Contract of Lease

CONTRACT OF LEASE KNOW ALL MEN BY THESE PRESENTS: __________., a corporation duly existing under and by virtue of the laws of the Republic of the Philippines, with principal place of _____, hereinafter known as the LESSOR; _______, of legal age, Filipino, married, and a resident of_______, Philippines, hereinafter referred to as the LESSEE; WITHNESSETH: That the LESSOR is the owner of a hotel building known under the name and style ____________, together with lot on it which it is erected, and the other lot being occupied by a residential house, all situated at, which the LESSOR hereby leases unto the LESSEE, and the latter accepts the same in lease from the former, subject to the following terms, conditions and stipulation, to wit: 1. TERM OF LEASE—The term of this lease is FIFTEEN (15) years effective 01 March 2017 and expiring on the midnight of 01 March 2032, renewable thereafter for another FIFTEEN (15) years at the option of the LESSEE; to be communicated by the LESSEE to the LESSOR at least thirthy (30) days before the expiration of the lease; 2. RENTAL — The parties herein agree that the rentals per month of the Leased Premises shall be PESOS: ONE HUNDRED FOURTY EIGHT THOUSAND (P148,000.00) ONLY throughout the first three (3) years of the FIFTEEN (15) years contract, with a fixed yearly increase of Five Percent (5%) from 4th year and 5th year and increase of 3% beginning at the sixth (6th) year up to the FIFTEEN (15th) year term, regardless of any inflation or deflation in the economic condition at any given time, payable monthly without the necessity of demand; Upon execution hereof, the LESSE shall pay Four (4) months advance rentals in the amount of PESOS: FIVE HUNDRED SEVENTY TWO THOUSAND ONLY (P572,000.00), Philippine currency, and two (2) months deposit amounting to PESOS: TWO HUNDRED EIGHTY SIX THOUSAND ONLY (P286,000.00), Philippine currency, provided, however, that said deposit shall be refunded to the LESSEE by the LESSOR upon expiration of the lease less the amount of unpaid rentals or damages caused intentionally or accidentally by the guests or employees of the LESSEE; That a 5% penalty from rental payment, shall applied for late payment after Six (6) months from the date of signing while under construction;

3. COVERAGE OF LEASE – This contract covers the hotel building and lot, together a big kitchen adjacent thereto. The LESSEE agrees to take good care of these properties in the concept of a good father of a family so that any damage or destruction thereto caused by the negligence or carelessness of the LESSEE, its employees and guests shall be paid by the LESSEE to the LESSOR in the appropriate value thereof; 4. USE OF PREMISES The premises shall be used exclusively for hotel and restaurant business. However, changes in methods of operation may be made by LESSEE in the interest of profitability. No gambling in any form shall be allowed in the premises; 5. SUB-LEASING THE PREMISES — The LESSEE shall have right to sublease, transfer, convey or assign its rights under this contract to any third party directly or indirectly, without the written consent of the LESSOR;

6. CONDITION OF PREMISES, REPAIRS AND MAINTENANCE—The LESSEE expressly acknowledges that the leased premises is in reasonable and tenantable condition and agrees to keep it in such condition. He shall deliver the leased premises at the end of the lease in the same reasonable and tenantable condition. The LESSEE shall also have the right to introduce temporary or permanent improvements therein by securing the written consent of the LESSOR. However, the one (1) bar and restaurant now existing as they are, may be renovated to the specifications of, in any manner, shape and form by the LESSEE without the consent of the LESSOR. Upon the termination of the contract of lease, all such improvements caused by the LESSEE shall belong to the LESSOR, without the need of reimbursement; major repairs caused by natural disaster shall be for the account of the LESSOR. Ordinary repairs within the premises that arise in the daily use of the leased premises shall be at the exclusive account of the LESSEE, provided however, that the LESSOR shall repair the roof on the bar as well as the roof on the apartelle only for the first year of the rent thereafter, the LESSEE shall answer for the minor or ordinary repairs of the leased premises; 7. ELECTRICITY, TELEPHONE, WATER AND OTHER FACILITIES AND SERVICES The LESSEE shall pay for and defray at his own expense the consumption on electricity, telephone, water and other facilities and services; 8. PROHIBITION ON STORAGE OF CERTAIN MATERIALS, ELECTRICAL CONNECTIONS —The LESSEE shall not bring into or store in the premises any inflammable combustible or explosive goods, wares, elements or materials more that what is basically necessary in the hotel and restaurant business, in order not to

expose the same from fire or shall the LESSEE make electrical connections which will unduly overload the electrical installation as these may endanger or expose the premises to fire; 9. INSURANCE — the LESSEE shall insure the building and all the equipment and fixtures existing thereon from the risk of fire, the beneficiary of which insurance proceeds shall inure to the benefit of the LESSOR only; P10,000,000.00 — total coverage of the building; 10. VISITORIAL RIGHTS OF THE LESSOR — the LESSOR or its authorized representative can enter the leased premises during reasonable hours to make periodic inspection therein; 11. LIABILITY FOR THE ACTS OF ITS EMPLOYEES AND GUESTS ENTERING THE LEASED PREMISES – The LESEE shall be responsible at all times for the acts of its employees and guests entering the leased premises. Any damage or injury to the premises caused by the fault or negligence of said persons shall be repaired promptly by the caused by the fault or negligence of said persons shall be repaired promptly by the LESSEE at his own expense; 12. LEGAL ACCESS —That the LESSEE is allowing or giving free and unhampered access to the LESSOR on the use of the leased premises in going to and from the adjoining lot or lots likewise leased by the LESSEE and also belonging to the LESSOR or its sister company; 13. COMPLIANCE WITH LAWS AND ORDINANCES — The LESSEE shall comply with any and all laws, ordinances, regulations or orders of the National and/or City Government authorities arising from the use, occupation, safety and sanitation of the premises and the like. Failure to comply herewith shall make the LESSEE liable therefore; 14. LEGAL ACTION — In case it becomes necessary to enforce this contract by legal action, the same may be brought within the jurisdiction of the Courts of Angeles City and whoever is the guilty party, hereby agrees to and covenants to pay, in condition to the amount of damages, the costs of litigation and attorney's fees; 15. NATURAL DISSTER OR ACT OF GOD — In case the hotel and the motel business and the community were destroyed by natural disaster or act of God, then this lease contract becomes null and void and of nor force and effect; should the area recover from such disaster, the LESSEE shall have the option to lease the premises with rent deduction to compensate for losses as a result of the closure or stoppage of business;

16. APPLICABLE LEGAL PROVISIONS — It is the essence of this agreement that the pertinent provisions of the New Civil Code of the Philippines governing these agreements shall be applicable to the parties herein insofar as they are not indirect conflict with the express provisions on this contract;

IN WITNESS WHEREOF, the parties and their instrumental witnesses, have hereunto set their hands on this ____ day of ________, 2017 at Angeles City, Philippines. LESSOR

LESSEE

BY:

BOARD OF TRUSTEE OWNER SIGNED IN THE PRESENCE OF:

WITNESS

WITNESS ACKNOWLEDGMENT

REPUBLIC OF THE PHILIPPINES ) CITY OF ANGELES

) S.S.

BEFORE ME, a Notary Public, for and in the CITY OF ANGELES, personally appeared Name

Competent Evidence of Identity

Date/Place Issued

________________________ __

_______________________ __

_____________________ __

_______________________ __

_____________________ __

In their capacity as Board of Trustee and Owner, respectively, of the entities herein represented, know to me to be the same persons who executed the foregoing instrument and acknowledged to me that the same is their free act and voluntary deed as well as the said entity. This document consisting of FOUR (4) pages including this page wherein the continuation of the acknowledgement is written, refers to an AGREEMENT TO CANCEL LEASE, duly signed by the parties on each and every page thereof, together with their instrumental witnesses. WITNESS MY HAND AND SEAL this _______ of _________, 2017

Doc. No.

__________

Page No.

__________

Book No.

__________

Series of

__________

AGREEMENT TO CANCEL LEASE

This Agreement to Cancel Lease is made and effective June 21, 2017. BETWEEN BONANZA HOTEL & MOTEL, INC. the LESSOR,) a corporation organized and existing under the laws of the Republic of the Philippines, with principal place of business at San Pablo Street, New Valley Subdivision, Angeles City Pampanga, represented herein by its President TERESA CO, of legal age Filipino, widow and a resident of Angeles City, Philippines, hereinafter know to as the LESSOR; AND: PONDEROSA CORPORATION, a corporation organized and existing under the laws of the Republic of the Philippines, with principal office located at San Pablo Street, New Valley Subdivision, Angeles City, Pampanga, represented herein by its Treasurer, MELVIN THURKETTLE, of legal age, British citizen and residing at Angeles City, Pampanga, hereinafter knows as the LESSEE; Whereas the LESSOR and the LESSEE executed a lease dated 01 August 2011 and expiring on the midnight of 31 July 2021 (the LEASE) of a hotel building under the name and style BONANZA HOTEL and RESTAURANT together with a lot on it which it is erected and the other lot being occupied by a residential house, all situated at New Valley Subdivision, Angeles City (the PREMISES) but the parties now wish to cancel the Lease; It is agreed as follows: TERMS 1. In return for the LESSEE vacating the Premises on or before the 21st of June 2017 (the TERMINATION DATE], the Lease is cancelled effective that date

and the parties will have no further obligation to each other under the Lease. 2. Nothing in this agreement operates to discharge obligations and liabilities accrued under the Lease up to the date of its cancellation. 3. This agreement binds and benefits the parties and their respective heirs, executors, administrators, personal representatives, successors and assigns. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

BONANZA HOTEL & MOTEL, INC. LESSOR By:

PONDEROSA CORPORATION LESSEE By:

BOARD OF TRUSTEE

MELVIN THURKETTLE TRESURER

SIGNED IN THE PRESENCE OF:

WITNESS

WITNESS ACKNOWLEDGMENT

REPUBLIC OF THE PHILIPPINES ) CITY OF ANGELES ) S.S. BEFORE ME, a Notary Public, for and in the CITY OF ANGELES, personally appeared: Name

Competent Evidence of Identity

Date/Place Issued

________________________ __

_______________________ __

_____________________ __

Melvin Thurkettle

Passport #026510181

03-26-97/United Kingdom

In there capacity as President and Treasurer, respectively, of the entities herein represented, know to me to be the same persons who executed the foregoing instrument and acknowledged to me that the same is their free act and voluntary deed as well as the said entity. This document consisting of TWO (2) pages including this page wherein the continuation of the acknowledgement is written, refers to an AGREEMENT TO CANCEL LEASE, duly signed by the parties on each and every page thereof, together with their instrumental witnesses. WITNESS MY HAND AND SEAL this 21st of June, 2017. Doc. No.

__________

Page No.

__________

Book No.

__________

Series of

__________