CONTRACT OF LEASE

KNOW ALL MEN BY THESE PRESENTS:

This CONTRACT OF LEASE is made and executed by and between ELMER S.

ESTACION, of legal age, married, Filipino and with residence at 219 Hibbard Avenue,
Brgy. Looc, Dumaguete City, Philippines, hereinafter referred to as the LESSOR:

-and-

SEAN PATTON P. ESTACION, single, of legal age, and residing at 219 Hibbard
Avenue, Brgy. Looc, Dumaguete City, Philippines, JULIUS R. ZERNA, married, of
legal age, and residing at Calindagan Highway, Dumaguete City, and JANETTE P.
SANTOS, of legal age, married, and residing at 144 Hibbard Avenue, Piapi, Dumaguete
City, Philippines, hereinafter referred to as the LESSEES;

WITNESSETH – That:

WHEREAS, the LESSOR is the owner of a lot with a residential building situated
within. This lot is particularly described as Lot No. 504-A-1 evidenced by Transfer
Certificate of Title 109-201500067 issued in Dumaguete City, which is situated in 219
Hibbard Avenue, Brgy. Looc, Dumaguete City, Philippines. The whole lot particularly
described above will be referred hereinafter as “THE LOT”.

WHEREAS, the LESSEES are willing to rent THE LOT including the first floor of
the residential building situated within and will be referred to in this contract of lease as
the “leased premises”.

NOW THEREFORE, for and in consideration of the foregoing premises, the parties
have agreed to enter into this lease agreement, subject to the following terms and
conditions, to wit:

1. TERM OF LEASE: This Contract of Lease shall commence from

____________________ and to end on ______________________, which period may
be renewed or extended upon such terms and conditions mutually agreed by the parties.

2. MONTHLY RENTAL: The monthly rental for the first three years shall
be TWENTY THOUSAND Pesos (P20,000.00), Philippine Currency, but is subject to
increase upon the discretion of the LESSOR provided a one-year prior notice is given to
the LESSEES. Payments of monthly rentals shall be made within the first five (5) days
of each month. Late payment of rent after the 5 th day of each month, shall be subject to a
surcharge of 3% of monthly rental added daily until rent surcharges are fully paid. It is
agreed further that the LESSEES, upon the signing or execution of this contract, shall
pay to the LESSOR the amount of TWENTY THOUSAND Pesos (P20,000.00),
Philippine Currency, which shall cover for the payment of rentals for the period of
_______________ to ____________________ or the month of
____________________, and the additional amount of FORTY THOUSAND Pesos
(P40,000.00), Philippine Currency, which shall serve as deposit for the payment of
unpaid rentals, utility bills (electric, water, telephone, etc.) and for any damage or
prejudice that may be caused in the leased premises by the LESSEES, members of his
family, guests, household members or representatives, clients, and such other persons
brought or invited to the leased premises by the LESSEES or such persons enumerated.

3. PRE-TERMINATION AND RENEWAL: In case the LESSEES decides to

pre-terminate or terminate this Contract of Lease, they shall notify the LESSOR in
writing not less than thirty (30) days before the intended date to vacate or the date of
expiration of the lease, with the added requirement that the LESSEES shall have fully
paid all the rentals due at or before the time he gives said notice. Furthermore, should
the pretermination be made by the LESSEES within the period of six (6) months from
the date of effectivity of this contract, then it is agreed that the above-mentioned deposit
of FORTY THOUSAND Pesos (P40,000.00), Philippine Currency shall be automatically
forfeited in favor of the LESSOR.
In case of pre-termination or termination of this Contract, unpaid rentals and
unpaid electric and utility bills, if any, and damages caused on the leased premises, shall
be paid by the LESSEES from the deposit mentioned in paragraph 2 of this contract
and/or by any of the LESSEE’s properties found in the leased premises which may be
immediately possessed and/or retained by the LESSOR, without the need of any court
order or authority, as security or payment for any unpaid obligation of the LESSEES
under this contract. In this regard, the LESSOR shall have the option to treat the
possessed or retained properties of the LESSEES as payment of the unpaid obligations, if
the LESSEES fails to pay his obligation within thirty (30) days from the time of the
expiration, termination or pretermination of the lease contract. However, the LESSOR
shall have the right to recover from the LESSEES sufficient amount to fully satisfy the
obligation of the LESSEE, if the current or prevailing value of the possessed or retained
property or properties of the LESSEES (which value shall be reckoned at the time the
LESSOR actually possesses or retains said property or properties) and/or the amount of
deposit is lesser than his/her unpaid obligation.

4. IMPROVEMENTS/REPAIRS/MAINTENANCE: The LESSOR allows

improvements, renovations, alterations or any changes to be introduced to the leased
premises provided that permanent improvements should be with prior written consent by
the LESSOR; provided further that these renovations or improvements should not alter,
renovate, destroy, or damage any part of the second floor of the residential building
situated within THE LOT. Any damage caused to the leased premises due to such lease
shall be the responsibility of the LESSEES and to repair such at their expense, but
always with the prior notice and consent of the LESSOR before said repairs or
maintenance is to be done or undertaken.

5. PROHIBITION: The LESSEES are prohibited to sublease the leased premises

or any part thereof to any person or entity without the prior written consent of the
LESSOR.

6. UTILITY BILLS: The LESSEES shall be solely responsible in paying for all the
utility bills like water, power (electric), telephone, or other appliances or electrical
gadgets/items used in the leased premises.

7. TERMINATION OF THE LEASE: At the termination of the lease, the

LESSEES shall peacefully and voluntarily vacate the leased premises without need of
written demand. The LESSEES shall turn over everything that has been entrusted to
them for the purposes of this lease contract, and the leased premises in the same
condition as it was when leased, or deliver it as it is with the approval of the LESSOR.
Unreasonable failure to pay any monthly rental shall ipso facto or automatically
terminate this contract of lease without need of written notice or demand. For this
purpose, the LESSOR is hereby designated by the LESSEES to remove all of the
improvements to THE LOT, or the latter’s personal effects or properties found in the
leased premises should the LESSEES fail to remove the same after the termination of
this lease agreement. If all the rents are paid, all utilities and all bills are paid, and
everything entrusted to the LESSEES returned, and the place is inspected by the
LESSOR and found by him to be in good and satisfactory condition, then the security
deposit or part thereof, if any is left, will be turned-over to the LESSEES.

8. RIGHT TO ENCLOSE PREMISES: Should the LESSEES refuse to

vacate the leased premises despite demand made by the LESSOR for failure to pay any
monthly rental and/or to comply with any of the provision or condition of this contract,
the LESSOR is given the right, notwithstanding any provisions of law to the contrary, to
enclose the leased premises in order to prevent the LESSEES from further using,
enjoying, possessing and/or occupying the leased premises. For this purpose, the
LESSEES are waiving their right to claim or charge against the LESSOR any liability
(civil or criminal) by reason of or occasioned by the exercise of the right or option
granted to the LESSOR under this paragraph.

9. COMPLIANCE: The LESSEES obligates themselves to faithfully comply

with the terms and conditions of this lease contract and, furthermore, comply with all the
requirements of law for the use and occupation of the leased premises.

10. The LESSOR has the right to terminate this contract if there is any violation
committed by the LESSEES on any of the aforementioned terms and conditions.

IN WITNESS WHEREOF, the parties have hereunto affixed their signatures this
________ day of _____________________ in Dumaguete City, Philippines.

ELMER P. ESTACION SEAN PATTON P. ESTACION

Lessor Lessee

Conforme: JANETTE P. SANTOS

_______________________ Lessee

Wife of Lessor
JULIUS R. ZERNA
Lessee

Signed in the Presence of:

1._______________________ 2 .__________________________