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CONTRACT OF LEASE

KNOW ALL MEN BY THESE PRESENTS:

This Contract of Lease executed by and between:

A-B-C PROPERTIES, INC., a corporation duly organized and existing under and by
virtue of the laws of the Philippines with principal office address at the Starmall Las
Piñas, CV Starr Avenue, Philamlife Village, Las Piñas City, represented herein by its
Senior Vice President, Cynthia J. Javarez, (hereinafter referred to as the "LESSOR");

-and-

DEC FOUNDATION, INC., a non-stock corporation duly organized and existing


under and by virtue of the laws of the Philippines with office address at St. BF Resort
Village, Las Piñas City, represented herein by its Treasurer, Jerry M. Navarrete,
(hereinafter referred to as the "LESSEE").

WITNESSETH: That —

WHEREAS, the LESSOR is the registered owner of four (4) parcels of land located at Brgy
Pulang Lupa Uno, Las Piñas City consisting an aggregate area of Nineteen Thousand Seven
Hundred Fifteen Square Meters (19,715) presently covered by Transfer Certificates of Title
listed in Annex "A" hereof' (hereafter, the "Leased Properties");

WHEREAS, the LESSEE has offered to lease from the LESSOR, and the LESSOR has
agreed to lease to the LESSEE, the Leased Properties, subject to the terms and conditions
hereinafter set forth;

NOW, THEREFORE, for and in consideration of the payment of rents and sums due
hereunder, and the faithful compliance with all the conditions and covenants hereinafter contained,
the LESSOR hereby leases unto the LESSEE, and the LESSEE does hereby accept under lease,
the Leased Properties, subject to the following terms, covenants, conditions and restrictions.

ARTICLE 1
DEFINITIONS & INTERPRETATIONS

1.1 Definition.

As used herein (including the recitals), the following terms shall have the following
respective meanings:

a) “Improvements” shall mean and refer to (i) all buildings, edifices and structures of
any type which may hereinafter be constructed and erected on the Leased
Properties, including permanent land improvements, such as sidewalks, roadways,
lawns, sewers, fences, parking areas, and wells constructed on or beneath the
Leased Properties, (ii) any and all equipment of or pertaining to such buildings or
structures on the Leased Properties, such as elevators, sprinkler systems, electrical
wirings and fixtures; and (iii) any other improvements erected and constructed or
affixed by the LESSEE which cannot be removed without defacing or injuring any
portion of the Leased Properties.

b) “Leased Properties” shall mean and refer to the 4 parcels of land listed in Annex
“A” hereof, copies of the transfer certificates of title of which are attached hereto
as Annexes “B” to “E”

c) “Premises” shall mean and collectively refer to the Leased Properties and
Improvements.

d) “Force Majeure” shall mean an act, event or cause, which is unexpected or


unforeseen, or if foreseen, must be impossible to avoid, or which is beyond the
control of the LESSOR or the LESSEE. The term includes rebellion, insurrection,
strikes on citywide or nationwide scale, flood, typhoon, earthquake, arson, bomb
threats, terrorism, but excludes labor unrest, lockout or work stoppage of the
LESSOR or the LESSEE.

e) “Rental Commencement Date” shall refer to _______________.

1.2 Headings.

The heading or titles of each Article or sub-article herein are used for convenience only,
and do not in any way control, limit or qualify the actual text or meaning of each Article or sub-
article.

ARTICLE 2
LEASE TERM

2.1 Term.

This lease shall be for a term of Five (5) years commencing on ___________ up to and
until __________. No interpretation in the physical possession of the Premises by the LESSEE for
any reason whatsoever shall serve to extend the term of this Contract of Lease. LESSEE may not
pre-terminate the lease without the express written consent of the LESSOR.

This lease may be renewed, at the instance of the LESSEE, upon written notice to the
LESSOR of LESSEE’S desire to renew the lease, which notice should be served at least one (1)
year prior to the expiration of the original lease. In the event that the LESSOR and LESSEE are
unable to agree on the terms and conditions under which this lease shall be renewed within ninety
(90) days from receipt of notice by the LESSOR of the LESSEE’S desire to renew this lease, then
this lease shall automatically terminate at the end of the original lease term herein provided and
the LESSOR shall be entitles to the rights granted under this Contract by reason of such
termination.

Unless otherwise renewed under the conditions established above, this lease shall not be
deemed extended beyond the date specified herein for its termination for any reason whatsoever.
There shall be no tacit renewal of this Contract, notwithstanding the continuation of the LESSEE
in the possession of the Premises for any length of time after expiration of the term of this lease.

If the LESSEE holds over the Premises notwithstanding the expiration or termination of
this Contract of Lease, without the written consent of the LESSOR and/or should the LESSEE
otherwise continue occupying the Premises against the wishes of the LESSOR, the LESSEE shall
be liable for and shall pay the LESSOR, in addition to payment of an amount equivalent to the
current annual rent for every month or fraction thereof that the LESSEE holds over the Premises,
an amount equivalent to thirty percent (30%) of the current annual rent for every month or
fraction thereof that the LESSEE holds over the Premises by way of liquidated damages for such
occupancy and unauthorized possession or use; provided that the payment by the LESSEE of such
liquidated damages shall not be considered as payment for rental nor shall It be construed to
extend or renew this Contract of Lease.

ARTICLE 3
RENT AND OTHER PAYMENTS

3.1 Rental Payment.

As and by way of annual rent for the Leased Properties, the LESSEE shall pay the
LESSOR, the amount of One Peso (Php 1.00) per month, or the total annual rent of Twelve Pesos
(Php 12.00) exclusive of the Value Added Tax (VAT).

The annual rent shall be paid within the period and in the manner provided in Section 3.3
hereof.
3.2 Taxes.

During the term or renewal of this lease, the LESSOR shall be responsible for all real
estate taxes levied on the Leased Properties. In the event that at any time during the term or
renewal of this lease, the real estate taxes on the Leased Properties shall be increased or there
shall be levied any new or additional assessment on the Leased Properties over and above the real
estate taxes currently payable for the year 2013, then the amount corresponding to the increase or
new or additional real estate taxes or assessments on the Leased Properties shall be shouldered
and paid by the LESSEE and such shall be in force on the date the real estate tax, assessment or
charge is increased or imposed. Such amount shall be paid by the LESSEE to the LESSOR within
fifteen (15) days from LESSEE'S receipt of notice or demand from the LESSOR, together with
proof of such increase or new or additional real estate taxes or assessments on the Leased
Properties.

All real estate taxes, assessments or charges on the Improvements shall be for the account
of the LESSEE. LESSEE shall provide the LESSOR with proof of payment of such real estate
taxes, assessments or charges on the Improvements within fifteen (15) days from payment of the
same to the taxing authority.

Other than the LESSOR'S income taxes or taxes required to be withheld from the rentals
due to the LESSOR but which shall be credited against the LESSOR'S income taxes, all taxes to
be due by reason of the receipt of rentals by the LESSOR, including the VAT, and all other
amounts which the LESSEE is required to pay the LESSOR as provided hereunder, as well as the
documentary stamp taxes or other taxes accruing by reason of the execution of this Contract shall
be for the account of the LESSEE. Proof of payment of the correct amount of documentary stamp
tax shall be provided by the LESSEE to the LESSOR within five (5) days from execution of this
Contract.

3.3 Manner of Payment.

The annual rent provided in Section 3.1 hereof shall be paid by the LESSEE to the
LESSOR on the Rental Commencement Date, and subsequently, at least fifteen (15) days prior to
the end of each year.

Such rentals shall be paid at the principal place of business of the LESSOR, or at such
other place as the LESSOR may by notice in writing to the LESSEE from time to rime direct,
without necessity of demand or the performance by a collector of collection services. Payment of
rentals shall be made either in cash or in check made payable in the name of the LESSOR. The
receipt of a check in payment of the rentals due hereunder shall not produce the effect of
payment until the amount thereof is actually received.

Payment of rentals shall be made net of the required withholding tax on rentals. The
LESSEE shall remit the taxes withheld directly to the Bureau of Internal Revenue as required by
law and shall indicate in the creditable withholding tax return to be tiled with the latter that the
taxes being withheld are to be credited to the LESSOR. Proof of such remittance shall be
submitted to the LESSOR within five (5) working days from such remittance. It shall be
understood, however, that the LESSOR shall have the right at any time during the lease term or
renewal thereof to designate a different manner of payment of the rentals due hereunder to the
extent permitted by applicable law and the regulations of the Bureau of Internal Revenue.

3.4 Security Deposit.

Upon execution of this Contract, LESSEE shall pay the LESSOR an amount equivalent to
one (1) month current rent, which shall serve as Security Deposit to answer and stand as security
for the proper and due performance of all the LESSE’S obligations under this Contract- and for all
losses and damages that may be incurred or suffered by the LESSOR by virtue of or in connection
with this Contract. Upon mutual agreement in writing by the parties, LESSOR is hereby
authorized to deduct the real estate tax on the Improvements and/or the LESSEE'S payment for
the increase in real estate taxes on the Leased Properties from the Security Deposit in the event
that the LESSOR is charged or required to pay the same by the taxing authority by reason of
LESSEE'S failure to pay the same as and when required hereunder. The existence of such Security
Deposit, however, does not and should not excuse the LESSEE'S non-payment of rent, or of any
other sum required to be paid hereunder on the due date specified thereof

The LESSEE shall he required to maintain the Security Deposit in the amount equivalent
to 1 month current rent, and such Security Deposit shall be automatically increased
correspondingly by the LESSEE as and when the rent increases without need of notice and
demand. When amounts for real estate taxes on the Improvements and/or I ESSEE'S payment For
the increase in the real estate taxes due on the Leased Properties have been deducted from the
Security Deposit by reason of LESSEE'S failure to pay or deliver the same as provided herein,
LESSEE shall deliver to the LESSOR, within 5 days from receipt of notice, the amount necessary
to update and maintain the Security Deposit to 1 month current rent.

The Security Deposit referred to in this Article shall be lot felted in favor of the LESSOR
upon the occurrence of any of the following:

(i) this Contract is terminated by the LESSEE without the express written consent of
the LESSOR for any reason whatsoever prior to the expiration of the term of the lease or any
renewal thereof;

(ii) on account of any breach, fault, omission or gross negligence on the part of the
LESSEE, which caused serious damage or injury to the business of the LESSOR or prevent the
LESSOR from performing its obligations under this Agreement, during the term of the lease or of
any renewal thereof.

Upon the occurrence of any of these events, the Security Deposit (or any balance thereof
which should otherwise have been returned to the LESSEE had such event not have occurred)
shall be forfeited in Favor of the LESSOR, in addition to whatever damages may be due to the
LESSOR arising from such occurrence. In the event, however, that this lease is terminated at the
instance of the LESSOR without any fault or negligence oldie LESSEE but with its conformity,
the Security Deposit shall be returned to the LESSEE, net of the amounts which may be deducted
therefrom under this Article.

The Security Deposit shall be returned to the LESSEE, without interest, only after the
expiration of the term of this lease and after the LESSEE shall have completely and satisfactorily
vacated and delivered the Premises to the LESSOR, less whatever amounts the LESSEE may
owe the LESSOR or which the LESSOR may apply against the Security Deposit as provided
hereunder. It shall be understood, however, that except as provided in this and other sections of
this Contract, the application of the Security Deposit against any unpaid obligations of the
LESSEE shall be effected only at the termination of the lease. The LESSOR shall,
notwithstanding the delivery of the Premises to the LESSOR by the LESSEE, have the right to
withhold any portion of the Security Deposit until the LESSOR shall have received statements of
account from utility companies supplying telephone, water, electric power or public utility
services to the Premises, covering the period ending on the date the LESSEE shall have
completely vacated and delivered the Premises and until such time that the LESSOR shall have
determined the existence or non-existence of damages and other amounts that may be deducted
from the Security Deposit as provided in this Article. The amount withheld shall answer for the
payment of such statements of account and other damages and charges and the balance thereof
remaining with the LESSOR after such payment shall be returned to the LESSEE.. Likewise, should
the LESSEE have any other obligation which remains due and unpaid under any other contract with
the LESSOR, the LESSOR shall have the right to apply the amount of these unpaid obligations
against the Security Deposit in settlement therefore upon the termination of the lease.

ARTICLE 4
CONSTRUCTION OF IMPROVEMENTS

4.1 Construction of Improvements.

(a) LESSEE shall introduce, construct and complete on the Leased Properties, at
its sole cost and expense, Improvements in pursuit of the LESSEE'S main business in accordance
with plans, specifications, and a detailed description of the work, which shall be approved by the
LESSOR. It is expressly acknowledged and understood by the LESSOR and the LESSEE that
the Improvements shall, at the expiration or termination of this lease, for any cause, become
part of the Leased Properties and be surrendered to the LESSOR, its successors or assigns without
need of reimbursement or payment whatsoever.

(a) LESSEE shall at its own expense engage an architect to prepare preliminary
plans and specifications, and shall prepare and submit to LESSOR such preliminary plans and
outline specifications in sufficient detail to show the design, character and appearance of the
Improvements to be erected. If LESSEE shall fail to submit the preliminary plans and outline
specifications required by this paragraph, LESSOR shall have the right to terminate this lease on
thirty (30) days' written notice.

(a) Within seven (7) days after LESSEE'S submission thereof, LESSOR shall inform
LESSEE in writing of any objections to such preliminary plans and outline specifications and in
such event LESSEE shall have seven (7) days thereafter to propose in writing corrective
amendments which LESSOR shall accept or reject within seven (7) days. Failure of LESSOR to
inform LESSEE of its objections within such periods shall constitute LESSOR'S approval of such
preliminary plans and outline specifications. LESSOR'S approval of such preliminary plans and
outline specifications shall not be deemed approval by LESSOR of the final plans or the complete
detailed specifications and as-built plans hereinafter requited to the extent the same pertain to matters
in addition to or different from the preliminary plans and outline specifications.

(b) Thereafter, LESSEE, at its own expense, shall proceed with the
preparation of complete and final plans and complete detailed specifications in the construction of the
proposed Improvements (hereinafter termed final plans) and shall submit the same to LESSOR For its
approval within seven (7) days from the approval date of the preliminary plans.

(c) Within seven (7) days after LESSEE'S submission of the final plans,
LESSOR shall inform LESSEE in writing of any objections to the final plans, and in such event
LESSEE shall have seven (7) days thereafter to propose in writing corrective amendments which
LESSOR shall accept or reject within the next seven (7) days. If LESSOR shall reject such
amendments, this lease shall terminate and shall be of nor force and effect.

(d) The LESSEE shall submit to LESSOR the final plans, informational data and detailed
drawings which may be required by the City of Cavite in connection with an application for permit and
shall obtain LESSOR'S prior written approval thereof before submitting said plans and drawings to
such government agency or department. Failure of LESSOR to inform LESSEE in writing of its
objections within seven (7) days shall constitute LESSOR'S approval of such plans and detailed
drawings.

(e) LESSEE shall be responsible for choosing a competent and licensed contractor to
undertake the construction of the Improvements and to supervise the construction works undertaken by
such contractor to ensure compliance with all laws and regulations, as well as to ensure that the
construction works are done in accordance with the approved plans. LESSEE shall be responsible and
liable for full payment of all wages, salaries and compensation due to the contractor and to employees
and workers of contractor or any subcontractor and compliance with all labor laws and regulations and
hereby holds the LESSOR free and harmless from any and all liabilities, losses, costs or damages
arising there from.

(f) LESSEE shall, once construction has been commenced, diligently and conscientiously
pursue the construction of the Improvements to completion; provided, however, that in the event
construction ceases for a total period of ninety (90) day.

(g) LESSEE will obtain and copy furnish LESSOR, at its sole cost, all necessary zone
changes, construction permits and licenses for the construction of the Improvements and shall comply
with all local and national laws and regulations concerning the demolition and removal of existing
buildings and structures on the Property, the excavation thereof, and the construction and maintenance
of the Improvements.

(h) LESSEE assumes full responsibility and entire liability for any and all damages or
injuries of any kind whatsoever to any and all persons and to all the property arising from acts or
omissions of the LESSEE, the contractor, its employees or workers which are connected with the
construction of the Improvements and hereby holds the LESSOR free and harmless from and for any
such responsibility or liability.

(i) LESSEE hereby declares and agrees that LESSOR or its duly authorized
representatives shall have the authority to enter the Premises and conduct periodic visits and
inspections thereof during all phases of the construction of the Improvements to check and verify
compliance by the LESSEE and its contractors or subcontractors of their respective obligations and
undertakings under this Contract and to check and verify that the construction is being undertaken in
accordance with the final plans approved by the LESSOR.

4.2 Ownership of -Improvements.

The LESSEE hereby warrants to the LESSOR that the Improvements constructed on the
Leased Properties shall, during the term of the lease or any renewal thereof, be repaired and
maintained to ensure that the value thereof shall not be unreasonably diminished or depreciated upon
expiration or termination of the lease. The Improvements introduced and constructed by the LESSEE
shall automatically become the property of the LESSOR in absolute and exclusive ownership, upon
the expiry or termination of the lease without obligation on the LESSOR'S part to pay or refund the
cost or value to the LESSEE.

The LESSEE shall further undertake the transfer of the name appearing in the Tax Declaration
on the building in favor of the LESSOR upon the expiry or termination of the lease. LESSEE hereby
warrants that all taxes due on such Improvements shall be duly paid and updated as of and up to the
expiry or termination of the lease and prior to the transfer of the Tax Declaration in the name of the
LESSOR.

ARTICLE 5
USE OF LEASED PROPERTIES

5.1 Use of Leased Properties.

The LESSEE shall use the Premises for the purpose of conducting therein the operation of a
commercial mall. I SSE'E warrants to and covenants with the LESSOR that the Premises or any part
thereof shall not be used for any unlawful, disreputable or hazardous business purpose nor shall any
business or operation be used for residential purposes Or as a dwelling place. The LESSEE shall not
alter the purpose Or use of said Premises without the prior written consent of the LESSOR, it being
expressly agreed that it, at any time during the term of this lease and without the previous written
consent of the LESSOR, the said Premises are used for purposes other than what has been agreed
upon, the LESSOR shall have the option to (i) cancel this Contract in accordance with Article 11
hereof and the LESSOR shall and thereupon become entitled to exercise all the rights provided
hereunder; (ii) increase the rental rare; or (iii) compel the LESSEE to stop the unauthorized activities.

5.2 Conduct of Business.

The LESSEE shall at all times, during the term of this lease, conduct its business in a reputable
manner. All government permits or licenses which are necessary or appropriate for the occupancy of
the Premises and the conduct of business by the LESSEE on the Premises shall be obtained by the
LESSEE and furnished to the LESSOR, and shall be maintained by the LESSEE for the duration of
the lease term or renewal thereof, and all costs -and expenses to be incurred in connection with said
permits and licenses shall be for the account of the LESSEE. The LESSEE shall at all times strictly
comply with all reportorial requirements of all concerned government agencies, such as but not limited
to the Securities and Exchange Commission and the Bureau of Internal Revenue and shall submit to
the LESSOR copies of duly filed and received documents such as but not limited to its General
Information Sheet (GIS), Audited Financial Statements and Income Tax Returns.

5.3 No Goodwill.

The grant to the LESSEE of the physical possession, use and enjoyment of the Leased
Properties confers no goodwill or patronage rights over the Leased Properties to the LESSEE, it being
recognized that such rights exclusively belong to the LESSOR as owner of the Leased Properties.
Neither shall the LESSEE have any right to sell or dispose of said goodwill or patronage rights to any
person.
ARTICLE 6
UTILITIES

6.1 Utility Applications and Charges.

All applications and connections for necessary utility services on the Leased Properties shall be
made in the name of the LESSEE only, and the LESSEE shall be solely liable for utility charges as they
become due, including those for sewer, water, electricity and telephone services.

6.1 Interruption of Utilities and Services.

The LESSOR assumes no responsibility for the inadequacy, quality or interruption in the
utilities or services consumed or supplied in or to the Premises.

6.3 Utility Installations.

LESSOR shall provide the necessary connections For the utilities, i.e., electricity, water,
telephone, drainage and sewer, adjacent to the Leased Properties at the most convenient location for
LESSEE.

All costs and expenses that may be incurred for or in connection with installations and
structures of utilities within the Leased Properties, including but not limited to electric posts and wiring,
shall be installed, secured and obtained at the sole expense of the LESSEE.

6.4 Ownership of Utilities.

All such utilities and structures connected to or incidental thereto shall, upon expiration or
termination of the lease be the sole property of the LESSOR without any obligation on the part of the
LESSOR to reimburse or refund the LESSEE for costs and expenses incurred therefore or for the value
thereof. The LESSEE shall further undertake, at its sole expense, the transfer of the name appearing in
the records of the utility companies in favor of the LESSOR upon the expiry or termination of the lease.

ARTICLE 7
INSURANCE

7.1 Insurance Coverage of the Improvements.

The Lessee shall, at all times during the term of this lease and the renewal thereof, at its own
expense, keep all Improvements on the Premises insured against loss or damage by fire, typhoon,
earthquake or destruction for the replacement value of such Improvements with a reputable and
recognized insurance firm in good standing acceptable to the LESSOR, naming LESSOR and LESSEE
as the insured, and with loss payable to the LESSOR and/or LESSEE as hereinafter provided.

The LESSEE binds itself to furnish the LESSOR a copy of the receipt of full payment of the
insurance premium for the Improvements within the first quarter of the insurable period.

The LESSEE shall pay all of the premiums therefore and deliver such policies, or certified
copies thereof, including all endorsements and amendments thereof, to LESSOR. In the event of the
failure of LESSEE either to effect such insurance within thirty (30) days after the completion of the
construction of the Improvements and thereafter at least fifteen (15) days prior to the expiration of any
policy, or to pay the premiums thereof when required, or to deliver such policies or certificates thereof
to LESSOR at least five (5) days before they become effective, the LESSOR shall be entitled, but shall
have no obligation, to effect such insurance and pay the premium therefore, which premiums shall be
repayable to LESSOR in accordance with Article 9 and on the specified date stated in the Statement of
Account. LESSEE guarantees that each insurer shall agree, by endorsement on the policy or policies
issued by it, or by independent instrument furnished to LESSOR, that the policy or policies in question
shall not be altered or cancelled without the written consent of the LESSOR.

7.2 Partial or Total Destruction of the Improvements.

In case of destruction of the Improvements by fire, typhoon and earthquake, partial or total, the
LESSEE shall have the sole prerogative to decide whether or not to reconstruct the Improvements.
(a) In the event the LESSEE decides to reconstruct the Improvements according to its
original or agreed design and specification, this shall be presented to the LESSOR for approval. At this
instance, the LESSOR shall not be entitled to share in the insurance proceeds. However, the LESSEE
binds itself to shoulder any deficiency in the insurance proceeds necessary to reconstruct and complete
the building.

The payment of the rentals provided hereunder shall not be suspended under any circumstance
and shall continue to be paid by the LESSEE as and when such rentals are due.

(b) In the event the LESSEE decides not to reconstruct the Improvement, the LESSEE
shall share the insurance proceeds thereof proportionately with the LESSOR. The LESSOR'S share of
the insurance proceeds shall he determined by multiplying the number of years that the Contract shall
have been in force at the time of the destruction of the Improvements by the amount of the proceeds
then divided by fifteen (15). Upon receipt of the insurance proceeds thereof, this Contract shall be
deemed mutually pre-terminated but without prejudice to the possible renegotiation of a new lease
agreement.

Should the LESSEE decide not to reconstruct the Improvements, the LESSEE shall be obliged to
pay the proportionate rent covering the period from the destruction of the Improvements up to the time the
decision of the LESSEE is conveyed in writing to the LESSOR.

ARTICLE 8
LESSEE'S ADDITIONAL REPRESENTATIONS & COVENANTS

8.1 Maintenance and Repair of the Premises.

The LESSEE shall, throughout the term of this lease and any renewal thereof, keep and maintain
the Premises in good and sanitary condition and repair, at its own cost, and without any expense to
LESSOR. The LESSEE shall also provide itself with receptacles which the appropriate ordinance or
regulations require to hold and contain waste matter, garbage and refuse. The LESSEE shall keep drains,
pipes, sanitary or plumbing apparatus in good and sanitary condition and repair and in accordance with the
requirements imposed by regulations of governmental authorities and the LESSOR. Copies of any
contracts or agreements which the LESSEE may enter into with other persons or entities for the
maintenance and repair of the Premises shall be provided by the LESSEE to the LESSOR immediately
after execution of the same.

The LESSOR shall not be obligated to make any repairs, replacements, or renewals of any kind,
nature or description whatsoever to the Premises.

8.2 Assignment or Transfer.

Without prejudice to the provisions of Section 8.3 hereunder, the LESSEE shall not assign or
transfer its rights under this Contract or any interest herein. Neither this lease, the Improvements, nor the
leasehold right of the LESSEE hereunder shall be subject to voluntary or involuntary assignment, transfer
or sale, or to assignment, transfer or sale by operation of law in any manner whatsoever, and any such
attempted voluntary or involuntary assignment, transfer or sale shall be void and of no effect and shall
entitle the LESSOR, at its option, to terminate this lease.

8.2 Subletting.

It is the essence of the business of the LESSEE that certain activities should be outsourced and
contracted with service providers and suppliers, which require the latter’s presence in the Property. For
which reason, the LESSEE shall have the option to sublet any portion of the Property to its service
providers and suppliers, provided the prior written consent of the LESSOR shall have been obtained,
which consent the LESSOR shall not unreasonably withhold.

8.4 Mortgage.

The LESSEE shall not mortgage, encumber or create any security interest in the Improvements
and to the leasehold rights granted hereunder to the LESSEE.
8.5 Alterations and Additions.

The LESSEE shall have the right to make such alterations, improvements and changes to any
Improvements as the LESSEE may deem necessary, or to replace any such Improvements, provided that
prior to making any structural alterations, improvements or changes, LESSEE shall obtain LESSOR'S
written approval of the plans and specifications therefore and provided the structural integrity of the
Improvements shall not be adversely affected by such alterations, improvements, changes.
The approval by the LESSOR of such alterations, improvements, changes or replacements shall in
no event relieve the LESSEE from the responsibility of obtaining all the necessary permits and licenses
pertaining to such alterations, improvements or installations or from paying the necessary taxes, insurance
premium or fees as shall be necessary or appropriate in connection therewith.

All such alterations, improvements, changes or replacements made by the LESSEE shall become
the property of the LESSOR at the expiry or termination of this lease, without compensation for their value
to the LESSEE.

8.6 Permit to Enter.

The LESSEE shall permit the LESSOR and its authorized representatives at reasonable times
before, during or after construction of the Improvements and/or during the term of this lease or renewal
thereof to enter the Premises for the purpose of determining the LESSEE'S compliance with this Contract.
The LESSOR shall be entitled without incurring any liability whatsoever in the event of an emergency to
enter the Premises as the LESSEE'S attorney-in-fact to conduct the inspection thereof for the protection of
the Premises.

8.7 Inspection prior to Expiry of Lease.

During the last six (6) months immediately preceding the expiration of the term of this lease, the
LESSEE shall allow, during business hours and upon prior written notice, the LESSOR'S authorized
representatives and prospective tenants to inspect the Premises, or any part thereof. During such period, the
LESSOR may exhibit, where it shall think fit, a notice offering the Premises for lease, which the LESSEE
shall not conceal, disturb or obstruct in any way.

8.8 Condition of Premises.

The LESSEE agrees to peaceably and quietly quit and surrender the Premises in good order and
condition to the LESSOR at the expiry Or termination of this lease and subject to the other provisions of
this lease. The surrender of this lease by LESSEE shall terminate all or any existing sublease on the
Premises.

8.9 Third Party Liability and Indemnification.

LESSEE represents and warrants that this Contract will not conflict with, or constitute a breach or
default of the LESSEE'S Articles of Incorporation, By-Laws or any resolution of its Board of Directors, or
any rights of its stockholders, or any contract or other instrument by which the LESSEE is bound, or any
law of the Philippines or any regulation, judgment or order of any office, agency or instrumentality thereof.
LESSOR shall not be liable for any loss, injury, death or accident, or damage to persons or property which
at any time may be suffered or sustained by LESSEE, or any occupant, sub lessee, visitor, user or any
person whosoever at any time may be occupying or visiting the Premises or who may be in, on, or about
the same, whether such loss, injury, death or damage shall be caused by or in any way result from or arise
out of any act, omission or negligence of the LESSEE or of any occupant, sub lessee, visitor or user of the
Premises or any portion thereof, or shall result from or be caused by any other matter or thing whether of
the same kind as or of a different kind than the matters or things above set forth, and LESSEE shall be
solely liable for and shall hold the LESSOR free and harmless from and indemnify the LESSOR from and
against any and all suits, proceedings, claims, demands, actions, liens, liability, loss, damage or
responsibility whatsoever, including but not limited to the reimbursement and payment by the LESSEE. to
the LESSOR of attorney's fees and cost of suit that the LESSOR may incur, on account of such loss,
injury, death, damage or suit. LESSEE hereby waives all claims against LESSOR for damages to the
Improvements that may be placed or built on the Leased Properties and to the property of the LESSEE in,
on or about the Premises, and for injuries to persons or property in or about the Premises, from any cause
arising at any time during the lease or renewal thereof, except those that may arise from the fault or
negligence of the LESSOR, its agents or employees.
8.10 Corporate Authorizations.

LESSEE hereby represents and warrants that this Contract of Lease has been duly authorized,
executed and delivered, and constitutes the LESSEE'S legal, valid and binding obligation, enforceable in
accordance with its terms. The LESSEE'S representative signing and executing this Contract has full
power and authority to bind the LESSEE in accordance with the terms of this Contract.

8.11 No Conflict.

LESSEE represents and warrants that this Contract will not conflict with, or constitute a
breach or default of, the LESSEE’S Articles of Incorporation, By-laws or any resolution of its Board
of Directors, or any rights of its stockholders, or any contract or other instrument by which the
LESSE is bound, or any law of the Philippines or any regulation, judgment or order of any office,
agency or instrumentality thereof.

ARTICLE 9
INTEREST, PENALTY AND APPLICATION OF PAYMENTS

The LESSEE shall pay the LESSOR interest on any amount due hereunder which remains
unpaid on the date on which such payment falls due as provided hereunder at the rate of 2% per
month or at the maximum prevailing interest rate allowed by law, if said maximum prevailing rate is
higher than the prescribed interest rate per month. Interest shall be computed from the date payment
falls due until payment of the outstanding account is effected in full.

In addition, all unpaid amounts excluding interest shall be subject to a penalty equivalent to
the rate of 3% per month based on the total amount remaining unpaid. Penalty charges shall be
computed from the date payment falls due until payment of the outstanding account is effected in
full.
The payment of interest and penalty charges as provided hereunder shall not be a substitute for
and shall be in addition to, the payment of the amount otherwise due there under, and shall not
prejudice the exercise by the LESSOR of any other right or remedy granted to it under this Contract.

Any payment received by the LESSOR shall be applied in the payment of obligations herein
in the following order of priority: (i) first, against the penalty due, (ii) then, against the interest due;
(iii) finally, against unpaid rent, Security Deposit and other charges. Should the payment received be
insufficient to completely settle any outstanding obligation, then subsequent payment(s) to be
received from the LESSEE shall be applied in the payment of such unpaid amount.

ARTICLE 10
LIEN

Unpaid rents and charges payable by LESSEE to the LESSOR for one (1) year under this
Contract shall constitute a preferred lien on ail personal properties of the LESSEE found or located
in the Premises in accordance with Articles 2241 and 2243 of the Civil Code. For this purpose, the
LESSOR is hereby authorized to prevent the removal of the said properties from the Premises or
demand their return from any possessor thereof.

ARTICLE 11
TERMINATION AND ITS CONSEQUENCES

11.1 Events Giving Rise to Default or Termination.

The LESSOR shall have the right to cancel or terminate this Contract upon the Occurrence of
any of the following events:

(a) the term (or renewal) of this lease shall have expired pursuant to Article after the
completion of the construction of Improvements, the Premises shall be closed, deserted or unoccupied
for a continuous period of six (6) months;

(b) the LESSEE shall fail to pay for at least two (2) months utilities accruing in
connection with the Premises, or shall fail to pay the rent or other amount due hereunder on the
date specified herein for its payment;

(b) the LESSEE fails to observe or perform any of the covenants provided there under; or
any of the LESSEE'S representations and warranties as specified hereunder shall prove false in any
material respect when made;
(c) the corporate existence of the LESSEE shall have ceased;

(d) the LESSEE shall become insolvent or be unable to pay its debts when due or shall
commit or permit any act of bankruptcy under the applicable law; or

(e) the occurrence of any event which entitles the LESSOR to exercise its right to cancel or
terminate this lease pursuant to other provisions in this Contract or the occurrence of any breach of any
provision of this Contract.

11.2 Consequences of Default.

Upon the occurrence of any of the foregoing events, the LESSOR shall be entitled to exercise
any of the following remedies, alternatively or cumulatively at its discretion, in conjunction with or
separately from any other right or remedy granted there under or under the law.

(a) The LESSOR is hereby constituted and appointed as the LESSEE'S attorney-in-law
with the following powers and rights upon the occurrence of any of the events specified in
article 11.1: to (i) open, enter, padlock, secure, enclose or fence the Premises or otherwise take
full and complete physical possession and control of the Premises; (ii) assume ownership and
take full control and possession of al improvements; (iii) take an inventory of the equipment,
furniture, articles or merchandise found or located in the Premises which may be removed
there from without defacing or injuring any ceiling, floor, wall or any portion of the Premises,
place any of the same in storage and charge the LESSEE the corresponding storage fee
therefore; in case the LESSEE fails to claim said equipment, furniture, articles or merchandise
from storage and liquidate any liability to the LESSOR within thirty (30) days from the date the
LESSOR takes possession of the Premises or of the LESSEE'S personal properties, to dispose of
said properties in a public sale and to apply the proceeds thereof to the payment of whatever
liability and/or liability and/or indebtedness the LESSEE may have to the LESSOR, including
reasonable expenses incurred by the LESSOR to collect the deficiency, if any. The
appointment of the LESSOR as attorney-in-fact of the LESSEE shall be considered coupled with
an interest, and hence shall be irrevocable.

(b) The LESSOR shall he entitled to collect from the LESSEE, and the LESSEE shall
continue to be liable for, the rental of the unexpired period of the lease, term and the penalty
and interest charges clue thereon (as applicable). The entire Security Deposit constituted under
Article 3.4 shall be forfeited in favor of the LESSOR, and the LESSEE shall continue to be
liable for all amounts which shall be due from it as provided there under. All these amounts
shall be due to the LESSOR in addition to whatever damages the LESSOR may incur or suffer
arising from the termination of this Contract. In no case, shall any amount due there under
from the LESSEE be applied against the Security Deposit, it being understood that the entire
amount thereon shall accrue by virtue of the forfeiture in favor of the LESSOR.

(c) Should the LESSOR be compelled to seek judicial relief against the
LESSEE or any of its employees, agents or representatives, the latter shall, in addition to the
damages mentioned above, pay an amount equivalent to 20% of the amount claimed in the
complaint, as attorney's fees (with a minimum of P50,000.00), aside from the costs of the
litigation and other expenses which the law may entitle the LESSOR to recover from the
LESSEE.

ARTICLE 12
GENERAL PROVISIONS

12.1 Rental Adjustment Due to Extraordinary Inflation.

It is hereby understood and agreed by the parties that the rental stipulated herein is subject to
proportionate adjustment by the LESSOR in case extraordinary inflation supervenes during the
affectivity of this Contract.
12.2 Expropriation

In the event that the entire Premises or more than 50% of the area of the Leased Properties is
expropriated during the period of this lease by any instrumentality of the Government or by any other
entity with authority to exercise such power, either party may rescind this Contract upon giving the other
party thirty (30) days prior notice thereof, without incurring any liability or providing the other party
with any basis for an action for damages. In case of such expropriation, the LESSEE hereby
unconditionally relieves and releases the LESSOR from any and all liability under this Contract in
connection with or arising out of such expropriation proceedings and agrees that the compensation to be
received by the LESSOR belong to it wholly as owner of the Premises.

In the event that the expropriated portion of the Leased Properties is 50% or less than its present
area, the same shall not be a ground for the rescission of the Agreement but rentals corresponding to the
area expropriated shall be deducted from the total annual rentals due from the LESSEE.

12.3 Non- Waiver

The failure of any party to insist upon a strict performance of any of the terms, conditions and
covenants hereof shall not be deemed a relinquishment or waiver of such terms, conditions or covenants,
granted to such party, nor shall it be construed as a condonation of any subsequent breach or default of the
terms, conditions and covenants hereof, which terms, conditions and covenants shall continue to be in full
force and effect. The subsequent acceptance of rent by the LESSOR shall not e deemed to be it waiver of
any prior breach by the LESSEE of any term, covenant or condition for this lease, regardless of
LESSOR'S knowledge of such prior breach at the time of acceptance of such rent. No waiver by the
LESSOR of any of its rights under this Contract shall be deemed to have been made unless expressed in
writing and signed by the LESSOR.

12.4 Notice

Where demand or notice is required to be given under this Contract, notice sent to the LESSEE at
the Leased Premises or at the address specified above by registered mail or by personal delivery, shall be
considered sufficient compliance with the requirement of notice or demand. All notices required to be
given to the LESSOR shall be considered sufficient if sent by personal delivery or registered mail to the
address specified above or to such other place as the LESSOR, upon written instructions, may from time
to time so designate.

12.5 Law and Venue Applicable

This Contract shall be construed, interpreted and governed by the laws of the Philippines.
Each party irrevocably submits to the jurisdiction of the proper courts in Metro Manila for the
purpose of enforcing any right or obligation under or arising out of this Contract. All other venues
are hereby expressly waived.

12.6 Entire Agreement

This Contract constitutes the complete understanding 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 be amended but only with an instrument in writing
signed by the parties.

12.7 No Partnership or Agency

Nothing in this .Agreement shall be consumed as constituting a partnership, agency or joint


venture between the parties. Other than authority of the LESSOR to act as attorney-in-law of the
LESSEE under specific provisions of this Agreement, the employees, agents, workers or contractors
of one party are not and shall not be deemed as employees, agents or contractors of the other, it being
understood that the relationship of the parties hereunder is purely that of LESSOR and LESSEE.

12.8 Additional Terms and Conditions

All the Annexes of this Contract constitute integral parts hereof.


12.9 Counterparts

This Contract may be executed in two or more counterparts, each of which, when properly
signed and executed by the parties, shall be considered originals thereof.

12.10 Covenant of Further Assurances

The parties covenant and agree that, subsequent to the execution and delivery of this Contract
and without any additional consideration, each of the parties shall execute and deliver any further
legal instruments or documents and shall perform such acts which are or may be necessary or proper
to effectuate and carry out the purposes and provisions of this Contract.

12.11 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 herein shall not in any way be affected or impaired.

IN WITNESS WHEREOF, the parties have signed this Contract of Lease on________
____________________at____________________

LESSOR
A-B-C PROPERTIES, INC.
By:

NAME
Senior Vice President

LESSEE
DEC FOUNDATION, INC.
By:

NAME
Chief Financial Officer

SIGNED IN THE PRESENCE OF:


ACKNOWLEDMENT

Republic of the Philippines)


City of ________________)

BEFORE ME, a Notary Public for and in the City of __________________________ this
_____________________ personally appeared the following:

Name Valid Identification Date& Place of Issuance

A-B-C PROPERTIES, INC.


(as represented herein by its president)

DEC FOUNDATION, INC.


(as represented herein by its president)

Known to me and to me known to be the same persons who executed the foregoing Contract of Lease
consisting of _________ ( ) pages, including this page, and they acknowledge to me that the same is
their free and voluntary act and deed.

WINTESS MY HAND AND SEAL at the place and on the date first above written

Doc. No.______
Page No. ______
Book No. ______
Series of ________

“ANNEX A”

Leased Properties
List of Transfer Certificates of Title

TCT No. Title in the Name of Area (sq.m)


T-90560 7,842
T-90561 7,693
T-90562 625
T-87141 3,555
TOTAL 19,715

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