SUBCONTRACT AGREEMENT

This Agreement made and entered into this 20th day of May 2014 at Manila, Philippines,
by and between:

Ruben A. Donina, Jr., of legal age, resident of ____________________________,

herein referred to as the “CONTRACTOR”

and

Arthur N. Baes, of legal age, resident of __________________________________,

herein referred to as the “SUBCONTRACTOR”

W I T N E S S E T H:

WHEREAS, the CONTRACTOR desires to obtain the services of the

SUBCONTRACTOR for the latter to provide and supply the necessary labor and
equipment for the repair of the two-storey building located at __________, Bohol,
herein referred to as the “PROJECT.”

WHEREAS, the SUBCONTRACTOR desires to provide such services.

NOW THEREFORE, for and in consideration of the foregoing premises, the

parties hereto agree as follows:

ARTICLE I
SCOPE OF WORK

1.1 The SUBCONTRACTOR shall provide and supply the labor and equipment for the
following:

a. Repair and retro fitting of two-storey building which includes but not limited to:
plastering, repainting, kitchen renovation, door and panel repair, roofing
insulation installation and tiling works;

b. Construction of the extension of the two-storey building which includes but not
limited to: structural and architectural works including furniture and fixtures,
electrical works, plumbing and sanitary works.

ARTICLE II
CONTRACT PRICE

2.1. For and in consideration of the performance and accomplishment of the PROJECT,
the CONTRACTOR shall pay the SUBCONTRACTOR the total amount of
________________________ (PhP __________) only subject to Article VI (Payments)
of the Agreement and pertinent laws on contracts.

2.2. The Contract Price is inclusive of all duties, taxes, licenses, premiums, fees and
charges which may accrue by virtue of the PROJECT, such as but not limited to permit
and registration fees, municipal and personal property taxes, fees for storage or
consumption, employment taxes, payments and contributions imposed by law and

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insurance. All such fees shall be for the account of the SUBCONTRACTOR.

ARTICLE III
TIME OF COMPLETION AND LIQUIDATED DAMAGES FOR DELAY

3.1 The SUBCONTRACTOR shall perform and complete the PROJECT to the satisfaction
of the CONTRACTOR within ______________________ reckoned from the date of
receipt of the Notice to Proceed.

3.2 Time being the essence of the PROJECT, delay in the consumption of the PROJECT
may be excusable only if the same is due to force majeure, additional work approved
by the CONTRACTOR, or for any other special circumstance as may be determined by
the CONTRACTOR.

3.3 Force majeure is defined as any circumstance beyond the control of the parties,
which directly prevent the parties from performing their obligations such as, but not
limited to extraordinary weather conditions, fires, earthquakes or other natural
calamities, valid work stoppage or suspension, orders of competent authority, civil
disorder, war and other hostilities.

3.4 Should there arise any circumstance provided in 3.2 above which affects the
performance of its obligations, the party concerned shall notify the other in writing
setting forth such facts and circumstances within five (5) days of its occurrence. Should
there be need to extend the period of compliance with its obligations, both parties shall
agree on a reasonable period within which to comply with the undertaking. Any other
request for extension by the SUBCONTRACTOR may be granted or denied by the
CONTRACTOR at its sole discretion.

3.5 Upon the occurrence of any circumstance of force majeure, the SUBCONTRACTOR
shall endeavor to continue in the performance of its obligations so far as reasonably
practicable. In such cases, the SUBCONTRACTOR shall give the CONTRACTOR written
notice of the steps it proposes to take, including any reasonable alternative means for
the performance of its obligations. The SUBCONTRACTOR shall not take any such steps
unless authorized in writing by the CONTRACTOR.

3.6 In no case shall extension of time for completion be granted in any of the following
circumstances:

a. Ordinary unfavorable conditions;

b. Labor problems or disputes involving the SUBCONTRACTOR’s employees,
workers or personnel, agents or suppliers;
c. When the reason given for the request for extension has already been
considered in the determination of the original completion time.

3.7 Should delay or default be due to any cause attributable to the SUBCONTRACTOR,
the SUBCONTRACTOR shall be liable to pay liquidated damages in the amount of Ten
Thousand Pesos (PhP 10,000) per day of delay. The CONTRACTOR shall have the
option to demand the payment of, or deduct such damages from any amounts due the
SUBCONTRACTOR. The CONTRACTOR shall notify the SUBCONTRACTOR in writing of
its choice of action under this section.

3.8 The provisions on liquidated damages notwithstanding, the CONTRACTOR has the
right to take all necessary and appropriate steps to effect an immediate takeover of the
construction work either by itself or another subcontractor under any of the following
circumstances:

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 a. If the progress of the work is delayed by at least twenty percent (20%) of the
contract period plus any extension duly granted, or does not conform with the
work schedule such that from all indications the SUBCONTRACTOR may not be
able to complete the PROJECT within the stipulated time; or
b. If the construction is not in accordance with the approved plans and
specifications; or
c. If at any time during the progress of the work the SUBCONTRACTOR should fail,
refuse, or neglect to supply and provide the required tools, materials, supplies,
equipment, facilities and labor-workmen in accordance with the schedule; or
d. If the SUBCONTRACTOR should abandon, fail to continue with the construction;
or
e. If the SUBCONTRACTOR violates any of the conditions, warranties, or covenants
under this Agreement.

3.9 In the event of takeover, whatever contracts entered into by the SUBCONTRACTOR
in the pursuit of its obligations under this Agreement which the CONTRACTOR may
want to assume are deemed assigned to the CONTRACTOR; Provided, that the
CONTRACTOR shall not be liable for unpaid obligations previously incurred by the
SUBCONTRACTOR prior to the takeover. The right of the CONTRACTOR to take over the
PROJECT shall be without prejudice to other rights and legal remedies it may be
entitled to.

3.10 The lawful occupation by the CONTRACTOR of any portion of the PROJECT shall
not be deemed a waiver of any of its rights nor shall it diminish any liability of the
SUBCONTRACTOR for liquidated damages for delays in other portions of the PROJECT.

ARTICLE IV
PAYMENTS

4. 1 The CONTRACTOR shall make an advance payment to the SUBCONTRACTOR in an

amount equal to fifteen percent (15%) of the total contract price.

4.2 The CONTRACTOR shall pay the SUBCONTRACTOR progress payments based on
billings for actual works accomplished. In no case shall progress billings be made more
than once every thirty (30) calendar days.

4.3 All progress payments shall be subject to a retention fee of ten percent (10%).
Such retention shall be based on the amount due the SUBCONTRACTOR prior to
deductions and shall be retained from every progress payment until fifty percent (50%)
of the value of the works, as determined by the CONTRACTOR, are completed. If after
fifty percent (50%) completion, the work is satisfactorily done and on schedule, no
additional retention shall be made.

4.4 No payments made by the CONTRACTOR shall be construed as a waiver of the any
claim for defects in the work, materials, or breach of obligations under this Agreement.

ARTICLE V
NO EMPLOYER-EMPLOYEE RELATIONSHIP

5.1 The relationship of the CONTRACTOR and SUBCONTRACTOR is that of an

independent contractor. Nothing in this Agreement shall be construed as creating an
employer-employee relationship between the CONTRACTOR and SUBCONTRACTOR.

ARTICLE VI

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 INDEMNIFICATION

6.1 The SUBCONTRACTOR shall indemnify, hold free and harmless and defend at its
own expense the CONTRACTOR against all suits, claims, demands and liabilities of any
nature or kind, including costs and expenses associated therewith, arising out of acts or
omissions of the SUBCONTRACTOR in the performance of any activity in connection
with the PROJECT, including those that may be initiated by its employees, workers,
agents or by any other entity or person against the CONTRACTOR by reason of or in
connection to the PROJECT.

ARTICLE VII
TERMINATION

7.1 Upon notice of termination the CONTRACTOR may take over and continue the
PROJECT, and any contract or agreement of the SUBCONTRACTOR with third parties,
which the CONTRACTOR, in its discretion, may want to assume. In such eventuality
such contracts or agreements are hereby assigned to the CONTRACTOR.
7.2 Within thirty (30) days after termination, cancellation or rescission of this
Agreement, the parties shall settle their respective obligations as of the date of the
termination, cancellation or rescission, including the refund of any and all advances
made plus legal interest from the date of receipt of the amount so advanced.

ARTICLE VIII
MISCELLANEOUS PROVISIONS

8.1 Failure of the CONTRACTOR to require performance by the SUBCONTRACTOR of

any provision hereof shall not affect the right of the CONTRACTOR to enforce the same.

8.2 All rights or remedies available to the CONTRACTOR under this Agreement or by law
are separate and cumulative. No right or remedy whether or not exercised shall exclude
any other right or remedy. No failure or delay by the CONTRACTOR in exercising any
such right or remedy shall construed as a waiver of any breach or default by the
CONTRACTOR.

8.3 Should it be necessary for the CONTRACTOR to institute any proceeding to enforce
any provision of this Agreement, the SUBCONTRACTOR shall be liable to pay ten
percent (10%) of the Contract Price as liquidated damages therefore. The damages
provided under this section are in addition to those that may be adjudged, plus twenty
five percent (25%) of the total amount of damages sought as attorney’s fees.

8.4 This agreement contains the entire understanding and agreement of the parties
with respect to the subject matter contained herein, supersedes all prior oral or written
understanding and agreements relating thereto except as expressly provided otherwise,
and may not be altered, modified or waived in whole or in part, except in writing signed
by duly authorized representatives of the parties.

8.5 Any changes or modification in the provisions of this agreement shall not be valid
and binding unless the parties have agreed in writing.

ARTICLE IX
SETTLEMENT OF DISPUTES

9.1 Should there be any conflict with respect to the interpretation or operation of any of
the provisions of this Agreement, the parties shall exert their best efforts to amicably
settle such dispute.

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9.2 Disputes with respect to any other legal matter shall be submitted to the jurisdiction
of the courts of City of Manila only, to the exclusion of all others.

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

CONTRACTOR: SUBCONTRACTOR:

By: By:

RUBEN A. DONINA, JR.

SIGNED IN THE PRESENCE OF:

________________________ _________________________

ACKNOWLEDGMENT

Republic of the Philippines )

Manila City ) S.S.

BEFORE ME, a Notary Public for and in the _________________ personally appeared on
_____________________, the following persons, presenting to me their respective
Competent Evidence of Identity, as indicated below:

Name I.D. Issued at/on

Ruben A. Donina, JR.

known to me to be the same persons who executed the foregoing instruments and they
acknowledged to me that the same is free and voluntary act and deed and the entity
they represent.

This instrument consist of six (6) pages, including this page on which this
acknowledgment is written, has been signed by the above parties and their
instrumental witnesses on each and every page thereof and sealed with my notarial
seal, refers to a SUBCONTRACT AGREEMENT.

WITNESS MY HAND AND SEAL on the date and place first above written.

Doc. No. _______;

Page No. _______;
Book No. _______;
Series of 2014

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