CONTRACT OF ENGAGEMENT

KNOW ALL MEN BY THESE PRESENTS:

1. The CONTRACT OF ENGAGEMENT, made this 7th day of

December 2020 by and between:

OSCAR and MARIA SUYO, with address Gardenia Street,

Purok Paghidaet, Barangay Mansilingan, Bacolod City, herein
referred to as the “CLIENT”;

RAUL REYES, with address at Broken Hearts Boulevard, 21st

Floor of Zadbouy Building, Lacson Street, Bacolod City, herein
referred to as the “CONTRACTOR”;

CHING HONG GI, as owner of Glorious Hardware, with

address at Fleurdeliz Street, Purok Mabinuligon, Barangay
Mansilingan, Bacolod City, herein referred to as the “HARDWARE”.

2. WHEREAS, the CLIENT is desirous that the CONTRACTOR execute

the works under this project hereinafter called “THE WORKS” and
the CLIENT has accepted the calculated total contract price of the
CONTRACTOR for the execution and completion of THE WORKS at
a total Contract Price of P 5,000,000.00.

3. WHEREAS the Contract Price of P5,000,000.00 will be divided into:

- P1,500,000.00 for labor, transportation, delivery, and

miscellaneous transactions
- P3,500,000.00 for necessary building materials
The usage and allocation of the money in the division of categories
of the Contract Price shall be solely up to the CONTRACTOR as
long as the end-result of THE WORKS is satisfactory to the
CLIENTS.

4. WHEREAS, the HARDWARE allows the CONTRACTOR to utilize

the Credit Line of the CLIENTS up to the amount of P3,500,000.00 for
the purpose of expediting and efficiently finishing THE WORKS.
 5. The CONTRACTOR shall procure such relevant materials and
products related to THE WORKS ONLY from the HARDWARE.

Definition of Terms

6. Open Credit Line– The system of ordering materials and products on

credit by the CLIENTS, established for them by the HARDWARE on
account of their long-term friendship.

7. Credit Limit – the maximum amount allowed by the CLIENTS for

the CONTRACTOR to take advantage of the Open Credit Line. The
amount shall be P3,500,000.00.

8. Allowable Credit Usage – the usage of the CONTRACTOR of the

Credit Line within the Credit Limit. Usage shall include orders and
purchases for THE WORKS made by the CONTRACTOR with the
HARDWARE.

9. Orders in excess of the allowed Credit Limit – Any order made by

the CONTRACTOR that is made while the allowed Credit Limit to
him has already reached the maximum allowable credit usage.

10. Approved Transactions in-excess of the allowed Credit Limit –

Orders made in-excess of the allowed Credit Limit which the
CLIENTS are notified of and subsequently gives their approval. The
orders will then be released to the CONTRACTOR.

11. Unauthorized Transactions – orders made in-excess of the allowed

Credit Limit which the CLIENTS are not notified of and had no
chance to approve but the HARDWARE still released the same to
CONTRACTOR.

Open Credit Line

12. The CLIENTS’ existing Credit Line with the HARDWARE shall be
utilized by the CONTRACTOR in order to place orders consisting of
building materials and products related to completion of THE
WORKS.
13. The total orders of materials and products during the period of
completion of THE WORKS shall not exceed the Contract Price which
is P3,500,000.00

14. The Credit Line shall serve as a convenient means of placing orders
with the HARDWARE in order for the CONTRACTOR to obtain
materials for THE WORKS more efficiently.

Utilization of Clients’ Credit Line with the Hardware

Manner of Ordering:

15. The CONTRACTOR shall place in orders with the HARDWARE for
whatever materials and products needed for completion of THE
WORKS.

16. If the Credit Limit of the CONTRACTOR allows the value of the
orders, the HARDWARE will issue the corresponding purchase orders
and promptly deliver the materials to the building site of THE WORKS
accompanied by the matching delivery receipt.

Manner of Payment:

17. The CONTRACTOR shall see to it that after receiving the orders or
until the HARDWARE informs him of the outstanding balance of the
orders he shall undertake to pay the Hardware the needed balance.

18. Payment of the orders shall be done by the CONTRACTOR and the
HARDWARE in whatever way it is convenient for both of them to
settle the transactions.

19. The HARDWARE shall undertake to issue a sales invoice whenever

the CONTRACTOR pays off a transaction made on credit using the
CLIENTS’ Credit Line.

20. The HARDWARE is to inform the CLIENTS of whatever transactions

or orders the CONTRACTOR makes and whether or not he has made
payment after the delivery of his orders.

Notification:

21. The HARDWARE undertakes to notify the CLIENTS of the status of

the credit line, whether the orders are still within the allowed Credit
 Limit and if so, how much allowable credits are left and also if the
orders were made in excess of the allowed Credit Limit.

Excessive Orders:

22. The HARDWARE undertakes to inform the CLIENTS of every in-

excess orders made by the CONTRACTOR.

23. The HARDWARE shall in no situation release the ordered materials in

excess of the allowed Credit Limit, except when the CLIENT gives
their approval.

24. Every approved transaction made in excess of the allowed Credit Limit
without the CLIENTS’ approval is deemed as unauthorized and made
beyond the scope of the CONTRACTOR’S authority to utilize the
CLIENTS’ Credit Line with the HARDWARE.

25. In the event that the HARDWARE releases materials and products
related to transactions not approved by the CLIENT, the HARDWARE
acknowledges the CLIENTS’ exclusion from liability and shall make
the CONTRACTOR solely liable for every unauthorized transaction.

Unauthorized Orders

26. Every order placed by the CONTRACTOR in excess of the allowed

Credit Limit using the CLIENTS’ Credit Line is to be reported to the
Client.

27. The CLIENTS shall then decide whether to approve the order made.

28. If the CLIENTS decide to approve the said order, he shall inform the
HARDWARE that he has approved the said order. The HARDWARE
shall then approve the transaction and release the materials ordered
by the Contractor.

29. The CLIENTS shall give the necessary amount to the CONTRACTOR
in order for him to pay the HARDWARE.

30. The CLIENT shall then issue an acknowledgement receipt to the

CONTRACTOR indicating that the CLIENT has paid the
CONTRACTOR the necessary amount to cover the in-excess
transaction and that the CONTRACTOR undertakes to deliver the
money to the HARDWARE to pay-off the transaction.
31. This acknowledgment receipt serves to exclude the CLIENT from
liability in the event that the CONTRACTOR does not comply with his
obligation to deliver the payment to the Hardware.

Release from Liability

32. That in the event that the CONTRACTOR does not comply with his
obligations, the HARDWARE undertakes to make the CONTRACTOR
solely liable and acknowledges the exclusion of the CLIENT from
liability regarding the transaction.

The Works

Project Site and the Building Itself

33. The project site shall be Lot 51, Burgos Avenue Extension, Bacolod
City, Negros Occidental.

34. The CONTRACTOR undertakes to secure all the necessary licenses

and permits required to start the construction of THE WORKS.

35. The CONTRACTOR shall be liable for any claim of damages arising
out of or in connection of the happenings inside the project site of
THE WORKS or in the vicinity of the project site.

36. The project is the construction of a commercial building.

37. The project shall have a parking lot with a capacity for 10 cars.

38. The project shall have 4 floors.

39. Each room shall have 5-unit rooms per floor, with dimensions not
less than 20x40 sq. m. per unit room

40. Each floor shall have 1 male and female bathroom that shall each
have a 3-person capacity

41. There will be one main office that shall have an included bathroom
on the first floor
42. The 3rd and 4th floor shall have a capacity for 6 persons each, with
two showers

43. There shall be two 10 ft. water tanks that shall prove as the water
source for the building, each having the capacity to hold 588 litres of
water. These tanks shall be accompanied by a pressure tank as well
as a water pump motor.

44. There shall be installed outside each unit an energy meter to measure
the electric usage for that specific unit.

45. The CONTRACTOR shall use the warehouse of the CLIENTS right
beside the project site for the storage of the necessary building
materials.

Delivery and Storage of Materials

46. Upon the creation and the subsequent issuance of a purchase order,
The HARDWARE shall deliver the materials at the CLIENT’s
warehouse along with the delivery receipt.

47. Prior to acceptance by the CLIENTS’ representative of the materials

ordered, the CLIENTS’ representative matches the delivery receipt
with the purchase order issued. After matching the two source
documents, the representative manually checks the delivery if they
are in line with what is stated within the delivery receipt.

48. The CLIENTS’ representative shall log in its ledger each delivery
received from the HARDWARE.

49. Any materials which are degraded or deemed unusable for THE
WORKS in the storage of the CLIENTS’ warehouse shall be reported
to the CLIENTS by the CONTRACTOR. The costs of these shall be
borne by the CLIENTS.

Release of Materials
50. The CLIENTS’ representative shall take note of every batch of
material that goes in and out of the warehouse for its use in THE
WORKS.

51. The CLIENTS’ or their representative shall in no way interfere with

the pulling in and out of the CONTRACTOR of the materials stored
in the warehouse. As long as such materials are to be used for THE
WORKS.

Employees

52. The CONTRACTOR may hire any person he deems fit for the job.

53. The CONTRACTOR may hire any number of people as employees as

long as the budget allocated in the contract price allows it.

54. Any excess of the budget in contract price allocated for labor costs
shall be shouldered by the CONTRACTOR himself.

COVID Protocols

55. Due to the rise of COVID-19, the CONTRACTOR undertakes to

ensure the safety of his employees.

56. The CONTRACTOR shall establish workplace, project site, and

working arrangements which consider the safety of employees and
prevent the spread of COVID-19.

57. Any employee who contracted COVID-19 in the project site or in

connection to THE WORKS shall be ensured by the CONTRACTOR
the necessary benefits and relief granted to ensure their recuperation.

58. Any costs related to the paragraph above shall be borne by the
CONTRACTOR.
Manner of Construction and Dispute Resolution

59. The CONTRACTOR undertakes to finish THE WORKS using the

most efficient and cost-effective use of materials taking into account
their quality and usability.

60. In the event that THE WORKS are finished and the same is not up to
par with standards set by the CLIENTS, as per an inspector or
evaluator hired by them, the CLIENTS and the CONTRACTOR shall
hire a set of commissioners to decide and settle whether the building
is up to par with the materials and standards used by the
CONTRACTOR or in the event of discrepancy, decide on the price to
be shouldered by the CONTRACTOR in order for him to attain
completion of THE WORKS on the standards set by the
commissioners hired.

61. The CLIENTS and the CONTRACTOR shall hire 1 commissioner of

their own and jointly decide on a third commissioner to decide upon
the issue in the preceding paragraph above.

Release of Liability

62. The CONTRACTOR’S employees shall be paid by him and in no case

shall the liability be transferred to the client.

63. In the event that the employees are not to be paid their dues for their
job on THE WORKS, the CLIENTS undertakes to pay the employees
of the CONTRACTORS. The CLIENTS reserve their right to file an
action for recovery of the amount paid against CONTRACTOR.

Stoppage of Work

64. Any stoppage of work for whatever reason other than ACTS OF
GOD or its equivalent under the law shall subject the
CONTRACTOR to damages if ever THE WORKS shall not be
completed in the time designated.
65. The CONTRACTOR shall also bear whatever the costs that will
necessarily attach due to the extension of the work because of the
stoppage or because of mismanagement of the allocated funds.

Final Provisions

66. NOW, THEREFORE, for and in consideration of the foregoing

premises, the parties hereto agree as follows:

66.1. In consideration of the payments to be made by the CLIENT to

the CONTRACTOR as hereinafter mentioned, the
CONTRACTOR shall provide and pay for all labor and
equipment, machinery, transportation and all other facilities
and services, and all materials necessary for the completion of
the project in accordance with the categorical divisions set out
by the PARTIES.

66.2. In consideration of the payments to be made by the CLIENT to

the CONTRACTOR as hereinafter mentioned, the
CONTRACTOR hereby covenants with the CLIENT to execute
and complete the Works and remedy any defects therein in
conformity with the provisions of this CONTRACT
AGREEMENT in all respects TWO HUNDRED TWENTY-
FOUR (224) CALENDAR DAYS.

66.3. In consideration of the execution and completion of the Works

by the CONTRACTOR, the CLIENT hereby covenants to pay
the CONTRACTOR the Total Contract Price stated above
herein.

66.4. In consideration of the friendship between the CLIENTS and

the HARDWARE, the latter shall be the sole supplier of
materials and products to be used by the CONTRACTOR for
THE WORKS.
IN WITNESS WHEREOF, the parties hereto set their respective hands on
7th day of December 2020 in Bacolod City.

CLIENT CONTRACTOR HARDWARE

Oscar Suyo Raul Reyes Ching Hong Gi

Maria Suyo

SIGNED IN THE PRESENCE OF

Giorno Giovanna Leone Abbacchio

Witness Witness
 ACKNOWLEDGMENT
REPUBLIC OF THE PHILIPPINES )
BACOLOD CITY ) S.S.

“SUBSCRIBED AND SWORN to before me this 7th day of December

2020, the Oscar Suyo and Maria Suyo exhibiting their Driver’s License Nos.
F01-89-049306 and V02-32-036912, issued at Bacolod City, Philippines
expiring on September 26, 2023 and September 25, 2023, respectively.

Ching Hong Gi who is personally known to me and to me known to

be the same person who personally appeared to me and signed the
foregoing as stated above.

Raul Reyes who is personally known to me and to me known to be

the same person who personally appeared to me and signed the foregoing
as stated above

WITNESS MY HAND AND NOTARIAL SEAL on the day, year, and

place first above written

Doc. No. 102

Page No. 20
Book No. X
Series of 2021