CIVIL WORKS CONSTRUCTION CONTRACT KNOW ALL MEN BY THESE PRESENTS: This Civil Works Construction Contract (“Contract”) made and executed this ___ day of in Makati City, by and between: LABAYAT 1 HYDROPOWER CORPORATION, a corporation duly organized and existing under the laws of the Republic of the Philippines with corporate address at 3°° Floor JTKC Centre, 2155 Don Chino Roces Ave., Makati City, represented herein by its COO, Mr. Johnson A. Sanhi, Jr., hereinafter referred to as the "OWNER"; -and - PACIFIC SUMMIT RENEWABLE CONSTRUCTION CORP., a corporation duly organized and eyisting under the laws of the Republic of the Philippines and with bus] [acess at Unit 2101, One Global Place, 5th Avenue, Corner 25ti et, Taguig, 1634 Metro Manila, represented by its Chairman/CEO, Mr. Paolo Antonio M. Cristobal, hereinafter referred to as the "CONTRACTOR". The OWNER and CONTRACTOR may hereafter be referred to rrContractor General Requirements; DamMeir (Intake Structure); Supplemental Dam/Weir (Intake Structure); Headrace (Except Stee! Headrace Line); Surge Tank; Penstock (Except Main Penstock); Powerhouse; Tailrace Channel; Sub-Station; and Series of Internal Access Roads. cose sea0cp ‘The CONTRACTOR shall perform and complete the WORKS in accordance with the’ following documents, which are deemed an integral part of this Contract, viz: a. Bidding Terms of Reference dated July 2015; b. Plans and Specification dated July 2015; ¢. Construction Schedule; and d. Bill of Quantities (BOQ), For avoidance of doubt, for purposes of this Contract, whenever used herein, the term “Contract” shall include the terms of the foregoing documents. Section 2. CONTRACT PRICE. The consideration for the WORKS shall be Three Hundred Twenty Two Million Six Hundred Sixty Nine Thousand Twenty Seven and 92/100 Pesos (PhP_322,669,027.92), Philippine Currency, as stated in the Financial Bid submitted by CONTRACTOR to OWNER. The Contract Price shall not be modified during the effectivity of this Contract as a result of any increase in the cost of labor brought about by new legislation and/or wage order, increase in the cost of materials, ordinary fluctuations in exchange rates, freight charges, insurance premiums, duties and taxes including Value Added Tax, fuels and oil, or for any other reasons. The Parties agree that in case of extraordinary inflation or deflation, there will be no adjustment in the Contract Price for fluctuations in exchange rates of currencies. OWNER hereby agrees to pay the Contract Price per Bill of Quantities (BOQ) as consideration for the execution and completion of the WORKS, which is ‘subject to validation by the OWNER and to be signed off by its duly designated Project Management Team, Vergel3 Consult (ar any replacement duly designated by the OWNER), as the same becomes payable in accordance with the following schedule of payment: 2. Twenty Percent Down Payment. ‘Twenty Percent (20%) Down Payment to be paid upon the fulfilment of the following conditions: (1) approval of the project financing bank for the release of the first drawdown by way of a Dated Check payable to the CONTRACTOR; and (2) upon submission by CONTRACTOR of a Performance Bond in the amount jo aeequivalent to twenty percent (20%) of the contract price in the form of a surety bond which is a "Call on Demand” bond obtained from a reputable bank satisfactory and acceptable to the OWNER, on such usual terms and conditions ("Bond’). The Bond shall answer for any delays incurred in the execution of the WORKS and for any liability that may be suffered by the OWNER arising from claims of third parties. In case the OWNER grants the CONTRACTOR an extension of time to complete the WORKS, the effectivity of the performance bond shall be reduced proportionately to an amount to be mutually agreed upon by both parties. In the event of the rescission or termination of the Contract due to the default of the CONTRACTOR, the OWNER may call in the bond for any or all claims against the CONTRACTOR. The premiums and other charges that may be due in connection with such extension shall be for the account and expense of the CONTRACTOR. The bond shall remain and continue to remain in full force and effect until the aforementioned obligations, claims of third parties or the CONTRACTOR's workers, penalty for delay, damages, and cost of labor and materials in the case of the termination of the Contract shall have been fully seftied and paid for by the CONTRACTOR. The performance bond shall immediately be released to the CONTRACTOR without need of further notice or demand, upon issuance of a Completion and Acceptance Certificate by the OWNER of the WORKS done; Any change in the Contract (whether such change increases or decreases the amount hereof) in time or payment due the CONTRACTOR or any extension, alteration, modification or innovation mutually agreed upon by both parties in writing, shail in no way annul, release or affect the liabilities of the CONTRACTOR and the surety or sureties of the bond submitted by the CONTRACTOR. b. Progress Payments. Payments of the progress billings shall be based upon completion of milestones set out in the Milestone Payment Schedule in Annex A (Payment Schedule), subject to validation by and to be signed off by its duly appointed Project Management Team, the Vergel3 Consult (or any replacement duly appointed by OWNER); Provided, that any contest on the progress billings submitted by the CONTRACTOR shall be resolved within a period of thirty (30) working days from notice thereof after which the progress billing shall be submitted to the financing bank for release of the funds. When CONTRACTOR deems that a payment milestone set forth therein has been achieved, the CONTRACTOR shall provide the OWNER with an Application for Milestone Payment which shall (i) specify the amount to which it believes itself to be entitled in accordance witli this CONTRACT, and (ii) describes the value of the Works properly carried out during the period for which payment is sought together with supporting documents and other documents or information requested by the OWNER to substantiate its liability to make payment under this Section, oe fue AYThe OWNER shall pay the progress billings, immediately, upon validation by the project financing bank of the applicable milestones and release of the appropriate funding. Payments shall be made by way of the OWNER’s company check, or of the bank's if made directly, payable to the CONTRACTOR, c. Ten Percent Retention Guarantee. The Parties agree that ten percent (10%) of payments to the CONTRACTOR shall be retained by the OWNER as guarantee of completion of work. Subject to the prior approval of the financing hank, the retention guarantee shall be released not later than seven (7) calendar days after the issuance of the Completion and Acceptance Certificate by the OWNER of the WORKS done, subject to a joint inspection and validation to be conducted including completion by the CONTRACTOR of a punch list, at such date and time to be agreed upon by the Parties, and subject further to submission by the CONTRACTOR of the following documents: 1. Appropriate Certification or a swom affidavit stating that all wages and salaries of employees and workers of the CONTRACTOR and all indebtedness incurred by the CONTRACTOR in relation to the WORKS (including but not limited to claims of or credits to suppliers, subcontractors or creditors of the CONTRACTOR) have been fully settled. In the event that there are any unpaid claims or credit, a quitclaim shall be duly executed by the concerned suppliers, subcontractors or creditors in favor of the OWNER; and 2. Guarantee Bond. The CONTRACTOR guarantees its work against qualitative defects in materials, poor workmanship and the like for a period of one (1) year reckoned from the day of the acceptance of the WORKS by OWNER, except defects due to materials and equipment supplied by OWNER, if any. In case any defect in materials andlor defect or failure due to the poor workmanship of CONTRACTOR on any partis of the WORKS is discovered during the said period, CONTRACTOR shall be bound to make good such defect, failure or poor workmanship, without any cost or expense to OWNER. During the same period, CONTRACTOR shall likewise hold the OWNER free and harmless from any and all liability or damages that may be incurred as a result of any breach of CONTRACTOR's guarantee. It is hereby understood that these stipulations shall not in any manner affect the rights and liabilities of the parties under Article 1723 and other provisions of the Civil Code, nor under any other existing laws, rules and regulations. The CONTRACTOR shall furnish the OWNER with a Guarantee Bond issued by a reputable bank, or bonding company, acceptable to the OWNER in the amount equivalent to Ten Percent (10%) of the Contract Price, effective for a period of One (1) year from the jp aedate of final acceptance by the OWNER of the WORKS, subject to the condition, but not limiting the CONTRACTOR’ liability, that any defect or flaw in the materials used and/or arising from poor workmanship of the CONTRACTOR which may arise during the said one year period shall be repaired by the CONTRACTOR promptly upon demand by the OWNER, in which case the one-year period shall be reckoned from the time of such repair; If the CONTRACTOR fails to correct or repair the defects within fifteen (15) days from receipt of written notice, the OWNFR may have’ the repairs done by another party at the expense of the CONTRACTOR and the CONTRACTOR shall assume and still be responsible therefor, or alternatively, confiscate the Guarantee Bond; Provided that in such event, the OWNER may only claim as against the Guarantee Bond, such actual amount as may be necessary to perform the repairs. The CONTRACTOR shall be responsible for any and all damages to, and for the necessary repair of, public streets, sidewalks, curbs and paving and other properties, whether public or private, occasioned by their use or opening in connection with or as @ consequence of the WORKS. The CONTRACTOR shall make good the same to the lawful satisfaction of the proper authority or party and hereby holds the OWNER free and harmless from liability for any such damage or repair. The Guarantee Bond shall immediately, without need of further notice or demand, be released and shall have no force and effect upon the lapse of the one-year validity period, except such portion Pertaining to the repair/s done. Section 3. OBLIGATIONS OF THE CONTRACTOR. CONTRACTOR shall completely and faithfully undertake the performance of this Contract strictly in accordance with Section 1 hereof and pursuant to generally accepted standards adopted by similar industries within the duration of this Contract. CONTRACTOR shall comply with all applicable governmental laws, rules and regulations in the performance of the WORKS, including the payment of all applicable taxes, duties, tariffs fees, and other charges which may be assessed in connection with or as a consequence of the execution of this Contract. Section 4. OBLIGATIONS OF THE OWNER. OWNER shall faithfully comply with its obligation to pay the Contract Price strictly in accordance with the schedule of payment set forth in this Contract without any unnecessary delay, including the obligations to release bonds and retention amounts specified in this Contract. OWNER shall pay a penalty equivalent to One-Tenth of One Percent (1/10 of 1%) of the retention amount shall be imposed upon OWNER for every calendar day of delay due to causes solely attributable to the OWNER. pe fhOWNER shall be responsible for any and all permits and licenses requisite or necessary in relation to the conduct of its business. OWNER shall give CONTRACTOR non-exclusive possession of the site where the WORKS are to be performed. Considering that the PROJECT consists of Four (4) Packages, OWNER shall oversee the smooth and well — coordinated interfacing activities among the Parties hence, the CONTRACTOR shall extend its full cooperation to meet the required Interfacing Schedule, attached herewith as Annex “B". Any problems in the coordination of interfacing activities shall be reported by the CONTRACTOR to the OWNER, who shall immediately cause the arrangement and fixing of schedules among various contractors of the other packages comprising the PROJECT. Any delays caused by such failure in coordination of interfacing activities to the flow of execution of tasks by the CONTRACTOR, and not otherwise attributable to the CONTRACTOR, shall be taken into account and shall grant unto the CONTRACTOR the right to an extension of period for completion, without penalty or liability. Section 5, _ EFFECTIVITY AND COMPLETION OF WORKS. This Contract shall be effective upon its execution and shall be completed within Thirty-One (31) months from the date the Parties agreed to commence WORKS. For this purpose, the Parties shall be deemed to commence work after the lapse of Fifteen (15) calendar days upon receipt of the Notice to Proceed ("NTP") by the CONTRACTOR in accordance with the Construction Schedule. The Parties may agree in writing to extend the said term based on mutually acceptable conditions. In the event that there is failure on the part of CONTRACTOR to complete the WORKS within the Approved Construction Schedule including Approved Time Extension (if there is any), a penaity in the form of liquidated damages equivalent to One-Tenth of One Percent (1/10 of 1%) of the amount of the contract price, but not to exceed fifteen, percent (15%) of such contract price, shall be imposed upon CONTRACTOR for every calendar day of delay. Section 7. PERMITS AND LICENSES. CONTRACTOR shall secure the necessary permits and licenses for the execution and accomplishment of the WORKS contemplated herein. Section 8. MATERIALS AND PERSONNEL. CONTRACTOR shall be responsible for purchasing materials and recruiting personnel for the execution and construction of the WORKS. Any personnel deployed by the CONTRACTOR to carry out its obligations under this Contract shall remain its employee, agent or representative, as the case may be. Il is expressly agreed that nothing herein shall create an agency, joint venture, partnership or employer-employee relationship between the Parties, or between the Parties’ employees, agents, or representatives; nor shall either Party hold itself out to third parties in such capacity. Neither Party has the power or authority to act for, represent, or bind the other in any manner. Section 9. FORCE MAJEURE. A Party (‘Affected Party") shall not be liable to the other Party for non-performance or delay in performance of its obligations under this Contract to the extent that such non-performance or delay arises due to causes beyond its reasonable control and not occasioned by its fault 0 peinegligence including acts of God, war, fire, flood, explosions, acts of terrorism, or of public enemy whether war be declared or not, public disorders, sabotage, rebellion, civil commotion, strikes, lockouts, boycotts, or other industrial or labor dispute, acts of the government, or any reasonable cause whether similar or not to the foregoing, beyond the reasonable control of the Affected Party ("Force Majeure Event’). The Affected Party shall promptly notify the other Party, in writing, of the occurrence of a Force Majeure Event and shall take all reasonable measures to mitigate, limit, and overcome the damages and effects to the other Party as soon as. practicable after the occurrence of the Force Majeure Event. Upon cessation of the Force Majeure Event, the Affected Party shall promptly notify the other Party of such fact in writing, and shall immediately resume its obligations hereunder. Subject to the Affected Party's obligation to promptly notify the other Party in writing of the Force Majeure Event, the performance of the Affected Party's obligations, to the extent affected by said Force Majeure Event, shall be suspended during the period the Force Majeure Event persists. Section 10. TERMINATION OF CONTRACT BY CONTRACTOR. In the event OWNER materially breaches any term of the Contract, CONTRACTOR shall promptly give a written notice of such breach to OWNER. If OWNER fails to cure the breach within fifteen (15) calendar days from receipt of the written notice, CONTRACTOR may, without prejudice to any other right or remedy available under the Contract and any other pertinent law, rules or regulation, terminate the Contract by giving a written notice to OWNER and it shall be entitled to recover from OWNER the (a) percentage of the Contract Price representing the portion of the WORKS. completed as of the date of termination to the OWNER’ satisfaction;, (b) any duly- Proved out-of-pocket expenses CONTRACTOR has incurred for materials and equipment as a result of the termination of the Contract prior to completion of the Works, less any offsets. CONTRACTOR may immediately terminate this Contract in case of OWNER’s (2) insolvency; (b) entering into liquidation (whether compulsory or voluntary); (c) having a receiver appointed over all or a substantial part of its assets; (d) ceasing or threatening to ceasé to carry on business; or (e) material misrepresentation. Section 11. TERMINATION OF CONTRACT BY OWNER. Should CONTRACTOR materially breach any provision of the Contract, OWNER shall, without prejudice to any other right or remedy, give CONTRACTOR written notice thereof. If CONTRACTOR fails to cure its default within fifteen (15) calendar days from receipt of written of breach, OWNER may terminate this Contract by giving written notice of termination.to CONTRACTOR. OWNER shall have the right to take possession of the premises and all materials, tools, and appliances thereon, and to finish the WORKS by whatever method OWNER deems expedient. OWNER may immediately terminate this Contract in case of CONTRACTOR s (a) insolvency; (b) entering into liquidation (whether compulsory or voluntary); (c) having a receiver appointed over all or a substantial part of its assets; (d) ceasing or threatening to cease to carry on business; or (e) material misrepresentation. Lk fa ae