CONSTRUCTION CONTRACT

KNOW ALL MEN BY THESE PRESENTS:

This CONTRACT made and executed this ____ day of __________

in 20_______, by and between;

FUNSHOES, a corporation duly organized and existing under the laws of the
Republic of the Philippines, with office address at 3 rd Flr. DSL Building, No.
380 Del Monte Ave. Quezon City represented by its President, ALICE R.
PAMIN, hereinafter called as the OWNER;

and

JT & G TEKNIKS CONSTRUCTION CORPORATION, a company

duly organized and existing under the virtue of the laws of the Philippine
with office address at Lot 13 Blk. 12 Phase 3B Eastwood San Isidro,
Rodriguez Rizal represented by its President, Engr. JOSE T. TAYAMORA
hereinafter called as the CONTRACTOR ;

WITNESSETH :

WHEREAS, the Owner negotiated with the CONTRACTOR for CONSTRUCTION of the Proposed
One Storey Warehouse, located at Champaca Ext. UPS IV Parañaque City , here-in referred to as the
PROJECT.

WHEREAS, the OWNER after evaluating the bids, has determined that the CONTRACTOR has
submitted the most advantageous proposal for undertaking the various components of the Structural,
Architectural Finishes Electrical and Plumbing Works.

WHEREAS, the CONTRACTOR having represented and warranted itself to possess the necessary
expertise, experience, manpower, technical and financial resources as well as the management and
supervisory capabilities to undertake the PROJECT, has manifested its intention to complete the Structural,
Architectural Finishes, Electrical and Plumbing Works of the PROJECT for the OWNER under the terms and
conditions as may mutually agreed upon by both parties.

WHEREAS, on the basis of such manifestation and representation made by the CONTRACTOR to
the OWNER, the latter cognizant of the former’s competence as a reliable Contractor with a good track record
as has been established during the pre-qualification and contract negotiation stages, has agreed to engage the
services of the CONTRACTOR to undertake the Structural, Architectural Finishes, Electrical and Plumbing
Works of the aforesaid PROJECT subject to terms and conditions hereinafter set forth;

WHEREAS, the OWNER has engaged the services of Arch. Bryan Patric Tan of 91-A Matumtum
St. Del Monte Quezon City, herein referred to ARCHITECT/ENGINEER (AE) who prepared plans,
specifications, working drawings and other pertinent contract documents for the PROJECT,

NOW THEREFORE, for and in consideration of the foregoing premises, and the mutual covenants
and stipulations herein set forth, the parties hereto have agreed and do hereby mutually agreed as follows.

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 ARTICLE I

CONTRACT DOCUMENTS

1.0 The Contract Documents shall consist of this Agreement and the following documents which are
hereto incorporated and made integral parts hereof:

a. Annex-A, Approved Construction Drawings and Technical Specifications as prepared by the

ARCHITECT/ENGINEER.

b. Annex-B, Contractor’s Bid Proposal including bid schedule and detailed unit price estimates.

c. Annex-C, Agreed Contract Work Breakdown based on the Lump-Sum Contract Amount
Agreed.

d. Annex-D, CONTRACTOR’s Table of Organization for the PROJECT with its manpower-
loading chart.

e. Annex-E, CONTRACTOR’s duly approved Construction Schedule in the form of bar chart
with S-curve and/or PERT-CPM Network Chart that shall be submitted prior to the signing of
contract.

Annexes D & E above may be modified or update from time to time during the construction
base on the remaining contract duration, subject to the approval of the OWNER.

f. Annex-F, Performance Bond and Surety Bonds, Guarantee Bonds, All Risk Insurance as
covered in Article IX hereof.

g. Annex-G, General Conditions of Contract.

2.0 The other documents, which hereafter may be mutually agreed upon by and between the OWNER and
CONTRACTOR and signed by both of them, whether prepared before or after the signing of the
foregoing documents, shall likewise form part of the Contract Documents.

ARTICLE II

SCOPE OF WORK, WARRANTIES AND

RESPONSIBILITIES OF THE CONTRACTOR

1. The CONTRACTOR shall not change or alter the plans and specifications without prior written
approval of the ARCHITECT. A mere act of tolerance by OWNER shall not constitute or be deemed
an approval.

2. The CONTRACTOR shall furnish and supply the complete labor, materials, equipment, tools,
implements supervision, and all other facilities necessary to undertake the smooth implementation and
completion of the Structural, Architectural Finishes, Electrical and Plumbing Works of the Project in
accordance with the prescribed plan specifications and as directed by the Contract Documents, except
as otherwise stipulated herein.

3. The CONTRACTOR’s basic scopes of work shall be that which are reflected in Annex-C hereof
entitled Agreed Contract Work Breakdown.

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 The quantities and unit prices of work items listed in Annex-C are shown therein only for the purpose
of facilitating the evaluation of periodic work accomplishment for computing progress payments.
Hence, any variances between these quantities and the actual quantities of works, and between those
unit prices and the actual costs of the respective work items shall not affect or alter the lump-sum
contract price stipulated in Article IV herein.

4. CONTRACTOR shall likewise be responsible for the following:

a. Construction of temporary facilities such as offices, bunkhouses and warehouse for the
storage of construction materials needed for the execution of its work. The said facilities
shall be provided and be made usable for the whole course of the construction duration.

b. Maintain the general cleanliness and sanitation of the site and undertake cleaning of site and
removal of construction debris during the entire contract period resulting from its work. After
the final completion but before acceptance of the work and final settlement had been made
between the parties, the CONTRACTOR shall forthwith remove all surplus materials,
scaffolds, apparatus, machinery, tools and equipment not part of the work finished or supplied
by its work and leave the work free and clean of all obstructions and hindrances.

5. CONTRACTOR shall employ sufficient number of men; and at all times maintain an adequate supply
of tools, materials and equipment to carry out the various phases of the work in accordance with the
agreed program of work subject to any exceptions which may be mutually agreed upon in writing by
both parties.

The CONTRACTOR shall diligently supervise the construction until completion and it shall assign a
Project Manager/Engineer in the person of _____________________ , who will make a daily
monitorial visit of the Project to ensure proper work and schedule implementation, and a one (1) full-
time competent Civil Engineer who shall act as Project Supervisor. In addition, the CONTRACTOR
shall also employ a competent general foreman on a full-time duly to supervise the workmen under
this Contract with the assistance of lead men. The OWNER and the PROJECT MANAGER reserves
the right to reject for reasonable causes any person or persons employed by the for the construction
work and the omission of the OWNER to exercise such right shall not in any way relieve the
CONTRACTOR of its responsibility to fulfill its undertakings.

6. The CONTRACTOR shall during the term of this Contract coordinate with the work of the other
tradesmen or specialty contractors of the other Construction Packages in addition to its own, but shall
not supervise work of the other trade contractors.

7. In case of any defect(s) on workmanship or materials which may be apparent in the course of the
construction, the CONTRACTOR upon the request of the OWNERS/ PROJECT MANAGER/
ARCHITECT, shall at its own expenses, tear down and replace such portion of the work done and/or
materials installed that, as in the OWNER’s reasonable opinion, unsound arc or defective, without
prejudice to the provision 8.0 of this Article.

8. All materials and workmanship shall be of the respective kinds described in the specifications, and the
CONTRACTOR shall, upon the request of the OWNER, the PROJECT MANAGER or the
ARCHITECT, furnish him with brochures and supporting documents to prove that the quality of the
materials are such as specified. The CONTRACTOR hereby warrants and guarantees that all the
materials it will supply under this Contract are new, first class, free from defects and shall fully
comply in every respect with the specifications, approved samples and other requirements of the
Contract Documents. The CONTRACTOR unless written approval is first obtained from the
OWNER and the ARCHITECT.
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9. The CONTRACTOR guarantees that any damages resulting from such defects shall be corrected
without expenses to the OWNER. If the CONTRACTOR fails to correct or repair the defects within
seven (7) calendar days from the receipt of written notice thereof from the OWNER or the PROJECT
MANAGER, the OWNER may have the work or repair done by another contractor at the expense of
the CONTRACTOR, this shall be answered by the retention money or Guarantee Bond submitted by
the CONTRACTOR.

10. The CONTRACTOR shall be responsible for any damages to, and for the necessary repair of public
streets, sidewalks, curbs and pavements, developments by other contractors and other properties,
whether public or private, occasioned by their use or opening in connection with or as a consequence
of the PROJECT that are attributable to the CONTRACTOR; shall make good the same to the lawful
satisfaction of the proper authority of party; and thereby holds the OWNER free and harmless from
any such damage or repair.

11. The CONTRACTOR shall put up and maintain adequate protection of all its works from damages and
shall protect the property and equipment whether owned or rented by the OWNER, as well as all
materials furnished and delivered to it by the OWNER from injury of loss arising in connection with
this Contract until final acceptance of the PROJECT by the OWNER.

12. The CONTRACTOR represents that it had and shall maintain throughout the period of this Contract,
adequate capitalization, financial capability, technical know-how and manpower to undertake and
complete the PROJECT.

13. The CONTRACTOR warrants that it shall obtain building permits / construction permit, occupancy
permits and such other necessary permits and all clearances and approvals other than permits, from
the proper authorities in accordance with its undertaking, if necessary or required. However, consent
of the immediate neighbors concerning the proposed undertaking, shall be obtained by the OWNER.

14. The CONTRACTOR shall provide everything necessary or appropriate towards the proper
accomplishment and completion of the PROJECT according to the true intent and meaning of the
drawings, plans and specifications and other Contract Documents taken together, whether the same
may or may not be particularly shown on the drawings or described in the specifications; provided
that, the same is reasonably inferred therefrom. If the CONTRACTOR finds any discrepancy in the
drawings or between the drawings and specifications, the CONTRACTOR shall immediately refer the
same to the ARCHITECT/ ENGINEER who shall finally decide on what shall be followed. It is
understood that the contractor anticipated such discrepancies in the plans, specifications and actual
condition, during the bidding and before the awarding of the contract.

15. The CONTRACTOR hereby recognizes the position of trust and confidence reposed on it by the
OWNER under this Contract and agrees to furnish its best skill and judgment to cooperate with any of
the OWNER’s authorized representatives in finthering efficient business administration and
superintendence in the performance of this construction and to secure the execution of this Contract in
the soundest way, in the most expeditious and economical manner, consistent with the interest of the
OWNER.

16. The OWNER shall, at his own expense, secure the homeowner’s construction bond from subdivision
administrator.

17. The CONTRACTOR shall pay all lawful fees including sidewalk or roadway utilization fees, and for
all the damages for sidewalks, streets, any public utilities or properties if necessary.

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18. The CONTRACTOR shall secure all certificates of inspection or testing that, may be required by
authorities having jurisdiction over the work.

19. The CONTRACTOR shall be responsible for the construction of billboard of the project subject to
approval.

20. The CONTRACTOR shall be responsible for the implementation or provision of the following at his
expense:

a. Testing of materials

b. Warehousing of Owner’s furnished materials intended for the Project

c. Provision of hangers and bracings for all PVC drains and downspouts. Details of it shall be
provided during the meeting.

d. Painting of electrical lines, drainage lines to observe standard color- coding.

e. Provision of asphalt coatings, burlap map soaked in coal tar, or concrete encasement for all GI
pipes embedded underground.

f. Mobilization of necessary equipment.

ARTICLE III

THE RIGHTS AND RESPONSIBILITIES OF THE OWNER

1.0 The OWNER shall have the right to supply the CONTRACTOR with additional drawings, instruction
and documents as it may deem necessary for proper and adequate prosecution of the Structural,
Architectural Finishes, Electrical & Plumbing Works of the PROJECT. Should additional costs be
entailed thereby, however, the CONTRACTOR shall be compensated accordingly.

2.0 The OWNER may rescind, terminate or cancel the Contract without incurring any liability whatsoever
to the CONTRACTOR, his bondsmen, employees, or third parties by giving thirty (30) days notice in
writing to the CONTRACTOR upon any of the following grounds;

a. The OWNER discovers that the CONTRACTOR (a) has isolated or is violating any of the
conditions of the Contract, or any Contract Documents, or of CONTACTOR’s warranties; (b)
has abandoned the PROJECT or without the prior written consent of the OWNER has
assigned the execution of the PROJECT to others; (c) is not performing his obligations of
executing the PROJECT in good faith, or in accordance with the plans and specifications; (d)
is not making such progress in the execution of the work so as to ensure its completion within
the period stipulated; or (e) has shown himself incapable of doing or incompetent to do the
PROJECT

b. The OWNER decides to suspend or discontinue the execution of the work stated, described,
or provided for in the Contract by reason of problems encountered by the OWNER whatever
may be the cause. In such a case, the CONTRACTOR shall be entitled to due compensation
for work accomplished up to the time the contract is rescinded

c. When the CONTRACTOR fails to provide a qualified superintendent, competent workmen,

or subcontractors or proper materials; or
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 d. When the CONTRACTOR fails to make prompt payment to subcontractors, workmen, or
materials dealers.

In any of the above cases, the OWNER shall first give the CONTRACTOR a five (5) days
written notice indicating the violation and demanding correction/remedy thereof.

3.0 In case of rescission/cancellation/termination of Contract, the OWNER may retain all amounts due
the CONTRACTOR for approved billings and the retention money and apply them to the payment of
all damages sustained by the CONTRACTOR to the OWNER.

4.0 The OWNER shall exercise the right to approve the materials and workmanship of the
CONTRACTOR and require the latter that only materials conforming to the specifications and
equipment complying with the required standards of quality as detailed in the specifications be used in
the work and to reject those which do not conform thereto or which are defective. Toward this end,
the CONTRACTOR is obliged to furnish for approval by the OWNER, samples of materials for
examination and testing.

5.0 The OWNER can exercise his right to change his mind by ordering changes in the CONTRACTOR’s
scope of work through alterations, additions, or deletions of some items of work, which he feels
would serve his best interest. However, if the changes entail cost increase or decrease, corresponding
cost adjustment shall be made.

6.0 The OWNER is entitled to indemnify from the CONTRACTOR for all losses and all claims,
demands, suits, notions, recoveries, and judgment of every nature and description brought or
recovered against him, by reason of any act or omission of the CONTRACTOR, his agents or
employees, in the execution of the work or guarding of it. However, if the changes entail cost increase
or decrease, corresponding cost adjustment shall be made upon prior notice and approval of the
OWNER.

ARTICLE IV

CONTRACT PRICE AND MANNER OF PAYMENT

1.0 For and in consideration of the full, faithful and complete performance of the works called for under
this Agreement, the OWNER shall pay the CONTRACTOR the lump sum amount of PESOS: NINE
MILLION FIVE HUNDRED THOUSAND ONLY (Php 9,500.00.00). Including all the existing
structure and materials at project location. The contract amount shall not be subjected to price
adjustment resulting from labor and material escalation. Value Added Tax is excluded. The amount
of contract stated herein excludes the following.

a. Items in the Architect’s specification and plans marked “By Owner” or “By Others”, “Not
Included”, “Works and Equipment not Included”.

1.1 Items not included in bid breakdown, or appeared in bid breakdown but with amount under
material cost, but is present or assumed present in drawings & specifications shall be deemed
included under contractor’s scope of work. Exceptions only wherein it is specifically noted under
exclusion items. Representations, should there be, are already anticipated and included in the
proposal.

3.0 The OWNER shall pay the CONTRACTOR the down payment the amount of PESOS: TWO
MILLION EIGHT HUNDRED FIFTY THOUSAND ONLY (Php 2,850,000.00).
30% - Upon signing of contract
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4.0 The OWNER shall pay the CONTRACTOR the balance of the Contract Price through monthly
progress billings based on the periodic actual work accomplished by the CONTRACTOR as certified
and duly endorsed for approval by the OWNER’s representatives and the Architect, payable within
(7) calendar days after presentation of the corresponding evaluated billings and complete supporting
documents. The aforesaid billing shall be subjected to pro-rata deduction of liquidation of the down
payment and Five Percent (5%) retention. The five percent (5%) retention shall be release upon
compliance with the conditions set forth under Article IX hereof. Should the Contractor opted not to
submit the required documents, the Owner may retain the retention to serve as guarantee against
material and workmanship defects up to one year reckoned from the date of acceptance. Should the
Owner failed to pay the Contractor on time within the prescribed time frame allotted above,
corresponding number of days of delay on the payment of the progress billing shall be automatically
considered an extension of the schedule.

ARTICLE V

CONTRACT PRICE ADJUSTMENT

1.0 The OWNER may, without invalidating this Agreement, order at any time in writing additional work
or alterations by correcting, altering or deducting from the work to be undertaken by the
CONTRACTOR. All such work shall be evidenced by Change Order forms signed by the OWNER
and shall be executed under the conditions hereof and of the CONTRACT DOCUMENTS.

2.0 No claims of additions or deductions to the Contract Price herein stipulated by reason of extra work or
alteration shall be valid unless ordered in writing by the OWNER. The value of any extra work or
alterations shall be, separately agreed upon by the parties in writing.

3.0 Should the OWNER require the CONTRACTOR to perform additional and/or extra work or to omit
or reduce any work, the cost of additional and/or omitted or reduced work shall be computed based on
actual accomplishment and agreed unit price.

Formulation for the change order cost derivation, are as follows:

a. For additional works: Bare cost of materials, equipment rentals, and labor plus 15% mark-up
corresponding to the profit, taxes, and miscellaneous costs. Prices of materials shall be based
on the prevailing market prices at the time the work order is made.

b. For deductive works: Bare cost of materials, equipment rentals, labor plus 5% mark-up
corresponding to the reduction in the profit. Prices of materials shall be based at the time the
bid was submitted by the Contractor.
4.0 Any value of Change Orders approved shall be considered as part of the Contract and to be included
in the progress billings.

ARTICLE VI

CONTRACT TIME

1.0 Since time is of essence in this Contract, the Works called for herein shall be completed in within 5
months (150) calendar days reckoning from the Down Payment. Failure of the CONTRACTOR to
complete the said works within the stipulated time frame shall make him liable for the payment of
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 liquidated damages. Note: Any excess days from the contract time shall not be subject to any penalty
with approval of the OWNER.

The CONTRACTOR may request the OWNER for an extension of the Contract Time in the
occurrence of events of Force Majeure, or acts of God which include earthquakes, floods, typhoons,
cyclones, revolution, war, tidal wave, and other cataclysmic phenomena which are beyond the control
of the CONTRACTOR; or should delay in work be incurred by act, delay of the OWNER, the
ARCHITECT/ ENGINEER or other persons employed by the OWNER including delay in the
delivery of OWNER-Furnished materials and in progress payments

This request for extension shall be filed and submitted in writing by the CONTRACTOR within seven
(7) calendar days from the occurrence of any one or more events mentioned above, the OWNER shall
decide within ten (10) calendar days from receipt of such written request, with due regard to the facts
and circumstances and of the merits or lack of merits, thereof, as the case may be, grant or deny the
said request. Should the CONTRACTOR failed to officially request an extension due to any events
mentioned above within 7 calendar days reckoned from its occurrence, such shall not be given merits
if claimed by the Contractor later as a reason to justify the delays.

Regardless of the decision of the OWNER on this matter, the CONTRACTOR shall proceed with its
work with such determination without prejudice to the provision on Arbitration as contained in
Section GC-24 of the General Conditions of Contract, which is appended herewith as Annex-G.

2.0 Notwithstanding the foregoing, no time extension on the time duration shall be granted in any of the
following instances:

2.1 Ordinary unfavorable weather conditions – monsoon rain;

2.2 Non-availability of equipment or materials that are supposed to be furnished by the

CONTRACTOR;

2.3 Labor problems or disputes involving the CONTRACTOR’s employees, workers or personnel
or those of its subcontractors, agents, or suppliers, and

2.4 When the reason given for a request for extension had already been considered in the
determination of another previous request for time extension

2.5 Deletion of work described in the plan and specification; the Contractor shall carry out the
requirements of the Owner and shall perform the deletion work in a satisfactory and
workmanlike manner and to the satisfaction of the Owner within the prescribed time frame.

ARTICLE VII

FAILURE TO COMPLETE THE WORK/LIQUIDATED DAMAGES

1.0 Should the CONTRACTOR fail to complete the PROJECT within the specified schedule as per
original work required or within the period of extension granted by the OWNER, the CONTRACTOR
agrees;

1.1 To pay the OWNER the sum of PESOS: 1/10 of 1% of the total construction cost for each day
of delay including Sundays and holidays as liquidated damages. To be entitled to such
liquidated damages, the OWNER need not prove that it has incurred actual damage. Payment
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 of such liquidated damages shall not in any manner relieve the CONTRACTOR from its
obligations and responsibilities under this Agreement; and

1.2 To allow the OWNER and/or another CONTRACTOR chosen by the OWNER to accomplish
and finish the PROJECT as provided for in Article VIII herewith.

2.0 It is further agreed and understood that the right of the OWNER to liquidated damages shall be
without prejudice to its rights of remedies against the CONTRACTOR provided elsewhere in this
Agreement or to which the OWNER maybe entitled in law of equity.

3.0 The OWNER may deduct any amount that may be due under Article VII, Section 1.1 above from the
retention stated in Article IV, Section 5.0 above and if the retention is not sufficient, the
CONTRACTOR shall, at his own expense, pay the insufficient amount.

ARTICLE VIII

DEFAULT OF CONTRACTOR

1.0 Any or all the following conditions shall constitute DEFAULT of the CONTRACTOR;

Should CONTRACTOR:

a.. file a petition for suspension of payment or for insolvency;

b. be placed under receivership or arrange with or assign in favor of its creditor or agree to carry
out its obligations under this Agreement under a committee or inspection of its creditors;

c. go into liquidation (other than voluntary liquidation for purposes of amalgamation or

reconstruction);

d. assign any or all parts of this Agreement without the prior written consent of the OWNER;

e. have an execution levied on its goods or assets;

f. fail to provide qualified superintendent, competent workmen or subcontractors or proper

materials;

g. fail to promptly pay its subcontractors, workmen or material suppliers/dealers

2.0 The CONTRACTOR shall also be in default if the CONTRACTOR

a. has abandoned the Agreement; or

b. without reasonable excuse has failed to commence the work or has suspended the progress of
the work for ten (10) calendar days after receiving from OWNER written action that said
materials of work had been condemned and rejected by the OWNER/ PROJECT
MANAGER/ ARCHITECT under these conditions; or

c. despite previous warning by the OWNER in writing, is not executing the work in accordance
with this Agreement or is persistently or flagrantly neglecting to carry out its obligations
under this Agreement

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3.0 The following procedure shall be followed in determining whether this Agreement may be terminated
under the immediately preceding clauses;

If the CONTRACTOR is behind schedule by more than ten percent (10%), he will be required to
revise this Critical Path Method (CPM) Network to reflect a new program of work that will insure the
completion of the PROJECT as scheduled. If he is delaying again by another five percent (5%) based
on the revised CPM Network, then the OWNER may terminate this Agreement under the immediately
preceding clauses.

4.0 If the CONTRACTOR refused or failed to prosecute the work or any separable part thereof with such
diligence as will insure its completion within the time specified in this Agreement, or any extension
thereof, or failure to complete said work within such time, also constitute default of the
CONTRACTOR.

5.0 Should any or all of the grounds enumerated above exist, OWNER, after giving fifteen (15) calendar
days written notice and without the necessity of any judicial process of action in law, enter upon the
site and the works and expel the CONTRACTOR there from immediately, without voiding this
Agreement, or releasing the CONTRACTOR from any of its obligations or liabilities under this
Agreement, or affecting the rights and powers conferred on the OWNER by this Agreement.
OWNER itself may complete the works. All essential equipment belonging to the CONTRACTOR as
may be needed for the completion of the PROJECT in accordance with the plans and specifications
and related documents shall, at the option of the OWNER, remain in the place of work until
reasonably completed under the circumstances.

ARTICLE IX

COMPLETION AND FINAL ACCEPTANCE

1.0 When the work required and called for under this Contract is completed; completion means 100%
complete (with necessary permits) with all the materials per contract installed, tested, and without
defects; the CONTRACTOR shall notify the OWNER in writing and request for a final inspection,
which inspection shall be conducted and completed by the OWNER within seven (7) calendar days
from receipt of the CONTRACTOR’s Request-for-Inspection letter

2.0 Should the work be found satisfactorily done, the OWNER/ PROJECT MANAGER/ ARCHITECT
shall, within three (3) calendar days from the last day of inspection, issue the Certificate of
Completion of the Project, and the balance of payment found to be due less the five percent retention

3.0 If the work is found defective, however, the OWNER/ PROJECT MANAGER/ ARCHITECT shall,
within three (3) calendar days from the last day of inspection, advice the CONTRACTOR of the
defects by issuing an Official Punch List.

4.0 Upon the correction of the items contained in the Official Punch List, the CONTRACTOR shall again
inform the OWNER in writing and request for an inspection to be completed within seven (7)
calendar days from the receipt of the said notice

5.0 Should the correction made by the CONTRACTOR of the items contained in the Official Punch List
be found satisfactory, the balance of payment found to be due, the CONTRACTOR shall be paid
immediately and the OWNER shall, not later than seven (7) calendar days after the last day of
inspection, issue the Certificate of Final Acceptance

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 ARTICLE X

ARBITRATION

1.0 Matters concerning any dispute, controversy or differences between the parties arising out of this
Agreement that may not be resolved by them to their mutual satisfaction, shall be submitted to an
Arbitration Committee, composed of three (3) members chosen as follows: One (1) member shall be
chosen by the OWNER, and One (1) member shall be chosen by the CONTRACTOR. The said two
(2) members in turn shall select a third member acceptable to both of them. The arbitration process
shall, be initiated by either party serving upon the other party a written demand for arbitration in
accordance with this Agreement within fifteen (15) calendar days from the occurrence of any dispute,
difference or controversy. The demand shall set forth the nature of controversy, the amount involved,
if any, the relief sought, and the name of the arbitrator appointed by the party on whom demand is
served to name its arbitrator within fifteen (15) calendar days from receipt thereof. The two (2)
arbitrators must agree upon the third arbitrator within ten (10) calendar days from the notice of
appointment. The decision of the Arbitration Committee shall be final and binding upon OWNER
and the CONTRACTOR. Matters not otherwise provided for shall be governed by the provision of
the Arbitration Law (Republic Act 876) The cost of arbitration shall be borne jointly by both the
CONTRACTOR and the OWNER on an equal basis.

2.0 In case of litigation respecting the composition, proceedings or award of Arbitration Committee,
venue shall be in the proper court of Metro Manila. In such case, the prevailing party shall be entitled
to collect from the other a sum equivalent to twenty-five percent (25%) of the total amount due, as
and for attorney’s fee.

3.0 Matters not covered by the above provisions shall be completed and supplemented by the General
Conditions of Contract.

GENERAL CONDITIONS OF CONTRACTS

GC-1 DEFINITION OF TERMS

a. “CONTRACT” shall mean the written agreement entered into between the OWNER and the
CONTRACTOR

b. “OWNER” shall mean _____________________ or its duly authorized representative.

c. “GENERAL MANAGER” (GM) shall mean the primary authorized representative of the
Owner who is directly responsible to the Owner.

d. “PROJECT MANAGER” (PM) shall mean the secondary authorized representative of the
Owner, who is tasked to oversee the execution of the contract work either directly or through
property authorized agents

e. “ARCHITECT” (A) shall mean who is responsible in the preparation of the plans,
specifications, working drawings, and other pertinent documents for the Project.

f. “PROJECT TECHNICAL GROUP” (PTG) shall mean the Management Group composed of
the GM, PM, the Architects and Engineers (A & E) and the Consultants. They are
responsible to the OWNER.

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 g. “CONTRACTOR” shall mean the person, or entity with whom the OWNER entered into the
Contract.

h. “CONTRACT DOCUMENTS” shall mean the Contract; Special Conditions for Contracts, if
any; these General Condition for Contracts; those stated in the Contract as Contract
Documents; and the drawings, plans and specification for the execution of the work, including
any and all documents which are referred to in the Contract Documents, or any modifications,
revisions or alterations therein

i. “WORK” shall mean the work to be performed and completed by the Contractor under the
Contract and any revisions, alterations and any extra work ordered to be done by OWNER

j. “CONTRACT PRICE” shall mean the total amount, which the OWNER is obligated to pay
the CONTRACTOR under the Contract for the execution and completion of the “Work”.
This shall include but is not limited to the supply of labor, materials, supervision and the
employment of CONTRACTOR-owned or provided tools, vehicles and equipment

k. “PROJECT SITE” shall mean the place or area where the Work is or will be carried out

l. “SUB-CONTRACTOR OR SUPPLIER” shall mean any person, firm or corporation entering

into agreement with the Contractor for the performance of the Contractor’s obligation or any
part thereof under the Contract. He is responsible to the Owner thru the Contractor and the
PMT and

m. “VENDOR” shall mean the person, firm or corporation entering into agreement with the
Owner for the performance of work or works not included in the Contractor’s obligations. He
is responsible to the Owner thru the PMT

GC-2 CONTRACT DOCUMENTS INCLUDED IN CONTRACT

All Contract Documents shall form part of the Contract even if they or any one of them is not referred
to or mentioned in as forming part of the Contract.

GC-3 CONFLICTS OF CONTRACT AND CONTRACT DOCUMENTS

The Contract Documents, Specifications and Drawings are mutually complementary. What is noted
in one although not shown in the others shall be considered contained in all. In case of conflict, such
conflict shall be referred to the Architect for final decision. In general, the Contract Documents shall
have the following sequence of priority and importance, prevailing over the other, in so far as their
specific statement(s) or phrase(s) conflict.

a. Contract
b. Special Conditions & addendum
c. General Conditions
d. Specifications
e. Drawings
f. Bid breakdown submitted by winning contractor
g. Bid Documents (Invitation to Bid; Description of Bid Packages; Summary of Important
Information and dates; Instruction to Bidders; Bid Bulletins; Minutes of Pre-bid Conferences;
Minutes of the Pre-Awarding of Contract)
Page 12 of 23
 h. UAP General Conditions
i. Minutes of the Construction Coordination Meeting

GC-4 CONTRACTOR’S REPRESENTATIONS AND WARRANTIES

A. The Contractor admits that he has inspected the site where the work will be performed; that
he informed himself fully as the conditions which might affect the nature, extent and cost of
the work required; that the OWNER shall in no way may be responsible for any cost or
expenses which may develop an account of failure of the CONTRACTOR or future factors
that may affect the cost of execution.

B. The CONTRACTOR represents that, in the contract price agreed upon, he has taken into
account the possible escalation in the cost of labor arising from any cause.

Likewise, the CONTRACTOR represent that, in the cost and price agreed upon he has taken
into account the materials or in the cost in the used of the CONTRACTOR – provided tools
and equipment or the escalation in the foregoing costs by reason of any delay, whatever
maybe the period, in completing the work due to causes directly or indirectly attributed to or
caused by the national, provincial, city or municipal government or any agency on entity or
official of the government, or any firm, company or person. The Contractor represents that
the contract price shall remain a firm, unalterable price, which shall not be subject to increase
for any cause or reason.

C. The CONTRACTOR warrants that it has sufficient operating capital to perform and complete
the WORK without relying upon advances or payments from the OWNER; that he has
sufficient and adequate equipment, tools and other materials that may be needed in the
WORK; that he has the required knowledge, experience and professional competence to
undertake WORK; that he has the experienced, skilled and professionally equipped personnel
to be assigned for this purpose; that the materials he shall supply is the best available or
obtainable; that the method or process he will follow is the one that will best accomplish the
desire results; that he will provide workmanship which is first class in particular aspect and
that he will be able to complete the work within the time specified without extension, as
provided for in the Contract.

D. CONTRACTOR warrants that; (1) if it is a corporation, it is duly incorporated and registered

with the Securities and Exchange Commission; that is franchise to exist as such or to engage
in business has not been terminated, canceled or suspended, or that it is not under
investigation by any competent government authorities for the purpose of terminating,
canceling or suspending or which may lead to the termination, cancellation or suspension of
such franchise; that it has been duly licensed to engage in the business or performing the
WORK; that its board of directors has approved the Contract and that the person signing for
the corporation has been fully empowered and authorized to sign the Contract; (2) if it is a
partnership, that is duly registered with the Securities and Exchange Commission; that it exist
as such, and that it has not been dissolved or is not in the process of dissolution; that it has
been duly licensed to engage in the business of performing the WORK or in a business which
necessarily includes the performance of the WORK; that cancel or suspend its right to exist as
a partnership or its rights to engage in business; that the partner or person signing the Contract
for the partnership has full power and authority to do so; and (3) if it is a single
proprietorship; that the business agency or agencies; that he has an existing license or permit
to engage in business as a single proprietorship or in the business of performing the WORK;
or that the business for which he was issued a permit or he was duly licensed necessarily
includes the performance of the WORK; that there is no investigation or proceeding to
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 terminate, cancel or suspend or which may lead to the termination, cancellation or suspension
of the permit or license to exist as a single proprietorship, to engage in business or to execute
the WORK.

E. The CONTRACTOR warrants that it is not insolvent or is in imminent danger of insolvency;

that there is no petition, action or proceeding, whether judicial or extra judicial, to declare the
CONTRACTOR insolvent for suspension of payments to creditors; that it has not met with its
creditor nor does it plan to do so to suspend payments of its accounts; that until completion of
the WORK and the expiration of the warranty period there will be no action, petition or
proceeding or meeting, whether judicial or extra judicial, initiated by CONTRACTOR or by
any person to declare CONTRACTOR as insolvent or for suspension of the payment of its
accounts; that it regularly pays the salaries and wages r the other money claims of its laborers,
workers or employees and the claims of suppliers of materials, equipment and services and it
has done anything nor will do anything by which a banking or financing institution may
declare it a bad credit risk.

F. The CONTRACTOR shall comply with all other guarantees, warranties and other
requirements that may be found or which may be implied in the Contract Documents.

G. The CONTRACTOR admits and agrees that if any of the representative above are found to be
false, or that if it violates any of the warranties enumerated above, whether the falsity of the
representation or the violation of the warranty be done in good faith, irrespective of the
alleged insubstantial nature of misrepresentation of the violation of the warranty, without
regards to the progress or the manner of execution of the WORK, or the damage or lack of it
sustained by the OWNER, the OWNER, in its absolute discretion, may rescind the Contract
without liability to CONTRACTOR for such decision and without prejudice to the
employment or pursuit of other remedies including collection or damages against the
CONTRACTOR.

GC-5 CONTRACT PRICE

A. The Contractor price shall be that which is fixed and agreed upon in the Contract. This shall
be deemed to include all cost to the CONTRACTOR for materials, supervision, tools,
equipment, labor, overhead and profits and specifically shall include, but not limited to bonds
and insurance premiums; escalation cost of materials; contingencies (other than force
mejeure); overtime or extra works; site delivery charges, warehousing and purchasing costs;
local and national income, personal and corporate taxes for the contractor and his employees;
and requisite bonds.

B. In case the CONTRACTOR receives from the OWNER any amount in advance of the
execution of the WORK, such amount shall be treated as deposit only to be returned by the
CONTRACTOR upon demand notwithstanding any languages in the bid proposal, offer
acceptance or letter of intent to the contrary.

C. No payment of deposit shall be made by the OWNER to the CONTRACTOR unless the
CONTRACTOR first submits for approval the bonds or policies under GC-16 and the
COMPANY finds that the bond or policies complies with the conditions set forth in the said
GC-16.

Page 14 of 23
GC-6 TERMS OF PAYMENT

A. Unless the Contract provides otherwise, the CONTRACTOR shall be paid by the OWNER on
the basis of monthly progress billings based on the actual work accomplished as certified by
the OWNER and duly recommended by the Architect payable within seven (7) days after
representation of corresponding invoices to the OWNER by the PROJECT MANAGER/
ARCHITECT, less a proportioned liquidation or repayment of the deposit or down payment,
if any, and less five percent (5%) retention.
B. All progress billings, including the billing for the 5% retention, shall be accompanied by the
CONTRACTOR’s affidavit showing that all claims and obligations for labor, services,
materials supplier, equipment and tools furnished by the CONTRACTOR in executing the
WORK have been fully and finally settled and paid by him.

GC-7 RELEASE OF RETENTION

The Five percent (5%) retained amount shall be paid by the OWNER to the CONTRACTOR, without
interest, thirty calendar days (30) after written notice and after written acceptance of the WORK by
the OWNER and upon written request of the CONTRACTOR, subject to the conditions set forth
under Article IX, hereof.

GC-8 EFFECT OF PAYMENT

The payment of the progress billing and the release to the CONTRACTOR of the retained amount
shall not be construed as an admission by the OWNER that the CONTRACTOR has satisfactorily
performed or is satisfactorily performing the WORK in accordance with plans and specifications, or
that such work is free from the defects of any kind, hidden or otherwise, or that the CONTRACTOR
is not guilty of violating, or that the CONTRACTOR is complying of the Contract or not of any of the
CONTRACTOR’s obligation thereunder.

GC-9 WITHHOLDING OF PAYMENT

GC-6 and 7 notwithstanding, the OWNER shall have the right to withhold any payments in case of
any claim against the CONTRACTOR for labor, services, supplies and/or materials, or for rental for
the use of the tools and equipment, or in case of non-compliance or defective or irregular compliance
with any of the CONTRACTOR’s obligations under the Contract.

GC-10 PERIOD OF COMPLETION

A. Time is of the essence in a Contract. The CONTRACTOR shall complete every portion of
the WORK in conformity with the work schedule stated in or appended to and forming part of
the Contract.

B. Without limiting the full extent of the CONTRACTOR’s liability under the Contract, the
CONTRACTOR agrees to pay the OWNER as liquidated damages, for every day of delay, an
amount equivalent to what is stipulated in sub-item 1 of Item I under Article VII. Liquidated
damages shall be automatically deductible from any amount due and payable to
CONTRACTOR under the Contract or from any other contracts and transactions entered into
by the CONTRACTOR with the OWNER and/or with any of its subsidiaries.

C. The period of completion shall be extended only if due to causes for which delays are excused
under the Contract and only when the OWNER approves the extension in writing. The

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 CONTRACTOR shall inform the OWNER in writing of any delay within fourteen (14)
calendar days from the date it occurs.

GC-11 EXTRA/ADDITIONAL WORK

Any variation in or of the scope of work as defined in the Contract shall be deemed an alteration. The
OWNER may make any alteration in or of the form, quality or quantity of the WORK or any part
thereof that may, in its opinion, be necessary and desirable, and shall have the power to order the
CONTRACTOR to do so, and the latter shall do, any of the following; increase or decrease the
quantity of any work included in the Contract; omit any such work, change the levels, positions and
dimensions of any part of the works, and execute alterations of any kind necessary for the completion
of the WORK.

Any work clearly independent of and not included in the scope of the WORK as defined in the
Contract, although related thereto, shall be deemed as extra work. All extra work shall be the subject
of negotiations between the parties and no extra work shall be paid by the OWNER unless authorized
by written agreement of the parties, specifically stating the extra work to be performed, the contract
price, and date of completion. If the extra work, shall be deemed to be completely separate work
under a separate contract. Minor alterations, shall be undertaken by CONTRACTOR at no cost to the
OWNER.

All change orders shall be evaluated within fourteen (14) calendar days by the OWNER upon the
submission of the CONTRACTOR of complete reduced plan showing the deviation of the actual
work from the original plan, and the submission of the detailed quantities and costs. No evaluation of
change orders shall be effected without complying the said requirements.

GC-12 COMPLETION AND ACCEPTANCE

Upon completion of the WORK, written notice thereof shall be, served by the CONTRACTOR to the
OWNER. Upon receipt of said notice, the OWNER/ PROJECT MANAGER/ ARCHITECT shall
inspect the WORK to determine if it has been satisfactorily performed and completed in accordance
with the Contract. If the OWNER determines that the WORK has not been satisfactorily performed
and completed, it shall so advice the CONTRACTOR and specify the unsatisfactory portion or
portions of the WORK; whereupon, the CONTRACTOR shall proceed to perform and complete the
WORK accordingly. If the OWNER determines that the WORK had been satisfactorily performed
and completed in accordance to the Agreement, the Owner shall issue a written notice of acceptance
to the Contractor.

GC-13 REMOVAL OF UNFIT EMPLOYEES

The CONTRACTOR shall provide and employ on the Project Site in connection with the execution of
the WORK only such technical assistants as are skilled and experienced in their respective callings
and such representatives, foremen and leadmen as are competent to give proper supervision to the
work they are required to supervise; and such skilled, semiskilled or unskilled labor as is necessary
for the proper and time execution and completion of the work. The PROJECT MANAGER/
ARCHITECT shall have the right to object to and require the CONTRACTOR to remove from the
work any person employed by the CONTRACTOR in the execution of the WORK who in the opinion
of the said PROJECT MANAGER/ ARCHITECT misconduct himself, or is incompetent or negligent,
in the proper performance of his duties or whose employment is otherwise considered by said
PROJECT MANAGER/ ARCHITECT to be undesirable. Such employee so removed shall not again
be employed in the execution of the WORK and shall be immediately replaced by a competent
substitute approved by PROJECT MANAGER/ ARCHITECT.
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GC-14 MATERIALS AND WORKMANSHIP

All materials and workmanship shall be of the respective kinds described in the Contract in the plans
and specifications and in accordance with the instructions of the ARCHITECT and shall be subjected
from time to time to such tests as the OWNER/ ARCHITECT may direct. The CONTRACTOR shall
provide such assistance, instruments, machines, labor and materials as are normally required for
examining, measuring and testing work, and the costs of such tests, including samples, shall be for the
account of the CONTRACTOR. During the progress of the WORK, the OWNER shall have the
power to order the CONTRACTOR in writing from time to time to remove from the Project Site any
material which the opinion of the OWNER/ PROJECT MANAGER/ ARCHITECT not in accordance
with the Contract; to substitute the proper and suitable materials; and to remove and re-execute any
work which in respect to the materials or workmanship is not in accordance with the Contract.

GC-15 CONTRACTOR’S LIABILITY

A. In case materials provided by the OWNER are turned over to the custody, safekeeping and/or
use of the CONTRACTOR, or in case the OWNER allows the CONTRACTOR to use
OWNER-provided tools and equipment or materials, for the purpose of executing the WORK
or any part thereof, and the OWNER-provided tools and equipment or materials, or any part
thereof, are lost or damaged due to circumstances not directly attributable to the fault of the
OWNER, the CONTRACTOR shall pay to the OWNER the cost or value of the materials,
tools or equipment lost or damaged as well as consequential damages immediately upon
demand of the OWNER at such cost as determined exclusively by the OWNER.

B. It is clearly understood that the employees or workers of the CONTRACTOR are not and
shall never be deemed warrants to pay its employees or workers in accordance with the Labor
Code of the Philippines, as amended, and applicable decrees, rules and regulations especially
as regards minimum wage, hours of work and compulsory allowances. It hereby undertakes
to have its employees or workers covered by the Social Security System, the Medicare Act
and the Employee’s Compensation Fund. Accordingly, the CONTRACTOR hereby holds the
OWNER free and harmless against any and all claims of its employees or workers under said
laws, decrees, rules and regulations, as well as under the provisions of the Contract.

C. The CONTRACTOR shall take all necessary precautions and exercise due care and diligence
in the execution of the WORK contracted for herein so as not to cause injury, damage or loss
to person and property. The CONTRACTOR shall hold the OWNER free and harmless from
all claims for injuries, damages or losses to persons and property, and shall indemnify it for
whatever payments, fines or damages it is made pay or suffer by reason of any act, accident,
or occurrence caused by or attributable to the fault, negligence or deliberate act of the
CONTRACTOR or any of its employees or subcontractor workers in the execution of the
WORK. Accordingly, the CONTRACTOR shall obtain and keep in force during the lifetime
of the Contract, adequate insurance coverage, including third-party liability and all risk
insurance coverage.

D. Any damage to or loss of property sustained by the CONTRACTOR, and any injury or death
suffered by its employees or workers, in the performance of the Work herein contracted for
shall be the sole responsibility and liability of the CONTRACTOR, except where the same is
entirely and exclusively sue to the fault and negligence of the OWNER. It shall be the
CONTRACTOR’s duty to protect itself at its own expense with adequate insurance coverage
for such responsibility and liability until the work is satisfactorily completed and accepted by
the OWNER.
Page 17 of 23
GC-16 PRODUCTION OF PAYROLLS, VOUCHERS AND OTHER PAPERS

The CONTRACTOR shall, upon demand by the OWNER, produce and make available for inspection,
examination and/or reproduction his payrolls, vouchers and other papers in order to ascertain that the
CONTRACTOR has fully complied, or is fully complying, with his obligations under GC-12, 14, and
16, including official receipts of payments of the required contributions and fees to the Social Security
System, Medical Care Commission and State Insurance Fund, as well as payments for taxes due to the
government by reason of the WORK. Failure or refusal by the CONTRACTOR to comply with such
demand shall be sufficient ground for the OWNER to withhold any payment due to CONTRACTOR
until he complies therewith and/or to terminate the Contract.

GC-17 CONTRACTOR TO KEEP PREMISES CLEAN

The CONTRACTOR shall, at all times, keep the premises free from accumulation of waste materials
or rubbish caused by his employees. Upon completion of the work, the CONTRACTOR shall, as
directed by the OWNER/ PROJECT MANAGER, remove from the project site, all temporary
structures, rubbish, tools, scaffolding and waste materials and shall leave the work in a clean state.

In case the CONTRACTOR fails to do so, the OWNER shall undertake the cleaning and charge
expenses incurred to the CONTRACTOR.

GC-18 WARRANTY

The CONTRACTOR shall guarantee the WORK against all defects in workmanship and materials
furnished by him for the period specified in the Contract. In the event that the WORK or any part
thereof is found defective and/or not in compliance with the Contract and the Contract Documents
within the said period, the CONTRACTOR shall, at his own expense, promptly carry out
remedial/corrective measures to correct the defects, errors or omissions pointed out by the OWNER to
the satisfaction of the latter. If the CONTRACTOR fails to undertake the said remedial/corrective
work within a reasonable period after due notice, the OWNER shall undertake the said work or have
the same undertaken by other contractors, the expenses and costs for which shall be paid and borne by
the CONTRACTOR, which the OWNER may deduct from any amount due to the CONTRACTOR
under the Contract and/or from the retention, without prejudice to other forms of collection should the
foregoing be insufficient.

GC-19 RESCISSION/CANCELLATION/TERMINATION OF CONTRACT

A. The OWNER may rescind, terminate or cancel the Contract without incurring any liability
whatsoever to the CONTRACTOR, his license to engage in the business of performing the
WORK or in a business which necessarily includes the performance of the WORK; that
cancel or suspend its right to exist as a partnership or its rights to engage in business; that the
partner or person signing the Contract for the partnership has full power and authority to do
so; and if it is a single proprietorship; that the business agency or Contract Documents

(1) The OWNER discovers that the CONTRACTOR (a) has violated or is violating any
of the conditions of the Contract, of any Contract Documents, or of
CONTRACTOR’s warranties provided in GC-4; (b) has abandoned the WORK or
without the prior written consent of the OWNER has assigned the execution of the
WOK to others; (c) is not performing his obligations or executing the WORK in good
faith, or in accordance with the plans and specifications; (d) is not making such
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 progress in the execution of the work so as to ensure its completion within the period
stipulated; or (e) has shown himself incapable of doing or incompetent to do the
WORK;

(2) The OWNER is of the opinion that the completion of the WORK is unnecessarily or
unreasonably delayed;

(3) The OWNER decides to suspend, discontinue, or suspended the execution of the
work stated, described, or provided for in the Contract; or in all cases where the
OWNER finds it more prudent by reason of problems encountered, whatever may be
the cause, to suspend or discontinue with the execution of the work in the Contract

B. The CONTRACTOR shall relieve the OWNER from liability for any claims of the third
parties as a result of the exercise of its right to cancel, rescind or terminate the Contract. The
OWNER may require the CONTRACTOR to execute an unequivocal sworn undertaking to
release the extra judicial that the CONTRACTOR, his employees or third parties may file
against the OWNER.

C. The OWNER shall notify in writing the CONTRACTOR’s bondsmen of rescission,

cancellation or termination of the Contract.

D. If the rescission, cancellation or termination is due to any fault, negligence or to the act or
omission of CONTRACTOR, OWNER shall have the right to damages from
CONTRACTOR.

E. The OWNER may retain all amounts due the CONTRACTOR for approved billing and the
retention fee and apply them to the payment of all damages sustained by the CONTRACTOR
to the OWNER. The OWNER may also refuse to release such amounts to the
CONTRACTOR or unless he executes in favor of the OWNER to the sworn, written
undertaking provided for in GC-16 C as the OWNER may direct, in such form and language
that the OWNER may require and approve.

(1) In lieu of rescission, cancellation or termination of the Contract, and/or in conjunction

therewith, the OWNER, at its option, may require the CONTRACTOR in writing to
undertake remedial measures to correct the deficiencies or defects discovered or
otherwise indicted by the OWNER as necessary to be done in the WORK

(2) If after two (2) days from such notice, no remedial measures are undertaken, or the
remedial measures being undertaken are insufficient or inadequate, as judged by the
OWNER, to correct the defects noted, the said CONTRACTOR shall, upon written
notice from the OWNER, immediately discontinue all further work under the
Contract and shall immediately quit the site, leaving untouched all materials,
equipment, tools and supplies then on site which shall be turned over to a duly
authorized representative of the OWNER. An inventory thereof shall be taken and
the OWNER’s inventory shall be immediately confirmed by CONTRACTOR’s
representative or any of CONTRACTOR’s officer or employee at the Project Site

(3) The OWNER may complete the WORK by such means as it may deem advisable,
using any or all of the CONTRACTOR’s materials, equipment, tools and supplies
remaining on the site

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 (4) In the event that total expenditures of the OWNER in completing the WORK by itself
or with the help of a contractor, subcontractors, or other third persons, including all
payments made on the project prior to the rescission, cancellation or termination,
shall be less than the Contract Price, the excess of the Contract price over said total
expenditures may be applied to settle unpaid wages of CONTRACTOR’s laborers
who have actually worked at the project site to execute the WORK

The amount that the OWNER shall pay shall not exceed whatever is necessary to
cover the unpaid balance of their basic cash wages for time directly and exclusively
devoted to the execution the WORK earned after the last payroll period as reflected in
CONTRACTOR’s payroll, vouchers and other papers, but beyond the effectivity date
rescission, cancellation or termination as established in the written notice to be sent to
the CONTRACTOR and the unpaid balance of the cost of materials actually utilized
in the execution of the WORK; provided that if the amount available for this purpose
is not sufficient to pay for all claims, the payment to laborers shall have precedence
over the claims of suppliers of materials

(5) The OWNER shall have full authority to sell mortgage or dispose of
CONTRACTOR’s equipment, tools, supplies and materials at the cost to be
determined by the OWNER if the OWNER shall find it necessary to do so to
complete the WORK at no cost to the OWNER over the Contract Price or to pay for
the unpaid claims of laborers or of the suppliers of materials.

(6) In case the OWNER shall decide to pay such claims, the OWNER shall not in any
event pay more than what is established by the claimants to the full and complete
satisfaction of the OWNER as legitimate, subsisting reasonable and unpaid claims
after the corresponding documents and supporting papers have been executed and
delivered to the OWNER, and the corresponding quitclaim, in such form and with
such contents as the OWNER may determine, are executed, duly sworn and delivered
to the OWNER within such period, in such copies and in such place or places that the
OWNER may in its absolute discretion determine.

(7) If the total expenditures incurred in completing the WORK by the OWNER and/or
with a contractor or subcontractors including the amount already paid to
CONTRACTOR, the damages that CONTRACTOR has obliged himself to pay as
stated in the Contract, the Special Condition, these General Conditions, or any
Contract Document and the amount paid to laborers and suppliers of materials shall
exceed the Contract Price, the CONTRACTOR and his surety or sureties shall
solidarily be obliged to pay the OWNER such excess, upon demand. Any unpaid
account shall earn interest computed at the highest lawful rate of interest allowed by
the CENTRAL BANK at the time of first written demand. In case it becomes
necessary to refer the matter to the lawyer to enforce the right of the OWNER to
demand payment of the amount determined to be due, including interest, the
CONTRACTOR and the surety or sureties shall pay attorney’s fees equivalent to
15% of such amount due, which in no case shall be less than P1,000.00 and 5% of
such amount due as expense of collection.

GC-20 FORCE MAJEURE/CONTRACT TIME EXTENSION

A. Claim for time extension of the Contract Period due to Force Majeure shall be subject to the
approval of the OWNER, at no additional cost to the OWNER. Events of Force Majeure of
Acts of God include Earthquake, Flood, Typhoon, Cyclone, Revolution, War, Tidal Wave and
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 other cataclysmic phenomena of nature and misfortune, which are beyond human prudence
and foresight.

B. Rain, Wind, Flood or other natural phenomena of in consequential degree to the locality of
the Project Site shall not entitle the CONTRACTOR for additional compensation for damages
resulting therefrom.

C. Strikes shall be considered as Force Majeure only if of national or regional scale. However,
strikes or other work stoppages caused by concerted mass action on the part of the
CONTRACTOR’s employees which are illegal per se or later determined to be illegal by the
National Labor Relations Commission (NLRC) may be a ground for contract time extension;
provided that the strike arising out of unfair labor practice as determined by the NLRC shall
not be considered a case of Force Majeure.

GC-21 ARBITRATION

Any dispute arising from, the interpretation of the Contract Documents, which the OWNER and the
CONTRACTOR are unable to resolve, between themselves, shall be submitted by either party for
resolution or decision to a Board of Arbitrators composed of three (3) members to be chosen as
follows:

A. One (1) member, shall each be chosen by the OWNER and the CONTRACTOR. The
said two (2) members shall in turn select a third member acceptable to both of them.
The decision of the Board of Arbitrators shall, as much as possible, be rendered
within fifteen (15) days from the first meeting of the Board. The decision reached
through the affirmative vote of at least two (2) members of the Board shall be final
and binding upon the OWNER and the CONTRACTOR.

B. Matters not otherwise provided for in the Contract or in a Special Agreement between
OWNER and CONTRACTOR, shall be governed by the provisions of the
Construction Arbitration Law of the Philippines.

The Arbitration or the process thereof shall not be the reason of the CONTRACTOR
to suspend work shall it affect the period of completion stated in GC-10 except that
portion of the WORK that is subjected to Arbitration.

GC-22 SEPARABILITY

The invalidity, in whole or in part, of any provision of these General Conditions shall not affect the
validity of the other provisions hereof.

ARTICLE XII

MISCELLANEOUS

1.0 SUBCONTRACTING OF THE PROJECT: The CONTRACTOR shall not assign, suble or sub-
contract any of the PROJECT covered by this Agreement except upon prior written approval by the
OWNER/ PROJECT MANAGER/ ARCHITECT. Any such assignment, sub-lease or subcontracting
shall be subject to the pertinent provision of this Agreement. Violation of this provision shall
constitute a ground for the termination of this Agreement by the OWNER.

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2.0 WARRANTY WORKS: The CONTRACTOR guarantees the quality of the workmanship under this
Agreement for a period of twelve (12) months from the issuance of Certificate of Final Acceptance of
the project. In this connection, the CONTRACTOR agrees to undertake, as warranty works, the
correction of all the defects attributable to the CONTRACTOR’s fault appearing after the completion
of the PROJECT.

3.0 COMPLIANCE WITH LAWS, ORDINANCES, ETC.: The CONTRACTOR shall comply with all
the laws, ordinances, rules and regulations of both the National and Local Government which have
been approved or may have been approved before the completion of the PROJECT, applicable to and
binding upon the parties hereto.

4.0 INTERPRETATION OF THIS AGREEMENT: In interpreting and construing the provisions of this
Agreement and in determining the intention of the parties hereto, resort shall be made to the
CONTRACT DOCUMENTS. In line therewith, this Agreement and the CONTRACT
DOCUMENTS shall be interpreted and construed together so as to give harmonious effect to their
respective provisions: Provided that, in the event or irreconcilable conflict between the provisions of
this Agreement and those of the CONTRACT DOCUMENTS, the provisions of this Agreement shall
prevail.

IN WITNESS WHEREOF, the parties hereto have set their hands on the date of and place first above written:

FUNSHOES JT & G TEKNIKS CONSTRUCTION CORPORATION

Represented By: Represented by:

ALICE R. PAMIN ENGR. JOSE T. TAYAMORA

President President .
OWNER CONTRACTOR

SIGNED IN THE PRESENCE

_________________________ ____________________________
WITNESS WITNESS

A C K N O W L E D G E M E N T

REPUBLIC OF THE PHILIPPINES

______________________________

BEFORE ME, at the above-stated place, this ______________20__, personally appeared

__________________________with Residence Certificate No.__________________ issued in ___________
on _____________________in his/her capacity as the owner of the proposed project and
_____________________with Residence Certificate No. ________________issued in _______________ on
_____________________ in his capacity as ______________, of
_____________________________________________ known to be the same persons who executed the
foregoing instrument and acknowledged to me the same is their free act and deed, as well as the act and deed
of the companies they represent.

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This instrument consists of twenty three (23) pages, including the page on which this acknowledgment is
written, duly signed by the signatories and their witness on each page hereof.

WITNESS MY HAND AND SEAL on the date the place first stated.

NOTARY PUBLIC

PTR NO. : __________________

Place : __________________
Date : __________________
Tin : __________________

Document No. : _____________________

Page No. : _____________________
Book No. : _____________________
Series of 20__

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