CONSTRUCTION AGREEMENT

KNOW ALL MEN BY THESE PRESENTS:

This Agreement made and entered into this ___________ at

___________ by and between:

IMPERIAL HOMES CORPORATION, a corporation

duly organized and existing under and by virtue of the
laws of the Republic of the Philippines with office
address at 1201 Alabang Business Tower 1, Acacia
Ave., Madrigal Business Park, Alabang, Muntinlupa
City, Metro Manila, represented herein by its Vice-
President for Planning, MARITES M. MANGAMPO,
duly authorized for this purpose, hereinafter referred
to as the “OWNER;”

- and -

E. AZURIN WELL SERVICES AND PUMP

SPECIALIST, a sole proprietorship duly organized
and existing under and by virtue of the laws of the
Republic of the Philippines with office address at F.
Manalo St., Villarhomas Subdivision, Antipolo City,
Rizal, represented herein by Owner and General
Manager, EVERITH C. AZURIN, duly authorized for
this purpose, hereinafter referred to as the
“CONTRACTOR;”

- WITNESSETH: That -

WHEREAS, IMPERIAL HOMES CORPORATION is the owner and

developer of a residential subdivision known as “IMPERIAL ROSMONT
HEIGHTS SUBDIVISION” situated at Brgy. Estanza, Legazpi City (the
“Subdivision”);

WHEREAS, the Subdivision requires the drilling, construction and

installation of one (01) Deep Well/Water System (the “Project”);

WHEREAS, the CONTRACTOR, having the facilities, equipment expertise

and knowledge needed in the Project, submitted a bid/proposal to the OWNER;

WHEREAS, after evaluating the bid/proposal submitted by the

CONTRACTOR, the OWNER determined that the CONTRACTOR’S bid/proposal
was the most advantageous and thus decided to award the Project to the
CONTRACTOR;

WHEREAS, the CONTRACTOR has agreed and accepted the award to

undertake the Project under the terms and conditions herein set forth;

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

and the covenants hereinafter stipulated, the Parties hereto hereby agreed as
follows:

ARTICLE I
 SCOPE OF WORK

1.1 The CONTRACTOR shall undertake the Project, i.e. the drilling,
construction and installation of one (01) Deep Well/Water System at a
location approved by the Parties as a good/reliable water source for
the Subdivision, to the satisfaction of and in accordance with the plans
and specifications duly approved by the OWNER.

1.2 The CONTRACTOR hereby undertakes to furnish all labor, materials,

tools, equipment, supplies and supervision and shoulder all the costs
thereof for all work to be done on the Project as well as the performance
of all operations necessary for the completion of the Project in strict
compliance with the terms and conditions of this Agreement, its annexes
and/or the design/ specifications and contract documents of the OWNER.

1.3 The Project shall include the supply and supervision of the following work
items:

1.3.1 Mobilization of equipment, tools and crew to the identified jobsite;

1.3.2 Setting-up of equipment and site preparation;
1.3.3 Drilling of Pilot Borehole (8.5” in diameter x 180 meters in depth);
1.3.4 Geo-physical testing by electrc logging of well, the results and data
of which will be submitted to the OWNER;
1.3.5 Reaming of Pilot Borehole (14” in diameter x 180 meters in depth);
1.3.6 Perforation of B.I. pipe casing, the number of which will depend on
the results of the electric logging of well;
1.3.7 Installation of blank and B.I. pipe casing;
1.3.8 Well development by backwashing and surging of well;
1.3.9 Pumping test analysis and interpretation of well (with pump
recommendation and submission of test results);
1.3.10 Lowering of pebbles;
1.3.11 Cement grouting of well;
1.3.12 Supply, delivery and installation of the following materials:
a. B.I. pipe (12” in diameter x 6 mm);
b. B.I. pipe (10” in diameter x 6 mm);
c. B.I. pipe (8” in diameter x 6 mm);
d. Portland cement;
e. Black pebbles (#15); and
f. Trucking/hauling charges;
1.3.13 Demobilization and site clean-up; and
1.3.14 Such other miscellaneous work necessary to complete the Project.

1.4 The OWNER shall be responsible for giving the necessary notices to and
obtaining the required permits and sanctions from the Local Government
and the pertinent government agencies in connection with the Project
and/or the various work items to be done under this Agreement. The
CONTRACTOR hereby undertakes to comply with the rules and
regulations of the Local Government and the pertinent government
agencies. The CONTRACTOR shall keep the OWNER free and harmless
from any liability arising from any violation of said rules and regulations
and shall indemnify the OWNER against any fines, penalties or losses
incurred by reason of any breach of this provision.

1.5 The CONTRACTOR shall construct temporary quarters, if necessary, for

its labourers and a warehouse for storing materials. The CONTRACTOR
shall shoulder the cost of materials for said temporary quarters and
warehouse. It is hereby agreed that upon completion of the Project, the

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 CONTRACTOR, its personnel, employees and/or labourers shall
voluntarily vacate and turn-over the premises used the temporary quarters
and warehouse to the OWNER.

1.6 The CONTRACTOR shall use such methods and materials for the
performance of all the work connected with the Project under this
Agreement that will produce satisfactory results and the rate of progress
necessary for the completion of the Project within the contract period. If at
anytime before the commencement or during the progress of the Project,
such methods or materials appear to be inefficient or inappropriate to the
OWNER for producing the quality of work required, the OWNER shall
have the right to order the CONTRACTOR to increase its efficiency and/or
to improve its pace or quality of work and the CONTRACTOR hereby
agrees to immediately conform to the OWNER’s orders. However, the
OWNER’s failure to demand such increase in efficiency or improvement in
quality of work shall not relieve the CONTRACTOR of its obligation to
produce the quality of work and rate of progress provided in the OWNER’s
plans and specifications and/or the Contract Documents.

ARTICLE II
THE CONTRACT DOCUMENTS

The following documents respectively marked as Annexes hereto and

made an integral part hereof shall, except as modified by mutual agreement of
the Parties, form part of this Agreement:

Annex 1. Technical Specifications and Drawings/OWNER’s General

Conditions of Contract;

Annex 2. Contractor’s submission shall include the following:

a. Authority of the signing official;

b. Quotation and Scope of Work;
c. Construction Schedule/Work Program;
d. Manpower/equipment Schedules

ARTICLE III
CONTRACT PRICE

Upon accomplishment of all the obligations specified in Article I above

which the CONTRACTOR agrees to undertake, perform and accomplish under
this Contract, the OWNER shall pay the CONTRACTOR the Contract Price of
TWO MILLION SEVEN HUNDRED FIFTY THOUSAND THOUSAND PESOS
(P2,750,000.00), Philippine currency, exclusive of Value Added Tax (VAT) but
inclusive of the Contractor’s Taxes and such other taxes and fees that the
CONTRACTOR is legally bound to pay.

ARTICLE IV
TERMS OF PAYMENT

4.1 Advance Payment: The OWNER shall give, as advance payment to the
CONTRACTOR, Twenty Percent (20%) of the Total Contract Price or the
amount of FIVE HUNDRED FIFTY THOUSAND PESOS (P550,000.00),
upon the OWNER’s issuance of the Notice to Proceed. It is hereby
understood that such Advance Payment shall be proportionately deducted
from each progress/monthly billing given by the CONTRACTOR in the

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 manner prescribed in this Agreement until the same has been fully
liquidated.

4.2 Progress Billings: The CONTRACTOR may submit progress billings on a

monthly basis. However, payments for progress billings submitted by the
CONTRACTOR to the OWNER shall be paid within fifteen (15) days from
the OWNER’s receipt thereof and shall be based upon the work
satisfactorily completed by the CONTRACTOR as evaluated by the
OWNER. Upon such progress billings the following shall be deducted: (a)
the corresponding amount to effect repayment of the Advance Payment;
(b) Ten Percent (10%) retention money herein provided (c) money/ies paid
by the OWNER to settle unpaid valid third party claims against the
CONTRACTOR or other obligations of the CONTRACTOR arising from
this Agreement, if any; (d) Two Percent (2%) Contractor’s Tax; and (e)
such other deductions prescribed by existing laws in the manner set forth
under such relevant existing laws.

4.3 Set-off/Compensation: The CONTRACTOR hereby agrees to purchase

from the OWNER one (01) parcel of land and the residential building
thereon identified as Block No. 40, Lot No. 36 and situated at Imperial
Rosmont Heights Subdivision, Brgy. Estanza, Legazpi City (the
“Purchased Property”) in the amount of NINE HUNDRED EIGHTY-SEVEN
THOUSAND FIVE HUNDRED SIXTY-FIVE PESOS (P987,565.00) (the
“Contract Price”). The Parties likewise agree that the CONTRACTOR’S
payment for the Purchased Property shall be set-off from the payment by
the OWNER of the Contract Price of the works done by the
CONTRACTOR in the manner and/or schedule provided herein and in the
sale documents. The Contract Price for the Purchased Property shall be
deducted from the CONTRACTOR’S Advance Payment and progress
billings, as follows:

a. Forty Percent (40%) of the Advance Payment or the amount of

TWO HUNDRED TWENTY THOUSAND PESOS (P220,000.00);
and

b. Thirty Percent (30%) of each progress billing or the amount of ONE

HUNDRED NINETY-ONE THOUSAND EIGHT HUNDRED
NINETY-ONE AND 25/100 PESOS (P191,891.25) for a minimum of
Four (04) progress billings.

The Parties hereby agree to execute a separate Contract to Sell

and other sale documents which shall state the terms and conditions of
their Agreement respecting the Purchased Property. It is likewise
understood that in the event the CONTRACTOR fails or is unable to
complete the Project or commits a breach of any of the terms and
conditions of this Agreement, all payments made by the CONTRACTOR
for the Purchased Property shall no longer be refunded by the OWNER
and any balance on the purchase price shall be immediately due and
payable to the OWNER by the CONTRACTOR, either in cash or through
bank-financing.

4.4 Final Payment: Final payment to the CONTRACTOR shall be subject to

the issuance of a Certificate of Final Completion and Acceptance of the
Project by the OWNER. The OWNER shall effect the final payment to the
CONTRACTOR within fifteen (15) days from the issuance of said
Certificate of Final Completion and Acceptance and provided further that
the CONTRACTOR has submitted a sworn statement attesting that all

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 obligations for labour, equipment and materials under this Agreement
have been fully paid. Nothing herein contained shall be construed as a
waiver of the right of the OWNER which is hereby reserved, to reject
whole or any portion of the work should the same be found to have been
constructed in violation of the plans and specifications or any conditions
and covenants of this Agreement. The Certificate of Final Completion
shall be based on the OWNER’s evaluation of the contract works
completed by the CONTRACTOR.

4.5 Retention Money: The amount equivalent to ten (10%) percent of each
progress payment made to the CONTRACTOR shall be retained by the
OWNER. Such retention shall be based on the total amount due to the
CONTRACTOR prior to any deduction and shall be retained from every
progress payment until fifty percent (50%) of the value of the works, as
determined by the OWNER, are completed. If, after fifty percent (50%)
completion, the work is satisfactorily done and on schedule, no additional
retention shall be made; otherwise the ten percent (10%) retention shall
be imposed. The total retention money shall be due for release upon the
issuance of the Certificate of Final Completion of the contract work by the
OWNER.

4.6 Fixed Contract Price: The Parties acknowledge that there shall be no
adjustments made in the Contract Price as stated in Article III hereof due
to the escalation of prices (labour and materials) which may occur during
the effectivity of this Agreement.

ARTICLE V
COMMENCEMENT AND COMPLETION OF WORK

5.1 The CONTRACTOR shall commence prosecution of the project within

seven (7) calendar days from receipt of the written Notice to Proceed from
the OWNER and shall finish and complete the Project within One Hundred
Fifty (150) calendar days from the date of receipt by the CONTRACTOR
of the Notice to Proceed unless extended in accordance with this
Agreement.

5.2 The OWNER shall have the right to suspend or withhold payment of any
of above-mentioned amounts if the CONTRACTOR falls behind the
agreed work schedule by more than ten percent (10%), despite the written
warnings by the OWNER except when the OWNER finds the delay to be
excusable.

ARTICLE VI
OWNER’S RIGHT TO SUSPEND WORK
OR TERMINATE THE CONTRACT

The OWNER, acting through the Project/Area Manager and/or its duly
authorized representative(s), may at any time terminate and take over the work
done by the CONTRACTOR or temporarily suspend the work, at its option, if any
of the following circumstances occur:

a. Satisfactory progress of the works resulting in a slippage of ten percent

(10%) or more, regardless of whether or not previous warning and notice to
improve performance has been issued to the CONTRACTOR; or
b. Assignment or subletting of any part of the works by the CONTRACTOR
without prior approval of the OWNER; or

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c. The CONTRACTOR’s wilful violation of any of the contract provision,
covenant and other condition agreed upon herein.

The OWNER shall likewise have the right to issue written warnings to the
CONTRACTOR in the event of a slippage in the progress of work of ten percent
(10%).

ARTICLE VII
LIQUIDATED DAMAGES

It is understood and agreed that time is of the essence of this Agreement.

In the event that the CONTRACTOR refuses or fails to complete the work within
the time herein specified, including any extension of time granted by the
OWNER, the CONTRACTOR shall pay liquidated damages in an amount
equivalent to ONE-TENTH OF ONE PERCENT (0.10%) of the Total Contract
Amount minus the value of the completed portions of the Project certified by the
OWNER as usable at the expiration of the contract time, for each calendar day of
delay until the work is completed and accepted by the OWNER. No liquidated
damages shall be charged when the delay in the completion of the Project is due
to any causes directly attributable to the OWNER or due to force majeure or
special risk.

ARTICLE VIII
CHANGE ORDER AND/OR ADDITIONAL WORK

8.1 The OWNER may, at any time, by a written order, make changes in the
schedule and the work required under this Agreement. If any such
change causes an increase or decrease in the work or the time required
for performing the work, an equitable adjustment shall be made in the
Contract Price and the completion date, upon mutual agreement of the
Parties reflecting such adjustments by way of a written variation order.

8.2 Should the OWNER find it necessary to have any additional work carried
out for the Project in addition to the contracted work, the CONTRACTOR
shall immediately carry out such additional work upon receipt of the
OWNER’s written instructions. Adjustments in terms of additional cost or
completion date or both, shall be reflected by a written extra work order or
supplemental contract, subject to the review and approval by the OWNER.

ARTICLE IX
CONTRACTOR’S LIABILITIES

9.1 It is hereby agreed and understood that no employer-employee

relationship exists between the OWNER and the CONTRACTOR and all
labourers, workers, employees and staff of the CONTRACTOR are not in
any way connected with the OWNER. There exists no employer-
employee relationship between the OWNER and said labourers,
employees and staff of the CONTRACTOR.

9.2 The CONTRACTOR binds itself to protect and immune the OWNER from
any suit or liability resulting from claims of any nature, whether for death,
injuries or damages that may be suffered by the CONTRACTOR’s workers
and/or by third Parties arising from or in connection with the performance
of the work done by the CONTRACTOR. The CONTRACTOR shall, at all
times, stand solely liable and/or responsible for compliance with all
existing laws, rules ands regulations and the CONTRACTOR agrees and

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 bind itself to save and hold the OWNER harmless from any and all
liabilities in respect thereto or arising therefrom.

ARTICLE XI
WARRANTY BOND

The CONTRACTOR shall guarantee the workmanship of the completed

work against latent defects for a period of one (1) year from the date of the
Certificate of Final Completion and Acceptance of the works. This guaranty shall
be settled by a Warranty Bond, callable on demand, in an amount equivalent to
ten percent (10%) of the Total Contract Price. Such Warranty Bond shall be
issued by a surety company acceptable to the OWNER.

ARTICLE XII
ACCEPTANCE OF WORK

No act of the OWNER or any of any representative of the OWNER super-

intending or directing the work or any extension of time for the completion of the
work shall be regarded as an acceptance of such work or any part therein, either
wholly or in part. Acceptance shall only be evidenced by the Certificate of Final
Completion issued by the OWNER. Before any final payment shall be made by
the OWNER, the CONTRACTOR shall execute an Affidavit/document that it
accepts the same as full settlement/payment of all its claims on account of the
Project/work done and materials furnished under this Agreement.

ARTICLE XIII
NON-WAIVER

No inspection made by the OWNER or any of its representatives; nor the

payment after acceptance of the whole or part of the Project/work; nor any
extension of the contract time granted by the OWNER; nor any possession taken
by the OWNER or its employees or representatives shall be construed to operate
as a waiver by the OWNER of any of the provisions of this Agreement or any
right of action reserved to the OWNER for any breach of this Agreement. This
right of action shall be in addition to other remedies granted to the OWNER
under existing laws for breach of this Agreement.

ARTICLE XIV
GENERAL PROVISIONS

14.1 Suppletory Use of Contract Documents - The Contract Documents

annexed hereto shall be suppletory to this Agreement. In case of conflict
between the Contract Documents and this Agreement, the latter shall
control and prevail. Any and all deficiencies in the provisions of this
Agreement intended to be covered hereby or otherwise connected with or
related to the Project referred herein, but not expressly covered by the
provisions of this Agreement, shall be supplied by the pertinent provisions
of the Contract Documents and shall be binding for purposes of this
Agreement.

14.2 Compliance with Laws, Ordinances, etc. - The CONTRACTOR shall

comply with all the laws, ordinances and regulations of both the national
and local government applicable to or binding upon the Parties hereto, the
works covered by this Agreement or the persons engaged in the
performance and accomplishment of the work covered by this Agreement
and shall be totally responsible for all damages either to the OWNER or to

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 the government, national or local, for non-observance of such laws,
ordinances, and regulations.

14.3 Modification/Changes/Alterations - No modification/ changes/alterations,

including transfer or assignment or sub-contracting of any right or
obligation under the terms of this Agreement, shall be valid unless
mutually agreed upon in writing by the Parties herein.

14.4 Validity Clause - If any term or condition of this Agreement is held invalid
or contrary to law, the validity of the other terms and conditions hereof
shall not be affected thereby.

14.5 Breach - A material breach by the CONTRACTOR of any warranty,

representation or covenant herein made entitles the OWNER, at its option,
to rescind ands/or terminate this Agreement upon written notice to this
effect to the CONTRACTOR and without necessity of instituting judicial
action for said purpose.

14.6 Arbitration - The Parties agrees to submit their disputes, questions, or

differences in connection with the interpretation and implementation of this
Agreement. The OWNER and CONTRACTOR shall appoint one (1)
arbitrator each, who shall in turn elect a third arbitrator. The Arbitration
shall be held in accordance with the Arbitration Law of the Philippines
(Republic Act No. 876). Awards or decision of a majority of the arbitrators
shall be binding and immediately enforceable upon the Parties. The
Parties shall equally shoulder the expenses for such arbitration.

ARTICLE XV
MISCELLANEOUS PROVISIONS

15.1 This Agreement shall take effect upon the date of receipt by the
CONTRACTOR of the Notice to Proceed with the Project from the
OWNER.

15.2 All notices called for by the terms of this Agreement shall be effective at
the time of receipt thereof and only when received by the Parties at the
addresses stated herein.

15.3 This Agreement is executed and delivered in four (4) copies, each shall be
deemed an original.

15.4 The Parties hereby warrant that they have legal capacity to enter into this
Agreement and that the Parties’ duly authorized representatives have
signed the same.

IN WITNESS WHEREOF, the Parties have hereunto affixed their

respective signature this ____________ at _______________________,
Philippines.

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 IMPERIAL HOMES CORPORATION E. AZURIN WELL SERVICES AND
PUMP SPECIALIST
By:
By:
MARITES M. MANGAMPO
Vice-President for Planning EVERITH C. AZURIN
Owner/General Manager

SIGNED IN THE PRESENCE OF:

________________________ _________________________

ACKNOWLEDGEMENT

REPUBLIC OF THE PHILIPPINES)

) S.S.

BEFORE ME, a Notary Public for and in __________ this _____________,

personally appeared the following:

NAME PERMANENT ID DATE/PLACE ISSUED

CARD NO.
IMPERIAL HOMES
CORPORATION
BY: MARITES M.
MANGAMPO
E. AZURIN WELL
SERVICES AND PUMP
SPECIALIST
By: EVERITH C. AZURIN

known to me to be the same persons who executed the foregoing instruments

and they acknowledged to me that the same are their own free and voluntary act
and deed as well as that of the corporation herein represented.

This instrument refers to a Construction Agreement, consisting of nine

(09) pages, including the page on which this Acknowledgement is written, duly
signed by the Parties and their instrumental witnesses on each and every page
hereof.

WITNESS MY HAND AND SEAL this _____________ at __________,

Philippines.

Doc. No. ____;

Page No. ____;
Book No. ____;
Series of 2015.