MEMORANDUM OF AGREEMENT

This Memorandum of Agreement (this “Agreement”), made and entered into this ____ day of
______________ 2018 in ____________, by and between:

CAMANSI WATERWORKS, a limited, duly organized, and existing barangay-water

and sanitation association (BWASA), operating exclusively and located in Barangay
Badas, Mati City, in the province of Davao Oriental, Republic of the Philippines,
represented herein by its de facto chief executive, and concurrent Barangay Captain,
HON. BONIFACIO O. VISITACION, hereinafter referred to as the “FIRST
PARTY”,

-AND-

SOUTH BALIBAGO RESOURCES, INC., a privately owned and controlled

corporation organized and existing under and by virtue of the laws of the Philippines
with postal address at Brgy. Gines Viejo, Passi City represented by its President,
CRISTINA ISABELLE P. ALEJANDRO, hereinafter referred to as the “SECOND
PARTY”,

Together, or jointly, referred to as “PARTIES;”

W I T N E S S E T H:

WHEREAS, the SECOND PARTY entered into a 35-year Memorandum of Agreement (MOA) with the
City of Mati in January 2018, the latter ably represented by City Mayor Hon. Carlo Luis P. Rabat, to
undertake, operate and manage a Parallel Level III Water System to address inadequate levels of clean
water service, low pressure and intermittent water supply; and to facilitate long-term water security and
universal access throughout the LGU;

WHEREAS, in the abovementioned MOA, the SECOND PARTY was conferred the privilege, clearance,
and capability of either providing or augmenting Level III service in all underserved and unserved
barangays of the LGU, including those already receiving formal services from any water provider, such as
the Water District, Barangay- and Rural Water and Sanitation Associations, Cooperatives and equivalent
operators;

WHEREAS, the FIRST PARTY, is a barangay-based Level III Water Operator, formed and operating to
ascertain beneficial access to water supply among constituents and stakeholders of the barangay, and to
properly manage and appropriate for its concessionaires a stable cache of water resources and facilities
within the confines of the barangay;

WHEREAS, the concessionaires of the FIRST PARTY, as well as other residents and constituents of
BARANGAY BADAS have clamoured for better, more responsive, and efficient water supply and
distribution service, and have thus collectively requested for organised service cum strategic option that is
more comprehensive, reliable, and can institutionalize universal water supply and distribution system in
and outside the present service area of the FIRST PARTY;

WHEREAS, the FIRST PARTY, admits it is limited in its financial, technical, managerial and operational
resources and capabilities, specifically towards the design, implementation, administration and
management of a medium- to long-term investment and development program for Level III waterworks in
the Barangay that would raise prevailing levels of water supply service;

WHEREAS, in purview of the original MOA by and between the City of Mati and the SECOND PARTY,
the FIRST PARTY recognises the SECOND PARTY – its constitution, initiations, jurisdiction, and

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representations – as a permanent resolution to upgrading water supply provisions of the FIRST PARTY,
and widening coverage throughout the Barangay or locality. The SECOND PARTY is likewise
considered a competent, appropriate and autonomous enterprise that can readily accommodate existing,
outstanding gaps in water supply of concessionaires, and address the future water demand requirements of
prospective concessionaires and customers in the Barangay;

WHEREAS, in reference to the foregoing, the FIRST PARTY has invited the SECOND PARTY to
finance, manage, operate and maintain a LEVEL III WATER SUPPLY SYSTEM, in the Barangay,
inclusive of existing operations and concessionaires of the BWASA, among other provisions and items,
under this supplemental Agreement;

WHEREAS, the SECOND PARTY accepts the invitation to establish, finance, operate, and manage a
LEVEL III WATER SYSTEM in Barangay Badas, inclusive of and covering all and any served and
unserved constituent, or prospective concessionaire of the FIRST PARTY, as means of precipitating long-
term water supply and security in the LGU, and enhance standards of living and productivity in the
Barangay;

NOW THEREFORE, for and in consideration of the above-cited premises and mutual covenants herein
contained, the parties do hereby bind themselves and agree on the following:

TERMS AND CONDITIONS

1. GRANT OF RIGHTS – The FIRST PARTY, as the immediate local authority embodying equivalent
powers, responsibilities, and laws duly promulgated by the local government of the Republic of the
Philippines under RA 7160, shall grant to the SECOND PARTY the exclusive right and
responsibility to:

i. Receive, takeover, manage, occupy, rehabilitate, repair, improve, refurbish, manage, qualify
or revaluate, and decommission the existing CAMANSI BWASA under a principle of
assignment: its infrastructure and facilities, technical, commercial, financial and operational
systems, and any other works or program currently established thereon, as it applies in this
Agreement;

ii. Design, construct, finance, operate and maintain a new and complete waterworks system in
BARANGAY BADAS; to conduct and carry out the necessary and required procedures,
such as, but not limited to well drilling, pipe laying, construction of storage tanks, pump
houses, filtration systems, water treatment plants and any other waterworks facilities or
works necessary to render reliable and adequate water service to the said area;

iii. Introduce, establish and construct improvements which the SECOND PARTY will own
manage, maintain and operate absolutely throughout the life of this Agreement;

iv. Render reliable and adequate water service to the said area in conformance to duly approved
standards and regulations of the National Water Resources Board (NWRB) and other
government agencies;

v. Bill and collect payment from the serviced customers for all services rendered;

vi. Disconnect customers with past due accounts;

vii. Utilize all water resources within the territorial jurisdiction of the LGU such as but not
limited to catchment areas, watersheds, springs, wells, reservoir and other water sources;

2. FREEDOM OF OPERATIONS – The FIRST PARTY shall grant the SECOND PARTY the full
power and authority to autonomously and freely deal with its existing customers and concessionaires

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 in the conduct of its business, and as the NWRB deems appropriate, provided that the vested rights
of the LGU are not compromised, undermined or affected.

3. ASSIGNMENT OF PRESENT WATERWORKS – In cognisance of the existence of a BWASA, the

FIRST PARTY shall:

a. Enable and ensure the effective, efficient and comprehensive assignment of the operations of
the BWASA to the SECOND PARTY, including, but not limited to, presently served
customers, transmission and distribution network and pipes, deep and shallow wells, and
water sources, reservoirs, tanks and storage facilities, pumps and motors, other mechanical
and electrical assemblies, meters, other appurtenance and devises necessary, relevant, and
useful to the conceived operational strategies and proposals of the SECOND PARTY under
and throughout the 35-Year Contract;

b. All such transferred, depreciable assets, including pipes, fittings, commercial and consumer
appurtenances, shall be subject to the disposition, audit, appraisal, and qualification of the
SECOND PARTY, in context of appropriating these for future operations;

c. All operational items and assets shall be documented to list and account for their respective
conditions, constitutions, contributions, designations and assignations, as it applies. This
document shall be prepared by the SECOND PARTY in cooperation with or with the
guidance of a representative, or equivalent, of the BWASA.

4. FRANCHISE OR COVERAGE AREA – The FIRST PARTY shall grant the SECOND PARTY the
jurisdiction and preferential rights to serve the entirety of the Barangay, thereby to accommodate and
target any served, underserved, and unserved barangays, villages and locales of the LGU, hereinafter
referred to as the “FRANCHISE AREA”.

5. BARANGAY ASSISTANCE – The FIRST PARTY shall commit to help and assist the SECOND
PARTY in negotiating and securing roads rights of way (ROW) and easement within the franchise
area relating to the implementation and operations of its waterworks facilities and/or access to such
facilities so that the SECOND PARTY may perform its obligations under this Agreement.

Secondly, the FIRST PARTY shall provide needed and required local permits for the SECOND
PARTY once this Agreement is signed. These local permits include barangay clearances, certificates
of no objection, and other waivers and forms that maybe required for the SECOND PARTY to
implement its program of work; The FIRST PARTY shall also provide the SECOND PARTY with
any other requisite, supporting legal issuances that reveal the signatures of Majority.

Thirdly, the FIRST PARTY shall assist the SECOND PARTY secure appropriate avenues,
schedules, parties, and commitments in regard to liaison activities, public fora, consultative
engagements, and similar exercises to be conducted by the SECOND PARTY vis-à-vis the
customers, residents and representatives, within the Franchise Area of the SECOND PARTY.

6. PERIOD – The period of agreement is THIRTY-FIVE (35) YEARS to commence upon the
fulfillment of the following conditions precedent, hereinafter referred to as the
“COMMENCEMENT DATE”:

a. Complete and effective turnover and transition of the BWASA, notably its commercial, billing,
organisational, and business operations, scope, and configurations to the SECOND PARTY;

b. Enactment by the Council of Barangay Officials of the FIRST PARTY of the resolution, or
official issuance, ratifying or seconding this Agreement between BOTH PARTIES;

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7. EXPIRATION / TERMINATION AND RENEWAL – After a period of THIRTY-FIVE (35)
YEARS from the Commencement Date, this Agreement may be renewed for another period that the
FIRST PARTY and SECOND PARTY will mutually agree upon, provided that:

a. The constituents and concessionaires of the FIRST PARTY are satisfied with the water service
provided by the SECOND PARTY;

b. The Council of Barangay Officials is amenable to the RENEWAL of this agreement;

c. After 30 years or before the turn over, the system should be inspected and rehabilitated if
necessary.

In the event that the FIRST PARTY and SECOND PARTY fail to agree on the renewal of this
agreement, the FIRST PARTY shall have the option to form or appoint a capable agency of the local
government, herein referred to as the SUCCEEDING PARTY, to assume the management,
operations and ownership of the waterworks system subject to the payment of a fair market value for
all or some of the fixed assets owned or introduced by the SECOND PARTY, except for:

i. Any property such as but not limited to land, equipment, and pipelines which are assigned to
the SECOND PARTY during the term of this Agreement;

ii. Any fixed asset, which may be deemed fully depreciated or no longer practical, to be
removed by the SECOND PARTY in the event that the SUCCEEDING PARTY decides not
to acquire the same.

Should the FIRST PARTY fail to appoint or form the SUCCEEDING PARTY and after the
expiration of this Agreement opts to have the system maintained and operated by a private firm, the
SECOND PARTY shall have the priority right, assuming that the same terms and conditions are
offered by other negotiating / competing parties to re-negotiate with the FIRST PARTY for the
continuance of its operation subject to the terms and conditions agreed upon;

8. FRANCHISE FEE – In exchange for the assignment of assets and operations of the BWASA, the
SECOND PARTY shall remit to the FIRST PARTY a one-time, lump-sum payment of PHILIPPINE
PESOS ONE HUNDRED FIFTY THOUSAND ONLY (Php 150,000.00), and thereafter, beginning
in Year 2 of operations by the SECOND PARTY an annual Franchise Fee following this fee
structure:

PERIOD FRANCHISE FEE PER YEAR

Date of Commencement (one-time) Php 150,000
Years 2 – 3 Php 60,000
Years 4 – 5 Php 80,000
Years 5 – 10 Php 100,000
Years 10 – above Php 120,000

The SECOND PARTY shall remit the annual Franchise Fee to the Barangay Treasurer, or a more
appropriate department of the FIRST PARTY or LGU, on a semi-annual basis; that is, FIFTY
PERCENT (50%) in June and the remaining 50% in December of each year during the life of the
Agreement.

9. TARIFFS – Beginning the COMMENCEMENT DATE, the SECOND PARTY shall be allowed to
bill/invoice and collect payment from its customers in the service area above for services rendered,
and as such:

a. On the first year, the SECOND PARTY, shall, to wit, adopt and apply the imposition of the
BWASA’s existing tariff table in compliance with the Community Consultations, where the

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 minimum rate is set at PHILIPPINE PESOS ONE HUNDRED PESOS (Php 100.00) for the first
10 cubic meters, and the SECOND PARTY shall charge the customers for the consumption
above the minimum compliant with the water rate schedule in the same, existing tariff structure
of the BWASA.

b. Subsequent to, or proceeding from Year 1, the SECOND PARTY shall escalate the water or
tariff rates as identified and proposed in SCHEDULE 1. SCHEDULE 1 shall in principle be
patterned or conform closer with the tariff schedule recognised and operationalised by the
SECOND PARTY with the City of Mati, in the original MOA. Hence, the SECOND PARTY
shall be tasked accordingly to escalate its water rates as it befits the levels of improvement and
operating service, but likewise subject to the approval of NWRB and the Barangay Council;

c. Require all fresh applicants to sign a contract with the SECOND PARTY requiring them to make
or put up a meter and consumption deposit if they have not yet done so and pay all service fees
related to the connection to the water system if they have just applied for a new service
connection. SECOND PARTY may offer, as a marketing incentive to potential new customers,
the advance payments of the guaranty deposit to ensure prioritization of connection to the water
service upon energization of the water system;

d. Require new customers to shoulder all expenses for materials necessary to tap their meter stand
to the mainline;

e. All tariff adjustments, increases and movements shall be subject to public hearing or
consultations, and also collegial review involving the FIRST PARTY, the Barangay Council, and
the Sangguniang Panglunsod, if necessary.

Furthermore, any of the aforementioned sums charged to the customer is exclusive of any value
added tax or other tax which might be chargeable in connection with payment of that sum and which,
if chargeable will be stated separately and payable by the customer at the same time as it makes the
relevant payment.

10. EMPLOYEES – The SECOND PARTY shall identify, recruit, and hire new labor and professional,
supervisory and managerial personnel as required to perform the singular, and collective obligations
and undertakings under this Agreement, subject to prior dialogue, deliberation and approval by the
FIRST PARTY.

Further, the SECOND PARTY shall extend preferential albeit qualified treatment to existing staff of
the FIRST PARTY, and members of the Barangay, in the engagement of personnel, labourers and
casual workers whose functions are required by the SECOND PARTY in the rehabilitation and
expansion of the existing BWASA operations.

11. RETENTION AND RESTRUCTURING – Upon commencement date, the SECOND PARTY shall
be enjoined to craft, present and implement before the FIRST PARTY, a Retention and Restructuring
Scheme (the “Scheme”) that shall, to wit:

a. Enable wiling, interested, and qualified personnel from the BWASA to join the SECOND
PARTY, or its extensions and agents, in the continued improvement, operations, management
and maintenance of the Waterworks;

b. Offer a reasonable, and equitable compensation package to any BWASA staff affected or
retrenched as a result of the transfer, transition or assumption of the SECOND PARTY in the
operations and management of the BWASA; However, the SECOND PARTY shall have
exclusive discretion, review and disposition over this transaction;

c. The Scheme shall be limited to and applicable only to full-time or permanent staff of the
BWASA;

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 Moreover, at no point during the implementation of this Agreement between the Parties must the
inability to complete and consummate the retention or retrenchment scheme, fatally jeopardise the
schedule of Project implementation, operations and management of the same under the SECOND
PARTY.

12. TITLES

a. The title to the entire waterworks facility assumed (if any) and procured by the SECOND
PARTY in the performance of its obligations under this Agreement shall not pass to the FIRST
PARTY and shall remain the absolute property of the SECOND PARTY other than that
provided for in Clause 5 (Renewal).

b. The SECOND PARTY shall have the full authority to create and provide security over the
waterworks facilities.

13. WARRANTIES

a. The FIRST PARTY hereby represents warrants and undertakes to the SECOND PARTY that at
the date of this Agreement and the COMMENCEMENT DATE:

i. It is duly organized and existing local government of the Republic of the Philippines;

ii. It has the full power and authority to enter into this Agreement;

iii. It has taken all necessary action for the authorization of its entry into this Agreement;

iv. This Agreement will be enforceable in accordance with its terms under Philippine law
without any requirement for further action to be taken by any party or any third party;

v. It shall not create any rule, ordinance or resolution to the effect of impairing the ability
of the SECOND PARTY to fulfill its obligations under this Agreement.

b. The SECOND PARTY hereby represents warrants and undertakes to the FIRST PARTY that at
the date of this Agreement and the COMMENCEMENT DATE:

i. It is a corporation duly established under the law of the Philippines;

ii. It has full power and authority to enter into this Agreement;

iii. It has taken all necessary action for the authorization of its entry into this Agreement and
the performance of its obligations under this Agreement;

iv. It shall provide a dependable 24-hour water service within the first two (2) years of
operations;

v. It shall provide adequate water pressure of at least 16 psi, particularly during peak hours,
within the first two (2) years of operations;

vi. It shall ensure that the supplied water is chlorinated or disinfected water;

vii. It shall ensure that the supplied water will be subject to monthly laboratory tests against
microorganisms;

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 viii. It shall expand the water services to areas within its Franchise Area that have not yet
been served, provided the expansion is economically feasible.

c. BOTH PARTIES hereto represented and warranted the power and authority, and legal right to
execute this Agreement and perform their respective obligations. PROVIDED, that this
agreement is the law between the parties and constitutes the legal, valid, subsisting and binding
obligation of the parties hereto enforceable in accordance with the foregoing agreed terms.

14. CONDITIONS PRECEDENT

a. The respective obligations of the parties under this Agreement are conditional upon the
occurrence of the following:

i. The representations and warranties of BOTH PARTIES in this Agreement shall be true
and correct in all material respects, whenever applicable;

ii. BOTH PARTIES shall have exchanged certificates, accordingly signed by duly
authorized officer of BOTH PARTIES attesting to the veracity, in all material respects
and whenever applicable, of the representations and warranties as mentioned herewith;

iii. A Certified True Copy of the Resolution of the FIRST PARTY authorizing the
execution, delivery and performance of this Agreement;

iv. All government authorizations such as, but not limited to any consent, permission,
license, concession, authorization, approval or certificate which is required by BOTH
PARTIES in this Agreement;

v. No order, statute, rule, regulation, executive order, injunction, stay, decree or restraining
order shall have been enacted, entered, promulgated or enforced by any court of
competent jurisdiction or governmental or regulatory authority or instrumentality having
jurisdiction over the matter that restraints, prohibits or declares illegal the consummation
of the transactions contemplated herein, and no action, suit, inquiry or proceeding shall
have been instituted or threatened by any governmental or regulatory authority or
instrumentality having jurisdiction over the matter that seeks to restrain, prohibit or
declare illegal the consummation of the transaction contemplated herein;

b. BOTH PARTIES shall use all reasonable means of obtaining the aforementioned items to satisfy
the Condition Precedent. Furthermore, on any date that a party becomes aware that any of the
conditions have been satisfied, it shall promptly give notice thereof to the other party of such
accomplishment.

c. Furthermore, if this Agreement is terminated for failure of the SECOND PARTY to fulfill the
Conditions Precedent as stated in paragraphs i, ii, iv and vi, of this Clause 11, the SECOND
PARTY shall indemnify the FIRST PARTY against all costs, charges and expenses incurred by
it in connection with the negotiation, preparation and termination of this Agreement. If this
Agreement is terminated for failure of the FIRST PARTY to fulfill the Conditions Precedent as
stated in paragraphs i, ii, iii, iv of this Clause 11, then the FIRST PARTY shall indemnify the
SECOND PARTY against all costs, charges and expenses incurred by it in connection with the
negotiation, preparation and termination of this Agreement.

15. FORCE MAJEURE (Man Made)/FORTUITOUS (Act of God) EVENTS

a. A “Force Majeure/Fortuitous Event” shall mean any event or circumstance or combination of

events or circumstances that wholly or partly prevents or unavoidably delays any part in
performance of its obligations under this Agreement, but not only if and to the extent that such
events and circumstances are not within the reasonable control, directly or indirectly, of the

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 affected party and could not have been avoided if the affected party had taken reasonable care. In
this case, BOTH PARTIES should not be liable for the force majeure. Force Majeure/Fortuitous
Event includes the following events and circumstances to the extent that they, or their
consequence, satisfy the above requirement and paragraphs b and c.

i. Any form of government occurrence that may render any or BOTH PARTIES incapable
of fulfilling their obligations in this Agreement; or

ii. Any act of war (whether declared or not), invasion, armed conflict or act of foreign
enemy, blockade, riot, terrorism or exercise of military power; or

iii. Any earthquake, flood, fire, hurricane or any other act of God or natural environmental
disaster wherever occurring; or

iv. Any condition of and circumstance affecting the site of the facilities (including but not
limited to soil, subsurface, environmental, geological, seismic, geotechnical, climactic,
hydrological conditions and the existence of underground obstructions, fossils, antiquity
structures and archeological remains); or

v. Inadequate source of water of the SECOND PARTY (but only to the extent that such
inadequate supply does arise from a breach by the SECOND PARTY of its obligations
under this Agreement); or

vi. Any failure of the water extracted from the water resources by the SECOND PARTY to
meet the raw water standards of the Philippines (but only to the extent that such failure
does arise from a breach by the SECOND PARTY of its obligations under this
Agreement); or

vii. Any interruption in the supply of electricity to the serviced area; and

viii. Any event or circumstance analogous to the foregoing.

b. If any of the following circumstances occur during the Period of this Agreement and upon
COMMENCEMENT DATE, the SECOND PARTY shall not have the right to consider any of
them to be a Force Majeure/Fortuitous Event that would suspend the performance or excuse the
non-performance of its obligations under this Agreement.

i. Any patent or latent defects in any part of the new facilities; and

ii. Breakdown or ordinary wear and tear of the facilities.

c. The FIRST PARTY shall not have the right to consider any Government Occurrence or any even
referred to in sub-paragraph a. v, vi, or vii of this Clause 12 to be a Force Majeure/Fortuitous
Event that would suspend the performance or excuse the non-performance of its obligations
under this agreement.

d. As such, and subject to paragraphs a, b and c of this Clause, no party shall be considered to be in
default under this Agreement when and to the extent that performance of obligations under this
Agreement is prevented whether wholly or partly, by any circumstance of any Force
Majeure/Fortuitous Event which arises after the date of this Agreement and each party shall be
entitled to suspend performance of its obligations to the extent that such party is prevented
wholly or in part in carrying out its obligations under this Agreement.

e. Furthermore, if any party shall rely on the occurrence of the event or condition as a basis for
being excused from performance of its obligations under this Agreement, then the party relying
on the event or condition shall

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 i. Provide prompt notice to the other party of the occurrence of the event or condition
giving an estimation of its expected duration and the probable impact on the
performance of its obligations hereunder;

ii. Exercise all reasonable efforts to continue to perform its obligations hereunder;

iii. Expeditiously take action to correct or cure the event or condition excusing performance;

iv. Exercise all reasonable effort to mitigate or limit damages to the other party to the extent
such action will not adversely affects its own interests;

v. Provide periodic notices to the other properties with respect to its action and plans for
actions and render prompt notice to the other party of the cessation and the event or
condition giving rise to it being excused from performance.

vi. Be likewise held free and harmless from any obligation resulting from the occurrence
beyond the control of both parties, or the event is not the fault of both or either parties.

16. EVENTS AND REMEDIES OF DEFAULT

a. Each of the following shall, to the extent that it is not caused by the default of the FIRST
PARTY or any act or omission of any Government Entity or a Force Majeure/Fortuitous Event
and is not remedied within the time period permitted (if any), be a SECOND PARTY EVENT
OF DEFAULT and entitle the FIRST PARTY to issue a Notice of Intention to terminate
immediately;

i. The SECOND PARTY fails to provide services of sufficient standard that there is a
widespread danger to the health of the public in the serviced area and such failure
continues for 30 days after written notice from the FIRST PARTY to the SECOND
PARTY requesting that such a failure be cured; or

ii. The SECOND PARTY fails to perform or fulfill its obligations and such failure
continues for 180 days after written notice for the FIRST PARTY to the SECOND
PARTY requesting that such failure be cured; or

iii. The SECOND PARTY becomes financially insolvent.

b. In an event that the FIRST PARTY fails to perform any of its obligations under this Agreement
in a material respect and such failure continues for 45 days after written notice from the
SECOND PARTY to the FIRST PARTY requesting that such failure be remedied; and, if such
non-performance is not caused by a default of the SECOND PARTY or a Force
Majeure/Fortuitous Event, a FIRST PARTY EVENT OF DEFAULT shall be declared and shall
thus entitle the SECOND PARTY to issue a Notice of Intention to terminate immediately.

c. If a Force Majeure/Fortuitous Event occurs either:

i. For a period exceeding 180 calendar days, or

ii. For an aggregate of more than 180 calendar days over any period of 360 calendar days
then the SECOND PARTY may terminate this Agreement by issuing a Termination
Notice at any time after the 180-calendar day period has expired.

17. CONSEQUENCE OF DEFAULT – If any Event of Default occurs and due notice of intent to
terminate has been issued to the defaulting party, BOTH PARTIES shall cease to perform their

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 obligations herein stated in this Agreement. Thereafter, BOTH PARTIES shall agree on the
following terms:

a. Should the Event of Default occur before the SECOND PARTY has completely recovered its
investment, the FIRST PARTY shall:

i. Allow the SECOND PARTY to operate the water system with due assistance and
approval, until such time it would have completely recovered its investment, as well as
repay all loans incurred in the conduct of business; or

ii. Procure all assets of the waterworks system from the SECOND PARTY based on terms
mutually agreed upon by BOTH PARTIES, and insofar as the SECOND PARTY shall
be able to recover its investment, and repay all loans incurred in the conduct of business.

b. If the investment of the SECOND PARTY would have been completely recovered at any time or
within the occurrence of the Event of Default, BOTH PARTIES shall follow the conditions
stated in Clause 5 (Renewal) in the turnover of the waterworks facilities.

18. CONFIDENTIALITY – Each of the parties shall treat all documents and other information whether
written or oral and whether technical or commercial, supplied to them by or on behalf of any other
party to this Agreement, relating to the facilities and shall not, without the prior written consent of
the other party or as required by law, the regulations of any international stock exchange or
recognized procedural practice and except in the case of information given to the lenders, or any
direct or indirect parent corporation.

The SECOND PARTY or any shareholder thereof, neither disclose to any third party the whole or
part of any such document or information nor shall otherwise communicate the same unless for the
purpose of complying with the terms of this Agreement.

However, the SECOND PARTY and its contractors shall be entitled to disclose to any of their
employees, advisers and contractors all documents and other information as may be necessary for the
performance of their respective obligations, but they shall not cause or permit any of these persons to
disclose any document or information made available to them except as maybe necessary for such
performance.

19. ASSIGNMENT

a. The FIRST PARTY shall not assign or otherwise transfer all or any of their rights or obligations
under this Agreement without the prior written consent of the SECOND PARTY.

b. The SECOND PARTY may, with the consent of the SECOND PARTY:

i. Delegate, assign and/or sub-contract any of its rights or obligations under this
agreement; or

ii. Assign, transfer or create security over all or any benefit of this Agreement for the
purposes of the financing or refinancing of the Company. Without prejudice to the terms
of any agreement entered into, all other assignment or transfer by the SECOND PARTY
of its rights and obligations under this Agreement shall require the prior written consent
of the FIRST PARTY such consent not to be unreasonably withheld or delayed.

20. RATIFICATION / CONFIRMATION – This agreement becomes effective and enforceable upon
ratification/confirmation by the Barangay Council or the Sangguniang Panglunsod as required under
the Local Government Code of 1991.

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 BOTH PARTIES hereto represented and warranted the power and authority and legal right to
execute this Agreement constitutes the legal, valid, subsisting and binding obligation of the parties
hereto enforceable in accordance with agreed term.

21. MISCELLANEOUS PROVISIONS

a. CUMULATIVES RIGHTS – Any right or remedy conferred by this Agreement upon BOTH
PARTIES shall not be exclusive of any other rights or remedy of BOTH PARTIES, whether
under this Agreement or provided or permitted to BOTH PARTIES at law or in equity, but each
right or remedy shall be cumulative of very other right or remedy available to BOTH PARTIES.

b. NO WAIVER – The failure of either party to this Agreement to insist upon the strict
performance of any of the terms and conditions of this Agreement shall not be construed as a
waiver thereof or of any other terms and conditions of this Agreement, but the same shall
continue and remain in full force and effect as if no such forbearance or waiver had occurred.

c. BINDING EFFECT – Except as otherwise expressly provided, this Agreement shall inure to the
benefit of and be binding upon each party thereto, and their respective successors and assigns.

d. ENTIRE AGREEMENT – This Agreement contains the entire agreement of the parties
concerning the subject matter hereof and shall, as of the effective date hereof, supersede all
previous understandings and agreements, whether oral or written, between the parties on the
subject.

e. NOTICES – Any notice or communication required to be given hereunder shall be deemed to

have been given when sent by messenger, telegram, or by registered mail to the addressee at its
address herein indicated or such other address as the parties may subsequently designate.

f. AMENDMENT OR MODIFICATION OF THE AGREEMENT- Any amendment or

modification of this Agreement, or any additional obligation assumed by either party in
connection with this Agreement, shall be binding only if in writing and signed by the authorized
representatives of the parties.

g. SEPARABILITY CLAUSE – In the event that any one or more of the provisions of this
Agreement are declared invalid, illegal, or unenforceable, such provisions shall be deemed
stricken out, and the invalidity, illegality, or unenforceability of these provision/s shall not affect
the rest of the Agreement, which shall remain in full force and effect.

h. VENUE OF LEGAL ACTION – All actions or proceedings arising out of or in connection with
this Agreement shall be brought preferably before the nearest Regional Trial Court of Davao
Oriental, or at the National Water Resources Board, Metro Manila.

SCHEDULE 1
TARIFF SCHEDULE
YEAR 1 – ADOPTING THE PRESENT TARIFF TABLE, AS PER LATEST LOCAL
ORDINANCE

YEAR 2

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Prospectively beginning on Year 2, the SECOND PARTY will be charging a minimum of PHILIPPINE
PESOS TWENTY PESOS (PhP 20.00) per cubic meter of water for Residential Establishments and
FORTY SEVEN (PhP 40.00) per cubic meter of water for Commercial Establishments during the first
year of operations. Each customer will be billed for a minimum of TEN (10) cubic meters per month or
TWO HUNDRED PESOS per month (PhP 200.00/month) for Residential Establishments and FOUR
HUNDRED PESOS per month (PhP 400.00/month) for Commercial Establishments.

Year 2 (Proposed)

Consumption Block Residential Rate (PhP/cu.m.) Commercial Rate (PhP/cu.m.)

0-10 cu.m. P 200.00 P 400.00

11-20 cu.m. P 25.00 /cu.m. P 45.00 /cu.m.

21-30 cu.m. P 30.00 /cu.m. P 50.00 /cu.m.

31-40 cu.m. P 35.00 /cu.m. P 55.00 /cu.m.

41-50 cu.m. P 38.00 /cu.m. P 58.00 /cu.m.

51-60 cu. m. P 40.00 /cu.m. P 61.00 /cu.m.

61-70 cu.m. P 42.00 /cu.m. P 64.00 /cu.m.

71-100 cu.m. P 44.00 /cu.m. P 67.00 /cu.m.

Over 100 cu.m. P 46.00 /cu.m. P 72.00 /cu.m.

In addition, the SECOND PARTY may impose reasonable environmental charges which shall be charged
along with the water bill to ensure that the septic tanks of the houses and establishments do not overflow,
thus promoting good hygiene. Granted, the levy of additional environmental charges shall be
communicated to the customers, for disposition and appropriate discourse, prior to their imposition.

Succeeding increases in water rates for the following years beyond the third year shall be confirmed or
communicated to the FIRST PARTY and shall be accompanied by reasonable justification with the goal
of ensuring consistent delivery of potable water to the consumers. The same shall also be subjected to the
approval of the National Water Resources Board (NWRB).

IN WITNESS WHEREOF, the parties have hereunto affixed their signatures in the place and on the date
stated above.

CAMANSI WATERWORKS SOUTH BALIBAGO RESOURCES, INC.

BARANGAY BADAS, CITY OF MATI

By: By:

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HON. BONIFACIO O. VISITACION CRISTINA ISABELLE P. ALEJANDRO
Barangay Captain President
FIRST PARTY SECOND PARTY

WITNESSES:

___________________________________ ___________________________________

Republic of the Philippines )

Mati City ) s.s.

Province of Davao Oriental)

BEFORE ME, a Notary Public for and in _________, have on this _______ day of
__________________, 2018 personally appeared:

Valid I. D. No. Issued at Issued on

Bonifacio O. Visitacion

Cristina Isabelle P. Alejandro

Known to me and to me known to be the same persons who executed the foregoing instrument and
acknowledged to me that the same is their free act and deed. This instrument consists of THIRTEEN (13)
pages including this page whereon the acknowledgement is written.

Doc. No. _______________

Page No. _______________
Book No. _______________
Series of 2018

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