, 2014	  	5,156,151.00	  	25,780,755.00	  	 	  	 	  	26,747,863.20	  	 
	 	 	April 1, 2014	  	March 31, 2019	  	5,207,712.51	  	26,038,562.55	  	 	  	 	  	26,747,863.20	  	 
	 	 	April 1, 2019	  	March 31, 2024	  	5,259,789.64	  	26,298,948.18	  	 	  	 	  	26,747,863.20	  	 
	 	 	April 1, 2024	  	March 31, 2029	  	5,312,387.53	  	26,561,937.66	  	 	  	 	  	26,747,863.20	  	 
	 	 	April 1, 2029	  	March 31, 2034	  	5,365,511.41	  	26,827,557.03	  	 	  	 	  	26,747,863.20	  	 
	 	 	April 1, 2034	  	March 31, 2039	  	5,419,166.52	  	27,095,832.60	  	 	  	 	  	26,747,863.20	  	 
	 	 	April 1, 2039	  	March 31, 2044	  	5,473,358.19	  	27,366,790.93	  	 	  	 	  	26,747,863.20	  	 
	        	 	April 1, 2044	  	March 31, 2049	  	5,528,091.77	  	27,640,458.84	  	 	  	 	  	26,747,863.20	  	 
	 	 	April 1, 2049	  	March 31, 2054	  	5,583,372.69	  	27,916,863.43	  	 	  	 	  	26,747,863.20	  	 
	 	 	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	Total Income	  	 	  	267,053,206.22	  	 	  	 	  	  272,828,204.64	  	 
	Total Months covered (PPer Contract)	  	 	  	 	  	 	  	 	  	 	  	 
	Total Monthly Income Per IAS 17	  	 	  	 	  	 	  	 	  	445,088.68	  	 
	 	 	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 	 	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 	 	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	Notes:	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 1. Caption    A.) represents rental income for the first 11
months
  
	  	 	  	 	  	 	  	 	  	 	  	 
	
 B.) rental income for the succeeding 61 months  
	  	 	  	 	  	 	  	 	  	 	  	 
	2. Rental accelerates @ 1% every five (5) years as per contract	  	 	  	 	  	 	  	 	  	 	  	 
	3. Total monthly income per IAS 17	  	 	  	 	  	 	  	 	  	 	  	 
	 	 	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 	 	Total income per contract	  	 	  	 	  	267,053,206.22	  	 	  	 	  	 	  	 
	 	 	Divided by: total months per contract (50yrs x 12)	  	 	  	600	  	 	  	 	  	 	  	 
	 	 	Total Income per IAS 17	  		  	445,088.68