Lease Agreement

LEASE AGREEMENT

This lease agreement is made on 25th October 2013, between DRATSHANG LHENTSHOG (hereafter "Lessor") and Mr. Ugyen (hereafter “lessee”) bearing CID No. 12001000333.

The purpose of this agreement permits lessee the exclusive use of the land measuring 200,000 square foot owned by lessor located at Kabisa in Thimphu for the construction of training institute for 30 years.

The parties agree as follows;

1. Contract duration

This agreement is a fixed-term lease beginning on 25th of August 2014 and ending on 25th of October 2044 for 30 years.

1. Price

Lessee has to pay Nu 50 per square foot per annum which amount to Nu 100, 000 for 200,000 square foot yearly.

1. Payment term

1. Lessee shall pay Lessor Nu 100, 000 per annum for 30 years. Payment shall be in the form of personal cheque or shall be delivered by hand to lessor.

1. If payment is not received by Lessor by the end each year, Lessee shall pay a Nu 1, 00,000 as late fees plus Nu 8500 for each additional month that payment is late.

1. If Lessee's personal check is returned, dishonored or not accepted by bank, Lessee shall pay Nu 50,000 for issuing of the bad check plus applicable late fees, and all future payments shall be made by hand delivery only.

1. Duties of lessor

• Provide the property in a clean and reasonable state at the start of the contract period.
•  Council rates and taxes should pay by the lessor.
• Maintaining proper receipts and maintaining records of any money received from the lessee.
• Allow the tenant reasonable peace, comfort and privacy in the property for the duration of the contract.

1. Duties of lessee

1. Lessee shall pay a security deposit of Nu 1, 00, 000 prior to moving into the property, and Lessor shall hold this deposit in trust during the lease term but no interest is accrued on the amount when it is in the lessors trust. It is refundable at the end of the lease period.

1. As the land was leased for establishing a training institute, it should not be used for some commercial purpose, like orange orchids, building hotels etc…

1. The attached description denotes the land to be utilized in this agreement and the all the space of the land will be used only by lessee’s family.

1. Lessee hereby acknowledges receipt of the land in good condition. Lessee agrees to leave the land in the same condition in which it was received.

1. Indemnity

If the Lessee is unable to pay the rent for more than 10 years, the ownership of that institute will be transferred to the lessor.

1. Attorney’s fee provision

If any dispute arises between the parties in the contract, the guilty party should pay the attorney’s provision fees and bear the related cost.

1. Modification of contract

To prevent someone from saying that the terms of the written agreement were verbally changed, the contract may only be modified in writing and signed by all parties.

1. Disputes resolution

In the event of a dispute between the parties, the dispute is resolved by binding arbitration, not by litigation. Three arbitrators are allowed to settle the case and the arbitrator should be a person who has been arbitrator for more than 5 years and should not be the relatives of either parties.

1. Procedure for disputes resolution

1. The parties may first try in good faith to settle by mediation any disputes arising out of or relating to this agreement.
2. If the mediation is not successful the parties may then resort to arbitration. It should be done through the oral argument between the parties and the maximum of 2weeks is given as the time of discoveries.
3. The Alternative Disputes Resolution Act of Bhutan 2013 should be the governing law in the resolution of the disputes.

1. Termination of contract

If the lessee is unable to pay the rent for more than 10 years, then the lessor has the right to terminate the contract and claim the ownership of the institution.

1. Renewal of the contract

This contract should be renewed after every 10 years, which means 3 times in the entire contract period. In the process of renewal, the provisions, terms and condition in the contract can be rectified with the consent of both the parties if needed.