A. Lease Contract

LEASE CONTRACT KNOW ALL MEN BY THESE PRESENTS: This CONTRACT OF LEASE is made and executed at the City of Iloilo, this 1st day of January, 2005, by and between: APPLE CORPORATION, a corporation organized and existing under Philippine laws, with principal office at Iloilo Business Park, Megaworld Boulevard, Mandurriao, Iloilo City, Philippines, represented herein by its President and CEO, Ms. Purple Twinkle Star, and hereinafter referred to as the “LESSOR.” -ANDA BLUE VALENTINE, SCARLET SNOW, and RED SPARROW, Filipino citizen, of legal age, and whose residence and postal address is at Brgy. Calumpang, Molo, Iloilo City, Philippines, and hereinafter referred to as the “LESSEES.” WITNESSETH: WHEREAS, the LESSOR is the absolute and registered owner of THE LEASED PREMISES, with all the improvements thereon, consisting of a total land area of ONE THOUSAND EIGHT HUNDRED TEN SQUARE METERS (1,810 sq. mtrs), more or less, situated at Zone 1, Brgy. Calahunan, Mandurriao, Iloilo City covered by Transfer Certificate of Title No 1234 issued by the Register of Deeds of Iloilo City and Tax Declaration No. 1234 copies of which are hereto attached as Annexes “A-1” and “A-2,” respectively; WHEREAS, the LESSOR has agreed to lease-out the entire property as described above to the LESSEES and the LESSEES are willing to lease the same; NOW THEREFORE, for and in consideration of the foregoing premises, the LESSOR leases unto the LESSEES and the LESSEES hereby accept from the LESSOR the LEASED premises, subject to the following terms and conditions: 1. PURPOSES:

That premises hereby leased shall be used exclusively by the LESSEES for residential purposes only and shall not be diverted to other uses. It is hereby expressly agreed that if at any time the premises are used for other purposes, the LESSOR shall have the right to rescind this contract without prejudice to its other rights under the law.

2. TERM: This term of lease is for FIVE (5) YEARS from 1 January 2005 to

1 January 2010 inclusive. Upon its expiration, this lease may be renewed under such terms and conditions as may be mutually agreed upon by both parties, provided that a written notice of intention to renew the lease shall be served to the LESSOR not later than seven (7) days prior to the expiry date of the period herein agreed upon. 3. RENTAL RATE:

The monthly rental rate for the leased premises shall be in THREE THOUSAND PESOS (Php 3 000.00), Philippine Currency. 1

All rental payments shall be payable to the LESSOR or through its authorized representative/s. 4. DEPOSIT:

The LESSEES shall deposit to the LESSOR upon signing of this contract and prior to move-in an amount equivalent to the rent for THREE (3) MONTHS or the sum of NINE THOUSAND PESOS(Php 9,000.00), Philippine Currency, wherein the two (2) months deposit shall be applied as rent for the 11th and 12th months and the remaining one (1) month deposit shall answer partially for damages and any other obligations, for utilities such as Water, Electricity, CATV, Telephone, Association Dues or resulting from violation(s) of any of the provision of this contract.

5. DEFAULT PAYMENT:

It is expressly agreed upon that should the LESSEES fail to pay monthly rental or should any of any of the check for any payment be dishonored for whatever reason, the LESSOR shall first issue a written demand to the LESSEES within five (5) days from default or breach and in case of non-payment after the expiry of the period stated in the demand letter, the LESSOR, at its option, may terminate this contract and eject the LESSEES. In such event, the LESSSOR or the latter’s representative is authorized to enter into the leased premises, take possession thereof, and expel the LESSEES and the latter’s agents and effects from the leased premises, all without necessity of a prior court action. It is likewise agreed under the foregoing case that the LESSEES shall continue to pay the monthly rentals until the possession of the leased premises is fully returned or taken over by the LESSOR. All arrears in rentals shall bear interest at the rate of three (3) % a month as penalty without prejudice to any other remedy available to the LESSOR under this contract and under the law.

6. ASSIGNMENT/SUBLEASE/TRANSFER OF RIGHTS: the LESSEES shall

not directly or indirectly sublet, allow or permit the leased premises to be occupied in whole or in part by any person, form or corporation, nor shall the LESSEES assign their rights hereunder to any other person or entity. No right of interest thereto or therein shall be conferred on or vested in anyone by the LESSEES without the LESSOR'S written approval. 7. ALTERATION, ADDITION AND IMPROVEMENT: The LESSEES shall

not make any alteration, installation, improvement or any addition whatsoever in the leased premises without the prior written consent of the LESSOR, and the same shall, upon termination of the contract, automatically become the property of the LESSOR without need of any reimbursement. No electrical connection shall be authorized without the corresponding electrical plan duly approved by the LESSOR. 8. REPAIRS AND MAINTENANCE OF LEASED PREMISES: The LESSEES

agree to undertake at their own expense any necessary repairs and/or maintenance work on the leased premises including their facilities without right of reimbursement from the LESSOR. The LESSEES shall take good care of the leased premises and shall be responsible for any damage, breakage, or loss not otherwise accountable to ordinary wear and tear. 2

9. THIRD PARTY LIABILITY: During the effectivity of this lease contract,

the LESSEES shall hold the LESSOR free and harmless from any damage, liability or responsibility to any person or property arising out of or resulting from the use of the leased premises by the LESSEES, the latter’s agents, employees, representatives, guests, customers and/or members. 10. PUBLIC UTILITIES:

The LESSEES shall pay for its telephone, electric, cable TV, water, Internet, association dues and other public services and utilities during the duration of the lease.

11. PERMITS: The LESSEES shall be responsible for securing all the

necessary permits and licenses, and all costs thereof shall be for the sole account of the LESSEES. 12. FORCE MAJEURE:

If whole or any part of the leased premises shall be destroyed or damaged by fire, flood, lightning, typhoon, earthquake, storm, riot or any other unforeseen events constituting acts of God as to render the leased premises during the term substantially unfit for use and occupation of the LESSEES, this lease contract may be terminated without compensation by the LESSOR or by the LESSEES provided that in either case, one shall provide written notice within a reasonable time to notice to the other.

13. LESSOR’S LIEN: It is agreed that the unpaid rents and charges payable

by the LESSEE to the LESSOR under this contract shall constitute a preferred lien on all the personal properties of the LESSEES existing in the leased premises in accordance with Article 2241 and Article 2243 of the New Civil Code. For this purpose, the LESSOR or its authorized representative/s is hereby authorized to prevent the removal of the said properties from the leased premises and/or demand their return from any possessor should they have been removed without the written consent of the LESSOR. 14. POSSESSION: The LESSEES acknowledge the receipt of the possession

of the leased premises in good and sanitary condition for the use and purpose for which the same is intended and agree that upon the expiration of the lease contract or upon earlier termination thereof, the LESSEES will voluntarily and peacefully surrender unto the LESSOR the possession of the leased premises in the same satisfactory condition as at the time of receipt, subject to reasonable wear and tear. The LESSEES shall turnover and surrender to the LESSOR all keys to the leased premises, including duplicates. 15. PRE-TERMINATION: This lease contract may not be terminated before

the expiration of the term agreed upon except by written approval of the LESSOR. If, for any reason, the lease is terminated before the expiration of the lease term, the following consequences shall arise: a) LESSEES shall pay unliquidated damages in an amount equivalent to the rentals for unexpired period of the lease term, in addition to the rentals due for actual period of occupancy. b) All advances and deposits made by the LESSEES shall be deemed forfeited in favor of the LESSOR. 3

c) The LESSOR may immediately offer the premises for lease to a third party. 16. INSPECTION OF PREMISES/LESSOR'S RIGHT OF ENTRY:

The LESSOR or its authorized agent may, after giving due notice to the LESSEES, have the right to enter the premises in the presence of the LESSEES or the latter’s representative/s at any reasonable hour to examine the same or make repairs therein or for the operation and maintenance of the building or to exhibit the leased premises to prospective LESSEES, or for any other lawful purposes which it may deem necessary.

17. ABANDONMENT: If, during the term of this lease, the premises shall be

deserted or remain unoccupied for a continuous period of fifteen (15) days, without prior notice to the LESSOR, the LESSOR shall have the right to enter the premises as agent of the LESSEES and to receive the rent, if any, and to apply the same to the payment of the rent due for the whole term of the lease, thereby holding the LESSEES liable for any deficiency. At its option, the LESSOR may lease out the premises, without prior notice to the LESSEES, to any party and under such terms as it may decide upon. The LESSOR shall have the right to retain properties of the LESSEES found in the premises as security for the payment of the LESSEES’ obligations, without prejudice to the right of the LESSOR to collect on the deficiency, if any, from the LESSEES. Such abandonment shall likewise give the LESSOR the option to cancel this lease agreement and to exercise all rights under this contract and under the law. 18. NON-WAIVER: The failure of the LESSOR to insist upon a strict

performance of any of the terms, conditions, and covenants hereof shall not be construed as a waiver of any subsequent breach or default of the rents, conditions and covenants hereof, which terms shall remain in full force and effect. No waiver by the LESSOR of any of the right under this contract shall be deemed made unless expressed in writing and duly signed by the LESSOR. 19. NOTICE: Where demand or notice is required to be given to the LESSEE

under this contract, the parties herein agree expressly that notices addressed and sent to the LESSEES at the leased premises or to the address stated under this contract shall be considered a sufficient compliance of the requirement of such notice or demand. 20. EXPIRATION OF LEASE:

At the expiration of the term of this lease or cancellation thereof, as herein provided, the LESSEES will promptly deliver to the LESSOR the leased premises with all corresponding keys and in the same good and tenable condition as of the time of the execution of this contract, subject to the ordinary wear and tear. Noncompliance with the terms of this clause by the LESSEES will give the LESSOR the right, at the latter's option, to refuse to accept the delivery of the premises and compel the LESSEES to pay rent therefrom at the same rate plus Twenty Five (25) % thereof as penalty until the LESSEES shall have complied with the terms hereof. The same penalty shall be imposed 4

in case the LESSEES fails to leave the premises after the expiration of this Contract of Lease or termination for any reason whatsoever. 21. ATTORNEY’S FEES:

Should any one of the parties herein be compelled to seek judicial relief against the other, the losing party shall pay an amount of One Hundred (100) % of the amount claimed in the Complaint as attorney's fees which shall in no case be less than P50, 000.00 pesos in addition to other cost and damages which the said party may be entitled to under the law.

22. INSURANCE OF THE LEASED PREMISES: The LESSOR shall pay for

the insurance premium of the residential unit used as leased premises. The LESSEES, in turn, shall, at their own expense, insure their personal properties placed in the leased premises. 23. VALIDITY OF THE LEASE CONTRACT: This lease contract shall be

valid and binding between the parties, their successors-in-interest and assigns. 24. LAWS AND VENUE APPLICABLE: This contract shall be construed,

interpreted and governed by the laws of the Republic of the Philippines. All actions or claims arising from this contract shall be brought before the courts in Iloilo City. 25. CERTIFICATION: The LESSEES certify that they have read the

provisions of this lease agreement, that they have understood the terms, conditions, and covenants of this agreement, and that they hereby express full conformity thereof and have received a signed copy of this agreement. 26. SEPARABILITY CLAUSE: In the event that any of the stipulations or

provisions under this contract shall be declared void or unenforceable, the same shall not affect the other portions of the contract which shall remain operative and binding upon the parties. IN WITNESS WHEREOF, parties herein affixed their signatures on the date and place above written. APPLE CORPORATION LESSOR

BLUE VALENTINE LESSEE SCARLET SNOW LESSEE RED SPARROW LESSEE

Signed in the presence of:

GREEN FARMLAND

MACY PINK

_____________________________

____________________________ 5

ACKNOWLEDGEMENT

Republic of the Philippines) _________________________) S.S

I certify that on this 1st day of January, 2005, before me, a notary public duly authorized in the city named above to take acknowledgements, personally appeared the following: Name Apple Corporation Blue Valentine Scarlet Snow Red Sparrow

CTC Number 10000000 10000000 10000000 10000000

Date/Place Issued January 01, 2005 / Iloilo City January 01, 2005 / Iloilo City January 01, 2005 / Iloilo City January 01, 2005 / Iloilo City

Who were known to me to be the same persons who executed the foregoing instrument and acknowledged to me that the same is their free and voluntary act and deed. This instrument consisting of 6 page/s, including the page on which this acknowledgement is written, has been signed on each and every page thereof by the concerned parties and their witnesses, and sealed with my notarial seal. IN WITNESS WHEROF, I hereunto set my hand and affix my notarial seal on the date and at the place above written.

Notary Public Atty. Kenneth T. Go NOTARY PUBLIC FOR ILOILO CITY UNTIL DECEBER 31, 2020 6th FLOOR ST IVESCENTER, 6741 PASEO CENTER, ILOILO CITY, PHILIPPINES ROLL NO. 56881/01-09-09 PTR NO. 1677015/02/06/10 1BP NO. 07834LT/0114/RIZAL CHAPTER

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