To: DAVAO DEL NORTE ELECTRIC COOPERATIVE, INC.

TASK FORCE DUTERTE - NORTHERN DAVAO POWER

Main Office: Km. 100, Montevista, Compostela Valley Province

Tagum Area Office: Bibu Square Bldg., Tagum City, Davao del Norte; and

ALL OTHER PERSONS IN POSSESSION OF THE PCU ANNEX BUILDING

From: PROVINCIAL COOPERATIVE UNION OF DAVAO (PCU-Davao)

National Highway, Magdum, Tagum City

Subject: NOTICE OF TERMINATION OF LEASE; DEMAND TO PAY, COMPLY &

VACATE

Date: November 23, 2018

This serves as Notice of PCU-Davao’s decision to terminate its lease contract with
DAVAO DEL NORTE COOPERATIVE (DANECO-CDA), and for DAVAO DEL NORTE
ELECTRIC COOPERATIVE, INC./TASK FORCE DUTERTE - NORTHERN DAVAO POWER
(TFD-NDP) and all persons acting on its behalf to comply with terms and conditions of
said contract and to vacate the PCU Annex Building within 5 days from receipt of this
notice/demand.

On June 24, 2015, PCU-Davao leased to DANECO-CDA Doors 1, 2, 4, 5 and 6 of

PCU Annex Building. The leased premises were used by DANECO-CDA as its office in the
conduct of its business as an electric distribution utility.

On November 9, 2018, the National Electrification Administration (NEA), through an

ORDER dated August 31, 2018, with the assistance of the Philippine National Police and
certain paid private individuals, broke open the office of DANCEO-CDA in PCU Annex
Building and has taken over its operations through the TFD-NDP. Currently, TFD-NDP and
other persons under its authority are occupying not just the premises leased to
DANECO-CDA but the entire PCU Annex Building. Worse, TFD-NDP is prohibiting agents
of PCU-Davao to enter the PCU Annex Building to inspect its condition.

While it assails the ORDER dated August 31, 2018, PCU-Davao is constrained to abide
with said order until the proper court declares it as invalid. With said order, PCU-Davao
considers TFD-NDP as DANECO-CDA’s successor-in-interest with respect to the lease

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contract and thus bound by its terms and conditions upon NEA’s take-over of
DANECO-CDA’s operation and occupation of the office of the latter.

Among the terms and condition of the said lease contract is the right of PCU-Davao as
lessor to inspect the leased premises during reasonable hours of the day. Yet, TFD-NDP
does not allow the agents of PCU-Davao to enter and inspect the PCU Annex Building, in
violation of the latter’s right to inspect the leased premises as provided in the terms and
conditions of the Contract of Lease. Under Article 1673 of the Civil Code, the lessor may
judicially eject the lessee for any of the following causes:

xxx

(3) Violation of any of the conditions agreed upon in the contract;

xxx

Thus, for this reason, inter alia, PCU-Davao decided to terminate the Contract of
Lease, and is requiring TFD-NDP and all other persons acting in its behalf to allow
PCU-Davao and/or its agents to enter the PCU Annex Building and to vacate said building.

In any case, PCU-Davao has no intention of continuing with the lease which is
expiring as of this day.

Under Article 1670 of the Civil Code, if at the end of the contract the lessee should
continue enjoying the thing leased for fifteen days with the acquiescence of the lessor,
and unless a notice to the contrary by either party has previously been given, it is
understood that there is an implied new lease, not for the period of the original contract,
but for the time established in articles 1682 and 1687. The other terms of the original
contract shall be revived.

Under Article 1687 of the Civil Code, if the period for the lease has not been fixed, it is
understood to be from year to year, if the rent agreed upon is annual; from month to
month, if it is monthly; from week to week, if the rent is weekly; and from day to day, if
the rent is to be paid daily.

As provided in the Contract of Lease, its term was for one year which started from
June 24, 2015 until June 23, 2016. However, even after June 23, 2016, PCU-Davao
allowed DANECO-CDA to stay and conduct its business in the leased premises without
any notice to the contrary being given by either party. Thus, an implied new lease for the
time established in article 1687 arose pursuant to article 1670, and since the rent agreed
upon is on a monthly basis, the period of the new lease(s) is understood to be from

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month to month. With the monthly lease expiring by operation of law today, November
23, 2018, PCU-Davao does not intend to renew the lease contract.

In view of the foregoing, PCU-Davao hereby reiterates the demand for TFD-NDP and
all other persons acting in its behalf to let the authorized representatives of PCU-Davao
enter the PCU Annex Building and to vacate the said building within 5 days from receipt
of this notice/demand.

PCU-Davao also demands from TFD-NDP reasonable rent in the amount of

____________ for the use of the entire PCU Annex Building from the start of its
occupation on November 9, 2018 until it finally vacates the said building, and payment or
indemnification of damages sustained by the building by reason or in account of, or in
connection with the implementation of the ORDER dated August 31, 2018 amounting to
_____________ within the same period.

In the event that TFD-NDP and all other persons acting in its behalf do not comply,
pay, vacate, and surrender possession of the PCU Annex Building to PCU-Davao within
the period given, PCU-Davao will be constrained proceed with necessary legal remedies
to protect its interest.

___________________

General Manager

Provincial Cooperative Union of Davao

National Highway, Magdum, Tagum City, Davao del Norte

Cc:

1. Person found in the premises ______________________

2. DANECO/TFD-NDP ______________________

3. DANECO-CDA _____________________________