CONTRACT OF LEASE

KNOW ALL MEN BY THESE PRESENTS:

This contract of Lease, made and entered this _________day of ____________, 2021 in Roxas City, Capiz
Philippines by and between:

SPOUSES G. ANTONIO T. ARBIS and MADELINE C. ARBIS, both of legal age, Filipino and with residence
address at 800 Centro, Dinginan, Roxas City (hereinafter collectively referred to as the “LESSORS”)
--and –
SOROSORO IBABA DEVELOPMENT COOPERATIVE, a duly registered cooperative under the Cooperative
Development Authority with business address at Sorosoro Ibaba, Batangas City, represented herein by its
Chief Executive Officer, HON. RICO B. GERON, pursuant to the Secretary Certificate
dated_____________(hereinafter referred to as the “LESSEE”);

W I T N E S S E TH; That
WHEREAS, the LESSORS are the beneficial owner of a parcel of land situated at Barangay Lonoy, Roxas
City consisting an area of One Thousand Five Hundred (1,500) square meters, more or less, and is covered by
Transfer Certificate of Title No. 097-2019002415 in the name of the previous owner, Marylou Daliva Billanes
(hereinafter referred to as the “LEASED PROPERTY”);
WHEREAS, LESSORS are willing to lease and the LESSEE is desirous of leasing the abovementioned
PROPERTY under the terms and conditions herein set forth;
NOW, THEREFORE, for and in consideration of the foregoing premises and of the following stipulations
and covenants, the Parties hereunto have agreed as follows:

FUNDAMENTAL LEASE PROVISIONS

LEASED PREMISES One Thousand Five Hundred (1,500) square meters

TERM Fifteen (15) years from Lease Commencement Date

LEASE COMMENCEMENT DATE LESSEE’s first day of commercial operations or expiration of 3

months Rent-Free Period, whichever comes first.

RENT FREE CONSTRUCTION PERIOD Ninety (90) days from start of Construction

MONTHLY RENT Base Rent of –Php 60,000.00 (net of all taxes and deductions)

ESCALATION The Monthly Rent shall be subject to an escalation of:

5% - 2nd to 5th year

7.5% - 6th to 10th year
10% - 11th to 15th year

MANNER OF PAYMENT The Monthly Rent shall be paid at the residence address
of LESSORS or its assigns without necessity of demand or
collection, or on before the tenth (10th) day of the month.

ADVANCE RENTAL Equivalent to Six (6) months rent, inclusive of withholding tax,
or Three Hundred Sixty Thousand (P360,000.00) pesos. To be
applied for the first (6) months of the Lease Term.

SECURITY DEPOSIT Equivalent to Six (6) months rent, non-interest bearing, or

Three Hundred Sixty Thousand (P360,000.00).

1. LEASED PROPERTY – LESSOR hereby Leases, lets and grants, by way of lease, unto LESSEE, and its
successors and assigns, the LEASED PROPERTY.

2. TERM - The term of his Contract of Lease shall be for a period of Fifteen (15) years commencing on the
Lease Commencement Date. LESSEE shall provide LESSORS a Notice of Lease Commencement in the form
attached as Annex ‘C”.
3. TURNOVER & ACCEPTANCE OF LEASED PREMISES – Turnover condition, Prior to actual and physical
turnover of the LEASED PROPERTY by the LESSORS TO THE LESSEE, the latter shall accept in writing the
LEASED PROPERTY from LESSOR. It is hereby understood that the LESSEE has surveyed and inspected the
LEASED PROPERTY and found the same ready for turnover. The LESSORS shall turnover the LEASED
PROPERTY to the LESSEE in the form attached hereto as Annex “D” LESSEE shall accept the LEASED
PROPERTY in the same document, and the parties shall jointly sign and indicate the date for the start of
the Rent-Free Construction Period which shall in no case be later than fifteen (15) days from signing of
this Agreement.

4. RENT FREE CONSTRUCTION PERIOD – The LESSEE shall have the right to construct, build or erect any
improvements, additions or installations on the LEASED PROPERTY from the time of acceptance of the
LEASED PROPERTY by the LESSEE made in writing and Three (3) months thereafter (“CONSTRUCTION
PERIOD’) unless otherwise amended or altered by the Parties in writing

4.1 Pre-operation. The LESSEE shall have no obligation to pay rent for the entire duration of the 3 months
Construction Period. Should LESSEE complete its construction prior to the utilization of the rent free 3
months construction period, the LESSE shall have the right to commence operations within the
Leased Premises, in which event the LESSEE shall commence payment of rent starting from the date
of commencement of such operations.

5. RENT

5.1 Monthly Rent. Effective on the Lease Commencement Date, LESSEE shall pay LESSORS in accordance
with the rates attached as Annex “A” The Rent shall be fixed rent of Sixty Thousand Pesos
(Php60,000.00) monthly The rent shall escalate by five percent (5%) effective year 2 nd to 5th and Seven
a half percent (7.5%) effective year 6th to 10th and 10% percent effective 11th to 15th year.

5.2 Method of Payment. The rental payments shall be paid by the LESSEE to the LESSORS within the tenth
(10th) day of each month of the lease period without notice or demand by tendering twelve (12) post-
dated checks to the LESSORS every year of the lease period. In the event that the deadline for the
payment of any rental, charge or any other amount under and pursuant to this Contract of Lease falls
on a Saturday, Sunday or a legal holiday, payment shall be made on the next succeeding business day
and the LESSEE shall not be considered in default or breach of the provisions of this Contract.

5.3 Taxes. LESSOR – will pay for the Real Property tax for the land.
LESSEE – WITH PAY FOR THE Real Property tax on the building

6. ADVANCE RENTAL – upon execution of this Contract of Lease, The LESSEE shall pay the LESSORS Six (6)
months Advance Rental in the amount of Three Hundred Sixty Thousand (360,000.00) pesos less
withholding tax. This advance Rental shall be applied to the first 6 months monthly rental payments of the
Contract of Lease.

7. SECURITY DEPOSIT – Upon execution of this Contract of Lease, the LESSEE shall pay the LESSOR a Security
Deposit equivalent to Six (6) months Advance Rental in the amount of Three Hundred Sixty Thousand
pesos (360,000.00), which shall be non-interest bearing, as guarantee for the faithful compliance by
LESSEE of all covenants and conditions of this Contract. Said security deposit cannot be applied by LESSEE
to any unpaid rent and shall be kept intact throughout the life of this Contract.

7.1 Return of deposit. The Security Deposit, or any balance thereof, shall be returned to LESSEE only
upon the expiration of this Contract of Lease termination thereof upon grounds provided for in this
Contract within a period of sixty (60) days after LESSEE shall have completely and satisfactorily
vacated and redelivered the LEASED PROPERTY to LESSORS.

7.2 Forfeiture of deposit. In the event that the LESSEE should terminate this Contract of Lease before the
expiration thereof, without just/valid cause or reason, said security deposit or any balance thereof
shall be automatically forfeited by LESSEE in favor of LESSORS, which shall serve as liquidated
damages to the LESSORS.

8 . PERMITS AND LICENSES – LESSEE shall obtain, at its own expense, permits and licenses required by the
City and/or National Government for the construction of LESSEE’S desired improvements and the
operation of its business. LESSORS shall assist the LESSEE in obtaining all the necessary permits, licenses
and clearances, and shall provide the LESSEE with and all documents and instruments needed to obtain
said permits, licenses and clearances. LESSORS shall furnish and provide to the LESSEE all the documents,
 papers and instruments in its possession which are necessary and pertinent to the procurement of said
permits, clearances, certifications, permissions or other authorizations.

9. UTILITIES AND SERVICES – The LESSEE shall pay for all utilities such as electricity, water and telephone. It
shall provide the necessary metering devices and enter into separate contracts with the utility companies.

10. CONSTRUCTION OF IMPROVEMENTS – The LESSEE shall have the right to make any alterations, additions,
improvements, alterations and installations and to the LEASED PROPERTY as it may find suitable based on
the operation and nature of LESSEE’s business.

11. USE OF THE LEASED PROPERTY – The LESSEE agrees to use the Leased Premises for the purpose of
operating a One Stop Shop (CoopMart/Feeds Oulet/Agri Best/Aquacare/Hardware/KoopPinoy/Savings &
Loans). Any conversion or modifications to the agreed Usage shall be subject to the prior written consent
of the LESSORS, which shall not be withheld, conditioned, or delayed. LESSEE shall not divert the LEASED
PROPERTY to other uses or sell commodities, wares and merchandise not normally carried in the line of
business indicated above without the prior written consent of the LESSOR. LESSEE shall have the right to
operate its business for such hours of operation as it may deem necessary and convenient for its
members/ customers.

12. LESSOR’S RIGHT OF ENTRY: The LESSORS or their authorized agent shall, after giving due notice to the
LESSEE, have the right to enter the LEASED PROPERTY in the presence of the LESSE or its representative at
any reasonable hour to examine the same or to exhibit the leased premises to prospective LESSEE, or any
other lawful purposes which it may deem necessary.

13. FORCE MAJEURE – Either Party shall not be liable for any delay or non-performance of its obligations
under this Contract in the event that such is caused by any circumstances of force majeure. Force majeure
is any event beyond the reasonable control of either party, including without limitation, war (whether
declared or not), rebellion, fire (except arson), flooding, lighting, and natural calamities. In the event of
force majeure, the affected Party shall notify other Party without delay.

14. TAXES – For the entire duration of this Contract the LESSORS shall pay the real estate taxes and other
assessments on the PROPERTY subject hereof due to the National Government, its subdivisions,
agencies and instrumentalities. The LESSEE, on the other hand, shall pay the real estate taxes on the
improvements introduced thereto during the term of this Contract of Lease.

Any taxes, including documentary stamps, fees or charges, whether national/local, which my be
imposed by virtue and as a result of the execution, implementation and operation of this Contract of
Lease shall be for the account of the LESSOR. For purposes of this provision, the LESSOR shall provide
the LESSEE with a copy of BIR No. 2000, as well, as other proof of payment of the documentary stamp
taxes and the LESSEE shall provide the LESSOR with a copy of BIR Form No. 2307 for the withheld
taxes.

15. TRANSFER OF RIGHTS AND SUB-LEASE – The LESSOR and the LESSEE shall have the right for any lawful
purpose to assign, or transfer its rights in this Lease upon prior written consent of the other party
which shall not be unduly conditioned, withheld, or delayed to any entity so long as the terms and
conditions of the lease shall be respected. The LESSEE, however, shall not sublet the PROPERTY to any
entity.

16. PRE-TERMINATION OF LEASE BY LESSEE

16.1 if the LESSEE has not yet commenced its construction, the LESSEE can pre-terminate the lease
without caused by serving written notice thereof upon the LESSORS ta least thirty (30) days prior to
effective date of termination. The LESSEE shall forfeit the full amount of the Security Deposit in favor
of the LESSORS. The LESSORS shall, upon pre- termination date and without need of any further
demand, return the balance of advance rental payment after any deductions allowed hereunder. For
this purpose, the rent-free grace period granted to the LESSEE under this Contract shall be considered
nullified, thrust the LESSEE shall be liable for the payment of monthly rent (on the basis of the rental
rate for Year 1) corresponding to the period of time it occupied the LEASED PROPERTY from Turn-over
Date until the effective date of pre-termination. The said monthly rent shall then be deducted from
 the advance payment made thereto by the LESSEE Pre-termination shall take effect on the thirtieth
(30th) day after receipt of the written notice of pre- termination by the LESSORS.

16.1 in case there has been a partial construction of building, the LESSEE can pre-terminate the lease
without cause by serving written notice thereof upon the LESSORS at least ninety (90) days prior
to effective date of termination. The LESSEE shall forfeit the full amount of the Security Deposit
in favor of the LESSORS and without any reimbursement from the LESSORS on the cost of the
partially constructed building. However, the LESSOR has the right to ask the LESSEE for the
demolition of the Building partially constructed at the LESSEE’s cost by giving the LESSEE a
written notice of demolition no later than two (2) weeks from receipt of the LESSE’s written
notice to pre-terminate this Contract. It is understood however that should this be the case, any
proceeds from the structural remains/salvaged materials shall accrue to or for the benefit of the
LESSEE, which the latter may use to offset the costs of demolition. Unless otherwise agreed
upon by the parties, demolition shall be completed within ninety (90) days from receipt of the
LESSORS’ notice to demolish. The LESSOR shall, upon pre-termination date and without need of
any further demand, return the balance of advance rental payment after any deductions
allowed hereunder, For this purpose, the rent-free grace period granted to the LESSEE under this
Contract shall be considered nullified, thus the LESSEE shall be liable for the payment of monthly
rent (on the basis of the rental rate for Year 1) corresponding to the period of time it occupied
the LEASED PROPERTY from Turn-over Date until the effective date of pre-termination. The said
monthly rent shall then be deducted from the advance payment made thereto by the LESSEE. As
and when applicable, the LESSEE has the right to take and/or remove all furniture, equipment,
fixtures, movables, perishable items, stocks and other similar items from the LEASED PROPERTY
as it may deem useful to its business without having to pay the LESSOR therefore. Pre-
termination shall take effect on the ninetieth (90 th) day after receipt of the written notice of pre-
termination by the LESSOR.

17. PRE-TERMINATION OF LEASE DUE TO FORCE MAJEURE – in the case the LESSEE pre-terminates this
Contract where there is an occurrence of Force Majeure, resulting to a closure or destruction of the
building or its inability to continue its regular operations, the LESSEE, after serving written notice to
the LESSORS at least sixty (60) days prior to the intended date of pre-termination, may cancel this
lease without incurring any further liability as a consequence of such pre-termination.

LESSEE shall return the LEASED PROPERTY to the LESSOR,” as –is-where-is”, all costs for transfer of the
ownership of the building shall be borne by the LESSORS. LESSEE shall be entitled to a refund of the
balance of the Security Deposit, less whatever amounts properly chargeable against it under the contract,
and LESSOR shall return the unapplied advance rent within sixty (60) days after surrender and turn-over of
the LEASED PROPERTY. The LESSEE has the right to take and/or remove all furniture, equipment, fixtures,
movables, perishable items, stocks and other similar items from the LEASED PROPERTY as it may deem
useful to its business without having to pay the LESSOR therefore.

18. EVENTS OF DEFAULT

17.1 The LESSORS shall be deemed in default if they pre-terminated the term of the lease without
fault, negligence or default on the part of the LESSEE;

17.2 The LESSEE shall be deemed in default in the following circumstances:

i. It defaults in the payment of the monthly rent for two (2) consecutive months;
ii. It pre-terminates the Contract of Lease without just and/ or valid cause as provided
elsewhere herein;

19. TERMINATION OF LEASE BY EXPIRATION OF TERM – in addition to grounds for termination of this
Contract of Lease provided elsewhere herein, the lease shall be considered terminated upon the
expiration of the lease term. Upon the expiration of term, the LESSORS shall return to LESSEE the
security deposit or any balance thereof paid by LESSEE to the LESSOR not later than sixty (60) days
after the expiration of the lease term period and/ or termination of the Contract of Lease. The LESSEE
will promptly deliver to the LESSORS the LEASED PROPERTY in a good and tenantable condition as
the same is now, ordinary wear and tear expected, devoid of all occupants, movable furniture,
articles and effects of any kind. Non-compliance with the terms of this clause by the LESSEE will give
the LESSORS the right at the latter’s option, refuse to accept the delivery of the premises and compel
the LESSEE to pay rent there from at the same rate plus twenty-five (25%) percent thereof as penalty
until the LESSEE shall have complied with the terms hereof.

20. SALE, TRANSFER AND MORTGAGE: the LESSORS reserve the right to mortgage the LEASED PROPERTY
Provided that a notice thereof must be made to the LESSEE. The LESSOR shall not, however, sell the
LEASED PROPERTY during the effectivity of the leased period.
21. OWNERSHIP OF IMPROVEMENTS AND RETURN OF LEASED PREMISES – Upon cancellation, expiration,
or termination of this Contract of Lease, the Building and all other improvements, alterations,
additions, or installations on the Leased Premises, shall become property of the LESSORS, subject to
the following rules:
21.1 Movables. The LESSEE may remove any movable property introduced to or placed in the LEASED
PROPERTY at its own expense.

21.2. Surrender of Leased Premises. LESSEE’s obligation to pay rent shall cease on the effective date
of cancellation, expiration or termination. Within thirty (30) days from the effective date of
cancellation/termination or from lease term expiry date (the “Grace Period’), as may be further
extended by mutual agreement of the parties, LESSEE agrees to return and surrender the
LEASED PROPERTY in tenantable state and in as good condition as reasonable wear and tear will
permit and without delay whatsoever, devoid of all occupants, furniture, machinery,
equipment, signage’s, and articles and effects of any kind under the terms and conditions
provided elsewhere in this Contract of Lease. In the event that LESSORS acquire the building,
LESSEE may remove such detachable improvements, additions, and installations and other
movable additions and improvements, provided that no substantial damage is caused to the
Building in the process of removal and turn-over the Building to the LESSORS.

22. GENERAL PROVISIONS

22.1 NON-WAIVER. The failure of the Parties to insist upon a strict performance of any of the terms,
conditions and covenants hereof shall not be deemed a relinquishment or waiver of any rights
or remedy that said Party may have nor shall it be constructed as a waiver of any subsequent
breach or default of the terms, conditions, covenants which shall continue to be in full force or
effects. No waiver by the Parties of any of their under this Contract of Lease shall be deemed to
have been made unless expressed in writing and signed by both of them.
22.2
22.3 JUDICIAL RELIEF: Should anyone of the parties herein be compelled to seek judicial relief against
the other, in addition the claim, the losing shall pay an amount equivalent to Twenty (20%)
percent of the amount claimed in the complaint as attorney’s fees which shall in no case be less
than P100,000.00 Pesos, in addition to other costs and damages which the said party may be
entitled to under the law.

22.4 LAW AND VENUE APPLICABLE – This Contract shall be construed, interpreted, and governed by
the laws of the Philippines. All actions under this Contract of Lease shall be instituted at the
paper court of Roxas City to the exclusion of all others.
22.5 BINDING EFFECTS. This Contract of Lease shall be binding not only between the parties thereto
but also upon their respective successors and assigns.
22.6 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 of warranty with respect to this transaction. This Contract may be amended
through an instrument in writing signed by the parties.
22.7 SEPARABILITY CLAUSE. If any terms or provision of this lease shall to any extent be held invalid
or unenforceable, the remaining terms and provisions of this Lease shall not be affected
thereby, but each term and provision of this Lease shall be valid and enforced to the fullest
extent permitted by law.

IN WITNEESS WHEREOF, the Parties hereto have signed this Contract on this _______ day of
__________, 20____________ in Roxas City, Capiz,, Philippines.

G. ANTONIO T. ARBIS SOROSORO IBABA DEVELOPMENT COOPERATIVE

LESSOR LESSEE

BY

MADELINE C. ARBIS ‘
LESSOR HON. RICO B. GERON
Chief Executive Officer
 SIGNED IN THE PRESENCE OF:

__________________________ _________________________

ACKNOWLEDGMENT

REPUBLIC OF THE PHILIPPINES

ROXAS CITY ) S.S

BEFORE ME, a Notary Public for and in ____________, this___day of ___________, 2021, the
parties personally appeared:

Name Evidence of Identity Date/Place Issued

Represented by:
Rico B. Geron CTC 05586829 1/7/2021 / Batangas City

G. Antonio T. Arbis LTO License #FO4-89-013140 6/3/2019 Roxas City.

Madeline C. Arbis CTC 23694489 1/7/2021 Roxas City

and to me known to be the same persons who executed the foregoing Contract of Lease and
acknowledgement to me that the same is their free and v oluntary act and deed and that of the
corporation they represent.

This document consisting of _______(____) pages including the page wherein this
acknowledgement is written, has been signed by the parties, together with their instrumental witnesses
on each and every page hereof.

WITNESS MY HAND AND SEAL on the date and place herein above written.

NOTARY PUBLIC

Doc. No. __________

Page No. __________
Book No. _________
Series of 2021.
Monthly Rent: P60,000.00 Covering sqm 1500.00
Security Deposit: P360,000.00
Advance Rental: P360,000.00

Escalation: 5% / 10%
Yearly Rent Table Rent each month Total Rent for the Year Escalation
Year 1 P60,000.00 P720,000.00 0%
Year 2 P63,000.00 P756,000.00 5%
Year 3 P63,000.00 P756,000.00 0%
Year 4 P66,150.00 P793,800.00 5%
Year 5 P66,150.00 P793,800.00 0%
Year 6 P69,457.50 P833,490.00 5%
Year 7 P69,457.50 P833,490.00 0%
Year 8 P76,403.25 P916,839.00 10%
Year 9 P76,403.25 P916,839.00 0%
Year 10 P84,043.58 P1,008,522.90 10%
Year 11 P84,043.58 P1,008,522.90 0%
Year 12 P92,447.93 P1,109,375.19 10%
Year 13 P92,447.93 P1,109,375.19 0%
Year 14 P101,692.73 P1,220,312.71 10%
Year 15 P101,692.73 P1,220,312.71 0%

Annex A

Monthly Rent Schedule

 ANNEX B

NOTICE OF TURNOVER OF LEASED PREMISES

TO: HON. RICO B. GERON

SOROSORO IBABA DEVELOPMENT COOPERATIVE
Sorosoro Ibaba, Batangas City

Date of Service: _______________

Reference is made to Section 3.2 of the Contract of Lease dated ___________________ entered
into between G. ANTONIO T. ARBIS and MADELINE C. ARBIS (“LESSORS”) and SOROSORO IBABA
DEVELOPMENT COOPERATIVE (“LESSEE”), IDENTIFIED AS Doc. No. _______________ Series of 2021,
in the notarial registry of Atty.______________ notary public for the City of Roxas, for the lease of the
property identified by ICT No: 097-2019002415; 1,500.00 sq.m “LEASED PROPERTY”.

LESSORS has already complied with the conditions stated in the Contract of Lease and is ready
to deliver possession of the LEASED PROPERTY to the LESSEE. This notice is to request the LESSEE’S
acceptance of the Leased Premises.

G. ANTONIO T. ARBIS MADELINE C.ARBIS

LESSOR LESSOR

ACCEPTANCE OF LEASED PREMISES

Date of Acceptance: ________________

This is to certify that the LEASED PROPERTY has been turned-over to LESSEE in compliance with
the turnover conditions stipulated in the Contract of Lease, and is hereby accepted as of the date
indicated.

Based on said Contract, the LESSEE shall have the right to construct, build or erect any
improvements, additions or installations on the LEASED PROPERTY from __________, 2021 and 3
months thereafter (“Construction Period”), which shall be free of rent, unless otherwise amended or
altered by the Parties.

Conforme:

G. ANTONIO T. ARBIS SOROSORO IBABA DEVELOPMENT COOPERATIVE

LESSOR

By:

MADELINE C. ARBIS HON. RICO B. GERON

LESSOR Chief Executive Officer
 ANNEX C

LEASE COMMENCEMENT NOTICE

TO: G. ANTONIO T. ARBIS

MADELINE C. ARBIS
____________________
____________________

Reference is made to Section 2 of the Contract of Lease dated _______________ entered into
between G. ANTONIO T. ARBIS and MADELINE C. ARBIS (“LESSORS”) and SOROSORO IBABA
DEVELOPMENT COOPERATIVE (“LESSEE”) as Doc. No. ________, Page No. _________, Book No.
_____, Series of 20__, in the notarial registry of Atty. ____________________ notary public for the
City of Roxas, Capiż, for the lease of the property identified as TCT No. 097-201902415 (the “LEASED
PROPERTY”)

Please be informed that LESSEE will commence its commercial operations on the Leased
Premises effective the start of business day of ____________________. Under the Contract of Lease,
the start of commercial operations shall be considered as the Lease Commencement Date.

Or

As per Section _____________ of the Contract, Lease Commencement date shall commence on
the start of commercial operations of the LESSEE or expiry of rent-free construction period, whichever
comes first. That, the rent-free construction period on _____________, 2021, without any further
extensions.

Hence, the term of the Contract of Lease shall be for a period of Fifteen (15) years commencing
on _________________________, or until _________________________, subject to amendments,
renewals, or extension as may be agreed upon by the Parties.

Conforme:

G. ANTONIO T. ARBIS SOROSORO IBABA DEVELOPMENT COOPERATIVE

LESSOR LESSEE

MADELINE C. ARBIS By:

LESSOR

HON. RICO B. GERON

Chief Executive Officer